22
Sep

Fed Up Tuesday

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Market Sentiment Watch: The just-around-the-corner-correction never seems to materialize. I'm sure it will but the attempts at making a run to the downside have been too elusive for me to put on what I'd call an actual hedge other than cash. I spent last week raising cash and yesterday dipping into it. I will not stray back into a heavily long position at this time but will continue to focus on event driven, active trading in the options portfolio. As far as the ZLT goes, I'm fairly content to ride out any Fall season discombobulations the market may throw my way unless some of the smaller players in the group break through their old highs, shattering what I feel are worthy valuation levels.  The Fed meets today and releases what is expected to be faily "non-event" commentary tomorrow.  We get home prices after the open, but with little other data to key off aside from that and a strong start to futures, it looks like more short bashing is likely in order.

 

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today - Horn River Tuesday (NXY, KWK, and maybe EOG), NGAS, BEXP
  5. Odds & Ends

Holdings Watch:

  • $10KP II: Busy day yesterday.

    • $18,500
    • 51% Cash
    • 8% Puts
    • The Current Holdings Tab Is Updated.
  • Yesterday's Trades:

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

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

    • 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%.

    • 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).

    • 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.

    • 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.

    • BEXP – Added (15) BEXP October $10 Calls (QBJJB) for $0.60 with the stock at 9.56. Analyst meeting tonight, the stock has been higher recently, and has upcoming catalysts. I continue to hold the common as well.

 

Commodity Watch

Crude oil fell $2.33 to close at $69.71 yesterday on a strong dollar and weak-ish equity market. This morning, the dollar has given back all of yesterday's gains and has fallen to fresh lows for this cycle (the lowest level for the dollar index since 9/26/08). If the dollar index breaks support here at 76, a fall to 72 to 71 seems likely. This morning crude is trading up a $1.50.  Products are equally strong, up 2% pre market.

  • Early Read On Oil Inventories:
    • Crude: DOWN 1.4 mm barrels
    • Gasoline: UP 0.4 mm barrels
    • Distillates: UP 1.6 mm barrels
  • OPEC Watch: Cartel leader Saudi Aramco sees "little chance" of lifting constraints on production next year "since a recovery in world demand has yet to begin."

 

Natural gas fell $0.20 to close at $3.58 yesterday. I was musing in Monday's post that volatility would be higher for a while, get used to it. We saw a small Canadian player announce a curtailments yesterday evening but for the most part, my suspicion is that people are going about their business, quietly curtailing production, so as not to draw attention in this age of political ire over such things. This morning gas is trading up slightly.

  • Imports Watch: 8.1 Bcfgpd, down 0.2 Bcfgpd from last week and last year.

    • LNG: 1.1 Bcfgpd, vs 1.0 last year.
    • Canada: 8.0 vs 8.3 Bcfgpd a year ago.


Crack Spread Update


Key Takeaways: Same as last week, refining capacity needs to come off seasonally plus some for the weak demand to rebalance the products market. Demand needs to rally and we are seeing some signs, outside of actual gallons of consumption that a rebound in freight is in the offing. I continue to hold a starter position in TSO as west coast margins remain superior to the rest of the country. Late last week saw the first rally in recent memory for the group ... there was little follow through the following day. I may add a second leg to the TSO position after inventories this week.


Stuff We Care About Today

NXY Announced Horn River Production Rising:

  • Production at 15 to 20 MMcfepd, most of which comes from their 3 most recent wells
  • They estimate they have 3 to 6 Tcfe of potential reserves on their 88,000 net acres

KWK - Announces First Horn River Basin Completion

  • First Well:
    • 3,500' foot lateral, 10 stage frac
    • 13 MMcfepd IP is strong to middle of the road.
    • 10 MMcfepd first month average is pretty strong.
  • KWK has drilled a second well 4,300 foot lateral and plans to complete it late this year
  • KWK has 127,000 net acres in this British Columbia shale play. Refer back to NXY's acreage comment relative to potential reserves in the preceding section. Then recall KWK had 2.2 Tcfe booked, company wide, at YE08. 
    • KWK's commitment requirements to hold acreage  is light  at 8 wells over the next 3 years. This would turn the exploration licenses into 10 year leases. Nice, and a feature that the Haynesville players wish they had.
  • This should move the stock higher and give me a graceful exit for my October $15 calls.

 

The preceding two comments may also produce a positive response at EOG who has 157,500 net acres at Horn River, and who has stated before that they see potential reserves, on their acreage, of 6 Tcfe. Total company booked reserves as of YE2008 were 8.7 Tcfe. 

