04
Nov

Fed Up Wednesday – Oil Inventory Preview Plus Lots More Earnings

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Market Sentiment Watch: Despite the continued waffley and at times, fast, nervous looking trading in the broad markets, the energy group put on its most solid looking performance in two weeks yesterday. Good news was sorted from bad and all felt right with at least our little chunk of the world. Even earnings misses, at names like FST and BBG were largely foregiven for the looks back that they were, in favor of improved guidance and operational results that bely a brighter future. Past earnings winners, also with great quarterly reports, like WLL, that were beaten down last week for now reason other than they produce hydrocarbons, sprang back to life as well. I'm not yet ready to go further long as the market is still the ultimate trump card but the action shows promise.

  • Eco data Watch:

    • ADP Employment came in at - 230K vs -254K last month. Friday's Payrolls estimate is -150K.
    • At 10 am EST we get ISM Non-Manufacturing, forecast at 51.5%, and
    • At 2:15 pm EST, we get the FOMC announcement. No change expected in rates but all eyes will be on the language: do they or don't they take out the phrase "extended period" with regard to Fed Funds. If they pull it look for  a pull back on "the risk trade". My money is on no and no hikes in rates until 2H10.

Recurring Theme From E&P Calls Watch

  • Gas price differentials are shrinking - as one operator put it, we are transitioning from a period of long gas, short pipe to long pipe and not enough gas to fill it all.
  • Liquids are king, so gas projects that are liquids rich and oil projects are taking precedence over dry gas projects, even for (or maybe especially for) those names that are traditional natural gas centric E&Ps.
  • Completed well costs in many of the shale plays continue to come down, not as quickly as before but still falling due to shortened drilling times. 

Today's Conference Call Watch: (all times EST)

  • PXD at 10 am
  • WRES at 10 am
  • SGY at 11 am
  • LINE at 11 am
  • DVN at 11 am

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today - Earnings comments on LINE, PXD, SGY.
  5. Odds & Ends

Holdings Watch:

  • $10KP II:

    • $21,400
    • 60% Cash

 

  • Yesterday's Trades:
    • None


Commodity Watch:

Crude oil rose $1.47 to close at $79.60 yesterday despite apathetic equity markets. The dollar seemed to peak mid day which coincides with a spike up from the lows for crude. After the close, the API released another conflicted looking set of data; bullish for crude, bearish for products. This morning crude is trading up about a buck, higher after the ADP data. 

Natural gas rallied $0.10 to close the day at $4.92. This morning gas is trading off 3 cents.

  • Early Read On Natural Gas Storage: 31 Bcf Injection.  My model shows it coming in somewhat lower, more on that in tomorrow's post.

Oil Inventory Preview


API Watch:  Not very useful this week.

  • Crude: Down 3.276 mm barrels. Falling imports, falling refinery utilization. Numbers here look odd again and from the lack of positive reaction in crude I'd say fewer traders are paying much attention to them.
  • Gasoline: Up 0.5 mm barrels. Demand continues to fall back. Seems reasonable.
  • Distillates: Up 1.8 mm barrels. Another hard to buy off on number. Counter seasonal demand reduction shown by API.

ZComments:

  • Crude: Setting aside the API results, a resurgence in crude imports seems likely any week now given OPEC's rising production levels and crude prices that should entice some tankered oil ashore. This should yield the occassional "very large" crude stocks build this Fall, at least until the end of what promises to be a protracted refining maintenance season comes to an end, probably by the end of the month to mid December. The Street is giving a nod in its numbers to the imports threat as well but only a small one as the five year average for this week calls for an inventory build of 1 mm barrels.
  • Gasoline: A few weeks back demand was holding up surprisingly well. My suspicion is that this was a function of retailers restocking after the close of summer having kept their stores lower than normal during a period of lower than normal driver demand.  I expect a pickup in demand soon as the recent apparent decline has been exaggerated and is likely more EIA fantasy than reality. This will lead, in the next 1 to 3 weeks in an expected draw down on gasoline stocks.
  • Distillates: Demand has stabilized and is begining to rise. Demand for heating oil should accelerate rapidly soon with weather and with a desire to buy before prices really mount in front of what has been forecast to be a colder than normal winter in the Northeast. Truckers continue to report increased shipments leading to an increase in diesel demand though I understand this will be a slow crawl back out of the hole as so many thousands of 18 wheelers are out of commission. 

 

Stuff We Care About Today

LINE Reported Solid 3Q Numbers, Boosts Hedges

The 3Q Numbers:

  • Production of 217 MMcfepd vs mid point of guidance of 212 MMcfepd. This is off from 219 in the second quarter but 5 MMcfepd remains shut in voluntarily due to low prices.
  • Costs of just under mid point of guidance
  • EBITDA of $142mm, above guidance and in line with the Street at $142 mm; coverage ratio was 1.09x, higher than forecast of 1.01x.

Highlights:

  • LINE expects to have 10 MMcfepd of shut in capacity at Granite Wash by year end as completions are deferred.
  • The company raised its hedge prices for 2010 and 2011 by trading in some 2012 to 2014 hedges:
    • 2010 and 2011 are now hedged at $92.25 oil and $8.87 gas. The company is roughly 50/50 oilvs gas and it is still hedged 100% for both 2010 and 2011. 

Nutshell: I continue to hold the units on this biggest and in my view best of run E&P MLPs.

Conference Call: Today, 11 am EST

 

PXD Reports OK Numbers; Activty Points to Brighter Future

The 3Q Numbers:

  • Production 113 M BOEpod (thousand barrels of oil equivalent per day), up 2% from year ago levels.

    • recall these guys basically shut down new drilling earlier this year in response to low prices, they're ramping out of those dark days now.
  • Revenue of $410 mm vs $400 mm expected
  • Costs showed continued good cost control
  • EPS of ($0.03) vs $0.07 expected
  • CFPS of $--- vs $1.57 expected

Brief Highlights:

  • They'll talk more about their second, more successful, previously announced Eagle Ford well and their plans for the area (continuous program now)
  • Spraberry - Activity Surge

    • 33 MBOEpd for the nine months average, up 8% ytd on a yoy basis; production is lower now due to lack of drilling
    • 3 rigs running now, moving to 14 rigs by January 2010, 19 by mid year and 24 to exit to 2010.
    • Why? Costs down, IRR at 50% on current oil strip.
    • 4Q09 level seen at 29 MBOEpd, with 4Q10 seen at 34 MBOEpd (or about a third of current company production).
  • South Texas - Edwards and Eagle Ford
    • Not a lot of incremental here, drilling next EFS well, may add another rig to the previously disclosed 1 rig continuously running.
  • Midcontinent - including the Raton, slow decline keeps lack of activity from killing volumes, VPP expires in January has net effect of adding nearly 5 MBOEpd to production.
  • Alaska, Tunisia, South Africa - Volumes up, look for more on the call.
  • 4Q Guidance: 105 to 110 MBOEpd - probably the trough for this cycle.
  • Hedge comment:
    • Oil - 85% coverage of 2010 and 2011 expected volumes with price upside
    • Natural gas - 2010 at 80%, 2011 at 50% (new hedge here)
  • Operating cash flow comments:

    • 2010 of $1 billion
    • 2010 of $1.4 billion 

 

Nutshell: The Street may not like the results today. I don't own it right now having missed the recent run, but I plan to circle back on weakness as I think the name is setting up for a much more interesting 2010.

Conference Call: Today, 10 am EST

WRES Reports - Will have comments when they release.

SGY Beats; Ups Volume Guidance

Brief Highlights:

  • EPS of $1.06 vs $0.64

    • Top of guidance range production
    • Strong adds to prices from their hedges
    • Greatly reduced LOE
  • Production of 239 MMcfepd up sequentially and YoY
  • 4Q seen at 225 to 235 MMcfepd; full year tightens from a range 205 to 225 to one of 210 to 220 MMcfepd.
  • Debt reduction continues
  • New Operations Stuff:

    • Offhosre: Cardinal Well (Vermillion Block 96) is a discovery; second well there (different fault block) is drilling ahead
    • Onshore: In the Marcellus the company has 8 vertical wells (2 in PA, 6 in WV) waiting on completion in the fourth quarter

Nutshell: Things looking up for a mostly Gomex Shelf name that I generally ignore. The stock is cheap, even for a shelf player at 2.0x 2010 CFPS. Market is going to like these results.

