Monday Morning And All Is Green + The Orange Charts and Lots of Other Thoughts

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Market Sentiment Watch: Dollar down, futures up. I'll be nibbling lightly in this holiday light trading week.

The Week Ahead: Boat load of data early, then nothing

  • Monday 11/23: Existing home sales after the open, forecast 5.74 mm. Home related data has been a drag on the market of late
  • Tuesday 11/17:
    • GDP 3Q Revision, 2.8% forecast, down from the initial 3.5%,
    • Case-Shiller home prices,
    • Consumer confidence forecast 45.5,
    • FHFA home prices for September
  • Wednesday 11/18: 
    • Jobless claims (forecast 495K, market has been looking for a number under 500K for months now),
    • Durable goods, forecast 0.5%
    • Personal incomes, forecast 0.1%
    • Consumer spending, forecast 0.6%
    • Consumer sentiment, November forecast 67
    • New Home Sales, October forecast 390K
    • EIA Oil Inventory Report - 10:30 am EST
    • EIA Natural Gas Inventory Report  - 12 pm EST
  • Thursday 11/19: Happy Thanksgiving - Market Closed  
  • Friday 11/20: Market open until 1 pm EST. No economic data release scheduled.

In Today's Post:

  • Holdings Watch
  • Commodity Watch
  • Stuff We Care About Today - Orange Charts Update, Who's Gotten Slammed In E&P, APC, EXXI
  • Odds & Ends

Holdings Watch:


Commodity  Watch:

Crude oil inched up 0.5% last week to close at $76.72. You could not tell this from the way most oil related issues ended the week. The forward curve steepened with the 12 month crude strip ending the week up 1.3% at $80.61. The January '10 contract takes over this morning as the front month having closed at $77.47 on Friday. This morning crude is trading about a buck on a weaker dollar.

  • Mexico Watch: Production Continues To Slide: PEMEX reported Mexico's production fell 5.6% from year ago levels at 2.6 mm bopd and that exports were down 13.7% from year ago levels.

Natural gas was very volatile last week but, as hard to believe as it is, ended the week UP 0.6% to close at $4.42. The 12 month strip is now trading at $5.07. This morning gas is trading up a dime.

  • Weather Watch:

    • Week Before Last: 92 HDDs which gave us a 20 Bcf injection.
    • Last Week: 113 HDDs ... coldest of the season to date but still well above normal.
    • This Week's Forecast: 126, even colder but still well above normal.



Stuff We Care About Today

(APC) Subsalt Discover Off Brazil

  • Wahoo #2, Campos Basin, block BM-C-30
  • Encountered 90 feet of pay 5 miles north and downdip of the discovery well which found 195 feet of pay

    • think big structure here
    • a deeper secondary objective will be tested in this wellbore (still 2,000 feet to TD)
  • APC is operator with a 30% working interest and has expressed interest in acquiring DVN's 25% statke in the play after it announced it would be selling off its international operations last week.
  • APC continues to wrack up big offshore international successes, I'll probably play this for the quick move today, like they had after drilling the Venus well off Africa several weeks back.

(EXXI) Ups Gulf of Mexico Bet

  • Buying further interests in 30 fields they already operate
  • Takes their run rate from 20,000 bopd to 27,000 bopd, makes sense logistically
  • Total costs of $263 mm, reserves not given in the pr, but the $ per flowing barrel of production doesn't look out of whack.
  • Conference Call at 9 am EST.

Who's Gotten Slammed In E&P? Quiet simply, gassy E&P names have taken a hard fall since October 20th:

  • One month declines averaged 24% in our most frequently trafficked gassy names.
  • While oilier names were off less between 8 and 22% with most in the lower end of the range.
  • Natural gas was off 26% for the period on the front month
  • Crude declined only 6%
  • The S&P 500 was essentially unched.
  • Notably, the natural gas twelve month strip fell only 18% in the last 30 days, making the intense sell off in the E&P names a bit of a head scratcher. Spineless analysts more down on natural gas than the people who actually trade it for a living. Yep.
  • Also notable is the fact that the strip still looks stronger than it did all summer.

So what do I do about it? Since hedges didn't matter and good news only held fleeting interest in the market I will continue to do what I do, watch the stories and their valuations, play in the names, with a slightly less aggressive tone until I see them perk up and then I will trade opportunistically as always.  To do that, I have to know the fallout of the recent valuation changes and the stories. The stories I get from the conference calls and writeups I do and the valuation changes are best pictured in the orange charts which leads me to the next section ...

The Orange Charts - Smalls and Mids Today, Big Caps Later in the Week

Notes For The Orange Charts:

These are just a handy reference. I update them every 30 to 45 days and just after the end of each quarter. I find them useful in explaining where the various players stand against each other, and with the help of previous trading, where they stand again each other. Some notes on this set of charts:

Short interest - up big across the board for the small caps biggest ones got bigger, SD leapt from 7% to 24% and was the biggest gainer. The mid caps were a different story with short interest falling over the last month. My sense is that the market in energy has narrowed with some hot money exiting. As they exit they short the smaller, perceived-as-less-safe names.

