15
Dec

Tuesday Morning And The Eco Numbers Are Unkind

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Market Sentiment Watch: As Mondays go, yesterday was unusual:

  • XOM made a large acquisition. It's been 10 years since its last big nab, Mobil. 
  • The Dow and Dow Transports made new annual highs while the S&P made a new closing high.
  • The $10 KP II more than doubled (albeit from a recently battered level) and is back in the black since inception.

Ecodata Watch:

  • PPI: up 1.8%, core up 0,5% (forecast up 1%; core forecast up 0.3%),
  • Empire State Index: up 2.55 vs 23.5 last month,
  • Industrial production (forecast 0.5%) comes out close to the bell, and
  • Homebuilder’s Index comes out at 1 pm EST (forecast 18 vs 17 last month)

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today - BEXP, Acquisition contest list
  5. Odds & Ends

Holdings Watch:

  • $10KP II:

    • $12,640
    • 6% Cash
    • The Holdings Tab Is Updated for the $10KP II and the ZLT.
  • Yesterday's Trades:

    • WLL – Sold the December $60 call for $6.60, up 35%, with the stock at $66.70. I continue to hold the 10 $65 calls and the common.


Commodity Watch

Crude oil fell $0.36 to close at $69.51 yesterday, it's ninth consecutive close in the red.  This morning crude is trading up 40 cents.

  • Early Read On Oil Inventories:
    • Crude: DOWN 2 mm barrels
    • Gasoline: UP 1.0 mm barrels
    • Distillates: DOWN 0.5 mm barrels

Natural gas rose $0.17 to close at $5.33 yesterday. This morning gas is trading up another dime on a resurgence of cold in the forecast.

  • Imports Watch: Up 1.2 Bcfgdp from last week flat with last year.

    • Canada: 7.4 Bcfgpd, up 1.0 Bcfgpd from last week, and down 0.9 Bcfgpd from last year.
    • LNG: Significant blip up. LNG volumes were 1.8 Bcfgpd last week, up 0.3 Bcfgpd from the prior week and more than double year ago levels. As always, I will continue to monitor for more than two of these in row as we have seen some facility commissionings that have driven volumes up for short periods but none have been the beginning of the much feared wave.

Crack Spread Update


Key Takeaways: I should just copy and paste last week's comment here. In fact:

Still watching the independent refining group languish and not about to touch them. U.S. capacity has increased over the year’s despite the lack of a greenfield project in decades and this capacity no faces higher regulatory costs than its peers as envisioned by the U.S. House of Representatives to offset green house gas emissions than does imported gasoline. If I shorted stocks, which I don’t, I’d take a look at some of the weaker players, from that angle as they are unlikely to be consolidation targets in the near or medium term and will continue to face depressed margins for quite some time.

In a nutshell, nothing new, the stocks continue to languish and will likely continue to do so through at a minimum year end but most likely much longer (except for some short lived bounces).


Stuff We Care About Today

BEXP Reports Biggest Bakken IP Yet

 

BEXP Reports Biggest Bakken IP Yet

Williston 25-36 #1H - East side of the Rough Rider area (where they have 104,100 net acres) in Williams County, North Dakota;  35% working interest (WI) 

Initial Production: 3,394 BOEpd

  • 2,769 bopd
  • 3.75 MMcfgpd
  • 32 frac stages, highest number of stages so far. 

Prior to this well, BEXP's average IP for its previous 8 long lateral wells was 1,900 BOEpd. How they plot out:

Upcoming wells:

  • State 36-1 #1H - (northeast Rough Rider, WI 15%) - should commence completion ops this week so they could have news here before Christmas.
  • Jackson 35-34 #1H - (central Rough Rider, WI% 58) -  complete late December.
  • Owan Nehring 27-34 #1H (western Rough Rider, 49% WI 49%)  - drilling.
  • Liffrig  29-20 #1 H (Three Forks test in the Ross Area (where they have  36,200 net acres); 72% WI) - drilling.
  • Jack Erickson 6 -31 #1 H (15% WI in Rough Rider near the Brad Olson well, west of the Jackson well) - expected to spud within days.  
  • In 2010 BEXP plans to complete 24 net horizontal wells in the Williston Basin.

Nutshell: First well on the eastern side of Rough Rider and it comes in very large. Stock should move well on the news and apparently BEXP plans to keep up the barrage of 1 well press releases so it could have legs into next week at least. Nice if you can keep it up but it also raises the bar on each well and will contribute to the volatility in the name down the road so I'd suggest they get back to releasing news after they have 2 or 3 to talk about. Also, give us some 30 and 60 day rates guys as those little charts in the presentation are beyond my intern's ability to accurately discern.  This snapshot has been added to the Reports page and the Catalyst Watch will be updated shortly. I continue to hold the January $10 and $12.50 strike calls as well as the common stock here. 

Other Thoughts on this News Watch:

  • This should also be very welcome news for (USEG) as this is their 5th well under the JV with BEXP and the stock has recently been pulled lower by its own secondary.
  • NFX is drilling in eastern Rough Rider as well, it's Chanel 1-33H, could have news soon here.

