21
Sep

Monday Morning And All Is Red

Print Friendly, PDF & Email

The dollar is getting a bit of a bounce this morning, (up a half percent with the dollar index approaching 77 from below) as the G20 and the Fed meet this week and with all talk about exit strategies. Oil sold off overnight as the dollar rallied and equity futures are pointing to a red open as well. Natural gas fought off an attempt to move lower with oil overnight. We get leading economic indicators 30 minutes after the bell which are expected to improve modestly but the bulk of the market moving swings should come out of the economic meetings and potentially from housing sales later in the week. I go into the week overweight in cash.

 

Conference Watch: B of A Merrill Smid Cap Conference: All times EST

  • Monday 9/21

    • GMXR - 8:00 am
    • WLL - 11:20 am
    • CXO - 2:30 pm
  • Tuesday 9/22

    • BBG - 1:40 pm (slides will be posted Monday evening)
  • CLR - ??? - I know they are speaking here, just don't know when.


The Week Ahead:

  • Monday 9/21: Leading indicators (expecting 0.7% vs last of 0.6%)
  • Tuesday 9/22: Home prices
  • Wednesday 9/23:  EIA Oil Inventory Report, FOMC (expected to stay at 0 to 0.25%)
  • Thursday 9/24: EIA Natural Storage Report, Jobless claims (540K expected, vs 545K last), existing home sales (5.4 mm expected vs 5.24 mm last report)
  • Friday 9/25 Durable goods (0.7% expected vs 5.1% last), new home sales (443K expected vs 433K last), consumer sentiment (70.1 expected vs 70.2 last read). We may also get the natural gas supply report for the month of July.

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today - HK, DPTR
  • Odds & Ends

Holdings Watch:

  • $10KP II:
    • $18,600
    • 73% Cash
  • Current Holdings Tab is updated,
  • The $10KP II Spreadsheet Tab.

 

Commodity  Watch:

Crude oil closed up 4.2% last week to end at $72.04. The 12 month crude strip is now trading at $74.55 and its chart looks like this.  This morning crude is trading off $1.50 to $2 with a bit of pre G20, pre Fed meeting dollar strength.


Natural gas closed up a whopping 27% last week at $3.78. The 12 month strip is now trading back above the $5 mark at $5.40 and I expect to see more hedging in short order. This morning gas is trading from down to 3% to up slightly in erratic trading but given the large swings we saw last week and the fact that the short position remains large according to CFTC data (see the wrap post for the numbers) this increased volatility should not be surprising.

  • Weather Watch: Late season shot of warm air. Cooling Degree Days (CDDs) compared to gas storage injections:

    • Week Before Last: 45 CDDs which helped produce an injection 66 Bcf, even with a holiday thrown against demand.
    • Last Week: 40 CDDs vs 40 expected and 35 normal. This reading was in line with the year ago week's when we saw an injection of 54 Bcf
    • This Week's Forecast: 47 CDDs, which is much warmer than normal and last year's readings of 27 and 31 CDDs respectively.

 

Stuff We Care About Today

HK Punts Permian Basin Assets

  • Expected sale of Permian Basin assets for $376 mm, rumored range was $300 to $400
  • 177 Bcfe associated reserves, so a pretty strong sale price of $2.12 / Mcfe for the type of lower upside reserves being sold.
  • Production associated with the package was 30 MMcfepd, or 6% of 2Q09 levels.
  • Nutshell: Good sale price, delivered as guided (before the end of 2009). Liquidity picture is further improved since the completion of the last secondary and with this deal. I'm not in options in the name at present but will be revisiting a position here shortly.

DPTR's Gray Well Flows Water

  • This is not one I'd normally comment on but the stock has been a rocket, up from $1.75 at the beginning of September to a Friday close of $4.01 and I've seen a couple of folks on the site mention it of late.
  • The now high profile Gray 31-23 well in the Columbia River Basin (Washington) uneconomic - producing water from prospective zones.
  • The stock put on half of its move after the company received approval to drill 4 additional wells in the vicinity.
  • The company had described the well as being an "upcoming catalyst with exploration upside". In today's release they describe additional drilling in the area as being curtailed.
  • Valuation is, um, astronomically high on a forward cash flow basis. 2010 CFPS is seen at 2 cents by a 8 analysts following the name. On reserves the name is less expensive looking, at $1.62 per Mcfe
  • I'll be looking at $3 October puts here depending on the open.



Energy Insider Selling Continues

  • APC CEO sold 287,000 shares, released Friday post close.
  • NFX - saw a number of Friday post close disclosures.
  • Once the floodgates open like this, expect to see all of the names see some insider profit taking.

