03
Dec

Thursday – Oil Review and Natural Gas Preview

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Market Sentiment Watch: Cautiously optimistic on the open with a better than expected jobs number and a new annual high for the S&P made early yesterday. However, I would expect another round of relatively muted trading in front of payrolls data tomorrow.

  • Ecodata Watch:

    • Jobless claims 457K vs forecast of 480K and last week's 466K,
    • We get nonmanufacturing ISM at 10 am EST, forecast of 50.5%

 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - NOG notes, GDP
  6. Odds & Ends

 

Holdings Watch:

  • $10KP II:
    • $11,300
    • 11% Cash
    • The quick look on the Holdings Tab has been updated.

Yesterday's Trades:

  • 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.

 

Commodity Watch:

Crude oil fell $1.77 to close at $76.60 yesterday, after the EIA released a mostly bearish set of inventory numbers. While the EIA's math looked a little fuzzy this week (with imports way down somehow yielding a big jump in inventories) the rise in inventories, especially at Cushing will put a ceiling on crude until the refining segment returns to higher utilization levels. Distillates did fall more than expected but demand there remains soft. That should occur fairly soon but I think the increase will be modest given prevailing poor refining margins. I expect crude to remain range bounce prior to the OPEC meeting later this month.  This morning crude is trading up 50 to 75 cents.


Natural gas dropped another 5% to close at $4.55 yesterday. I continue to think support is in the $4.50 to $4.60 range and that gas is currently oversold. This morning gas is trading up 5 cents in advance of what should be the first storage report of the season showing a withdrawal.

Natural Gas Preview

  • My number: 10 to 15 Bcf withdrawal

    • 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
      • Imports: Down 1.9 Bcfgpd from last week and 1.6 Bcfgpd from year ago volumes.
  • Street Consensus: 2 Bcf withdrawal

EIA Oil Inventory Review


ZComments:

CRUDE OIL - Weird Numbers. Refinery throughput fell 127,000 bopd and production increased about 100,000 bopd but imports were off 550,000 bopd. How this yields a larger than expected build in stocks is a mystery.

 

 

 

GASOLINE  - Big surge in imports drives big surge in inventories.

 

DISTILLATES:


 

 

 

Stuff We Care About Today

The NOG Comments from yesterday and the BEXP comments from the day before have been added to their respective Notes pages on the Reports Page.

 

I got to listen to the NOG replay last night; a few incremental notes:

  • Their end of October $60 mm equity raise will largely go to land acquisition, with cash flow and their revolver they still should not need to raise additional funds for drilling next year.
    • Have been acquiring acreage in the 300 to $1,000 per acre range which is pretty good. 
    • Have an extensive top lease program running nabbing acreage that is about to expire
    • Still have no debt
    • Still have an undrawn $25 mm credit facility
    • Guesstimate they still have $40 mm in cash following the deal.
  • Bakken acreage now at 85,000 net acres - Montrail, Dunn, Williams, McKensie ... pretty much centered around the core of the play in Montrail.
  • They're receiving 1 to 5 AFE's a day, never turn any of them down, so increasingly busy
  • One of their main operators Slawson has added a 5th rig
  • They have an extended lateral with 36 planned frac stages set to complete in late December, the Stallion well, which will make the Catalyst List.
  • EOG drilled a Three Forks test in Southern Montrail County (helps delineate them for the TFS) with an IP of 1,585 BOEpd (the Van Hook 100-15)
  • Enbridge's Bakken expansion line is running 2 months ahead of schedule, could be on line before year end .... think smaller differentials to NYMEX
  • Thinking Bakken at 600,000 BOE EURs is looking conservative; given the type curves of the wells that they have participated in that statement is reasonable.
  • Lastly, the low cost operator ($7/BOE puts them at best in class in the Bakken) and low employee count (they have 5) reminds me of (MCF), without all the Dude talk. Still getting to know it but am considering common, swapped from my position in SD and GMXR and maybe some of my KOG as well.
  • I'll add an NAV page shortly but suffice it to say for now, using very conservative acreage prospectivity and EUR assumptions I can quickly get to a number well over doulbe the current share price here.