2009 Numbers: Don't mean that much at this point as the year is nearly done however they provide a point of reference as to either multiple expansion or contraction. On the Cash Flow to Capex number, again, the year is nearly complete and we'll have to wait to early next year to fill out the list but for now, most players are stating their intentions to live withing a stone's throw of expected cash flow.

2010 growth has only been expressed by a couple of players but we should see more of them with numbers in early January and all should be out by mid February. The volume leader on estimates at present for 2010 is HK.

The Orange Charts will be archived on the E&P tab.


Odds & Ends

Analyst Watch:

  • (PVA) - Upped to Buy at SunTrust

Interesting Article Watch:

155 Responses to “Monday Morning And All Is Green + The Orange Charts and Lots of Other Thoughts”

  1. 1
    zman Says:

    CXO on the tape with a Permian Basin purchase, details pre open.

  2. 2
    BirdsofpreyRcool Says:

    7:56AM Energy XXI to increase interests in core operated Gulf of Mexico Oil properties for cash considerations of $283 mln (EXXI) : Co announces it has executed a conditional purchase/sale agreement to acquire certain Gulf of Mexico shelf oil and natural gas interests from MitEnergy Upstream, a subsidiary of Mitsui & Co. (MITSY) for a headline cash consideration of $283 mln. The transaction involves mirror-image non-operated interests in the same group of properties Energy XXI purchased from Pogo Producing Company in June 2007. The properties include 30 fields currently producing 8,000 net barrels of oil equivalent per day, about 77% of which is oil and 80% of which is already operated by Energy XXI. Upon restoration of volumes pending repair of third party pipelines damaged by hurricanes in 2008, net production is expected to reach 10,000 BOE per day. Offshore leases included in the purchase total nearly 33,000 net acres. “The original Pogo property acquisition turned out to be an excellent transaction for Energy XXI, and the purchase announced today will double our interests in the same properties,” Energy XXI Chairman and CEO John Schiller said. “The synergies are obvious, as no incremental personnel, systems or other overhead will be required. Administrative and operating cash costs are expected to be reduced by about $1 per BOE overall. This transaction will boost our recent production run rate by 43% to about 27,000 BOE per day, with near-term upside anticipated.”

  3. 3
    BirdsofpreyRcool Says:

    Energy XXI has scheduled a conference call for today, Monday, Nov. 23, 2009, at 9ET to discuss the acquisition. To actively participate on the conference call, please call 1 (913) 312-1494 about 5 minutes before the scheduled start time and use Confirmation Code 8423321.

  4. 4
    zman Says:

    BOP – any HT / TT thoughts? Preparing my shopping list

  5. 5
    BirdsofpreyRcool Says:

    EXXI — no word on how they are going to finance the acqtn… and that is KEY to stock price reaction, of course. Don’t think it’s prudent for EXXI to take down more debt, altho the added reserves should increase their revolver limit. Currently, EXXI has $669mm debt and $124mm of availability ($14mm cash + $110mm bank revolver). Gonna make the assumption (at this point) that the acqtn is 100% equity+cash financed.

    Not sure how the stock is going to take this (although the acqtn appears to be highly attractive), but the Bondholders should be doing the HAPPY DANCE today. More assets backing up the value of your bonds… gonna guess the EXXI 10s will trade to $88.

  6. 6
    BirdsofpreyRcool Says:

    TechTrader is calling for a 60/40 SHORT trade today.

    HeadTrader is suspiciously quiet, so far. Mondays are tough for him.

  7. 7
    zman Says:

    EXXI call starting.

    Crude up $1.50 (dollar down more since I posted)

    NG up 9 cents, forecast helpful but not great.

  8. 8
    zman Says:

    Analyst Watch: NFX upped to Outperform at BMO.

  9. 9
    BirdsofpreyRcool Says:

    Schiller dancing pretty hard on this… but, it does sound like a good acqtn!

  10. 10
    zman Says:

    Game plan today continued from the post, will be nibbling in some of the beaten down names in the Blue charts (1 month bashing charts). Yes, that includes HK and WLL (several wells to announce prior to year end), NFX (which may have 1 last ops update prior to Christmas) but which has also seen the greatest uptick in CFPS from before 3Q earnings. Probably BEXP as they will have 3 more wells to release prior to year end. May take a little APC on a morning pullback. Also going back to WLT.

  11. 11
    BirdsofpreyRcool Says:

    Great!! They have back-up financing at L+200bps. This is good news.

  12. 12
    zman Says:

    Gold up $23,

    Crude up $2 and may test $80 again. Notably products are up more.

    Big risk asset day.

  13. 13
    PackMan Says:

    Looks like they are throwing all kinds of BS news at the market today to try to salvage Black Friday (won’t work) and ignore the health care multi trillion albatross (won’t work either). SPY up 13 + handles.

