18
Sep

Witchy Friday

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Sentiment Watch: Market looks ready to take a breather but for all the prognostications of an impending major sell down, it also does not seem ready to fall off a cliff just yet. Glad to have cash, nibbling opportunistically and in some new areas but mostly, hugging that cash until the broader market sorts itself out.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review
  4. Stuff We Care About Today - Gulf of Mexico Shelf Players Update Part II
  5. Odds & Ends

Holdings Watch

  • $10KP II:

    • $19,700
    • 73% cash
    • 3% in puts
    • The Current Holdings tab is updated.
    • I will update the $10KP II tab again for Monday.
  • Yesterday's Trades:

    • HAL – Added (5) October $27.50 PUTS (HZLVR) for $1.20 with the stock at $28.
    • TSO – Added (10) October $16 calls for $0.80 (TSPJP) with the stock at $15.70. See reasoning in the Tuesday post. Group started to move up yesterday after being a laggard. Downgrades not affecting the stock. I am likely to double this if it backs off as I was planning to add TSO soon anyway.
    • APC - Added (5) APC October $70 calls (AZWJN) for $1.10 with the stock at 64.50, off a little with the group and on profit taking after yesterday’s move.

Commodity Watch

Crude oil eased 4 cents to close at $72.47 yesterday. This morning crude is trading trading with equity futures having sold off 1% overnight with Asia but recovered modestly this morning.

Natural gas fell $0.30 to close at $3.46 yesterday after the EIA reported a better than expected storage injection (see below). This morning gas is trading up five to ten cents, eying a low in the mid-Atlantic (see link below)

Natural Gas Storage Review


ZComment: EIA reported a much lower than expected injection yesterday. The crowd liked it for about 10 minutes but then the momentum shifted back to short term profit taking. Aside from the price action on gas, it's important to keep watching the movements in storage as they continue to auger for a storage peak that is lower than many on the Street still forecast. This is due to the fact that the Street continues to use average end of season injections and is not giving enough credit to production declines and curtailments that are making themselves pretty plain in the weekly data. Recall that last week's data reflected temperatures that were in line with the prior week AND contained a holiday (which lessens industrial demand) and yet the injection fell week to week. First,  have a look at the basic graphs ...

.... From these you can readily see ...

A) We're still at record levels of storage for this time of year.

B) & C) The surpluses to year ago and 5 year averages continue to decline

D) Injections are running in line with normal to slightly below normal levels. This is due to high storage but also apparently due to higher levels of industrial demand.

Moving into a look at the directionality of injections this season we see a distinct shift occurred back in June. Looking at injections on a season to date, cumulative basis relative to the five year average injection level, we have seen injections drop from a 1.8 Bcfgpd surplus to a more benevolent 1.0 Bcfgpd level.   



... And I continue to see peak storage in the 3.7 to 3.85 Tcf range.

 

Stuff We Care About Today

Gulf of Mexico Shelf Player Update: Part 2

  • The Long Shot Bet In The Offshore: CPE. $2.23. (And I think a suckers bet.)

    • CPE - 9.75% Senior debt ($200 mm ) due December 2010, becoming more onshore focused. Production comes from a combination of Shelf and near Shelf Deepwater developments (Habanero (11.25% working interest) and Medusa (15% WI)).  Medusa is roughly a third of their current production and it should see one workover and one new well late in 2010 that should keep production close to flat 2010 vs 2009.
    • Activity curtailed at present due to prices, workovers a go, exploration delayed ... in other words they are on a maintenance budget.
    • Production:

      • 2008: 31.4 MMcfepd, 51% gas
      • Current production: 30 MMcfepd
      • 2009 guidance: 28 to 34 MMcfepd 
    • Hedges: Lightly hedged, adding to 2010 hedges
    • Reserves: At year end 54.8 Bcfe
    • The Plan - transition to more onshore activity and oil. Added a small amount of West Texas Wolfberry reserves earlier this month. 
    • What killed the stock last year? Suspension of their deepwater project at Entrada in the deepwater Gulf of Mexico due to higher than expected costs and the fall in oil prices. The company has non-recourse debt on its balance sheet of $83, or 30% of total liabilities that may be taken off the books. The lease expired in June and this project won't be coming back. However, the debt may be coming off the books as it was a non-recourse loan from their partner in the well for which they have not yet received a receivalbe. Their balance sheet would improve substantially if this simply goes away as management has promised it will. 

    • Valuation:

      • TEV / EBITDA 2009 of 5.6x
      • TEV / EBITDA 2010 of 7.3x (note this falls next year as production is expected to decline)
      • TEV / Reserves of $6.13 / Mcfe which is extemely high, this comes down to  $4.60 if the Entrada debt goes away... still high.