 

NGAS - Quick Look For Jerome

  • Production - 2Q09
    • 11 Mcfepd, (it's tiny),
    • 68% natural gas;
    • suffering from a small sequential decline due to price restrained drilling activity
  • Cost Structure: High
    • LOE: $2.61 /Mcfe - this is lower quartile
    • All in Cash Costs: $7.65. Pretty tough when you sell the gas at $6.61 last quarter
  • Balance Sheet:
    • Net Debt to Total Cap: 52%, not exactly on the low end of the scale
  • Valuation:
    • 2009 P/CF: 5.2x
    • 2010 P/CF: 5.7x
    • 2009 and 2010 TEV / EBITDA at 10.4x. That's high. Given their debt load and lack of manuevering room on gas prices and high cost structure, I just can't get involved. 

MCF - More involved that I thought, I should have something out Wednesday or Thursday.


BEXP Analyst Meeting Tonight:

  • They should be able to play up a string of near term catalyst and may have well news from a 28 stage completion in their Rough Rider area in the next several days. 
  • Analyst Meeting Broadcast Tonight at 6 pm EST.


Other Interesting Tid Bits Watch

  • Back From The Dead: EPL
  • RAIL Earnings - worth watching as a general indicator...orders picking up. Conference call at 11:00 am EST.
  • BBG speaks at B of A at 1:40 pm EST. 

Odds & Ends

Analyst Watch:

  • (XTO) target raised from $43 to $47 at Barclays, rating stays Overweight
  •  Citi raises (BTU) and (ANR) to Buy
  • (RDC) cut to Sell at Jesup
  • (UNT) cut to Neutral at SunTrust

Well Said Watch: API To The Obama Administration:

"In about a week's time, we will mark the one-year anniversary of the end of the moratoria for new oil and natural gas leasing in federal waters off our Atlantic and Pacific coasts. Despite the public's clear desire for more domestic energy development and the industry's years of experience operating offshore in an environmentally sensitive way, this administration repeatedly has slow-pedaled this plan which would benefit all Americans, especially in these tough economic times. New oil and gas development could create thousands of jobs, add over a trillion dollars to government coffers, strengthen America's energy security and encourage our economic recovery.

"It’s time to end the delays. The administration now has comments in hand. It knows that oil and natural gas will be integral to the nation's economy for decades to come. It must act now to ensure that America has the energy it needs today -- and in the future."

143 Responses to “Fed Up Tuesday”

  1. 1
    zman Says:

    BMO ups UPL target to 70 from 58

  2. 2
    zman Says:

    Bill – hear ya, there are definitely things to like there.

    Gold surging, 1.3%.

    E&P – expecting a strong open across the board. The KWK Horn River well is likely to drive that name to easily outperform today.

  3. 3
    RMD Says:

    Still working on MCF, but thanks for heads-up in #119 yesterday.

  4. 4
    elijahwc Says:

    ON Briefing this am:

    WLL Whiting Petroleum ests and tgt raised to $67 at Keybanc (55.49 )

    Keybanc raises their 3Q EPS ests to $0.29 from $0.13 (consensus $0.11), as well as their FY09 and FY10 EPS ests to ($0.23) and $2.06 from ($0.46) and $1.97 (consensus ($0.22) and $2.38), respectively. In addition, the firm raises their WLL tgt to $67 from $60, as the firm has increased their 3Q09 production estimate to 55.3 Mboe/d from 54.3 Mboe/d to incorporate better than expected production from the Co’s operated wells in the Bakken play and non-operated wells completed by EOG Resources (EOG). With the stronger than expected production for 3Q09, the firm would not be surprised if the Company increased its full year guidance to a range that is more in line with the firm’s full-year estimate.

  5. 5
    zman Says:

    Much obliged Eli. Sounds like Key is front running more well news … like maybe at IPAA OGIS San Fran next week, which I will only attend over the internet as the wife put the kibosh on that trip after intern #2 decided that sleep is unnecessary.

  6. 6
    zman Says:

    Anyone see a news item on CLR?

  7. 7
    Jerome Blank Says:

    Thanks very much for the look at NGAS

  8. 8
    zman Says:

    TPH saying Boardwalk repair update last night shows quicker return to service than expected. Good for SWN, HK

  9. 9
    zman Says:

    Simmons and TPH both liking the KWK news as much as I thought. Stock probably has legs today. I own the October $15s and may double that position on the first lull.

  10. 10
    zman Says:

    Dollar down + Saudi saying it probably won’t hike next year (oh come now, you see $100, you will produce more if you have 4 mm bopd of idle deliverability) combining to send oil up just under $2. Products up as much.

