Monday Morning Bounce

138 thoughts on “Monday Morning Bounce”

1. Natixis raises BEXP target from $10 to $13

   KWK on the tape with slightly better than expected numbers.

   MCF results out – looks way better than the one analyst that follows them was looking for.

2. TPH with a good catch, saying NFX is now high bidder for TXCO assets which gives them a solid entry into the western end of the Eagle Ford shale play.

3. Dollar just over 75 now.

4. mcf release here

   http://finance.yahoo.com/news/Contango-Reports-First-bw-3663131337.html?x=0&.v=1

   Read it, its incredible,imho

   cash cost 61 cents an mcf

   earned 85c vs 45c estimate

   cash per mcf was 4.00 when avg selling price was 3.40 due to liquids

   non hedged, production @ 8 bcf per qtr, every 1 dollar in ng prices means 50 cents falls to the bottom line

5. Interesting comment by the ceo

   “Mr. Peak continued, “Industry supply trends together with my gleanings from a number of recent industry conference calls lead me to believe the industry may be on its way to drilling gas prices back to the $2.00 to $4.00/Mcf price level. Even though demand for natural gas is likely increasing, supply from the onshore lower 48 since November 2008 has been basically flat despite an approximate 50% drop in rigs drilling for natural gas. In essence the increase in production from shale wells has overcome ongoing industry-wide geologic decline while drilling significantly fewer wells”

6. reef — re: TXCO — good call on the post-BK equity trading. Stock was trading like it was “worth something.” But NFX’s official $223mm offer for the assets (against over $332mm of debt and other liabilities) pretty much says “no soup for YOU” to stockholders.

   Stock was trading at 40cents on Friday. Sometimes, euqity investors can be just a little TOO optimistic.

7. Dollar at previous low… tapping and looking to break down. Has no reason for support and will crack.

8. TechTrader taking a long weekend today.

   HeadTrader thinks we sell at open, then it slows down… he says he can’t find a reason for the mrkt to be up other than the Senate saying House heathcare bill is DOA. He thinks it’s a slooooooooooooooooooooow day…

9. Z: US$ goes to 72. What effect would you guess for CL, NG, GC.

10. TechTrader doing a fly-by and saying if the mrkt opens down, then there is a 65% chance the best trade will be LONG today. And (it gets better) if the mrkt gaps UP, the odds of a long trade working increases to 70 or 75%. This is one of the higher-conviction days, for TT, in recent trading.

11. bop – te TXCO no crumbs, no anything for me??

12. HERO — GS upgrading to Outperf with a $7 PT

13. kyleandy — not if i read the balance sheet correctly… take a look at their latest monthly filing and add up the liabilities (both pre- and post-petition). Looks to be more than the $223mm that is being offered for the assets. There might be some sort of bone, thrown to equity (like NFX warrants or something), but in this case, I doubt it.

    I’ll take another look at the BS to make sure they didn’t (somehow) pay down their revolver debt.

14. bop – thks

15. TXCO 9/30/09 BS shows total pre- and post-petition liabilities of $358.8mm. These get paid first (“priority of claims”) from any proceeds from the sale of the assets. If anything is left over, that is what goes to equity. Given NFX’s purchase price of $223mmm, doesn’t look to be the case here.

16. sd up 7 %
    hk up 2 %
    chk up 2

17. bop – thks guess i’ll try and salvage something

18. No power at office. On phone connection. Tom. Dollar there would be postive oil and gold. Probably not so much for ng

19. kyleandy — TXCO… it’s a tad confusing, as NFX did not buy 100% of the assets here. But, don’t know how much value remains. And it still has to add up to more than the liabilities…

20. my technology is all farooqed up this morning too…so much for my weekend pledge to be nicer and gentler here at the office….hope Z gets up soon

21. I’m in.

    FTC product alerts:

    The staff at the local SBUX.. Top notch and
    AT&T for getting me wifi access in 6 minutes flat.