GDP 2010 Capital Budget ~ In Line With Cash Flow

  • 2010 budget: $230 mm flat with 2009

    • that pays for 24 net horizontals, 2/3rds in their NW Louisiana Haynesville area
    • $40 mm goes to acreage.
  • 2010 production guidance: 15 to 25% over 2009. Pretty much what you would expect out of them, it's preliminary, look for gas prices to dictate whether we see the high or low end of it.

 

Odds & Ends

Analyst Watch:

  • (DRYS) coverage initiated at Deutsche Bank with a Buy and $10 target.

Interesting Reading Watch:

116 Responses to “Thursday – Oil Review and Natural Gas Preview”

  1. 1
    PackMan Says:

    Retail Sales:

    http://online.wsj.com/article/BT-CO-20091203-706557.html

    DOW JONES NEWSWIRES

    The vast majority of retailers reporting November same-store sales have missed analysts’ muted expectations after last year’s plunge, and the industry as a whole may even post results below prior-year levels.

    The performance comes after what many viewed as a mixed kickoff to the holiday shopping season, with shoppers on average spending 7.9% less than the Black Friday weekend of 2008, according to the National Retail Federation. In general, lower-priced items were favored.

  2. 2
    BirdsofpreyRcool Says:

    KOG does seem a bit “stuck in the mud” right now. They are sticking to their knitting and methodically drilling majority-owned wells on their own acreage with their own rigs, building cash flow and not pulling down debt. That keeps the pace slow and rather boring.

    Not as sexy as the NOGs, AEZ, USEGs, of the world, I fear.

    (If that sounds sarcastic, it sure isn’t meant to be. Honestly.)

    Here’s the thing… I know KOG is also being hit up with AFEs and they also run a small staff which is focused on the Bakken. I wonder if — at some point — with their excess cash flow and some of the funds raised from their recent 2ndary, if you won’t see Lynn and The Boys start to behave a little more like the farm-in kids. I do know that sometime during the 1Q10 KOG will have 3 rigs running on the Rez… 2 operated and 1 XTO. That should “kick it up a notch” (as a famous chef says).

    Just some thoughts.

  3. 3
    zman Says:

    BOP – I hear ya and I want to own a basket of Bakkens going into 2010. NOG, as I see it, they are a lower risk play, taking smaller interests in each well and letting the more experienced guys drill them (although they probably use the same guys to complete them as KOG). Anyway, still getting to know the NOG, liked what I’ve heard and read so far. By the way, no farm ins or carried interests there, everything is a headsup working interest (so if they have 10% of a section, they pay for 10% of the costs and get 10% of the oil).

  4. 4
    BirdsofpreyRcool Says:

    EXXI — some thoughts here too.

    I think we have to assume that the Davy Jones ultra-deep well is a duster. It was always a high-high-risk wildcat and those types of wells — by definition — usually come up empty-handed. However, while the DJ well certainly gets people’s attention, it is NOT factored into my $4 PT for the stock. That is based on current estimates of low-risk reserves and expected cash flow. The $6 PT that the CRT analyst has out there includes a risk-weighted contribution from DJ — but that only serves to demonstrate the tremendous upside IF the DJ well hit something on the order of 1Tcfe.

    But here’s the thing, if/when DJ is publicly-declared a duster, then EXXI (and MMR and PXD) will take a hit on the news. Of the 3, EXXI and PXD will be buying opps at that point, as people figure out that there is very little upside from DJ currently priced into EXXI.

    However, that is definitely a Headline Risk for this Single-Digit Midgit. If you plan on this happening, you can profit from it, when it does.

    Just some more thoughts.