  14. 14
    BirdsofpreyRcool Says:

    EXXI — %265mm (?) estimated cost at closing… will finance with a combo of equity, cash, and some debt. Again, this is major good news for the bondholders and should be good for stock, once we know what dilution will be required.

  15. 15
    zman Says:

    BOP – it’s a good purchase price at $12.30 / BOE on the proved, especially with it being 77% oil
    Q&A starting…

  16. 16
    zman Says:

    EXXI – Shiller – if we do 100% equity it’s still highly accretive. I don’t doubt that at the discount they are getting on the barrels.

  17. 17
    zman Says:

    BOP – yeah, true on dilution, just sounds like they haven’t got it worked out yet.

  18. 18
    zman Says:

    BOP – Slide 7 will get them a lot of new attention as they move up the Shelf Players list.

  19. 19
    BirdsofpreyRcool Says:

    z — but they have bank back-up at L+200bps and have already hedged the production at $75/Boe. So, at least will be doing additional equity from a position of some strength. They don’t have to beg for it.

  20. 20
    zman Says:

    Pack – saw your tweet re good news breaking out all over. Hear the sarcasm, but this is all dollar related and Ya know, some areas have been pretty beaten back. E&P for instance.

  21. 21
    zman Says:

    BOP – Have you seen a balance sheet slide, pre and pro forma, didn’t see it. Don’t know where they are after their recent debt machinations.

  22. 22
    zman Says:

    Twitter Watch: To follow us on Twitter use keyword ZmansEnrgyBrain.

  23. 23
    PackMan Says:

    Z – yes, where is that sarcasm font anyway ? E&P going up is ok w/ me.

    But retail, finnies, real estate ? Nah.

  24. 24
    BirdsofpreyRcool Says:

    EXXI has $669mm of total debt, adjusted for the exchange.

  25. 25
    zman Says:

    Pack – oh, that other stuff. yeah, pleezzee. I think if you use Z’s in place S’s it conveys the sentiment properly, lol.

  26. 26
    BirdsofpreyRcool Says:

    HeadTrader = thinking it will be hard to sustain the gap up at open during a holiday week. but, he would buy any signif pullback today.

  27. 27
    BirdsofpreyRcool Says:

    EXXI equity financing is a bit open… will use more debt, if equity doesn’t like it, will have $350mm revolver available for this. And if mrkt gets really tough, can scale back what they buy from Mitsui. So, EXXI in the driver’s seat with this acqtn. Pretty positive.

  28. 28
    zman Says:

    I think for EXXI, bigger is better from a Street perspective since they are not overpaying. You couldn’t know the structure of the deal as they are going to have to road show this. I bet it’s not 100% equity, betting closer to 50 to 75% equity though. Maybe they get it down over $2.25 as people are probably going to bid this up… looks pretty on paper plus Shiller is a good explorationist but also a good exploiter and there is quite a bit here to talk about exploiting.

    Revolver $350 mm available – redetermination soon, a little messy but 2010 should be a better year to look at the balance sheet. Would be mostly undrawn were they to do 100% equity.

    No comment on how much equity. That’ll be the governor on a huge run in the stock.

  29. 29
    BirdsofpreyRcool Says:

    EXXI — sounds like this acqtn happened pretty fast, so will take some back-and-forth with SEC to get documents ready to do an equity offering. But, don’t have concrete answers for equity holders yet… if this upsets someone, I would be a buyer on the back of their skittishness.

  30. 30
    zman Says:

    BOP – thanks for the added HT color.

    $160 mm drawn now.
    $— LOC
    $70 mm cash

    what else, missed that, what was on letter of credit?

  31. 31
    choices Says:

    Z-excellent orange charts-thanks.

  32. 32
    BirdsofpreyRcool Says:

    EXXI stock price — agreed. The equity offering overhang could keep a lid on stock price. However, it puts them in a bit of an interesting situation, stock price wise. The acqnt is accretive with 100% equity financing… and the more the stock goes up, the less stock they have to issue to close this. Plus, have the option to use some bank debt. So, stock could spiral UP… with the more it moves up, the less dilutive it is. Sort of a “Noble Spiral” (as opposed to the “Death Spiral” usually seen in overhangs).

    Interesting situation. I am a buyer here.

  33. 33
    zman Says:

    Choices – Probably should have done more notes on them but its good to hit the reset button every once in awhile and there’s nothing like a data dump for that. All numbers are updated for 3Q, with estimates for CF and EBITDA and prices and short interest from Friday.

  34. 34
    zman Says:

    BOP – yeah, was things it could limit them to mid $2s and not $3 pre deal. Pretty positive stuff, suddenly a contender and by buying properties they already know well. It ups their risk a little from an operational standpoint but I don’t think that’s a major deal. Glad they are hedging it as a down turn in oil prices would limit their ability to do workovers, fault block exploration etc.

  35. 35
    zman Says:

    Re 30, will wait for replay to confirm those numbers, cash sounds high, couldn’t hear over my own typing.