    SBUX double shot energy + coffee which apparently makes me type faster but not better

    My iphone which I have to admit beats a blackberry for stock applications

22. fidelity and bofa both down. scottrade working

23. ROSE – good to see group leading performance on their earnings…pretty encouraged that they are drilling a 2nd Bakken well prior to first one’s completion

24. Also nice to see WLL making a push for its 2009 high with higher oil.

25. Thanks for the HT and TT comments BOP. I guess TT is pretty confident of the long call at this point.

26. Peak vs Papa: two of my favorite people. Both smart and shareholder friendly. Both very industry savy. However one says nat gas pricing is going up and the other down because one thinks supply increasing and the other thinks supply decreasing.

    So, whatever position one takes, you can always point to a very smart person agreeing with you.

27. BSJ – have not looked, how much of a hedge does MCF have on right now. I note that the more hedged you are, the more you see gas prices tumbling. If you look at the mitigation of declines in the aggregate lower 48, it is coming from a recovery of Gomex production and then a small move up in LA, flat OK offfsetting some down down TX prod. I don’t think the “shale offsetting declines of conventional ” is completely justified.

28. Ida now a TS

    http://weather.myfoxtampabay.com/maps/WTVT/custom/storms/ida_track.html

29. I don’t think MCF is hedged at all. Of course MCF has no debt, so they can be more light on potenial hedges.

30. Z, your writing you take a more Papa point of view as compared to Peaks. But Peak is smart, as are you (lolo) and Papa. That what makes this arguement so interesting.

31. I didn’t either but thought I’d check, so liquids bumped them over the avg gas price? If he really believes that it would be prudent to go ahead and hedge some, since he does produce gas ya know. Otherwise, he might as well go ahead and become the Jeff Bridges character in Men Who Stare at Goats.

    He’s not alone, listen to the guys at LINE who are also smart, gas not going up for a long long time according to them… and they are 100% hedged and even monetized some out year hedges to boost 2010 and 2011 floors.

32. BSJ – no doubt they have better info than I. Papa’s model is top notch. Anadarko’s was better last time I was there which was year’s ago it was years ahead of everyone on the sell side on both supply and demand. They sounded pretty cautious on `12 month gas prices on their 3Q call and I’m not a raging bull. I just think we go back to $7 for a 2H10 average gas price.

33. I think by having no debt, that sort of hedges MCF in a sense. If Peak is wrong, MCF is going to make alot of money. If he is right, then having no debt and producing fields is not really going to kill MCF by having no hedges.

34. Saw drilling permits run by the Feds will cost you $6500, up from $4000 soon. Net impact is negligible on the industry, just annoying as they are just doing it because they can.

35. Hear ya BSJ and I tend to agree. One consideration would be lease expirations. If gas goes to to for a protracted period, those hedges could protect a capital budget that gets those leases drilled before they expire. Assuming they leased them with the intent to drill them

36. Starbuck music is damn annoying. Going to crank the ROSE call in 15 minutes to hear over Streisand.

37. Good to see watch: that the powers that be once again seem to like HK today.

38. BOP – did McQuarrie do anything with it’s KOG target?

39. Cannacord takes GMXR target from 17 to 22

40. V – Dollar at 15 month low. Good call man.

41. KOG — Macquarie still stuck in the mud with a 10/29/09 PT of $1.40. I must say, they are not making their clients any money, with that call.

42. Maybe the don’t work weekends, could be a Tuesday call.

    ROSE in 5, KWK too but it was uneventful

43. I think if gas did go back down to 2, then you might see Peak buy some of the “distressed merchandise” that will come onto the market. For example, he recently bought some Cotton Valley property. Peak is the ultimate contraian, a man after my own heart.

44. So contrarian it makes me wonder why he’s public.

45. Hero up 14%

46. We’ll you know, last year, before the market and energy crash, he did try to sell the company. He had some deal where he sold the production and shareholders where to keep the current leases and get the cash from the production sale. But the collapse of nat gas and credit market put an end to that.

47. ROSE CC

    Started call at $14.85

    Comfortable to guide an unspecified level of growth in 2010 for both production and reserves.

    Not going to tell you every detail about Eagle Ford and Bakken as they are still leasing.

    “substantially” increase 2010 capex, substantial portion will go to EFS and Bakken.