 

 

New Context Watch - Pick the next E&P to be taken out and get a free quarter of subscription to the site. Send your picks in comments with the word "contest" for all to see. First come, first serve and only one pick per customer  Offer limited to subscribers who are still subscribing at the time the deal is announced. One thing is for sure, I'll be giving away something as the response was pretty good. I'll take EOG since no one else did. So far we have:

AEZ Announces Participation Agreement

  • AEZ takes on a JV partner on about half of its Goliath Area (Williams County , North Dakota) acreage
  • Promote is pretty favorable - The undisclosed partner will pay 100% for a quarter interest in a one well program, there's also a $1.1 mm cash payment to AEZ.
  • Expect to spud the well before year end
  • Small, but positive deal.

Stuff I Failed To Respond To In Yesterday's Comments Watch:

  • WFT for guru. Honestly I think they are bit off the beaten path to benefit and have their own set of problems in Mexico that could hold them back in the near term. I could be wrong on that and it may be fully digested by the market but I'm not ready to play there yet.
  • AREX - Approach Resources for BSJ Quicklook Watch  ~ will take a look in the Wednesday post

 

Odds & Ends

Analyst Watch:

  • SD - Barclays trims target a buck to $16, stays at Overweight
  • XTO - Cut to Sector Perform at RBC
  • PVA - started at Buy at Wunderlich

 

152 Responses to “Tuesday Morning And The Eco Numbers Are Unkind”

  1. 1
    BirdsofpreyRcool Says:

    Good morning. I’ll start with one from the Rumor Mill…

    The “results” from the deep shelf Davy Jones well keep shifting. The Whispers of Despare that were in the air last week have been replaced by Currents of Optimism. Drilling, while very very slow, is progressing. And the downhole pressure has not changed over the last coupla hundred feet. Indicating a pressure reversal. This is taken as a good sign. Wyoming can do a better job of telling you why (gas cap indication; porosity zone).

    Anyway, I don’t make these up… just pass ’em along.

  2. 2
    zman Says:

    BEXP indicated $12.12 bid. Tudor this morning says they aren’t ready to do the NAV extrapolation just yet but it’s on the way in a Bakken piece.

  3. 3
    zman Says:

    Dollar index up sharply this morning, surprised crude isn’t tanking again with the weak equity futures but then again, 10 days is a long streak in either direction for crude.

  4. 4
    reefguy Says:

    swn- its the only one left..:(

  5. 5
    zman Says:

    Reef – nice pick. I half thought you’d take IOC. I’m surprised XOM didn’t go that way.

  6. 6
    zman Says:

    APA out there still too, that one may be an acquirer though.

  7. 7
    zman Says:

    XOM bid $70, don’t see any upgrades though, anyone?

  8. 8
    zman Says:

    Exxon comments last week:

    Natural gas global demand growth set to grow 1.8% per year through 2030 (up 50% in total) vs growth of 0.8% for crude. More growth in gas is largely due to increased gas-fired generation.

  9. 9
    reefguy Says:

    I would have picked IOC, but I cannot get Mulachek kicked out!

  10. 10
    zman Says:

    Reef – After all this, you still want him gone?

  11. 11
    BirdsofpreyRcool Says:

    TechTrader out with low conviction on the day… 55/45 LONG. He only like to put on a day-position when there is high conviction in a direction.

    HeadTrader is sitting on the sidelines this morning. Nursing a cup of coffee.

  12. 12
    zman Says:

    Thanks BOP, was just about to ask.

    Group opening with a tinge of red, watching, nursing coffee myself for the moment but am cognizant of my December calls.

  13. 13
    BirdsofpreyRcool Says:

    Hearing EXXI upgraded to ADD at CapitalOneSouthcoast.

  14. 14
    zman Says:

    EXXI on the tape with its completed offerings pr, looks as expected.

  15. 15
    zman Says:

    BEXP holding up 5%, new 14 month high.

  16. 16
    zman Says:

    Analyst Watch: Deutsce Bank coming with a Buy on XOM.

  17. 17
    reefguy Says:

    Mulacek needs to pass the baton to reach the next level..

  18. 18
    zman Says:

    Industrial production up 0.8% vs 0.5% forecast.

  19. 19
    zman Says:

    Hear ya Reef, thanks, timing on the oil leg is year end, correct?

  20. 20
    bill Says:

    i think bloddyjohnson took vq yesterday

  21. 21
    zman Says:

    Crude up nearly a buck. Everyone is looking for a big heating oil demand jump tomorrow. Except for those trading HO, who only have it up half the % gain of crude today. Hmmm.

    NG holding up a dime. Big draw Thursday is a given. Next week’s number could be a little better than expected as well as I expect Canadian exports to slacken with all the cold up there and I expect U.S. weather will come in high to the HDD forecast presented by the Climate Prediction Center yesterday for this week.

  22. 22
    zman Says:

    Bill – I think you are right.

  23. 23
    Jerome Blank Says:

    UNG back into X’s with the $10 print this morning….

  24. 24
    zman Says:

    Good TA call on the UNG Jerome!