Next week: Looks at MCF, SGY and ATPG (but only if it comes in a bit).

Link to yesterday's post for Gomex Shelf player stats.

CRED - Drilling Their First Horizontal Bakken Well

  • The Petro-Hunt 148 with a planned 10,000 foot lateral,
  • Located on the Fort Berthold Reservation, 10 miles to the west of KOG's #1 and 2 wells. This is the far west side of the Reservation, close to the Neeson and next to two Peak wells with IPs of 1,200 and 600 bopd.
  • They sold this one down to a 10% interest
  • in the process of permitting two more wells.
  • Credo only has 4,900 net acres in the play with other blocks close to the KOG pads
  • Company has a 15 mm in cash, no debt and market cap of $105 mm so its a micro cap, and it is somewhat expensive on trailing reserves although those are price depressed numbers. It would likely get a bit of a move if the well comes in close in terms of IP to its neighbors. 

Conference Watch:

  • B of A smidcap conf will have some of our names next week.
  • IPAA at end of month.

Odds & Ends

Analyst Watch:

  • (CVX) upped to Outperform at Credit Suisse

Interesting Article Watch:

 

108 Responses to “Witchy Friday”

  1. 1
    zman Says:

    GDP on the tape with Haynesville ops update, looking over it now.

  2. 2
    Jay Says:

    CHK moving on MS.

    “In a deal with Chesapeake Energy announced on Tuesday, they’ll receive almost double the bonus offered previously and an additional bump in the royalties they keep. The five-year deal offers $5,750 per acre immediately as a sign-up bonus, 20 percent royalties and a multiyear extension option.

    The Wyoming County landowners group represents about 37,000 acres that haven’t been leased yet, and if all property owners sign up, the deal, in bonus money alone, is worth about $212.75 million.”

    http://www.rigzone.com/news/article.asp?a_id=80439

  3. 3
    zman Says:

    IOC started at Morgan Stanley at Overweight, going to run a bit.

  4. 4
    Wyoming Says:

    Friday humor:

    http://www.nypost.com/p/news/local/manhattan/jad_gets_heave_ho_from_helmsley_nIJbRjyo9FqI7FhHe5SM3O

    😉 (for BOP)

  5. 5
    RMD Says:

    EROC on tape announcing proposal by General Partner refinancing the LP and selling the LP the GP’s subordinated stock and 49% of the GP’s stock. Only read this once but it looks like the GP is bailing out to some extent. Unstable states don’t last long, something had to give!
    NB: from memory the GP’s holdings in the sub. stock tie into the arrearage in the distribution; I’ll have to clarify just how that works.
    My quick thought is the GP decided the LP was never going to recover in it’s current state.

  6. 6
    zman Says:

    GDP press release. Solid, jam the shorts Haynesville update.

  7. 7
    zman Says:

    NG up 11 cents. Short term profit taking over already? Back to the short squeeze.

  8. 8
    BirdsofpreyRcool Says:

    Wyo — likin’ old Leona’s ghost a little more. LOL.

  9. 9
    zman Says:

    Wyoming – your KEG still liked by TPH.

  10. 10
    BirdsofpreyRcool Says:

    Last two options expiry days have been “non-events,” in HeadTrader’s book. But, here goes…

    TechTrader is 55/45 short today.

    HeadTrader says he wouldn’t be surprised to see them rip the mrkt to new highs.

    Then he adds… guess it wouldn’t take much to the upside to get there…

  11. 11
    BirdsofpreyRcool Says:

    Bears are getting a tad desperate… saw some comments last night that were trying to make a BIG DEAL out of the Investment Grade Bond Index backing up 3 basis points yesterday.

    THREE BASIS POINTS. Ha! We eat three basis points on our toast every morning. That’s nothing. Sheesh.

  12. 12
    zman Says:

    BOP – I put a bonds are overheated story at the bottom of the post just for you.

  13. 13
    BirdsofpreyRcool Says:

    Thanks, z. Been seeing a lot of those lately. Overheated bonds just means stocks are cheap. But completely agree. At these spreads, i’d rather be in stocks, than bonds.

  14. 14
    zman Says:

    re 10. Agreed, they are usually throw away days.

  15. 15
    zman Says:

    Refiners making fresh highs early.

    RMD – the CRED might be up your alley.

  16. 16
    reefguy Says:

    ioc up $5.25. I tried helping you guys

  17. 17
    zman Says:

    Goldman raised APC target to $60, stays Neutral, giving the shares a bit of a lull.

