11
Jan

Monday Morning And All Is Well

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Market Sentiment Watch: Not a lot of market moving economic data scheduled to be released before the oil report this week. That report needs to show an increase in distillate demand or oil will likely be just visiting north of $83. Alcoa (AA) reports later today, officially kicking off earnings season. Energy earnings don't start hitting until later in January with HAL up first the news flow in the sector keeps coming, with MMR/EXXI/PXP finding the treasure at Davy Jones (see below).

 

The Week Ahead:

  • Monday 1/11: No eco data,
  • Tuesday 1/12: Trade balance (forecast -$35B),
  • Wednesday 1/13: Beige Book, EIA Oil Inventory Report,
  • Thursday 1/14: Jobless claims, retail sales (forecast up 0.4%, also 0.4% for the ex autos figure), import price index (forecast 0.4%), November inventories (forecast 0.0%), EIA Natural Storage Report,
  • Friday 1/15: CPI (forecast 0.2% and 0.2% for core), industrial production (forecast 0.4%), consumer sentiment (forecast 73 vs last read of 72.5).
  • Saturday 1/16: January option expiry. Note:  Market is closed for MLK next Monday

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today - WIOWIO, CHK, MMR, IOC
  • Odds & Ends

Holdings Watch:

  • $10KP II:
    • $33,300
    • 41% Cash.
  • The Holdings tab has been updated for the Quick View and the $10 KP II.
  • Friday's Trades:
    • HAL – Added (15) Feb $35 Calls for $0.935 average, with the stock at $33.35. Will come out of my $33 Januaries either today or Monday most likely.
    • ATW – Bought (5) ATW Feb $40 Calls (ATWBH) for $2.00. Stock has best long term earnings profile amongst the deepwater drillers and looks like its about to breakout of a 3 month base to my layman’s technical eye, following some of the larger names higher. Starting small as I didn’t grab it on the recent pullback.
    • HK – Added (20) of the Feb $29 calls (HKNH) for $0.60.

    • HK – Added (15) of the Feb $28 calls (HKBG) for $0.90.

    • Added (3) IOC – $85 calls (IOCAQ) for $2.15 with the stock at $83.

      • ZLT Trades

        Sold All GMXR for 14.41, up 47%

        Sold a piece of my KOG, at $2.55, up 146%

        Bought EXXI at $2.74.

Commodity  Watch:

Crude oil rose 4% in the opening week of the year to close at $82.75. The 12 month crude strip is now trading at $85.61. Crude prices feel somewhat extended at current levels. The last time the strip was this high was October 2008, as oil prices shot lower from their highs that summer. This morning crude is trading up a buck plus to a fresh 15 month high on a continued pull back in the dollar, China, and the following:

  • Rebel Yell Watch: Nigeria. Gunman attacked a Chevron pipeline on Friday, cutting production by 20,000 bopd. This is the first attack in the region of any significance in months and comes as no surprise as former rebels claim the government has reneged on it compensation for arms promises.
  • Refinery Fire Watch: Newfoundland fire takes 115,000 bpd of gasoline production offline.

-

Natural gas rose 3% last week to close at $5.71, in very volatile trading, lifted at first by cold weather, then sliding in the latter part of the week as the forecast for the current week moderated. The 12 month strip is now trading at $6.02 and for E&Ps who have not hedged the rest of the winter strip I think the time will be nigh in the next two weeks as prices move on two big storage numbers. This morning gas is trading off 20 cents on the warmer forecast.

 

  • Weather Watch: -Temps get a bit of a bounce but it's still very cold and with the holiday's behind us, so too is the demand dampening impact of plants being closed during the week.

    • Week Before Last: 239 HDDs which was 28% colder than last year, 9% colder than normal, and yielded last Thursday's 153 Bcf withdrawal report.
    • Last Week: 269 HDDs vs a prior forecast of 264; 201 last year and 224 normal. Last week was easily the coldest of the season to date. This should yield a 200+ Bcf, maybe a 250 Bcf ish number this Thursday.
    • This Week's Forecast: 215 HDDs vs 226 Normal and 255 in the year ago week.

 

 

Stuff We Care About Today

WIOWIO - Why I Own, What I Own ($10KP II) - The quick and dirty skinny.

ATW - Offshore Driller

  • Small rig portfolio (9 rigs), so each unit is significant to the whole
  • EPS growth in the sector is unmatched through 2012 as they add 2  more deepwater newbuilds.

    • 2009: $3.89
    • 2010: $4.14
    • 2011: $4.83
    • 2012: $6.12

  • Near term EPS upside could come from the return of 1 of their warm stacked rigs to service; we should find out about that on the 1Q call on Feb 4.
  • I own some Feb calls here and am likely to slowly add more prior to earnings.

BEXP - Small Cap E&P

  • Drilling big wells in the Bakken, expect more results in the very near term (1 to 2 weeks)
  • The name is a bit lofty (P/ 2010 CF now 16.3x) although the bigger than expected well results will drive NAVs and CFPS higher as the year progresses making valuation downgrades of fleeting significance.
  • I own some January and February calls in the $10 KP II plus some common in the ZLT.

EOG  - Big Cap E&P

  • Traditionally one of the gassier E&Ps, now getting oilier (and doing so faster than its peers) via a number of high profile oil plays (Bakken, Barnett Combo) and quieter plays
  • Valuation: At 7.0x 2010 CFPS of $14.14, the name is not expensive; balance sheet is exceedingly strong
  • News expected on a Three Forks test in its Parshall field, the core of the Bakken.
  • I own some Jan calls but will be long longer dated calls for the quarterly results.

HAL - Big Cap Oil Service

  • North American natural gas comeback play
  • Leverage to a rising rig count in the U.S., especially given the increasingly complex character of current wells (longer horizontal laterals with more stages drilled in hotter, higher temp environments - obviously not the only game in town but it's an obvious one (which is good for options plays) and it still trades at an ever so slight discount to SLB.  
  • Earnings should be out Jan 25th and the company should be able to talk about the light at the end of the tunnel with more confidence this time around.
  • I own some Jan and Feb calls.

IOC - E&P focused on big gas targets in Papua New Guinea

  • just own a small piece here from time to time for news out of the company, expecting a gas condensate test soon (and there has been talking of a gas condensate contract already having been signed on some sites)
  • next driver is likely to be a test of the oil potential in their Elk well.