  25. 25
    RMD Says:

    BEXP: IP rate, 1st 30 day rate, 1st calender month rate:
    Olsen 1433, 730, 568
    Figaro 1895, 831, 632

  26. 26
    BirdsofpreyRcool Says:

    EXXI SouthCoast upgrade deets —

    As mentioned earlier, CapOne Southcoast upgraded EXXI to Add from Neutral and raised their tgt to $2.50 from $1 based on valuation. Furthermore, EXXI recently acquired ~23 MMboe in proved reserves from Mitsui for $283 mln, resulting in a price of ~$12.30/boe. The acquired properties are about 77% oil and currently produce ~8 Mboe/d net, which should provide an additional ~2 Mboe/d net of storm-delayed production by Jan-Mar 2010. The firm likes the acquisition, as the co gets more oil at an attractive price and the assets are located primarily on properties that the company already operates.

  27. 27
    zman Says:

    RMD – where did you pull those from? Or did you eyeball their slides? Those are not bad as Bakken declines go.

  28. 28
    RMD Says:

    3rd party source read to me; I think a combo of SEC and ND filings.

  29. 29
    zman Says:

    Oil service showing more strength today after underperformance for the last couple of weeks.

  30. 30
    West Says:

    Contest can I change to DNR. Surprised that it is not taken.

  31. 31
    reefguy Says:

    IOC- waiting on oil leg DST.eta is christmas…

  32. 32
    zman Says:

    West – will do.

  33. 33
    zman Says:

    If BEXP starts reporting 3 MBOEpd wells instead of 2 MBOEpd average its going to get more notice and drift higher. Stock is and has been pricey on forward cash flow but people are looking at some sizable acreage positions and thinking it could be the next WLL.

  34. 34
    RMD Says:

    AEZ partner is HAL.

  35. 35
    isleworth Says:

    CapOne Southcoast upgraded EXXI to Add from Neutral and raised their tgt to $2.50 from $1 based on valuation. Furthermore, EXXI recently acquired ~23 MMboe in proved reserves from Mitsui for $283 mln, resulting in a price of ~$12.30/boe. The acquired properties are about 77% oil and currently produce ~8 Mboe/d net, which should provide an additional ~2 Mboe/d net of storm-delayed production by Jan-Mar 2010. The firm likes the acquisition, as the co gets more oil at an attractive price and the assets are located primarily on properties that the company already operates.

  36. 36
    isleworth Says:

    Sorry – BOP – didn’t see that you had already posted

  37. 37
    BirdsofpreyRcool Says:

    thanks, isle. Double-team coverage!

  38. 38
    zman Says:

    Re 34 – thanks, thought the “industry” language in the pr was a little odd. Wonder why they don’t get an E&P partner and ramp it up?!

  39. 39
    West Says:

    #31, Reef is this test just the oil section in the vertical hole or will this also include the horizontal leg. Do you know est length of horizontal lateral?

  40. 40
    RMD Says:

    AEZ #38: I don’t know. Maybe no one wanted to do a small deal (25% x 50% X 60,000 acres = 7,500. It lets AEZ prove up without giving lots away?
    I wonder why HAL bothered: maybe this is their chance to try a new technique/technology which can be marketed to others after testing (solely my guessing here).

  41. 41
    bloodystupidjohnson Says:

    Of all the stock listed in the contest, the best fit for another company would be OXY and VQ. Both big in Calif, both in the Moneterey shale, and both oily. This is really a match made in heaven.

    However, because Marquez owns so much stock, and unless he has a complete change of heart, it probably won’t be.

  42. 42
    zman Says:

    RMD – re HAL, yep, gives them something to highlight in their quarterly press release if it works.

    BSJ – gotta pick one

  43. 43
    zman Says:

    WLT breaking on out now, $74.25

    NOG back above $10; should see well news there in next 3 to 4 weeks.

  44. 44
    Denise Says:

    Greetings everyone,

    Went to a John Maudlin/Stratfor/GaveKal
    seminar in Dallas yesterday and wanted to share these observations made regarding Dubai (which I think is right on!)by Louise-Vincent Gave -(from my memory not exact)

    “All the international banking community are eyeing Dubai with the thought that these idiots are blowing up with oil at $80 bucks a barrel.

    They are also playing games favoring local banks on the debt resolution.

    The banking community is thinking what would happen if oil went to $50?

    Answer by the intl bks-

    “I want the hell out”

    So therefore liquidity to the Middle east will remain very tight.
    So what are the alternatives?
    Borrow or pump oil
    His firm (Gave-Kal)are in the pumping camp- Which they feel is bullish for global growth.

  45. 45
    zman Says:

    Crude up $1.40 at $70.90.

    NG up 11 cents at $5.45.

    Will roll the WLL calls to January soon, probably sell out of the Decembers today and take the Januaries on the oil numbers tomorrow.

  46. 46
    bloodystupidjohnson Says:

    I pick VQ, where hope is trumping reason.

  47. 47
    zman Says:

    Thanks Denise.

  48. 48
    reefguy Says:

    ME- picks up Edge assets in BK for $260MM, mostly onshore south Texas

  49. 49
    reefguy Says:

    #39- just in the vertical, below that tested to date.

  50. 50
    zman Says:

    Reef – do they have 3D over this?