MCF - interesting - details in the Tuesday post

Odds & Ends

Analyst Watch:

  • (LUKOY) cut to Neutral at HSBC

 

120 Responses to “Monday Morning And All Is Red”

  1. 1
    zman Says:

    Jay – BOP traveling today, told me to tell you she will get back to on the forwarded message soon.

  2. 2
    zman Says:

    DPTR bid down $1.40 (from $4). Ouch.

  3. 3
    zman Says:

    DPTR has a lot of debt: Interest expense last quarter of $15 vs Revenue of $23. That’s a non starter. I would expect it to go a lot lower, back through the point it started so even though most of the move at $2.60 will have occurred prior to open (if that is the opening level) I don’t see what keeps them from falling into the mid $1.50s. I would not fall in love with a short here as they have asset value which will put them on the block for a sale but they are going to get crunked today.

  4. 4
    bill Says:

    your mcf comment peaked my interest..whats not to like

    last conf call here

    http://www.investorcalendar.com/IC/CEPage.asp?ID=143782&CID=

    not to steal your story…

    7 employees
    no debt
    company buying back shares
    low cost producer

    ty for highlighting it

  5. 5
    zman Says:

    Hey steal, away, if I can get away with that little typing, well, I am pretty lazy so just let me know, lol. It looks like you and me today as BOP is traveling. Glad I am hugging a good piece of cash. Will look at the Bakken’s later this week to buy. May short a little high P/CF multiple gas in here.

  6. 6
    zman Says:

    ZTRADES:

    DPTR – Added (10) DPTR October $3 PUTS (QHRVJ) for $0.60

    and

    Added (25) DPTR October $2 PUTS (QHRVI) for $0.15

    Both with the stock at $2.80, see post for details.

  7. 7
    reefguy Says:

    z- Your betting against Kirk Kirkorian

  8. 8
    bill Says:

    z great move raising cash last week

    good bargains today…

  9. 9
    zman Says:

    Reef – hear ya. Not a big bet and he can call me about the valuation.

  10. 10
    bill Says:

    ive notice going opposite opening trend is very profitable

    bot at open numerous positions..all up now

    be nice strategy,

    when everyone wants to sell…buy

    when everyone wants to buy…sell

  11. 11
    zman Says:

    Bill – Got lucky. Not rushing in to buy at the moment. I wonder who is willing to exit first, Europe or the U.S. ? Seems to me the U.S. will have to exit more slowly and that will keep the dollar down. Right now it is having a pretty big day, up 0.9%.

  12. 12
    reefguy Says:

    I agree with your valuation. I think the Columbia Basin play had a ghost chance in hell, and not for a company this close to liquidation.

  13. 13
    zman Says:

    Reef- but those 844K acres look so good on paper, lol. I don’t track them closely so maybe I am missing something.

    Big debt – check
    Not great hedges – check
    Disappointment in a high profile play – check
    Stock had previously more than doubled due to the perceived potential of this play – check
    Haynesville activity – periphery of the play, smallest wells we’ve seen there – check.

  14. 14
    zman Says:

    Reef – I think ECA has done ok in the Columbia River Basin, right? These guy’s well was a lot further south though.

  15. 15
    reefguy Says:

    management stinks. check
    equity owned by one rich guy. check

  16. 16
    reefguy Says:

    Last time I looked ECA had a buck or two to piss off….

  17. 17
    zman Says:

    Reef – ROFLLMAO – see, I’m just too nice to have written 15. LOLOLOL

  18. 18
    reefguy Says:

    Further on Kirk. He owns 33.89% of DPTR. Now didn’t he lose big on some now BK auto companies? How about a Casino? Why not energy for a trifecta!

  19. 19
    zman Says:

    SMH – sent out a note saying apparently DPTR has a divining rod. Now that’s just mean.

  20. 20
    zman Says:

    ZTRADE:

    DPTR – Added another (25) of the $2 puts, (QHRVI) for $0.15. Still not a big position, stock hugging the $2.80 level, down 31%.

  21. 21
    jiveyjr Says:

    Dick Stoneburner came up from Houston and made a presentation at our local Dallas Investor Forum Sat. morning….great discussion of the assets and reiterated the history of the mgt. team building assets to sell them…..

  22. 22
    reefguy Says:

    You know, Casino’s water down their drinks, maybe it was a synergistic energy/casino project.

  23. 23
    zman Says:

    Thanks Jivey. Can’t argue with their assets. Higher gas and they will undoubtedly go higher. Still look expensive on CF but when haven’t they. Fear of deal becomes less so, for the moment, with this Permian sale. Funny how people are punting the good reservoirs (in terms of perm) in favor of the cruddy ones (shales) with high carbon content. 15 years ago that would have been reason to lock management up. Yeah technology.

  24. 24
    zman Says:

    I wonder how long Kirk’s ego will have him carry the stock today.