NFX - Mid Cap E&P

  • Cheap - 4.5x 2010 CFPS, likely to see number rise here this year once they announce their 2010 drilling plans.
  • Waiting on a operations update that historically speaking is likely to be out in the next few weeks.
  • Things they have that could be in there:
    • A hand full (5+) of big Granite Wash wells - the company continues to drill the Oklahoma wash play but opted in the Fall to curtail completion activities due to low gas prices. Good call on their part as gas prices have lifted substantially.
    • Bakken well in the east part of the Rough Rider Area where BEXP recently announced two 3,000+ bopd IP wells.
  • I own some February calls in the $10 KP II and some common in the ZLT.

NOG - Small Cap Bakken Focused E&P

  • Looking for more of the same from these guys, low (bit increasing working interest) participation in good wells in Monrail County, N.D.
  • Valuation - middle of the road, higher than I stated in comments on Thursday but still acceptable, especially given their small size (I can get to a much higher $ NAV on potential reserves on their acreage using fairly conservative metrics.
  • I own some Feb calls.

HK - Mid Cap Gassy E&P

  • Play on return to more stable gas prices
  • "Feels" overdue for an operations update (I'd guess next 2 to 4 weeks and prior to earnings)
  • Will be in the top five gassy growers (in its size class probably top 3) for 2010
  • Balance sheet looks strong
  • Red Hawk results due - this is the Eagle Ford Shale oil play they are working up on a large number of acres in Zavana County, TX.
  • On release of earnings I'm confident they will again beat their production guidance
  • I also do not expect them to announce an offering.
  • I own some February calls in the $10 KP II and some common in the ZLT. 

SWN - Mid Cap (approaching large cap) Gassy E&P

  • Play on return to more stable gas prices, especially leveraged to natural gas at present as they enter the year with far less than their usual amount of expected production hedged.
  • Set up for 36% growth in 2010; putting them at best in class for growth given their size.
  • I own some Jan and Feb calls in the $10 KP II and some common in the ZLT. 

 

CHK's "Monster" Barnett Well - saw a story in the paper over the week and will synopsize -- out of interest

  • The Day Kimbal Hill #A1 - southeast Tarrant County
    • 7,500 lateral (about double the play average) with 16 frac stages
  • October average production 12.97 MMcfepd - a record out of the 14,000 wells drilled in the play to date
  • Estimated recovery: 10 Bcfe, > 4x your average Barnett shale well
  • Estimated life: > 50 years.
  • Estimated revenue $60 mm ($6 gas estimate for 10 Bcf)
  • Cost to drill it: $2.6 mm

MMR Announces Major Discovery At Davy Jones

  • So far, they've drilled to 28,263 feet
  • Have attained logs showing 135 feet of hydrocarbon bearing pay in the Wilcox.
  • Production testing to follow
  • Concept was to find the same kind of large, deepwater type targets in shallow water. This would be cheaper to drill and cheaper and quicker to hook up to production.
  • Nutshell: Big, big news for MMR (32.7% working interest), EXXI (15.8% WI), and PXP (27.7% WI)

 

IOC - Announcing Gas Condensate Test at Antelope 2

  • Positive, details to follow

 

 

Odds & Ends

Analyst Watch:

  • CVX and PBR - raised to Buy at Citi
  • FRO, NAT, and OSG upped from Underperform to Buy at Jefferies

Interesting Reading Watch:

 

247 Responses to “Monday Morning And All Is Well”

  1. 1
    zman Says:

    Jumping out for coffee, back by 9 est.

  2. 2
    elijahwc Says:

    Drive by research
    ATPG: Capital One Southcoast says: We are maintaining our ADD rating for ATPG while increasing our target price by $2 to $23 by assigning an additional $1 of value to Telemark and $1 to the company’s infrastructure assets (mainly Innovator and Titan). ATPG has invested an estimated $1B in its Innovator, Titan & Octabouy floating production facilities, and we are increasing our risked valuation for these assets to $345MM from $275MM previously. Telemark production start-up timeline: Last week, ATPG announced that the topsides had been installed and the mooring lines were connected for the Titan at its Telemark hub with 1st production still expected by late 1Q10. Even if the production start-up should slip into 2Q10 (we model March 2010), we don’t view this as a big issue, since total company production is still expected to more than double by 2H10 (from 92 MMcfe/d in 3Q09). Recent insider selling: The ATPG CEO sold 443K shares last week (~ 7% of his holdings) at an average price of $20.22/sh. We expect this news will weigh on the stock near term but still believe our new price target will be achieved over the longer term. Still, we are not recommending that investors aggressively buy ATPG at current levels, as our new $23 target offers a modest 14% upside and we see greater upside potential in ME (+24%). Impact of higher oil prices: ATPG is very levered to oil prices, given that liquids represented 56% of production in 3Q09 and is expected to go higher once Telemark comes online later this year. Our target price is based on $70 oil this year and $75 oil for 2011+. Each $5 increase in our 2010+ oil price deck increases our NAV by ~ $2/sh.

    Meanwhile

    ATPG: Chm Bulmahn registers 870m shrs and sells 443m @ 20.22. Puts him at #3 on the insider selling hit parade for last week.

    And

    MHR: A Gary Evans sighting @ Pritchard (get used to this as the I-bankers know a meal ticket when they see it). Magnum Hunter Resources Corp. (MHR-$1.89) – Raising rating from Neutral to Buy and price target from $2.00 to $3.50; NAV is $6.00 As a result of recent acquisitions, MHR will be well-positioned in three of the most prolific areas of the country; the Marcellus and Eagle Ford Shales as well as the Williston/Bakken in North Dakota. Upcoming events during H1 10 that could be catalysts for the stock are the company’s first horizontal Eagle Ford and Marcellus wells. Also, look for a tripling in MHR’s Eagle Ford acreage in the near-term to >20K gross acres (50% WI). The current position is ~8,400 acres in Fayette and Lee Counties, TX and we expect the company’s footprint to expand to other counties. The Eagle Ford acreage along with 47K net West Virginia Marcellus acres in Tyler, Pleasants, and Wetzel Counties, are very meaningful positions for a company with a market cap of only $100 MM.

  3. 3
    elijahwc Says:

    More drive by research:

    Weeden downgrades Diamond Offshore (NYSE: DO) from Buy to Hold. Price target lowered to $110.