    Movie Quote Tuesday Watch (for WLT)

    “We’re going ballistic Mav”

  51. 51
    zman Says:

    HAL – back up through $29, going to take the loss there soon (today) and swap into January $30s.

  52. 52
    Jay Says:

    Fog Stalls Ships Inside, Outside Houston-Area Ports

    Dec. 15 (Bloomberg) — Fog began lifting in Texas this morning after stalling 108 deep-draft vessels inside and outside Galveston Bay, where oil tankers have been waiting as long as three days to deliver cargoes to Houston-area refineries.

    (more)

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

  53. 53
    bloodystupidjohnson Says:

    I see where Credit Suisse predicts that DVN is the best fit and next one to go to a shale hungry major.

  54. 54
    zman Says:

    Thanks Jay, been very foggy here too, could be a dip in imports next week on a 3 day delay.

  55. 55
    BirdsofpreyRcool Says:

    z — #50… Top Gun?

  56. 56
    zman Says:

    Re 55 – yeah, but a guy wouldn’t have included the question mark, lol.

  57. 57
    BirdsofpreyRcool Says:

    #56 — don’t be so sure of that, mister !!

  58. 58
    BirdsofpreyRcool Says:

    Is it still cool for a guy to admit he likes a Tom Cruise movie??

  59. 59
    zman Says:

    BOP – the planes and explosions are cool. Notice however the distinct lack of Bond Girls in TC movies. Hmmm.

    Group continuing to slowly green. Traders looking for the same draw and build figures this morning as they were last night when I stuck them in the post.

    BEXP has had a few periods of profit taking but is holding up at 6% gain on the day and if the market goes really green could march to 10%.

    Personally I think the talk of rate hikes at every turn of anything that looks like inflation is silly.

  60. 60
    zman Says:

    BEXP – anyone see any broker comments on the press release this morning? This well and the next are under the JV with USEG. The subsequent wells are not all going to be even in the event of USEG taking the next option which means higher working interests on some 28 and 30 stage wells.

    Crude up $1.50 at $71

  61. 61
    BirdsofpreyRcool Says:

    Thomas Weisel out with a note on KOG yesterday, pointing out that even if well 9 is a complete duster, that only condems about 10% of KOG’s prospective acres. In fact, TW’s $3.50 NAV on assumes only 75% of KOG’s acreage is prospective for MB at 640 acres. So, doesn’t take into account any TFS potential, or downsizing well spacing. TW thinks the sell off is overdone.

    I do too. But KOG has somehow been caught in the sites of the short-sellers. I did a quick check of their Yahoo msg board… and it’s true. The shorties are doing their nasty dances on KOG right now. That could change, quickly, if/when Peak Energy’s lates TFS test near KOG’s acreage comes in.

  62. 62
    zman Says:

    BOP – lot of industry now thinking Bakken will ultimately spaced on 320s with 4 wells per section (2 Bakken, 2 TFS under), drilled from a common pad, with a lot of tightly spaced fracs. If KOG runs the numbers and shows 7 day IPs maybe they should also show the 24 hour test that BEXP and WLL and others are showing. Call it an apples to apples thing. Call it getting your stock up.

  63. 63
    zman Says:

    HAL really starting to catch a run here. Jerome, any thoughts?

  64. 64
    BirdsofpreyRcool Says:

    KOG seems to have an almost allergetic distain for doing anything to get their stock up. While it seems to allow them to sleep at night, **I** get hives from their laid-back approach.

    I think it’s admirable that Lynn wants to act like he’s Exxon. But, he’s not. A little bit of enthusiasm would be a lovely Christmas Present, at this point.

    ho, Ho, HO, Lynn!!

  65. 65
    zman Says:

    NFX doing very well again today as well.

  66. 66
    bloodystupidjohnson Says:

    Something you don’t see everyday: SNS, which is a $12 stock has announced they are going to do a 1/20 reverse stock split.

  67. 67
    zman Says:

    Reef – Good price for ME on the assets?

  68. 68
    zman Says:

    POTUS on TV on Cash for Caulkers

  69. 69
    zman Says:

    YGE – Chinese Pv solar company on the tape with a very large order, 130 MW, largest in their history and very large for a solar name. Stock has been basing, starting to move higher but not really moving on the news.

  70. 70
    tomdavis12 Says:

    Z: Kenny Loggins “Danger Zone” very male song

  71. 71
    Jerome Blank Says:

    RE: #63, HAL is re-testing the underside resistance zone of a failed ascending triangle as we speak at about the $29.50 to just under the $30 level, this is a favorite technical spot to “sell into the rally”….a trade thru $30 would reverse HAL back into x’s on the current buy signal and really improve its techniocal picture…

  72. 72
    zman Says:

    Tom – ouch.

  73. 73
    reefguy Says:

    67-Not the most sporty assets…

  74. 74
    zman Says:

    Reef – Hear ya, moving along. ATPG and SGY poking their heads up again. Been awhile. If gas prices do look to level out in $5+ land next year, there should be some margin expansion for the Shelf names. They are very very cheap on forward cash flow (like in the 2x range). Take that to 3x and well, there’s a 50% move on them.

  75. 75
    zman Says:

    WLL – finally green after a morning of light volume profit taking.

