18
Dec

T.G.I.Expiry

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Market Watch Sentiment: Normally I'd say yawns were called for on option expiry Friday. However, a number of better than expected non-energy earnings results and a pullback for the dollar from its recent run could make things interesting early as both factors allow commodities to reassert themselves today. In natural gas land, follow through from yesterday's big kahuna gas storage withdrawal yielded overnight gains and cold / bad weather in the northeast this weekend and across a broad swath all the way to the Mexico border next week will continue to bolster gas prices.

Lastly, there is no formal deal at COP 15 despite a last minute swoop in by the U.S. President  meaning that energy stocks can remove one brick from their wall of worry today. China has not agreed to independent monitoring of its emissions and the developing nations do not like the longer time line for reductions sought by the developed nations who want to set goals for reductions by 2050 (... the Maldives says it will drown by then).  The developing nations also want the developed countries to foot more of the ever increasing cost of any plan put forth. And speaking of plans, not only do the 15,000 delegates not have a plan, framework, or etch a sketch rendering of one after two weeks of talks but they can't even decide what to call such a plan should it coalesce in the waning hours of their Copenhagen vacation which to me speaks to the wide divergences between the various parties involved. Words of advice: Next time teleconference and don't set an arbitrary deadline, otherwise you guys are just part of the problem. 



In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review
  4. Stuff We Care About Today - SWN Guidance
  5. Odds & Ends

Holdings Watch

  • $10KP II:

    • $20,000
    • 60% Cash

    • I will update the $10KP II spread sheet again on Monday.
  • Yesterday's Trades:

    • NOG - Sold the (10) Janaury $10 Calls for $1.30, up 108%, with the stock at $11.10. Will buy it back on a pullback.
    • HAL – Added 50 December $30 Calls HZLLF for $0.34 on a 207 Bcf withdrawal from storage (WILDZ).
    • HAL – Added (25) January $33 calls (HZLAT) for $0.24 with the stock stuck at $30 in a slow market. Likely to add more next week.

Commodity Watch

Crude oil closed inched down 1 penny to close at $72.65 yesterday despite a 1+% surge in the dollar. This morning crude is trading up nearly a buck in the early going.

  • OPEC Watch: OPEC President Jose Botelho de Vasconcelos says "no change" regarding the Cartel's quotas next week. I guess the ministers are headed to Angola on the 22nd for the free sugar cookies.
  • Suncor Fire Watch: A fire at their Alberta upgrader shuttered production of 150,000 bopd some of which  would normally be headed south to the U.S. midwest. (SU) says the unit will be down for the next 2 to 4 weeks for repairs which should help draw down inventories after the recent bloat at Cushing.

Natural gas jumped a whopping 6% or $0.30 to close at $5.77 yesterday after the EIA reported a record and much bigger than expected 207 Bcf withdrawal from storage (see thoughts below). This morning gas is trading up a dime plus.

Natural Gas Storage Review


ZComment: Last week saw record volumes (for this week of the year) come out of storage ...


...And This Helps Erode the Surplus But We Will Need Sustained Cold To Support Gas Above $5. Gas in storage is still about 400 Bcf high to normal levels so we need multi weeks of colder than normal weather to help rebalance the market. The big draw yesterday is weather and not some sudden updraft in industrial demand or dip in production and while every little bit helps, its important to realize that a cold December (congrats again to Joe Bastardi on that forecast!) does not mean a cold January necessarily follows. 

 

 

 

Stuff We Care About Today

SWN Provides Initial 2010 Guidance

Budget: $2.1 B for 2010 vs $1.8 B in 2009

  • Fayetteville Shale: 57% of the budget oes to the Fayetteville Shale (14 rig program set to drill 9% more wells than last year for 5% fewer dollars while achieving a 10% increase in lateral length to 4,500 over 2009's average). SWN sees F.S. wells costing $2.75 mm in 2010; this compares to $2.9 mm average cost in 3Q09. 
  • Haynesville / Bossier Shale: 11% goes to East Texas (2 rigs). This is the area where their first three wells came in with IPs of 7.2, 13.4, 16.7 MMcfepd.  
  • Marcellus Shale: 2% goes to the Marcellus Shale with the first operated rig to commence drilling in January.  
  • Debt to Cap is currently 30% and that should not be expanded significantly (maybe as much as a 2% increase on this budget).

Production: 36% on the mid point for 2010

On Monday I wrote in comments: On the growth front I bet they can do 20%+ for each of the next 3 years, probably over 30, maybe as high as 40% when they come with 2010 numbers in February. That will get the multiple down further and make them very attractive … their concept of not hedging until prices rise is serving them better now but I’d like to see them come to the market saying they’ve hedged the first quarter soon.

  1. The growth guidance it isn't a disappointment to me and should not be to the Street either.
  2. These are "under promise, over deliver" type guys:

    1. They are set to produce 400 to 410 Bcfe, up 36% on the mid compared to 2009
    2. Last year they provided initial guidance of 280 to 284 Bcfe which would have been (48%).
    3. They are now forecasting 297 to 300 Bcfe for 2009 and that's with the problems at the Boardwalk pipeline which curtailed output for a month this past Fall.
    4. My point is that they don't set goals they can't beat.
    5. At 36% organic growth they are will be best in class for growth among firms their size and are, to date, only second to (HK) in terms of growth expectations (HK is easier to grow given their smaller size) among firms of any significant size.
    6. One last point - 1Q10 guidance also looks like a layup.

Cost Guidance:  Looks overly conservative.

  • LOE of $0.87 to $0.92 - this looks a bit high and I'd bet they are bagging the Street on guidance here as they have had LOE of $0.76 through the first nine months of 2009 after predicting a range of $0.92 to $0.97 / Mcfe.
  • G&A expense came in low to guidance as did production taxes. Their new guidance for both looks conservative as well.