Conference Call: today, 11 am EST

Reporting After The Bell For Thursday Conference Calls

IOC, GDP, PXP

CLR Pre Call Thoughts:  less clarity on the quarter than at past release dates, company has been fairly quiet regarding new drilling and I have no position at present other than a long standing position in the common.

HK Pre Call Thoughts:

  • Good chance they beat on 3Q volumes. They traditionally have either come in anywhere from center of guidance range to extremely high to guidance. Haynesville wells have exaggerated this habit.
  • Either way they will be able to say they topped 0.5 Bcfepd for the first time, up huge (like 60%) from 3Q08 levels.
  • Probably a reiteration of the 30 to 40% growth in 2010 they announced last quarter.
  • The Street is expecting bigger wells from them in the Eagle Ford. It would seem likely they deliver a modestly higher rate set of wells (just north of 10 MMcfepd, with a focus on more liquids rich wells) as they announced that JV with SFY which begs the question, why do that if the returns don't justify it? Answer is that the returns due justify it and that the E.F.S. is every good a shale play as the Haynesville from a rock and organic content standpoint.
  • Probably some Haynesville wells, look for drilling time to have fallen again and well costs to be down again. CHK saying some at $6mm now, last HK said was $8.5 mm.
  • Budget talk to remain constrained to $1.3 billion next year.
  • Dick Stoneburner should make his debut as lead spokesman - we'll see how that plays.
  • NO DEAL. No debt, no equity, no deal. 

 

 

Odds & Ends

Analyst Watch:

  • (APC) - Barclays raises price target from $45 to $66. Way to be on the ball dude, why bother covering it if you are in perma neutral, late to the game status?
  • EOG raised to Buy at  Deutsche
  • (FST) target raised from $20 to $22 at Jefco, rating stays Hold.
  • (SFY) target raised from $25 to $29 at Jefco, rating stays Buy.

Interesting Reading Material:

 

193 Responses to “Fed Up Wednesday – Oil Inventory Preview Plus Lots More Earnings”

  1. 1
    bill Says:

    sgy indicating up 10%

    atpg reporting tomorrow
    Released news of covenant relaxation for an additional cost of 275 basis poiints

    i think they will have a bad qtr and they will spend 1 second on it. Discussion will be the FUTURE

  2. 2
    elduque Says:

    Good morning Z- Although not active. Looking for the market to be much lower in the next 6 months. I really do appreciate all the work that you and everybody else on the board provides. What a gift to be able to come to a site that you know that you can get all the info. you need on the sector to make profitable decisions.

    Many Mahalo’s

    Enjoy the moments, they are precious.

  3. 3
    bill Says:

    from the wsj

    http://online.wsj.com/article_email/SB10001424052748703294004574513713926109106-lMyQjAxMDA5MDAwNDEwNDQyWj.html

  4. 4
    zman Says:

    Bill – The SGY quarter showed lots of promise and a big beat (see details above). Very cheap name.

    Thanks ElD, thanks much.

  5. 5
    zman Says:

    Re 3 – Wolf doesn’t get it. A small uptick in drilling now won’t forestall the coming decline in supplies.

  6. 6
    BirdsofpreyRcool Says:

    Good morning…

    TechTrader is 55/45 LONG for the best day trade.

    HeadTrader wants to know the impact of the IEA lowering world energy demand…

    Credit markets up with futures. HY up over a full point. Lots of $$ still pouring into corporate bonds… that will push M&A activity higher. Always does.

  7. 7
    BirdsofpreyRcool Says:

    For anyone looking for energy-related corporate bonds, the EXXI 10% due 6/13 are trading at a 16% yield to maturity. Given the uptick in EXXI’s production profile, the bonds should be well covered.

  8. 8
    zman Says:

    Re IEA – It’s another mixed signal from the Paris based group. Tell the market you need to investment more one minute, and that prices are not high enough to spark such investment and then comment that prices are too high and OPEC should produce more. On the short term forecast for 2010, they have been raising numbers for the last several times, this is their longer term numbers…good luck coming in near them when the global economy is back on track.

  9. 9
    zman Says:

    In other words BOP, it matters as much as the square root of bupkiss.

  10. 10
    isleworth Says:

    According to the Bloomberg survey, analysts believe that crude oil inventories had a build of 1500K during the week ending Oct 30 (last year crude saw a build of 54K); expectations range from a build of 300K barrels to a build of 2600K (16 out of 16 analysts expect a build); prior 4 week avg is a build of 579K… Analysts believe gasoline inventories had a build of 400K (last year gas saw a build of 1123K); expectations range from a draw of 2800K to a build of 2000K (9 out of 17 analysts expect a draw; 2 analysts remain at unchanged); prior 4 week avg is a draw of 722K… Analysts believe distillate fuel inventories had a draw of 1000K (last year distillates saw a build of 1206K); expectations range from a draw of 2900K to a build of 2000K; (14 out of 16 analysts expect a draw); prior 4 week avg is a draw of 439K.

  11. 11
    BirdsofpreyRcool Says:

    z — You made HT laugh… and say “Thx.”

  12. 12
    zman Says:

    WRES Results Brief: Upside surprises…surprising.

    EPS of $0.04 vs $0.00 expected
    Production was up 1% sequentially … workovers.

    Revenue up 8% seq. , production + better prices.

    Costs falling, LOE , production taxes (much lower revenues), G&A (cost cutting) all down large

    …more in a bit …

  13. 13
    bill Says:

    for you non hipster types

    http://stevebunkoff.blogspot.com/2007/10/what-is-bupkiss_04.html

  14. 14
    bill Says:

    bop

    i think you have a winner with exxi

    production will be 40 % higher next qtr

  15. 15
    zman Says:

    WRES cont.

    Now have plans to resume drilling in California (oil) and Wyoming (gas) in 1Q10. I think the California new drill wells will be their onshore, drilled from a production cellar, undulating horizontals.

    $114 drawn of $120 available line. Still high but they have come off completely drawn status. They are in line with all covenants.

  16. 16
    milepost_43 Says:

    #2…what elduque said…..

  17. 17
    zman Says:

    Dollar down 0.4%, looking to cross back below 76 on the dollar index.

    PXD – weakening on their quarter, looking to add there, honestly would like to see it pull off a couple of bucks first, may not happen, Q4 looking like the production trough.

    SGY – impressed by the quarter and the activity, not the old Stone I remember, making excuses and lacking capital discipline. Up big now, not chasing, ma take some on a pull back later today or tomorrow.

  18. 18
    BirdsofpreyRcool Says:

    bill — reef knows EXXI much better. I’ve been using his help and insights there. But thanks!

  19. 19
    zman Says:

    Is this move ADP or Corzine, lol?

    Thanks MP.

    Group and market trading off highs pretty quick. Oil inventories, then FOMC to get through, then Friday’s jobs number looming large.

    Watching my APC recover. That really was a solid quarter.

    WLT almost back to the pre 3Q release price, also a very strong quarter, just came at the wrong time. Still holding my $60 strikes. And still not adding. Broad market is main concern there and everywhere.

    WRES – up a nickle. Glad to see them getting busier.

    Crude up 25 cents now, from over a buck just before the open, all green trading moot before EIA.

  20. 20
    BirdsofpreyRcool Says:

    It’s Corzine… Futures were up pre-ADP.

  21. 21
    zman Says:

    BOP – I thought was from Europe being up, LOL.

    Gold on fire again, going for $1,100

  22. 22
    zman Says:

    S&P hovering just above that 1050 level that’s been trouble some for the past 2 weeks.

  23. 23
    BirdsofpreyRcool Says:

    Maybe Europe was up b/c of Corzine too…

  24. 24
    kyleandy Says:

    bop – welcome back do u have cusip # on EXXI bonds. will try and buy some. any comments on KOG? thks

  25. 25
    zman Says:

    Ohhhhh. Tricky.