    Weeden upgrades Ensco International (NYSE: ESV) from Hold to Buy. Price target $53.

  4. 4
    elijahwc Says:

    Pritchard upgrading NOV on the basis of “mullets”?????

    National Oilwell Varco, Inc (NOV-$47.11) – Upgrading to Buy from Neutral and increasing price target from $45 to $60. One customer stated that “2010 will be the year of the top drive,” while others stated their clear plans to spend on rig upgrades. Also, in the NOV breakout session a significant number of attendees (~10) were not aware of the Arctic rig that was being planned and the fact that NOV should receive a $300 – $400 million order in the next quarter or two. We have heard from various energy savvy investors that most of the positive news is in the stock, however, we do not believe that generalists and retail investors are aware of all of the upside in orders that we should see in 2010 and beyond. NOV had its usual discussion on acquisitions, but did not comment on when it was going to buy one of the major subsea players…guess we have to still wait and see. However, with orders looming and further acquisitions to occur we believe that NOV could trade close to 20x our $3.08 2011 earnings estimate, within the historical average range as we look for upward revisions as well based on order flow. However, we do not expect NOV to give order guidance for 2010, which some feel may hurt the stock at the quarter — keep in mind that NOV has historically not given that guidance and only did so last year due to the mass uncertainty that was in the market. We do not view not giving guidance as a negative, but as less knowledgeable investors may feel different, this may lead to a pullback at the quarterlyannouncement.(Uhlmer)

  5. 5
    zman Says:

    Congrats to BOP and REEF on the Davy Jones! Reef continues to hit with IOC as well.

  6. 6
    zman Says:

    EXXI outperforming MMR and PXP on the news nicely based on current bids. My sense is we get the opening pop and mid morning pullback with a close at HOD.

  7. 7
    nifkin Says:

    CFTC meeting on Thrsday…any thoughts? http://www.cftc.gov/newsroom/generalpressreleases/2010/pr5771-10.html

  8. 8
    jiveyjr Says:

    great work on EXXI…

  9. 9
    BirdsofpreyRcool Says:

    MMR/PXP/EXXI going to have an impact on a few others today… RDC for one. Note from the MadWms group —

    MMR PXP & EXXI Davey Jones, S Marsh Island 230, logged 135 net ft in the Eocene pay on a 20k acre structure. Seems to be at least a TCF discovery and may be much more. Co. commented that this may be one of the largest discoveries on the shelf in decades….RDC will be the major beneficiary of this from a service stand point due to their fleet of Tarzan and Gorilla rigs, these were designed for this kind of work.

  10. 10
    skimo Says:

    BOP, thanks for your double down ideas on EXXI Friday. I needed to get out of another position and sort of piggybacked the idea(without reducing KOG). Z, thanks for all your analysis. This board rocks!

  11. 11
    zman Says:

    adding to #9, they have more targets, their understanding of the Wilcox (and perhaps the Cretaceous further down hole) is obviously what they thought it was, correlating on seismic and to deepwater wells. Means good things for the next drills at Blackbeard and Amazzo.

  12. 12
    reefguy Says:

    ioc- second dst at 11 mcfpd- going to find the exit

  13. 13
    BirdsofpreyRcool Says:

    EXXI was worth $4 without any contribution from Davy Jones or Blackbeard. DJ should add $2 (if the find is a Tcfe or more; which is conservative)… so, raising the near-term PT to $6. Should be a nice day.

  14. 14
    zman Says:

    Looking to come out the rest of my Jan HAL today, holding the new FEBs for awhile most likely.

  15. 15
    BirdsofpreyRcool Says:

    Hearing there should be more (positive) announcements coming from MMR re: The Deep Prospects. Might be something out about upping the activity level at Blackbeard.

  16. 16
    zman Says:

    BOP – I was thinking about 1 Tcfe for talking purposes as well could be higher, this was a re entry after all and they may find a more pay down hole, plan as of last Friday was to go ahead to 29K feet.

    If its a T, then their 13% NRI would give them 130 BCFE, not to shabby on current reserves of 456 Bcfe total company proved from their last presentation.

  17. 17
    BirdsofpreyRcool Says:

    skimo — glad you were able to “piggyback.” But, you make your own decisions… just happy this one is working out for you!

  18. 18
    BirdsofpreyRcool Says:

    z — thing is… reading the PR, they didn’t encounter the gas/water contact in the well… so, they don’t know how big this reservoir is yet (in a “good” way). Very positive stuff.

  19. 19
    1520sbroad Says:

    Z – always good to see the WIOWIO. Reminds me of all the other good plays out there.

    Ran across this name over the weekend re: frac fluid debate/ fra legislation with particular interest in the Marcellus and NY/PA water permitting. ESPH is the ticker – Ecosphere Technologies. Tiny stock still in VC/ramp up phase to some degree. Wondered if you or others would take a look from an engineering/completition standpoint. I went thru their whole site and some of their ideas seem to make a lot of sense. Also interesting that SWN ordered and has likely taken delivery of some of their technology.

    From an investment standpoint this is pretty far off my radar given it’s size but the technology is intriguing.

  20. 20
    zman Says:

    ZTRADE:

    HAL – Sold the (25) Jan $33 Calls (HZLAT) for $1.70, up 577%, iwth the stock at $34.60. I continue to own the Feb calls taken last week.

  21. 21
    skimo Says:

    BOP, I was already leaning that way! Just needed that extra nudge!

  22. 22
    zman Says:

    BOP – roger that, full to base = good.

  23. 23
    zman Says:

    IOC not reacting to the new news as expected. When that falls back I imagine it will fall back hard, as the TA types are all over it. I went in small on Friday, not adding on the dip here.

  24. 24
    BirdsofpreyRcool Says:

    z — EXXI trading as you predicted, so far. But as the information is absorbed, I think the stock will close at the the HOD. I have to admit, DJ came in a lot more positive than I thought. With positive implications for the other deep wells EXXI is in too.

  25. 25
    zman Says:

    NFX and SWN looking stronger here. Unlike the positioning of most of the E&Ps, you’ll note SWN hit an all time high this morning. NFX looks to me like it is setting up for a breakout from this little elevated base or flag. I expect news there before too long.

