Thursday – Oil and Natural Gas Inventory Previews

225 thoughts on “Thursday – Oil and Natural Gas Inventory Previews”

1. NFX conference call went well, incorporated a few more things from into the NFX section. Nice to hear someone talk about darcies and not have mill or micro in front of it.

2. NFX and CLR likely to be good outperformers today. ROSE may slowly get a little bit of action from the mention of Lodgepole production but that’s a connection only Wall Street could make as they are a state away from each other. I think the Lodgepole mounds are charged by the lower and upper Bakken and their is a limestone seal. They are basically bumps with good communication which can give you high initial rates. May be a little early to get as excited as some of the comments from the operator of the Stark County well gets in this press release:

   http://phx.corporate-ir.net/phoenix.zhtml?c=197380&p=irol-newsArticle&ID=1330259&highlight=

3. The UPL presentation is apparently not being broadcast from Barclays. Good low cost gas producer, nothing new in the pdf from what I can tell. I have enough gas on my plate for now but may start using UPL and RRC from time to time in addition to SWN as my gas proxy. SWN speaks at 9:45 EST at Barclays.

4. Eli – that finviz.com site is very cool, thanks again.

   Dollar looking like it’s had it, going lower.

5. Boos to TPH for their lack of coverage of current events at HK post deal. Either cover a name or don’t. That HK EFS was their biggest yet in the play and deserves a mention, yet today all they talk about is EP having acreage within (they think) HK’s territory. Lame.

6. Good morning.

   TechTrader says it’s a 60/40 short day, but expect a lot of volatility (if prior patterns hold up).

   HeadTrader agrees with the short but recommends you keep a very tight leash on any day-trading position.

   High Yield Bonds continue to outperform… even with the massive amount of issuance in the pipeline. Pretty astonishing, really. In the face of all this new supply, you usually see some spread widening, to accomodate the new issuance. Tells me a flood of cash has flowed into the lower-grade corporate bond mrkt.

7. Phrase of the day: vuggy carbonate.

8. Oh Stop!! That phrase brings tears of joy to the eyes of a petroleum geologist.

9. – it’s what middle eastern dreams are made out of.

10. It almost renders the petroleum engineer useless… that type of formation will produce itself!

11. HK can’t decide whether to fly higher, or continue to flap around. Thought we would see some more excitement, after the EFS well results.

    Think we will in time, tho…

12. From the “I’m not a geologist but I took a course yada, yada, yada”

    Vugs are little holes in the reservoir. This gives the reservoir better porosity and permeability. Think of porosity like a sponge’s ability to hold a solution and perm as its ability to let it pass through it. In this case, the reservoir is a vuggy carbonate (limestone) so you get high production if it is filled with hyrdrocarbons. Higher still as this one is naturally fractured. Bet they are leasing like crazy in Stark county.

13. From the SMH morning note —

    CLR – discovery in Lodgpole formation which is above Bakken and TFS, 463 bopd from 10ft vertical perf; there have been 41 lodgepole discoveries in the last 15 years; they do have some running room here; not in our numbers formally and we will review guuidance with the company soon; also, latest TFS completed well costs under $5mm and 6.8mm/d in Anadarko woodford, CLR has 117K net acres there.

14. HK – I think the Barclays and JPM (deal) analysts will be onto that big well. I think around the deal price you run into deal related supply so it is going to be bumpy until the stock from the deal held by the more nervous hands is cleaned up.

    You can see the Lodgepole mounds on 3D pretty well. I guess ROSE has seen similar mounds in Montana as that bit is now turning to the right to test all three plays.

15. nice explanation, z.

    Vugs without permeability yield very little production. Vugs combined with permeability is just about the best reservoir I know of. It is truly the definition of finding the “Sweet Spot” within a producing formation.

16. Basically, you are looking at the Lower Mississippian age equivalent of a reef formation. It is one of the few facies changes you can actually see on seismic.

17. SWN presentation starting now.

18. NFX reacting negatively to a 5,000 share sale by the chairman, that’s an opportunity in my book.

19. ZTRADE:

    Added (2 to start) NFX October $45 Calls for $0.75 with the stock at $40.50. The stock had a good bit of news out last night but is off with a small insider sale and with the market early. See site for details on last night’s press release.

20. Walsortian Mounds. Now z has fallen into it! In the late 199o’s this play was made, with some success. The problem is that they are one or two, maybe three well stratigaphics “mounds”. Yes thet are visible and definable on 3-D, but at the time, the ability to use seismic to find porous from non-porous bodies was not possible.
    It does not suprise me that Bakken players will find them, perhaps unexpectedly. I thing, however they are a small value(very small?) add to the Bakken story. IMHO

21. CLR pushing $40 which is good as it is waking up my Sept. $40 calls.

22. Reef – thanks, I was concerned that they didn’t have a lot of running room. USGS said the whole play is small a long time ago. Wondering at the tone of the pr, they let the operator have a “best well I’ve ever seen quote” which is kind of rookie.

    The TFS is bigger news in my book as they are finding good TFS nearly to Canada and are working hard to prove it up on more of their acreage. They have 3 rigs now, going to five in the Bakken.

23. SWN call ongoing – hearing little new, all positive, but nothing new so far.

24. z-tfs is two to three orders of magnitude larger than lodgepole mounds

25. Wow – Don’t drink and drill. Subsea 7 says they have fired 60 people in the last year for drug and alcohol abuse. The phrase should be “got Shale?”, not “got Meth?”

26. Reef – I only see mention of Lodgepole in Stark County. I have not got a good cross section cartoon showing it. Have the mounds not be found in other neighboring counties.

27. reef — great point. Yes, totally agree, a minor part of the Bakken story. As mentioned earlier, like drilling into a sweet spot. But, not something you can build an entire play around. Unless it’s Reefs in Michigan. (But Shell got to that play decades ago.)

28. Yes in adjacent counties

29. Ever heard of them in Montana? Northwest Montana perhaps, lol.

    Production on those falls off a cliff normally right? But they almost have to work well with floods as well.