    FST getting a little follow through.

    Someone wake up the Barclay’s E&P analyst team. Keeping most things on equal weight and raising price targets on the quarterly reports to the current price level is a job for one of my dogs, not an analyst.

  26. 26
    choices Says:

    #7-BOP-do you have a CUSIP?

    Thanks!

  27. 27
    zman Says:

    Jat, any thoughts on BHI, I saw nothing in the quarter to make me a believer.

  28. 28
    zman Says:

    PXD and WRES in 3 minutes. Will listen to PXD as the stock is coming off and there may be some gems on their call worth knowing in a timely fashion. Will listen to WRES later.

  29. 29
    BirdsofpreyRcool Says:

    EXXI (ticker EGYLN) 10% due 6/15/13 CUSIP 29276KAC5. I see trace trade around $83.5. Would love to hear what a broker would quote.

  30. 30
    zman Says:

    ISM Non-manufacturing 50.6 vs 51.5% expected.

  31. 31
    zman Says:

    PXD call starting.

    Market more than shrugging off that ISM data. Interesting.

  32. 32
    BirdsofpreyRcool Says:

    weaker ISM = interest rates not going up any time soon….

  33. 33
    VTZ Says:

    Can we all agree that if the Fed comes out dovish we are going to rally and if they are hawkish then we fall?

    Also, if they are dovish and we don’t rally rally then that’s a good indicator that we are heading down?

  34. 34
    zman Says:

    PXD

    Aggressive Spraberry drilling program
    Add 1,000 wells through 2012 – see rig add schedule in the post.
    Drilling costs are down 30% from year ago.

    Getting tubulars, rigs in a row for this. Plan to double Spraberry oil production by 2012 or 2013 (couldn’t hear which), that’s bigger growth than I thought, this is now just under 1/3 of total company volumes.

  35. 35
    zman Says:

    BOP – exactly so.

  36. 36
    milepost_43 Says:

    #29…Etrade says 79–85…

  37. 37
    zman Says:

    because the U.S. is more of a service economy than the Administration thinks it is or wants it to be … I still need to see if I can get a job spraying insulation or screwing solar panels to peoples roofs.

    PXD – 90 to 100% oil focused moving forward. They are thinking of the Eagle Ford as an oil play. They’re saying the right stuff here.

  38. 38
    choices Says:

    BOP-Interactive has bid 81, ask 85.5-I just bought a few at 85.5-TD Amer, which does not do much of anything below IG has a quote of 86.5-did say it was callable at 105 in Jun 2010.

  39. 39
    zman Says:

    PXD rig counts:

    Now: Spraberry 3, 1 in Alaska, 1 in Eagle Ford.

    By January: 14 in Spra, 1 each in AL, EFS, Tunisia.

    By end of 2010: 24 in Spra and 1 each in the 3 above.

  40. 40
    zman Says:

    PXD

    Spraberry (W. Tex) – 425 wells next year, most will be deepened into the Wolfcamp.

    Average costs with be $1 mm apiece. So there’s the big chunk of your 2010 capex, well within cash flow to cover the other programs.

    Sprayberry Production:
    q309 30 MBOEpd
    q409 29

    2010: average 32
    2011: avg 41
    2012: avg 51
    2013: avg 63 MBOEpd

    That’s strong work.

  41. 41
    zman Says:

    PXD EFS Update:

    Second well (11.3 MMcfepd) was only 2,600 foot lateral, 9 stage frac.

    Third well is not too far to the south in Live Oak county, longer lateral 16 stage frac.

    Plan now to drill through 2010, up from the earlier mentioned five well program, looking for a JV.

  42. 42
    BirdsofpreyRcool Says:

    Thanks for the mrkt info on the EXXI bonds.

    Choices — at 85.5, the yield to worst is 15.38%. The “worst” is maturity on 6/15/13. If you get called any time prior to maturity, your yield is higher. I think it is a good buy. And I am impressed that TDA had the bonds… you’re right, they are far below IG (currently rated Ca/C-), but that is b/c the debt exchange has not occurred yet. That will close by Nov12th, delevering EXXI’s Balance Sheet and improving their cash position. Then all the Nov – Feb production coming on line will greatly improve EXXI’s cash flow… total interest coverage will be over 3x.

  43. 43
    zman Says:

    PXD Slide 13 – good slide

    11.3 MMcfgpd dry gas well = $57,000 per day revenue.

    but its got liquids so breaking it out on gas, condensate and NGLs gives you the reality of $96,000 per day.

    So its the same as if they had drilled an IP well of 19 MMcfgpd if it were dry gas.

  44. 44
    zman Says:

    EIA in 10 minutes

  45. 45
    zman Says:

    PXD – Tunisia – 3 well program starts in January. New 3D based targets.

    Going over financials now. I have to say, pretty simple story, good to see them stepping up to the plate now that oil prices are higher. Capital discipline here appears to be better than in the past. Cost cutting efforts have borne fruit. I could care less about the quarterly numbers other than they may give me a good entry point for calls; stock has been falling during the call and I imagine some of that is just weak hands getting out of a name that didn’t beat.

  46. 46
    zman Says:

    EIA Oil Inventory Report

    Crude just before report: up 56 cents at $80.15

    Crude down 4 mm barrels
    Gasoline down 0.3 mm barrels
    Distillates down 0.4 mm barrels

    Crude Imports : 8.1 mm bopd – very very very low.

    Gasoline demand: increased to 9.015 mm bpd – hey, hey, see comment in post.
    Distillate demand: ticked back slightly.

    Good numbers. Imports make the crude case a bit over stated.

    Oil up $1.30 now.

  47. 47
    zman Says:

    More EIA

    Cushing stocks remained flat near the low of the year.

    Utilization: fell back to 80.6%. Refiners continue to take bigger maintenance turns than is normal. Can’t blame them.

  48. 48
    choices Says:

    BOP-thanks for feedback-TD does not have the bonds, they need to deal with 3d party broker, higher price than with Interactive but still decent yield.

  49. 49
    BirdsofpreyRcool Says:

    choices — for any one who is skittish about the stock market (and who isn’t??), I think energy-backed corporate bonds are a great place to park some cash and get better than a money market return. Of course, the risk is a lot higher than money markets, but I am not a fan of bond funds (and I used to help run one). They have a funny way of locking in losses at precisely the wrong time.. but a private investor can chose to hold his/her bonds through a volatile period, continue to clip the coupon, and (unless there is a BK), receive their principal back.

    Glad to be of any help.

  50. 50
    zman Says:

    PXD call over, went well, stock down $1.10 now. Watching.

    SGY and LINE calls at the top of the hour. Will listen to SGY as I have heard the LINE story enough and I own it and I’m not planning to sell any time soon.

  51. 51
    zman Says:

    Bakkens firming nicely with crude.

  52. 52
    PackMan Says:

    Out of pretty much all the stock I picked up during the selloff … HK, WRES, KOG, BEXP, SD ….

  53. 53
    kyleandy Says:

    z – u like PXD call enuff to consider buying? i thought it was pretty good. any thoughts on their new mlp PSE selling around 21-22 w/ .50 initial dividend?

  54. 54
    guru Says:

    Z:

    Signing in for the first time in 2009.

    Do you have any opinion on XTO? They reported a very decent quarter. Thanks.

  55. 55
    zman Says:

    Nice work Packman.

    Kyle – I’m watching it, yes. PSE – have not seen it.

  56. 56
    zman Says:

    SGY call starting now.

  57. 57
    bloodystupidjohnson Says:

    English language rant: what happen to the use of the word increase? Was it blackballed or something? Now it is ramp this or ramp that. Heck, I even heard some guy say ramp down instead of decrease.

    Then what about the use of guidance by companies. Wouldn’t it be better if the companies just said, “this is out GUESS of earnings for this quarter”.

  58. 58
    zman Says:

    Guru – come by more often, not a big fan of XTO, I think they overpaid in a number of plays they were late in entering.