Hedges: SWN has 12% of expected 2010 volumes hedged at an average price of $8.83 / MMBtu.

Bottom Line Guidance:  SWN Gave Ranges for EPS and EBITDA based on prevailing natural gas prices:

  • At $5 gas they see:

    • EPS of $1.85,
    • EBITDA of $1.695 B
    • CFPS of $4.83
  • At $6 gas they see:

    • EPS of $2.44,
    • EBITDA of $2.015 B
    • CFPS of $5.72
  • The Street is Currently At:

    • EPS of $2.34
    • EBITDA of $1.931 B
    • CFPS of $5.50

Nutshell: 1) Growth for 2010 should be a bit better than expected but is still set a level which provides for continuous upgrading and beats as the year progresses. 2) SWN is expanding its efforts outside the Fayetteville, even as it fine tunes and improves results in that bread and butter gas shale play. 3) Cost guidance is conservative, as usual. and I've already seen one report this morning lowering numbers over said guidance (Citi, who took their price target down from $52 to $50) and all I can say to them is "you got bagged pal, wake up, do your homework and don't just eat off the spoon".  SWN continues to trade at a  steep discount to its other near-pure-play shale counterparts RRC and UPL while exhibiting best in class growth with low operating costs and is carrying its process to new plays including potentially higher impact East Texas shale (which I expect to become a second core for the company this year) and the Marcellus.

Odds & Ends

Analyst Watch:

  •  (TK) initiated at Outperform at Oppenheimer.

 

184 Responses to “T.G.I.Expiry”

  1. 1
    zman Says:

    Analyst Watch:

    B of A Merrill resuming coverage of the “large cap oil sector”

    At Buy: OXY, APA, APC, HES, CVX

    Neutral: XOM, DVN, MRO

    Underperform: COP

  2. 2
    zman Says:

    White Christmas Watch:

    http://www.accuweather.com/news-story.asp?partner=accuweather&traveler=0&article=6

  3. 3
    zman Says:

    Analyst Watch: Wells Fargo initiating coverage on a slew of small and mid cap E&P names

    Outperform: ATLS, COG, EQT, SFY, and WLL

    Market Perform: PXD, GDP, GMXR, ROSE, PQ, VQ, NBL, and HK

    Underperform: CLR

  4. 4
    zman Says:

    Looking at the natural gas continuous front month contract, with the front month now at 5.91 this morning we are approaching some interesting levels. I don’t think gas has a lot of staying power up but I also don’t think the shorts have been this frightened in awhile and I know the stocks are not discounting current levels.

    We hit $5.98 on the front month back in October. Before that, you have to go all the way back to January to see a level this high. And that was on the slide down from $14. The short position in natural gas is epic in size and has been around a long time. Some of them may be frightened or even forced to cover if we break through $6 on all this pleasant weather. That could give way to a spike in gas, one that will be short lived for certain but one which may allow the E&P charts to pop to new highs and the E&P companies to hedge out their Spring / Summer production.

  5. 5
    zman Says:

    KOG on the tape with news.

    #9 not economic

  6. 6
    milepost_43 Says:

    #5 KOG …how concerned should I be about their ability to do the following given economic conditions?

    “..potential borrowings under a new reserve-based revolving line of credit that it EXPECTS(my emphasis) to put into place in early 2010.”

  7. 7
    zman Says:

    KOG PR

    Looks like $60 mm 2010 budget to drill 13 net wells.

    #9 was low flow, I assume just on the wrong side of the pinchout.

    #10 is at TD, #11 is drilling ahead in the lateral, expect completions on both in 1Q10.

  8. 8
    ram Says:

    Is KOG dead money until the next news?

  9. 9
    zman Says:

    MP – I don’t they’d put it in the PR without a reasonable chance of obtaining it. If not, the program can be scaled back to accommodate a slower path.

  10. 10
    zman Says:

    Ram – Best guess would be we see a little shake out between now and year end and then it tracks with oil with the occasional blip around other operator’s efforts. I see nothing here to suggest the #9 is indicative of anything about the next two wells which are west and north of here, offsetting their first successful pair of wells in their acreage. I sold 20% of mine I think around $2.50 awhile back and will watch it for a time but I don’t feel this “news on #9” is much of a shock to holders.

  11. 11
    zman Says:

    That being said, you tick off the wrong holder with that rookie attempt to bury the bad news at the end of the press release, a holder of size, and he could plow out, putting it through $2. That could have a cascade effect as many holders of single digit midget stocks are just chartists and will bail on that kind of weakness.

  12. 12
    zman Says:

    Crude up 1.70 at 74.34. The Strip is up strong as well. OPEC saying nothing happens next week apparently is a surprise to some.

  13. 13
    zman Says:

    POT cut to Sell at Soleil, target $85, for you fertilizer fans, Max Pain is $105, stock got plowed yesterday, still up at $112 now.

  14. 14
    zman Says:

    SWN – bid up at $46 on the budget and guidance which as you can see from the post I thought were pretty good. Sorry Citi. I will punt my December $45s pretty early and have no plans to sell my Januaries for now.

  15. 15
    BirdsofpreyRcool Says:

    KOG — well #9 is non-economic. It was buried as far as they could bury it… at the bottom of the Operational Update. That was good info from West re: lack of a flare. Company dialing back it’s estimate of Bakken prospectivity to 90% of it’s acreage. Still supports an NAV that is much higher from here, according to TWP (TWP at $3.50 NAV with 75% of FBIR acreage productive for MB, nothing for TFS and well-spacing downsizing). 2010 drilling program is entirely permitted and will include a TFS well “in the first part of 2010.” So, should just start to be a math exercise and less of an exploration model of determining NAV. ALSO, they are going to throw $5mm at determing the economic potential of some of their non-Rez acreage. A prudent 10% of 2010 capital.