  26. 26
    zman Says:

    BOP – I did say end of day at HOD didn’t I?

  27. 27
    BirdsofpreyRcool Says:

    z — yep. Don’t know if it actually ends up that way… but, it should!!

  28. 28
    zman Says:

    Market feels stuck in neutral, today and tomorrow, not a lot to chew besides auctions and a fed member speech.

  29. 29
    zman Says:

    I’ll have a revised catalyst list out tomorrow.

  30. 30
    West Says:

    Andy, Idid not see any deal that would meet our quailification happen for Merger Monday. Local CXO bought private Terrace Petroleum and another private co ‘s Wolfberry production for about $ 260 million. Let Z know what you want and I will settle up with him. THX

  31. 31
    zman Says:

    West – BRY did a deal in the Wolfberry.

  32. 32
    zman Says:

    Mulling an MMR trade. Had hoped for a pullback but when you start applying this good news to other things they have in the ultra deep portfolio yet to drill or to retest with new knowledge, well, the stock just won’t stop running. Hopefully that statement will stop it momentarily, lol.

  33. 33
    BirdsofpreyRcool Says:

    MMR — not an insignificant short position in the stock… showing 12.3mm short on 69.5mm float (on BB). That is turbo-charging the run today, I think. Not a good day to be short MMR….

  34. 34
    BirdsofpreyRcool Says:

    bill — didn’t you buy some calls on MMR recently?? wow-sers, man!

  35. 35
    milepost_43 Says:

    Davy Jones geology….ran across this thread on IV MMR MB….Geologist was my 2nd college choice…always enjoy reading this type of info…just didn’t have enough EXXI BUT their 13 10s just keep on giving–$956.50..

    http://www.investorvillage.com/mbthread.asp?mb=1520&nhValue=1001&nmValue=1100&sync=1&tid=8413414&showall=1

    Some Comments on the Geology and prospects for “Davy Jones”

    In deep water and ultra-deep Gulf of Mexico (GOM), discussions of the geology of the region should start with the salt – specifically with the Louann salt. The sediments that the oil in the GOM is sourced from are mainly sediments on top of the Louann salt.

  36. 36
    Jerome Blank Says:

    BEXP…I noticed a few interesting technical developments in BEXP over the weekend…of course big news if it develops can change things in a heartbeat…I normally don’t comment on indicators as such, but the daily MACD, OBV and RSI were all showing interesting material bearish divergences as to price…at the point that BEXP hit its high price back on 1/6…the indicators could not reach new highs and started to diverge, you usally like to see the indicators follow the price higher…just mentioning it to keep an eye on BEXP, if you have good gains, consider your profit stops in case this is a harbinger rather than a red herring..

  37. 37
    West Says:

    Z #31 do u have link?

  38. 38
    reefguy Says:

    ioc- off 10%

  39. 39
    zman Says:

    Thanks JB, I use OBV too and noticed the same yesterday when running through my WIOWIO.

    Market looks a little cautious here in front of AA tonight.

  40. 40
    West Says:

    I got it thx. Permian Basin continues to consolidate with a lot of acreage held by independents that is being snapped up .

  41. 41
    BirdsofpreyRcool Says:

    milepost — those EXXI 10s are beautiful things. It doesn’t get much better than that, investing in high yield bonds. Sure, the stock has more upside — in the long run — if something works out. But a nice coupon stream is great downside protection.

  42. 42
    zman Says:

    http://finance.yahoo.com/news/Berry-Petroleum-to-buy-apf-260672001.html?x=0&.v=1

  43. 43
    ram Says:

    JB – have you looked at NOG lately? Thanks for the BEXP info.

  44. 44
    zman Says:

    Reef – Re IOC – not good enough good news I’d guess people want the oil test. My 3 contracts going to be scuds but that’s why I went small, that and the chart as JD was warning me about the potential for a big pullback there.

  45. 45
    TEXWS6 Says:

    Ecosphere:

    Pie in the sky IMO. We looked at it for several cases, but we found out that we can just blend high TDS frac/flowback water with fresh water. The problem with all of these companies that make a great piece of technology (recylce water, multi-lateral, etc) is that they price it high enough that it doesn’t make sense. I understand that quite a bit of R&D goes into these types of technologies, but what about the marketing?

  46. 46
    1520sbroad Says:

    #45 – Thanks Tex – is the price for Ecosphere technology prohibitive? I couldn’t find any info on thier site about what it actually costs to use their technology. I did put a call in to them and haven’t heard back yet.

  47. 47
    zman Says:

    MMR way into “strong gets stronger” mode. People are likely looking at the weekly chart and thinking it could run easily into the mid 20s.

  48. 48
    zman Says:

    TISDZ – another way to play the ultra deep on this news.

  49. 49
    bill Says:

    34,

    was lucky to have calls on pxp and mmr. Sold them today and bot some more exxi.

    CRT research had 6 didnt it? Was that with or without Davy Jones

    Aside, from the gom plays, I had pxp because i wanted to play q4 earnings, mmr was too cheap in the 7’s.

    Nibbling at rosebud’s rose march 20 calls, lol

  50. 50
    BirdsofpreyRcool Says:

    CRT’s $6 PT on EXXI did include $2 from 1Tcfe contribution from either DJ or Blackbeard. But even without today’s news that DJ is officially a “discovery,” EXXI is worth $4 from currently ramping production. So, it was undervalued before the DJ news.

  51. 51
    zman Says:

    Nice job bill.

    Citi upped their long term oil price deck from $65 to $80.

  52. 52
    zman Says:

    MMR to tries at 13.40+ repelled, maybe we get a little pull back here. Thinking it goes higher in the medium term on this news and the prospect of a coming flow test and many more presentations where Jim Bob say “And, if you thought Davy Jones was good, wait ’til you see what we gonna drill next …”

  53. 53
    BirdsofpreyRcool Says:

    Just got the Macquarie update on EXXI… they have a 12-month PT of $4.75 and an “Outperform” rating (showing “current” stock price of $2.63… sheesh). Thing is, they go on to say that $4.75 PT does NOT include any contribution from Davy Jones.

  54. 54
    elijahwc Says:

    Some folks over on Barron’s Online out in support of BOP’s $6 target on EXXI:

    CRT Capital Group

    WHILE STILL TOO EARLY TO BE definitive, in our view, early indications are positive for McMoRan Exploration’s (ticker: MMR) high profile Davy Jones [Gulf of Mexico] gas prospect. We regard Energy XXI (EXXI) shares as having the most material exposure to the Davy Jones prospect.

