02
Dec

Wednesday – Oil Preview Plus NOG and Coal Thoughts

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Market Sentiment Watch: Quietly optimistic, forgetting about Dubai, concerned over the jobs report on Friday.

  • Eco Data Watch:
    • ADP employment came in at a loss of 169,000 jobs vs 203,000 jobs lost in last month's survey. Recall that the market is looking for 100,000 jobs lost with this Friday's report.
    • Beige Book later this afternoon


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today - NOG, WLL, Coal update
  5. Odds & Ends

Holdings Watch:

  • $10KP II:

    • $12,300
    • 15% Cash

 

  • Yesterday's Trades:
    • None. Tried and failed to take ROSE calls again, will have to be satisfied with the common as the options there trade in their own little odd world.


Commodity Watch:

Crude oil rose $1.09 to close at $78.37 yesterday. After the close, the API released bearish data showing larger than expected inventory builds across the board. This morning crude is trading off 50 cents.

  • Russia Watch: Production hit another record in November, with volumes totaling 10.07 mm bopd. Russia will attend the OPEC meeting later this month and should smile and thank lots of members there for the gift their curtailment has given the Motherland. I don't expect them to commit to anything at the meeting.

Natural gas eased $0.08 to close the day at $4.76 after a brief foray into positive territory. I think gas has support in the $4.50 to $4.60 range and that the market needs time to fully digest the implications of the onshore declines that the EIA's report on Monday divulged  This morning gas is trading essentially flat. 

  • Early Read On Natural Gas Storage: 0 Bcf. I think this consensus estimate will fall into a withdrawal range of 20 to 30 Bcf today.

    • Last Week: 2 Bcf Injection
    • Last Year: 64 Bcf Withdrawal
    • 5 Year Average: 41 Bcf Bcf Withdrawal
    • 10 year Hi: 13 Bcf Injection
    • 10 year Low: 100 Bcf withdrawal

Oil Inventory Preview


API Watch: As usual, a bit dubious about big builds in crude and in products during the same week.

  • Crude oil: Up 2.887 million barrels
  • Gasoline: Up  3.423 million barrels
  • Distillate: Up  1.059 million barrels

ZComment: Looking for pick ups in holiday travel and shopping related demand in gasoline and a seasonal increase in distillates. Oil imports came off their recent lows last week making them somewhat less of a threat for an upside surprise to this week's inventory number. Numbers get a bit squishy around now for distillates and since the weather has been mild up until now there is a good chance we get a build and not the small draw the Street is looking for.

Stuff We Care About Today

WLL Watch

  • Stock has been moving well, hit another new 2009 high yesterday
  • WLL speaks at BofA credit conference today at 10:30 am EST and tomorrow at the Jefferies Energy Summit. 
  • Valuation: 2010 TEV / EBITDA of 4.6x and 4.5x P/ 2010 CFPS, both below the peer average 

 

Cannacord Adams Global Energy Conference

  • Link to agenda (see page 4)
  • Companies presenting that I care about (all times EST)

    • Crescent Point Energy Corp - 10:15
    • BEXP at 10:40
    • NOG at 11:05
    • ROSE at 11:30 - still waiting on well results from their first Montana Bakken test even as the drillbit spins on the second well. If it works they have 239,000 net acres in the area so plenty of running room.

Quick NOG Thoughts (Because I tried and failed to add here too yesterday and you may see me take some calls after the oil numbers hit):

  • Bakken Player with small working interests in lots of wells,
  • Williston Basin: 70,000 net acres
  • Red River area: 22,000 net acres
  • Balance Sheet: No debt, recent secondary took care of that, provides about $45 mm cash on hand as well.
  • Game Plan:
    • drill 14 to 16 net wells in 2010 (aggregate cost of probably $45 mm)
    • remain as a non-operator (biggest partners EOG and Slawson) to keep costs down.  Average working interest is low but has been rising, sees 15% working interest in the 2010 program
  • Production: Growing quickly, albeit from a small base:

 

  • They see growing volumes 20 to 30% per quarter next year. This should translate into them underspending cash flow next year (Cash of $50 mm + about $50 mm of EBITDA vs a budget of about $55 mm in the Bakken, not sure Red River budget but it won't be as large). 
  • Hedges:  225 Bopd hedged at $82.60 through Dec. 2011. That's a little over 10% of the expected 2009 exit rate.
  • Valuation:

    • 2010 P/CF: of 7.9x, not shabby for an upstart with a TEV to EBITDA of only 6x.
  • Nutshell: Been watching it for awhile, waiting on a pullback that only recently came, now seems like a good time for a "getting to know you" trade.