  18. 18
    zman Says:

    Reef- can’t kiss all the girls.

  19. 19
    reefguy Says:

    MS-IOC model could be a $100 stock

  20. 20
    zman Says:

    Reef – Does Raymond James still cover it, they used to say $65 I think.

  21. 21
    reefguy Says:

    RJ-do not know,IOC hired their analyst

  22. 22
    reefguy Says:

    RJ strong buy- $54 target

  23. 23
    zman Says:

    Thanks Reef.

  24. 24
    zman Says:

    May add a quick trade to APC as it pulls back on the Goldman semi-snub. I have to look at that kind of upgrade of their price target as a mark to market event, and seeing as the stock broke out to new highs, while they were Neutral, it tells me the analyst was asleep at the wheel and is content to stay that way. Irritating they still have that much swing in the market. Stock may retrench to middle of the gap range from the Wednesday well announcement. Not a big position for me, won’t make it one if I add another piece to the trading calls I added yesterday. The rest of the Street who are buys are likely to make a round of calls this morning and try to keep it from filling the gap entirely.

  25. 25
    oklahoma Says:

    19. Would M Helm be the analyst with MS?

  26. 26
    zman Says:

    Bakken profit taking continuing, 2 to 5% drops for all the usual suspects. Watching the WLL for an entry potentially next week.

  27. 27
    zman Says:

    Note to GDP – never put out an ops update on a Friday … no one cares.

  28. 28
    oklahoma Says:

    Helm was the analyst with MS that was following Triton energy at one time and made some great calls on their discovery of the Cuisiana field. Not that it means anything… just curious.

  29. 29
    Dman Says:

    Z – #27 = opportunity?

    Market trying to deal with the shock of seeing the dollar up 0.4%

  30. 30
    zman Says:

    Thanks Oklahoma, I don’t know that guy.

    Dman – maybe, I’m staying light for the moment on my exposure. Have some KWK but really little else levered to the commodity. If I were to go after a natural gas short squeeze candidate it would be GDP or GMXR or maybe SD. Depends on how much you like debt. Also a consideration will be amount of revolver drawn down vs the month end gas price as people look at another round of non-cash reserve writedowns and then redeterminations thereafter. I’m doing a little work right now on that. Guys like PQ, that have run hard, also have 100% of their available line drawn right now. If gas prices turn back down that could be sort of ugly. Again, happy I went largely to cash when I did.

  31. 31
    Dman Says:

    #30 – I think Nicky was saying that she expected some sort of retest in the commodity.

  32. 32
    Dman Says:

    Z – I keep forgetting to mention: some of the new hot money in energy could be due to the demise of levered ETFs like DXO. All those hedgies need some new toys.

  33. 33
    zman Says:

    re 32 – good point D. On a related note, I wonder, on natural gas, how much of the short covering rally, was the fear of the shorts of UNG deciding that it could indeed go ahead and issue new units.

  34. 34
    baylor3217 Says:

    TSO seems to have had a big turnaround in the past 10 min. Any reasoning?

  35. 35
    zman Says:

    Baylor – nothing I see, noisy day with expiration. Price action probably doesn’t mean much today. Rest of the refiners have backed off their highs from earlier with only VLO still barely green.

  36. 36
    zman Says:

    KWK CFO on the tape selling some shares

    Seeing more and more of this, OII last night with a exec with a bigger sale.

  37. 37
    baylor3217 Says:

    VIX creeping back up.

  38. 38
    baylor3217 Says:

    Re 36 – WLL seems to have had one of the bigger runs the last two weeks. Possible put opportunity?

  39. 39
    Jay Says:

    Friday Semi-OT:

    This is a new video of a portable oil production system that I invented. Operators needing to “produce or plug” their are the main buyers right now.

    My production cost with this system is about 1/7 of using traditional equipment on a per bbl basis.

    http://www.youtube.com/watch?v=4LaHxz7ijKY

    JR

  40. 40
    zman Says:

    Agreed big run but I’m less of a technical guy on names like that. It remains very cheap to its peers so, if I were going to put a Bakken, and I’d rather just hold cash and buy them again lower, it would be a higher multiple name like CLR. In my book, given where oil is and the results to date, the run at WLL is well deserved and has further upside left. They have the biggest wells in the play and a lot of them, chances are they have another ops update this fall with more wells attached to it that could/should re catalyze the stock.

  41. 41
    zman Says:

    Bidding a little APC add here.

    Sweet Jay, is this one partnered with HP or the likes?

    Can you give the link to your website again?

  42. 42
    zman Says:

    Just had some site issues, am working with host to move to a new, faster, better, server as our traffic has increased.