    Details released so far encourage us that Davy Jones drilling will create value from McMoRan’s ultra-deep exploration portfolio, supportive of our Buy ratings on McMoRan and (drilling partners) Energy XXI and Plains Exploration (PXP) shares.

    We have a $15 target for McMoRan, and a $6 target for Energy XXI. In our view, the market is paying up for some portfolio success in McMoRan shares now, but none in Energy XXI shares. Plains Exploration also has a stake in Davy Jones and additional McMoRan prospects, however, while supportive, positive results at Davy Jones would be less material for Plains than McMoRan or Energy XXI.

    McMoRan’s release mentions the idea of appraisal drilling updip, suggesting that McMoRan thinks additional sands would be gas-bearing in locations where the same sands are at shallower depth (think up the hill, around 1,000 feet shallower). On the other hand, if Davy Jones is ultimately a commercial flop, we see more downside to McMoRan shares which already reflect some exploration success, than in Energy XXI which does not even fully value existing proved reserves, in our view.

    McMoRan’s drilling efforts at Davy Jones are testing the idea that at great depth, reservoirs from the Miocene era and earlier in large structures still have good porosity and permeability, which could lead to high production rates and material reserve volumes, likely gas.

    A success scenario for McMoRan’s ultra-deep portfolio could involve development of several trillion cubic feet of gas reserves, drilling wells for around $100 million each, with reserves of 150 billion cubic feet (bcf) per well, which would be sector leading finding costs (around 66 cents per million cubic feet [mcf]), accompanied by very high production rates and corresponding low production costs, and multiple reservoirs encountered in each well.

    Results from Davy Jones will help inform the partnership’s next steps for McMoRan’s existing apparent gas discovery at Blackbeard. If targeted Eocene sands are good at Davy Jones, we expect the McMoRan partnership to deepen or redrill the Blackbeard oil field to similar objectives.

    –Duane Grubert
    –Gray Peckham

  55. 55
    bill Says:

    ty for the info bop so 4 without and 6 with it.

    Does this make them or mmr or pxp better targets now

    The gassy names seem to be declining with ng off. Looks like everyone is disounting this weeks 225 ++ withdrawal.

    As we said last week, this has put a good dent in the y-o-y surplus numbers

  56. 56
    zman Says:

    Today looks like a buyers strike in the group and in crude. No interest in taking more risk at the open of earnings season.

  57. 57
    BirdsofpreyRcool Says:

    For anyone keeping score, Duane Grubert is a very very good E&P analyst. He used to be a geologist with Unocal… he knows his stuff and he follows some unusual names. Always worth reading anything he has to say, imho.

  58. 58
    BirdsofpreyRcool Says:

    lol — “no one wants” shallow shelf acreage and high-decline rate production… so, don’t think EXXI is a target. Au contraire… i am hoping that EXXI can pick up shallow-shelf acreage from other players looking to exit those assets.

  59. 59
    zman Says:

    After tossing the HAL Jan calls and having BEXP sink to the lower $14s, I have only 3% exposure to January calls as we enter expiry week. February by the way is one of those sort of rare 5 week periods between expirations. $10 KP II cash now stands at 59%.

  60. 60
    zman Says:

    BOP – MMR and EXXI – now that they’ve shown it can work you can bet they are targets of big cap E&Ps and Majors.

  61. 61
    BirdsofpreyRcool Says:

    #60 — rats.

  62. 62
    zman Says:

    NG down 30 cents, group not liking it.

  63. 63
    ram Says:

    Buyers strike or rotating out of energy?

  64. 64
    zman Says:

    No where near the volume to imply such a move.

  65. 65
    BirdsofpreyRcool Says:

    Leon Cooperman on CNBC… gonna talk about his stock picks next. Should be worth listening to. (Wonder if he will mention his recent, large position in EXXI??)

  66. 66
    BirdsofpreyRcool Says:

    What I like about Mr. Cooperman — he is one of the few large stock managers who really “gets” the interaction of debt and equity and how that affects the valuation of a stock. A lot of people talk that talk… but few really get it.

  67. 67
    DrLink Says:

    Would this be a correct take on IOC? “Shorts here want you to believe that the flow rate dropped from 705 to 11mmcf.
    Consider that the choke at the big flow was 4,5 inches, today only 0,5 inches.
    This DST is not about establishing flow rates of gas,it is about understanding the permeability, deliverability of condensate. Most of the gas zone is now behind pipe and should not produce gas, so now the tests are done on the condensate heavy zone. The lower zone of the open hole, where the condensate is expected to increase again, has NOT been tested yet.
    So the news gives the Shorts the excuse to drive the stock down and cover, and it gives us an excellent entry point again.

  68. 68
    choices Says:

    BOP-thanks for the cmt on NGPC-could not get back to you on Fri-it popped up the last several days but is off 3.6%-yield is lower than PSEC but it appears to be a much more focused finance group managed by experienced oil and gas pro’s.

    I think I will wait for awhile to see what settles out.

    Thanks again. congrats on EXXI and thanks for EXXI 10’s. IB board has them @99 last trade but no bid/ask.

  69. 69
    zman Says:

    ZTRADE:

    MMR – Added (20) February $15 Calls (MMRBC) for $0.60 with the stock at $12.65. See today’s post for thoughts here.

  70. 70
    choices Says:

    Has anyone switched over to Windows 7-I use Vista for trading platforms and I’m not comfortable with it at all-my old XP worked better.

    Interested in any experience on Windows 7.

    Thanks.

  71. 71
    zman Says:

    DrL – I can’t imagine they want you to buy off on that concept but maybe so. I think its buy the rumor, sell the news action that has gotten out of hand today. If you bought (recently) at $50 and see it down $6 you say, “that never happens” and if you are a retail guy you punt. If you are a retail broker you suggest “locking in” etc and so the stock gets a downward move like this, especially with a chart like that. Kudos to JD for warning me about the chart.

  72. 72
    BirdsofpreyRcool Says:

    choices — thank you for the updated quote on those lovely EXXI 10s.

  73. 73
    zman Says:

    Choices – last I heard Eli had and liked it better than vista. Eli?