Coal Watch:

 

 

 

 

 

Coal Thoughts:

  • Metalurgical coal demand rebounding quickly due to Asia
  • Steam coal demand in the U.S. still suffering, electricity generation in the U.S. is down ---% YoY.
  • (ANR) sees recovery in thermal (steam) coal in the not too distant future
  • ANR sees a balanced market by late next year for thermal coal as coal producers keep shuttered mines offline.
  • WLT - reiterated comments they made on the 3Q call, that their ability to move met coal is only limited by their ability to get it out of the ground. Demand is strong for met coal.
  • Inventories are still too high but are being worked lower and prices for thermal coal are strengthening in advance of a rebound in demand there.

Odds & Ends

Analyst Watch:

  • (AEZ) initiated at Buy at Wunderlich with a $4 target

114 Responses to “Wednesday – Oil Preview Plus NOG and Coal Thoughts”

  1. 1
    PackMan Says:

    Comscore: Online “cyber monday” sales up 5% vs. last year.

    No big whoop.

  2. 2
    zman Says:

    Pack – what ever expectations?

  3. 3
    zman Says:

    This story shows stronger results for Cyber Monday:

    http://www.medialifemagazine.com/artman2/publish/New_media_23/Robust_Cyber_Monday_defying_forecasts.asp

  4. 4
    West Says:

    KOG is suppose to frac the # 9 later this week a little behind what we thought. Good shows on # 10 acroos the River where they are at TD.

  5. 5
    zman Says:

    Going through new NOG slides this morning at Cannaccord, they present later.

    Update Bakken acreage from 70K to 85K net.

  6. 6
    zman Says:

    ZTRADE:

    NOG – Added (10) Jan $10 Calls (NOGAB) for an average of $0.60. Up and coming Bakken player, see today’s post for details, they speak at the Canaccord later this morning.

  7. 7
    BirdsofpreyRcool Says:

    west — thanks for the update. Yep, sounds like KOG is running a bit late.

  8. 8
    BirdsofpreyRcool Says:

    EXXI — they are doing a RoadShow starting today, Dec 2nd, and ending up in Dallas on the 8th, with pricing on that day. There is a Netroadshow, so if anyone has brokers on this deal, you should be able to listen to the presentation.

  9. 9
    BirdsofpreyRcool Says:

    TechTrader says 55/45 LONG for best trade today.

    HeadTrader says there doesn’t seem to be much going on.

  10. 10
    choices Says:

    Z, what is your take as to where they set the offer price for SD, relative to the close yesterday $8.85 vs 9.03 close-seems to be trading up this morning on heavy volume. It would seem to me that if offer price is below market price, it would trade down but maybe someone sees something in this deal.

    Thanks.

  11. 11
    zman Says:

    Choices – they priced the deal in the hole and not by much so its a normal thing, not bad. Just did what they had to do to get it done and leave the deal buyers with appetite.

  12. 12
    zman Says:

    Thanks for the comments BOP, had an email problems looks fixed now.

  13. 13
    zman Says:

    BEXP will have new slides at Canaccord but will not be webcast.

    NOG will be webcast at 11:05 EST
    ROSE will be webcast at 11:30 EST

  14. 14
    zman Says:

    Stocks flattish pre oil numbers in 30 minutes.

    Bakkens more mixed early today as you would expect with oil looming but WLL and CLR both moving higher, AEZ up another 5% on Wunderlich, NOG and BEXP creeping up,

  15. 15
    zman Says:

    NOG – does a lot of talking about how Slawson is getting their Bakken wells drilled and completed for $3 mm.

    BOP/West – got an estimate for D&C costs on 9,10,11?