  43. 43
    zman Says:

    Re 42

    Friday movie quote:

    “screws fall out all the time, the world is an imperfect place”

    This is another reason to follow us on Twitter. Code word ZmansEnrgyBrain. If the site goes down I can let you know over there

    or you can just go to the backup site at:

    http://zmanbackup.wordpress.com/

  44. 44
    bill Says:

    EROC proposal has got my dander up this morning.

    My take, its a major screw job on the current unitholders and enriches NGP (eroc original sponsor) and current management , to the detriment of current unitholders

    The proposals is self serving and is outright theft.

    As it turns out, i flipped my shares yesterday at a profit, but thats irrelevent.

    Nothing pisses me off more than insiders screwing the little guys.

    ______________________________________

    eroc an mlp has 3 lines of business.

    midstream-pipes located in depressed areas

    upstream- gas wells in alabama
    minerals- royalty interests in haynesville and other places

    the crown jewel is the minerals business, no costs pure profit and will grow as more wells come on line

    NGP is offering to steal the crown jewel for cheap money and “bribe” current mgt to make it happen, (by offering them a new incentive deal”).

    NGP own 20 % of eroc

    At one time eroc traded at 30, it fell to 3 with lower oil and ng prices and when they suspended the dividend. They earmarked the cashflow to debt reduction.

    They have too much debt:

    they could sell shares
    they could sell assets
    they could do nothing and earmark 140 m annual cash flow to debt reduction
    or they can let , significant insider steal the best asset for short money and take a bonus to enable it

    Im going to follow it and hope someone sues to stop it.

    Post deal, they should have about 100 m shares and 100 m ebitda so best case 1.00 per share and with a 5 dollar stock price it goes to 8 to 10 or so.

  45. 45
    zman Says:

    ZTRADE:

    APC – rounding out my October call position on weakness in the name due to a Goldman Neutral reiteration there this morning. Added (5) more of the $65 October calls for $1.65 with the stock at $61.90.

  46. 46
    Jay Says:

    Thanks Z,

    Yes, this is the system that uses the production tubing that is licensed to Parker-Hannifin for manufacture. We are about to start testing for 1,750′ depths as well.

    We have licensed the states of Kansas, Oklahoma and part of N. Texas under our Utility Patents to folks who want to build/buy/sell the systems.

    Two websites:

    http://www.blackstormsystem.com and
    http://www.strippersolutions.com

    Have a great Friday!

    JR

  47. 47
    zman Says:

    Got a copy of the SMH report. Thanks for that. Another analyst saying look through the trough on drilling and the double dip of natural gas rig count falling again. He’s saying avoid the drillers but like service like HAL sense the wells are more intensive. I personally don’t get the argument for that as they have been more service intensive for quite some time so that should already be in the Street’s estimates. As to pricing power, I just don’t get that from my conversations with guys who are paying the service companies. I guess we shall see.

  48. 48
    zman Says:

    Best of luck JR… You pull off the whole Indiana Jones thing well by the way.

  49. 49
    zman Says:

    If you haven’t watched the video in 39 I’d tell you it’s worth your time. If the Administration takes away the marginal well tax exemption status (for stripper wells) then that kind of good old fashioned American ingenuity gets a good old fashioned kick in the crotch. I’m personally a fan of ingenuity.

  50. 50
    kyleandy Says:

    jay liked the rocking chair touch in the video!!!!

  51. 51
    Jay Says:

    Semi OT – Stripper Wells

    We’re in the middle of a once great oilfield that had the gas drive blown off/wasted. The really big deal will be having site-specific Enhanced Oil Recovery – totally avoids gov’t sign off in doing large units.. just empowers individual operators – much desired because we have an unusually high %’age of oil in the ground – at shallow depths – with lots of wellbores.

    The portable system lets me make more oil with one set of equipment than I could otherwise make with 20 sets. If I can play off the synergies in getting the oil to move w/ EOR + mobile production then the economics are going to change a whole lot.

    I’ll email you Mah Story for reading over a beer sometime..

    JR

  52. 52
    bill Says:

    Is there any reason why the ng stocks are getting pummeled today?

    HK which never ran up getting hammered
    swn down but i think that one is fully valued

  53. 53
    zman Says:

    Bill – good question. I suspect it has more to do with early direction on the day in the energy group as a whole and expiration. Weak just keeps getting weaker unless the broad market can put on a rally. Also, seeing a bit of insider sells which scares people. Both SWN and HK are higher multiple stocks, but both are higher growth rate names as well. They are probably growing reserves at at least 1.0x their production rate this year as they have historically. That puts a lot of Bcfe in the calculation for 2009 when looking at $/Mcfe. But on days like today, there is not going to be a lot of discriminating going on. As to HK not having run, there’s the dilution of the numbers to consider from their secondary. 10% more shares out and the price is 5% higher so, not a huge run but it has moved and again, it was already more expensive that most. I hold it as a reserves growth story for the long term and will buy it again on softness in the stock for a trade in options as it is the #1 grower (of any size) in the group this year. Very low cost, very high quality set of assets, with 10x+ reserve potential under their acres to current bookings.