  11. 11
    bill Says:

    looks like kwk will be the star of the day

  12. 12
    zman Says:

    DPTR – bid slightly lower. I continue to hold 50 of the $2 strikes. Will be watching closely as anything can happen and maybe it catches a buyer in what is sure to be a sea of energy green love at the open. I’m content to cover those if it tries to run and re-put higher for a fall later. Lack of broker support after a 45% fall yesterday on 84 mm shares is pretty telling today.

  13. 13
    reefguy Says:

    Noble presentation last night-New discovery in Israel has proved reserves of 6.3 TCF. Numerous undrilled structures on 3 million acre block. Unrisked potential on these in excess of 20 T. This is not bad for a 12 B market cap stock.

  14. 14
    zman Says:

    Reef – I never followed that one but they own the Israeli gas fired power market it seems. Is APA a partner in that?

  15. 15
    West Says:

    look for next upleg on ATPG to begin today.

  16. 16
    zman Says:

    West – hear ya, them and everyone else, lol.

  17. 17
    zman Says:

    HK at $25, been awhile.

    BEXP took out $10, analyst day tonight.

    KWK, backing off from $15+ now, may add a little more. Watching NG which has given up the day’s gains.

    DPTR – hugging $2.20, no gain on day.

  18. 18
    zman Says:

    DPTR looking like it wants to take a shot at $2. Lot of stops should be hanging out there. Could get uglier.

  19. 19
    zman Says:

    DPTR breached $2.

  20. 20
    zman Says:

    ZTRADE:

    DPTR – Sold 50 (all) $2 October Puts (QHRVI) for $0.30, up 86%, with the stock falling through $2.

  21. 21
    zman Says:

    Market shrugging off a little flat Fed data,

    July home prices rise 0.3%. Data shows U.S. home prices down only 4.2% YoY, off only 10.5% from peak.

    Energy staying strong.

  22. 22
    1520sbroad Says:

    Z or VTZ – any of the canadians have acreage up there? I vaguely remember that PWE has some acreage there??

  23. 23
    1520sbroad Says:

    #22 – i was referring to the horn river news from KWK.

  24. 24
    zman Says:

    Tater, Jerome, could you fellas take a fresh whack at HK? Thanks.

    1520 – NXY for sure, they had an announcement out last night too on the play.

  25. 25
    1520sbroad Says:

    #24 – reading NXY now. Thanks – i will try and dig up any other players up there.

  26. 26
    zman Says:

    EOG getting play off the news too. ECA, APA, and DVN have acreage up there too.

  27. 27
    Wyoming Says:

    http://blogs.wsj.com/environmentalcapital/2009/09/21/steven-chu-americans-are-like-teenage-kids-when-it-comes-to-energy/

  28. 28
    bill Says:

    did you see bernake and gang arriving for meeting in 20 suv’s

    how come they are not driving the govt mandated 50 mph pelosi special battery operated 2 seater?

  29. 29
    zman Says:

    Re 27 – Speechless. Your condescending tax dollars at work. I am Jack’s complete flabbergasted lack of surprise.

  30. 30
    bill Says:

    I bot some bexp for tonights meeting..maybe they will have a suprise announcement to make

  31. 31
    Jerome Blank Says:

    Re:#24 HK…is currently on a dated sell signal from its break below $22 back in June, but right now HK is in a very interesting spot bumping up against the bearish trendline as we speak at $25, where it is likely to encounter resistance, HK breaks resistance and goes back on a buy signal with a print of $26, it should be noted that $26 was very tough resistance early this summer, so the friction area for HK is $25-$26, get thru this and it should get easier for the next leg higher

  32. 32
    zman Says:

    Bill – yep, that’s why I added BEXP calls yesterday. They have a number of wells between now and year end to announce. Timing looks close on one either tonight (the Olson well, their biggest frac to date and I think the most stages anyone has yet attempted at 28 in the play) or for IPAA next week.

  33. 33
    zman Says:

    Thanks Jerome, kind of what I thought. Biggest risks there are a resumption of the downtrend in natural gas and the broad market.

  34. 34
    zman Says:

    Still watching the KWK, mulling doubling my $15 Oct. calls there.

  35. 35
    Dman Says:

    #27 I’m sure Chu was a really smart guy, but now he’s become a political zombie, or at least talking like one. Reminds me of an article Cramer wrote about a friend of his, really smart, who joined the White House team (I think it was in the previous administration). Said he called him up to try to talk about the economy & his friend just repeated zombie talking points.

    Having said that, I’d really like to see Chu’s actual plan. So far all I’ve heard about is painting roofs & other gestures.

    Those teenagers will get pretty annoyed if they do all the personal energy saving only to find that China has melted the ice caps for them.