    I think a weak #9 was pretty much priced in. I don’t like the way that Lynn handled the update, but how does one deliver what can only be described as “bad news” without sounding like it tanks everything? You put it at the end… after talking about all the positive stuff you’re gonna do. The major disappointment to me is that mngt was saying #9 would be an “average” well, when they were running around, doing the 2ndary. Of course, timing that 2ndary before #9 was completed and tested was a clue as to what they really thought. Still….

    I don’t think KOG is dead-$ here. Peak is drilling a TFS well near KOG acreage and KOG has returned to drilling acreage that they KNOW is productive for the MB. Also, at some point, KOG will be able to layer in some oil hedges and finalize their bank borrowing base. And then they will begin to plan to hook up to some local infrastructure, boosting revenues by capturing the nat gas production. Unless oil prices head lower, the next few days should see the low price in KOG stock for the next year, I would think.

  16. 16
    zman Says:

    Hearing Pimco boosted cash position to largest since Lehman failed. I like Gross. Obviously he is smart. But they have launched an equity fund now. If people listened to you like you were EF Hutton and you have cash and wanted to be long equities yet the market was up as much as it is these months since March, you might be tempted to be more dire about things than is necessary. Not saying he’s doing that. Just thinking out loud.

  17. 17
    zman Says:

    Thanks for the update BOP, I agree, its not as bad as it may look to some and it is probably mostly priced in. I’d put the bad stuff first in the operational part of the PR and close on a higher note. “That’s the way Dad did it. That’s the way America does it. And it’s worked out pretty well so far”

  18. 18
    zman Says:

    By the way the end of #17 was the movie quote for Friday.

  19. 19
    BirdsofpreyRcool Says:

    TechTrader at 65/35 SHORT the rally today.

    I’m not so sure we close red today… M&A Monday is (or should be) on people’s minds.

    HeadTrader just in with he would be “buying the dip” that TechTrader is calling for.

    So, there you have it. Something for everyone today.

  20. 20
    zman Says:

    Have a friend who as the $110 December puts on POT. Think that’s going to work out now. SMA is lower, max pain is lower and it helps that he had them from before yesterday.

    Not sure about at POT but the #1 or #2 cost for a fertilizer company is usually natural gas.

  21. 21
    zman Says:

    Thanks BOP. I’ll be punting December calls early on the opening pop as I have little faith in anything except pinning action, especially on a quad witch.

  22. 22
    BirdsofpreyRcool Says:

    Ooops… total brain fart. Forgot it was quad witching. ALL BETS ARE OFF for closing today.

    May go walk the dog.

  23. 23
    zman Says:

    Natural Gas Street Price Forecast Update:

    Thanks to a little Bird for sending.

    2010: $6.00 (median estimate)
    2011: $6.50

    So you can bet that most of the Street will be taking numbers up modestly on the SWN release, unless they buy into that overly conservative cost guidance (again, sorry Citi).

  24. 24
    BirdsofpreyRcool Says:

    Prediction (knowing that lately I’ve sucked at near-term price pickig… but, it’s what we do, isn’t it)… KOG will not spend much time significantly below $2.15 (at the lowest) and will close at $2.35 today.

  25. 25
    BirdsofpreyRcool Says:

    AEZ already recovering from the $3.50/share 2ndary drive-by they announced this morning…

  26. 26
    zman Says:

    Nice. 1.4 mm share trades in 1 minute to put a cap on the rally of HAL. Don’t know if they can keep it down but that was a good shot at it.

  27. 27
    zman Says:

    SWN trading over $46

  28. 28
    zman Says:

    Wells Fargo mucking with my plan to re enter WLL at $65. Not going to buy it here at $68.35 until backs or trades to the side for a bit. Still holding the common.

  29. 29
    BirdsofpreyRcool Says:

    Last thought on KOG (for now) — there were a bunch of shorts that jumped on the stock over the last two weeks. THIS (well #9 = duster) is the NEWS they have been waiting for.

    Well… it’s just not THAT bad. I mean, it’s not GOOD. But it doesn’t thwack 33% of KOG’s FBIR acreage either (about the only thing I can think of as a short-thesis, as KOG has no debt and already did their 2ndary raise). So, if you had recommended your PM short KOG… when do you recommend he/she cover that short? Today? Merger Monday?? Dec 31st???

    I’m betting the shorts start covering today…

  30. 30
    zman Says:

    POT $109 and falling…congrats JD

  31. 31
    zman Says:

    ZTRADE:

    SWN – Sold the December $45s for average $1.52, up 15%, with the stock trading around 46.50. I continue to hold the common and the January calls.

  32. 32
    elijahwc Says:

    #15 & 29 on KOG: Apparently TW also had a note out yesterday that Peak’s TFS well near KOG has a tubing leak on the second of a 12 stage frac stimulation that will delay results. So, I’d have to agree that everything will be baked in after today.

  33. 33
    BirdsofpreyRcool Says:

    elijah — thanks for that update. I don’t get TW’s research directly. By the way, do you know where that Peak well is? The last one they drilled in the TFS was in the donut hole, surrounded by KOG’s agreage… but I don’t know where this one is.

  34. 34
    zman Says:

    Ram – HK unstuck today.

  35. 35
    elijahwc Says:

    No I just saw this pass on a news feed, Fly on the wall, and repeated it here.