  54. 54
    RMD Says:

    #15 CRED: Z, at a very cursory look I think I like the MCF story better, but will keep looking.
    #44 EROC: Bill, I think history almost always shows that financial engineering tricks (read: MLP spin-offs) run into some problem not anticipated at the IPO (except maybe by the GP, which is why they sun off the MLP in the first place). EROC was financed wrong, had a mishmash of unmanaable assets, and mgt sho signed on anyway. I hope they have a conf.call because I’d like to hear their public spin on this.

  55. 55
    RMD Says:

    DPTR One guy who has followed stock thinks Col. River Bottom well is key to the future and has formation damage.

  56. 56
    zman Says:

    RMD – since when do I only get to pick one off the beaten path name, LOL?

    Re MCF – you’ve got to love the part in their presentation where they point out that taxes are by far their biggest cost. $2 per Mcfe goes to taxes vs $0.62 for LOE and $0.20 for G&A (I was right, still only 7 employees). Talk about working for the government.

  57. 57
    RMD Says:

    Yes, I noticed that tax comment. So, tell us what you really think…

  58. 58
    zman Says:

    RMD – Something they can clean up perhaps. Did he get a skin #?

    Re Mcf – Monday or Tuesday. If soccer is rained out then Monday.

  59. 59
    zman Says:

    Rig Count Watch:

    Oil: down 7 to 288 vs 413 year ago

    Natural Gas: down 2 to 699 vs 1606 year ago

    Horizontals: up 4 to 430 vs 638

    Canada up 22 to 206 vs 433

    Texas is rolling back over, down last week, down 15 more this, at 373 vs 949 a year ago. Barnett just not economic at $3 gas.

  60. 60
    zman Says:

    NG up 20 cents, or 6% back to $3.66. We get the first good look at CFTC numbers following this short covering rally later today. Should see the net short contract. If it hasn’t moved much yet this rally in gas could get new legs.

  61. 61
    jat Says:

    Not to be too tangential, but there is an oil company executive on CBS’s “Survivor,” and he makes us all look really, really bad.

    http://www.youtube.com/watch?v=kfIQpF3jD9o

    On the first episode, he creates a “dumb-ass girl alliance,” empties his tribe’s water, burns his teammates’ socks, and tells a sob story about losing his house in New Orleans and his dog in Hurricane Katrina.

    He’s from Dayton, TX, and he’s never had a dog.

  62. 62
    1520sbroad Says:

    Z – do you think stocks notice that move in nat gas today or is there just too much options expiration noise?

  63. 63
    zman Says:

    1520 – If it holds into the close of NYMEX in 1.5 hours, maybe, looks like they are starting to notice it now a bit. For me, the question isn’t so much today, as I’m not playing any Septmebers for expiry, but next week, something Reef mentioned yesterday, which is that if there had not been a holiday in last week’s demand number we would have been well below trend given the weather on the injection. Its a bit milder this week so that mitigates it a bit but I have to think the injection is going to be lower 60s due to line pack issues. Also, we may get supply data a bit early (Next Friday) from the EIA for the month of July. If we see a small downtick it could set the shorts to running. I’m pretty content to nibble on red days for awhile and hold lots of cash. Isn’t this supposed to be the worst two months of the year? If Kass’ gnome is right, the jig on the market is up. Of course, NG happens to be just about the worst performing assets out there ytd, or maybe second if count the paper Iranian votes are taken on. So it may be the asset to rotate to of choice.

  64. 64
    zman Says:

    Crossing the word “bit” out of my vocabulary.

  65. 65
    1520sbroad Says:

    #63 – agreed. I have taken some profits too and will spend a few marginal dollars on calls for nat gas e&p while waiting to see if the market will sort out some.