    Increasing focus on oilier plays …

48. Crude up 2.40, blame the dollar, not Ida

    ROSE –

    We expect to grow volumes consistent with long term goals … call growth in 2010 “step function”

    Not a big tug from leasehold demands

    Guidance in December …

49. ROSE

    – someone should hold a “how to conduct your quarterly conference call” course for IR guys. Day 1 – How not to read the pr. Ugh.

50. Peak/MCF is unhedged and Monday morning quarterbacking he could have hedged in at 10 + last year.

    Yes he mentioned avg prices were 3.40 and he still made cash margins of about 4 mcf due to liquids

51. WLT, just hit its 52 week high. If you own WLT, you have to accept the crazy volatility in the stock.

52. BSJ – agreed, it’s still cheap into the upper $70s on 2010 CFPS. I hold the $60s and $65s of November now.

53. I don’t show them quite at a 52 high though, unless I’m running delayed in here and don’t know it.

54. With WLT, you got to remember the quality of its assets. It has the BEST coking coal assets in the country, it has no railroad transportation problems, and is near a major port. And now, after the spin offs, it is one clean operation.

55. According to Scottrade, it hit 68.31 today, which is a new 52 week high.

56. ROSE CC Cont.

    Confident they will be in the upper end of their prior full year 2009 production guidance range.

    Divestitures coming will take down overall decline rates and LOE.

    Ahh you wrote WLT and I read WLT. I hold a couple of the $60 calls in WLT.

57. ROSE Operations Comments:

    1st EFS continues to meet expectations, added acreage around it during the quarter, the Santa Cruz well (#3) will be 9 miles south of the discovery well, will go to 300 foot frac stages from 400 in the first well. Will be active here (Spring Ranch area) in 2010.

    2nd well – 30 miles west of Springer Ranch – 10 stage frac, 3700 foot lateral, 90 barrels of condensate per 1 mmcf of gas, one of the highers liquids cuts in the play seen. Added to acreage in this area too, 17,000 acres in this area (the Gates area)

58. ROSE Ops Comments

    >200 drilling locations on 160s on their EFS acreage, still adding, may have 1 to 3 rigs next year.

    Bakken

    1St – Tribal Gunsight well – lodgepoll and bakken test,

    2nd well Tribal Riverbend well spud, 30 miles northwest.

    Everything they thought about the Williston (Alberta Bakken) continues to hold up. This is my Montana Bakken play.

59. ROSE CC Q&A

    > 230K acres in this area of the Bakken, like KOG they are on tribal lands, I don’t think anyone else is this far north and west and still in the U.S. and still in the Williston.

    1st well – you can assume they hit with this well as they would not have taken it to the horizontal td otherwise. his quote

    They’ll probably drill 5 to 6 wells as they attempt to delineate the play, rather scattered about to help prove it up.

60. ROSE Q&A

    Eagle Ford – 47 K net acres

    Gates Ranch area is in the oil/condensate window of the play – 17k acres, 80+% working interest, contiguous.

    Sprinker Ranch – dry gas area, 14 K net acres, majority 100% WI.

    The rest (15K net ) has not been disclosed as to where it is.

    Macquarrie Question: looking for ranges on 2010 goals – answered with its premature, but have been looking to build up inventory position and build liquidity. If you read between the lines he just said look for double digit growth when they release guidance next month.

61. ROSE – Quite a few analysts on this call for a little company.

    Dow just shot to a new 2009 high. Gnomes seen on ledges.

62. ROSE – what’s hold fat capex level?

    $170 mm in the past. Think costs down enough now to call it $150 mm. They have many years of inventory that would allow to hold flat if need be at the $150 mm level.

    Bakken – already contracting for takeaway capacity.

63. “Dow just shot to 52 week high”, was that a Kass prediction? LOLO!

64. Call still going, lots of analyst interest, sounds like all 10 analysts who cover it are on the call.

65. http://screencast.com/t/rtyozDUTpiT3

    For the Eagles.

66. and ROSE moving up during the Q&A. Analysts coming away pretty favorable. Lots of easy, cheap production maintenance recompletions they can do in the Sacramento Basin, also low cost stuff in the Rockies.