  74. 74
    bill Says:

    pxp up only 2 % and they have the largest interest

  75. 75
    choices Says:

    Z-did you get anything from SD last week-I lost track on whether they presented/or PR’d and nothing on their web site-did anything come out on SD’s ability to service debt in 2010?

    Thanks.

  76. 76
    bill Says:

    scott brown (r) a no name has pulled even with Coakly ( D) for the run off for Ted Kennedy senate seat in liberal mass. Special election next Tuesday.

  77. 77
    bill Says:

    I havent seen anything new from sd but they usually have an operation update first week of feb.

    they just closed an acquisition from fst which makes them more oilier

  78. 78
    zman Says:

    Choices – I saw nothing on them last week.

  79. 79
    bill Says:

    accuweather on warming trend

    http://www.accuweather.com/news-top-headline.asp?partner=accuweather&traveler=0&date=2010-01-11_16:25

    says it only brings temps up to “normal”

  80. 80
    zman Says:

    Watching WLL come in pretty sharply. Waiting.

    Bill – Yeah, I know. Bastardi hinting that Feb could be a cold one.

  81. 81
    zman Says:

    Re 7 – I don’t see big fallout from that meeting. If they get it passed without making exceptions for producers and syndicates who help producers hedge that would be, um, stupid.

  82. 82
    zman Says:

    LNG Watch: Send out volumes of 3.5 Bcfgpd last week, up 2.8 bcfgpd from year ago levels. That makes some sense given prices, but is more than gas wants to see in here, definitely spooking the stocks a bit.

  83. 83
    bill Says:

    then this guy says we get extreme cold again early feb

    http://www.accuweather.com/mt-news-blogs.asp?partner=accuweather&blog=Anderson&pgurl=/mtweb/content/Anderson/archives/2010/01/clues_to_the_next_several_weeks_2.asp

  84. 84
    bill Says:

    alot of momentum traders coming in and leaving names

    today everyone is running away from gassy names

    I think they come back when people realize progress vis a vis the y-o-y numbers (i hope)

  85. 85
    choices Says:

    CLD mentioned last week on coal-IPO in Dec, Credit Suisse rates it outperform today-not sure if they were an underwriter.

  86. 86
    elijahwc Says:

    Re: Windows 7. “Choices – last I heard Eli had and liked it better than vista. Eli?”

    Choices it’s a massive improvement over Vista. A literal quantum leap. The only problematic item ironically is that my quote vendor Thomson One has issues with it. Otherwise it is a wonderful and elegant solution. Go for it.

  87. 87
    zman Says:

    Bill – they appear to banging out of some gassy names but still on lowish volume. I’m watching SWN for an add but I’m going to be patient this week unless things just get whacked.

  88. 88
    zman Says:

    Eli – Thomson One has problems with it because that is one cobbled together POS software package.

  89. 89
    bill Says:

    how many shares does cooperman own re exxi

    he didnt mention the name or any names for that matter

  90. 90
    choices Says:

    Thanks, Eli.

  91. 91
    bill Says:

    evil banks have replaced evil oil companies for the moment

    i guess we only love bankrupt companies, lol

  92. 92
    tomdavis12 Says:

    Z: Will you have any access to the panel discussions at the GS conference this week?

  93. 93
    bill Says:

    exxi is running back up near hod

  94. 94
    zman Says:

    Tom – I doubt it. I believe there is another conference this week as well, checking.

  95. 95
    zman Says:

    ZTRADE:

    SWN – Added (10) SWN $50 February calls for $2.35 with the stock at $49.57, off nearly two on profit taking in natural gas names.

  96. 96
    Jerome Blank Says:

    Re: #48…hi ram…sorry for the delay…from here, NOG goes back into o’s on a print of $12, this corresponds with a decent confluence of support at the daily 20 SMA also at about $12…the thing that’s tough about NOG right now, is that there is really no great place to put a stop, a lot of the close points all look like good places to buy, so if your bullish on the stock longer term, it might be better to consider riding out any short term pullbacks…if NOG reverses back into o’s it will be then easier to set up a tighter stop loss strategy…

  97. 97
    zman Says:

    CHK on the tape saying it is seeking no more big JVs. Fears a double dip in gas prices the economy falters, fails to recovery, says they’ve been adding to hedges.

  98. 98
    zman Says:

    Thanks JB for your continued chart reads, that’s a help.

  99. 99
    elijahwc Says:

    CXPO Crimson Exploration announces agreement to sell non-core South Louisiana assets (4.38 -0.10)

    Co announced that it has closed the sale, to a private company, of certain of its operated and non-operated working interests in various producing wells, related production equipment and associated acreage in Allen, Cameron, Calcasieu and Jefferson Davis parishes in southwest Louisiana. The contracted sales price for these non-core properties was approximately $7.8 mln, with net proceeds of ~$7.3 mln, after adjustment for oil and gas operations for the period between the effective date and the closing date and other normal closing price adjustments. The purchase and sale agreement provides for up to an additional $2.4 mln in gross proceeds for the sale of additional properties for which various consents are still being solicited. Under the agreement, co has 180 days from the closing date to obtain those consents. The sale of these assets represents a strategic exit from all operations in South Louisiana and removes ~$5.2 million of our total recorded asset retirement obligation at September 30, 2009.

  100. 100
    ram Says:

    JB thanks for the info. Please no apology. Only Zman should apologize for something, not sure what though.

  101. 101
    zman Says:

    Analyst Watch:

    Dahlman – WLT, MEE, CNX started at Buy.

  102. 102
    zman Says:

    ZTRADE Addendum. I see those SWN calls were executed at 2.33, not 2.35.

  103. 103
    zman Says:

    Re 100. Don’t harsh my mellow, sunshine.

  104. 104
    elijahwc Says:

    Bill on EXXI: Leon Cooperman filed 13G for 5.5% ownership around 12-22. Got it on the deal as best I recall. He did mention that it was one of his largest energy positions prior to the stock pick segment on CNBC. I believe it turned the stock off the 3.22 level.

  105. 105
    elijahwc Says:

    If one wants to lever a small psn today or tommorrow in EXXI does anyone here have any insight into what might constitute proper levels short term? I’m dumbfounded.