    BSJ – I like to use the work ramp and will use it and other misspelling of it as I see fit. Apologies but you’ll just have to deal with it. As to guidance, some is better than others. Guidance for a manufacturing operation like a shale play is a lot easier than guidance for a shelf player who has lots of wells and depends on exploration for upside.

  59. 59
    zman Says:

    Can’t get on the SGY call.

  60. 60
    BirdsofpreyRcool Says:

    kyleandy — #24… sorry… forgot to address your KOG question. I continue to think KOG is a wonderful, pure-play way to own the Bakken. Upside will come from 3FS test well (1H10), XTO partnership contributing volumes, hooking up to a pipeline, higher oil prices, and any contribution from their DVN partnership in the Vermillion. Other than oil prices, the biggest downside was the anticipation of an equity offering. I thought they would wait until after well#9 was completed, but I guess Lynn saw the window of opportunity and went for it. Also, I think that very-prelinimary results from #9 indicate that it will be an “average” well, at best. Won’t know for sure, until it is completed in December.

    I’ve heard that KeyBanc is placing a $4 NAV on KOG as of what they think the reserve base will be, come 12/31/09… with a $6 NAV projected for the end of 2010. But, KeyBanc is also (most probably) involved in marketing KOG to potential acquirers… so, have to take the valuation with the lump of salt it deserves.

    KOG = no debt, expanding reserve base, close to 100% oil production, good partners (DVN and XTO), equity-offering done, upside from DVN and hooking into pipeline infrastructure sometime in 2H10.

  61. 61
    baylor3217 Says:

    I’m raising cash in this rally.

  62. 62
    West Says:

    BOP, Do you have a feel on whether KOG will make a profit for 3rd qtr?

  63. 63
    zman Says:

    SGY call just started working midstream.

    Guess I’ll read the transcript on the front half and listen to the Q&A.

  64. 64
    baylor3217 Says:

    Thoughts on WLL for the November 60 calls? Do we think this rally is sustainable? Or were we given a gift today to unload for small profits 🙂

    Many calls are back from the dead.

  65. 65
    zman Says:

    West – Model I saw the other day, can’t recall whose it was, showed a penny loss. Street is at $0.00. Coin toss if they make money, not sure most people are going to care about that.

  66. 66
    zman Says:

    Re 64 – I’m holding, it’s one of the cheapest names in the group, had a very strongest quarters in the group, announced the largest well in the Bakken and has more in the area on the way. I think it also benefits from positive results at other names in the region (BEXP) and (CLR) come to mind. CLR I don’t have a good feel for at this time but if the question had been about them I’d be taking profits prior to earnings just because its pricey and doesn’t often drill the high profile wells that people want to see right now. I own the common there but not options.

  67. 67
    zman Says:

    FST acting well for a second day on good well results yesterday, and despite a miss on the quarter.

    BEXP reports Friday. I don’t think they have new well results to talk about as they just spilled the beans on their BCD Farms well. Expecting a decent quarter and talk about their plans post deal.

  68. 68
    kyleandy Says:

    z – LINE call over short and sweet!! missed the questions cause was on phone.
    bop – tried to buy bonds EXXI at boa and fidel no luck either place.

  69. 69
    BirdsofpreyRcool Says:

    West — I don’t have an income model built for KOG, but Raymond James does. It looks pretty conservative (which is good). Can’t see how KOG could be EPS positive for 3 or 4Q09. But, there is a chance they will see positive cash flow from operations and EBITDA for 3Q, ramping up nicely from there (with apologies to BSJ). That, in itself, would be a huge positive, vs results from the last 2 1/2 yrs.

  70. 70
    zman Says:

    Thanks Kyle, will go back and read transcript later.

  71. 71
    zman Says:

    Continued good calling of the dollar VTZ.

  72. 72
    choices Says:

    #68-kyle-still available at Interactive, TD Amer thru 3d party.

  73. 73
    BirdsofpreyRcool Says:

    kyleandy — those are two good places to check… surprised that choices could buy thru TDA, but that is a good part of what makes individuals buying individual bonds so tough. You can try leaving an order with BoA to call, if they see the bonds… see if that works. And thanks for the update.

  74. 74
    BirdsofpreyRcool Says:

    The thing about buying individual bonds… you often have to tell your broker what to do… and make him/her do it. It takes more effort, as a broker, than just striking a key on your computer and considering it “done.” But, if there are EXXI 10% bonds out there, offered in the Street, you should be able to get them. Just tell your broker what you will pay, and tell him to get to work and get them!

  75. 75
    zman Says:

    ZTRADE:

    FST – Sold the (10) November $20 Calls I picked up before earnings for $1.70, up 59%. This was a “getting to know the name” trade and I’m still in that process. I liked what I heard on the conference call and will probably be more frequently trafficking in the name.

  76. 76
    isleworth Says:

    DVN
    Sees improving economics in the North American natural gas business. Costs have come down considerably from the peaks of last year, and based on internal forecast as well as the future strip, key development gas projects all deliver attractive rates of return that are well above cost to capital. With the improving outlook for natural gas prices with the impact of the sale-down of lower tertiary and with lower overall industry cost structure, this should allow DVN to step up activity next year. With acreage positions in many of the best shale plays, have no shortage of opportunities; have currently adding drilling rigs in major shale development plays, and will continue to do so in 2010. The step-up in activity for the remainder of the year will move co outside the range of previous 2009 EMP capital guidance. For 2010, currently working through the budgeting process and expect to finalize the 2010 budget by year end. Based on better than expected third quarter production and higher than expected activity levels in fourth quarter, are increasing our full-year 2009 production forecast by 3 million barrels, to a range of 247 to 249 million BOE… Crude Oil- based on strong year to date results and outlook for the fourth quarter, are once again increasing 2009 production outlook; now expect full-year production to be between 247 and 249 million barrels. This revised forecast provides a fourth quarter production range of 58 to 60 million barrels, which is up about 2 million barrels from previous guidance for Q4.

  77. 77
    bloodystupidjohnson Says:

    Damn, I was trying to buy some UNP puts, but of course it ran away from my order.

  78. 78
    VTZ Says:

    RE 71 – Thank you, kind sir.

    Today is going to be tough to call depending on what happens with the Fed but I think that some amount of Fed hawkishness is priced in and if the Fed does nothing and continues to be dovish the dollar could move to put in a short term low depending on how fast it falls. If it does not move substantially at the announcement then I think a longer sustained down move is possible.

    If the Fed is dovish and the dollar rallies for no reason then I expect that the down move will also continue.

    I’m expecting a minor top in gold between 1125 and 1150 and a minor low in the dollar somewhere just above 74 if they both spike up and down respectively, otherwise the move could be sustainable.

    The bond vigilantes are in hiding because they didn’t want to run into the Fed purchase program, but the gold vigilantes are running wild.

  79. 79
    zman Says:

    ZTRADE

    HK – Added (10) HK $25 November calls (HKKE) for $1 (on the mid and easily) with the stock at 24.36.

    WILDZTRADE

    HK – Added (10) HK $26 November calls (HKKP) for $0.65 (also easily on the mid).

    Earnings tonight for their call tomorrow. See post for thoughts on the quarter. I already own $28 and $30 strike calls here and the name has been lagging.

  80. 80
    VTZ Says:

    May I also add a yeehaw to 78.

  81. 81
    zman Says:

    Isle – thanks for the DVN comment. They announced a “big” Haynesville well a couple of days back. If you listened to the CHK call Aubrey mentioned when he talked about some folks issuing IPs based on larger choke sizes than what many of the leaders have been doing.

  82. 82
    West Says:

    Z or BOP is either KOG model available for viewing anywhere ? THX

  83. 83
    zman Says:

    West – will look about for it.

  84. 84
    kyleandy Says:

    BOP – tried to leave order w/ boa – no deal- also said my 30 bond order was too small. pissed me off, but since commissions on stk trades are zero, cant change. called a fixed income guy next time will call stock trader.

    CHOICES thks just hate to go to trouble of opening new acct, shifting money, etc. told the boa guy ameritrade could do it thru third party, he didnt really care.