  16. 16
    zman Says:

    NOG slides – good, little new in there, they can make the lowest cost operator in the Bakken claim by not being the operator and therefore keeping the G&G and other things off their income statement. For a little guy, it makes a lot of sense to let EOG, Slawson, MRO, Fidelity, Hess, CLR in that order drill your wells for you.

  17. 17
    zman Says:

    Knock, knock, this thing on?

    SWN pushing $45, needs to see $46

    WLL at fresh highs, I will sell my $60 strikes if oil inventories are bearish and hold my $65s, maybe add.

    WLT – wow.

    NOG picking up.

  18. 18
    zman Says:

    BEXP working higher as well at 11.17, need $11.50 for a break out there.

  19. 19
    West Says:

    KOG still showing 4 to 6 mil. They are incresing # and size of fracs so that might balance out any rig rate reduction.

  20. 20
    cargocult Says:

    Will that metalurgical coal rebound help drybulk?

  21. 21
    zman Says:

    West – hear ya on that, thanks, will check out what Slawson is throwing at those wells.

    Have you looked at NOG and AEZ?

  22. 22
    zman Says:

    Cargo – yes, it has been. China set to be over 50% of global steel production in 2009 so they went heavily into net importer status of coal, from U.S., VZ, Australia.

  23. 23
    zman Says:

    Oil inventory numbers in 5 minutes.

    BEXP presents to a closed room in 15 minutes, slide show is blank.

  24. 24
    Jerome Blank Says:

    Intraday…EXXI channel line being defended again today, like to see it hold $2.15 on the close

    KOG hitting resistance at the confluence of the 20 and 50 daily SMA, gravity is starting to pull on KOG with the lack of news, dialing down to the 30 min, KOG hit resistance right at the 200 period MA which corresponded with the lower trendline of the “sloppy triangle”, I’d sure like to see KOG above $2.55

  25. 25
    zman Says:

    Oil Inventory Report:

    Crude down $0.70 at $77.70 just before release.

    Inventories:
    Crude UP 2.1 mm barrels
    Gasoline UP 4 mm
    Distillate DOWN 1.2

    Demand:
    Gasoline: 8.943 mm bpd – flattish
    Distillate 3.579 mm bpd – down, not great

    ….

  26. 26
    zman Says:

    Numbers look odd as imports backed off substantially at 8.4 mm bpd and yet we got a big build in inventories.

    Utilization was off at 79.7% which partially but not completely explains the build.

    Weird, not bullish numbers.

    Crude off 90 cents, has been off $1.20, not a feeling that it will really be able to rally without a surge in the broad markets or a retreat in the dollar today.

  27. 27
    BirdsofpreyRcool Says:

    Jerome — good characterization of how KOG is trading. Think “no one cares.” KOG did their 2ndary and everyone who wanted shares, got them. Now it’s just waiting-on-news… So traders jumping to more exciting horses, I guess. No worries, just not gonna move… until it moves, i guess.

    EXXI starts their official RoadShow today, so could see some intraday moves on that one, until it officially prices on Dec 8th.

  28. 28
    zman Says:

    … more EIA….

    Refinery inputs were down about 130,000 bopd so that’s some demand off the table

    … but …

    Imports dropped by 550,000 bopd, more than offsetting the drop in inputs.

    Production was up 130,000 bopd from the prior week but this still is not enough to offset the drop in imports…

    … again, weird numbers, doesn’t look like oil wants to fall off a cliff on #s so strange.

    Crude off 75 cents now, energy hanging in there, well off highs, but not dropping like a stone on this data.

  29. 29
    baylor3217 Says:

    POT screaming to the upside. Quite a move over the last 6 weeks from $90. Seems over bought.

  30. 30
    zman Says:

    Link to NOG presentation:

    http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2802140

  31. 31
    reefguy Says:

    POT- its baby sister, IPI is also up 4.5% today and has followed it up along the way over the last six weeks….

  32. 32
    bloodystupidjohnson Says:

    For people who like dollar stocks with some Bakkan exposure, I see where director Franklin Burke has continued his buying with another 10,000 shares purchased on 11/30 for $1.90

  33. 33
    bloodystupidjohnson Says:

    Re 32: sorry — AXAS is the stock.