  66. 66
    bill Says:

    thanks z, i bot hk calls today.. i think the down move was overdone

    rmd- eroc all what you say ,maybe and is true, however, the bod has a duty to look out for all unitholders, not the just the sponsor and mgt

    the asset that they are selling is spinning off 25 m in pure cashflow and projected to at least double to 50 m in 3 years with NO RISK.

    that asset is surely worth more than 100 m.. the 135 offer price less 31 m in fees eroc would have to pay ngp

    so they net 100 m and give up 50 m in annual cash flow and they dont have to pay arrearages to current unit holders 60 cents time 50 m units is another 30m

    so the net effective price for those assets is 100 m less 30 or 70 m

    they can do a right offering or a secondary without ngp involvement

    the stock is at 4.50, surely they will get more than 3.10 in an offering

    The proposed deal is theft pure and simple

    and even though they have a lot of debt its being paid off at 100 m a year clip

  67. 67
    1520sbroad Says:

    bit is well represented in 63.

  68. 68
    bill Says:

    atpg has settled down at 19.70.

    Only 1.0 m shares traded today, yesterday was over 5.0 m

    I’m still long but have lighten up on the position. Im bullish if they can get titan hooked up an flowing 20,000 bbls of oil per day.

  69. 69
    bill Says:

    Which brings up a question

    Atpg new 600 m platform will process their own oil but it could be used to process someone elses oil.

    What processing fees can a platform like that earn?

    Would it be a fixed monthly rate or a royalty payment?

    One option is to sell half interest to somebody like GE. Maybe a better option, would be to float debt and equity and maintain 100 % ownership

    z any thoughts?

  70. 70
    zman Says:

    Bill – they would definitely look to tie back satellite discoveries to the hub with spare capacity. Generally is a fee for volume, not sure of the size in terms of dollars, will dig around to see if I can come up with something. That kind of thing would be included in their hurdle rate for the project.

    I used to cover a lot of the big caps as they ventured out into the deepwater. Stocks generally rise on discoveries and sell off on initial production unless it is early or on time (which is not always the case as deepwater has lots of issues). I would not have any doubts about them getting the production on line, but that is also already factored into the thinking of the Street or it should be. Just something to think about.

  71. 71
    Jerome Blank Says:

    Hi Zman…HDY is very popular today, curious about the relative lack of particiaption by END, seems like they should be doing better, any thoughts, looking at both for the right type of pullback

  72. 72
    bill Says:

    thanks for 70

    i guess they could charge whatever the market would bear. If oil is 70, would a 25 % fee be too extreme?

    who owns thunderhorse and is that a production platform?

  73. 73
    zman Says:

    Its going to be a lot lower number than that. Think a few $ per barrel.

    Thunderhorse was formerly called Crazy Horse but renamed due to political correctness. Apparently it is better to forget the Indians than honor them. That’s BP and Exxon. Think of a football field sized platform. That was the first time I heard someone use discovery and billion barrels in the same sentence with the knowledge that they only had one straw into it.

    http://en.wikipedia.org/wiki/Thunder_Horse

  74. 74
    bill Says:

    daily shipping report

    http://files.irwebpage.com/reports/shipping/08l26Pvi9u/imarex%20daily%20report%209.18.09.pdf

    – Jonathan Chappell issued a note (yesterday) highlighting the fact that the tanker equities have
    received their fair share of love from the investing world as part of the global macro bull run, yet the dry
    sector has seen no such affection. “Specifically, we believe that the near-record high multiples at which
    many tanker stocks are currently trading point to a belief that a robust rebound in global oil demand will
    drive a material increase in tanker rates and thus earnings. On the other hand, many dry bulk stocks’
    valuation apparently reflect a belief that recent favorable economic data points represent a recovery
    head-fake and that global trade is set to decline again.”

    Nat is totally expose to the spot market and spot rates have been dismal in q3. They pay out 100 cashflow and cashflow will be down and so will the q 3 payout. I say it sells off when they release the “news” I think nat is a profitible short over 30.00

    Interesting graph on oil shipments for the last 5 years and current run rate

  75. 75
    zman Says:

    NG up 27 cents, erased yesterday’s give back.

  76. 76
    Jerome Blank Says:

    Hi Zman any thoughts on #71

  77. 77
    zman Says:

    Bill – by the way, very impressed with the stay up power of ATPG. I would have expected profit taking here on that move. So far not yet. Again, good trade man.

  78. 78
    bill Says:

    good stuff on 73— 5 billion to build it, wow those evil oil companies

  79. 79
    zman Says:

    Re HDY – pure spec play.

    END – search me when that plays. Maybe people just don’t like the N. Sea any more. I need to do some re-learning of that story as the last things I looked at appeared to have them on the mend after a series of dryholes in 2007/2008.