    NG up 15 cents at $5.48; the strip is up about 9 cents.

    Crude holding above the $70.50 level for now, would like to see it close north of $70.

  76. 76
    PackMan Says:

    Picked up a little more EXXI at 1.85; figure once the arb overhang lifts; could get a decent move. One hopes !

    Z – in for BEXP in contest …

  77. 77
    bloodystupidjohnson Says:

    http://www.universetoday.com Shows some breathtaking photos by the recently repaired Hubble telescope.

  78. 78
    zman Says:

    re 77 – Nice shot.

    Pack – I have you down. Lot of acreage, could make that work well for someone large.

  79. 79
    zman Says:

    Shelf Players – ok, a little weirdness, maybe someone with a fund and some spare cash buying into the bet I was talking about in 74.

    ATPG up 2.7%
    SGY up 2.5%
    MMR up 1.9%
    WTI up 2%

    These are the safer plays on the shelf, names like CPE left in the cold, also MCF and while they are probably the best name in the patch they are weird in their dealings with the Street and get discounted for it.

  80. 80
    zman Says:

    HK moving back up through $24.

  81. 81
    zman Says:

    Getting close to taking some December chips off the table. Will be a seller of some of my names prior to the close today.

  82. 82
    bloodystupidjohnson Says:

    Z: 79 – any thoughts EPL, which has come out of bankrupcy?

  83. 83
    zman Says:

    BSJ – did they get new management?

  84. 84
    zman Says:

    VTZ – Any dollar thoughts? My sense is the Fed statement tomorrow sends it lower.

  85. 85
    zman Says:

    Jerome – thanks for 71. The WLT continues to march, thinking BTU could be next one to move to a new annual high in the coal space, thinking Januaries should work into year end window dressing. Coal should get more interesting in 2010: 1) met coal remains strong, any recovery in the U.S. and that market really gets tight, 2) thermal coal should pick up with higher natural gas prices and we’ve just come off a loser of a year for aggregate generation.

  86. 86
    bloodystupidjohnson Says:

    I know where you are going with this. Pre bk EPL might have had the WORST !!! management team of any company any where. Post bk, they have a new CEO, (former ceo of GPOR) but all the other people are still there.

  87. 87
    zman Says:

    BSJ – thanks, just checking. Will see if I recognize any of the names there. These guys were, at one point, cowboy aggressive types.

  88. 88
    zman Says:

    Hats off to the Thomson technical support guys, not half bad answers to a barrage of questions this am. Still a poor man’s Bloomberg, cobbled together bunch of programs but it works and at about 1/8th the cost of a bloom.

  89. 89
    PackMan Says:

    BSJ — I love those space photos from Hubble and Nasa. Amazing pictures.

    The Universe is really too mindboggling to contemplate. You cannot wrap your head around it.

  90. 90
    bloodystupidjohnson Says:

    Z: through the bk, they have wipe out alot of debt. According to 12/9 presentation net debt/cap is 11% They also are selling for around 1.5 times cash flow. I am only comparing it with the other shelf plays.

  91. 91
    bloodystupidjohnson Says:

    AMEN Pack.

  92. 92
    nifkin Says:

    SFY acting like a shelf name

  93. 93
    zman Says:

    Re 90 – hear ya, can only compare to other Shelfs, they all look cheap but will have a look at what they have left in terms of assets.

    SFY caught a target price upgrade from the reluctant analyst at Barclays this am.

  94. 94
    zman Says:

    Good day to reorganize the market watch page.

  95. 95
    bloodystupidjohnson Says:

    Big problem for those shelf plays, is replacing the reserves in a timely and cost effective mannner. Lets face it, it is expensive and time consuming to drill in the gulf. This is why shelf plays always look cheap, then in reality they not.

  96. 96
    zman Says:

    BSJ – nothing like a 3 year RP ratio to have you feeling like a mouse on a wheel.

  97. 97
    zman Says:

    Also – they are subject to bigger blow ups than their onshore peers. I lived through some big ones with Spinnaker back in the day.

  98. 98
    elijahwc Says:

    Interesting article:

    The new Cardium oil play in Alberta is rapidly approaching the stature of Saskatchewan’s famous Bakken play

    http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=15803

  99. 99
    tomdavis12 Says:

    Z: Is there a % higher from here that you would look for the exit door with LINE and VNR?

  100. 100
    choices Says:

    Z-any connection to your comments in #79 to the relative strength today of some of the drillers, ATW, RIG, DO and even WFT, all are up reasonably well today?

  101. 101
    zman Says:

    Coices – maybe in the vaguest of sense that other people may be thinking now is as good a time as any to get long offshore for 2010. Honestly, I think the deepwater rig guys are up with the OIH’s move today. They’re due a bounce. Held off on ATW as I’d really like to take it on some extreme weakness as the options are not good traders (illiquid, fat spread)

  102. 102
    zman Says:

    Most Bakkens moving well today, KOG up 5%, good to see, NOG up 4%, care more about that at the moment more as I have January options. All moving on oil and BEXP news.

    Note in the post the comment on NFX. There’s slightly better than a coin toss of a chance (using history as a guide on timing of press releases and length of time since the last @nfx update) that they get news out on their Bakken well in close proximity to BEXP’s well out prior to end.