  34. 34
    BirdsofpreyRcool Says:

    Cross Asset Class Market Strategist #1 — great look-back and commentary about the possibility of retesting the March 2009 low (hint: NOT!)

    http://www.capmarkets.com/ViewFile.asp?ID1=128192&ID2=374255373&ssid=1&directory=6571&bm=0&filename=12.02.09_Absurdity_is_Making_the_Rounds_Again.pdf

  35. 35
    zman Says:

    Energy/oil dragging the market away from its highs. Stocks not really reacting to a 2.25% down day on oil or another drubbing for natural gas.

  36. 36
    zman Says:

    Oil down $2, look for whole number support at $76. Group worsening but still not off a cliff.

  37. 37
    zman Says:

    The big gasoline build was largely attributable to a surge in imports, probably pent up deliveries from before Ida.

  38. 38
    Jerome Blank Says:

    Re: #33 thanks BSJ, AXAS has an interesting chart…AXAS bounced hard off its Long term P&F trendline on 10/14 but is currently on a buy signal in o’s, great when a director buys, do you believe this stock to be fundmentally sound with potential?

  39. 39
    bloodystupidjohnson Says:

    Jerome: I don’t really follow this stock. But I just notice that Burke has been buying steady buying this stock at higher prices. It has Bakkan, haynesville, and eagle ford exposure, so it might be of interest to some of the other readers.

  40. 40
    bloodystupidjohnson Says:

    Z: just curious, since you are an options guy, and do have some longer term stock holdings, have you ever consider leaps?

  41. 41
    zman Says:

    AXAS – has been around a long time and has seen many iterations. They have just restructured the company and I wrote it up a month or so ago. I’m staying away for now.

    LEAP – yes, been there, done that, never seems to work well for me.

  42. 42
    Jerome Blank Says:

    Re: #39,41…thank you BSJ, ZMAN

  43. 43
    zman Says:

    Can’t here the NOG presentation. Oh well, will try to get a better replay.

  44. 44
    zman Says:

    ROSE presentation starting

  45. 45
    Jerome Blank Says:

    new all time low in UNG…I have a 8.77 print, exceeding the previous low of $8.80 set back on 11/20

  46. 46
    kyleandy Says:

    z – i heard it there was a box in the upper left corner to listen to it. pretty impressive i thought

  47. 47
    zman Says:

    ROSE giving a solid presentation, focusing on the bread and butter and not the icing that the Eagle Ford and Bakken plays represent at first. Solid way to play it. I have met a couple of members of management here in the past at different companies and have known one of them back to the Vastar days, very conservative on what they say, always in under promise, over deliver mode.

  48. 48
    zman Says:

    ROSE Quick Summary

    California: Sacramento Basin – cheap, by-passed pay play. 16 stacked horizons, recompletions cost $50,000 apiece (almost free). They have 303 wells, here, not drilling anything new, but 160 are idle so re-enter, perf new zone.

    DJ Basin – Niobrara Chalk – 350 Bcfe net reserve potential, big acreage, lots of wells to drill as they downspace all the way down to 40 acre spacing

    Eagle Ford Shale – 47,000 net acres, 2 first wells were gassy, see potential for almost 300 wells on this acreage. About 2/3 rds of the acreage is to west of HK wells and APC/TXCO is in their area, rest of position is undisclosed due to competitive reasons.

    Alberta Bakken (far west, north Montana Bakken)

    239K net acres – hearing positive things first well, second well drilling,

    thanks Kyle, yep, just could not hear them well at NOG, ROSE sounds fine.

  49. 49
    choices Says:

    EXXI 10’s: IB screen=bid 86.5, ask 90, last trans 89, vol 3 mil

  50. 50
    zman Says:

    ROSE – more Bakken

    Terms of the option on their acreage requires 2 wells per year over the next 5 years. When they drill 1 well they can then lease 20,000 acres around that well site.

    Completing the first well, drilling and coring the second well. So no new news today.

  51. 51
    zman Says:

    BEXP, NOG, AEZ continuing to walk higher, lots of other things starting green up or at least de-redden. No sense of panic in the E&P or OIH space over the oil numbers. Oil still down $1.50.

