09
Sep

9-9-9

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Sentiment Watch: Cautiously optimistic on the group; uncertain territory for the broad market. EIA numbers will be delayed until tomorrow for the holiday; expect API numbers after the close. Lots of conference presentations today from Rodman and Barclays (see Stuff section below). We get Beige Book later this afternoon.

Pre Game OPEC Watch: Saudia Arabia says current prices are good for producers and consumers. They say don't expect any change to quotas today. Venezuela says the price should be closer to $80 to $100 but I would not expect anyone to pay attention to them at today's meeting. 

  • Rising OPEC Production: According to Platt's, August OPEC production (ex Iraq) was up 120,000 bopd from July, at 26.24 mm bopd, versus the 11 country production quota of 24.85 mm bopd. When you add in Iraq, who currently is not bound by the quota system, OPEC production was up 220,000 bopd month to month.



In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today
  5. Odds & Ends

Holdings Watch:

  • $10KP:

    • $7,300
    • 39% Cash
    • The Current Holdings Tab is updated.
    • The $10KP II Spreadsheet Tab is updated.
    • The ZLT tab has been updated with a G/L % spreadsheet.
  • Yesterday's Trades:

    • BEXP - Sold the BEXP September $7.50 calls (QBJIU) for $1.60, up 205% with the stock at $9.08. I continue to hold the common stock here.


Commodity Watch

Crude oil jumped $3.08 to close at $71.10 yesterday on a modestly strong equity market and a dollar that punched through support to reach 11 month lows. A number of refining capacity curtailments (see Cracks section below) also helped to bolster products. This morning crude is trading up $0.50+ ahead of the OPEC announcement.

  • Early Reach On Oil Inventories: (we get the API numbers after the close today and the EIA numbers on Thursday this week due to the holiday)

    • Crude: DOWN 1.6 million barrels
    • Gasoline: DOWN 1.5 mm barrels
    • Distillates: UP 0.9 mm barrels

Natural gas rose $0.08 to close at $2.81 yesterday. This morning gas is trading up 5 to 10 cents as short covering continues.

  • Early Read On Natural Gas Storage: 78 Bcf.
  • Imports Watch: 9.5 Bcfgdp from last week, in line with year ago and last week's levels.

    • LNG stuck at 1.1 to 1.2 Bcfgpd range.
    • Canada  fell 0.1 Bcfgpd from the prior week to 8.3 Bcfgpd and in line with year ago levels.  Storage is very full up there too so they want to send it down south while there is still time.
  • Industrial Demand Watch: The best sign I have that industrial demand is probably starting to recover (aside from the injections in the latter part of summer which were at times smaller than I would have anticipated) is the rally in chemicals being shipped in the U.S. via rail. 

 

Crack Spread Update


Key Takeaways: 

  1. Starting to get a little more enthusiastic about the group as VLO and others lent margin support yesterday to the Fall/Winter picture.
    1. VLO - Shutting two additional refineries, Aruba now down indefinitely.
    2. FTO - Kansas refinery - reduced rates (about 95% of capacity) due to margins. Their Cheyenne refinery will run at a bit lower capacity. Impact will be to reduce 3Q EPS.
    3. I'll quantify as a % of total cap but its beyond a token reduction at this point.
    4. This will lead to a slightly sharper reduction in oil demand in the coming weeks.
  2. West Coast Cracks Continue To Outperform. Makes me think TSO may start to outperform as well.
  3. Watching more closely, taking no action for now but if we see demand for diesel start to pick up more than expected as the fall agricultural season picks up we could see better than expected for 3Q/4Q.

 

Refiner Multiple: Cheap for a reason but maybe nearing a trough if the group can enforce self-discipline.


Stuff We Care About Today

Barclay's Conference - Today's Presentations I Plan To Listen To (all times EST); (some of these may not be webcast).

  • APC - 8:25 - good for color from CEO on the gas markets; did not get to listen, will hit the replay
  • EOG - 9:05 - Link to presentation, guidance did not change in presentation
  • DO - 9:45
  • BHI - 10:25
  • HK - 11:05 - Floyd still scheduled to do the presentation; no new presentation available at time of posting but the old presentation was removed from their IR page as I watched.
  • BBG: 12:25 - Rockies gas perspective, more and more interesting name, thin trader though it is.
  • STR: 1:05
  • OII or KWK: 3:05
  • CXO: 3:45
  • SD:  4:25

KOG Reports Rates On Wells 5 and 6 Bakken Wells

  • New well results:

    • Well #5 IP of 978 BOEpd
    • Well #6 IP of 1,492 BOEpd (1,309 bopd + 11.1 mmcfgpd) -

      • this was their extended lateral test with 15 frac stages
      • first 7 days of production saw an average rate of 1,118 BOEpd - not too shabby
  • Well results on 7 and 8 around the corner:

    • #7 reached TD last month and has a 9,950 foot lateral section
    • #8 just reached TD - 6,621 foot lateral
    • #9 will have a 10,000 foot lateral (not yet spud)
    • I'd look for completion data on the 7 and 8 wells, as a guess, in about 45 days.
    • Wells are reaching TD at an increasing pace; wells costing about where I'd guess, maybe a touch low for the longer laterals with their stated $5.5 to $6.0 range.
  • Baxter Shale - Non-operated, minority interest CFU #14-36 (in which KOG is carried by DVN) is being completed in the Vermillion Basin.
  • Speaking at Rodman Renshaw today at 11:15 EST.

SFY - Speaking at Rodman Renshaw at 11:40 EST. May give a talk about their latest efforts in the Eagle Ford.