67. Thanks Wyoming, great map

    Power back on at office, back in 30 minutes

68. Do the rates on the map include liquids (gas equivalent) or is it just gas?

69. Basis differentials have narrowed. Some area getting a major premium to Henry Hub

    Any reason why this happens , vq likes to brag that they sell their ng in Calif

70. BSJ: did MCF ever reveal what the price/mcf was in their ’08 production sale?

71. Tex – Just looking at the HK well, that’s an MMcfe and not an MMcfg.

    Bill – happens as you increase takeaway capacity to market. Either by adding new pipelines, which is the case with Rockies gas recently with Rockies Express taking gas East or with the Boardwalk Pipeline, which increased takeaway cap from the Fayetteville Shale. The other way to accomplish this is with declining production or increased demand in a region.

72. Tex,

    I believe they are doing the equivalent thing. The one I am looking at looks like it has on the map the 1,000 BTU adjust. The table they have prior (see link below) looks to have the equivalent with the liquids added.

    http://screencast.com/t/AwzNUNCBmp

    For grins:

    http://screencast.com/t/w9Mc6zyYY
    http://screencast.com/t/sTQyOkqvNF

73. sd had hedge their basis at a cost of 70 cents. Im sure they deliver to many points but waha used to be a big discount to HH now about par, so they lost alot of money on that hedge 135 m or so which is in their q3 PL. Offsetting that was their HH hedge in the 8’s

74. wyo = great map – now u need to find one for the bakken!!!

75. EVEP (and I suppose Enervest) agrees with Peak/MCF. On conf. call said he’d been wrong about $1.00 gas but expects gas could have a rough yr. in ’10 as “reality starts to set in”. Shale co.s still spending 35-50% greater than cash flow not helping. RAJA asked a Q about shale gas displacing conventional in Appalachia.
    Is this answer correct??
    He said since shale has higher pressures they use different gathering systems (impling there is no shale vs. conventional competition?); EVEP has gathering and compression systems for their legacy gas, plus long relationships with the Columbia and Dominion trunk pipelines. Hence their competition is other conventional producers, not CHK.
    Does this make sense, especially if gas goes to $2-3.00 as EVEP still expects?

76. Mt. Rushmore as seen from the North.

    http://screencast.com/t/pvLSkMhp

77. I don’t teach my girls this:

78. 70 mcf

    Freeport LNG Development, L.P.

    On February 5, 2008, the Company sold its ten percent (10%) limited partnership interest in Freeport LNG Development L.P. (“Freeport LNG”) to Turbo LNG LLC, an affiliate of Osaka Gas Co., Ltd., for $68.0 million, and recognized a pre-tax gain of approximately $63.4 million on the sale. Freeport LNG is a limited partnership formed to develop, construct and operate a 1.75 billion cubic feet per day (“Bcfd”) liquefied natural gas (“LNG”) receiving and gasification terminal on Quintana Island, near Freeport, Texas. The Company used $20.3 million of the proceeds from the sale to pay off its debt with The Royal Bank of Scotland plc, including principal, interest and fees. Another $20.0 million was used to pay off its debt with a private investment firm. The remaining $27.7 million was used for working capital purposes.

    Arkansas Fayetteville Shale

    On December 21, 2007, the Company sold its Western core Arkansas Fayetteville Shale properties to Petrohawk Energy Corporation for $199.2 million. The sale was effective October 1, 2007. The Company sold approximately 14,200 acres with 6.4 Mmcfd of production, net to Contango. The Company recognized a gain of approximately $155.9 million for the fiscal year ended June 30, 2008 as a result of this sale.

    On January 30, 2008, the Company sold its Eastern core Arkansas Fayetteville Shale properties to XTO Energy, Inc. for approximately $128.0 million. The sale was effective December 1, 2007. The Eastern core consisted of approximately 11,200 acres with 3.0 Mmcfd of production, net to Contango. The Company recognized a gain of approximately $106.4 million for the fiscal year ended June 30, 2008 as a result of this sale.

79. RMD: If I remember correctly, they where going to sell or had an agreement to sell, their interest in the Dutch and Mary Rose fields. I don’t remember the price, but the stock was being bought by its largest shareholder, Sellers, at the time for 80+. Call it brain lock, but that is all I can currently remember. Maybe Bill can help me out here.