    Natural gas getting crunked, down 4%. The Street is at a withdrawal of 2 Bcf for tomorrow. My thought is that it will be bigger, given a sharp pullback in Canadian and LNG imports week to week and much cooler weather. I’m at a 10 to 20 Bcf withdrawal but may hone that a little this afternoon. Gas looks oversold here.

  52. 52
    bloodystupidjohnson Says:

    RE 47: quality of ROSE management — all you have to know about the quality of ROSE management is that Robert Rodriquez of the FPA funds bought into this stock before it when public and has been a major shareholder ever since. Rodriquez is one smart operator and does not cotton to flashy or questionable management.

  53. 53
    john11 Says:

    I did listen to NOG, well worth circling back to it, was quite impressive.

  54. 54
    zman Says:

    BSJ – thanks for the color in 52.

  55. 55
    zman Says:

    John – I find it interesting from the standpoint of:

    a) larger inventory (and larger than I thought as of today) so plenty of running room,
    b)letting the experienced operators operate,
    c) has its financing squared away so no deals anytime soon and has hedged a little but not a lot.
    d) no debt so if the AFE’s do pile up from operators wanting to drill more wells they can tap their revolver to meet the capex need.
    e) undeniable inclined production growth profile.

  56. 56
    kyleandy Says:

    z – NOG – could u do your thing and give us some idea what this thing is worth. its a pretty uncomplicated business model as he kept saying we give them money and in a few months they start giving us back money. with only 5 employees, expenses have to be minimal. the only red flag can be the price of oil, their wells are almost sure things given their 100% success so far.

  57. 57
    zman Says:

    Kyle – will set up a table on it.

  58. 58
    zman Says:

    Kyle or anyone, have you figured out a way to get a replay of that NOG presentation?

  59. 59
    isleworth Says:

    FYI – Goldman Sachs expects the U.S. economy will underperform most economists’ expectations next year and reckons the global economy will outperform, according to a report. The investment bank told clients it believes the U.S. economy will grow by 2.1% over the course of next year, while the world as a whole will do better, rising by 4.4%, amid a strong performance by Brazil, Russia, China and India, which are collectively seen as growing by 9.2%. “The combination of better than expected growth and lower than expected inflation should be good news for financial markets,” the report said. The bank continues to believe that even with a rebound in the U.S. the Fed is unlikely to tighten interest rates any time soon given what it sees as a minimal inflation threat. This lack of action on the monetary policy front “should be positive for risky assets, potentially sowing the seeds for fresh asset overvaluations down the road. This in turn makes us somewhat nervous about many possible risks out there, including if the Fed were to tighten earlier than we currently expect.”

  60. 60
    choices Says:

    http://www.newswire.ca/en/webcast/viewEvent.cgi

    Z-you prob have this but it does give access to all the slides for the presenters-audio is following current schedule-Transglobe now.

  61. 61
    zman Says:

    Thanks choices, can’t see to rewind that. Will listen to the podcast when they archive it tonight.

    COP on the tap saying 2010 capex to be down 10% from 2009. Service names no like that kind of talk at the moment but best guess is that they shrug it off as people note that E&P is not taking as much of a budgetary hit as refining and marketing.

  62. 62
    kyleandy Says:

    z -http://podcast.newswire.ca/feeds/newswire/71617-en.xml
    avail tomorrow

  63. 63
    reefguy Says:

    ioc-Another big analyst(Goldman or Merrill)is preparing to start coverage/

  64. 64
    zman Says:

    Thanks Kyle, will have a listen when it comes up.

    Thanks Reef, missed it on the pullback yesterday.

    Fed’s Lacker: Recovery well underway. Foreshadowing Beige Book.

  65. 65
    choices Says:

    Just watched a video replay from this AM of CNBC interview with Pinkerton, CEO of RRC-says Marcellus shale area “could” produce “10-20” times the nat gas which has already been found in the US-no doubt, talking his book, as BOP would say. heh

  66. 66
    VTZ Says:

    If I got to go on national TV I’d talk my book too.