FSLR Signs 2 GW China Deal

  • Wow - 2 Giga-watts ... that's the size of two good sized nukes or nearly double the amount of capacity installed by FSLR since its inception.
  • 25 square mile installation
  • 2019 completion date

The ROSE intro piece has been added to the Reports Tab.

Odds & Ends

Analyst Watch:

  • HAL - Pritchard starts with Buy, $35 target.

Interesting Article Watch:

 

191 Responses to “9-9-9”

  1. 1
    zman Says:

    Congrats on the ATPG bill – I will circle back to it on a pull back.

  2. 2
    bill Says:

    eureka!!!!!!!!!!!!

    http://finance.yahoo.com/news/ATP-Discovers-Additional-bw-3044589533.html?x=0&.v=1

    posted on tuesday site

  3. 3
    bill Says:

    thanks .. do you have barclay schedule

  4. 4
    bill Says:

    sorry just saw it

    * APC – 8:25 – good for color from CEO on the gas markets; did not get to listen, will hit the replay
    * EOG – 9:05 – Link to presentation, guidance did not change in presentation
    * DO – 9:45
    * BHI – 10:25
    * HK – 11:05 – Floyd still scheduled to do the presentation; no new presentation available at time of posting but the old presentation was removed from their IR page as I watched.
    * BBG: 12:25 – Rockies gas perspective, more and more interesting name, thin trader though it is.
    * STR: 1:05
    * OII or KWK: 3:05
    * CXO: 3:45
    * SD: 4:25

  5. 5
    zman Says:

    Bill – that’s not the full list, just what I plan on listening to. The full list I only have in PDF, if there is a company you are interested in let me know and I will look it up.

  6. 6
    zman Says:

    EOG call starting now.

  7. 7
    zman Says:

    NG short covering … day 3. Up 12 cents, or 4% today. No weather to account for this, especially not in the tropics.

  8. 8
    bill Says:

    do you mind sending me the pdf file

    bfraser921@aol.com

    thanks

  9. 9
    zman Says:

    EOG will be 50/50 oil/gas from 35/65 today by 2013.

  10. 10
    zman Says:

    8 – done

  11. 11
    zman Says:

    EOG Bakken

    6 rigs now, going up in 2010.
    They think 850K BOE per well – no change from last look in the core
    CWC $4.1 mm – avg 2009, will fall more

    Bakken lite –
    think 320 acre spacing
    300,000 boe
    CWC $4.3

    Avg now 16 days to TD, best at 15

    TFS
    not really talking, mapped it over entire basin.
    says its on significant portion of their 500K acres, tests by year end, nothing different on thoughts than what others are seeing.

  12. 12
    zman Says:

    EOG Barnett Combo – Oil

    Very thick on northern part of the play, less cooked (oil, not gas), hyperbolic declines, saw another operator’s horizontal that was producing oil, got them interest.

    Says they have cracked the code now,
    IPs of 200 to 500 BOEpd

    EURS of 210 mm boe
    This assumes 2% RECOVERY… will come up.

    85 wells this year, double that next year.

    345,000 acres in this part of the play.

  13. 13
    zman Says:

    EOG Haynesville:

    116,000 net acres, 55% in Tx, 45% is HBP
    4 rigs now, going to 10 next year.

  14. 14
    zman Says:

    EOG British Columbia

    double thickness of gas part of barnett, much higher pressure,

    nothing new here.

    says fracs improved in 2009, cut costs
    CWC of $10 mm, down 40% from last year.

    6 Tcf for whole play – says conservative on acreage cut and recovery factor so that figure should go up.

    Royalty fell from 27% to 2% in BC during the investment recovery period, then ratchets back up. Smarter government, wow.

  15. 15
    zman Says:

    NG going for $3

  16. 16
    tater Says:

    Added a Daily view for WLL

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882

    Hate smileys? Hate small children, puppies and Christmas too?
    🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂 🙂

  17. 17
    zman Says:

    Tater – thanks much for the cautious note.

    BOP – any HT or TT comments?

  18. 18
    zman Says:

    E&P and Service easing at the open, volumes very small, could be a little fear over OPEC, then inventories, combined with profit taking.

  19. 19
    ram Says:

    How do you create smileys on a BB?

  20. 20
    BirdsofpreyRcool Says:

    KOG — initial reaction = news on wells 5&6 were in line with what I expected. So, happy with the results. I want to spend some time with the 30-day, cumulative results, as this is what the company wants to focus on in the long run. They think it is a much better predictor of EURs than IP rates.

    From a production and cash flow perspective, KOG just keeps plugging along, getting better and better. The next major milestone will be proving up the 1/3rd of their acreage south of the river. This is what wells 7, 8, and 9 will do for them. After that, we should have a good handle on what the Bakken reserves are under KOG’s net 35,000 acres. Then it’s on to the 3Forks. But we already know there is great 3Forks potential on KOG’s acreage, due to the Peak well, drilling in the middle of KOG’s holdings.

    Looking forward to hearing what Lynn might say about wells 7&8 this morning at R&R….

  21. 21
    zman Says:

    HK presentation up, reading.

  22. 22
    VTZ Says:

    Z – Re Government in 14. That combined with regressive policies in Alberta are what’s driving down the amount of Canadian NG because lots of the bigger BC plays are in earlier evaluation stages.

  23. 23
    BirdsofpreyRcool Says:

    erratum — make that “Peak well, drilled in the middle of KOG’s holdings.” That well was completed in the Spring, if i recall correctly.