    I also would point out that it is pretty disingenuous for the WSJ to run a column with the word “environment” in it. I preferred it when they didn’t even pretend to give a damn. More dignified that way. It’s a bit like businesses pretending to be green: I preferred the old days when they went around saying what they thought: that the environment was put there to be destroyed.

  36. 36
    VTZ Says:

    ECA, PCA (now SU), QEC (the Utica shale players I like), EOG, APA, DVN, lots of the trusts have pieces of it.

  37. 37
    VTZ Says:

    There’s other players I’m forgetting for sure. It is a big play and basically everybody is seeing huge rates.

  38. 38
    zman Says:

    VTZ – Yep, it’s the Haynesville Shale equivalent for British Columbia, sans infrastructure. No one is expecting large volume adds prior to 2012 or so (and some of that volume will be shipped as LNG to Asia). The most leveraged name among U.S. large cap independents (based on acres, position in the play, well results so far and relative to their proved reserves on a company wide basis) is EOG. On the smaller side, that would be KWK. These will be the “go to” names for U.S. money managers to get leverage on it.

  39. 39
    ram Says:

    West-Bill; atpg still has legs to double fom here?

  40. 40
    ram Says:

    Could KWK get more momentum than EOG because of it’s smaller size?

  41. 41
    zman Says:

    BOP is away on personal stuff but sent this link along.

    http://www.capmarkets.com/ViewFile.asp?ID1=124026&ID2=352898569&ssid=1&directory=6571&bm=0&filename=09.22.09_Credit_Supporting_MandA_and_Higher_Equity_Valuations.pdf

  42. 42
    zman Says:

    Ram – 40, yes, smaller size, more leveraged to the play.

  43. 43
    zman Says:

    We’re back to the really small caps trading up quickly, GST through $5. I still find that and the wave of insider selling in energy reason for caution.

  44. 44
    Dman Says:

    Anyone heard from Robert Prechter lately? Oil not at $5 just yet. All it needs is a 93% correction of its rally since 1850.

  45. 45
    zman Says:

    Doing a little reading/writing, here if anyone needs anything but otherwise sitting back and enjoying this move.

  46. 46
    zman Says:

    Dman – thanks for the laugh.

  47. 47
    zman Says:

    BEXP does not have new slides up for tonight’s Williston Basin (Bakken) presentation. I have the August presentation in hand and will give comments when I see something new from them.

    BBG speaks at the smid-cap conference at 1:40 EST.

  48. 48
    Nicky Says:

    Morning all.

    Looking for another high in the indices -1079 – 1090 SPX, which should complete (iii) of v up, then we see iv down before a final move up in v which I still think will get to the 1123 or higher region and likely take us into early October.

  49. 49
    md Says:

    Nicky

    Please elaborate to the EW challenged.
    How far down on the iv

    and after final move up to 1123 or so
    where to in early Oct.

  50. 50
    zman Says:

    I’m thinking to take more profits as wee approach the close.

    We are at the point where in any weekly data, we can expect a dip in utilization that will cut oil demand. This week’s data expects a small reduction in oil inventories after a larger than expected dip last week. Part of that was low imports and part was high demand. If those 2 reverse back out of the numbers with this week’s data, it would set oil back a bit. I see no reason to not take gains and buy things back at lower prices if we get them.

  51. 51
    bill Says:

    atpg blasted thru 22 up another 7 %

    drinks are on West

  52. 52
    bill Says:

    35 , lol

    yeah the wsj likes dirty water and acid rain

  53. 53
    md Says:

    The flash numbers released for July show electric use up YOY only .5%.
    Industrial DN 12.5%

  54. 54
    bill Says:

    39, i still like atpg but i dont have west fortitude to let it all ride

    i still own it but only 25 % of my original position..sold some today

    Im afraid the company will do a secondary knocking the thing down 3 or 4 bucks

  55. 55
    jiveyjr Says:

    I’m a bit slower to the calls, but I thought the WLL presentation was very, very good yesterday

  56. 56
    zman Says:

    Jivey – it was and he does a good job, I plan to trade in and out of it with oil as my cheap exposure name until it’s not cheap any more. His presentation held nothing new compared with the one from last week but they should have news on the horizon and may get a further bump from comments from BEXP tonight.

  57. 57
    Nicky Says:

    Hi md – sorry I need to be clearer as it is going to get very challenging up here.

    Okay so we are working on wave iii of v. I believe we are currently in v of iii (alternative has us still in iv of v with lots of chop). Looking for a high tomorrow between 1079 – 1091 SPX. Then the pullback for wave IV. I don’t think IV will take us below 1039. Then the final wave V for wave 1 of C which is going to take us to the 1123 SPX level into early October.
    Now the top could come anytime in the first two weeks of October.