  25. 25
    zman Says:

    WLL speaks at 11:20 at the smid cap. Could be interesting. Presentation on their site looks unchanged from last week. Should be nearing more Bakken well data. Stock is off about 10% from recent high, not enough given the market to make me jump but close.

  26. 26
    jiveyjr Says:

    Stoneburner offered up something I didn’t know re: Lousiana leases…he said that the La. laws require much more drilling to hold the Haynesville acreage than will be required of the EFS acreage in Texas….he commented that the EFS acreage may produce a higher ROI than Haynesville because of the condensate that will be produced

  27. 27
    Jerome Blank Says:

    HDY really moving today, I think the feeling of the group was that the company was too much of a risk up here because it had few if any proven assets? Although not up on big vol thus far, this co is up 12% when almost everything else is down, gotta get your attention…runs into P&F friction between 2 and 2.25

  28. 28
    reefguy Says:

    26- The Eagleford will be the #1 Shale play for those and other reasons.

  29. 29
    jiveyjr Says:

    thx reef…he indicated that they had most of the Eagleford under lease themselves…enviable position

  30. 30
    reefguy Says:

    HDY- We are playing close-ology, or in a historical allegory, this is a new color tulip…

  31. 31
    zman Says:

    Reef- more like farology. That’s a heck of a lot of water in between em. But yep, that’s it. Nice move!

  32. 32
    Dman Says:

    reef, maybe I need more coffee, but I’m not sure what “close-ology” is …

  33. 33
    reefguy Says:

    Closeology. Funny but the Santos Basin(Brazil) and west Africa deepwater are geologic closeology.

  34. 34
    zman Says:

    Think analagous or look-a-like, in this case APC’s Venus well is to the south of HDY’s acreage. There are a series of Cretaceous fans off the coast that may run up and down the coast. By virtue of APC having a hit at Venus, it, to some extent, de-risks, the play at to the north off Guinea.

  35. 35
    zman Says:

    Jerome – any thoughts on WLL PF? I was looking to get back long on just such a pullback and am wondering if it has further room to go, maybe a gap close nearer to $50?

  36. 36
    VTZ Says:

    Nicky – I’m looking for gold to close at 999 or higher today for short term momentum to hold or else I expect a pullback to just above 980.

  37. 37
    zman Says:

    DPTR – not quite an hour into trading and we are 22+ mm shares. Biggest day of late was when it ran up on 64 mm shares on Sept 9 after announcing they were permitting more wells in the play.

  38. 38
    zman Says:

    Email BOP wanted me to post:

    JPM US Fixed Income Weekly comments regarding the Corporate Credit Markets… “We expect spreads to tighten further as insurance companies, pension funds, and retail investors continue to buy bonds with supply not keeping up. Look for financial spreads to tighten towards industrials. CDS curves should steepen.” Their ABS experts are also bullish on the consumer ABS sector as well as the CDO/CLO market segments…….. WELCOME TO THE PARTY!!! We have been talking about these factors driving corporate spreads tighter and equity markets higher for months….and we do not believe these trends are about to roll over. In addition, the resurgence of the corporate credit markets is making potential merger purchases more likely even as it allows investors to demand greater premiums to sell. Companies that had their LBO/MBO activities interrupted by the credit crisis – especially those that remained profitable over the past year – are likely to attract suitors in this environment. We do not think the highly leveraged buy-out season has reopened, but we do expect strategic buyers will purchasing companies in which PE guys had made too expensive in 2006. We also believe that investors need be looking at previous LBO companies that still have a large amount of bank debt. Although we expect banks to extract their pound of flesh for missed covenants….banking desires to reduce non-performing loans will entice them to refinance many of these loans. This should allow the shorter term unsercured bonds of some late cycle LBOs to rally as well as fuel the equity prices of companies that were attempting to get a deal done before the credit crisis hit.

  39. 39
    zman Says:

    Does anyone see when CLR is presenting at BofA smidcap?

  40. 40
    Jerome Blank Says:

    Re:#35, WLL is currently at a difficult action point from a P&F perspective, although still on a buy signal, WLL reversed back into a col of o’s, indicating short term weakness, there is support at the 20 day SMA at $52, and like you pointed out major support at $50 (previous strong resistance.) A number of P&F signals could develop from here, I’ll keep a close eye on it.

  41. 41
    Dman Says:

    Funny news item:

    http://thehill.com/blogs/blog-briefing-room/news/59523-obama-open-to-newspaper-bailout-bill

    But I think they are actually serious.

  42. 42
    zman Says:

    Dman – That shot about fact checking by the “real news” vs the “blogosphere” gets under my skin. I think I do a good job fact checking but what do I know, I’m just a blogger and should probably be outlawed.