  24. 24
    VTZ Says:

    Other than price of course… low prices fix low prices.

  25. 25
    rseidman Says:

    09:37 ATPG ATP Oil & Gas and ATLS downgraded to Neutral at Capital One (14.54 +0.64) -Update-

    Capital One Southcoast downgrades ATPG and ATLS to Neutral from Add saying with the most recent EIA 914 data showing lower declines m/m than expected (0.3% onshore vs 0.5% – 0.8% expected) they think that the rebound in natural gas prices will take longer than expected. The firm thinks the oversupply of natural gas will last into 1H10 vs prior estimate of year-end 2009. Following the recent pull back in futures prices as well as concerns about potential 1H10 oversupply, the firm is lowering their natural gas price deck through 2010.

  26. 26
    BirdsofpreyRcool Says:

    TechTrader is sitting on his hands… it is a 50/50 day.

    HeadTrader says to “buy big pullbacks, until proven wrong.” (HT is secretly a member of the Mo-Mo Tribe).

  27. 27
    zman Says:

    HK presentation notes:

    Little change to open section. No change to hedges, well count plans

    slight boost in H.S. avg IPs to date.

    Eagle Ford:
    11 wells drilled now, avg IP 8.9 mm/d
    acreage the same at 210K

    New wells:
    Henderson-Cenzio 877: IP 13.2 mm/d
    2 other new wells around 6 MMcfe/d but a big chunk of that was condensate (northern rim of play is liquids rich)

  28. 28
    Jay Reynolds Says:

    Chevron May Foot Legal Bills for Man Who Taped Judge

    >Sept. 9 (Bloomberg) — Chevron Corp., battling a $27 billion environmental lawsuit in Ecuador, said it may pay the legal bills of a U.S. businessman whose secret recordings of meetings with the judge on the case led the jurist to step down.

    Californian Wayne Hansen used a pen equipped with a tiny camera to record meetings he had in May and June with Judge Juan Nunez in Ecuador, Chevron announced Aug. 31. … snip

    Chevron alleges that Judge Nunez disclosed his intention to rule against the company at the meetings.

    more….

    http://www.bloomberg.com/apps/news?pid=20602099&sid=azwOVWeGukJI

  29. 29
    BirdsofpreyRcool Says:

    I think I posted yesterday that (based on history) I thought KOG would pull back on the actual news. Trade as low as $1.58 or so, then settle around $1.75 or so. But, I’m a long term holder, I have a tough time calling short-term swings in this one.

  30. 30
    zman Says:

    More on HK presentation:

    That 877 #1H well IP at 13.2
    30 day average 10.4 mm/d – that’s pretty strong.

    Their Storey 267 well described as excellent, being completed now, 15 stages.

    Saying 30 day average are 35 to 75% higher for their recent wells than for their first 7 wells.

    Good math visual on wells with condensate vs dry gas wells on slide 20 under the current pricing regime. In short, a little bit of condensate goes a long way with a 5 MM/d + 250 bcpd well = a 9,750 MMcfgpd well (using a 15 to 1 ratio).

  31. 31
    1520sbroad Says:

    Z- that condensate in the EFS is priced differently? Based off of crude pricing roughly?

  32. 32
    zman Says:

    more HK presentation: slide 21

    great pix of fractured shale.

  33. 33
    zman Says:

    Thanks much for your color BOP.

  34. 34
    1520sbroad Says:

    are there takeaway issues with condensate vs. gas?

  35. 35
    zman Says:

    1520 – It trades at a differential to oil, lower but still a very good thing to have. Separate it, tank it and then truck it commonly…very routine.

  36. 36
    1520sbroad Says:

    got it – thanks.

  37. 37
    choices Says:

    Z-your comments on EOG presentation-as I understand, not much new but solidly executing their plan-I was completely asleep on this one-it traded below 69 on Friday, now approx 74.

  38. 38
    zman Says:

    NG at 2.96, up 15 cents. Cover, cover, cover.

    Choices – that about sums it up. I too did not add at the bottom of this channeling stock.

    Still waiting on OPEC proclamation to do nothing.

  39. 39
    zman Says:

    VTZ – dollar at 77.01, hit 76.89 earlier. Timber?

  40. 40
    zman Says:

    Crude back to $72+.

  41. 41
    zman Says:

    October NG over 2.97, strip up over a dime.

  42. 42
    bill Says:

    25 do you have the whole report

    atpg getting more “oilier”

    and with titan installed double oil production

    if their thesis plays out all ng stocks are sells or hold’s

  43. 43
    bill Says:

    pxp/chk going “balls out” in the haynesville.. 30 rigs now going to 40
    regardless of 2 dollar ng, lmao

    they need to get land hbp and they are “on plan”

    pxp said they can then turn on more ng if prices move up to capitalize inferring they can turn off the spigots if it doesnt

  44. 44
    zman Says:

    Bill – you know of course that the “regardless” comment is a bad, not a good thing. Everyone in the Haynesville, just about everyone, has the same lease expiration fuse burning. And drilled but not completed doesn’t get you into HBP status, you have to produce the gas.

  45. 45
    rseidman Says:

    bill:

    Got the ATPG downgrade through briefing.
    No more info from me.

    Still love the way the stock is behaving.

    Thanks again

  46. 46
    zman Says:

    BHI website apparently not carrying their Barclays presentation so skipping that one.

  47. 47
    VTZ Says:

    Dollar is not finding support anywhere yet. It will be interesting to see what happens at Nicky’s level but I’m not seeing a lot to suggest that it couldn’t be on its way to 72 more quickly than people expect.