  67. 67
    choices Says:

    The question, I guess, is it based upon facts and analysis or just BS.

  68. 68
    zman Says:

    Choices – Not doubting you heard what you heard but that’s not a valid claim. The U.S. consumed 23 Tcf of gas last year. That’s trillion with a T. We have been consuming a like amount for a very long time (more or less depending on the year).

    The high end of the range I’ve heard is 500 trillion cubic feet for the Marcellus. Now, rest assured that’s a lot of gas.

    But the U.S. has consumed about 225 Tcf since the start of the decade. About 80% of that is domestically sourced, meaning it was found here and extracted (and those reserve pools are not all exhausted) and that is just this decade. Really hate to see CEO’s use hyperbole like that.

  69. 69
    zman Says:

    And if you just want to look at acreage in the shale gas plays … you can see here that it covers a big area and there is a lot of gas underlying that, but look around at some of the areas as well, some have lower concentrations of gas, some have higher, most have better terrain making it easier to extract:

    http://www.eia.doe.gov/oil_gas/rpd/shale_gas.pdf

  70. 70
    tomdavis12 Says:

    Z: Being told asset allocation moves in size from energy to utilities & healthcare. Only mention because with options not only do you have to be correct fundamentally, but timing is oh so important.

  71. 71
    zman Says:

    Thanks Tom. Ya know I hear that every time we have a red day.

  72. 72
    tomdavis12 Says:

    Z: I hope i’m wrong but the energy tape feels heavy. I never have any doubts about your fundamental assesments.

  73. 73
    zman Says:

    Tom – It should feel heavier today. Oil is down $1.80 and gas is down another 5%. Most of my names are flat or slightly up (BEXP, WLL, ROSE, NOG, WLT) or down a bit (SWN, HK, HAL, NFX) just to list the call positions.

    I just think people need to say something like “sector rotation” on days like this. Yesterday CNBC kept running a scrolling line that said Energy names leading, I suppose that was rotation into the sector? Anyway, when I hear that you’re hearing it I want to know who said it. Not asking but that’s my reaction. Not trying to be sarcastic but I’ve done this a long time, and rotation of any importance doesn’t happen in a day and you certainly can’t see it that first day (at least I can’t). I’ve been a manager and I’ve sold to them and I can also say that the core, the guys who take the big positions don’t up and sell CHK and buy AAPL to replace it all of a sudden. But then again, I could just be wrong.

  74. 74
    reefguy Says:

    MMR/EXXI/PXP- Davy Jone Update…..attempting to log below 28000′ not yet in Midway, so amybe not total depth. No significant shows, maybe some skinny sands, waithing on logs to decide what to do….Does not sound real sporty….

  75. 75
    tomdavis12 Says:

    Z: I apoligize if my comments felt like a second guess. That was never my intention.

  76. 76
    zman Says:

    Snowing here, not that you could tell by the price of natural gas. Dallas has an inch I hear which is early for them.

  77. 77
    zman Says:

    Tom – My skin is not that thin and I didn’t take it that way, no apology necessary at all man, I just hear that kind of thing, after the kind of days we’ve been having 2 up, 1 down and think, Ohhh reeeaaaalllly??? Call me a skeptic.

  78. 78
    zman Says:

    And like I said, I could be wrong.

  79. 79
    jiveyjr Says:

    Z, when I got up this morning it was snowing a darn good bit. I live near the DFW airport. It’s 34 or so outside, but ground to warm for snow to stick so it’s hard to say how much we gotbut it snowed a lot

  80. 80
    zman Says:

    Does anyone have the Jefferies Energy summit conference, would really like to see that.

    BEXP at HOD, inching.

  81. 81
    zman Says:

    Jivey – thanks, 34 is cold enough to blast the heat all night.

  82. 82
    john11 Says:

    Anybody see or have the Morgan Keegan piece on BPZ being added to focus list, from yesterday? tia!

  83. 83
    ram Says:

    Speaking of being wrong, where is the media uproar over someone misleading the world on global warming?

  84. 84
    BossmanG Says:

    Talking about weather, here in Toronto (canada) we had our first snow free november since the weather office started keeping records in 1937…

  85. 85
    zman Says:

    Ram – they left it to Jon Stewart

    Boss – was it much warmer than normal or just dry?