  85. 85
    kyleandy Says:

    z – nobody’s commented on td#11 lurking in the carribean http://crownweather.com/?page_id=1184

  86. 86
    zman Says:

    Kyle – thanks, had not seen, could go anywhere.

    http://media.myfoxtampabay.com/myfoxhurricane/

  87. 87
    zman Says:

    And there is still plenty of hot water in the way were it to target the Gomex.

    https://www.fnmoc.navy.mil/ncoda_web/dynamic/ncoda_1440x721_global_sst.gif

  88. 88
    BirdsofpreyRcool Says:

    kyleandy — buying individual bonds sometimes means having to drop the “nice” and be tough… ask to speak to your guy’s supervisor. “Too small” is unacceptable (and tell him that). Keep pushing… you can make it happen. Also, keep FIRM to the price you will pay. Don’t pay more than choices did… and tell your broker that. KEEP PUSHING. That is the only way these lazy brokers will do anything. They laugh at the public behind our backs (i know)… do NOT let them get away with telling YOU what to do. They work for you. They clearly need to be reminded of that.

  89. 89
    zman Says:

    Official track has it looking towards Gulf

    http://tropics.hamweather.com/2009/atlantic/eleven/trackmap_zoom1.html

  90. 90
    zman Says:

    3,600 calls traded in those HK $25 calls today.

  91. 91
    bloodystupidjohnson Says:

    Is that good or bad?

  92. 92
    zman Says:

    BSJ – just sort of interesting. School of thought from guys at places like Monster.com is that options traders are clued in to key events, that they “know” something. I generally don’t buy it and haven’t seen any studies to say that it means more than there is a rumor out there the stock is going to do well. It could also be people playing broker pre call notes on it and that would suggest the brokers are looking for a strong quarter and for once, no secondary.

  93. 93
    BirdsofpreyRcool Says:

    kyleandy — and another thing… those EXXI bonds are $2,000 face value… and your broker said your 30-bond order was “too small”??? I would jump down his throat and go for a heart/lung extraction. He is an @ss and should be treated as such. Bond Desks abound with BSD’s… do NOT let them get away with it. They work for YOU. (hint: this is why profanity was born on Bond Desks… every seat is occupied by an @sshole).

    Do not let him get away with treating you that way. You want those bonds, they are available in the Street, if he can’t get them for you at the recently-traded price, ask for someone who will.

    This stuff really chaps my butt. Sorry, but it’s just unacceptable behavior, on the part of Fido and BofA, and it gives individual bond buying a bad name.

  94. 94
    bloodystupidjohnson Says:

    My point was that for every option buyer there is an option seller. Can’t those sellers just be as clued in as the buyers?

  95. 95
    oklahoma Says:

    #84-kyleandy-OptionXpress showing 44 at 86 agency best effort min 25K order

  96. 96
    zman Says:

    It comes out of brokerage inventory. If you watch level II you can seem them move the bid and offer size with the fluctuations in the stock price. So no single guy needs to decide today is the day to sell me a bunch of calls, if I take the offer, a brokerage or several fill it. They’re making a market, that’s all, not like the other side of the trade is anything more than math.

  97. 97
    choices Says:

    BOP-you sure about $2000 face value-I believe it to be $1,000.

    Respectfully,

  98. 98
    RMD Says:

    Kyle re: PSE did an acq. in the Spraberry (according to Citi downgrade of 9/9/09). Given PXD’s enthusiasm about the Spraberry, I want to listen to PSE’s replay as I don’t know PSE.

  99. 99
    BirdsofpreyRcool Says:

    choices — LOL.

    Bloomberg shows $2k as the “minimum piece/increment”… but Bloomberg isn’t always right. But even if it’s “only” $30k of bonds… that is SIGNIFICANT. And I would never allow a Bond Desk to treat me that way. Come out swinging and don’t take “no” for an answer!

  100. 100
    BirdsofpreyRcool Says:

    Midday Overview

    · SP500 up ~1% as of 12:15 (to 1055 on cash) heading into the FOMC decision @ 2:15pm. No single great reason being cited for the strength (China eco growth revised up, elections on Tues, etc), although the weaker dollar prob. helping stocks the most. Pretty tentative move higher this morning without a whole lot of real money sponsorship. People waiting for Fed and CSCO (and jobs on Fri).

    · Equity sectors – Strength pretty broad-based today although ominous patterns in regional banks and transports. “Defensive” sectors like HC, utilities, and telcos some of the strongest in the market. HC stocks up ~1.7% on back of Tues’ elections (people saying reduces chances of reform passing). HMO index is up ~5%. Tech, utilities, energy, materials, and telecom services are up ~1%. Financials are a relative laggard today (up just 0.4% as regional banks come for sale and insurance makes just small move higher). The transports are dropping 1% on the day (although this comes after a huge ~5% ramp during the Tues session). Semis are staging a nice bounce today (up 1.5%) w/some real money participation.

    · Corp credit – Pacing along w/stocks today for the most part. IG is ~2bp tighter while HY rallies a bit north of ½.

    · Dollar dips; the DXY is off 0.65% as of noon. Expectation increasingly that FOMC will leave statement relatively unchanged (something that is weighing on the buck a bit). Euro and GBP among strongest currencies against the dollar.

    · Treasuries – Weaker across the board today ahead of the 2:15pm FOMC decision (10yr yields are up 4bp). The Treasury announced its Nov quarterly refunding earlier this morning (will be selling $81B in coupons next week). Also – TSY said that to potentially improve liquidity in the TIPS program, it will extend the average maturity of the portfolio to better capture the premium associated with inflation protection, Treasury will replace its 20-year TIPS offering with 30-year TIPS.

    · Gold and the US$; gold up another 0.6% (after Tues’ ~3% ramp) – some color from JPMorgan’s M Jansen – Gold has continued to roof, both in USDs and in local currency terms and it seems that the RBI’s decision to buy IMF gold has set in train a new thought process about central bank appetite for USDs in reserve accounts. We look at this in some detail in the report, but suffice it to say, we don’t believe that central bankers are actively cutting their USD holdings for the relative safety of gold. Overall we see the RBI’s decision to purchase gold largely as an opportunistic purchase of a large bloc of gold at a non-disruptive market price. One other reason that central banks are likely interested in holding more gold – especially if such gold can be accumulated domestically – is via the liquidity that holding gold can provide. Overall China is logically the buyer of the remaining IMF gold if the reason is to actively diversify current USD holdings in favour of non-USDs but we have seen little evidence of China wishing to walk down that path.

  101. 101
    baylor3217 Says:

    CSCO earnings after the bell should be interesting.

  102. 102
    West Says:

    http://webcastingplayer.corporate-ir.net/player/playerHOST.aspx?c=136094&EventId=2494620&StreamId=1381545&TIK={c193f7e6-bd60-4bc1-aa9b-5318e95680ce}&RGS=3&IndexId=…..XEC 3rd qtr cc for those with an interest. They will have a 3rd big Yegua well hooked up next week. Liquids rich production from these and other plays: Granite Wash & Cana-Woodford. Permian Basin oil plays gearing back up. Gearing back up with low debt.

  103. 103
    BirdsofpreyRcool Says:

    And you think **I’m** bullish?? Ha. Look at what GS is saying…
    ======================================

    Buy Gap, Macy’s Calls Before Sales Reports, Goldman Sachs Says
    2009-11-04 15:09:53.528 GMT

    By Jeff Kearns
    Nov. 4 (Bloomberg) — Investors should buy bullish options on Gap Inc. and Macy’s Inc. because the retailers may advance after reporting greater-than-estimated sales tomorrow, Goldman Sachs Group Inc. said.
    Gap, operator of Old Navy and Banana Republic stores, may beat projections for revenue at U.S. stores open at least a year and increase its third-quarter profit forecast, New York-based derivatives strategists Stuart Kaiser and Maria Grant wrote.
    Macy’s may rise because of cost cutting and sales that top forecasts due to “cooler weather and pent-up apparel demand,”
    they said.
    Goldman recommended buying San Francisco-based Gap’s November $22 calls, which break even if the shares add 4.3 percent. Those contracts added 15 percent to 75 cents yesterday, while the shares climbed 0.6 percent to $21.94.
    The strategists advised buying the November $19 calls on Macy’s, based in Cincinnati. The second-biggest department-store chain added 0.4 percent to $17.77 yesterday, while the November
    $19 calls dropped 5.7 percent to 50 cents.
    This month’s stock options expire Nov. 20.