80. Jerome – if you get a chance please have a look at NFX. Thx.

81. 74,
    posted one the other day, it was a little old but it had some good. I think I just put in a link, not sure how I can querie all of the posts I have made, it was within the last 2 weeks.

82. As Bill is now showing, MCF likes to sell high and buy low. That is why if Peaks predication comes to pass, it will not be surprising for MCF to buy from distressed assets.

83. LINE and CHK have a history of doing the same thing, only they carry more leverage.

84. Z – have you owned LINE long enough to see their tax paperwork etc.? As an LLC i assume they issue K-1’s, any quirks there? Anyone else familiar with LINE come tax time? – i am not put off by quirks just trying to measure them against others of a similar type.

85. pretty big (positive) move in riskier credit today… part of it is due to The Bears, reversing tracks on at least part of their position.

    HY13 93 3/4 +1 1/8pt

    Something to note about the CDS indices (IG and HY) however, is that they are easier to short/go long than underlying credit. So, just because you see them move up or down, isn’t always a reflection of lockstep movement in the underlying cash market. That said, there is always “information content” to be gained from watching these liquid (institutional-only) indices.

86. No I have not, only been in since Spring. I have a tax account so that’s his headache.

87. re: 82; if Peak’s prediction comes to pass there could be chaos ala 3/09 in Nat Gas Land.

88. Market has totally stalled for 3 hours.

89. RMD – I don’t really need to comment on that do I.

    V – hear ya, probably be an interesting last hour. Will be on the CRZO call in 30 minutes.

90. Refiners continuing to not play in the rally.

91. Got this from Nicky via email:

    I think we have a b wave down about to start shortly. SPX has resistance at 1088. b wave could take us back to the 1050 area.

92. #80 NFX remains on a P&F buy signal, holding longer term support at $41 and now reversing back into x’s with the print of $44 (good sign)…a very uncomfortable retrace from the recent high above $50 back to support at $41…NFX goes back on a sell signal if it prints $40, (short term sell)but the long term P&F trendline is just below at $37-$38, this trendline held back in july, where NFX rallied to new relative highs off this longer term support…in addition NFX will still likely be above its 200 day daily moving avg on the $40 sell print, so if you are bullish and holding longer term, consider holding until the supportive P&F trendline is actually broken…

93. That means Nicky expects the dollar to hold the line. It looks like it is now.

94. Jerome – thanks much!

95. V – For the moment but everything out of the G20 was stimulate, stimulate, stimulate.

    http://www.marketwatch.com/story/dollar-slumps-versus-euro-as-gold-futures-soar-2009-11-09

96. Bill – you could probably day trade ATPG for the volatility of and width of that channel it’s running.

97. EOG gives Brian Singer (at least it should be him) at GS the bird with a rally today. It’s a little muted but generally GS has the power to trump a market call. If anyone gets the GS note on EOG I’d like to see it.

98. Dow at 10,200, Dow Transports moving higher as well, still 3.4% off their 2009 highs which would probably get more bulls into the game.

99. CRZO call started

100. 95 – Oh I know. Trust me that I don’t think the dollar is worth within 20% of where it is now. It WILL breach 72 at some point and then it will free fall.

     I’m still expecting one rally at 74 or 72 so that we can all reload our energy (and gold) bets at nice levels. Bounce to maybe 78? I’m not selling any gold yet but I have some. I think gold COULD extend this rally to 1250-1300 before a meaningfull pullback to some level above the breakout or to the breakout level (1034).

     I’m watching the 10 and 30s for indications of weakness because the long bond has approached the trendline and once confidence breaks in that and people sell out that will be a lot of USDs floating around looking for a home in non-American assets. The “flight to safety” was a flight to the US long bond and the flight from USD collapse will be the same thing. Keep in mind that the USD was at 72 before the “flight to safety” and rallied a tonne. Expect the same type of decline on the way down. The decline thus far has been based on the weak dollar policy but has not affected the demand for the long bond yet.