  5. 5
    BirdsofpreyRcool Says:

    (Ok, my bad. I’ve always used the term “farm-in” to mean taking a piece of a well or play that someone else developed… doesn’t mean it’s a carried interest. It can be a pro rata working interest too. Maybe I’ve been using it wrong, all these years. I’m not a Landman.)

  6. 6
    BirdsofpreyRcool Says:

    TechTrader out with a 60/40 SHORT call today, for the best day-trade.

    HeadTrader is sticking with his call to “buy the dips.” Especially with the BAC news now. He says it doesn’t mean that the best intra-day trade isn’t to be short, but other than that, he feels it’s best to be long.

  7. 7
    zman Says:

    BOP – I thought they did promotes too until I listened to the call yesterday, just point it out as it makes the math easier.

    Simple math, they have less than half the shares of KOG and nearly 3x acreage in the Bakken plus another 22K acres in the Red River, participating with small interests in a lot of wells that’s driving that 20+% volume growth per quarter, no debt, and probably about $40 mm in cash. It’s just a different animal and no one well is going to make or break them.

  8. 8
    BirdsofpreyRcool Says:

    z — not arguing the comps on KOG and NOG. Just personally, I think NOG is cheap for a reason. But, it’s cheap, nonetheless. And cheap stocks find value investors.

  9. 9
    zman Says:

    BOP – just thinking out loud which I guess is the same as talking my book.

    NG and Crude lower. Dollar is bouncing.

  10. 10
    West Says:

    Thanks for thoughts BOP. I would assume one of those AFEs will be for a 3Forks test. This has the possibility to greatly increasing the potentional value of their acreage and company. I would not expect them to sell the company before they at least have a couple of 3Forks test. At some point next year they will probably do another offering and it will probably be in the 2nd qtr. Also in there somewhere their contract on the first rig will expire and they will not have to keep it. Lynn and Co are doing an excellent job so I don’t have to worry about that part.

  11. 11
    BirdsofpreyRcool Says:

    LOL — we all talk our book. The danger is in thinking someone ISN’T talking theirs.

  12. 12
    BirdsofpreyRcool Says:

    west — KOG made it through the fire (as did the other single-digit midgits). I don’t worry about them having to sell out cheaply. At least for now. I believe they are only contracted to have a 1-month overlap with the two Unit rigs. And KOG is in the enviable position of being in the driver’s seat… do they keep the 2nd rig? Or sub-lease it out to others who are ramping up drilling programs. So, the 2nd rig is an asset now, and not the liability it was a yr ago.

    KOG has their excellent working relationship with Unit to thank for this positive outcome.

  13. 13
    zman Says:

    CPC just finally posted the HDD forecast for this week:

    169 which is basically the first nearly “normal” week we’ve had this year.

    Last week’s reading was 128, well below normal.

  14. 14
    kiaora Says:

    BOP- re #4..I need a little clearification….Why did the CEO buy all those shares if that well is a duster?

  15. 15
    Wyoming Says:

    RE 12, sub leasing will be difficult in this rig environment. Lot of rig cos to give any operator standing up a derrick a sweet deal. Only benefit is that the crew has been running and learning curve already established.

    Not sure of Bakken rig counts but but if you had a rig in the UPm Pinedale or other parts of the Gas country, you would do anything almost free to get it out.

  16. 16
    BirdsofpreyRcool Says:

    kiaora — which CEO? I’m not sure who you are talking about…?

    Also, not saying DJ is a duster. Just noodling that it’s a high-risk wildcat. The nature of those types of wells is that 90%+ of them turn out to be non-economic. DJ could still turn out to be a huge find. We don’t know yet. But, just saying historical odds are that it won’t. And we have to prepare for that outcome. I don’t think any of the parties involved in DJ know the outcome yet… that is why they are still drilling.

    Just doing a little of “Plan the Trade, and Trade the Plan…” If DJ results are negative and EXXI trades down to $1.50… I am planning on buying more shares. I should have been clearer, sorry.