30. Reef – I just think its adjacent conventional production. I saw MRO put a horizontal into it awhile back, wondering if that is CLR’s plan or just go with a few verticals…they didn’t give much data in the pr.

31. the swn guy is putting me to sleep

32. Bill – Yeah, nothing wrong with it at all, just droning a bit.

33. BOP – did you punt on HK, stock moving well, lol.

34. NG off 8 cents, gas storage in 10 minutes.

35. z — can’t even think of a (printable) response to your comment.

    Still long and strong the Hawk.

36. I just like to whine a bit about it… but, I try to stick with my convictions. Just like you!

37. BOP – I only said it because of your I sense that your inner strength can handle the ribbing.

    JPM and Barclays guys must be touting it today.

38. SWN call over – I got little new out of that except maybe a little more optimistic attitude towards the E. Tx part of the Haynesville.

    KOG refusing to sell the news.

39. #35 was said with a laugh… but it doesn’t appear to READ that way. OOPS.

    If you can’t take it, you have no place in the kitchen (or something like that).

40. VTZ – sent you something on sands.

41. 39 – I knew how you meant it. The internet is a very flat medium.

42. hence the popularity of the little smiley-faces and stuff… annoying, but useful.

    🙂

43. Touché. Still don’t like them.

44. 69 Bcf

    Street was at 72

    Immediate reaction was to trade gas off the day’s low.

45. We get the oil numbers in 30 minutes.

46. Honestly Z, I must have used hundreds of those smiley’s before you announced you don’t like them… I felt so guilty for all those past smileys. Not that I like them, but like BOP says they were invented for a reason… which is that online it is easy to the tone wrong.

    I don’t like them because they are very crude indicators of tone … but they are a lot quicker than writing a paragraph & then waiting a day to re-read it to see if it “sounds right”.

47. Raymond James – neutral rating reiteration on KOG today. Says things are improving, prospects looking up. I see no target price and they stayed at market perform after essentially parsing the press release. Useless. Unless. Unless you wait to upgrade closer to the next well and to deal time. Clever.

48. z doesn’t use exclamation points either… it appears obvious that, at some point in his prior life, he had a very nasty and rigorous and traditional editor.

49. Dman – You just earned an invite to our egg nog laden X-mas party. I thought sarcasm was a lost art. Upon further reflection, I now like all smileys other than the one that automatical replaces the number eight if I use a paren. Now, if you will tell me the difference between a vug and karst, quickly, without googling it, I’ll buy you a “Got Bakken?” or “Got Shale?” limited edition Zman’s Energy Brain t-shirt.

    Gas in the green, oil improving as it closes on inventories but that is just broad market confidence.

50. BOP – True. I had a nice young thing editor first, with a voice like honey. She got replaced by an old crone from Goldman who was never seen to smile or laugh despite the rumors of Jameson in her desk drawer. Apparently, she destroyed my ability to use the word “very” as well.

51. hmmm…. i see your point on “very.” Not that I will stop using it… but it now has “sore thumb” status. As in “sticking out…”

52. HK approaching a post deal high!!!!!!!!!!!!

53. ROSE – someone starting to notice they have the word Lodgepole in their vocabulary.

54. z! Is that you, showing emotion?? Cracking a SMILE. This is truly a very very special DAY for you!! 🙂 🙂 🙂

55. Don’t get used to it.

    NG fighting to stay green, going to be up to the bigger players. A smaller injection at this point likely means a small boost in industrial demand but a bigger element of production curtailment.

    If we get bullish looking EIA oil numbers today I would expect a shot at $3 on natural gas.

56. WLL – through 54, still a cheap Bakken name.

    CLR at 40.50 which is above the 2Q press release high from a month ago marking a new 2009 high. My $40 calls are alive and kicking.

57. HeadTrader weighing in… saying “you have to keep buying the dips, until proven wrong.” That is the mo-mo philosophy, but it is also working.

    Something to ponder… stocks actually do well, in an inflationary environment… not HYPER inflationary, of course. Inflation makes YoY earnings look better.

    Not condoning/defending/explaining… just pointing this out.

58. EIA Oil Inventory Report

    Crude down 5.9 mm bbsa
    Gasoline up 2.1
    Distillates up 2.0

    Utilization: 87.2 % – that’s staying high through the holiday, will fall next week.
    Crude Imports: 9.1 mm bopd – middling
    Gasoline Demand: 9.283 mm bpd – ok, not great end to the season
    Distillate Demand: 3.482 mm bpd – in line with last week, good to see

    Total product supply remained high, off just slightly from last week.

    Mixed bag numbers, just like API last night. …

    Oil was up 95 cents before the report at 72.25

59. Z – hearing anything on PQ these days? Any current thoughts?

60. …continued …

    Jet fuel actually picked up on holiday travel last week to some pretty good levels

    Stocks at Cushing ticked up 0.1 to 31.3 mm barrels.

    Good news on the numbers was that the draw on crude was primarily related to throughput at refineries, we saw 15.1 mm bpd inputs for the first time in I don’t know how long, will check. Bad news is that definitely will not last as driving season draws to a close and VLO and others who have announced production curtailments go ahead and carry them out, in addition to their normal maintenance season shut downs.

61. Isle – Nothing new, but I have taken my eye of them since the 2Q call as their activity is depressed and I sold my stock. I will look into it. They should be doing a gulf coast test soon but I don’t see them reaccelerating in the Woodford or Fayetteville soon on the gas side.

62. Z – you know full well I have no *idea* what a vug or a karst is. And I’m not even going to google it. Well, maybe later I will.

    GMXR has seen high volume bars in the last hour of trading yesterday & the day before. I’m guessing a bit of short scrambling & wouldn’t be surprised to see that again.

    Nice moves in KWK, HK.

63. PQ is still on a P&F sell signal, goes back on a buy signal at $5.00

64. BOP – somehow I’m not entirely convinced by Z’s new conversion to smileys. We need to find some Z-compliant emoticons. I’m thinking they’d be a little complicated. Maybe a graph of some sort, indicating YoY mood deficits with little circles pointing out important spikes.