  43. 43
    bill Says:

    lol

    file under “dont tread on me”

    http://news.yahoo.com/s/ap/20090921/ap_on_go_ot/us_health_care_overhaul_medicare

    first time ive seen something like this

  44. 44
    nifkin Says:

    CLR- presenting 2:15PM on Nov 17th

  45. 45
    zman Says:

    Jerome – thanks.

    Nifkin – thanks, which conference is that. I think they are at IPAA OGIS next week and BofA had them on the schedule to speak either today or tomorrow in Boston.

  46. 46
    zman Says:

    HK looking to go positive, nice turn off the lows in the group today. Surprised by the speed, as always, with which WLL can move. Presentation there in 20 minutes. UPL, which is another pricey gas name went positive early and has run well since.

    Going to take a small HK position here.

  47. 47
    zman Says:

    ZTRADE:

    HK – added (10) HK October $24 Calls (HKJO) for $1.10 with the stock at $23.60 on a weak day in the market and positive news for the stock (see today’s post).

  48. 48
    Dman Says:

    #42 I guess Mr O doesn’t spend much time watching CNBC & basking in their “fact checking”.

    More broadly, the mainstream media have been a dismal failure & accordingly are being replaced by bloggers for anyone who really wants to know anything, not to mention young folks who hardly know what a newspaper is.

    So naturally, what to do with such failure? Bail them out & let them fail indefinitely into the future! Bailed-out bloviators as far as the eye can see..

  49. 49
    Nicky Says:

    Morning all.

    Leading indicators a bit of a joke – improved on the back of stock prices which really is ludicrous. Negatives things like unemployment and capital orders but I guess they don’t matter.

  50. 50
    zman Says:

    LI was below consensus by 0.1

    http://www.marketwatch.com/story/leading-indicators-show-recession-bottoming-out-2009-09-21

  51. 51
    elijahwc Says:

    Kind of long but thought I’d pass along anyway:

    Doomsday for the Natural Gas Market? (pretty bullish)
    Commodities / Natural Gas Sep 19, 2009 – 06:42 AM
    By: Joseph_Dancy

    The bearish story for natural gas is becoming very well known. Lots of bearish natural gas analysts are around – rightfully so. With record levels of natural gas storage and weak industrial and generation demand spot prices have dropped to seven year lows (see chart, courtesy Bloomberg).

    September and October are historically the months with the lowest total natural gas demand as the heating season has not started and demand from electric peaking plants is subdued with the end of summer’s heat and air conditioning loads. Natural gas drilling activity, measured by the rig count, has fallen to under 700 from 1,606 rigs running last year – a drop of 56% from year ago levels.

    Short term we have no argument with the bearish view of natural gas. But over the longer term, six to eighteen months out, we have run across some interesting – and very bullish – forecasts. A growing number of companies have also dropped hints during quarterly conference calls that they think natural gas markets will improve in 2010. If so, the natural gas equities in our opinion will run further and faster than the commodity.

    Here is some of the recent commentary on the natural gas markets:

    An interview on Bloomberg radio mentioned that the “Mother of all contangos” was in place in the natural gas futures market. This means the price for natural gas to be sold next year is much higher than the current spot price. Over the last two decades the gap between the12 month forward contango price (the price you can get for natural gas futures sold a year from now) and the spot price has never been higher. The incentive is to store the natural gas according to the commentary, and sell it later when prices are higher – which explains the full storage facilities.

    Bloomberg noted that when the contango was anywhere this steep in the past twenty years the natural gas spot price increased in value on average by 74%. The best play will be natural gas stocks according to the commentary, not the natural gas ETF investment vehicle.

    Supporting this viewpoint is the fact that the current contango in natural gas is reminiscent of the “super contango” in crude-oil futures that occurred about half a year ago. At that time, crude contango helped push inventories at Cushing, Oklahoma to a record high. The price of crude oil since rallied by more than 50% while inventories are down 15% from their peak.

    Canadian natural gas producer Fortress Energy presented their market assessment in a report that was included with the company’s recent second quarter earnings release. Fortress believes many industry analysts are misreading the size of the potential decline in natural gas production. Fortress management submits that the lack of drilling activity, the massive decline rates of many shale formations, and a recovering economy point to a “very alarming supply shortage about to hit North American natural gas markets.”

    The company’s study concludes that “without question some dramatic supply issues are mounting. If rig counts remain at 700 for any length of time, and North American producers continue to focus on drilling shale wells, those wells’ robust initial production rates are clearly insufficient to offset declines.”