  48. 48
    zman Says:

    HK – wondering when some analyst is going to notice that big EFS well, stock stuck flat pre presentation. Maybe they want his word he’s not doing another stock deal in the near term.

    Given the location of the well, on the southern and western edge of their drilling to date in the play it probably bodes well for the other EFS names over on that side from APC/TXCO to ROSE and SFY.

  49. 49
    1520sbroad Says:

    z- slightly off topic – any opinion/thoughts on NFX leadership – Trice?

  50. 50
    zman Says:

    1520 – You mean Boothby? Good. Very solid all around.

  51. 51
    zman Says:

    HK starts in 10 minutes.
    KOG in 20 minutes.

  52. 52
    elijahwc Says:

    DPTR exploding upward on volume. No news. Just FYI

  53. 53
    1520sbroad Says:

    Aha – i see trice stepped down but is still on the board. Thanks – he is on the board of another company i own.

  54. 54
    zman Says:

    Eli – hear ya, lots of little names have been moving. Its like SDM’s in each chamber, spin, see who moves today. When the crap starts to float I get a bit nervous. No reflection of DPTR intended, just pointing out the obvious. Saw MPET make a little attempt yesterday on CEO buying and no other news.

    WLL – onward and upward, CLR trailing it higher, BEXP as well.

    I find the lack of a sell the news on KOG encouraging.

  55. 55
    zman Says:

    …and I think Trice is good too, Boothby is just different and it was time as the company changed, even since Schiable, the last president died last year.

  56. 56
    zman Says:

    Nicky – 1028 resistance appears to be broken. SP500 moving on up.

  57. 57
    zman Says:

    HK call starting late … I will be on this one.

  58. 58
    zman Says:

    … and I understand BOP and others will be on the KOG call at 11:15 EST at RR.

  59. 59
    elijahwc Says:

    RE: WLL #16 & #54.

    Markets are bids and offers and in my experience chart gaps are always filled. So a nearby gap to the upside is comforting.

  60. 60
    zman Says:

    HK starting now

  61. 61
    BirdsofpreyRcool Says:

    I will be on the KOG cc… but, could use some help, posting info, from anyone else on the call. THANKS!

  62. 62
    BirdsofpreyRcool Says:

    KOG cc starting…

  63. 63
    Jerome Blank Says:

    CMZ Compton Petro up 18% this morning

  64. 64
    zman Says:

    HK Presentation – new stuff or good points only:

    Haynesville operating costs < $0.10 per Mcfe Hedges unchanged, will add some more to get to 70% of expected production for 2010 (now 63%) Budget: 3/4 Haynesville $750mm/$1 B in 2009. Plus $300mm for services div. 2010 Budget: probably the same budget Hawkfield services getting them onstream faster and faster. They may monetize this. "we're not known to be conservative in the oil and gas business but I believe we run our finances conservatively." Just at the tail end of the Permian Basin sale, should consummate sale well before year end. Haynesville: Averaging 7.5 Bcfe per well on about 50 wells. Average IP of 18.1 mm/d First 30 days IP about 15 mm/d Says core of the field is well known, much of their 325K acres is in it. Says the Bossier Shale is now thought to be productive in a big area, smaller than Haynesville but still large, couple of tests underway now (Shelby /Nacogdoches counties, Tx). Says these are 5 or 6 or 7 Bcf wells, says they are as good as the good wells in NW LA. THAT IS A BIG STATEMENT. Leasing terms not as pressing here. This is popping the stock... more in a minute .... 12 rigs running now

  65. 65
    BirdsofpreyRcool Says:

    KOG — starting to talk up the 3Forks.. first time i’ve heard this from them.

  66. 66
    bill Says:

    I like what im hearing on hk

    atpg at hod coming off early morning profit taking

  67. 67
    bill Says:

    >Says core of the field is well known, much of their 325K acres is in it.

    i wonder where chk is relative to this

  68. 68
    bill Says:

    ng and oil stocks are moving…

    plll now over 2.20 and vq at 9

  69. 69
    BirdsofpreyRcool Says:

    KOG — reached TD on well 8 yesterday… onto 9 next.

  70. 70
    zman Says:

    HK Presentation Comments #2

    Eagle Ford Shale:

    210K net acres between two reef trends

    3 rigs running on about their 25th or 30th well (hmmm, moving faster)

    Cost is $400 per acre vs $5,000 in the H.S.

    Trending towards $4 mm for 5 to 6 Bcfe

    No lease pressure here either

    SW of their property is fairly dry, the 2/3 north-easterly portion is liquids rich. They’ve pretty much drilled all over their block at this point, proving up the entire thing.

    Says thinking about that condensate math, you can get the equivalent of a 2 Bcfe EUR bump with the liquids given values now.

    Haynesville vertically fractured , EFS more horizontal, both work well with frac jobs.

    Porosity consistent through out the pay zone.

    EFS competes very well with or is perhaps better than the HS on economics

    … starting Q&A …

  71. 71
    nifkin Says:

    DPTR- couple things- hear Tracinda may make a bid for whole comonay, also hear company is closer to approval on natural gas exploratory wells in Washington state

  72. 72
    zman Says:

    Bill – CHK is right in the same area, it’s a big core.

  73. 73
    BirdsofpreyRcool Says:

    KOG — plans a 3Forks test “early next yr”… will make it a long-lateral… as opposed to Peak’s 3Forks well, which was short and had some completion issues… but is still a good well.

  74. 74
    zman Says:

    HK back above deal price…barely.