  106. 106
    bill Says:

    Oh ok, i missed that, ty

  107. 107
    1520sbroad Says:

    BOP – did Cooperman have anything interesting to say on CNBC? An interesting guy – very cash flow savvy. I remember being on a conference call with a REIT that he had a position in – he asked some very pointed questions. Sounded like a fixed income analyst — coverage this, coverage that…

  108. 108
    zman Says:

    Eli – re 105 – will try to work something up. I think % moves on the little names are pretty useless in here and the probably category just shot markedly higher for them so it could continue to run a bit, with the reset button being pushed at the open of a new day. I got enough in my 3 buys of the name to keep me happy for now.

  109. 109
    BirdsofpreyRcool Says:

    1520s — i had to run out to a mtg… just got back…

  110. 110
    zman Says:

    Reef – IOC half off its lows.

  111. 111
    dij Says:

    IOC also through its resistence at 75.7.
    78 would be next.

  112. 112
    zman Says:

    IOC = one crazy trading stock.

  113. 113
    BirdsofpreyRcool Says:

    MMR — i missed the conf call… was anyone on it who could summarize?

  114. 114
    zman Says:

    BOP – missed the start, listening to replay now.

  115. 115
    zman Says:

    …actually, listening to the call, its still going on.

  116. 116
    BirdsofpreyRcool Says:

    stuck on some calls right now… will have to catch replay. thx

  117. 117
    zman Says:

    BOP – he’s just talking about being real careful with a sanitary completion, starting low and coming up hole over time, doesn’t want to botch the well long term by perfing different zones to see what they can produce. I’m sure he said when they will test it but I was not on the call then.

    Analysts very congratulatory.

  118. 118
    Jerome Blank Says:

    Zman, West…I looked at the Stockcharts open forum area…you can post comments right on the charts including P&F, and it looks like you can e-mail or page copy the charts if you’re a memeber…do you think folks would be interested in taking a look at these comments/charts…would anyone “vote for me”…..

  119. 119
    zman Says:

    Listening to this call, very interesting credibility call for Jim Bob. He’s showing off all his geology skills.

    Also watching IOC now down 4.00, was down 11+ a little bit ago.

  120. 120
    ram Says:

    I’ll vote for you.

  121. 121
    jiveyjr Says:

    it takes a lot of work to post those charts each evening at stockcharts, but I certainly appreciate people doing it…I would vote for you and follow your work Jerome

  122. 122
    bill Says:

    on 119

    are you talking a new mmr call or the call on 12/30

    if a new one can you provide a link or phone number

  123. 123
    zman Says:

    MMR Call

    Saying the possibility of the quartz gains being crushed is a “fantasy”, even at these depths (pressure), so the porosity is maintained.

    To develop the 20,000 acre structure here, they think it will take 10 wells to fully develop.

    They think there may be another 7,000 acres downdip from their current well.

  124. 124
    zman Says:

    Been going on for 1.5 hours, I missed the start:

    http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=65638&eventID=2674077

  125. 125
    zman Says:

    Jerome – you got my vote!

  126. 126
    bill Says:

    jeeZ, im on their site and dont see it…HELP

  127. 127
    Jerome Blank Says:

    Re: #120, #121…ram…jiveyjr…thank you…I was a bit concerned about the work involved, especially if you try and do it right…it’s like a blog, need to keep it updated all the time…after a 14 hr day, you get a bit tired….

  128. 128
    bill Says:

    ty sir ive got it

  129. 129
    Jerome Blank Says:

    RE: #125, Zman…thank you

  130. 130
    zman Says:

    Call about to end, will start replay as soon as it’s available but he definitely hung out the potential for Davy to be bigger than at last mention.

  131. 131
    zman Says:

    Waiting on replay. Earnings in MMR out next week.

  132. 132
    1520sbroad Says:

    Jerome – i’ll follow what you put up on stockcharts. Your work has been very helpful.

  133. 133
    Jerome Blank Says:

    KOG base flagging right at the topside trendline on the daily chart…we’ll see if this holds…dialing down to the 30 min, I’d like to see $2.55 act as support…

  134. 134
    Jerome Blank Says:

    RE: #132…1520sbroad…thank you…

  135. 135
    zman Says:

    … and part of me wonders if there is another equity deal here around the corner. Last was six months ago but the balance sheet should be in really good shape. Sept 30 saw cash of $225 mm and an untapped revolver, more recent update, I’d guess they wait for another pop on the stock from a production test but it’s just a guess. They had expected at the end of the 3Q to see their borrowing base reduced due to low prices, this news and better O&G prices may reduce the size of any reduction.

  136. 136
    tomdavis12 Says:

    JB: Got my vote

  137. 137
    kiaora Says:

    Jerome….please post link to the charts

  138. 138
    Jerome Blank Says:

    Re: #136, tomdavis…thank you…I’m really going to consider it…can we post charts on this site?

  139. 139
    zman Says:

    We could have a link to your stockcharts site.

  140. 140
    andy Says:

    jb – if u don’t wan’t to go to all the trouble of stockcharts that’s ok, you’re doing a great job here!!! keep it up. thks

  141. 141
    Jerome Blank Says:

    Re: #137, Kiaora, thanks much…I appreciate the interest…

  142. 142
    sunshine Says:

    I’ll vote for you to.

  143. 143
    Jerome Blank Says:

    RE: #140, andy, I appreciate that…sunshine…thank you, Zman #139, going to give it serious consideration, would be fun to incorporate it somehow…

  144. 144
    zman Says:

    Oil easing 20 cents into the close of NYMEX. NG ending down 30 cents.

  145. 145
    zman Says:

    Still no replay available for the MMR call, will let ya know if I glean anything from it once it is available.

  146. 146
    zman Says:

    TexasWest, since you a response email.

  147. 147
    zman Says:

    Bill – Your PXP is climbing slowly. Are they in future MMR prospects. My read on today’s action is that they are much bigger in terms of reserves so despite their bigger working interest than that of EXXI, the find means less in terms of impact on their reserves and production than it does for the smaller companies. It may just be an opportunity to get PXP before it really moves on the news.

    So far so good on MMR as it moves closer to its HOD as the day winds down.

  148. 148
    Patipati Says:

    Jerome, I am into your charting skills!