    Sidebar, weekend viewing for those interested in learning more about the Cardium. Lengthy but informative.

    http://watch.bnn.ca/commodities/december-2009/commodities-december-10-2009/#clip244771

  36. 36
    zman Says:

    ZTRADE:

    HAL – Sold the (10) HAL Decembers $29 Calls for $1.15, up a whopping 2%. I continue to hold the $30s for a bit longer as well as the Jan $33s.

  37. 37
    BirdsofpreyRcool Says:

    Maybe west knows where that Peak TFS well is. Thanks for your help!

    Fly on the Wall sounds like it’s fun (useful) to watch.

  38. 38
    zman Says:

    BEXP back above $13. Should be news again either next week or just after Christmas. I continue to hold the common and the Jan $10 calls.

  39. 39
    zman Says:

    What’s the Peak well name, I’ll look it up?

  40. 40
    BirdsofpreyRcool Says:

    z — i don’t know. It has just been referred to as the Peak TFS well near KOG’s acreage.

  41. 41
    BirdsofpreyRcool Says:

    I’ll go ask…

  42. 42
    jat Says:

    I’d love some general thoughts from the group here on the sustainability of the gas run, both on the spot and the E&Ps, in the next one or two months. My situation is this: very recently, my largest E&P position was taken out for a 25% premium and I sold it. That was fun.

    But now, while I’m still overweight, I have a rather large gassy hole in my portfolio. I am not much of a mo-mo fiend and (excluding all possible hindsight bias) was interested in gassy names when spot Henry was closer to $3.50 and everyone here in New York was quite bearish on gas around Thanksgiving. That, in fact, was when I added to my recently-lost position. Now, thanks to the M&A and my desire for a heavier coat, the sentiment in NYC has changed. There are still bears out there, as evidenced by a few recent lunches I’ve attended, but people are warming to the idea. $41bln and a 200+ draw will do that. Given that I’m most comfortable with commodity stocks when things are at extremes, I’m a little stymied. You’re not reflecting $7.50 LT on the names yet, but you’re surely not reflecting $5.00! And these ST trades can always go on longer than anticipated, so the fact that we’re back to “drill baby drill,” that the UK/US arb is unfavorable, and that gas is losing share to coal can remain eclipsed as we all freeze to death.

    General opinions appreciated.

  43. 43
    baylor3217 Says:

    wow! I jump online a little late this morning and things are popping. Starting to feel greedy but trying not to get an itchy trigger finger.

  44. 44
    baylor3217 Says:

    Even CHK be ripping. Kicking myself for not buying calls when I planned to 2 weeks ago with the stock in the 22-23 range.

  45. 45
    zman Says:

    Jat – I have already given you all my thoughts via email.

  46. 46
    baylor3217 Says:

    So if we think everything’s baked into KOG, is now a short term good entry point?

    I’ve actually been trading it fairly effectively the last 2-3 weeks.

  47. 47
    BirdsofpreyRcool Says:

    baylor — given that you’ve been successfully trading KOG (congrats!!), what do you think about the near-term price action?

  48. 48
    jat Says:

    re 45: Fair point, and certainly appreciated! I was wondering if the 200+ withdrawal had changed anything or if the other frequent contributors had a strong opinion on the trend here.

  49. 49
    baylor3217 Says:

    BOP – It seems if this news was horrible we’d be looking at retesting the recent lows today. So far it’s held up fairly well this morning, which is making me want to re-invest some recent profits with a nominally sized trading position.

    What I’m concerned about is it hasn’t really been trading with nat gas prices and with this huge run up from the beginning of december, if we get a pull back here in NG, I’m wondering if it will start trading more in tandem with the commodity price.

  50. 50
    baylor3217 Says:

    Sold my Jan SWN calls for $2.80 to wait for a pull back and re-load.

  51. 51
    zman Says:

    Baylor – It’s an oil, no a natural gas play.

  52. 52
    baylor3217 Says:

    Z – Yes typo. Been focusing too much on my gassy names this morning. Typing and trading not always a good thing for me.

    My thesis remains the same.

  53. 53
    reefguy Says:

    MMR down 2%….Davy..Davy…what is happenning at Davy Jones

  54. 54
    baylor3217 Says:

    SWN up 15% in less than 10 days. Nice move there.

  55. 55
    zman Says:

    ZTRADES

    HAL – Sold the WildZ from yesterday for $0.19, down 46%.

    HAL – Added (20) January $31 Calls (HZLAD) for $0.73.

  56. 56
    bill Says:

    atpg on a road show stock moving

    latest inteview with the cfo

  57. 57
    zman Says:

    Hear ya, thought you knew the difference, just wanted to be sure and not get other folks scratching their head.

  58. 58
    BirdsofpreyRcool Says:

    reef — that a rhetorical question? or, you have some color there… as I see it, DJ could keep on drilling at a snail’s pace, or be “done” any day (if they screw up or hit the Cretaceous… whatever comes first). It’s a completely bi-polar situation. Happy Talk one day, dry hole worries the next. You hearing anyting?

  59. 59
    reefguy Says:

    z- Number of equities on my screen that are red- 5/80
    Number of equities on my screen that are in Davy Jones 3
    Each of these three are red…

  60. 60
    baylor3217 Says:

    FSLR has pulled back from it’s recent copenhagen highs. Any thoughts on support here with it at $134?

    Extremely volatile name. I played it to the upside heading into copenhagen when it had a 20+ point run but I’m not sure there’s much catalyst now other than oil ripping to the upside, which it would seem if anything oil doesn’t go about $80 by much if at all in the near term.

  61. 61
    zman Says:

    I’m largely done for the day in terms of trading. I’ll have two scuds (an EOG $100 and a WLT $80, both were small, both have been toast for some time). Two scuds is not too bad for me, part of the game.