65. Dman – You wouldn’t want the shirt off my back anyway.

    NG taking its cue from oil to rally now. Again, numbers for oil rather mixed, products are down as they made a lot of gas in anticipation of labor day driving. Oil could easily still roll over here, have a feeling it won’t but just a feeling. If Bank of England had tightened up a bit it would have been helpful to the dollar drop cause but oh well.

66. Missed getting on the NBR and RIG calls due to the oil numbers. Will listen to NBR later … I’d really like to hear how NAM levered service is hunky dory with no gas rig recovery until the second half of 2010.

    Will listen to BTU call at 11:45 EST.

67. Jerome – At what level does ROSE qualify on point and figure as a buy signal?

68. Dman, well… we know !!, “very,” and ;), are out.

69. Anyone planning to listen to CRK at 11:45EST?

70. Z – I listened to the recent NOV call. They pretty much assumed nothing good in their NAM market & were mainly talking about the global oil side. Analysts mostly asked about the Brazil rigs.

71. Dman – hear ya KWK and HK moves … its like Dawn of the Dead.

72. Dman – and that and Mexico could be their saving grace. NBR can transition rigs as well down to Mexico for big tenders. They are pretty cut rate priced though. I just look at the OIH up double the best of the energy space and 4x the market YTD and I scratch my head.

73. Oil looking pretty weak as gasoline is down almost 2%.

74. BOP 57 is why we can be assured that the govt is willing to inflate their way out.

    Ben has all but said that this is what he intends to do, while at the same time posturing enough for China.

75. The funny part is that China knows that what the US is going to do and are starting to position themselves accordingly. The US govt on the other hand thinks they’re being smooth/cute by proclaiming the recession is over due to the insane amounts of dollars they’ve printed and distributed. Really this is counterproductive.

    Suggestion to US policymakers, media and politicians. Stop antagonizing China and portraying them as evil for trying to protect their savings.

    Maybe there’s a lesson to be learned here?

76. VTZ — agreed. I physically cringe, every time I hear our govt criticize anything China is doing. China is watching out for China and will do what’s best for China. (Which is more than can be said for many in our own govt.)

77. Re: #67, hi ZMAN…ROSE has a great looking P&F chart, it’s currently on a buy signal from its print of $9.50 back in the middle of July, it then rallied to break its long term downward P&F trendline of $13.00 in early August…it’s currently in a bullish trading range…a fresh buy signal out of the current consolidation prints at $14.00, target price from a print of $14 calculates to $24.00…at its current price and before going on a new buy signal, ROSE goes back on a sell signal with a print of 11.00, long term P&F support again at $8.00

78. Much obliged J 🙂

79. #74 – the best bit of wisdom I’ve seen on the inflation/deflation issue is that in a fiat currency regime, it is ultimately a political decision whether to allow deflation or to instead print money to inflate out of it. They almost always try to print like crazy. The worse the deflationary pressure, the more they print, as Ben has plainly said they will.

    Z – #72: would the very different balance-sheet structure of service vs. E&P have anything to do with it?

80. Z – Just looked at that report. It’s a surprisingly complete overview of the projects.

81. RE 79 – Ben has flat out said on multiple occasions that the mistake that Japan made was stopping stimulus too early. Rest assured that the US will overkill it.

82. http://www.epmag.com/Videos/item44878.php
    http://www.epmag.com/WebOnly2009/item44871.php
    http://www.epmag.com/WebOnly2009/item44985.php

83. Dman – oh great, make me think for a minute, nice. Yeah, that’s no doubt part of it. I just see continued deflation or at least lack of pricing power and flattish activity next year. I’m an E&P guy as you know and there are service guys here who would argue with me on the whole coming pricing power of the service segment but I still don’t see it and having talked with some guys who drill the wells very recently, I can say that neither do they. One could simply say service fell harder first and therefore it is first to front run a move to better times. But I don’t see the catalyst for further moves up in the NAM levered service names now…but then, this market will astound you and the OIH is high beta and there you have it, upward and onward. I await the next big undeserved upward run on names like HAL to take puts.

    Crude fought off its first trip into negative territory alright following numbers. Would like to see some of the oil price volatility smooth out now.

84. VTZ & BOP – I saw an interesting article yesterday that may shed some light on what the US & Chinese governments are up to behind the scenes. Because whatever the apparent bickering, which is just for public consumption, they must be working together in private since they both want to hold the system together for their own political survival.

    Recall that analyses of some of the TARP programs showed that they amounted to huge give-aways to participating private entities. The govt takes all the risk but the private party can win big. Well the Chinese have decided that they like that sort of risk-reward setup & are looking to see how they can “invest” in some of these give-aways of US taxpayer funds.

    Now they would only let that be known if it was already understood that the US govt was OK with it. Why would they be OK with it? Because the Chinese must be setting some conditions on their continuing massive purchases of Treasuries. It looks to me like their money comes in one door & they want to make an arrangement where it can go back thru another, more obscure door.

    That’s my interpretation of the facts in the article – I’ll see if I can find it for ya.

85. ATPG

86. West – Yep, I saw it too, not chasing and I can’t congratulate Bill every day on it so I thought I’d just not comment. They picked up a target upgrade by Canaccord from $11 to $17 this morning.

87. Mr. E is putting it on the shorts

88. i took some profits on atpg options today that i held due to the move.. i still like it and im still long the common..

    It has a huge short interest and everyone is piling into energy stocks. In early July I couldnt give any of them away

    I think the company issues shares at some point..they were happy with 8.25 3 months ago.

    Anyways, i dont like chasing names either. It seems to have a pullback early, then strength, then late day selling

89. Agree Z and I agree that there are many ways in which they are working together, but expect the pace of treasury purchases to moderate. They’re just trying to ease the fall for the US for their own sake. USDs work well for buying foreign assets right now.

90. Wyoming – thanks. First video reinforces the opportunity. “1,000s” of sites for sequestration world wide.

    Re California – no kidding.