    After that a really decent pullback for wave 2 of C which I believe could take us back to the 960 region in the SPX. It will be a fast correction and likely take around a month.

    Then up into the Spring.

    Md I am working this with cycles and waves. Many are calling for a top on this wave up so they would say we go straight up in a v to anywhere between 1070 and 1100 and top there. Its not impossible but doesn’t fit with the cycles which is why I am looking at a top forming in a more choppy way.

  58. 58
    elijahwc Says:

    #44 not on his current thinking, but this little life lesson showed up from Bob Prechter courtesy of Raymond James:

    You KOGers & ATPGers ought to like this.

    Do You…Sincerely?!

    “Do you have the mental fortitude to accept huge gains?”

    “This comment usually gets a hearty laugh, which merely goes to show how little most people have determined
    it actually to be a problem. But consider how many times has the following sequence of events occurred? For a
    full year, you trade futures contracts, making $1000 here, losing $1500 there, making $3000 here and losing
    $2000 there. Once again, you enter a trade because your (trading) method told you to do so. Within a week,
    you’re up $4000. Your friend/partner/acquaintance/broker/advisor calls you and, looking out only for your
    welfare, tell you to take your profit. You have guts, though, and you wait. The following week, your position is
    up $8000, the best gain you have ever experienced. ‘Get out!’ says your friend. You sweat, still hoping for
    further gains. The next Monday, your contract opens limit (down) against you. Your friend calls and says, ‘I told
    you so. You got greedy. But hey, you’re still way up on the trade. Get out tomorrow.’ The next day, on the
    opening, you exit the trade, taking a $5000 profit. It’s your biggest profit of the year, and you click your heels,
    smiling gratefully, proud of yourself. Then, day after day for the next six months, you watch the market continue
    to go in the direction of your original trade. You try to find another entry point and continue to miss. At the end
    of six months, your method finally, quietly, calmly says, ‘Get out.’ You check the figures and realize that your
    initial entry, if held, would have netted $450,000.”
    “So what was your problem? Simply that you had allowed yourself, unconsciously, to define your ‘normal’ range
    of profit and loss. When the big trade finally came along, you lacked the self esteem to take all it promised . . .
    who were you to shoot for such huge gains? Why should you deserve more than your best trade of the year?
    Then you abandoned both (trading) method and discipline. To win the game, make sure that you understand
    why you’re in it. The big moves in markets only come once or twice a year. Those are the ones which will pay
    you for all the work, fear, sweat and aggravation of the previous years. Don’t miss them for reasons other than
    those required by your objectively defined method. The IRS categorizes capital gains as ‘unearned income’
    that’s baloney. It’s hard to make money in the market. Every dime you make, you richly deserve. Don’t ever
    forget that.”

    . . . Robert Prechter – the Elliott Wave Theorist (1992)

  59. 59
    zman Says:

    LINE at $24. After having reviewed the stories at the other upstream E&Ps and found them largely lacking last week, I continue to hold this one.

  60. 60
    cargocult Says:

    Any insight into CWEI?

  61. 61
    zman Says:

    Cargo – no particular insight there, no. I have them on a watch list, moving up with everything else, don’t see any news out to account for the rally, which at 6%, is sort of “in line” today.

  62. 62
    zman Says:

    Heck of a run off the $20 level though. Wow.

  63. 63
    zman Says:

    Talking your book watch:

    “If ever there was going to be a retreat below $60 a barrel, it is now,” Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in a telephone interview. “It was a very weak summer. We came out with more gasoline than we started.”

    Same chap touting $0 natural gas.

  64. 64
    West Says:

    Thx Z. For those with an interest my research shows that the shorts still have not started covering ATPG yet. We could have parabolic move up from here if they panic or have a margin call. Several Brokerage firms have increased their margin requirement on the stock in the last 2 weeks. Yesterday we had hotdogs and today we are having burgers . I’m marinating the filet and trying to find a cuban cigar.Just imagine a big fat pig in his recliner with cowboy hat , cigar, and cold Lone STar, that’s me.

  65. 65
    zman Says:

    West – What has short interest 4 weeks ago? I show it at 20% of float now. The stock is already moving straight up so unless it bends over backwards, hard to get more parabolic. Since it has recently tripled, wonder what new news, beyond short covering drives it from here. Also, the higher they get, the more critical it becomes that timetables for new production and deals get met. Stock is still not expensive on forward cash flow, but I wonder when they raise additional capital…who could blame them at these levels, especially given their balance sheet.