  103. 103
    bloodystupidjohnson Says:

    ELI: you and I might be the only people here that are taking any sort of interest in the Cardium play. If you loved the Bakkans, then you will like the Cardiums — lol.

  104. 104
    zman Says:

    BEXP at $12.50

  105. 105
    zman Says:

    BSJ – not to slight it at all, I just have enough on the plate at the moment in oil research and I don’t get as good of data on Canadian stocks. Plus, I have histories with most of the companies I trade in and the only Canadian stock I ever covered officially was TLM. So I stick to what I know or can easily play.

  106. 106
    bloodystupidjohnson Says:

    Z: Investing within your circle of competance – good idea – one of Buffetts tenets to successfull investing.

  107. 107
    baylor3217 Says:

    Considering establishing a gold position with a first traunch here around $1120.

  108. 108
    zman Says:

    RMD – AEZ = nice call.

  109. 109
    zman Says:

    Baylor – hear ya on that, housing index was weak at 16 vs 17 last month, and 18 expected. Dollar should lose a little on that.

  110. 110
    zman Says:

    BEXP – on a weekly chart, now back into resistance from summer 2008.

  111. 111
    zman Says:

    ZTRADE:

    BEXP – Sold the (20) $12.50 January calls for $0.85, up 172% with the stock at $12.50. I continue to hold the $10s and the common and will rebuy this on a pullback before the next set of data.

  112. 112
    zman Says:

    ZTRADE

    WLL – Sold the (10) December $65 calls for $2.70, up 16%. Will roll to longer dated calls after a pullback from these levels. I continue to own the common.

  113. 113
    zman Says:

    ZTRADE:

    HK – Sold the (10) December $22 calls for $2.10, up 75%. Plan to roll to Januaries soon.

  114. 114
    Jerome Blank Says:

    BEXP is amazing, $11.50 printed another X and breaks out above of the redrawn ascending wedge, support at $12…

  115. 115
    isleworth Says:

    Z- any thoughts today on establishing your position in XOM as you mentioned you might tip-toe into yesterday?

  116. 116
    zman Says:

    ZTRADES:

    SWN – Added (10) January $45 Calls (TKQAI) for $1.80. Will punt the $43 Decembers soon. Also still hold some worthless Dec $45 calls here and the common.

  117. 117
    zman Says:

    Isle – Watching XOM slip lower towards another gap in the chart. Street’s reaction has so far been pretty muted from what I’ve read. I think they have trouble concentrating this time of year.

  118. 118
    Jerome Blank Says:

    KOG holding support above $2, still a buy in x’s…I’d sure like to see it trade back into the consolidation above $2.50 over the next several days, getting above moving avg resistance…

  119. 119
    1520sbroad Says:

    Full disclosure – i am talking my book here as well as my bet in the next to be taken out contest –

    some big blocks in GMXR on the buy side in the last hour. Still a big short interest out there in them. Run shorty?

  120. 120
    zman Says:

    Re GMXR – that would be my bet, watching it for an exit from the ZLT. I have enough gas exposure in my stock holdings now, especially with the additional HK a couple of weeks back.

  121. 121
    zman Says:

    MLPs: Just walking higher. LINE, VNR, LGCY, EVEP

  122. 122
    Jerome Blank Says:

    EXXI still a buy in X’s…holding support at the redrawn lower trendline on the daily ascending triangle, trendline points drawn at the, 9/4/09 low, 11/20/09 low, consider buy stop right above $1.75, everyone will be buying at $1.75…

  123. 123
    zman Says:

    BEXP up $1, 8.6%. Continuing to hold the January $10s and the common. This one is subject to post news day pullbacks. If it does and the oil numbers aren’t abominable I’ll add the $12.50s back. If they don’t pull back then I’m ok with the lower volatility positions.

  124. 124
    zman Says:

    Jerome – not to be a pest but did you have a chance to look at BTU and WLT in the coal space?

  125. 125
    zman Says:

    And Jerome, is $45 the line in the sand on SWN? Where do you show the 50 day SMA? It looks to be right here at 44.60?

  126. 126
    zman Says:

    NG at $5.50, up 3%
    Crude up about 2% at 70.80
    Nymex close in 10 minutes, good levels to hold here. Not sure anyone is going to care what API has to say tonight.

  127. 127
    Jerome Blank Says:

    RE:#124, WLT “looks marvelous”. printing another X with the $75 trade, my only caution is that it looks like vol is tapering off a bit, I have trouble buying up especially with decreasing vol, I’d rather catch this on a pullback, perhaps to first support at $72.50, risking that it runs without me…

  128. 128
    Jerome Blank Says:

    Re: #125, SWN breaks above P&F trendline resistance and goes back on a buy signal with a print of $46, I have the same 50 day SMA # at 44.60, its tugging on that # now…SWN double top breaks on a print of $46…

  129. 129
    zman Says:

    Jerome – perfect, thanks much, couldn’t agree more on the volume confirmation or lack thereof as the case is now. The stock has gone mo-mo on us. The fundamentals, comments like “we’re selling all the met coal we can get out of the ground”, and the cheap forward multiple are keeping people piling into the pullbacks, which also makes the pullbacks sharp at times as quick profits make for nervous bunkmates.