    I’ve added a NOG Notes link to the Reports page.

  86. 86
    ram Says:

    I wish it would get into the 60’s.

  87. 87
    zman Says:

    I’ve going to do my best going forward to stick my little daily blurbs into the notes page of each stock (of the ones I really care about that is) on the Reports page, unless I do a separate piece and then I will stick that on the Reports page.

  88. 88
    zman Says:

    Iran moving ahead with plans to go to 20% purity, which is “90% of the way to 90% purity” … what you need to make a bomb.

    http://news.yahoo.com/s/nm/20091202/ts_nm/us_iran_nuclear_6

  89. 89
    reefguy Says:

    BOP see 74

  90. 90
    zman Says:

    WASHINGTON (MarketWatch) – The U.S. economy “improved modestly” in late October and November, with moderate gains in consumer spending, manufacturing and housing offsetting “dismal” conditions in commercial real estate, the Federal Reserve said Wednesday in its Beige Book report on the economy. Eight of 12 Fed regions reported the economy had picked up since mid-October, while conditions were little changed or mixed in the four bank regions stretching from Ohio and Pennsylvania to the south. Labor markets remained weak, “with further layoffs, sluggish hiring and high levels of unemployment.” Business contacts told the Fed that there was little or no upward pressure on wages or consumer prices.

  91. 91
    zman Says:

    Reef – have you heard anything about BB Hill?

  92. 92
    reefguy Says:

    z- zilch…..

  93. 93
    VTZ Says:

    RE 84: Weather nice in Alberta for this time of year as well… barely any trace snow on the ground.

  94. 94
    BossmanG Says:

    Z, seems warmer then usual…train to office always walk above ground, haven’t had to do up my jacket yet

  95. 95
    BossmanG Says:

    I remember when I was a kid (forget which year), but I did some research on what the weather might be like over the winter. Research said very light winter in terms of snow fall, so I went door to door and offered neighbours to shovel their driveways for $30 a week snow or no snow…got lucky, and surprised they didn’t back out lol.

  96. 96
    zman Says:

    Smart kid

  97. 97
    zman Says:

    Market doing a whole lot of noting in front of jobless claims, and ISM (non-manufacturing) tomorrow and especially payrolls and unemployment on Friday.

    BEXP trying to close near the old high but won’t quite make it. I am in January calls there so I have a little time and should see 2 or 3 more well results before expiry (and I plan to be out of them before the holidays anyway).

    BEXP speaks at 11:30 EST tomorrow at BofA and it will be webcast.

  98. 98
    zman Says:

    WLL spoke at BofA today and will be at the Jefferies Energy Summit tomorrow.

  99. 99
    zman Says:

    Beerthirty

  100. 100
    PackMan Says:

    FED: Commercial real estate conditions were widely characterized as weak and, in many cases, deteriorating further. Market conditions were reported to have weakened in virtually all Districts

  101. 101
    zman Says:

    Pack – What about the rest of the report? It started with this:

    Reports from the twelve Federal Reserve Districts indicate that economic conditions have generally improved modestly since the last report. Eight Districts indicated some pickup in activity or improvement in conditions, while the remaining four–Philadelphia, Cleveland, Richmond, and Atlanta–reported that conditions were little changed and/or mixed.

    http://federalreserve.gov/fomc/beigebook/2009/20091202/default.htm

  102. 102
    milepost_43 Says:

    #65…have had a GOOG alert on FRACing for awhile…seems to be a lot of NIMBY blowback especially in NY….example
    http://money.cnn.com/2009/12/02/news/economy/drilling/
    http://www.bayjournal.com/
    probably only need a couple of “accidents” and the “brown” will hit the “fan”….

  103. 103
    zman Says:

    Milepost – you saw that CHK is no longer leasing acreage in NY and that they won’t be drilling there?