  80. 80
    zman Says:

    Bill – and you have to pay the lease tab on that block and many adjacent blocks for the privilege to drill in several thousand feet of water on a seismic target that you shot and processed at your own expense. If you have a dry hole you don’t get your $ back from the govt. for selling you crappy acreage either. Then there’s the cost of that rig at $500K+ per day, which can be delayed by anything from bad luck to loop currents. Then there’s the development platform and the rig on it to drill all the development holes (because just because you found oil with the exploration well doesn’t mean you can sit back and relax) and then there are hurricanes and from the wiki file above you can see how those can put a kink in your time line.

  81. 81
    zman Says:

    … all so people can drive.

  82. 82
    zman Says:

    NG up 30 cents, more than it lost in yesterday’s profit taking. You can run shorty but eventually you have to cover.

  83. 83
    Jay Says:

    Following the NW Times and others “Debunking Peak Oil” pieces, Energy and Capital ran this piece..

    to which Merril Lynch responded by saying, “Michael Lynch fired back quickly, saying that my article “tops them all” and alleged that I had predicted $500 oil with a global depression.”

    http://www.greenchipstocks.com/articles/reading-peak-oil-deniers/486?roi=echo3-4816543966-3402911-1fa4356872c11a3ee23680a0bdbc2c57&

  84. 84
    zman Says:

    NG up 10% with 15 minutes to go in the NYMEX day.

  85. 85
    zman Says:

    A few tidbits in an otherwise “no kidding” gas story.

    http://www.marketwatch.com/story/natural-gas-finds-strategy-against-low-prices-2009-09-18

    The comment about industrial fuel scheduling rising for 15 weeks is interesting although I don’t know where that data comes from.

  86. 86
    zman Says:

    Refiners back to flat. Looks like a move up wants to happen in that space.

    Got sent another piece showing trucking is starting to pick up. Interesting, would like to see that translate into added diesel demand.

  87. 87
    jat Says:

    83, great article, thx.

  88. 88
    bill Says:

    picked up some wll on the pull back

  89. 89
    zman Says:

    CLR priced that $300 mm senior deal, 8.25%, ytm 8.375%

  90. 90
    zman Says:

    Was sort of tempted to myself Bill. Feeling pretty patient at the moment, plus this day is pretty much all noise and I thought it probably wouldn’t hurt to see the beginning of next week unfold on the dollar.

  91. 91
    zman Says:

    Seems like a really good price on those CLR bonds.

  92. 92
    zman Says:

    For CLR that is.

  93. 93
    BirdsofpreyRcool Says:

    I see the final rating on the CLR bonds… B2/BB… so, a full 2-notch difference between moodys and s&p. Must be some parent/subsid differences that moody’s sees. That is usually the reason for a 2 notch difference. Anway, it’s a nice rate for CLR — and, if you believe the BB — not a bad rate for investors either. I like the fact that CLE didn’t up the deal size. Very professional. Very cool. I’m liking the way these guys manage their balance sheet. Kinda anti-Aubrey.

  94. 94
    choices Says:

    FWIW: copper selling off last few days, “may” be a reflection on the strength of the recovery (and general markets).

  95. 95
    zman Says:

    Thanks much BOP – given their debt load, which isn’t overly burdensome but isn’t something to overlook either (about 40% debt to cap), I’d like to see them add some hedges on. That runs counter to their thinking however and I really doubt it will happen. Still, the reserve potential here is large compared to the booked barrels.

  96. 96
    zman Says:

    Reef – good trades IOC and HDY.

  97. 97
    reefguy Says:

    getting lucky

  98. 98
    BossmanG Says:

    Z, whats your opinion on “operation flow orders”
    http://www.zerohedge.com/article/why-has-natural-gas-spiked-60-labor-day
    thanks.

  99. 99
    BossmanG Says:

    or comments/thoughts.

  100. 100
    zman Says:

    Better lucky than good!

    Group de-reddening into the close.

  101. 101
    zman Says:

    Boss – they happen around this time or a little later every year. Due to higher storage they are happening more frequently and earlier than normal. They will result in less gas being put into the pipeline and storage infrastructure in the U.S. They will cause some people to come in at the lower end of 3Q guidance ranges. Pretty hard to tell who or where but many have already taken them into account in their guidance. Basically the production just gets delayed, involuntarily by the pipe owner.

  102. 102
    jy Says:

    RE #73 GOM shelf processing fees normally run ~$1.00/Bbl for oil and water and ~$0.10-$0.20/mcf for gas plus a fixed monthly charge in the $5,000-15,000/well. Compression usually ~ $0.05/stage.

    Second– “Thunder Horse” Prospect was originally named “Crazy Horse” after Neil Young’s band – nothing to do w/Lakota Sioux indians at all. Indians got upset– name changed.

  103. 103
    Wyoming Says:

    https://secure.oilandgasinvestor.com/shaleseries/

    The Marcellus is free, you have to pay for the rest if you want to listen in.