    $10KP II is back up to $20 K + at the moment after swooning as low as $5K ish last Friday. Thanks again Exxon.

    Cash is 62%

    Positions going into next week in terms of size are SWN, HAL, BEXP. May shave the SWN and add a bit more oil exposure, may not.

  62. 62
    zman Says:

    Also planning to add back some coal.

  63. 63
    BirdsofpreyRcool Says:

    reef — (as you know) people lie, stocks don’t. Wonder what’s going on there…

  64. 64
    zman Says:

    Reef – no bueno

  65. 65
    VTZ Says:

    Is SWN a name that could benefit from end of year rebalancing?

  66. 66
    zman Says:

    Baylor – did you see the link to all the broker thoughts on the 2010 guidance? Very mixed bag.

    http://www.solarfeeds.com/green-stocks-central/10321-analyst-reaction-to-first-solar-guidance-fslr.html

  67. 67
    reefguy Says:

    Me thinks we need Cretaceous pay or no good.

  68. 68
    baylor3217 Says:

    Not that there’s any direct correlation to this board, but RIMM has rolled over almost 3% from it’s morning highs after earnings.

  69. 69
    BirdsofpreyRcool Says:

    reef — well put. agreed.

  70. 70
    reefguy Says:

    So why is CPE red? maybe kicked out of NYSE???

  71. 71
    zman Says:

    V – Ya know, they are the high class girl at the dance that doesn’t kill you with a big dinner and bar tab (compared to an RRC or a UPL), so yeah, I think they will be on the “should own this to show everyone how smart I am list”. They also have the emerging sex appeal of Marcellus. You can hear the conference call now. “We combined our multiple years of experience working in the Fayetteville shale with the knowledge that others paid for in the Marcellus to hit the ground running with wells that are drilled more close to what we consider “optimal” than at any first entry of a play in our history” or something similar.

  72. 72
    zman Says:

    CPE just an also ran on the Shelf, too much risk, tax loss selling, etc. I’ve been watching ATPG and SGY perk up. I think SGY will be on the list of names to own for sure and while I have not been a big fan of either Stone or the Shelf in years I could see multiple expansion for this group from 2x CF to 3x CF and they would still be cheap and there you have a 50% move in the stock. The reason for the multiple expansion would be stable oil and stable and slightly higher natural gas.

  73. 73
    zman Says:

    JD – again, with the POT, good call. $106.

  74. 74
    zman Says:

    HAL pin to $30 complete and total as they knocked it just under to squash the call holders.

  75. 75
    zman Says:

    Wonder if EXXI will have something to say by the January OGIS.

    http://www.ipaa.org/meetings/pdf/102010ogisfloridalistofpresentingcompanies.pdf

  76. 76
    BirdsofpreyRcool Says:

    Hearing BJ screwed up the Peak TFS completion (as reported by elijah) near KOG’s acreage. Also, weather up there is horrendously cold. So, Peak won’t be able to finish completing that well until mid-January. But, it is located about 2 miles due west of KOG’s western-most acreage. Close enough to provide a decent data point, but still far enough away that it won’t “prove up” (or disprove) any TFS potential on KOG’s acreage.

    Looking forward to KOG’s own TFS test by “mid-2010.”

  77. 77
    zman Says:

    Guessing that KOG has nothing to say on 10 and 11 until at least February, you agree BOP?

  78. 78
    BirdsofpreyRcool Says:

    Why is it that the British are so much more humorous in their reporting? The latest comments on COP 15… (reminder, I am an AGW “denier,” so talkin’ my book here).

    http://blogs.telegraph.co.uk/news/geraldwarner/100020279/copenhagen-climate-summit-most-important-paper-in-the-world-is-a-glorified-un-press-release/

  79. 79
    zman Says:

    Wow = NOG – just noticed it continued the run today. Sold it yesterday for a nice gain and will buy back soon. Could be some AEZ sellers coming over as NOG just did a secondary back in October and has no need at present and no debt.

  80. 80
    BirdsofpreyRcool Says:

    z — #77. That timeframe sounds about right. Will get a tighter read on that by the end of this year. However, the weather is slowing everybody’s schedule down. It’s a COLD winter this year.

  81. 81
    zman Says:

    LINE = 26.70, another high. VNR moving well too.

  82. 82
    BirdsofpreyRcool Says:

    KOG down to LOD… here’s where the shorts step up the covering, I would think.

  83. 83
    zman Says:

    Fighting the temptation to nibble at new NFX and WLL positions.

  84. 84
    zman Says:

    … and IOC

  85. 85
    zman Says:

    Crude just gave up $2. Games, games, games.

  86. 86
    zman Says:

    Picked up an Automoblix for intern #2. If you can find a better looking and rolling wooden toy car I’d like to know about it.

  87. 87
    zman Says:

    Market taking a dive.

  88. 88
    BirdsofpreyRcool Says:

    This is where TechTrader gets to say “see, I’m right, sell the morning rally.” However, it is also where HT steps in and reminds that he would “buy the dips.”

    So, something for everyone.

  89. 89
    reefguy Says:

    z- Those those high $ euro toys? My boys had them…

  90. 90
    zman Says:

    ZTRADE:

    SWN – Took 10 of my 15 January 45 calls (TKQAI) off the table for $2.80, up 51%, with the stock at $46.50. Just booking a little more cash.

  91. 91
    zman Says:

    Reef – Yeah, the ones that come apart with the little people inside. Actually, I think I like it more than he does.

  92. 92
    baylor3217 Says:

    As the market moves into free fall mode relatively speaking, does anyone have any thoughts on what to buy your employees for a gift?