    Tudor Pickering Holt also is forecasting a major decline in natural gas supply by year-end. They take their 2010 forecast “to $7.50/mcf” which “pushes gassy names to top” of their “near-term list of trading opportunities”:

    Gas supply model thoughts – Maintaining high confidence in direction and magnitude of gas supply at year-end (steep ~10% year over year decline). Our forecast model was built to predict overall US gas production based on rig count and well quality. . . . Our bullish gas 2010 gas call is predicated on a pretty steep drop off in production by year end. This is supported by improving trends in gas storage over the summer and our analytical work . . . [they go on to note some modeling issues with recently released government data]

    FirstEnergy Capital Corp. is taking a decidedly more bullish stance than many of its brethren when it comes to its natural gas market outlook. The firm is confident that natural gas storage withdrawals in the United States this winter will approach record levels and a price spike will soon follow. “We see the Street as being far too conservative on estimating U.S. cumulative gas storage withdrawals for the upcoming heating season, and expect that such withdrawals will be close to or at record levels,” FirstEnergy analyst Martin King said in a recent note. King said this will set the stage for a rapid price rebound in the early going of 2010, and likely make FirstEnergy’s current $7 (U.S.) per million Btu price forecast for 2010 “appear too conservative.”

    Bill Powers had some interesting comments last month in his Powers Energy Investor report on the natural gas market:
    “. . . the U.S. is heading towards a gas deliverability crisis that will be very damaging to the economy. Today’s conventional wisdom will only make the crisis worse. . . . I believe we are about to experience a big mismatch between U.S. reserves and gas deliverability due in large part to long-lived shale gas reserves.”

    The number of drilling rigs drilling for natural gas remains below 700. Industry consensus is that 1,200 rigs are needed to keep North American natural gas production even. The natural decline rate on conventional wells is nearly double what it was two decades ago, and the decline rate on unconventional shale wells is well above 50% – the initial production rates are very impressive but decline quickly.

    Canadian natural gas production is down considerably due to the lack of drilling and low prices but imports have not declined as severely. Canadian producers have exported excess gas this summer to storage facilities in the U.S. as Canadian natural gas storage facilities near capacity. As the Canadian winter heating demand revives the decline of exports to the U.S. could be substantial, and surprising in their magnitude.

    An unnamed hedge fund has made a large bet last month that natural gas prices will triple by winter just as the spot price of the commodity slid to a seven-year low. Traders took notice when the fund spent millions for the right to buy US natural gas at $10 per million British thermal units in January and February, well above the spot level of just over $3.

    EOG Resources noted in their latest conference call that “we’ve become more bullish regarding 2010 and 2011 gas prices.
    We still expect North American gas prices to remain quite low through year-end. As you know, we’ve historically devoted a lot of work to developing domestic gas supply models and we think our current model is the most granular and best we’ve ever built. It’s telling us that December 2009 domestic production will be 4.8 Bcf a day lower than year-end 2008 and this deficit will deepen further throughout 2010. When added to the Canadian supply drop of at least 0.8 Bcf a day, we expect the gas market to turn sometime early in 2010 almost regardless of what happens. . . “

    Declines in Canadian natural gas production will set records this year as low prices keep the lid on drilling for new supplies, industry observers said last month. Volumes from Western Canada, where the bulk of the country’s natural gas is produced, will drop by one billion cubic feet per day on average this year down from an earlier estimate of 750 million cubic feet per day, First Energy Capital Corp. analyst Martin King predicted. “This . . . will be the largest single year decline for natural gas production on record in Canada,” King said in a supply update. 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.

    The peak of the hurricane season is September 10th. While we have only had 4 named storms as of August 31st (five named storms as of this writing). In the past decade we have had three years when only 4 storms had formed by August 31st: 2000, 2001 and 2002. The following are the final statistics for each season – reflecting substantially increased activity near season-end:

    2000 – 10 named storms, 6 hurricanes
    2001 – 11 named storms, 9 hurricanes
    2002 – 8 named storms, 4 hurricanes

    Keep in mind that roughly 20% of U.S. natural gas and crude oil is produced in the Gulf of Mexico and in coastal areas, and roughly one-third of the nation’s refining capacity is on the Gulf coast. While any hurricanes that form over the next few months may not make landfall in the Gulf, when they have they have tended to severely disrupt operations and natural gas markets (note the ‘spikes’ in natural gas prices in the chart above, courtesy of hurricanes Gustav, Ike, Rita and Katrina).

    Some weather forecasting services are providing a preliminary glimpse at the upcoming 2009-10 winter — and many of them indicate the patterns are setting up for a cold outlook in the Midwest. Some forecasters see the potential for the coldest US winter in a decade. “We do think there are opportunities for a potentially colder than normal winter coming up, one of the coldest we’ve seen in the past decade,” suggests former EarthSat meteorologist Matt Rogers, now with the Commodity Weather Group.

    Demand for natural gas is very cyclical. Winter demand for space heating increases total demand by over 90% from the low levels seen in a typical September or October (see chart). A cold winter in the Midwest and Northeast directly impacts demand for natural gas, and prices.