    Speaking about the Haynesville extension, have seen 3 or 4 of these “good wells”

    For the first time they are saying the Bossier, as they see it distinctly above the Hayensville, is highly prospective.

    They’re headed to breakout …

  75. 75
    zman Says:

    Bakkens moving very well now.

    WLL – still looks like a breakout to my laymens eyes but I appreciate the caution voiced by Tater. As I see it, this remains the cheapest name in the Bakken group and on the cheap end of E&P at present.

  76. 76
    1520sbroad Says:

    gmxr movement associated with the HK Bossier thoughts?

  77. 77
    BirdsofpreyRcool Says:

    KOG — drilling program sounds like after they prove up all the acreage on the Rez, will concentrate on drilling wells that are close to infrastructure. SMART MOVE! Will get an immediate $9/bbl increase by devlivering into a pipeline, instead of having to truck their crude out.

  78. 78
    zman Says:

    GMXR – yes, that and a gas related short squeeze, GMXR and GDP have massive short interest.

  79. 79
    1520sbroad Says:

    i’ll listen to gmxr at rodman tomorrow

  80. 80
    zman Says:

    Just jumping onto the end of the KOG call.

  81. 81
    BirdsofpreyRcool Says:

    KOG — after well 9, will have proved up entire acreage block on the Rez.

    Just ended. No questions.

  82. 82
    zman Says:

    BOP – Did Lynn say when to expect 7/8 results, I guessed 45 days in the post? Also, I take it no mention of capital markets?

  83. 83
    BirdsofpreyRcool Says:

    z — if you take KOG’s last slide… and give them their 34mm bbls of reserves (just the FBIR stuff)… that equates to $190mm mrk cap / 34mm bbls = $5.60/bbl in the ground.

    If they get #9 drilled and completed and tested b/f the EOY, under the new SEC rules, will they be able to book at least the Bakken part of those reserves (25mmBO)?

  84. 84
    BirdsofpreyRcool Says:

    KOG — no mention of capital mrkts, correct.

  85. 85
    kyleandy Says:

    KOG – results from 8 & 9 avail late oct , early nov. also peak drilling 2 sanish forks wells now in the middle of their acreage- will be very interested in outcome

  86. 86
    zman Says:

    Re 83. No. They’d get to book the wells themselves at whatever, (is it Netherland?), allows them, plus the PUD locations immediately offsetting them. I don’t know if they will get 1 or 2 puds per PDP location here. But it’ll be less than 10 mm boe I’d bet.

  87. 87
    Nicky Says:

    Morning all. Preferred count still very much in play – ie new highs. The count is aligning very nicely. Dollar in v down, whilst indices, metals, energy all in v up.

  88. 88
    zman Says:

    Thanks for that add Kyle. So the 7/8 wells could be included with the 3Q release.

  89. 89
    BirdsofpreyRcool Says:

    KOG = TD’d well 8 yesterday… so, have to move a completion rig on (5 days?) + complete #7 (longer lateral, 6 days?) + test (7 days?) + turn to well #8 (2?) + complete #8 (shorter lateral, 4 days?) + test (7 days?) = 30 days with no glitches.

    Clearly, some wild-ass guessing on my part here… i’m no completion engineer.

  90. 90
    zman Says:

    NG now 2.98, 6+%.

    Note both GMXR and GDP leading as gas rises. Run shorty run.

  91. 91
    kyleandy Says:

    KOG meant 7 & 8

  92. 92
    BirdsofpreyRcool Says:

    kyleandy — thanks for the 7/8 info… missed that comment due to multi-tasking.

  93. 93
    zman Says:

    SD and KWK speak later today, their short interest aren’t exactly low either (19% and 11% respectively).

  94. 94
    BirdsofpreyRcool Says:

    kyleandy — LOL… i actually read your comment as “7 and 8″… so, missed the typo.

  95. 95
    zman Says:

    Wyoming – please lend a hand on 89.

  96. 96
    zman Says:

    OPEC story – still no official pr

    Members urging cheaters to be good.

    http://www.google.com/hostednews/ap/article/ALeqM5g1SdnMFsykjmQAC4v_IYOSg2aTOAD9AJQV480

  97. 97
    zman Says:

    ZTRADE:

    HK – Doubled my September $24 Calls (added 20 more of the HKIO) for $0.30 with the stock at $23 following today’s presentation at Barclays. See comments on site for further details.

  98. 98
    zman Says:

    Go BEXP

    Congrats again Bill on ATPG. Nice move.

  99. 99
    BirdsofpreyRcool Says:

    DPTR… had a friend tell me to buy that at $2.00 yesterday. Next time, I won’t laugh at him.

  100. 100
    zman Says:

    Nicky – where’s your next resistance level on the SP500?

  101. 101
    VTZ Says:

    Most people seem to be saying the 1150 range is the next stop.

  102. 102
    Nicky Says:

    Z – well obviously previous high at 1039. Then 1044, 1051, 1070, 1080.

    I can’t see 1150 on this run. But most likely on the rally that will start in November.

  103. 103
    zman Says:

    Thanks Nicky.

    The gas storage consensus for tomorrow has fallen from a build of 78 as of yesterday to a build of 72. If I didn’t know better, I’d say some shorts who also submit estimates to the survey are trying to force a miss.

  104. 104
    bill Says:

    atpg presentation for rodman conf today is on their web site..nothing new except todays announcement

    i expect a secondary at these prices

  105. 105
    zman Says:

    KOG moving higher now.