    I generally do a car and a $5 to $10 gift (I have a lot of employees) so I’m looking for a new idea.

  93. 93
    zman Says:

    Soleil analyst just smoking POT today.

  94. 94
    zman Says:

    Baylor – If you buy them a car I don’t really see the need for anything else, lol.

  95. 95
    reefguy Says:

    Those toys make the kids expand their minds…long term very positive for Educational success

  96. 96
    baylor3217 Says:

    lol. I just saw that. More months like this and I’ll buy them a car.

  97. 97
    zman Says:

    $10KP II = 78% cash

  98. 98
    BirdsofpreyRcool Says:

    baylor — can I come work for you? A car beats the fruitcake I get every year!

  99. 99
    zman Says:

    Reef – intern #2 has been reading some news stories to me on the international stuff at night of late (they don’t have a lot of math in them that I need to absorb). Good to hear your six your old daughter sound out uranium centrifuge.

  100. 100
    reefguy Says:

    z-start leaving the Economist out on the kitchen table…makes for good conversation(i am not kidding)

  101. 101
    reefguy Says:

    Gifts- I get multiple Greenberg smoked turkies. Does anyone really like those??

  102. 102
    baylor3217 Says:

    brk-a is at near 5 month lows.

  103. 103
    baylor3217 Says:

    I was thinking about buying a movie gift card to blockbuster and one of those things of popcorn to give them a (cost effective) experience.

  104. 104
    zman Says:

    XOM – the slide continues.

  105. 105
    baylor3217 Says:

    I know this isn’t energy related, but markets starting to get boring today.

    I’m not a chartist, but if you are (even an amateur who probably knows more than me) is RIMM not in a solid head and shoulders pattern from a chart perspective, with the right shoulder / arm waiting to fill in?

  106. 106
    baylor3217 Says:

    RE 104 – interestingly enough, Bob Simpson is from my alma matter and has been a huge donor to the athletic program the last 2 to 3 years.

    Many people are already spending his money he would make on the deal should it go through.

  107. 107
    jiveyjr Says:

    well, I’m becoming a bigger KOGger here at 2.03….

  108. 108
    baylor3217 Says:

    #107 – KOG hasn’t broken into the 2’s in quite a while.

    Anyone have some color here?

  109. 109
    Jerome Blank Says:

    Re:#107, #108…KOG goes back into o’s on a print of $2, but KOG holds its P&F buy signal until a print of $1.75…

  110. 110
    baylor3217 Says:

    Thanks JB

  111. 111
    jiveyjr Says:

    re: # 106…occasionally, when I get a little tooted up and suffer from big penis envy (BPE), I get one of my friends who is a director of XTO to explain to me one more time how he and Bobby have earned the money they’ve dragged out of the place…but when I sober up, I realize it’s just BPE, goes on everywhere and not my business

  112. 112
    BossmanG Says:

    Z, did you order the Automoblix online? Can’t see where they carry them in stores (or canada…)

    Anybody have any suggestions for educational toys for a 2yr old?

    baylor, we received these solid coffee mugs that are stainless steel/ceramic with the firms logo…so far working well

  113. 113
    RMD Says:

    MLP musings: DNR is selling GEL interests because it plans no more near term drop downs. Paid $2.2mm in ’02, proceeds $85mm.
    No drop downs = no interest anymore. This is for Virginia who thinks the General Partner thinks first about the MLP, 2nd about the GP.

  114. 114
    baylor3217 Says:

    Jivey, #111, how did they earn the money? Is there an interesting story there that’s rather unique?

  115. 115
    cargocult Says:

    Are we waiting for some kind of news on WRES?

  116. 116
    baylor3217 Says:

    KOG gently backed away from the abyss for now. We tested these levels a week or two ago and ran back up to near 2.40 (pre #9 news of course)

  117. 117
    baylor3217 Says:

    Anyone have an opinion on WLL puts here?

  118. 118
    zman Says:

    Automoblix – nope, bought in a store but they are on Amazon.

    Cargo – I don’t expect anything until at least January out of them.

  119. 119
    jiveyjr Says:

    re: 114, no nothing more than the usual director/executive relationship where they appoint one another and approve each others comp.

    I was just making something of a joke on a slow day….

  120. 120
    zman Says:

    Baylor – I don’t see why one would take puts on that name vs taking them in CLR. Valuation is much richer in CLR and they are not drilling the really big wells in the play.

  121. 121
    zman Says:

    ZTRADE:

    SWN – Sold the remain (5) SWN January $45 calls for $3.20, up 66%

    SWN – Bought (10) SWN $48 Calls (TKQAV) for $1.55.

    Both done with the stock just over $47.

  122. 122
    zman Says:

    Jivey – it made me laugh. Had my dad in one of those types years ago. Went BK. He still brings it up from time to time.

  123. 123
    DrLink Says:

    Automoblix wow those are not cheap, wonder if the are publicly traded, cause they must be making big bucks! :]

  124. 124
    zman Says:

    I got him this one.

    http://www.amazon.com/Manhattan-Toy-Automoblox-Orange-Sports/dp/B001NFTQFG/ref=sr_1_11?ie=UTF8&s=toys-and-games&qid=1261157015&sr=1-11

    They are for 3 and up but he’s advanced and I’ve got the little people on the shelf.

  125. 125
    baylor3217 Says:

    Iranians sieze Iraqi oil well.

  126. 126
    zman Says:

    Thanks Baylor. Here’s the story:

    http://www.bloomberg.com/apps/news?pid=20601082&sid=aGLN5XoCnMRU

  127. 127
    zman Says:

    Fundamental Lack of Respect Watch:

    “They positioned tanks around it and dug trenches,” Nazmi said by phone from Basra. “They are still there, they raised the flag.”