    AccuWeather Senior Meteorologist Joe Bastardi is also seeing some similar historic weather trends that he says could herald a bitterly cold winter, particularly for the Northeast and South.

    “The closest comparison we’re using for this upcoming winter is the 2002-03 winter season,” Bastardi said. “Then you have the extreme case of the 1977-78 winter, which is also a possibility.” The latter winter held the record for subfreezing temperatures for an unrelenting 51 days. Even a possible repetition of the milder 2002-03 season has some gas traders anxious. That was seven years ago, and the US population has grown by an estimated 26 million people, notably increasing natural gas heating loads.

    We remain optimistic that over the next 12-18 months we will see higher natural gas prices as supply and demand realign. Profitable and well managed companies in the most inefficient part of the market – the small capitalization, publicly traded, firms – should outperform the commodity and their larger brethren.

    As Berkshire Hathaway Co-Chairman Charles Munger has said, when the risk/reward ratio is tilted heavily in your favor invest heavily – good long term investment ideas are rare, act when they present themselves.

    By Joseph Dancy,
    Adjunct Professor: Oil & Gas Law, SMU School of Law
    Advisor, LSGI Market Letter

  52. 52
    zman Says:

    Natural gas imports watch:

    Pretty much flat with the last week and last year.

    8.0 Bcfgpd from Canada
    1.1 Bcfgpd from LNG – still no tsunami and at this point, you can’t blame the lack of gas showing up in the U.S. on new capacity delays…this is price, sending it elsewhere. My vote is China, India

  53. 53
    zman Says:

    HK approaching $24 now, up 1%+, good to see it acting like you’d suspect on the news, once it went green.

    DPTR at $2.43, volume of 38 mm shares. I’d guess weaker if the market softens back up.

    WLL call about to start. Doesn’t look they are posting a new PDF for the presentation.

  54. 54
    Nicky Says:

    Indices:

    Look like we could be in a wave iv correction. Support is at 1058 and then 1050.

    Once done I think we then see wave v of what is only likely to be 1 to the upside. Cycles make me think that the correction that follows the end of this wave up will only be a wave ii and then we likely go much higher into the spring of next year.

    So possible targets for the end of this wave up are 1079,1090, 1123. I will also add that the cycles are unlikely to top before 9/24.

    To change this outlook? We need to break 1039 area.

  55. 55
    zman Says:

    WLL B of A Presentation #1

    Presentation slides appear identical to Sept 3rd slides.

  56. 56
    zman Says:

    ATPG doing its imitation of an energizer bunny again. Pretty fascinating.

  57. 57
    zman Says:

    Reef – Kudos on the HDY. IOC pulling back today, down 8%, you adding?

  58. 58
    Nicky Says:

    VTZ the advance for the USD looks corrective so likely another leg down still needed which means more upside for gold – so I agree with you.

  59. 59
    VTZ Says:

    Thanks for commenting.

  60. 60
    zman Says:

    WLL – presentation could be a taped version of the last one, nothing new here. All good, but nothing new. Maybe they will have some news next week for IPAA.

  61. 61
    reefguy Says:

    IOC- not adding..yet. Gorgon and other competion makes me a bit cautious

  62. 62
    zman Says:

    Jerome – one more for you, DPTR?

  63. 63
    zman Says:

    Hear ya re Gorgon. There is an awful lot of stranded gas around these days. Probably keeps gas in the States honest for many years to come. Of course, China is a natural resources black hole, especially when times are strong globally.

  64. 64
    zman Says:

    DPTR – very large bid defense at $2.30 which was the open price on its break out day on September 9.

  65. 65
    zman Says:

    WLL – results soon on a company maker type well at Lewis and Clark prospect area. Nothing to report now, but soon. His words on the company maker wording, not mine.

  66. 66
    bill Says:

    wll locked in with 5 year contracts ng at 5.50 at the well head..not too shabby

    wll is a great story, i added options on this this am

    atpg still moving higher

  67. 67
    zman Says:

    ZTRADE:

    WLL – Added (5) October $55 Calls (WLLJK) at $3.10 with the stock at $55.10 on weakness in the stock and group. Listening to presentation at BofA, sounds like they are not far off from some catalytic news.

  68. 68
    bill Says:

    sames slides- i think the ng hedge is new news

  69. 69
    zman Says:

    Bloody idiot question from the analyst at B of A for WLL, talked about why have you delayed drilling at Lewis and Clarke. Answer is they have not, moron, he just talked about it being drilled and potentially being a company maker.