  36. 36
    BirdsofpreyRcool Says:

    choices — great buy on those EXXI bonds the other day. When you get a chance, could you see where IB is quoting them? They should be quite a bit higher… but sometimes brokers are slooooooooow in marking up their retail inventory. Can make for some good buys, until the broker wises up.

  37. 37
    bill Says:

    on exxi- i like the deal and bot some this am

    30,000 bbls would almost double revenues

    The key is how many shares do they have to issue

    maybe cov pref securites may be the way to go here with conversion at 2.50

  38. 38
    zman Says:


    First of several nibbles today.

    WLL – Added (3) December $60 calls (WLLL) for $3.80 with the stock at 61.90. I also hold some $65 strikes here.

    HK – Added (5) December $22 calls (HKLS) for $1.10 with the stock at 21.70.

    See thoughts on the beaten down E&P sector in today’s post along with the Orange Charts Update.

  39. 39
    BirdsofpreyRcool Says:

    EXXI — like the fact that mngmt can take some time (and do a road show) before placing x-amt of equity. I thought the stock was undervalued as it was, at $2/share. Now, post this aqtn, it is really undervalued. Doing a deal road show will all Schiller to reacquaint investors with EXXI’s properties and position and potential. Right at the same time as their hurricane-damaged production is all coming back on-line. I think the stock runs to about $2.50 and then stalls there.

    Any negative news from Davy Jones and/or Blackbeard doesn’t subtract from the operational upside here. Basically, at this price, you are getting any upside from EXXI’s two high-risk wells for free. My thoughts, anyway.


  40. 40
    zman Says:


    WLT – Added (5) December $80 Calls (WLTLP) for $1.30 with the stock at $72 and moving fairly well. The name remains cheapish on forward earnings and appears poised for a break out to my layman’s technical eye.

  41. 41
    zman Says:

    Re 39 – probably a fair assessment.

  42. 42
    zman Says:


    NFX – Added (10) December $45 calls (NFXLI) for $1.15 with the stock at 42.70, up with the group and a broker upgrade. This name had the largest upgrade in terms of CFPS and EBITDA estimates since October in the Orange Charts today. They have catalyst potential in the form of more Granite Wash wells to be released around year end, but in general, just buying a cheap name after a recent pullback.

    Came out swinging today, will sit for a bit and watch.

  43. 43
    zman Says:

    Listening to EXXI replay.

  44. 44
    zman Says:

    EXXI Balance Sheet Clarification:

    $160 mm drawn on revolver now
    $15 mm letters of credit
    $70 mm cash

    as of last Friday

    Anyone have a good share count now?

  45. 45
    BirdsofpreyRcool Says:

    EXXI — with the recent debt restructuring, think there are about 159mm shares o/s.

  46. 46
    zman Says:

    Existing home sales 6.1 mm, better than expected.

  47. 47
    BirdsofpreyRcool Says:

    z — thanks for the revolver info. Think the numbers i was using are pro forma for debt redux.

  48. 48
    BirdsofpreyRcool Says:

    Home Resales — saw something this weekend that I haven’t seen in a long time around here. A “SOLD” sign on a house. In really BIG letters, too.

  49. 49
    choices Says:

    BOP-EXXI 10’s: IB live data on my screen has quote of Bid 79.75, ask 84.5, with last trade @81.5-I do not think this is any change from Friday.

    However, the bonds I hold in IB account are valued at market of 86.625. The IB real time data for bonds must not be up to speen on data feeds from the bond broker(s).

  50. 50
    choices Says:

    BOP-tried to buy a few EXXI 10’s @ ask price and it has not executed as of yet. Last week, it was not problem.


  51. 51
    BirdsofpreyRcool Says:

    choices — thanks for the bond price update. Someone could probably sneak in there and try to buy them at 82 or so… might take a few days for them to realize that the mark should be higher. So far, there are no trades on TRACE… so those guys are clueless that the bonds should be marked higher.

  52. 52
    zman Says:

    1/3 of existing homes bought by first time home buyers. Makes me think that if jobs are not up in 1 year there will be a first time home buyer bailout.

  53. 53
    zman Says:

    BOP – Re EXXI, they have no senior debt now?

  54. 54
    zman Says:

    53 – That can’t be right.

  55. 55
    BirdsofpreyRcool Says:

    EXXI has $669mm of proforma debt… Bank + 2nd Lienss + 10% Srs

  56. 56
    zman Says:

    Thanks, Brain shut off for a moment. Just working up a BOE NAV.

  57. 57
    BirdsofpreyRcool Says:

    z — thanks!!

  58. 58
    BirdsofpreyRcool Says:

    that is $669mm of net debt, by the way

  59. 59
    ram Says:

    Nicky – Got levels?

  60. 60
    ram Says:

    Did J say that HK went on a P&F sell Friday?

  61. 61
    zman Says:

    Next buzzformation out of North Dakota: Birdbear, deeper than Bakken, thin, probably an after thought at present. May help valuation for some of the smaller guys.