101. The weather on Mars: 50 knots

     http://www.ndbc.noaa.gov/station_page.php?station=42363

102. Heating degree day forecast for this week is out: 91 which is pretty mild for this time of year.

103. 96

     im mostly out of atpg but would buy on pullback to the 15’s

     Oil at telemark doesntcome online until april 2010, so 2 more lousy qtrs coming up

     Mcf tried to sell Dutch and Mary Rose fields in june 2008 but cancelled it in sept 2008. They never mentioned what they wanted or what the offers were but as everyone know ng peaked in july 2008 so they almost sold that at the highs

104. Ida Impact – minimal

     MMS plans to release an estimate of shut in production shortly, I would not expect much to be offline.

105. CRZO call a snoozer.

106. ESV rebasing to the U.K. Amazed at how many offshore drillers are taking their HQ’s out of the U.S.

107. Barclays calling the EOG production growth target of 13% for 2010 “much stronger than expected”. That is how I’d characterize it as well. Driscoll is a pretty conservative analyst and in my view has missed a lot being on the sidelines worrying about gas prices but I think he’s right with the price target upgrade and devotion to his Buy rating here. As the name gets oilier it is likely to get more devotees on the sell side.

108. Sort of a wishy-washy piece by Cross Asset Class Strategist #2… still, has some good credit observations and key levels on the SPX

     http://www.capmarkets.com/ViewFile.asp?ID1=320290&ID2=341218357&ssid=2&directory=11608&bm=0&filename=Are_We_Going_To_Be_Wrong_Again_11-9-09.pdf

109. Got the EOG piece from GS. Thanks. Essentially it is a “stock has run XX% from our Buy rec, taking profits” piece. Has little to do with valuation, sounds like a commission generator trade for them, basically saying it trades a little higher than the group and therefore has less upside. I’d tell you that the name generally trades at a wide premium to the group and the fact that it is so narrow to the group now is part of why I own it now and not a reason to sell it back. If it runs into the high $90s near term on a strong market I’ll take profits but I see their downgrade as a non-event.

110. Switching to the TSO call.

111. 89: no comment necessary.

112. SP at 1090+.

     A little surprised by the strength in gasoline and distillates relative to oil today. Ida is not going to be a problem for refined product supply, unless you are thinking of imports and then maybe we lose a day or two of imports that will just get lumped into the next week’s imports.

     TSO says refining capacity could fall into the high 70%’s

113. TSO was talking about it’s own refineries running at 77% in the 4Q, the domestic installed based is running about 80% now.

114. now that KOG has their secondary out of the way is the new ZMAN strategy to sit back and wait for “you know who from Cowtown” to overpay?

115. TSO – call is a mixed bag of poor results and optimism regarding the future. Q&A about to start.

116. Jivey – either that or let them prove it up and then start to downspace it. I probably won’t sell any more before $3.50 or the T.F.S test.

     S&P just drifting higher.

117. thx re: KOG

118. Jerome – does the PXD chart look very similar to the NFX chart to you?

119. Jivey – unless I see something I can get more leverage on in the play I probably won’t think of selling it. It’s a nice call option without expiration. I think its probably close to fully valued for now on the Bakken alone, maybe another $0.50 or so and then its pretty full by my way of thinking unless costs fall further, they drill longer laterals and start hitting bigger wells. Then you have the Three Forks and that may be pretty big for them. Then you have “what’s next?” and they probably have enough drilling locations that they won’t need to ask that for another 2 or 3 years. So far, for a little guy, they are doing quite a good job of managing both the ops and the stock. And we’ve all seen any number of single digit midgets muck up a good thing by over promising and then under delivering.

120. TSO – If you strip out the unemployment you actually have growth in gasoline demand on the West Coast. Is that like created or saved gallons of gasoline demand?

121. Analyst Watch:

     BEXP – Raymond James out reiterating Strong Buy and $18 target. Yes, I still own the $10s and the $12.50s and the common.

122. HERO — the CS upgrade report is well worth the time spent, combing through it. HERO is one of the muckiest of the bottom-dwelling, mud-suckers… but at this point in the cycle — with their recent 2ndary and credit agreement negotiations done — might be time to do some Bottom Feeding here. Bought some a week or so ago and enjoyed the ride down a buck (not). But held on. Given the relative underperformance of HERO vs the rest of their universe, I think it might be time where the rising tide lifts all the (lift)boats (and jack-ups and barges). Caveat = won’t be a hockey-stick recovery in rates and utilization… too much excess capacity and new-builds out there. But, I think it’s time. Added to my position today on expectation that we have reached the low for shelf drilling rigs.