    Re Tibor – you remember how long Crazy Horse took to get on production. A lot longer than they thought. Great closing quote about congress. wow, “obese leaches”

91. NG back to yesterday’s high, tapped 2.99 a minute ago.

92. Ca article is one of those Duh things for us but the inlaws in Los Angles don’t understand. Oil companys bad um kay.

93. Hear ya Wyoming – oil companies can boost South Park quotes too, as in “screw you guys, I’m going home”. Saw Salazar is now thinking about risk-weighted royalties. Is that a government jobs program or what? Will they hire a bunch of geologists to pour over the Gomex lease sale blocks to ascribe probabilities to each block with the less risky targets getting a higher royalty? Sheesh.

94. FYI – gasoline demand was above the five year average for the second consecutive week. Hmmm.

95. Think job creation Z. This is how you become a productive society. They can add all those jobs to GDP and just print their salaries… no biggie. The money will go back into circulation and feed into banking system deposits and it will just be another form of stimulus.

    You’re not thinking outside the box enough.

96. Can’t find the article re #84. It’s out there on them intertubes somewhere…

97. Very good and impressive, now do you know what character drinks coffee? Hint – underwear gnomes.

98. Crude down on second post data test, cutting through 71, will, likely run hard for a bit, maybe takes a shot at 70. Funny how Epperson can tell you wow, bigger build in gasoline but can’t make the demand quote or the link between the crude draw and the fact that there was an end of season bump in gasoline production. Useless. My kingdom for Melissa Francis back covering oil full time.

99. re 97 – I’ve exhausted by SP knowledge.

    VTZ – I’m waiting for them to put me in a box, a trader tax paid for box, actually. Ugh. Ok, done ranting.

100. Dman RE 84 was this it?

     http://yellowroad.wallstreetexaminer.com/blogs/?p=234

     Z – it is Tweak

101. Wyo – no, that ain’t it.

102. #97… couldn’t resist… one of my fav WSJ columns of recent years —

     http://online.wsj.com/article/SB124329131991652291.html

103. Wyoming – That guy is awesome. So if Simpsons is ok for a 4yr old, I wonder if SP is ok for a 6 yr old. Hmmm.

     Crude fought off bout of selling #2, back green and at 71.50 level. Distillate inventories are definitely the biggest negative out there for current pricing I see. 25% above the 5yr average now. It loooooks like distillate demand is picking up a bit, maybe a touch higher than seasonal trend.

     NG at 3

104. Tweek

105. The middle part of #102 on energy just caused me to break a rib.

     NG at $3.04 by the way.

106. WLL presentation in 10 minutes

107. NFX has recovered well from that opening bit of Trice sale silliness. Chart is a stone’s throw away from a HOY but all of these names have added a gap this week to fill at some future point.

108. #84 – found the article. I got the acronym wrong, it was the PPIP, not the TARP, not that I pretend to understand either of them:

     “CIC Looks to Pile Cash Into U.S. Real Estate”

     http://online.wsj.com/article/SB125243309793493085.html

109. HK finally left the nest…

110. FYI: The “Gimmie Credit” folks on PXP’s recent deal.

     Plains Exploration & Production
     PXP 7.75%
     500m
     B1/BB
     11.169%YTC

     8.217%YTM
     97.875
     Call 6/15/11 @ 103.88

     6/15/2015
     +590bps/5yr UST

     600mm deal

     Gimme Credit® / Exploration & Production
     Carl Blake (cblake@gimmecredit.com)
     September 10, 2009

     Back in August, Plains Exploration and Production announced the restructuring of its joint venture agreement with Chesapeake Energy and issued 15 million shares of common stock. We told investors at the time that we thought Plains would likely tap the high-yield market to fund a portion of the $1.1 billion that’s due to Chesapeake by the end of September (see GC report dated 8/10/09). So it wasn’t a surprise to see Plains at the head of the line on the first day after the high-yield primary market’s Labor Day recess to place $400 million of 8.625% ten-year senior notes, which it issued at a discount to yield 8.875%.

     Plains has been trying for some time to mitigate the risk of the mammoth funding commitment it made to Chesapeake in exchange for a 20% stake in a majority of Chesapeake’s Haynesville properties. The deal had repeatedly caused Plains to pay top dollar to raise funds during challenging periods of the recent credit cycle. We, therefore, view this as a watershed event as it sharply reduces the variability in cash requirements just as Chesapeake accelerates its activities in Haynesville. More good news: by restructuring its joint venture with Chesapeake and reallocating capital to its oil-rich California properties, Plains believes it can reduce its capex budget for 2010 by 20% to $1 billion while doubling its production growth from 5% to 10%. We think Plains’ substantial hedge position (covering 90% and 70% of anticipated production for the remainder of 2009 and 2010, respectively) and balanced production mix (which is now expected to be 60% crude oil) bodes well for the current commodity price environment. The upside potential associated with Plains’ natural gas activities in Haynesville also augurs quite well for the future. Logistically, the company plans to combine proceeds from the transaction (which we estimate at $386 million) with $346 million of proceeds from an equity offering last month, along with cash on hand of $456 million as of the end of the second quarter, in order to fund the payment. Pro forma for the note offering, we estimate total debt of $2.4 billion (increasing leverage a turn to 2.8x), net debt/proved reserves of $8.30/BOE, and pro forma liquidity of $1.2 billion, primarily reflecting undrawn revolver availability.

     The current NYMEX curve suggests that, over the next 24 months, crude oil prices will remain above $70/bbl, and natural gas prices could rebound sharply (albeit off depressed levels, reflecting weak interim demand and near-capacity underground storage). Preliminary results suggest that Haynesville has tremendous potential and that Chesapeake is an able partner. Plains also has promising assets in the Gulf of Mexico that complement its long-lived California reserve base, but the company’s production and reserve performance has been sketchy in the past. This inconsistent performance is reflected in its three-year average reserve replacement cost, which we calculate at over $47/BOE, nearly 50% higher than the estimated industry average of $31/BOE. While past performance may not be indicative of the company’s future performance, we think there is a risk that Plains won’t be able to achieve its goals for production and reserve growth cost-effectively.