  104. 104
    BirdsofpreyRcool Says:

    West — did you get the RJ report on KOG?

  105. 105
    kyleandy Says:

    bop – now trying scottrade

    RMD – I think PSE acquired sprayberry property from PXD. they’re pretty entangled. PXD owns 68% of PSE. just heard the tail end of call
    (another quick one) , only thing i learned was expect a secondary soon. will listen to rest of it later.

  106. 106
    bill Says:

    # 89

    atpg just launched titan a few days ago. They wanted to wait for all storms to pass

    hmm the perfect storm???

    This is unbelievable!

    Atpg told the world it would go out by end of october and with earnings call tomorrow it appears they wanted to meet that schedule weather be damned

  107. 107
    VTZ Says:

    “We look at this in some detail in the report, but suffice it to say, we don’t believe that central bankers are actively cutting their USD holdings for the relative safety of gold.”

    BS, they have all said they want to do that and China has informed their citizens to save using gold.

    “One other reason that central banks are likely interested in holding more gold – especially if such gold can be accumulated domestically – is via the liquidity that holding gold can provide.”

    None of the gold produced in China is leaving China. Gold in the US is leaving the US. Gold is liquid because it’s a currency. For me as a Canadian to buy a bbl of WTI oil I require one currency exchange, the same as if I held gold.

    “Overall China is logically the buyer of the remaining IMF gold if the reason is to actively diversify current USD holdings in favour of non-USDs but we have seen little evidence of China wishing to walk down that path.”

    This is why gold is 100% going higher. That is complete BS. Little evidence? There is little evidence that China wants nothing more than to diversify away from every single USD it has.

  108. 108
    VTZ Says:

    Also, India bought the gold as a huge sum because there’s no way they could accumulate that much without driving the price up and they were obviously looking for a way to diversify.

  109. 109
    zman Says:

    Re 107 – yep, yep. Interesting to see the great black hole that is China taking on more and more natural gas and now that they were purportedly through with big crude purchases, U.S. import levels continue to decline to new recent lows. Output from OPEC is on the rise, the crude is going somewhere… my bet is Asia.

  110. 110
    RMD Says:

    Kyle; that connects the dots on PSE/PXD.

  111. 111
    zman Says:

    Jerome, you around, looking for a read on PXD.

  112. 112
    VTZ Says:

    Wait for the hedge funds to start thinking the momo in gold looks nice. Then wait to see JPM get completely obliterated by all their gold shorts once they can’t find any physical to cover deliveries with. This whole situation is such a joke.

  113. 113
    West Says:

    BOP , I have not seen that yet.

  114. 114
    baylor3217 Says:

    Thoughts on ATPG earnings tomorrow?

  115. 115
    baylor3217 Says:

    Decent rollover on ATPG mid day

  116. 116
    tomdavis12 Says:

    Z: Any thoughts re RIG earnings?

  117. 117
    zman Says:

    Tom – Haven’t had a chance to look at them yet, service taking a bit of hit on them and BHI today its seems.

    BOP – can you forward that to West?

  118. 118
    zman Says:

    Just turned on CNBC for the first time today. Gasparino pitching his book, day 2. He must have some dirt on GE executives too.

  119. 119
    zman Says:

    Bill – Apparently no one thinks that TD does much, at least no one trading natural gas. NG down 18 cents.

  120. 120
    Jerome Blank Says:

    Re: #111, hi ZMAN…I check in as much as I can…PXD is back into a col of o’s like a number of other strong stocks we watch, but remains on a P&F buy signal, it’s been on a rip since breaking out above $32 in Sept…because of the non-stop strength, there are not a lot of good interim technical reference points, there is support here, PXD is trying to hold the 20 day daily moving average on a closing basis, but it looks like, unless we rally it won’t hold…the next area of major support is a confluence at $37…stong support around that number,if a trader buys here, the stop should be below the $37 level

  121. 121
    zman Says:

    Jerome – thanks much, kind of where I was on support. No reason for me to step in front of the fed on a weak name, if the day becomes weak it will suffer all the more.

  122. 122
    zman Says:

    Last thoughts on HK before they report tonight. Just on guidance, they released their look for the rest of the year 4 days after SWN cut their Fayetteville shale numbers at the end of July due to Boardwalk. So HK, who gets between 15 and 20% of their production from the Fayetteville had the curtailment thoughts from SWN in their guidance. BWP cam back faster than anyone thought, and helped SWN to beat their quarter. HK was confident enough after just having beaten the snot out of 2Q numbers to go on and establish slightly higher 3Q estimates. Part of my reasoning on why I think they beat. Other part is a suspicion they are hooking up more big Haynesvilles, including some to the south in Texas and bigger than previously announced Eagle Ford wells.

    If they get the release out tonight I’ll have a separate post out before the call.

  123. 123
    West Says:

    THX, for the KOG . They report tomorrow right?

  124. 124
    bill Says:

    sd /crusdaer buyout

    the equity holders are pissed they get bupkiss for their equity interests in crusader

    see here for latest filing

    http://docs.bmcgroup.com/Crusaderenergygroup/docs/txnb_3-09-bk-31797_867_0.pdf

    at best, the old kru mgt a bunch of boobs , at worse fraud.

    Anyways, on page 10, they mention bexp and useg and the value of crusdaers 37,000 acers in the bahken,

    Also, sd made a bid for the whole company in january 2009

    Seems, like the equity committee is trying to slow this thing down and asking the judge to appoint a special examiner

  125. 125
    zman Says:

    West – I show them Thursday night for a Friday morning call.

    Thanks Bill.

  126. 126
    zman Says:

    Fed funds unchanged.

    Extended period stayed in the statement.

  127. 127
    PackMan Says:

    BOP; GS / GAP; that’s funny. I was walking buy a well located Gap store over the weekend and observed to myself how subdued / empty the store seemed.

    Anecdotal I know; GS knows all.

    At $100 Million / Day without any losses, all hail GS.

    [sarcasm]

  128. 128
    bill Says:

    sd reports thurs as well

    Interesting comment in the lawsuit re useg/bexp

    they said 990 m in “value” was created based on the results of 1 bexp well

    Time and higher ng prices will cure crusaders “problems”

    Anyways, Sd is getting a helluva a deal here assuming they pull it off.

  129. 129
    VTZ Says:

    Apparently none of the potential for them raising rates that everyone was talking about was actually priced in.

  130. 130
    zman Says:

    Ken Heebner on CNBC making my exact point from the other day on S&P earnings next year. Saying the market isn’t cheap at 14.5x next year’s numbers but that next year’s numbers are going to surprise to the upside.

  131. 131
    zman Says:

    V – I think the equity markets go higher from here.

  132. 132
    VTZ Says:

    I agree without the worries from the Fed.

  133. 133
    BirdsofpreyRcool Says:

    HK suddenly all perky… liking it.

  134. 134
    VTZ Says:

    Everybody had to turn their buy programs computers back on.

  135. 135
    VTZ Says:

    I think gold can make a run at 1100 today… Dollar getting hit now.

  136. 136
    zman Says:

    HK perky does not matter unless you sell today before earnings BOP. You didn’t tell me you were back long.

  137. 137
    BirdsofpreyRcool Says:

    still seeing a lot of red names… mrkt is going to take a bit to digest where it stands… wants more info from Friday’s Jobs Number, methinks.

  138. 138
    BirdsofpreyRcool Says:

    z — you gonna sell b/f earnings today?

  139. 139
    bill Says:

    bulker day trade

    egle reports tonight

    suprmax rates have held up better than the larger sizes

    Be quick as what market gives it also takes.