  106. 106
    BirdsofpreyRcool Says:

    File under FWIW… my friend who told me to buy DPTR yesterday, just sold his ATPG. I only mention this because… well… for the obvious reasons…

  107. 107
    kyleandy Says:

    KOG – quick little jump there

  108. 108
    BirdsofpreyRcool Says:

    KOG — like i said, i suck at calling price action. Maybe it won’t sell off, after all.

    Works for me, tho!

  109. 109
    West Says:

    MRO/ KOG ?

  110. 110
    BirdsofpreyRcool Says:

    west — funny… i was thinking the exact same thing… MRO could use the completion expertise… not to mention, the contiguous acreage.

  111. 111
    bill Says:

    exxi up another 30 %

    i used to own it at 51 cents and sold it at break even arrrrrrrggg

    is this move getting frothy or what?

  112. 112
    BirdsofpreyRcool Says:

    i don’t think the move in energy is frothy yet… unless we are NOT in an eco-recovery. If we are, then i think the Energy Kids have further to run.

  113. 113
    zman Says:

    Bill – I think so, yes. I think what hasn’t moved and has solid fundamentals will move but there is obviously hot money flooding into the energy groups again.

  114. 114
    BirdsofpreyRcool Says:

    z — i definitely defer to your expertise on overall energy mrkts…

  115. 115
    BirdsofpreyRcool Says:

    …. but, i am also in the “eco-recovery” camp.

  116. 116
    zman Says:

    BOP – when I say frothy, I’m talking about moves in the little names, like the EXXI and the KOGs etc … I still think the growthy mid cap and big caps on the cheap side are in either cheap or middling valuation territory. Some of the higher growth stuff is pretty lofty but much of that hasn’t moved in awhile and is always expensive relative to the group. But when I see volume spikes in the single digit midgets on little news and lots of prayers, I call that frothy.

  117. 117
    BirdsofpreyRcool Says:

    Of course, passage of tax-and-trade will pour Round-Up on any green shoots. So, it’s a qualified belief in the eco-recovery.

  118. 118
    zman Says:

    And when I am referring to the more expensive names not having moved much, yep, I’m talking about HK and SWN and CLR to a lessor extent.

    On the still cheap side but moved a lot you have things like WLL drilling the biggest known Bakken wells to date … lots of them. They present tomorrow by the way.

  119. 119
    BirdsofpreyRcool Says:

    z — phew. I feel better now. Thank for laying that out. Agreed.

  120. 120
    zman Says:

    CAT looks delayed past Christmas in favor of healthcare.

  121. 121
    zman Says:

    OPEC taking a long time to “do nothing”. Must be yelling at the cheaters and deciding how to punish Russia.

  122. 122
    kyleandy Says:

    good tutorial on horizontal drilling and fracing at http://www.northernoil.com/drilling.php

  123. 123
    kyleandy Says:

    z – what time WLL tomorrow?

  124. 124
    zman Says:

    WLL = 1:05 EST

    OPEC set to start talking in 2 hours.

  125. 125
    zman Says:

    VLO CEO says U.S. climate bill as it is now would cost his company $6 to $7 B per year. There goes the cash flow to upgrade to a cleaner processes.

  126. 126
    baylor3217 Says:

    Perspective on possibility of KOG doing a secondary?

  127. 127
    zman Says:

    E&P Volumes are on the lowish side today, especially compared with yesterday’s run rate. People are not committing in front of inventories and OPEC.

    Baylor – my thought is they do one before year end, but after 3Q results as they will have 2 more wells under their belt. 10% of float to give them capital for 2010’s full drilling and land budget. They also have to consider what oil and the economy are going to do and that’s going to be up to them to decide. If you think the lack of mogas market support pushes crude back towards $50 then you do the deal sooner, not later. If you think the economy will pick up and that products supplied will continue to extend and / or the dollar won’t spike on you, you can afford to wait awhile.

  128. 128
    Wyoming Says:

    Re 89. I am not sure how they are setting themselves up for their completion so the days count will vary. Personally, I go rigless in the beginning until I need to mill out my composite plugs. I prefer the plug/perf technique, all others are unreliable and not as cost effective IMHO. Depending on WHP is whether you need a CT unit or hydraulic assist. I’m getting repetative to previous posts so you probably need to be specific on your completion questions.

  129. 129
    BirdsofpreyRcool Says:

    baylor — here’s the thing… KOG has more than enough cash/working capital to complete well #9. With that well, they will have tested all of their Bakken acreage. Since 30% of their acreage is south of the Little Missouri River and is only now being tested by wells 7, 8, and 9, I just don’t see where it makes sense for them to do a 2ndary prior to proving everything up. Especially as their bank redetermination (in Sept, i think??) should result in some availability on their revolver.

    Why issue at $1.75, when you can issue at $2.50?

    thoughts, z?

  130. 130
    zman Says:

    One thing I wish they would add to their presentation is a focus on burn rate vs cash flow so that people get a better feel for when they will need to come to the markets.

  131. 131
    BirdsofpreyRcool Says:

    re #129 — posted b/f i saw your 127

  132. 132
    zman Says:

    Listening to NBL presentation.

  133. 133
    zman Says:

    TSO up, rest of refining down.

  134. 134
    zman Says:

    Beige book out, “factories fueling U.S. economic improvement.”

  135. 135
    bill Says:

    profit taking is coming in

    sd slides for today

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzUwMjY0fENoaWxkSUQ9MzM5NjgwfFR5cGU9MQ==&t=1

  136. 136
    zman Says:

    I looked those slides over earlier, did not see a lot new.