     As of the close on Wednesday, Plains’ newly issued 8.625% notes due in 2019 were hovering around the issue price, to yield 8.8%, essentially in line with the 10% notes due in 2016 (issued in May) that have a similar covenant package. Those bonds, which we lowered to underperform in mid August at 108.5 (y.t.w. 8%), have since traded off, presumably in anticipation of the new deal and in sympathy with the decline in natural gas prices, which have fallen 23% in the last 30 days. With the overhang of new issuance removed, we now believe Plains’ bonds are positioned to outperform, but owing to depressed commodity prices and operational uncertainties, we see near-term limited upside.

     Plains Exploration: Sr Notes: 400mn 8.625% 10/15/19; 565mn 10% 3/1/16; 500mn 7% 3/15/17; 600mn 7.5% 6/15/15;400mn 7.65% 6/1/16

111. BOP – I’ve been flying a little close to the wind on that name myself. Looks like its trying to fill the deal gap down … would like to see better volume on this move.

112. HK – I’m so proud of ya, you actually remembered you’re an energy stock & the world’s running out of energy.

113. Waiting on the WLL call to start, not terrible jazz playing.

     Speaking of gnomes, what’s Kass thinking now with the SP going upward and onward, raising more cash I would guess.

114. #113 raising more cash by selling short?

115. re 87. Mr E = Evans???

116. Big run in hk. If oil can hold I may be able to exit a winner on my options. Missed opporunity to help my dca. Dang you work! Can’t day trade for a living yet.

117. when does atpg present and do u have link? thx

118. Kass last checked in on 09/08 on RMSilver as follows:

     My view continues to be that we have made a high for the year.

     S&P futures shot up by over 10 points in premarket trading and, despite the near-panting from the bullish cabal, churned most of the day and closed with an advance of slightly less than those levels.
     In terms of price action, as I mentioned previously, the financials, excluding Goldman Sachs (GS), underperformed for the second consecutive trading day.

     In terms of rising sentiment, we are now arguably at the polar opposite of March’s generational bottom as investors have turned far more positive as is implicit in the terrific price action and in the limited fear (and rising complacency) on the part of most investors (and investment surveys).

     As expressed in today’s opening missive, I have again adopted a variant (but bearish) view in opposition to the current constructive price momentum, a view that I feel increasingly comfortable with as I did six short months ago.

     Our due bills are mounting, and the outlook over the balance of the year does not seem, to this observer, nearly as sanguine as many expect.

     My view continues to be that we have made a high for the year.

     I will be traveling and out until Friday, but you will be in the very capable hands of Gary “The Count” Dvorchak.

     Thanks for reading The Edge, and enjoy your week.

119. WLL Presentation:

     From the company – 3 great things at WLL:
     1) 75% oil
     2) Great play in the Bakken, production ramping
     3) CO2 projects in OK and TX both reacting above the indie engineering forecast.

     Sees debt coming down more by end of quarter

     Can double reserves by developing their probable and possible reserves. About half of these are in the Bakken.

     …more in a bit …

120. ATPG – 3:40 EST, don’t have a link, probably is on their site.

121. DPTR Follow up: from briefing

     13:14 DPTR Delta Petroleum announces continuing completion operations on the Gray Well (3.34 +0.32)

     Co announced an update on the completion activity from the Gray 31-23 well in the Columbia River Basin as Delta has experienced abnormally high trading volumes in its common stock in recent days. On September 8, 2009, Delta received approval to drill four exploratory natural gas wells in the Columbia River Basin. These wells are contingent upon the success of the currently completing Gray 31-23 well. As previously announced by Delta, completion operations involving the Gray 31-23 have commenced and are continuing, but no determination has been made regarding the commerciality of the well.

122. NG swung positive today on the daily MACD. Crude likewise but the swing looks much stronger in NG.

123. WLL — “Lewis&Clark” = like Parshall?

124. WLL Presentation Cont.

     Lewis and Clark area may develop into something as good as their Sanish/Parshal fields in the Bakken. That’s quite a statement, think he has said it before though.

125. WLL Presentation Cont…

     Nothing new in their presentation, in fact presentation is from last week. All good, just nothing new. They have consistently drilled the biggest wells in the play and a lot of them.

126. atpg

     http://phx.corporate-ir.net/phoenix.zhtml?c=123846&p=irol-irhome

127. FWIW — KOG is hoping that their well #9 looks like the WLL Rigel State 11-16H on slide 22…. “the pinchout zone”

128. #87 Mr. E is David Einhorn Greenlight Capital.

129. WOWOWOW…

     HY Index at 91 1/8

     amazing rally in junk bonds… given the fact that there is a ton of issuance currently getting done.

130. WLL Presentation Cont…

     Differentials think fall from $9 now to $7 by year end as they added their own line.

     BOP – you gotta like the fluorescence on slide 35.

131. More slide on GEOLOGY!!

132. WLL Presentation Cont.

     Lewis and Clark Prospect – Three Forks
     175K gross acres
     First well at end of 08 tested > 1000 boepd
     Wells will be drilled out of existing verticals for $4 mm a pop. “Casing exit” wells.
     Next 6 Id’d.
     Next well will drill in 4Q.

     They are in the process of putting together another large L&C type acreage position.

133. wll ceo does a nice job

     i wish i owned some

134. WLL Presentation

     Those CO2 projects outperforming early is pretty key, can add to reserves significantly if they keep that up, especially in the Texas CO2 flood.

     Bill – yep, he got through a heck of a lot in a little bit of time.

135. mr e has a good nose for value

136. WLL Street Consensus:

     2009: 8.37
     2010: 12.24

     Given that have their production is moving rapidly higher, that 4.4x next year’s multiple still looks cheap to me. Low debt to cap and falling and just about no risk of a writedown as they are so oily and the gas is hedged. I think it has more legs but will trade with oil as always.