  62. 62
    zman Says:

    Last Thursday Jerome wrote:

    HK gave up support this morning, its now on a P&F sell signal…also worried about AEZ…if you look at the traditional daily chart, there is a samll gap lower on the open which occured after a daily “shooting star”, yesterday, this is bearish…I’ve seen this setup many times, it’s a high probability setup for more downside, I’m going to try and buy further down, I’ll keep you posted…

  63. 63
    ram Says:

    Thank you Zman.

  64. 64
    zman Says:

    Market stalling up here at 1111 level. I have an email in with Nicky on levels. Lots more data Tuesday and Wednesday, summary of what’s coming up is in the post.

    Probably the last injection of the season and very small will be announced this Wednesday. Degree days running behind normal and last year but still starting to pile up.

  65. 65
    ram Says:

    Thanks for the Nicky email.

  66. 66
    zman Says:

    WLT – back off pretty rapidly, may take a second piece on this pullback.

  67. 67
    zman Says:


    WLT – Added (2) WLT $70 December calls (WLTLN) for $4.50 with the stock at $70.90.

  68. 68
    zman Says:

    Choices – another thing about the Orange Charts – on the reserves section, those are 2008 reserves, so they are largely 11 months out of date, will have new numbers in February, plus you have a rules change on reserve accounting. Look for HK to come way down the list on how the market it valuing its reserves as they are probably going to grow total reserves at 80% ish when the number comes out after year end.

  69. 69
    isleworth Says:

    FYI – HK – Insider VP of Investor Relations Dunlap bought 4000 HK in open mkt at $22.77 on 11/16….been there since 2004……first open market purchase I can find for her.

  70. 70
    zman Says:

    Isle – thanks, they may be trying to send a message, would like to see Wilson and Stoneburner step up, also would like to see Stoneburner do the presentations.

  71. 71
    isleworth Says:

    FYI – Soros in last filing 9/30 increased HK stake to 900,000 shares from 400,000 at end of June

  72. 72
    zman Says:

    Housekeeping watch: will add production growth for 2010 to the Orange Charts when it becomes available, I think I only have 3 companies with 2010 out now and 1 with a 2011 number. Any other charts you think would be useful?

  73. 73
    bloodystupidjohnson Says:

    When ever I see reports that Soros, or Pickens have increase their stake in X company, I always wonder how much active management do they do in their accounts? Or, as I believe, these decisions are made by someone else, and Soros and Pickens may or may not know what is really in their account.

  74. 74
    zman Says:

    BSJ – Don’t know about George.

    TBP I’ve met and I know people who have had money with him and he can talk the individual stories very well.

  75. 75
    zman Says:

    Posted on reserves by Jay over the weekend. Scary if this guy is half right in that it will skew things and make some little fish look a lot more valuable than they are.


  76. 76
    bloodystupidjohnson Says:

    TBP might talk the stories, but does some else make the buy and sell decisions? It would be very hard to be flying around the country, at Pickens age, and activity manage a stock portfoio. TBP is probably in the investment meetings where stock ideas are dicussed.

  77. 77
    zman Says:

    BSJ – he has analysts and traders, but I’m pretty certain he is in, at some level, on the buy/don’t buy decision. Once they buy I’m sure the accumulation (how fast, what price) is left to the traders.

  78. 78
    baylor3217 Says:

    Re:67 Z, what’s the rationale between expecting a 5-12% up move in WLT in the next 30 days?

  79. 79
    bloodystupidjohnson Says:

    It is probably that Pickens would set the general guide lines, like gas is cheap lets look for some gassers, or oil is expensive, lets look to cut back on our positions, etc..

    In my mutual fund days, I worked for an investment legend, and he really didn’t pick the stocks that were bought or sold, but he did sit in on the investment meetings, and road shotgun over what we did.

  80. 80
    bloodystupidjohnson Says:

    Compare this with Buffett would actually pick up the phone and says buy x amount of y shares.

  81. 81
    baylor3217 Says:

    I can tell you this about TBP, he donated a ton of money to Oklahoma St University in stock, oil futures, etc and they lost A TON of money to the point where construction is now at a stand still as they attempted to purchase their way into a contender at the college level.

    I’m not sure of his involvement after the donation but they lost well over half the money they originally received on paper.

  82. 82
    zman Says:

    Baylor – I don’t need it to rise to the strike price for it to be a profitable trade. Coal stocks have been outperforming as coal prices move up and demand increases. Met coal and generation coal have been moving well. And this particular name is still cheap despite the recent rally in the shares.

  83. 83
    baylor3217 Says:

    Re: 80, I’ve always wondered what will happen to BRK.A which i’ve been in and out of through the years once Buffett heads to that big stock exchange in the sky and if there would be a great buying opportunity there.

  84. 84
    baylor3217 Says:

    Z, 82, I hear ya on the strike price but that of course depends on how soon in the remaining days does it make a move.

    Thanks for the color on the decision to purchase.

  85. 85
    zman Says:

    BSJ – ok.