  137. 137
    zman Says:

    Beige Book:

    http://www.federalreserve.gov/FOMC/Beigebook/2009/20090909/default.htm

    Crude tracking tick for tick with the Dow

  138. 138
    bill Says:

    the democrats are running out of things to tax but lets give them credit for trying to come up with ideas

    next on cnbc is the idea of a trading tax

    ie they get a cut of every buy and sell order on wall street

    THROW OUT THESE BUMS

    GAWD I CANT STAND IT

  139. 139
    1520sbroad Says:

    new swn presentation – i think, i didn’t see much new stuff in there:

    http://www.swn.com/investors/LIP/latestinvestorpresentation.pdf

  140. 140
    apbd Says:

    Is bill still a fan of atpg after the downgrade?
    apbd

  141. 141
    zman Says:

    The Stifel guy is absolutely right about the dangers of going after the high frequency traders. They provide liquidity which narrows spreads. Plus, it just seems like another tax that can be added because it can be passed. Saying it isn’t much but then saying it will raise $100 B is a bit dichotomous.

  142. 142
    jpntexas Says:

    sorry, but someone hit my GTC KOG at 1.95 today, I will buy back sometime soon I am sure. Nice ride from 0.78

  143. 143
    jiveyjr Says:

    Peter Worden commenting to his minions on TCNet that KOG looks good technically on multiple time frames….

  144. 144
    BirdsofpreyRcool Says:

    jiveyjr — thanks for the techinical color on KOG. helps.

    jpntexas — way to ride ’em cowboy!!

  145. 145
    jiveyjr Says:

    yw BOP; thx for getting me in the name…I’m still trying to get bigger in it on any pullbacks..

  146. 146
    zman Says:

    KWK presenting in 15 minutes

  147. 147
    jpntexas Says:

    thanks BOP and West for the continuous flow of good info. I still like the name but took a little short term profit.

  148. 148
    jpntexas Says:

    Time for Vaca on the left coast so I can hassle all of the vineyards for one more glass. Cya next week.

  149. 149
    bill Says:

    vq presents tomorrow i found slide 10 interesting

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzUwMjY0fENoaWxkSUQ9MzM5NjgwfFR5cGU9MQ==&t=1

  150. 150
    BirdsofpreyRcool Says:

    jpntexas — raise a glass to little ol’ KOG while you’re at it… and ENJOY!

  151. 151
    zman Says:

    OPEC telecast started:

    http://www.opec.org/home/Multimedia/liveStreaming.aspx

  152. 152
    zman Says:

    KWK Presentation

    Hearing nothing new so far, very high level stuff and no new presentation.

  153. 153
    West Says:

    group effort, reloading on pullback. Lynn is getting better with each presentation, you can hear it in his voice.

  154. 154
    kyleandy Says:

    west – how big a pullback to interest u??

  155. 155
    zman Says:

    Iraqi oil minister – overall economy is on its way to recovery, sees increased oil consumption coming, already seeing increased oil consumption in the developed countries.

    Says plenty of crude and products on the market in the U.S. and elsewhere. Says inventories and response from OPEC will be enough to meet revitalized demand.

  156. 156
    West Says:

    bo @1.76

  157. 157
    zman Says:

    Next OPEC meeting is March 2010, Cancun. Man, I just might have to go.

  158. 158
    zman Says:

    Ecuador’s Oil Minister –

    Recession slowly being solved. Looking forward to a stabilization of prices for consumers and producers. Also looking forward to re-negotiation of contracts with foreign partners.

    This guy will be the next OPEC president.

  159. 159
    BirdsofpreyRcool Says:

    Remeber the cash TED spread? Guess where it is now…

    South of 17 bps.

    From a wide of almost 500 bps. If that doesn’t tell you the bank crisis is history (at least, for this eco-cycle), i don’t know what else to say.

  160. 160
    zman Says:

    OPEC – sounds like one more meeting in December, then Cancun in March.

    Anyone see news on CRZO, strong all day?

  161. 161
    zman Says:

    Hijacked jet in Mexico City with hijackers threatening to blow it up on the runway.

  162. 162
    bill Says:

    plll to the moon for no good reason 2.50 from 2.00 bucks

    atpg call starting any second

    http://wsw.com/webcast/rrshq15/atpg/

  163. 163
    bill Says:

    0n 140

    yes

    the downgrade is bogus as it refers to ng prices being low as the reason for the downgrade

    it must of been written 10 days ago

    since then ng prices are up 20 % and atpg is mostly oil and not ng

    now if he said a 100 % move is reason to cut back on positions , i would agree

    i bot more today and i will buy more tomorrow

  164. 164
    bill Says:

    sorry atpg is thursday at 340

  165. 165
    Dman Says:

    The market is toying with the bears. Glad I’m not short.

  166. 166
    zman Says:

    OPEC opening statement:

    Concerned about continuing price volatility.

    Distillate stocks are at high levels globally.

    Generally economy has improved since last meeting, still concerned.

    Bigger issues: eradicate poverty, sustainable development with the environment

  167. 167
    West Says:

    pretty impressive action there in ATPG and GS, the mkt leader.

  168. 168
    Dman Says:

    Plll – now that there’s a scoopy chart.

  169. 169
    Dman Says:

    plll – groovy ticker to go with the name.

  170. 170
    BirdsofpreyRcool Says:

    BB headline — “Crude oil may rise to $90 by end of September, Newsom says”

    who’s Newsom?