  128. 128
    ram Says:

    Thanks ZMAN for earlier comments. SWN better than HK for cold influence?

  129. 129
    zman Says:

    Ram – I think so.

    1) it’s 12% hedged for 2010 vs >60% for HK so price moves matter more to it.
    2) at $6 gas strip for 2010, their cash flow covers their capex or is very close to it so no deal worry, no need for asset monetizations and no deterioration of the balance sheet.
    3) no brain damage from worrying about which shiny bauble management will need to go spend money on next.

    I still will traffic from time to time in HK and I still hold the common but for a pure gas play, yeah, I think so.

  130. 130
    zman Says:

    BOP took off to go shop

  131. 131
    zman Says:

    Kyle – saw your comment last night re HAL – that was the better way to play. The $10 KP III will have the ability to write calls.

  132. 132
    ram Says:

    TY

  133. 133
    BirdsofpreyRcool Says:

    ha! u r funny z…. the only diff between you and me right now is that you get to keep one eye on the mrkt, while shopping on line!

    Gonna go do my part for the economic recovery in Michigan. Interestingly, I won’t be the only one out there.

    Nice call, jiveyjr… don’t want to jinx it, so won’t say any more.

  134. 134
    zman Says:

    LINE – odd mid day reversal.

  135. 135
    ram Says:

    HK keeps walking higher.

  136. 136
    zman Says:

    GMXR up another 5%, clear breakout, looking more like a squeeze.

  137. 137
    kyleandy Says:

    jivey- nice buy KOG at 2.03

  138. 138
    baylor3217 Says:

    Re #137, great looking call so far. It’s been down in that range two or 3 times in the past month and bounced nicely.

    If the “worst” of the news is behind us, it may have proven to be a good entry point heading into the new year.

  139. 139
    zman Says:

    ZTRADE:

    NOG – Added (20) of the $12.50 January calls (NOGAV) for $0.30. I sold the $10s yesterday and wanted to get a little more leverage on the name.

  140. 140
    baylor3217 Says:

    KOG at 2.23. Pretty large intraday reversal of 10%ish

  141. 141
    reefguy Says:

    NOG–nice

  142. 142
    baylor3217 Says:

    starting to become a very slow day around here. Of course, my vacations typically coincide with the boring times of the market.

  143. 143
    jiveyjr Says:

    yep, on KOG Jerome suggested putting an order in just above $2, which is what I did. I didn’t buy a lot, and like every trade that turned 10%, I wish I hadn’t been so chicken.

  144. 144
    zman Says:

    Always gets slow around the holidays.

    BEXP kicking back up, lot of 4 and 5% moves in the Bakkens today. Most other moves just noise.

    SWN holding over $47; will like to see some new targets there on Monday due to the new budget.

  145. 145
    milepost_43 Says:

    143…got greedy at 1.96….aarrgghh….

  146. 146
    jiveyjr Says:

    re:145…I put in some orders lower too, but Jerome is really good with how he combines PF and other technicals…no big surprise his target area to be right on…they teach in Wycoff that you see strength on down days and that is how I interpret this action in KOG…

  147. 147
    BirdsofpreyRcool Says:

    Back for close… not so bad after all.

  148. 148
    zman Says:

    BEXP = new high. Maybe a well next week, maybe the week before New Years.

  149. 149
    zman Says:

    KOG down a penny is a pretty good victory.

  150. 150
    choices Says:

    #145-I had an order in @2.02-obviously did not get filled-I think BOP called it-shorts may be covering.

  151. 151
    baylor3217 Says:

    149 – still time to close up or flat 🙂

  152. 152
    baylor3217 Says:

    KOG did 4x their typical daily volume today

  153. 153
    BirdsofpreyRcool Says:

    jiveyjr — well done… well done indeed!

  154. 154
    zman Says:

    Whoa KOG at the close!

    Beerthirty. Have a great weekend.

  155. 155
    john11 Says:

    Amex specialist with the wild closing print on KOG.

  156. 156
    baylor3217 Says:

    JOHN, what does that mean, amex specialist?

  157. 157
    BirdsofpreyRcool Says:

    john11 — think a short didn’t want to go over the weekend with his position open on KOG… just grabbed as many as he had to, to close out. Wild stuff, for sure.

  158. 158
    jiveyjr Says:

    my Bloomberg shows closing price for KOG 2.41, so does Fidelity, but Tradestation shows 2.30…nuts

  159. 159
    baylor3217 Says:

    so all in all, a good week. Once again, I left money on the table taking profits a bit too soon.

    I suppose that is the emotional side kicking in, but at some point you have to secure your profits.

    Have a great weekend everyone. Enjoyed the conversation as always.

  160. 160
    zman Says:

    There was definitely a grabbing of Bakkens into the close, witness BEXP, NOG, WLL, KOG and CRED which I was musing about yesterday, up 18% into the close.

  161. 161
    jiveyjr Says:

    if Bloomberg VAP is to be trusted, he grabbed 182,100 shares at 2.41

  162. 162
    BirdsofpreyRcool Says:

    baylor — the richest people i know ALL “sell too early.”

  163. 163
    baylor3217 Says:

    158 – crazy how those 3 would show such differing closing prices.

    FWIW, yahoo shows closing price at 2.26

    ameritrade shows 2.41. Does that mean someone actually purchased shares at 2.41?

  164. 164
    BirdsofpreyRcool Says:

    jiveyjr — either some M&A is in the air, swirling around the Bakken Kids… or somebody REALLY just threw in the towel on a KOG short position. Either way, makes for an interesting close.

    Have a great weekend, all! Fun day. Both TT and HT got it right.