    Baylor – he donated shares of energy companies, they went down after he did, I don’t think he was involved at all. Don’t see how that’s reflective of him but I’m not defending him either, I think he is smart, and I think that what happened last year with oil prices and then gas prices was so far outside the norm that even the most experience guys in the space took a severe beating.

  86. 86
    zman Says:

    Stocks appear to be in vacation trading mode. Pop then fade slowly. Will be interesting to see market next week.

  87. 87
    reefguy Says:

    TBP- knows every trade he or his fund makes

  88. 88
    zman Says:

    Reef – Any word on what happened to Blueberry Hill. Total hurry up and wait headfake there.

  89. 89
    isleworth Says:

    Baylor: Shame on OK State for not selling the stock after they received it. I have run three university endowments and I can tell you that selling gifted stock is Standard Operating Procedure for endowments.

  90. 90
    BirdsofpreyRcool Says:

    isle — that is very interesting to know about university endowment SOP on gifted stock. Thank you for sharing some investment color from your background.

  91. 91
    zman Says:

    The conspiracy theorist in me would say TBP gifted CHK stock, among other things, and that CHK’s pretty campus in OKC along with Aubrey being friends with TBP had something to do with the lack of a sale as the shares were falling. Naah, couldn’t be.

  92. 92
    bloodystupidjohnson Says:

    Re 91: Watch it Z, you are getting more like me everyday, though I am not a conspiracy theorist, lets say you have a healthy skepicism.

  93. 93
    zman Says:

    BSJ – LOL.

    Crude gains more than cut in half, whacking the S&P gains on the day as the sector which was leading eases substantially during lunch. Lot’s o’ data tomorrow.

  94. 94
    zman Says:

    BOP or anyone, did you catch the key dates for EXXI in terms of SEC and deal closure ?

  95. 95
    BirdsofpreyRcool Says:

    EXXI — didn’t write it down… something like Jan 27th. SEC is 3 weeks or so. But dealing with the SEC can be a BlackBox experience. And all the SEC staff seems to disappear around the end of the year… so, EXXI might be optimistic about SEC timing.

  96. 96
    zman Says:

    Jerome – WRES when you get a chance? Thx.

  97. 97
    zman Says:

    Shocking how low the volume is on EXXI today, even for the holiday week that was pretty big news. I guess the lack of a structured deal is keeping most people on their hands. Same people will likely find more confidence to buy if the name moves up during the road show of a deal that will dilute them …funny how that works. Mulling.

  98. 98
    zman Says:

    The current holdings tab is updated for today’s trades…too much time on my hands on a quiet day.

    Stocks continue to trickle off. Crude up 70 cents, NG up 5 cents (which would be the third up day in a row).

  99. 99
    BirdsofpreyRcool Says:

    z — buy a few shares of EXXI… that way, you will have more incentive to do a cash flow model on them!

  100. 100
    BirdsofpreyRcool Says:

    EXXI — that said, if/when DJ and/or BB come up nada, EXXI is gonna be smacked down. THAT would be the time to really load the boat… if/when that happens.

  101. 101
    zman Says:

    BOP – Will put something together on it for the morning post, if I can get all the moving pieces together and if I don’t fall asleep.

  102. 102
    1520sbroad Says:

    great charts today. helps me keep perspective on how Mr. Market prices things.

    i ran some charts this morning – one shows that one of the canadian royalty trusts that i own (slow growth energy in my mind) has outperformed HK (big growth in my mind) over the last month by 20%. Mr. Market is tough to figure sometimes…

  103. 103
    baylor3217 Says:

    Z, I was thinking of a topic on a slow trading day like today. I took a vacation day and am mostly enjoying doing nothing.

    So here’s one for the group, what are your goals for the 10KP trading portfolio? I have certain trading / investing goals, one of which is to make money, amongst other things.

    I’m curious of yours…

  104. 104
    BirdsofpreyRcool Says:

    z — just ask questions, i’ll try to fill in the blanks for you to keep you awake. Really would like to see your CF model on EXXI.

  105. 105
    zman Says:

    Senator Lincoln to introduce transparency legislation to OTC derivatives market, sounds like it will raise costs on the E&P names as custom contracts will cost more, be forced to be cleared through a clearing house, and face higher margins. Ugh.

  106. 106
    zman Says:

    Baylor – the $10KP II is my options trading vehicle, it is icing on my investment cake, and I generally keep it under 25% of the total value of holdings (right now its quite a bit less). It’s short term, action oriented, sometimes hedged with puts but more often just cash as we are in an up and to the right market most of the time. It is also volatile because it is an options portfolio. I do options outside of it but its my public presence for options. I don’t grow it to a huge number and keep that all in options as the risk there becomes to high. So periodically I cut it back to $10K (or the market cuts it back as the case may be) to keep a fresh perspective and to reduce my exposure to the risky nature of options.

  107. 107
    zman Says:

    Re 104, just dusting off a quick and dirty CF model now to start plugging away on. May be ready for tomorrow, may be for Wednesday. Either way beats staring at a market watch and maybe I convince myself to buy a little.