  70. 70
    West Says:

    Porky’s cooking BBQ today and having a Lone Star. Add to shares on break of 20.88 with volume. Shortable shares at 150k. Turning up the heat a little bit. They should announce a monetization of assets this week or next week.Probabaly only 80 million $. The p&f chart will have double top break out at 21. oink…oink

  71. 71
    bill Says:

    wll hints at a new discovery to be announced soon in lewis and clark

  72. 72
    zman Says:

    Bill – they spoke about it favorably last call, sounded more interesting on this call, obviously we don’t have anything yet but it is right around the corner, sounds like news next week or the week after. Maybe they keep it for the 3Q call, dunno. Analyst should be so embarrassed by #69 he should quit.

  73. 73
    bondbuddha Says:

    Does anyone follow QBC?

    tks,

    (formerly known as jpntexas) 🙂

  74. 74
    bill Says:

    72, lol

    i love wll story. if you like energy stocks you have to have some bahken exposure and for me , wll fits the bill

  75. 75
    bill Says:

    Wll talked a little about co2 flooding and that being a game changer for us oil

    dnr is not moving with the money coming into the sector..nibbled at that one too

  76. 76
    Jerome Blank Says:

    Re:#62…DPTR…went on a short term sell signal with the print thru $3 this morning, major P&F trendline support at $2.01 to $2.25, which so far appears to be holding…a print of $2 would break trendline support and suggest further downside. If a trader believes the stock fundamentals are still good for DPTR, then one strategy is actually a buy right here with a stop at $2. IF you are already long and holding, hold at this point, with a top at $2.

  77. 77
    zman Says:

    Thanks Jerome, there is still size on the bid, so the larger holders are trying to promote a bit of bottom fishing here.

  78. 78
    zman Says:

    Fast Money guy, the oily headed one, saying oil goes lower rest of the month.

  79. 79
    Dman Says:

    #76: Fortune cookie say: if Z is actually *short* an E&P company, trader no likey lousy E&P !

  80. 80
    ram Says:

    Since the ZMAN does not give advice, only information, what back of the envelop information on net worth could DPTR be now with the news out today?

  81. 81
    Jerome Blank Says:

    Anyone following NGAS, it has an good technical pattern developing, from what I can tell from the company website, NGAS is drilling new wells and has recently moved to reduce debt thru an asset sale, any thoughts on the company’s fundamental picture would be greatly appreciated, buying vol has recently increased…thanks

  82. 82
    Dman Says:

    #78 – on the continuous contract chart, crude is sitting on the lower channel line, looking like it is going to nibble thru & there’s some downside below.

    But on the Oct or Nov contracts, it is not quite on the line yet…

    So which rules? Continuous or actual contract charts? There should be a law or something…

  83. 83
    zman Says:

    DPTR – Ram – I have not done one yet. In the post I said they were not expensive on an NAV basis. They are less expensive now. Their problem is a lack of cash flow and catalysts going forward. Their interest payments are over half their revenues at last quarter’s commodity prices and they are gassy so, that’s a problem. But as to NAV, they are trading at about $1.25 / Mcfe, so not excessive there. Maybe they get bought. I would imagine that would happen after the stock gets a bit more washed out. This was below $1.75 just two weeks ago when it started moving up on the move in gas, the move in the little stocks and the potential of this well.

  84. 84
    zman Says:

    Jerome – I don’t follow it. Will take a peek at the fundies for the morning post.

  85. 85
    zman Says:

    Bill – went back and checked, looks like natural gas hedges are unchanged or only slightly changed at WLL. Their comments regarding the Lewis and Clark prospect area well were more confident.

  86. 86
    kiaora Says:

    From a technical perspective…Is there a new ‘got to own it’ price for KOG?

  87. 87
    zman Says:

    Tater, Jerome, 86 is for you guys.

    Natural gas slowly creeping up off the opening lows. Oil is holding over $69 but a trip to $65 isn’t necessarily out of the cards, nor a return to $74 or so. That’s a pretty healthy range for the oily E&Ps.

  88. 88
    zman Says:

    NGAS – I’ll have more in tomorrow’s post but in a nutshell, I won’t be touching that here. More than enough debt is a concern, high $/Mcfe cost structure is a killer. If gas prices rally sharply, I’m sure it will move with them but it is a risky bet at best. Pricey on a reserves basis as well.

  89. 89
    Jerome Blank Says:

    Re:#86, hi Kiaora…KOG is currently on a P&F buy signal, recently breaking thru its bearish trendline, with a upside target price on this buy signal at $3.25, KOG reached $2.89 on 9/17 getting within striking distance of its price objective and then pulled back, it should be noted that the last two days of pullbacks have been on fairly light vol, I’m holding to at the very least the current price objective… the way the price action sets up in this stock, you really have to hold with no stop, so position sizing is very important…KOG stays on a buy signal from its current price all the way down to 65 cents, but additional major support is right below that price…the price strategy will change if KOG reverses into o’s which will happen from this level with a print at $2, and then 3 box reveres back into x’s…I will get back to you if this happens, for a very risky trade…look for a a pullback to $2, $1.50 less risky, but will it get there?