  66. 66
    DrLink Says:

    I have a neighbor who every time I see him talks about what a great company SandRidge
    Energy is and how Tom Ward is a great guy, and that when gas turns it’s going to be a winner…..any comments? Also it seems like SJT really is a proxy to gas price.

  67. 67
    1520sbroad Says:

    Z – what was the CFTC short interest change in NG – maybe you mentioned it in the wrap post?

  68. 68
    zman Says:

    DrL – I know SD fairly well. He’s not wrong, but it has a fair amount of debt and has been off my list as an easy trade for awhile. There should be some SD notes on the Reports tab from days of old.

    1520 – still very high, did not change much at all from the prior week.

  69. 69
    West Says:

    #65, New monthly report on short positions on Thursday , last is 20% as you said. I don’t have this in writing but they should announce a monetization of asset in the next couple of weeks. This morning stock available to be shorted was 150k , my last check was 350k. I am more trading the charts and stock action which says that we continue to move higher. Mostly likely people know of upcoming transactions that will help their debt position. Another thing is that there are no big blocks of stock available. Have you ever played Texas Hold’em? Big E and a few others are playing now with ATPG. PLEASE BE ADVISED I am not telling anybody to buy here. Also if they don’t get a monetization deal they will probably do an additional offering. I also think that longer term this stock will double in the next year with a doubling or tripling of production. There is also that rumoring floating around that they are an acquistion target for their infrastructure.

  70. 70
    zman Says:

    re 69 – Ok, thanks much.

  71. 71
    1520sbroad Says:

    #68 – thanks – i looked back thru the last few posts and didn’t see it mentioned so i figured it was a non-event.

  72. 72
    zman Says:

    West – also understand, I’m just trying to understand, not trying to call a top or anything like it, on a chart it looks to me like it needs a rest. On 2010 CFPS it remains cheap (but obviously less cheap than it was 4 weeks ago). On 2010 EBITDA it is kind of in a middle of the road valuation. Monetizations are known but they certainly won’t hurt. Anyway, thanks for the input, I’ve not touched it yet.

  73. 73
    VTZ Says:

    Z, I just sent some reports.

  74. 74
    West Says:

    Z, totally with you. I have been playing this since breakout at 10.5. Sold 3/4qtrs of my KOG and moved into atpg. As it has developed since then it is not a traditional stock trade, thus the Porky Pig Trade.

  75. 75
    baylor3217 Says:

    Thoughts on OIH puts?

  76. 76
    zman Says:

    OIH – puts – too broad spectrum for me. Parts of the OIH I like. But even the parts I have concerns about continue to run hard here and I don’t want to fight the tape. I’ll wait longer to add to my HAL position.

  77. 77
    zman Says:

    V – saw that, thanks much.

  78. 78
    baylor3217 Says:

    Thoughts on OIH puts on the recent runup?

  79. 79
    baylor3217 Says:

    Sorry for the duplicate aubmital. Apparently can’t operate my iPhone

  80. 80
    zman Says:

    ZTRADE:

    APC – Sold (10 – all) of the APC October $65 Calls for $2.55, up 40% to my average cost. I continue to hold the $70 strikes here but didn’t need a 10% position going into inventories tomorrow. I may add this back in the morning if we see an unexpected build in crude stocks and the group weakens. These were taken after the Venus discovery and doubled on group weakness and prior to the Horn River announcements by their competitors over night.

  81. 81
    1520sbroad Says:

    VTZ – i remember you posted a handful of gold miners in the past week or so – i am looking for NYSE traded solid names to compare with a screen i have been running for miners. I greatly appreciate your thoughts.

  82. 82
    zman Says:

    $10KP II back to 60% cash after today’s sales.

  83. 83
    VTZ Says:

    RBI K SLW RGLD are some of my faves in an increasing gold environment. K is mostly a solid company that’s probably the first midcap taken out by barrick. I used to like ELD too but it’s pretty fully valued now I think.

  84. 84
    zman Says:

    EOG in full breakout mode.

  85. 85
    zman Says:

    IPAA presentation schedule for next week:

    http://www.ipaa.org/meetings/pdf/092009OGISSanFranSchedule.pdf

  86. 86
    elijahwc Says:

    Cimarex files mixed securities shelf offering

    Needs $ to acquire MHR again

  87. 87
    zman Says:

    RMD – are you going to IPAA San Fran? MCF speaking on 3rd day.

  88. 88
    VTZ Says:

    Z – did you look at the WCSB receipts declining from 15 bcf/day in Jan 07 to just over 13 in July? Could easily be 12.5 bcf/day or less by the summer next year.