  17. 17
    BirdsofpreyRcool Says:

    Wyoming — i absolutely defer to your expertise here. KOG has said that they think there is demand for their type of skid-rig in the Bakken. They think they will have the choice of either using the 2nd rig, or giving it up. The great thing is that there is only a 1 month overlap, where KOG will be carrying the cost of 2 rigs, if they decide to give it up. But, not suggesting that the U.S. isn’t awash in idle drilling rigs right now.

  18. 18
    Wyoming Says:

    Me, I would say they give it up. PTEN, NBR, HnP and the drills all have skid types available. I have been out of it for a couple of months now but I have not seen any huge rig count jumps since I left.

  19. 19
    zman Says:

    ISM – non-manufacturing missing the mark at 48.7%

  20. 20
    BirdsofpreyRcool Says:

    EXXI — reading that the (very preliminary) price talk on EXXI’s offering of $75mm of convertible perpetual preferred stock is 7.25 – 7.75% coupon with 15-20% convert premium. This security will also price after the close on Dec 8th, with EXXI’s 2ndary stock offering.

  21. 21
    zman Says:

    Stocks in limbo, watching congress zing Ben and waiting on payrolls. yawn.

  22. 22
    zman Says:

    BOP – are the road show materials available anywhere yet?

  23. 23
    BirdsofpreyRcool Says:

    z — tried to access the NetRoadShow yesterday… said it wasn’t up yet. Haven’t tried today.

  24. 24
    Jay Says:

    http://www.epmag.com/WebOnly2009/item49303.php

    Call Guinness, again!

    Vertical gas well in Papua New Guinea sets record.

    InterOil Corp. of The Woodlands, Texas, and Cairns, Australia, created a monster, setting a new record for a vertical gas well with a drillstem test recorded at a calculated 705 MMcf/d of gas and 11,000 b/d of condensate.

  25. 25
    zman Says:

    Cold:

    http://www.accuweather.com/news-story.asp?partner=accuweather&traveler=0&article=2

  26. 26
    bloodystupidjohnson Says:

    Another 30,000 shares purchased by Burke at AXAS for 1.86 – 12/1/09

  27. 27
    West Says:

    Z, did u set a tab for DNR & any comments or updates . From a shear OIL reserves stand point in the US they have to be getting on up there. I had seen something that said that the EAC potentional was larger than all their other projects combined.

  28. 28
    zman Says:

    CNBC saying White House saying unemployment numbers might tick upward. Now, we know the President gets a 1 day advance view on data and with payrolls coming out tomorrow …

  29. 29
    zman Says:

    West – no, didn’t do anything with them, saw they were making another acquisition in here. I do have them on the Orange Charts but that’s it.

  30. 30
    BirdsofpreyRcool Says:

    Also, the White House is sending up a trial balloon, saying they might use the TARP monies for a Jobs Bill. Proving, yet again, that there is no such thing as “temporary” in Washington. Once they have the money, they keep it.

    Along those lines, Kass’s gnome is hearing that the BOJ has started to sell US Treasury Notes and bonds in order to fund their own domestic stimulus programs.

  31. 31
    bloodystupidjohnson Says:

    DNR has purchased the Canroe field (north of Houston) for 256.4 mil in cash and 11.62 mil common shares. DNR also announced they are selling the remaining Barrett Shale for 210 mil.

    For better or worst the new CEO Rykhoek is sure putting his stamp on this company.

  32. 32
    zman Says:

    Natural gas storage report

    +2 Bcf, draw in East offset by build in producing region.

    Street was at -2,
    I was at -10 to -15 Bcf

    NG just before the report, down 3 cents at $4.49

  33. 33
    zman Says:

    That’s just not a good gas storage number, gas may still rally in the near term as weather was still pretty mild last week and isn’t this week and gas has already been beaten back quite a bit. But still a bad number.

  34. 34
    zman Says:

    30 – no doubt, once they’ve got it they keep it.

    Stocks not really reacting to the gas number.