  108. 108
    zman Says:

    Jerome – would ask you to add WLT to that list. Failed to breakout of its recent high this morning and has beaten a retreat and now is negative on the day. Last time it did that it was two weeks of seemingly nonsense down trading, irregardless of market action, before it turned higher and went to a new high. Thanks.

  109. 109
    zman Says:

    BOP – re ? earlier, I don’t include retirement obligations in the NAV unless they are out of line with norms or are just massive.

  110. 110
    BirdsofpreyRcool Says:

    #109 — thanks. I don’t either. But, not sure how others treat the obligation (i look at is as part of operating expense, spread out over time, so don’t use it in NAV either)

  111. 111
    BirdsofpreyRcool Says:

    z — i mean, the ALL IN cost to bring almost 23mm BOE of PDPs on EXXI’s Balance Sheet is only $16/bbl in F&D. Wow. Seems like a heckuva deal to me!!

    Anyone out there buy any EXXI 10s today?? If so, where are they trading? Can’t get any institutional quotes today. The A Team is clearly taking the entire week off.

  112. 112
    choices Says:

    #68, thanks, Z, I need to do a lot more study on those charts-do you have or have you seen a good summarized analysis of the rule change and its effects. I have not been following it much to my chagrin.

  113. 113
    cargocult Says:

    Time to double-up on SD?

  114. 114
    BossmanG Says:

    Z / VTZ / 1520sbroad, do you mind sharing a list of canadian equities you follow/trade?

  115. 115
    isleworth Says:

    re EXXI 10s – trades today from $81.25 to $82.50 – looks like about $7M + traded

  116. 116
    zman Says:

    Choices – I honestly think it is only going to confuse people. For those on the upper end of the trust / real company spectrum, like an EOG, I don’t think it will add much, but for little names, who play the numbers aggressively, you are likely to see some big jumps, big jumps that people will likely be quick to fade as doubt about the veracity of the claim comes to light.

  117. 117
    PackMan Says:

    HK having a bad day now …

  118. 118
    zman Says:

    Cargo – I’m going to wait, if I wasn’t in I’d think about adding but only with the long term in mind. It may be stagnate money for some time.

  119. 119
    BossmanG Says:

    RE 114 – or anyone that does…

  120. 120
    zman Says:

    Pack – yep, went up less, backed off when the group did, just going red now. No reason for it other than group fade as commodities when red. Going to be somewhat slow to add as trading seems herky today and will be this week.

  121. 121
    1520sbroad Says:

    #114 – my canadian list has gotten progressively smaller and more concentrated:

    PWE – canroy
    GG – gold
    POT – fert – i follow a bunch of the other fertilizers too.
    SU – oil sands

  122. 122
    zman Says:

    Boss – I really don’t trade them. I watch TLM, NXY, ECA, SU but its really not my thing.

  123. 123
    zman Says:

    And Pack, it’s possible I’m just missing something with the name.

  124. 124
    1520sbroad Says:

    My slant on the canadian stuff is more buy and hold. No trading except for writing calls against my positions.

  125. 125
    zman Says:


    WLL – Added another contract, tiptoeing in, of the December $60 calls for $2.90 with the stock at 60.80.

  126. 126
    zman Says:

    1520 – then my favorite, long term thought up there is TLM, no offense to ECA which is probably more interesting. TLM is perpetually at a discount and I think will be absorbed down the road (but I’ve thought that for a decade and no joy so far).

  127. 127
    PackMan Says:

    Z 123 – anything is possible with this stupid market.

    BOP didja check out Hussman’s comments re: the Fed / Treasury ?

  128. 128
    bill Says:


    i wonder if exxi would sell off some of its speculative interests dj or bb to plow into the sure thing

    even if dj hits, then, they are rewarded with spending more money on devp wells and platforms, etc

    Id like to see them spin it off

  129. 129
    BirdsofpreyRcool Says:

    isle — thanks for the bond color on the EXXI 10s. Got some colleagues trying to scoop up a few at 84. Given that $7mm have traded today, they should be able to get them… can you tell who (broker) sold ’em? CRT is strangely quiet today… think they are sitting on the bid…

  130. 130
    bill Says:

    going to get colder next week


  131. 131
    zman Says:

    Bill – yep, thanks, 30 day also:


  132. 132
    tomdavis12 Says:

    Z: If the EPA protection of the mayfly will hurt the Appalachia coal producers but help the Powder River guys, does WLT fit into this catagory?

  133. 133
    zman Says:

    Tom – As I understand it that applies to mountain top removal, or MTR or the valley fill method. WLT is a deep shaft miner in Appalachia and a surface miner in Alabama.

  134. 134
    bill Says:

    132 mayfly, what the hell is that?

  135. 135
    zman Says:

    a very old flying bug that is popular with fly fishermen.

  136. 136
    zman Says:

    Here’s the Bloomberg story on it from last week.


    MEE does a lot of this type of mining.

  137. 137
    zman Says:

    Brean Murray saying coal stocks fell off today on China demand slacking off 11% in October.