137. atpg up now 11.3 % unfreakin believable

     why did i sell those options

     arrrrggg

138. Crude fought off sell off attempt #3 on the day and is not pushing back towards $72.

139. Wow, just like the old days (insert an exclamation point or a smiley face here).
     apbd

140. SP 1040.

141. bill — atpg… don’t beat yourself up. One of the best (savviest) all-energy investors i know just sold the remaining 1/2 of his atpg shares here. So, you’re in smart company.

142. 141- momo runs r funny things they never do what u expect

143. 128 Thanks – He’s a very smart cookie. Buy the way, he’s publicly traded as GLRE.

144. bill — back away from the screen… put down the mouse… take 3 deep breaths.

     And don’t look at ATPG.

145. Hey Koggers! We have achieved a 2-handle.

146. … adding to 141

     and not that I would ever give advice on anything to anyone but …

     “I NEVER beat myself up over profits taken. For that matter, I strive to never to beat myself up over losses. Trade closed? Then its out of my head and off my marketwatch. Sure, I watch it, but only with an eye for the future.”

     That goes right along with the rule “the only one who cares what you paid for a stock or option is you and you shouldn’t.” What you paid for something has no bearing on the vehicle’s value, the market certainly could care less and therefore it should not enter into the sell decision. That trap of needing to “get back to even” is a dangerous one. ”

     ~ excerpts from still to trite and therefore as of yet unpublished trading rules of Zman’s Energy Brain.

147. NG up 10+%

148. Sounds like there is a book in there Z. ….Looks like a lot of the sideline money is having to play catch up , especially in energy.

149. KOG @ $ 2.00. Wow. Now what?
     apbd

150. bop lol, thats exactly what im going to do

151. apbd — according to Jerome… we are good to go to $2.25 before we run out of steam.

152. BOP TY
     apbd

153. West – Only if printed on soft paper for the times it’s wrong.

     NG at $3.20. Take that Raymond James and all you gas = $0 types.

     HK at a buck over the deal price.

154. vq is up at barclays at 225

     http://investor.venocoinc.com/phoenix.zhtml?c=193733&p=irol-presentations

     oily calif

155. 320 wow

     hk up from the dead wow

156. I think the KOG CEO believes that KOG should be trading with a 2-handle here. I don’t think HE thinks it’s over-valued and will therefore rush to do a 2ndary here. Of course he might! But, I think it’s pretty silly to do, before knowing the production results from at least wells 7&8. I mean, they know they hit hydrocarbons in well 7 already, just don’t know how it will produce. But with 1/3rd of KOG’s acreage yet to be proved up (with wells 7, 8, and 9), I hope Lynn sits on his hands until we get some results south of the Little Missouri.

     If the stock continues to run up, however, I could hardly blame him if he took mo-mo money.

157. NG up 30% in 5 days. Room for more unless they start mentioning it on TV.

158. Congrats Nicky on another amazingly good call on NG

159. Epperson mentioned it earlier. Said it was because the storage number came in light. Useless.

160. EOG awake with the group, back to the upper middle of its range. Their 2Q numbers were excellent, sold off for the wrong reasons, that too may take out the $80 level highs in the next couple of days.

161. Closed 1/3 of my kog position up 52% and trying to be happy a about the profit booked. Like others on here I try not to second guess a profit but it’s human nature

162. baylor — i’ll bet you get a chance to reload those shares someday soon. Nice trading!

163. here are the vq slides

     http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzUwMTMyfENoaWxkSUQ9MzM5NTI4fFR5cGU9MQ==&t=1

164. EOG is starting to 3forks wells nw of the Sanish. I need to do a report. Also KOG’s wells are really good and this is definitely one of the better areas of the play south of the Sanish. My money still says that Stetson’s well is wet and that CLR’s well east of KOG’s #9 is wet. THE MAGIC LINE KEEP IT IN MIND.

165. west — you mean The Pink Line of Death? 😉

166. Crude closed up about $0.60 just under $72

     NG launched into the close, up 15+% above $3.25.

     Gassy growth stocks not reacting nearly as well as gassy highly shorted stocks. Makes me cautious.

167. yes I do

168. Geologists HATE to use pink. So, when it shows up on a map, you know it means something really really bad.

169. KOG priced the last deal at $0.75, back in May. If it were a $75 stock, now at $204, I wonder if you’d wait on 2 wells to price a deal. Given the run you’ve had and the run oil has had and the run the market has had and the pile of distillates on hand globally as we head into winter … well, it’s just food for thought. I’m holding for now but they are close to my last asset value read ($2.10) and I may come out of half if they take another leg up.

170. I’m still pecking at WRES…that’s seems like money in the ground waiting to be marked to market

171. MHR Sighting / G Evans back to old ways

     Magnum Hunter Resources Corporation Announces Acquisition of Sharon Energy Ltd.’s Sharon Resources, Inc.
     1:27pm EDT
     Magnum Hunter Resources Corporation announced the execution of a definitive agreement to acquire 100% of the capital stock of Sharon Resources, Inc., a wholly owned subsidiary of Calgary based Sharon Energy Ltd. The total consideration of $2.35 Million under the agreement will be paid in 2,294,474 shares of restricted common stock of Magnum Hunter Resources Corporation. Closing is anticipated to occur on or about September 30, 2009.

172. Jivey – I could not have summed that up better myself.

173. it seems to be playing out just the way you had envisioned…..

174. Jivey…fast down, slow up. Not good for options, at least the way I do options, but good for me for the common. I probably ought to be selling calls against my position there.

175. NG at 3.28 up 16% on the day, up 3 cents in the aftermarket. Volume over 140K on the front month. That is big. This contract does not expire until September 28th.

     Note that UNG too is up. 9.4%. Big delta.

176. This happy Kogger thought this is something to put on ones radar-from Ron Insana

     “After writing about the growing threat emanating from Iran for weeks, it is shocking to me that the markets remain unusually complacent about the imminent deadline that Tehran faces for halting its nuclear enrichment program.
     U.S. Says Iran Could Expedite Nuclear Bomb
     By David E. Sanger
     This article was reported by William J. Broad, Mark Mazzetti and David E. Sanger and written by Mr. Sanger.