  35. 35
    BirdsofpreyRcool Says:

    z — it just hasn’t been that cold here yet. Not surprised at the number, in all honesty.

  36. 36
    zman Says:

    NG flat to slightly up on the number.

  37. 37
    zman Says:

    BOP – well the cold is on the way now.

  38. 38
    BirdsofpreyRcool Says:

    Yeah… they had to pull out the Warm Fuzzies in Dallas yesterday. Funny thing, it was colder in Dallas than in Detroit yesterday. But, you’re right, that will change soon.

  39. 39
    bloodystupidjohnson Says:

    Where I live, we laugh when you say this is cold – lol

  40. 40
    tomdavis12 Says:

    Z: Fido leaning on energy again today and not because of commodity pricing.

  41. 41
    kiaora Says:

    BOP re#4,16…CEO= wrong officer..VP of investor relations @ EXXI spent last tue & wed buying 30,000 sh of EXXI stock @ the ave cost of $2.41 per share

  42. 42
    zman Says:

    Re 38, yeah, weird pattern, going to be snowing south of us too, snow in Houston is pretty rare.

    http://www.accuweather.com/regional-news-story.asp?region=southwestusnews

  43. 43
    bondbuddha Says:

    BSJ, down here in Houston you can see women pull out their minkies any day under 60!

  44. 44
    zman Says:

    Thanks Tom.

    ROSE making another new high, weird, must be people thinking about that first Alberta Bakken well.

    K – my sense is that he’s buying for the long term, with the recent acquisition in mind. Don’t know his finances but chances are its not that big a sum to him.

  45. 45
    zman Says:

    Bond – so many responses come to mind, but this is a family channel, lol.

  46. 46
    ram Says:

    Still waiting to drop into 60’s during the day.

  47. 47
    ram Says:

    Pull out there what?

  48. 48
    BirdsofpreyRcool Says:

    bondbuddha — women in Houston pull out their minkies to go to the frozen food section at Central Market! 🙂

    (“minkies”… that’s cute!)

  49. 49
    bondbuddha Says:

    Mink coats you dirty oldies

  50. 50
    bondbuddha Says:

    That is true BOP, I have been there to verify and testify

  51. 51
    BirdsofpreyRcool Says:

    kiaora — I thought that might be who you meant. Just wanted to be sure. The EXXI VP purchase underlines why I bought the stock. Putting any positive results from DJ or BlackBeard aside, EXXI at $2 (or, $2.41) is cheap to their production outlook and field development potential. JMHO, of course… but, nice to see insiders buying.

  52. 52
    zman Says:

    Ram – you’re in Florida, right?

    Bond – what, I thought a minkie was some small furry creature, floating on a piece of ice in artic with big, dark, sympathetic eyes. On a side note I do miss living in a state with Central Market and Whole Foods vying for my $10 for the perfect avocado.

  53. 53
    ram Says:

    Si.

  54. 54
    BirdsofpreyRcool Says:

    Here’s a scary headline: “Paul McCartney Rocks Hamburg 49 Years After First Beatles’ Gig in the City.”

    My, how time does fly…

  55. 55
    zman Says:

    NG green

  56. 56
    ram Says:

    I’ll pass on my minkie thoughts.

  57. 57
    ram Says:

    Should have put a comma after “pass”.

  58. 58
    Popeye Says:

    BOP
    Ronnie Wood of the Rolling Stones was released on bail Thursday after being arrested for possible assault in southern England, police and his spokesman said.

  59. 59
    zman Says:

    Stocks off lows but waffling about. If Fido is pressuring them, they aren’t doing their worst yet. I used to work with their energy lead, and I know what you are talking about by the way. They are pretty smart but they trade with a sledgehammer.

    NG up 3 cents.

    Wonder how much the market rallies when they go ahead and keep Bernanke.

  60. 60
    Gtinvest Says:

    Who is fido and how can you well if they are pressuring energy?