  89. 89
    bill Says:

    bexp report is now on their site

    z tell me how good is it

    http://www.bexp3d.com/IR_pres.pdf

  90. 90
    zman Says:

    No, I have not looked at the monthly data you sent earlier yet, its on the stand for tonight. With the EIA, there is a bit of collection lag, due mostly due to Gulf Operators who delay sending in their production figures to the govt. So there may be some slight upward revisions for this data as well, but yeah, I would expect to see it slide. We’re one really cold winter away from a more than balanced market.

  91. 91
    zman Says:

    Bill – thanks, that will take a bit, its more 2x their normal pres.

  92. 92
    elijahwc Says:

    WLL 69.1m piece trades @2:36 on a 58.11 print. Rest of trades today 100 share pieces. Makes one say hummm…

  93. 93
    zman Says:

    BEXP – next well still listed as “planned” 28 stage frac … this was the well they were set to begin completing mid September so they are probably a week or two away from announcing anything….

  94. 94
    zman Says:

    BEXP – showing a longer history plot on their big Ross area well, the Anderson 28-33. That well is holding up very well and was a 24 stage frac, more than double production of their early wells 30 days in. …

  95. 95
    ram Says:

    Re #93 – could that put short term neg pressure on stock?

  96. 96
    zman Says:

    Ram – maybe but I kind of doubt it. Today is the 22nd, they were set to begin completing it “mid Sept.” so pretty optimistic to have it done by today. They know it is a discovery, just don’t know how good yet.

  97. 97
    zman Says:

    The bulk of the BEXP presentation gets into the history of the basin’s development and its geology …

  98. 98
    zman Says:

    Somebody let me know when they see API. Thanks.

    Beerthirty. BEXP presentation begins at 6 pm EST.

  99. 99
    elijahwc Says:

    ATPG files 5.3mm shrs

  100. 100
    West Says:

    atpg offers 5.3 million

  101. 101
    zman Says:

    Seems like the right move for them.

  102. 102
    elijahwc Says:

    deals deals deals: GDP Goodrich Petroleum announces $150 mln convertible notes offering (26.62 +0.81)

    You will probally want a piece of this one.

  103. 103
    bill Says:

    100

    i knew they wouldnt be able to resist

    they probably hope to get 100 m

    its a good move for them

    i hope the stock goes down 3 bucks as id like to reload

  104. 104
    West Says:

    long term helps ATPG on several fronts, short term probably pull back . Dropping initially in after hours . Back on the spit.

  105. 105
    bill Says:

    atpg also sold the gomez pipeline for 78 m

    they still own 100 % of the titan platform

  106. 106
    bill Says:

    that going to be almost 200 m

    they have to be estatic as they was talks of selling half of titan for 300 m

  107. 107
    bill Says:

    down 1.2 in ah

  108. 108
    bill Says:

    west, im coming to your barbeque!

  109. 109
    elijahwc Says:

    104 and 107: 125mm Convert also done QIB Rule 144 = convertible arb

  110. 110
    bill Says:

    and another 125 m for 300 m in all

    i wonder if einhorn snapped up the convert

    this is what they said they need 300 m

    this will remove the financing risk off the table

  111. 111
    1520sbroad Says:

    VTZ – #83 – thanks for those names. i can’t find RBI or K – are they TSE symbols?

  112. 112
    bill Says:

    more atpg news

    probably had to give an update due to offering

    http://finance.yahoo.com/news/ATP-Operations-bw-268366631.html?x=0&.v=1

    net net new news neutral other than pinning down a sail out date for titan and mms delayed approval

  113. 113
    West Says:

    call me crazy, but this is good and I am buying some here in after hours at 20.60. Now the news is out there.

  114. 114
    bill Says:

    i wonder what pricing will be

    a 10 % hit on tomorrows close??

    18 on low side 20 best case probable 19

  115. 115
    VTZ Says:

    I thought they would be on NYSE. Kinross and Redback Mining.

  116. 116
    elijahwc Says:

    110 – brilliant point. It (the convert)would have to season and go through a registration/filing period before anyone would have to know. So if it shows up in Greenlights portfolio thats exactly what happened.

    Odds however favor it being scattered among the Citadels of this world with the common shorted against it.

    One other thought. The remaining logical buyers for the convert are those that have be short heretofore. Immunizes their position.

  117. 117
    VTZ Says:

    KGC and the other one looks like pink sheets?