    Im hoping/expecting for a 4 % pop or 20 cents 4.80 to 5.00 ish

  140. 140
    bill Says:

    im also in sd, im 6 to 9 months early on the name, but i think things are improving in this sector and they will have huge volume growths when the oxy plant comes online

  141. 141
    zman Says:

    BOP – no, no, I’m a believer.

  142. 142
    BirdsofpreyRcool Says:

    Credit market doesn’t know what to do… so it’s doing nothing. Bond quotes are bouncing around with the stock market, but no one is buying/selling. Funny, people/traders don’t seem to know which direction to pick.

    So, tell me… what is the direction of Max Pain here?

  143. 143
    zman Says:

    Bill – good point, been watching those rates each weekend when I do the wrap, also the Capes have done better of late. I’m not playing for now but 2010 may be the year of the dry bulker.

    Bill – You know I was in SD shortly after the IPO, round tripped that big move. Ugh. My bad. 2010 likely to be better for them on a reserves growth, production growth and pricing basis.

  144. 144
    BirdsofpreyRcool Says:

    z — just checking to be sure. thx.

  145. 145
    zman Says:

    BOP – Gotta say again, good to have you back. You seem to be a good luck charm bringing green markets 😉

  146. 146
    zman Says:

    Wondering if the S&P daily chart is indeed patterning itself like the last two month end sell offs, then rallies from a higher low. Sure starting to look identical.

  147. 147
    BirdsofpreyRcool Says:

    whoa, z! AN EMOTICON. I’m touched. Thx.

  148. 148
    BirdsofpreyRcool Says:

    Well… here’s the thing, this Christmas is going to better than last Christmas. But believe me, won’t take much of a stretch to accomplish that. Anyway, I think we rally for a few weeks more.

    We shall see.

    kyleandy — Scottrade treat you any better? I hope so.

  149. 149
    zman Says:

    Actually I thought I turned those off. Was trying to go oldschool with a semicolon and a paren.

    Dollar getting crushed back by nearly a percent.

  150. 150
    zman Says:

    What to do with a gnome:

    http://www.advertisementave.com/tv/ad.asp?adid=786

  151. 151
    BirdsofpreyRcool Says:

    Credit Market doesn’t know what to do… so, it’s rallying a bit.

    Guess there were a few shorts set up, prior to the announcement.

  152. 152
    zman Says:

    BOP – On Christmas, I dunno, saw a poll saying 65% plan to spend less this year. A lot few probably worried about their jobs as the newly unemployed were in that category last year. Are retail sales supposed to be close to even? I don’t know haven’t kept up with that. It doesn’t mirror the truckers and diesel consumption since retails seems to have drawn their inventories down much lower than usual. So they need to rebuild quite a bit, more trucks roll, even if they will be selling less units.

  153. 153
    PackMan Says:

    BOP; you know where I stand on holiday sales. Even if they are up 1% YOY; that would basically be disastrous.

  154. 154
    BirdsofpreyRcool Says:

    z — i thought i had read somewhere that temp hiring for Holiday Sales were up vs last year. And then you have GS telling us to buy calls on Macy’s and The Gap… ha! Sounds downright cheery to me.

  155. 155
    zman Says:

    Conference calls tomorrow: (all times EST)

    * IOC – 8:30 am
    * PXP – 9:00 am
    * CLR – 10:00 am
    * HK – 10:30 am
    * GDP – 11:00 am

    anyone else?

  156. 156
    kyleandy Says:

    BOP – scottrade called and said they had em for 86.5. i told the broker to tell the bond guy everybody else was buying them for 85.5 and placed an order at 85.5. they came back and said they could do it at 86 so i took it!! sure hope they’re $1000 bonds not 2000.

    oklahoma & choices – thks for helping

  157. 157
    zman Says:

    Reef – anything in particular you want to hear on the IOC call tomorrow?

  158. 158
    BirdsofpreyRcool Says:

    kyleandy — well done. You shaved a half point off the offer. That isn’t pidgeon feed, on 30 bonds!

    Just remember, buying bonds is like buying real estate… don’t let them tell you it’s “not negotiable.” It is.

  159. 159
    West Says:

    Z what was that address for the heat map? thx

  160. 160
    zman Says:

    CLR acting pretty well going into their earnings. Not going to play this time but they are fairly reliable guiders/reporters, will be on the first half of that call. Positives there could help out on WLL, BEXP, and maybe KOG.

  161. 161
    zman Says:

    http://finviz.com/

    It’s also listed in the links at upper right on the site under finviz

  162. 162
    West Says:

    thx that is really a good site

  163. 163
    BirdsofpreyRcool Says:

    PackMan — #153… true. Still, even car sales (non-clunker stimulated) were bettern expected yesterday. Some people are buying some stuff. It seems to be The American Way.

  164. 164
    PackMan Says:

    Yeah; but structurally high unemployed people with less access to credit and trying to both pay down debt and save money is a tough one, even if the consumer is resillient and inclinded to buy stuff.

    I just think its a numbers game …

  165. 165
    BirdsofpreyRcool Says:

    Carly Fiorina announcing she is going head-to-head with Barbara Boxer for a California seat in the Senate.

    “Head to head” might be a overstating the contest a tad, however… as one must have one (a brain), in order to use it.

    [sorry… couldn’t resist…]

  166. 166
    BirdsofpreyRcool Says:

    PackMan — what i don’t understand is… who is buying cars? Who is buying RVs, for that matter?? Honestly, it’s a head-scratcher for me…

  167. 167
    zman Says:

    ZTRADE:

    PXD – Added (5) November $45 Calls (PXDKI) with the stock at $41.60, off about 2%. Reasoning in today’s post and in comments from the call. Going in slowly.

  168. 168
    kyleandy Says:

    BOP – miracle -scottrade called back and said they got em for 85.5. am amazed!!

  169. 169
    oklahoma Says:

    z- your thoughts on SWN and NFX?

  170. 170
    zman Says:

    Oklahoma- Could you be more specific?

  171. 171
    BirdsofpreyRcool Says:

    kyleandy — cool!! Nice buy. Go in armed with what you are willing to pay and negotiate! THAT is the way bonds are purchased. Way to go.

  172. 172
    oklahoma Says:

    thought about averaging down here and looking for a good entry level.

  173. 173
    zman Says:

    Market fell all the way back to 1,050.

  174. 174
    zman Says:

    Okla – They’re acting a bit poorly today, think its just noise, half of the group is now red, leadership is green due to earnings and upgrades. I’m not adding in here just yet, biggest risk is still the market. Also, I have positions in both and don’t feel like they will do much different from the group at this point since they’ve already announced and have no immediate near term catalysts ahead. My thinking is therefore that they move up with the group which should move up at a better pace than the market.

    Market diving.

  175. 175
    BirdsofpreyRcool Says:

    House is pushing forward with their HealthCare Bill… vote could be as early as this weekend. Pelosi is claiming that yesterday’s elections were “victories” for the Democratic Party.

  176. 176
    zman Says:

    Now they’ve got Prechter on CNBC saying market is about to fall significantly. He’s got a new book out too.

  177. 177
    zman Says:

    BOP – file 175 under “if you say something often enough it becomes true”. If the ticker for the Democratic Party was GOP she’d be correct.

  178. 178
    BirdsofpreyRcool Says:

    I don’t care if you’re Dem or Rep… Pelosi just defies logic.

  179. 179
    kyleandy Says:

    victory?? and that’s one of the leaders of our country!!!

  180. 180
    VTZ Says:

    Ugly close

  181. 181
    BirdsofpreyRcool Says:

    hmmmmm…. strange day.

  182. 182
    PackMan Says:

    BOP … just saw this on GPS in my Twitter stream … havent read it yet … fyi

    http://davianletter.com/blog/2009/11/4/gap-everybody-same-tired-s-t

  183. 183
    PackMan Says:

    BOP 166 good question.

    Maybe its GS putting their $100 M per day to work buying stuff to make it look like the economy is functioning 1 Ha !

  184. 184
    PackMan Says:

    BOP 175 … I wonder then what defeat looks like …

  185. 185
    PackMan Says:

    gotta run…

  186. 186
    BirdsofpreyRcool Says:

    PackMan — youre funny.