  61. 61
    zman Says:

    For Packman, November retail sales disappoint:

    http://www.marketwatch.com/story//november-same-store-sales-miss-expectations-2009-12-03

  62. 62
    zman Says:

    Fidelity, and you’d have to hear about on a trading desk.

  63. 63
    Gtinvest Says:

    thanks z

  64. 64
    isleworth Says:

    I’ve been busy…………..

    http://www.huffingtonpost.com/2009/12/02/meredith-walusek-bikini-c_n_377810.html

  65. 65
    choices Says:

    Wash Post article may be of interest in that NG potential is finally being picked up by “main stream” media-unusual article for the Post and it appears in the most read column.

    http://www.washingtonpost.com/wp-dyn/content/article/2009/12/02/AR2009120204305.html?nav=hcmodule

  66. 66
    zman Says:

    Just doing a little number crunching, here if anyone needs anything.

  67. 67
    BirdsofpreyRcool Says:

    Popeye #58 — Guess they are still vying to be the Bad Boys of Rock and Roll!

  68. 68
    bloodystupidjohnson Says:

    Choices, I read that article this morning. Nothing like being on the cutting edge of what is happening — lol
    Typical Post article – lol

  69. 69
    zman Says:

    NG rolled over, down 5 cents, oil off slightly, keying of market which seems to be keying off Ben’s defense on CNBC.

  70. 70
    zman Says:

    WLL and WLT – funny but the tickers seem to trade in tandem.

    ROSE – gave up all of the rally, no worries, in the common only and plan to be awhile longer.

    LINE – reached up and tagged the recent high, seems to make new highs or move higher on days like this. Still 10% yield and I think it likely we see a distribution hike there, maybe 5 to 10% over the current $0.63 per quarter, in 2010.

  71. 71
    zman Says:

    Stick WLL and WLT on your screen next to each other … weird.

  72. 72
    jiveyjr Says:

    thx, for LINE…I rebought it recently, but not in enough size…was hoping for a pullback that so far hasn’t come

  73. 73
    kiaora Says:

    Z… opinion on XLE breaking thru lower trendline of the 6mo channel

  74. 74
    zman Says:

    K – I’m not a TA guy so its probably a better question for Jerome or Nicky. To me it looks like a tightening wedge shaped based which in my book is often a good, not a bad thing. Volume declines at the wedge gets tighter, then tears one way or the other would be typical. But again, I’m not a TA guy.

  75. 75
    john11 Says:

    Here are the slides from BEXP’s presentation this morning, if anyone wants a quick look.
    http://www.bexp3d.com/IR_pres.pdf

  76. 76
    jiveyjr Says:

    Art Hil, stockcharts.com technical analyst who shares duties with John Murphy, featured XLE in his note this morning. He shows that the Bollinger Bands are at their tightest in five months. He notes the relative underperformance of XLE since its mid-October high but says the uptrend is still in place. He says the formation is now a triangle and that the contracting volatility will yield its clue to its next direction when the XLE price violates support at 56 or resistance at 58.4

  77. 77
    zman Says:

    Thanks Jivey – one man’s triangle is another man’s wedge, lol.

  78. 78
    bloodystupidjohnson Says:

    RE 77: Please no Tiger references – lol

  79. 79
    RMD Says:

    GS visited HS producers. Comment summary: steady state efficiency environment until 2012 when, once acreage is held by production, operators will shift
    to pad drilling.
    Pvt. producers bearish on gas pricing as public cos keep drilling to hold leases and use hedges to offset low prices. They need over $6.00 to drill legacy CV wells.
    More confident of EFS; XTO building a position there. 1st PXD horizontal reports in 1/10.

  80. 80
    zman Says:

    My Bakken List:

    CLR, EOG, NFX, XTO, BEXP, ROSE, WLL, NOG, AEZ, KOG, CXO. Listed in order of net acreage. Got anyone to add?