  165. 165
    zman Says:

    KOG

    There was a 182,100 share trade at the close at $2.41. Then a bunch of smaller lower price trades around $2.30

  166. 166
    baylor3217 Says:

    Funny, my ameritrade account now values all my KOG shares at 2.41. I had a GTC order at around 2.44. Guess I set it a bit too high for what I was wanting to trade out of.

  167. 167
    john11 Says:

    Baylor,…specialist is the american stock exchange guy responsible for (this is the funny part..)maintaining an orderly market in a particular stock. In my next life I want to be one..but they’ll probably extinct pretty soon.

  168. 168
    jiveyjr Says:

    you too BOP…good info. you’ve had on KOG and others…

  169. 169
    zman Says:

    John – they make a very good living. As long as they don’t make mistakes.

    Pleased as well with the move in SWN relative to the other gassy names. Gas should have good weather support next week. Odds are we see the HDDs come in better than the original forecast.

  170. 170
    jiveyjr Says:

    yep, I had a very good week…thx Z…

  171. 171
    BirdsofpreyRcool Says:

    HeadTrader making some comments… he said there was a ton of really weird closes on lots of stocks. He points to the quarterly index rebalancing as a driving force on some of the moves. Could explain KOG too. That many shares, when it is such a small part of the NYSE AMEX Composite index, is no big dollar impact to indexers. But, rebalancing has to be done. So it is. At whatever price it takes to get the number of required shares. Don’t ask me any more about this… Not my specialty. But, HT says it explains a lot of the wild moves at closing.

    KOG high print could also be a short, closing a position with as many shares as it too… which just happened to capture up to 2.41. Anyway, kinda fun to watch.

  172. 172
    BirdsofpreyRcool Says:

    “as many shares as it took…”

  173. 173
    zman Says:

    Signs are pointing to a major, perhaps historic snowstorm impacting millions in the Mid-Atlantic and Northeast. Blizzard warning is in effect for Long Island.

  174. 174
    BirdsofpreyRcool Says:

    Oh good! Just in time to celebrate what Obama is calling his “Preliminary, Unprecedented Climate Pact to Slow Warming.” Thank goodness, those guys have their hands on the global thermostat.

    Sorry… can’t help myself. 😉

  175. 175
    zman Says:

    DB upped their target on SWN from $56 to $63 this after noon.

  176. 176
    zman Says:

    Nice call on the rebound in KOG today BOP.

  177. 177
    BirdsofpreyRcool Says:

    thank you, z. The move to 2.41 was due to index rebalancing, i think…. but i’ll take the rebound to 2.30. Didn’t hit my 2.35… but, i didn’t think it would tank to 2.03, either. Really have to admire jivey, sticking his hand out there. But, having Jerome’s input is very very useful in defining buy and sell levels.

    Working together, we can make $$. That is what your site is all about. Kudos!

  178. 178
    zman Says:

    By request, the $10KP II page is updated.

    http://zmansenergybrain.com/subscriber-data/holdings/holdings-wiki/

    $10KP II at $20,500; 75% cash.

  179. 179
    PackMan Says:

    127, surely Obama has nothing to say about that.

    Iran rubbing it in his face during his Copenhagen preening.

  180. 180
    Jay Says:

    Could be good for Cushing…..

    “Dec. 18 (Bloomberg) — U.S. refiners in the Midwest may see crude costs rise after Suncor Energy Inc. said its oil sands production may decline as much as 4.2 million barrels while an Alberta upgrader is repaired.

    A Dec. 15 fire will curb output at one of the company’s two oil sands upgraders north of Fort McMurray, Alberta, by 120,000 to 150,000 barrels a day during repairs that are anticipated to last between two and four weeks, Suncor said yesterday. Synthetic light, sweet, crude, or syncrude, produced by the upgraders is shipped to refineries in the U.S. Midwest, or Padd 2, region.”

    more

    http://www.bloomberg.com/apps/news?pid=20602099&sid=aW_lb_wJkqw0

  181. 181
    Jay Says:

    Re the incursion into Iraq by Iran.

    What a cool way to take some pics to send home and jack up oil prices at the same time.

    “Hey guys, we’re coming over and bringing food. And while we’re there we’ll put up a flag while you guys take pictures of us. Then you can run us out and we’ll take pictures of you for your families.”

    2.5 billion barrel field but don’t have a sense of how it lies relative to the contested area at the border.

  182. 182
    milepost_43 Says:

    Cruise Missiles hit al Qaeda in Yemen……… —

    On orders from President Barack Obama, the U.S. military launched cruise missiles early Thursday against two suspected al-Qaeda sites in Yemen, administration officials told ABC News in a report broadcast on ABC World News with Charles Gibson. http://abcnews.go.com/Blotter/cruise-missiles-strike-yemen/story?id=9375236

    may need to up my Energy weighting…….ex Middle East………..

  183. 183
    Jay Says:

    Iran Confirms Iraq Oilfield Takeover

    TEHRAN – Iran confirmed Saturday, December 19, the takeover of an oil well on the Iraqi border, in the first such incursion since the US invasion, insisting that the field lies on its territory.

    “Our forces are on our own soil,” the armed forces command said in a statement cited by Iran’s Arabic-language Al-Alam television. (more)

    http://www.islamonline.net/servlet/Satellite?c=Article_C&pagename=Zone-English-News/NWELayout&cid=1260258117024&utm_source=rss&utm_medium=rss&utm_campaign=rss

  184. 184
    Jay Says:

    How pirated Nigerian oil is refined. Found this after seeing that 600 illegal refineries had been destroyed. Worth a look.

    http://vision02.com/wp-content/uploads/oil_pirates_1.jpg

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