     Just talkin’ my book.

123. ——————————————————————————–

     Case No. 11761: Application of Kodiak Oil & Gas (USA) Inc. for an order amending the
     field rules for the Heart Butte-Bakken Pool to allow up to two horizontal wells to be drilled on a 1280-acre spacing unit within Zone III, Sections 28 and 33, T.149N., R.92W., Dunn County, ND, with the second horizontal well drilled and completed in the Bakken Formation at any location not closer than 300 feet to the boundary of the spacing unit and such other
     relief as is appropriate.

     Case No. 11762: Temporary spacing to develop an oil and/or gas pool discovered by the
     Kodiak Oil & Gas (USA) Inc.#1-22-23H Charging Eagle, NENE Section 22, T.147N., R.92W., Dunn County, ND, define the field limits, and enact
     such special field rules as may be necessary.

     Case No. 11634: (Continued) Temporary spacing to develop an oil and/or gas pool discovered by the Kodiak Oil & Gas (USA) Inc., #1-22-10H Charging Eagle, NENE Section 22, T.147N., R.92W., Dunn County, ND, define the field limits, and enact such special field rules as may be necessary.

     https://www.dmr.nd.gov/oilgas/dockets/20

124. BOP – I’ll be playing that area as well, either via RDC or ATW (who has some shallow stuff). I think some of the Shelf rigs adds you are seeing or will see shortly are some big lifting, high horsepower rigs.

125. TSO call over, they sound excited about retooling and cost cutting efforts. I gotta say I just can’t get on board with the name or the group at this time. They have an analyst meeting tomorrow and I’ll tool through those slides. They did that calc on employment adjusted demand being up but I gotta say that its not very scientific and the increase they are seeing in demand (when you strip out the unemployed) is probably just the unemployed looking for jobs or going to the beach more often.

126. Thanks for the update West. I guess mid year 2010 we will see them go to 4 wells per pad (2 m Bakken, 2 TFS)

127. Thoughts on kog’s move today? Good exit point for an entry lower?

128. Baylor – Not by me but that’s not to say it won’t pull back in here giving a buyer the chance to add lower. I took some profits a couple of weeks ago on 1/5th. That was enough for me for now, see my comments above in 116, 119.

129. MCF gave back a small move higher earlier. How was that call?

130. Analyst Watch:

     EOG – Weeden comes with Strong Buy
     Deutsche comes with an upped target of $115 from $110.

131. S&P and DJIA looking likely to go out at HOD.

132. Beerthirty

133. Thoughts on follow through tomorrow?

134. 129, they didnt have a call
     they are ignored by everyone

     Question:

     In 2008, production took a hit as huricanes shut in a bunch of production causing daily volumes to fall from about 60 bcf a day to 52 a day. This year we will do 60 b a day causing a huge y-o-y increase,

     Will this be a suprise or has the markets priced this in?

     When does ng production fall..the world wants to know?

135. Already priced in.

     Supply declines that will be more noticeable actually started a report back from the last one and will re emerge shortly. I think by Feb or so (November data) you’ll see an acceleration in declines. EOG mentioned that they are almost through their backlog of drilled but not completed wells and that they know of others that are too.

136. Not a good call by HT today, BOP.

     He was probably right in his thoughts, but the fix was in !

137. TT, on the other hand, identified the potential for a trend day (or as I call it, a Free Money Day) early.

138. PackMan — even HT listens, when TT talks. But, he likes to put his own spin on things. Where TT is usually right is when there is no eco-news to mess up the technical trading patterns in the morning. When there IS eco-news, that is where HT’s practical spin on mrkts helps.

     Just a little something to keep in mind, as I think they are both worth listening to. Glad you follow ’em. I find their input helpful.

     “Free Money Day”… good way to put it. Hope we can enjoy some more of those, as we march toward the end of this dreadfully-trying year.

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