  81. 81
    Jerome Blank Says:

    Re: #73 XLE is a big macro picture, most TA’s would view the consolidation triangle broken short term to the downside on a print thru $56, this also correspondes with a reversal back into o’s on a P&F chart, but XLE remains on a buy signal until a print of $54, but…long term P&F trendline support is just below at $52-$53, which if you look at a long term trendline drawn on a traditional chart is right at the support line…start with the low on 3/5/09, trace up thru 7/8 and 7/13, you’ll find tendline support, right at the P&F trenline, this confluence is usually very meaningful….

  82. 82
    zman Says:

    RMD – can you clarify the PXD comment, 1st horizontal where? They have announced results of 2 EFS hz wells to date.

  83. 83
    zman Says:

    Jerome – care to give your hunch as to which way it breaks?

  84. 84
    zman Says:

    WLT / WLL both up 90 cents, been noticing it for weeks, just weird.

    BOP – has Lynn ever stated his volume goals for 2010, where he thinks cash costs go on a $/BOE basis?

  85. 85
    Jerome Blank Says:

    Re: #83, this is where bullish percents can sometimes be most useful, but in this case, I don’t think it is much help, $BPENER being right at 57, which is not that helpful, the broad mkt is back into o’s at 74 (a complex spot),in bull correction, not that helpful either…yet… right now XLE is a buy in x’s, if it prints thru $56 it goes back into o’s and the probability of a major retest of support increases, if $56 holds, the odds still favor long…could go on for an hour on this….

  86. 86
    zman Says:

    Ok, thanks J. Any thoughts on what appears to be a breakout at WLL?

  87. 87
    Jerome Blank Says:

    RE: #86 WOW…a quad breakout top after a classic beartrap on 11/20…it’s a buy, support at $62.50, again at $60, no worries until the stock breaks $59

  88. 88
    jiveyjr Says:

    two stocks I love that I never made any money on because of technical analysis and most likely my misuse thereof WLL/EOG

  89. 89
    zman Says:

    Jerome – thanks. BEXP might be about to do something similar.

    WLL – tapping 66. I will be coming out of the lower strikes in short order.

    EOG – up today too, considering adding there as I have a tiny position in the $100s which is probably not going to work out.

  90. 90
    jiveyjr Says:

    that move in WLL is on big volume too…I added the common back and am gonna try and ignore it…added the common back in EOG going to try and do the same….can really out think myself

  91. 91
    bill Says:

    bop i think you meant PXP not PXD in your Davy Jones comment.

    PXP had an update yesterday on their web site

    Re >DRYS) coverage initiated at Deutsche Bank

    i havent seen the report but drys just gave them a chunk of business recently moving away from cantor. Oh yeah, Cantor downgraded drys to a sell recomendation so i consider the research tainted but id like to read it if anyone has it

  92. 92
    VTZ Says:

    Z – Did you see the TLM job cuts (220) in their shale gas group? Is that just a product of the restructuring or do you think it’s a commentary on the state of NG?

  93. 93
    jiveyjr Says:

    yeah, I’m a would be technical analyst; the PF chart displayed on stockcharts.com shows the quad top breakout and assigns a target of $77…that’d be nice

  94. 94
    jiveyjr Says:

    that comment in #93 pertains to WLL

  95. 95
    zman Says:

    V – I did see it on upstream last night. Don’t know on the former, but on the latter, yes, seeing it here and there around the U.S. as well. Guys getting let go quietly at some shops. Wyoming could probably answer better if he’s seeing further belt tightening.

  96. 96
    VTZ Says:

    Misread the PR it’s actually to shift focus to shale gas.

  97. 97
    VTZ Says:

    It still sounds as though the cuts were to the gas group.

  98. 98
    Wyoming Says:

    I just got a call this morning about a position in Pittsburgh for Mar. Shale. Anyone interested contact Z and I will forward him the contact info for you.

    That said, I think you see the larger players let go some staff and probably will let go more. Smaller shops probably just released consultants to right size.