  130. 130
    tomdavis12 Says:

    Z: Any interest in the FSLR 2010 guidance call tomorrow?

  131. 131
    zman Says:

    Tom – forgot all about it, yes.

  132. 132
    zman Says:

    NG closing the session at $5.52, a 6 week high. I saw Schork say he say NG higher in the future, outperforming oil. This from the guy who at $3 that NG was going to $0.

  133. 133
    baylor3217 Says:

    Picked up some GLD at 110

  134. 134
    zman Says:

    Stepping out for a bit, back well before the close.

  135. 135
    VTZ Says:

    Sorry Z no time today for any comments on the dollar right now… will comment tonight.

  136. 136
    zman Says:

    Group showing remarkable resilience to this little late day downdraft.

  137. 137
    zman Says:

    Thanks V – appreciate the thoughts when you get a chance.

  138. 138
    zman Says:

    Planning to check out of the majority of the rest of the December calls tomorrow.

  139. 139
    zman Says:

    GE on the tape saying the “worst is behind us” for Pack no doubt, lol.

  140. 140
    elijahwc Says:

    HTE follow up: Deal with KNOC is now done @ C10.00 with USD/CAD @ 1.0611 and HTE trading at 9.33. Bet stock goes away before year without a hitch.

    15-Dec-09
    14:47 HTE Harvest Energy Trust approves plan of arrangement involving the Trust and Korea National Oil Corporation (9.37 +0.01)

    Co announces approval plan of arrangement involving the Trust and Korea National Oil Corporation. Voting securityholders were 90.5% in favor of the Arrangement, which provides for the acquisition of all the issued and outstanding trust units by KNOC’s Canadian subsidiary, KNOC Canada, for C$10.00 per unit. An application will be made to the Court of Queen’s Bench of Alberta on December 16, 2009 for a final order approving the arrangement. The Trust also announces that it has received, from the Competition Bureau of Canada, an Advance Ruling Certificate in respect of the acquisition of the securities of the Trust by KNOC Canada Ltd.

  141. 141
    tomdavis12 Says:

    Z: Relative superior performance. What a wonderful thing.

  142. 142
    VTZ Says:

    Bottom line is that Fed has to re-iterate extended period and dollar re-tanks. They MIGHT have a token blurb on inflation which might be enough for some people to rally it so I really don’t know which way it will go in the short term. Gold certainly is not believing the rally and has been right recently.

  143. 143
    zman Says:

    Beerthirty come early, knocking off to play with tike #2. Will be back around in a few hours.

  144. 144
    RMD Says:

    AEZ: Outside IR gent says HAL is their JV partner on the Fetter Field as well. HAL is “in it for the monetary angle”, not for a technology experiment, and plans standard industry practice on the well: 9,ooo ft lateral, 24 stage frac (as per the release).

  145. 145
    elijahwc Says:

    #133 Re; GLD. Sorry for the length of this post but it comes from site that I can’t link you into. It’s the best explation I’ve seen of the tax attributes of owning GLD and the reason I prefer GDX and GDXJ.

    INVESTORS HAVE BEEN POURING MONEY into exchange-traded funds that buy gold and silver, and that has helped push the price of gold to a recent high of $1,123 an ounce. But fans of those ETFs might not realize that the tax consequences of their investments could be costly.

    The gold rally could yield a bonanza for Uncle Sam.

    Gold and silver receive special treatment in the tax code. Considered collectibles, not capital assets, they don’t qualify for the maximum 15% tax rate on long-term capital gains. Instead, gains on the sale of gold and silver investments, including gold- and silver-backed ETFs, and gold bullion and coins (except certain U.S.-issued coins), are taxed at a maximum rate of 28% when such investments have been held for more than a year. When these assets are held for less than one year, gains are taxed as ordinary income.

    PRECIOUS-METALS ETFS are organized as grantor trusts. Investors in an ETF are treated as owning undivided interests in the metal owned by the fund. When an investor sells shares in the ETF, the tax code treats that investor as having sold a share of the metal backing the fund. Thus, the investor is subject to the maximum tax on collectibles.

    If the ETF sells some of its gold or silver, as funds typically do to pay expenses, including management fees, then gains or losses on such sales flow through to the fund’s investors, though they receive no cash distribution. In the case of gains, the investors must include their share of the profit in gross income, which likewise would be taxable at the maximum 28% rate.

    The SPDR Gold Trust (ticker: GLD), a popular gold-backed ETF, instructs shareholders on its Website how to compute the gain or loss when the ETF sells metal to pay expenses. (See http://www.spdrgoldshares.com/media/GLD/file/SPDR_Gold_Trust_2008_Tax_Information.pdf.)

    These tax rules also apply to other precious-metals ETFs, such as the iShares Comex Gold Trust (IAU) and iShares Silver Trust (SLV). But they don’t apply to ETFs that use futures or derivative contracts to track the performance of metals, such as PowerShares DB Gold (DGL), PowerShares DB Silver (DBS) and PowerShares DB Precious Metals (DBP). Exchange-Traded Note funds, or ETNs, also have different tax rules, as do ETFs that buy stock in companies in precious-metals-related businesses.