     WASHINGTON — American intelligence agencies have concluded in recent months that Iran has created enough nuclear fuel to make a rapid, if risky, sprint for a nuclear weapon. But new intelligence reports delivered to the White House say that the country has deliberately stopped short of the critical last steps to make a bomb.
     The New York Times put out this report late last night, but upon reading the entirety of the article, it looks like press action has been planted by various interests from Washington to Tel Aviv to raise the pressure on Iran, not actually recognize or confront the problem as described.

     A PR offensive will not deter Iranian President Mahmoud Ahmadinejad from continuing work on a bomb, which is why some intelligence experts believe only a real offensive will do the trick.

     Many say “P-Shah!” But I would hate to say, “Ayatollah so!” if this situation deteriorates. My bet is that tensions will rise as we approach the end of September, when the U.S. and U.N. have imposed a deadline for Iran to come to the negotiating table and give up its plans to weaponize nuclear material and work with the West to use nuclear fuel for peaceful, civilian purposes only. Not in this lifetime.

     Iran does not appear to take the West seriously, and while it has slowed the pace of enrichment, the U.S. is reading this as a sign of internal political struggles, while Israel thinks the race for the bomb is on.

     I’d bet on Israel’s intelligence any day, despite their usually hawkish view of any and all geopolitical risks, most of which are deemed existential threats … and not without good reason. Their field work is superior to ours, and my own sources see a conflict, or at least a tension-inducing stalemate, as inevitable.

     I told subscribers of my “Market Movers” newsletter this morning that I purchased 1,000 shares of the Energy Select Sector SPDR (XLE) , which tracks the energy sector index. I may have more moves to come, and subscribers will be alerted if I decide to take more action on oil.

177. Denise – add to that the PRK are now upgrading uranium and plutonium and I think we have some geo-political premium inflation coming back to work.

178. Dollar re-weakening late, oil is marking that trade in the late session. The oily names are marking the move in oil. WLL approaching 55 now.

     If I were to kick myself, it would be over PXD which seems to be moving on up without me.

179. If anyone on the site subscribes to Stratfor it would be interesting to hear what they are saying about the situation?

180. PXD call in 10 minutes.

181. PXD’s new presentation shows next 5 EFS wells to be in Live Oak and Bee counties to the southwest of their mechanically impaired initial well in Dewitt county.

182. atpg call at 340

183. ATPG and KOG battling it out at the top of my watch list.

184. bill, have u heard anything about them having a deal with GE for infrastructure as soon as new production platform is in position?

185. atpg up 16 % weeeeeeeeeeeeee

186. rumors of it–

     ge has a 150 m stake in another platform.. i heard they would invest when its hooked up, which is another 3 months

187. PXD call starting now.

188. working on infrastrcuture sales

     gomez pipeline coming soon

     the ceo sounds confident..

     Titan platform getting them attention

     half assets on shelf

189. Sorry if this has already been mentioned.

     Capital One Southcoast Upgrades Petrohawk Energy (PK) to Strong Buy

190. BEXP – took the day off.

191. D – go here and sign up for John Mauldin’s Weekly ELetter. He normaly republishes a lot of the Stratfor material under one of his mailings called Outside the Box.

     http://www.frontlinethoughts.com/gateway.asp

192. Well is it PK or HK?

193. Saw them up HK to Buy last night.

194. ummmmm….. wow.

195. PXD Presentation

     0 rigs a couple of months ago going to 15 to 17 next year.

     EFS mentioned as drilling 5 gas/condensate wells.

     Highlighting their cash costs being lower than the oil patch group, just above the gassy names.

     Good solid story, should be long, not, and not going to chase today.

196. Beerthirty.

197. The “WE” are very happy once again. THX everybody for your input.

198. HK IO

     Single contract below bid trade @ .45

     Someone just discovered why you never hit the market button.

199. PXD thinks EFS is prospective on half of their 310K, two areas, reef thins in between.

     $1500 to $2000 per acre, just ramped in last few weeks.

     Next EFS well will have results on the earnings call in early November (?).

200. GDP call at 3:25 EST.

201. Denise, re Stratfor: before you worry about their views, need to find out if their track record on Iran is any good. A lot of credible analysts thought GBW was going to attack Iran. Turned out he decided 2 wars was enough to be going on with. Why would Obama take a different view? The whole point of his crazy Af-Pak escalation is to insulate himself against accusations of being “weak” when it comes to attacking impoverished countries. Not much point in that plan if he’s going to attack Iran anyway, or greenlight the Israelis, which he must know will drag him into the resulting conflict.

     About a week ago Z mentioned that an oil trader thought the action in gold & bonds was due to moves on the Iran front. My question to myself then was, “OK so why was oil ignoring it?”. Oil is now going up, but not like it moves when the Iran issue heats up. The September deadline means there will be rhetoric & sabre-rattling, which could be worth a few $ per barrel. But unless oil starts moving in $5 increments, I’m inclined to think the market just isn’t buying the Iran story.

202. Continuing #201:

     Mind you, even if the whole thing is bogus, could be good for an oil trade into late Sept.

     (This is where a smiley would normally have been inserted)

203. D – I think the market discount Ahmad after the “election”. I mean, he stopped going to nightclubs, avoided the spotlight, etc. Now that “he’s the only guy” again, he’ll be able to add a bit of nutbag premium back to crude. But you are right, it is limited unless something actually happens. I’d bet on Israel doing a flyover before I see the President or the Security Council sitting down to come up with more stern language that Iran will only make fun of.