    It seems coal volumes were down 11% from September levels.

    And up 219% from year ago levels. So naturally, sell the stocks off. Sheesh.

  138. 138
    zman Says:

    AEZ out with a mid day ops update, 1 Niobrara recompletion in the PRB: ok rate, not a lot of details (nothing on costs, expectations), they should have saved it for a) the morning, and b) when they had something more to say. Rookie.

  139. 139
    isleworth Says:

    BOP re #129 – sorry can’t help on who had traded them. $84 should get you some……

  140. 140
    BirdsofpreyRcool Says:

    PackMan #127 — no. You have a link?

    I find Timmy to be a major disappointment. I think he lost a lot of lunch money to bullies on the playground when he was young. I don’t think he ever learned how to stand up to pressure. Goldman Sachs played him like a fiddle.

  141. 141
    BirdsofpreyRcool Says:

    Thanks, isle. Got people out there, trying to transact at the 84 level. You are right, they should trade there.

  142. 142
    choices Says:

    EXXI 10’s-my attempt to buy a few @84.5 still has not been executed altho volume appears to be 11.23 mil-last trade @82.5 all according to IB screen (bid/ask has not moved)

  143. 143
    zman Says:


  144. 144
    BirdsofpreyRcool Says:

    choices — thanks for your update. Wonder why they “can’t” execute your order? That is highly irritating.

  145. 145
    BirdsofpreyRcool Says:

    Inflation thoughts… i totally agree with this.


  146. 146
    RMD Says:

    GEOI on conf. call for 3mm share deal (with 15% shoe) estimated EUR for industry across whole Bakken play at 400m. (Z, that makes the blood rush to my toes on AEZ NAV.)
    Since cash flow about carries 2 yr. capx budget of $90mm, deal will allow them to participate in “active acq. market” in ’10 and could increase their positions “appreciably” by 1Q10. Sounds like they will be at least somewhat more proactive to the St.

  147. 147
    BirdsofpreyRcool Says:

    color from my High Yield hedge fund friend… “lots of EXXI 10s traded today at 82.5… ” So, not sure why people can’t get their order filled at 84. But, i know at least 2 people who tried there and the desk never called them back. Reminder… you have to be a PAIN (sometimes) to get bond desks to actually do any work!!

  148. 148
    PackMan Says:

    BOp # 140


  149. 149
    PackMan Says:

    About 1 year ago the market rallied 500 points on the announcement that Timmy would by Sec Treas.

  150. 150
    PackMan Says:

    BSJ #73 re: Soros; as he in the past outsourced funds intenally and externally to managers w/ diff strategies (think Bob raiff, or Druckenmiller, or PC Chatterjee or others), he generally would not be up on or involved in those positions.

    But it still gets reported as “Soros” did this or that. Much like “Fidelity” did this or that.

    Wouldn’t make too much of it, unless it was a gargantuan position.

  151. 151
    PackMan Says:

    BOP: http://news.yahoo.com/s/ap/20091124/ap_on_bi_ge/us_ap_poll_stressing_over_debt

  152. 152
    BirdsofpreyRcool Says:

    PackMan — ha! No argument from me. I’m saving my money in anticipation of having to buy an expensive insurance plan, as my “high deductible” plan (plus HSA) does not qualify for what the Dems want me to force me to buy.

  153. 153
    Jerome Blank Says:

    RE: #60, HK is now trading on a P&F sell signal with the print of $21…expect resistance on a rally back to the 200 day SMA at around $22.50, from here, a print of $24 would three box reverse the stock, trapping the bears…this reversal would really improve the technical structure quite a bit

    Re: #96 WRES…stays on a P&F buy signal until a print of $1.75, but is currently in a col of o’s near major support, this zone of strong support is between $1.75 and $2, WRES seems to now be forming a descending triangle on the daily chart after the initial breakout above three dollars back in early Sept with overhead resistance again from here at about $2.75, this area of resistance at $2.75 to $3, is an important technical spot as WRES goes back into x’s on the print of $3, $2.75 has been an area of resistance since as far back as May, $3 print from here would reverse the stock back into x’s and would be a second test of this resistance zone….

  154. 154
    BirdsofpreyRcool Says:

    PackMan — 140+148… The Fed and the Treasury have way overstepped their boundaries… and seem to know no new ones (boundaries, that is). Some things about banks need to be kept private (confidentiality supposedly keeps us all calm and prevents premature runs on banks), but both Timmy and Ben have overplayed their hands… both for different reasons. I won’t rehash the fact that we were seconds away from a global run on the banks at this time last year. And for stopping that, we have Ben and Paulson to thank. But we all know what absolute power does…. the Govt took it too far. The concept of the original TARP was needed. What was implemented amounted to a bait-and-switch on the American Taxpayer. I could go on and on… but you know what I think already.

    Govt policy and their own lack of self-regulation was the main cause of all this. And for a “cure”? Well… we are going to get more and more of the same. I’ll shut up now.

  155. 155
    zman Says:

    Thanks Jerome

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