  104. 104
    Wyoming Says:

    Last time, other 3 are in spam hell

    http://tinyurl.com/lcbxnc

  105. 105
    Wyoming Says:

    One more

    http://www.aspousa.org/index.php/2009/09/the-aftermath-of-the-great-recession-part-i/

  106. 106
    West Says:

    From Rocky Mountain Oil Journal, 9-18-09……Rosetta Plans More Sideways Work on Blackfeet Indian Reservation
    Glacier County, Montana
    More horizontal work is planned on the Blackfeet Indian Reservation along the western flank of the Sweetgrass Arch in northern Montana. Houston-based Rosetta Resources (Rosetta) has staked the company’s third horizontal test some 7 miles south of the Canadian border and nearly 18 miles northwest of the giant Cut Bank Field. Rosetta’s latest venture will be the Tribal Riverbend W #07-4H, a projected 11,230’ horizontal Devonian Souris River test spotting in the nw-nw 7-36n-9w, Glacier County. The bottom hole is scheduled to terminate in the sw-sw 7-36n-9w.

    This latest staking by Rosetta is barely more than a mile southwest of a dry hole drilled by Cenergy Exploration at the #1-32 Swenson Warren, sw-se 32-37n-9w. Drilled to the Mississippian Madison to a depth of 5,775’, this hole was abandoned in 1983. The company did run two DSTs in the hole, one in the Lower Cretaceous Bow Island and the other in the Jurassic Sawtooth. The Bow Island interval at 4,447’–4,465’ reversed out 730 of mud, while the Sawtooth test from 5,637’ to 5,700’ recovered 20’ of slightly gas-cut mud with the sampler containing 1,300 cc of mud. No additional tests were performed, and the hole was plugged. Log tops of this failure include the Rierdon at 5,540’, Sawtooth at 5,636’, and the Madison was picked at 5,671’ under a KB elevation of 4,282’.

    The W #07-4H location scales roughly 6 miles southwest of another horizontal test staked by Rosetta at the Tribal Riverbend #12-13H, sw-nw 12-37n-9w. This 10,675’ horizontal Bakken prospect is nearly a mile west of Landslide Butte Field, a vertical Mississippian Sun River and Madison oil pool that has produced more than 861 k bo and 925 mmcfg following its discovery in 1966. The nearest hole to the #12-13H drillsite to penetrate the Bakken section is almost a mile east at a dry hole drilled by Beren Corp. at the #1 Johnson se-se 12-37n-9w. This hole bottomed in the Devonian Souris River at a depth of 6,984’. The company set 5½-in. production casing to 6,355’ and perforated the Madison, Banff, Bakken, and Nisku with negligible results. No other testing was conducted, and the hole was abandoned in 1981.

    As mentioned, the W #07-4H represents Rosetta’s third horizontal test planned on Blackfeet tribal lands. Some 19 miles to the southeast, the company continues to drill a 9,150’ horizontal Devonian Three Forks test at the #31-16H Tribal Gunsight, se-se 31-34n-6w. Elenburg rig No. 21 is supplying the iron for this venture.

    This active Rosetta prospect is nearly a mile northeast of a dry hole that had good shows in the Devonian. Drilled by Flank Oil, the #1 Bugbee, se-sw 6-33n-6w, bottomed in the Three Forks at a depth of 5,350’. The company open-hole perforated the Three Forks section from 5,028’ to 5,030’ and swabbed up to 10 gallons of oil per hour. Deemed noncommercial, no production casing was run, and the hole was abandoned in 1958.

    Two miles west of Rosetta’s active drillsite is the huge Cut Bank Field complex, a stratigraphic-type trap that is considered a Class “A” oil and gas field. First discovered in 1926, this field has cumulated more than 171.6 mmbo and 650 bcfg from the Cut Bank, Madison, Bow Island, Kootenai, Sunburst, Lander, Moulton, Black Leaf, and Dakota. Production is coming from depths less than 4,500’. With more than 1,000 holes drilled within this field, the reservoir is currently producing from nearly 600 wells and is averaging 23,731 bo and 130 mmcfg per month. There is no Devonian production within Cut Bank Field at this time.

  107. 107
    zman Says:

    Thanks much West.

  108. 108
    VTZ Says:

    http://www.financialsense.com/fsu/editorials/dancy/2009/0918.html

    Z – “Projected production rates will be “the lowest average natural gas production rate seen in Western Canada since 1995.” King also noted exports to the United States likely will fall to 15-year lows. ” says First Energy Capital which, other than Peters and Co would be the best estimate.

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