  118. 118
    bill Says:

    well, with my painful experience with hk and pxp they both fell hard for about a month after the pricing

    pxp went from 30 to 24 hk is just getting back to its offering price and it took at least a month

    i think atpg is going to be different as this was the major risk item and this removes that risk

    they got lucky and the shorts arent going to like that

    they raised 300 m with hardly any pain

    i dont think it goes below 18 and a year out your 20.60 purchase might be a double

  119. 119
    bill Says:

    i think i will buy a 1000 here as well

  120. 120
    bill Says:

    its moving up off lows in after hours,, i actualy think this is bullish news

  121. 121
    1520sbroad Says:

    #117 – thanks – KGC is what i thought you were talking about. RBIFF is red back in the States.

  122. 122
    zman Says:

    API Watch:

    # Crude: Up 276,000 barrels – the result of a small recovery in imports and a modest retreat in refining capacity utilization.

    # Gasoline: UP 3.815 million barrels

    # Distillates: DOWN 1.882 million barrels – API attributed this to a sharp rally in demand. If that is reflected by EIA tomorrow that will likely be more important than the drop in gasoline demand. In the after hours market this surprise decline boosted HO pricing.

  123. 123
    baylor3217 Says:

    With the atpg deal, do we see any “me too” action in the space?

  124. 124
    zman Says:

    Baylor – we have been seeing deal action for two months. We will probably see a little more for the more financially stretched balance sheets in the next month. After that, deals likely to focus more on use of proceeds to take out distressed players.

  125. 125
    baylor3217 Says:

    Anyone have Ameritrade? What do u have to do to execute an after hour trade?

  126. 126
    kyleandy Says:

    bot ATPG at 20.25 at bk of amer at 5:40

  127. 127
    zman Says:

    BEXP call in 15min

    Current holdings and $10KP spread tabs updated.

  128. 128
    zman Says:

    Marc Faber – Buy stocks because U.S. Dollars will be worthless.

    http://finance.yahoo.com/tech-ticker/article/338419/Buy-Stocks-Because-U.S.-Dollars-Will-Be-%22Worthless%22-Says-Faber?tickers=fcx,gld,nem,chk,ng,xom,pfe&sec=topStories&pos=8&asset=&ccode=

  129. 129
    zman Says:

    BEXP conf call pushed back to 6:45 EST due to flight delays.

  130. 130
    bill Says:

    i also got 1,000 atpg at 20.25 at 5:04

    do yourself a favor and listen to earnings call for q2 at rodham presentation

  131. 131
    zman Says:

    BEXP presentation delayed until 7:30pm EST

  132. 132
    zman Says:

    BEXP call starting.

  133. 133
    bill Says:

    being a finance guy, i wish they spent some time on the PL, cash flow, and balance sheet

    this technical stuff is putting me to sleep

  134. 134
    zman Says:

    This is specifically a Williston Basin tour.

  135. 135
    zman Says:

    Dollar cracked 76 in AH trading.

    Still on the BEXP call, notes in morning.

  136. 136
    West Says:

    ATPG, Just some thoughts. I would not be surprised to see a pull back to recent breakout point of 18.88 which is the 10 dma. The buyers will probably wait for selling and may encourage the selling by those with stop lose triggers. As stated before I have a large core position that was established at a lower cost basis and may add additional shares if opportunity arises. The stock has made a monster move so prudence be your guide. Longer term I recommend the stock for growth over the next year when production should double and possibly triple. According to information that I have seen there is still a 20 % short interest of available float and only 350k shares available to short at today’s close. Probably a lot of voliatity near term so keep that in mind when trading either way.

  137. 137
    VTZ Says:

    I just came to note that the dollar cracked 76 and I’m happy to see you already posted.

  138. 138
    zman Says:

    M&A Watch

    SD picks off Crusader

    http://finance.yahoo.com/news/SandRidge-Energy-Inc-prnews-1173687592.html?x=0&.v=1

  139. 139
    bill Says:

    kru is the symbol

    filings here

    http://www.ir.crusaderenergy.com/phoenix.zhtml?c=99933&p=irol-sec&secCat01.1_rs=31&secCat01.1_rc=10

    looks like the price covers the debt nothing for shareholders

    assets all over the place

  140. 140
    bill Says:

    this explains yesterdays weakness in sd stock which sold off all afternoon

  141. 141
    zman Says:

    Bill – I covered it in the Wednesday post which is now up. I think this is a very good deal for them.

  142. 142
    bill Says:

    kru last presentation

    http://media.corporate-ir.net/media_files/irol/99/99933/pdfs/Sept%202008%20Investor%20Presentation.pdf

    reminds me of bexp..no financials

  143. 143
    zman Says:

    Bill – the BEXP presentation last night was not a complete company look. It was only designed to be a Williston primer.

    The last Crusader presentation actually did contain reserves, production growth and operating metrics by the way.

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