  104. 104
    zman Says:

    Gold at $1,227

  105. 105
    West Says:

    KOG Area:This well information for Zenergy well that is just to the northwest of KOG northwestern area and the #4. Excellent short lateral well that IPed for 791 bopd and made 15,110 bo in first 25 days.Zenergy and STR have additional wells staked in this area. KOG has a couple of thousand acres in this area that is outside of their area of mutual interest with XTO , so their may be a jv with Zenergy to develop this area. A little further south they have established a joint venture with Peak ND to develop the Skunk Creek prospect. Unfortunately KOG is a little cash strapped to aggresively drill all these prospects. The price has been stuck in a range for quiet sometime and the key is going to be the # 9 , which I don’t expect to be anything but average. Now is is just my opinion, but KOG has not been in any hurry to complete this well and they have drilled enough wells now that they have a good idea of what they have from logs and drilling samples.Since there wasn’t much price movement with the announcement of the 7 & 8 wells, which were both decent wells, there is a high probability that a less than stellar well could cause a big down draft in the stock. This would be a opportunity for long term investors to add to positions. Current theory, hold 1/3rd long, add 1/3rd on sharp correction and then add additional 1/3rd on break above current range. Since we know that there is some interest from outside companies it would be prudent to have some positions even if we know that the # 9 is less than stellar. BOP would have a better feel for this than me, but I would not expect an offer from XTO unless there has been another offer presented. I think that there is at least a 50% chance that STR would also make a competeing offer at that point or maybe before based on current drilling results. The 3Forks is still several months off so not a near term catalyst. Just some thoughts………NDIC File No: 18007 API No: 33-025-00908-00-00 CTB No: 118007
    Well Type: OG Well Status: A Status Date: 9/1/2009
    Wellbore type: Horizontal
    Location: SESW 2-149-93 Footages: 255 FSL 1807 FWL Latitude:
    47.7470593543616 Longitude: -102.549025213213
    Current Operator: ZENERGY OPERATING COMPANY, LLC
    Current Well Name: DAKOTA-3 TAT {1922} 14-2H
    Elevation(s): 2296 KB 2274 GL Total Depth: 15217 Field:
    WILDCAT
    Spud Date(s): 5/30/2009
    Casing String(s): 9.625″ 2010′ 7″ 10948′
    Completion Data
    Pool: BAKKEN Perfs: 10948-15217 Comp: 9/1/2009 Status:
    SI Date: 11/6/2009
    Cumulative Production Data
    Pool: BAKKEN Cum Oil: 15110 Cum MCF Gas: 6098 Cum
    Water: 2564
    Production Test Data
    IP Test Date: 9/7/2009 Pool: BAKKEN IP Oil: 791 IP MCF:
    604 IP Water: 330
    Monthly Production Data
    Pool Date Days BBLS Oil Runs BBLS Water MCF Prod MCF Sold Vent/Flare
    BAKKEN 9-2009 25 15110 14047 2564 6098 0 3049

  106. 106
    VTZ Says:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aOg7AI2VCmc0&pos=5

    Hahaha… One of these days China is going to stop buying one single auction to prove a point.

  107. 107
    zman Says:

    Thanks much West, mulling some changes in my Bakken common exposure at this time.

  108. 108
    zman Says:

    Thanks for the article VTZ

    You’ll find this one funny:

    http://dailybail.com/home/snl-presidential-mockery-hu-jintao-asks-obama-why-you-not-ki.html

  109. 109
    VTZ Says:

    Oh yeah I saw it. Great skit.

  110. 110
    zman Says:

    Nikkei up 3.3%, hmmm.

    V – this one made me chuckle as well, “value added data”, “truth plus?” lol

    http://newsbusters.org/blogs/noel-sheppard/2009/12/02/jon-stewart-climategate-poor-al-gore-global-warming-debunked-internet

  111. 111
    VTZ Says:

    I’m blocked from that video because I’m just a stupid Canadian.

  112. 112
    zman Says:

    Thanks John

  113. 113
    zman Says:

    BEXP a dime away from breaking out. Working up a Bakken cash cost study, not entirely apples to apples but it will show you some things that can hold some of these names back if they don’t the costs under better control.

  114. 114
    zman Says:

    WLL – new high, pretty good volume. Over the last five weeks it has felt like we are seeing energy managers reposition into oil (again) from natural gas. WLL looks to be trying to finally break out of the base started back in October.

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