    Investors aren’t allowed to own collectibles in Individual Retirement Arrangements, or IRAs, and other self-directed retirement accounts, including 401(k) plans. When gold and silver are purchased for such accounts, an amount equal to the cost of acquiring the collectible is treated as a distribution to the owner. It is included in gross income and taxed at ordinary rates, although an additional 10% penalty might apply if the owner is under age 59½.

    THESE RULES APPARENTLY don’t apply when gold or silver are purchased for a retirement account through an ETF, although the Internal Revenue Service hasn’t stated its view publicly. Instead it has issued opinions in private-letter rulings and internal documents, including letters to the major precious-metals ETFs.

    Based on such documentation, retirement accounts are treated as having purchased fund shares, not the collectibles held by a fund. Thus, the cost of purchasing a gold or silver ETF in a retirement account wouldn’t be treated as a distribution to the owner.

    The prospectus of the iShares Comex Gold Trust, for instance, states that the sponsor has received a private-letter ruling from the IRS; it provides that purchase of the fund by various types of retirement accounts doesn’t constitute the acquisition of a collectible and won’t be treated as resulting in a taxable distribution to a retirement-plan participant. There is one exception: If the fund was to sell its precious metals and distribute the metal in kind to shareholders, those transactions would be treated as the acquisition of a collectible.

    The Bottom Line
    Gains on the sale of precious metals and related exchange-traded funds are subject to tax rates as high as 28% when such investments have been held for more than a year.
    A PRIVATE-LETTER RULING is applicable only to the taxpayer who asked for and received the ruling. It may not be used or cited by other taxpayers as precedent in court cases. But it reveals the thinking of the IRS on an issue, and auditors generally follow it. In addition, most tax advisors believe a taxpayer in a similar situation can safely rely on the ruling.

    Gold has rallied about 25% since the end of 2008, so precious-metals ETFs are likely to remain popular with investors. Thus, fund holders would do well to familiarize themselves with the tax issues pertaining to such holdings.

    Put another way, a golden opportunity isn’t always what it seems.

  146. 146
    PackMan Says:

    Whew, the worst is behind us. That’s good info. What would we do w/ out GE.

    Taxes on Gold and GLD … well that sucks …

  147. 147
    guru Says:

    Z:

    Lately all the solar companies are coming out with very bullish comments on the demand side for the fourth quarter and 2010 and solar panel inventories appear to have been drawn down to normal levels. I don’t know whether the severe price discounting is still going on or not.
    If I recall correctly, FSLR has an analyst day tomorrow starting at 4:15 pm EST. This should be an interesting conference call to hear. FSLR has corrected substantially in 2009 from its highs of 2008. However, FSLR is also the lowest cost producer of solar panels ($0.85c/watt). I am interested in your thoughts on FSLR as a core holding.

  148. 148
    PackMan Says:

    More great charts from Fibozachi http://www.zerohedge.com/article/ftu-fibozachi-technical-update-121509#comment-165078

  149. 149
    jy Says:

    BOP et al—Re #1 about MMR Davy Jones prospect above, better? late than never.

    “…..Drilling, while very very slow, is progressing. And the downhole pressure has not changed over the last coupla hundred feet. Indicating a pressure reversal. This is taken as a good sign….”

    Encountering lower pressure can be a sign that the well is entering a pressure cell that is more favorable for the retention vs the expulsion of hydrocarbons from reservoirs located in that lower pressure area. Sometimes the regression is indicative of porous reservoir rocks in that interval that allow fluids to be expelled from the shales surrounding them. This often occurs when a well crosses a pressure sealing fault. Sometimes this pressure difference is visible on seismic data as “oatmeal” or very poor reflectivity in the higher pressure block vs more coherent reflectivity in the lower pressure block. It may also be visible in velocity processed seismic data. Pressure regressions are highly sought in deep GOM overpressured shelf wells.

  150. 150
    BirdsofpreyRcool Says:

    jy — thank you for the detailed answer. Makes sense.

    So, the info, on the margin, sounds positive. But it also sounds like there is still a long way to go, given the Cretaceous objective, the ultra-deep drilling conditions, and the very slow pace.

  151. 151
    VTZ Says:

    Bottom line is that Bernanke can’t do anything tomorrow because he’s handcuffed by congress, what he said the other day and the fact that the real economy is not improving. They won’t change the wording and if they do hint at inflation then watch the flush out of the long bond once people start believing it and the dollar will go down.

    From a technical perspective, the rally in the dollar could go as high as mid 78s before meeting resistance but it’s overbought on some metrics already and we all know there’s no fundamental strength in the dollar.

    Beyond mid-78, 82 is the next major level. More than likely, I think that gold has become a leading indicator for the dollar as nobody is believing this mini-rally that isn’t really a rally but rather a fall in the euro.

    Tomorrow I don’t expect anything to really change so maybe this technical rally can continue a little longer but I see no fundamental reasons to change my view. The thesis is still intact and will be reconfirmed tomorrow.

  152. 152
    zman Says:

    Agreed

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