  171. 171
    bill Says:

    atpg buyers beware

    i think they do a secondary at some point. They need about 300 m so maybe 150 m in debt and equity makes sense

    I got burnt in pxp and hk when they offered shares in the secondary market

    In june they sold 8 m shares at 8.25

    3 months later we are at 15.00.

  172. 172
    bill Says:

    any two-some Newsom is the mayor of san franciso but i think you are referring to someone else

  173. 173
    Nicky Says:

    Newsom? sounds like Nuisance.

  174. 174
    BirdsofpreyRcool Says:

    apparently, he thinks he knows something about oil mrkts… but i have NO IDEA who “two-some, nuisance Newsom” is… interesting headline, tho.

  175. 175
    zman Says:

    Fairly good sized bump in oil price immediately after API released. Guessing bigger than expected draw on gasoline but have not seen #s yet, anyone?

  176. 176
    zman Says:

    Thanks BOP – APIs look very messy, much bigger draw on crude stocks but build in gasoline and a big build on distillates. Sounds 1/2 imports based on crude and partly higher production and then partly wonky on the products.

  177. 177
    Jay Reynolds Says:

    Newsom? Same guy who said on July 6: “So if that’s the case, and let’s just go back to the high of a couple of weeks ago of $72, I would say we should get back down to about $50, a little bit below $50, if we see a normal seasonal decline in this market,” he predicted.”

    http://www.rigzone.com/news/article.asp?a_id=77952

    But wait! There’s more!

    Senior analyst, Darin Newsom with DTN, a market information service out of Omaha, Neb., says that oil may hit $90 before year-end.

    http://www.ogfj.com/index/blogs/OGFJ-Editorial-Blog.html

  178. 178
    zman Says:

    NFX on the tape with a Pearl River Mouth Basis discovery (S. China Sea), stock bid up. Says tested at 6,000 bopd which was the max the equipment could handle. I remember when they sold their China stuff back and kept this area. Nice. They speak tomorrow early at Barclays.

  179. 179
    zman Says:

    API Watch:

    Crude: DOWN 7.216 mm barrels
    Gasoline: UP 0.571 mm barrels
    Distillates: UP 3.282 mm barrels

  180. 180
    BirdsofpreyRcool Says:

    Jay Reynolds — thanks for the Newsom lesson. One less analyst to watch.

  181. 181
    Dman Says:

    BOP – no need to resort to analysts when you’ve got TeddyBearCam

  182. 182
    BirdsofpreyRcool Says:

    Sadly, TeddyBearCam doesn’t try to predict oil prices…

  183. 183
    apbd Says:

    Re 140. TY
    apbd

  184. 184
    Wyoming Says:

    http://tinyurl.com/nxptdt

  185. 185
    zman Says:

    OPEC reading closing statement now:

    The market remains oversupplied.

    Current production quota levels are to remain unchanged until markets become more balanced.

    There was no mention of compliance in the close of meeting statement. In the Q&A, the Secretary General stated that they expect members to adhere to their production quotas but that compliance is pretty good under the current circumstances.

    OPEC is not in favor of any price band, their experience is that it didn’t work.

    As far as price goes, they are looking at the environment around them. They are walking a very thin line, don’t want to jeopardize the recovery that they see right now. They do not think $80 oil would jeopardize the recovery.

    At the same time, they need more capacity and they need a high enough price to engender investment. Anything below $75 does not accomplish this.

    OPEC will meet again December 22 in Angola to reassess the oil markets.

    I’ll have a cleaned up version of this with a few added notes at the top of tomorrow’s post.

  186. 186
    zman Says:

    Thanks for 184. I’m no scientist but I’ll go with science over opinion any day on numbers. What the numbers then mean … well that’s where I come in, lol.

  187. 187
    Jay Reynolds Says:

    184 – Thanks WYO. I was following their discussion and was interested to see what they came up with.

    If we are really looking at a global “natural” decline rate at or near the IEA’s 9% rate absent lots of new investment then things in the oil market are going to get interesting and fast!

    I’m trying to position for cheap reserve acquisition (it can be $0 bonus w/ 1/8 royalty here for old stripper leases)- specifically looking for non-equipped wellbores. If CAT passes margins for most operators here are going to be fairly seriously impacted for those of us that pump 24X7.

  188. 188
    RMD Says:

    Jay #187: I was considering LEI for stripper leases, but gave up when 1. mgt didn’t return a phone call and 2. did areally expensive-looking financing/farm- in in Aug. Just fwiw. Just noticed now that stock was up on huge volume today. No idea why except for Z’s comments on dogs moving last.

  189. 189
    zman Says:

    NFX – presentation starting, Boothy opened with “Newfield is in the relentless pursuit of profits” … if you watched Obama’s speech last night you know what he means.

  190. 190
    Jay Reynolds Says:

    RMD – While the stripper well resource is huge it really needs some grass-roots technology. We have access to $50K solutions to $5K problems and that has to change. My orientation is to focus on reserviors that have strong water drive, oil at about API gravity 21 because it makes for such profound and early water coning. In this area, these factors combine to assure that the reservoir will not have had any secondary recovery and a higher than typical percentage of the Original Oil In Place remains awaiting the application of appropriate technologies. It is my job to provide and employ that technology.

  191. 191
    Jay Reynolds Says:

    Wyoming –

    Thought you’d enjoy this analysis re Ghawar on the Peak Oil topic.

    http://www.theoildrum.com/node/2470

    You’ll also find a community that devotes itself to tracking movement of rigs for drilling and recompletion from producers to injectors via satellite imagery. That has allowed pretty good tracking of the advancing oil/water contact.

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