    CSCO on the tape, saying perky things… like they “see economic recovery around the world.”

    I am not making this up.

  187. 187
    BirdsofpreyRcool Says:

    U.S. Stocks Erase Gain as House Votes to Limit Card Rates
    2009-11-04 21:57:04.472 GMT

    By Sapna Maheshwari
    Nov. 4 (Bloomberg) — U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve’s plan to keep interest rates at a record low.
    Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc.
    led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards. The Standard & Poor’s 500 Index wiped out most of a 1.5 percent rally triggered when the Fed said it will leave interest rates at “exceptionally low” levels.
    “The credit-card regulation and regulation in general, how much Congress is going to clamp down on financial company activities, is important,” said Giri Cherukuri, who helps manage
    $1.5 billion at Oakbrook Investments in Lisle, Illinois. “To the extent that Congress keeps their hands off of things, that’s better for financial stocks and financial stock prices.”
    The S&P 500 added 0.1 percent to 1,046.5 at 4:19 p.m. in New York. The Dow increased 30.23 points, or 0.3 percent, to 9,802.14. About five stocks fell for every four that rose on the New York Stock Exchange.
    The Fed, at the end of a two-day policy meeting, restated its intention to keep interest rates “exceptionally low” for an extended period and said the U.S. economy is picking up.
    “Businesses are still cutting back on fixed investment and staffing, though at a slower pace,” the Federal Open Market Committee said in a statement. “Activity in the housing sector has increased over recent months.”

    ISM Shows Order Growth

    The S&P 500 rallied in morning trading after the Institute for Supply Management’s report on non-manufacturing businesses showed 1.4 percent growth in new orders and a 2 percent increase in the backlog of bookings. The main index in the report fell to 50.6, below analysts’ estimates while still signaling growth.
    Some traders may have sold shares in anticipation of the Nov. 6 report on the U.S. job market. The unemployment rate increased to 9.9 percent in October, according to the median economist estimate in a Bloomberg survey.
    “It’s such a big number, people would rather wait on stocks,” said Walter Todd, who manages $750 million as co-chief investment officer at Greenwood Capital Associates LLC in Greenwood, South Carolina. “There’s a lot of people taking a wait-and-see approach to Friday’s number.”

    Financials Slump

    The S&P 500 Financials Index slumped 1.5 percent, the most among 10 industries, after the House vote and as analyst Meredith Whitney said the biggest U.S. banks may face declining values on home-loan bonds with government backing as the Fed prepares to end its $1.25 trillion purchase program.
    Bank of America Corp., JPMorgan Chase, Citigroup and Wells Fargo increased holdings of so-called agency mortgage-backed securities by 44 percent from the third quarter of 2008 to the second quarter of 2009, Whitney said in a note yesterday to investors. Those increases came as the Fed began buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in an attempt to keep mortgage rates low and spur housing demand, she wrote.
    JPMorgan fell 1.2 percent to $42.21, while Wells Fargo slid
    3.1 percent to $26.82 and Citigroup lost 1.7 percent to $3.97.
    Hartford Financial Services Group Inc. erased earlier gains and fell 5.3 percent to $24.44. The insurer, whose new chief executive officer is conducting a review of businesses, said it will halt sales of some of its life products sold to companies.
    Baker Hughes Inc. slipped 5.9 percent to $40.89. The oilfield-services provider that agreed in August to buy BJ Services Co. said third-quarter profit plunged 87 percent after energy prices tumbled.

    Health Insurers Gain

    Health insurers led the market higher earlier on speculation that opposition to Democrats’ health-care reform will be bolstered by Republican victories in governor races in New Jersey and Virginia. Democratic leaders signaled they’re ready for the House to begin debating the legislation and vote on its passage and yesterday’s elections won’t affect how the House proceeds.
    Aetna Inc., the third-largest U.S. health insurer, jumped
    5.2 percent to $28.01. Cigna Corp. climbed 5.2 percent to $29.78. A group of health-care equipment and service companies jumped 1.2 percent, after earlier rising as much as 3 percent for its biggest intraday gain since June.
    An index of raw-material producers erased earlier gains and fell 0.1 percent. Freeport-McMoRan Copper & Gold Inc. climbed
    1.2 percent to $77.70 as gold advanced to a record of $1,096.50 an ounce, while copper led industrial metals higher.

    Dollar, Treasuries

    The Dollar Index, a six-currency gauge of the greenback’s strength, fell 0.8, erasing yesterday’s gain. The Reuters/Jefferies CRB Index of 19 raw materials climbed for a third straight day, rising 0.2 percent.
    Treasuries fell for a third day. The 10-year note yield rose five basis points, or 0.05 percentage point, to 3.52 percent.
    Ambac Financial Group Inc. surged 35 percent to $1.50. The world’s second-largest bond insurer reported third-quarter net income of $2.19 billion, reversing a year-earlier loss, after unrealized mark-to-market gains in its credit derivatives portfolio. MBIA Inc., the biggest bond insurer, advanced 7.5 percent to $4.42 for the biggest gain in the S&P 500.
    Of the 382 companies in the S&P 500 that have published quarterly earnings since Oct. 7, 84 percent exceeded estimates, according to data compiled by Bloomberg. That would mark the highest full-quarter proportion in data going back to 1993.

    Disney, Merck

    Walt Disney Co. rallied 1.5 percent to $28.03. The company received Chinese government approval to build a theme park in Shanghai, its first resort investment on the mainland, to tap rising incomes in the fastest-growing major economy.
    Merck & Co. jumped the most in the Dow, rising 6.4 percent to $32.64. The drugmaker said that following the acquisition of Schering-Plough Corp., earnings for the combined company, excluding some costs, will increase at a “high single-digit”
    percentage rate each year through 2013. The company expects cost savings of at lease $3.5 billion annually after 2011 to come from all areas across the company.
    Pulte Homes Inc. rose 3.5 percent to $9.55. The U.S.
    builder that bought competitor Centex Corp. in August boosted its estimated cost savings from the deal by 25 percent and said it reduced debt by $1.7 billion in the third quarter. Lennar Corp. and DR Horton Inc. gained more than 3 percent.
    The VIX, a measure of stock-market volatility known as Wall Street’s fear gauge, fell for a third day, dropping 3.8 percent.
    The index trimmed its retreat after earlier falling as much as
    7.6 percent.

  188. 188
    RMD Says:

    BOP #165 : Calif. politicians always define the Law of Unintended Consequences. Brains? I doubt it.

  189. 189
    bill Says:

    155

    dont forget about atpg at noon

    the egle trade wont work

    they beat by 3 cents— 6 vs 1 not enough to mean anything , and the absolute numbers are down from last year and qtr to qtr.

    the ceo is accruing 3.5 m per qtr for himself (bonus) which happens to be a majority of the profits.

    ga is close to 8 m per qtr, to put that in perspective, it only cost 11 m to operate the 25 ships with its 10 man crews

    ARRRGGG, z never ever let me buy a bulker stock again

  190. 190
    zman Says:

    Bill – that’s just frustrating. When does DSX report.

    Trying to stay awake through the GDP report. Boooorrrinnnnggg. May not really review it, nothing stands out. Won’t be on their call.

    IOC up next.

    HK still not reporting, a Reuters story did hit earlier saying everyone expects good thing, had about 5 positive broker quotes. Sets the bar higher than I like but I still think they make people happy with their numbers.

  191. 191
    zman Says:

    HK coming across high to 3Q guidance,

    upping 4Q09 guidance.
    upping 2010 guidance.

    Will have a stand alone piece out late tonight.

  192. 192
    Jay Says:

    I wonder….
    If a hurricane is a “heat engine”, a great mixing machine that feeds on the difference between water and air temps, then the potential storm energy could be quite great even if waters are a bit cooler assuming that atmospheric temps are proportionately lower still.

    I’m no hurricane expert, aside from the historical late season storms, does this line of thinking have any creedence?

    JR

  193. 193
    zman Says:

    HK Pre Call Note is up.

    Tropical Storm Ida has formed.

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