204. This cloud pile in the western Gulf may have helped gas late today.

     http://www.ssd.noaa.gov/goes/east/watl/loop-vis.html

205. OPCO reviewed APA’s views after meeting mgt. My selected bullet points are:
     n Commodity Price Outlook. Apache is bullish on crude oil prices, but bearish
     on natural gas. Farris doesn’t envision a meaningful recovery in gas prices
     soon.
     n CAPEX. APA is setting its 2010 CAPEX budget based on its grim outlook for
     natural gas. Farris said that APA’s 2010 CAPEX should be higher than 2009’s.
     n Services Costs. Farris believes that as long as we are in a $3 natural gas
     environment, services costs will continue to come down, regardless of what the
     services companies say.
     n American Natural Gas Alliance (ANGA). The natural gas consortium is
     ramping up its efforts to combat the coal lobby. Intensive lobbying efforts are
     ongoing, and an advertising campaign will be rolled out shortly.
     n M&A. Farris believes natural gas stocks reflect all of their upside potential. APA
     is not interested in an acquisition at these prices.
     n APA is looking to lock in gas prices now because they don’t believe they will go up any time soon.
     n Gulf of Mexico plays have a short reserve life, but can make money in any price environment and
     have a higher rate of return than a rapidly declining shale play.
     n As long as gas is $3/million BTUs, services costs will have to come down. No matter what the
     services companies or other E&Ps say, there will be cost deterioration. People and salaries can be
     cut if needed, which is what has happened in past cycles in the 1970’s, 1980’s and 1990’s.
     n According to Farris, if natural gas producers don’t change the rules in Washington, they’re in a lot of
     trouble.
     n The coal lobby is a powerful opponent of ANGA. They are senior, well-funded and politically
     connected.
     n Twenty-eight states (including IL, NY, PA, OH and IN) have significant ties to coal industry.
     n The grandfathering of credits to the coal industry is a big hurdle for ANGA.
     n The coal lobby will point to natural gas price volatility, in addition to claiming they are burning cleaner
     coal these days.
     n APA is optimistic that some sort of natural gas incentive or carbon tax will appear in a Senate bill
     sometime in the future.
     Gas production:
     n The best shale plays will be the winners.
     n Any production declines will flatten out because only the initial drop-off will disappear with reduced
     drilling. Producers are doing everything they can to fight declines with new technology.
     n Granite Wash plays will be big over the next few years because of their high liquids content, which
     have higher returns. Sales from just liquids would cover costs, with gas sales being all profit. This is
     the case with gas production in Qatar.
     Gas demand:
     n CNG vehicles could eat up as much as 2 bcf /d of demand.
     n Converting 25% of coal plants to natural gas would increase annual gas demand by 12 tcfe per year.
     Horn River:
     n APA believes it has the best economics of all North American natural gas plays.
     n Well’s initial production was 16-18 mmcfed and is currently about 10 mmcfed.
     n Remote location and lack of structure are the biggest challenges there, in addition to a 10% CO
     2
     content.

206. ROSE on the tape with an operations update. 1 EFS well with results, another completed soon, and a Montana Bakken drilled, about to be cored.

207. Wow, what a day; and I made almost no money in this space (out of, or too hedged, in my positions).

     Lot’s of 10% + moves today , and this week in the market in general.

     Re: Doug Kass 118, my recollection in March that he was off by a few days in his bottom call; let’s see how his top call plays out.

     Me: I think today was GS and JPM saying thanks Timmy for the free money; we’ll squeeze ’em higher today for ya since we can’t bribe you with a no show job (like a Snow, Rahmbo, Quayle, Summers, Greenspan, etc.) just yet. But we will.

208. 176 — Iran:

     I wouldn’t put too much faith in Obama taking an agressive position w/ Iran.

     Read here regarding upcoming UN fest where O wants to shine for the we hate America crowd.

     http://hopeychange.blogspot.com/2009/09/obamas-upcoming-un-coming-out-party.html

209. Re: Stratfor; not a big fan in George Friedman’s analysis of things … he never seems to get it right.

210. For good middle east info, including on the Iran threat, try

     http://www.jpost.com

     http://www.debka.com

     both Israeli focused; the latter supposedly tied into the intelligence community and a bit alarmist.

211. 201 Agreed. Basically b/c Obama wants to hug Ahmedinijad, no matter what Iran does or what he does to provoke strong measures (sanctions or military).

     O wants to be loved by the UN; he is not gonna take any meaningful action. He may claim to be “concerned”, but that’s about it.

212. 203 … exactly Z, what I meant, better said.

213. Einhorn’s Greenlight Partners had 1.75 million shares of ATPG at the end of the 2nd quarter. I’m making a bet that the Texas Hold’em player is squeezing the shorts who at last count had 7.1 million shares shorted ( about 20% of the float) with only 500k shares available to be shorted. Of course a lot of good news and a sector rally will make you very uncomfortable. There was steady buying at the ask all day long. One of the things that I like about this stock is that there is a lot of liquidity as far handling trades of all sizes. If some of you have tried to trade WLL stock and options you know what I mean, the MM are not your friend and you can move the stock a lot just by trying to take a position. Also WLL has 100% margin requirement…..I bought ATPG last Thursday and sold 2/3rds of my position today at 17.45. Probably just a little early but this is not normal price action. As a few of you said today it is always good to make a profit and as my mother says you really haven’t made any money unless you sold it……..A lot of the contributors here have been here a long time and a lot of new names to me anyway. This is without a doubt the best source for hard information (and a little bs) that is actionable that I have every had the privilege to be associated with on the net. Special thanks to Z and BOP and everybody else for your words of wisdom and insight.

214. For example, re: Iran.

     Today:

     http://www.jpost.com/servlet/Satellite?cid=1251804543278&pagename=JPost%2FJPArticle%2FShowFull

215. I am on an Iran roll now:

     http://online.wsj.com/article/SB10001424052970203440104574402583170409334.html

     http://nypost.com/p/news/opinion/opedcolumnists/why_iran_might_talk_with_bam_wquLcVNNBNKND6poL7JSFN

     many considered views, no clear policy ….

216. west — your words are too kind. Frankly, I think we all make a pretty good team. Your hard data well contributions have helped me personally a lot. Thank you!

217. Not that you can really trust any government’s data but China data is rolling across the tape now. Very strong on industrial output, even stronger on lending which had been the big concern, much stronger lending that expected/previously telegraphed by Beijing.

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