  90. 90
    Jerome Blank Says:

    Re #88, thanks Zman

  91. 91
    zman Says:

    CXO call about to start at B of A

    Nat Gas failing into the close of Nymex, off 5%.

  92. 92
    zman Says:

    DPTR – at LOD, 68 mm shares so far.

  93. 93
    zman Says:

    CXO – always interesting little name. About to talk about their Bakken assets.

  94. 94
    zman Says:

    CXO – Still interesting post call. Anyone familiar with their lower Abo horizontal play. I’m going to do a little research but I don’t know if anyone else has been targeting the Abo, don’t think so, via horizontals.

  95. 95
    Jerome Blank Says:

    Re:#87, on the continuous light crude P&F chart, oil is currently on a sell signal from what looks to be its first print of $69 back on 9/1…major bullish trendline support at $68 which continues to hold, ($67.05 on 9/2 and $67.12 on 9/4, guess someone is watching this price level)…a print of $67 breaks support and suggests an objective of $62, crude goes back on a buy signal at $74 as mentioned by Zman

  96. 96
    zman Says:

    HDY up 23%. Their third option going forward was to do a stock deal. Hmmm.

  97. 97
    zman Says:

    Nicky – Not much of a correction eh? Still waiting for a bit more red to get more long.

  98. 98
    zman Says:

    ZTRADE:

    BEXP – Added (15) BEXP October $10 Calls (QBJJB) with the stock at 9.56. Analyst meeting tomorrow night, the stock has been higher recently, and has upcoming catalysts. I continue to hold the common as well.

  99. 99
    zman Says:

    ZTRADE –

    DPTR – Sold the $3 Puts (QHRVJ) for $0.90, up 46%, on the mid with the stock stuck at $2.25. I continue to hold 50 of the $2 strike puts.

  100. 100
    rseidman Says:

    Z: Price paid for BEXP calls?

  101. 101
    zman Says:

    BEXP $10s were $0.60

  102. 102
    rseidman Says:

    Thanks

  103. 103
    zman Says:

    UBS bidding 6 figures for DPTR, not really helping it.

  104. 104
    ram Says:

    Could you expand on #103?

  105. 105
    zman Says:

    UBS was bidding about 100,000 shares, some of the biggest size all day and with some other big bids can scare back the offers and send the stock higher. Sellers sliced that bid like butter. Stock fell.

  106. 106
    zman Says:

    Safe play would be to take those $2 puts off the table before the close and pocket 55%. Mulling.

  107. 107
    ram Says:

    Thanks.

  108. 108
    zman Says:

    Actually not mulling it because there is no size on the bid for those $2s. Will revisit it in the morning.

    Beerthirty.

  109. 109
    Wyoming Says:

    http://screencast.com/t/NXPRkQ3MZb3f

  110. 110
    zman Says:

    Thanks for the chuckle Wyo, you familiar with the L. Abo?

  111. 111
    Wyoming Says:

    No Hablo L. Abo

  112. 112
    zman Says:

    KWK – on the tape with its first Horn River Basin completion (B.C.)

    13 MMcfepd IP is strong to middle of the road.

    10 MMcfepd first month average is pretty strong.

  113. 113
    zman Says:

    A name we’d all like to forget:

    http://www.marketwatch.com/story/amaranth-sues-touradji-capital-2009-09-21

  114. 114
    zman Says:

    KWK – bid 13.80, close 13.12.

  115. 115
    TEXWS6 Says:

    Z,

    Email me about the Abo play..

  116. 116
    Wyoming Says:

    Reading an LA Times article and it had an add linking to this site:

    http://www.anga.us/

    It is a lobbyist site promoting NG to the country. It won’t be shown much in Texas for obvious reasons.

  117. 117
    RMD Says:

    MCF: listened to IPAA presentation; now I knw why I have been nibbling at stock since my posting about the p&f chart, like the whole way he comes across, though on a $/mcfe basis it’s up there.
    CEO thinks Congress takes away the IDC, and that it will help the strong gas players. Anyone have IDC updates?

  118. 118
    zman Says:

    RMD – have not forgotten it either, working on it now, won’t be tomorrow, more involved than I thought, either Wednesday or Thursday for a solo piece.

  119. 119
    zman Says:

    RMD – remember Spinnaker? These MCF guys are basically riding 9 wells. One goes bad, like Alex Deep did for SKE, and the record skips hard at the party, many dancers thrown to the floor.

  120. 120
    bill Says:

    i took a small initial position in mcf

    i like it for low cost, no debt, 100 % pure ng play

Leave a Reply

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®