    Next step will probably be M&A, that will take care of the rest of us (good or bad). Of course we all know that energy consumption will increase in the future by all those whose jobs have been saved or created 😉

  99. 99
    zman Says:

    Jivey – and I’d probably come out of all of it for a pullback if it jumped above $70.01, as it starts to get less cheap up there and while it will generate close to $15 in CFPS next year, it is in the “cheap for a reason” camp due to higher than average per unit operating costs (something that will creep lower as volumes move up).

    Thanks Wyoming.

  100. 100
    zman Says:

    ZTRADE:

    WLL – Sold the $60 December Calls (WLLLL) for $6.70, up 85%. I continue to hold the $65 December calls.

  101. 101
    baylor3217 Says:

    Fslr up huge today. Anyone have any color there? I have several option strikes awakening similar to the scene that played out after their second quarter plummet.

    Thoughts?

  102. 102
    kyleandy Says:

    z – thks for NOG stuff. re #80 would it be too much to ask if u could tell us approx how much % of the companies total
    acreage is connected to the bakken?? i am becoming a believer that the bakken is even better than originally thought. i pretty much know some of them, but i have no idea on some of your list like NFX, XTO. not sure i worded this correctly, but i think u understand what i want. just a general approximation. thks

  103. 103
    zman Says:

    Kyle

    NOG has 85K net acres Bakken (and TFS) and counting.

    Also 22K net acres in the Red River which is Williston Basin too but not Bakken.

  104. 104
    zman Says:

    Kyle – did that cover it? I have the list of acreage in the play I can include in the post tomorrow. This gives you little more than an idea of how much they have to drill however. If you make some basic assumptions about well spacing (I use 640 acre spacing or 1 well per square mile which is conservative) and a reserves per well guesstimate, this is going to vary around the play, then you can get an idea of what the Bakken potential means to each company vs what their booked reserves are now. For the little guys like KOG and NOG its pretty much the whole shooting match, for NFX and EOG, its nice but only a piece of the pie (maybe one of the better slices) and for names like WLL and CLR, its not everything but its what really counts.

  105. 105
    kyleandy Says:

    z – thats good – thks

  106. 106
    zman Says:

    Ok, great. Market sinking into the close, payrolls, payrolls, noting definitive out of the jobs summit (shocker), payrolls…

  107. 107
    zman Says:

    Beerthirty

  108. 108
    reefguy Says:

    92- what offices had the cuts?

  109. 109
    reefguy Says:

    PXP- read the transcript. Davy Jones will not be down till Quarter 1 and Cretaceous is mentioned as objective.

  110. 110
    milepost_43 Says:

    108
    Layoffs for 128 Talisman workers in Calgary

    Updated: Wed Dec. 02 2009 18:22:23

    ctvcalgary.ca

    Talisman Energy is letting go 220 workers from its North American division and most of the cuts will impact workers in Calgary.

    The layoffs will impact the company’s natural gas business and means 128 people at its headquarters in Calgary have been let go.

  111. 111
    reefguy Says:

    milepost_43- thank you!

  112. 112
    VTZ Says:

    http://bunning.senate.gov/public/index.cfm?FuseAction=NewsCenter.NewsReleases&ContentRecord_id=556a0e84-feaa-d20f-2867-6793698d6974

    Amazingly honest comments from a politician.

  113. 113
    VTZ Says:

    http://www.bloomberg.com/apps/news?pid=20602099&sid=agnrYy0khRck

  114. 114
    RMD Says:

    No PXP well was explicitly mentioned in GS report; did say they were still seeking a JV though.

  115. 115
    bill Says:

    rmd — do you have access to gs report on pxp, if yes, id like to see it

    bfraser921@aol.com

  116. 116
    PackMan Says:

    Z – 61 see 1 and a healthy dose of “told ya so” aka as “that’s 1 in a row !”

    Hey did Obama save or create any jobs today ? Or did he leave the job summit early to go play golf ?

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