  149. 149
    DrLink Says:

    What Roller Coaster to the Max
    Here’s Morgan’s Stanley IOC’s report —

    – Abstract
    We are raising our price target on IOC to $115 from $80. We are
    increasing several assumptions in our valuation model based upon recent
    results and our 2010 outlook. In the past three months IOC has delivered
    record well results, exceeding even bullish expectations; the market for
    resource acquisitions has improved; IOC’s planned LNG facility was approved
    by PNG; and IOC signed a “key terms” agreement for its planned liquid
    stripping facility with Mitsui. The latest evidence of the transformation is
    in today’s drill stem test in the condensate zone of Antelope-2, that
    reported flow rates of 20.7 bbls of condensate per 1mmcfd of gas (+15% from
    prior tests). Overall, we see further upside in share price as the company
    transforms from an early stage frontier exploration story to a global
    hydrocarbon producer continues in 2010.

    – Abstract
    Two primary changes in our assumptions cause us to raise our target:
    (1) an increase in the assumed price per mmcfe in the upstream sell-down
    process (we are assuming a sale price of $1.63 per mcfe for 6.7Tcfe, still
    bellow the $1.74 per mmcfe for comparable regional gas transactions) and (2)
    a reduction in our risk estimates for both the upstream assets and our
    target price discount to our NAV. We are also increasing our base, bull
    ($165), and bear ($55) cases.

    – Abstract
    Attractive risk/reward for 2010: We see 40% upside in our base case
    and almost 3:1 risk/reward in our bear-to-bull cases. Our bull case
    includes value for an oil discovery, where we expect results in 30+ days.

    – Abstract
    Material 2010 catalysts should drive commodity- independent share
    price outperformance: (1) test of the oil leg in mid-February, (2) potential
    signing of liquids stripping facility agreement in 1Q10, (3) resource
    upgrade in the year end reserve report (1Q10),
    (4) successful completion of the upstream sell-down and LNG partnership
    process in 1H10, and
    (5) exploration results in new target structures (2H10).

  150. 150
    jy Says:

    Rumored (good source) cost on Davy Jones well thru 1-8-2010 = $75,000,000

  151. 151
    zman Says:

    jy – re 150, not surprising, still cheap compared to a deepwater, deep well once you taking into account the timing to production and the lower cost of the development program and facility.

  152. 152
    zman Says:

    Anyone see a reason for SJT (the San Juan royalty trust) to be up 7% today? Seems odd, maybe a sellside recommendation?

  153. 153
    zman Says:

    MMR = wow. Up 55% on those calls today, strong. Holding.

  154. 154
    zman Says:

    Watching NOG for an add to my Feb position.

  155. 155
    bill Says:

    147

    i sold the calls on pxp this morning and bot half of them back when the stock was only up 2 %

    I agree, lesser impact, but i think it merits more than a measly 3 % lol

  156. 156
    bill Says:

    pxp is also in the MMR Blackbeard I think 47 %

  157. 157
    zman Says:

    Bill – I am trying to figure out how much, but 3% seems pretty light. Do you know which other projects in the ultra deep shelf they have an interest in with MMR, if any? Re listening to the end of December MMR call.

  158. 158
    zman Says:

    re 156 – Thank you. Need to take a harder look at PXP.

  159. 159
    bill Says:

    In the past, Flores has monetized his gom discoveries.

    I dont think its imminent but they also have another gom discovery to develop (Shell)

  160. 160
    BirdsofpreyRcool Says:

    little birdie suggesting that PXP and APC talk about their Lucius discovery tomorrow… people not focusing on that well…

  161. 161
    RMD Says:

    JB, you have my vote.

  162. 162
    zman Says:

    I wrote in the post HAL kicks off earnings season but in fact SLB is taking over with the energy kickoff after 2 quarters of going second and will report on Friday, Jan 22.

  163. 163
    Jerome Blank Says:

    EXXI is bumping up against P&F trendline resistance now at $3.50…EXXI trendline resistance breaks on a print of $3.75…MMR prints a 9 box P&F ascending triangle breakaout on the gap..wow…

    RE: #148 Patipati…thank you…

  164. 164
    bill Says:

    pxp is moving up into the close

    new presentation

    silent on the gom stuff

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzY0MjEyfENoaWxkSUQ9MzU4NTEzfFR5cGU9MQ==&t=1

  165. 165
    bill Says:

    160 – thats a wow if that happens in light of everything else

  166. 166
    bill Says:

    ill get you an answer to 157 in a moment

  167. 167
    zman Says:

    Thanks Bill.

  168. 168
    BirdsofpreyRcool Says:

    Jerome… so, EXXI between 3.50 and 3.75 is in a sort of No Man’s Land?

  169. 169
    elijahwc Says:

    EXXI price Tgt raised to 5.50 from 3.50 at UBS just now.

  170. 170
    BirdsofpreyRcool Says:

    elijah — thank you for that update!

  171. 171
    RMD Says:

    Bill re: EFS I agree the EFS is the next “style merchandise”, and the Bakken will fade from interest just like the HS did. Ergo my BEXP short. (And BPP luvs it when I get all contranian.)
    Eli: MHP has a nice .10 scale P&F.

  172. 172
    BirdsofpreyRcool Says:

    RMD — you called the recent AEZ top… you da man!

  173. 173
    elijahwc Says:

    RMD: Thanks, welcome back and trust that you kept Maggie off the Bunny slopes. Much more to come on MHR. This guy has actually mastered the art of serial dilution in a way that makes you money.

    My canidiate for the next “style merchandise” = Cardium in Alberta.

  174. 174
    BirdsofpreyRcool Says:

    I see this just hit “TOP” news on bloomberg = “McMoRan, Energy XXI Find May Be Largest in Decades (Update 4)”… guess there were a coupla earlier versions. But, getting more and more attention.

  175. 175
    bill Says:

    this press release defines who has what

    on blackbeard mmr has 42 % and pxp 47 %

    http://www.mcmoran.com/pdf/2009/122909.pdf

    Its like pxp hasnt moved on the news when i see mmr up 52 %

  176. 176
    elijahwc Says:

    New headline on the tape: McGwire admits steroids use. MMR & EXXI too.

  177. 177
    Gtinvest Says:

    bill here is the link to pxp % http://finance.yahoo.com/news/McMoRan-Exploration-Co-bw-3135826493.html?x=0&.v=1

  178. 178
    Jerome Blank Says:

    RE: #168, even in these euphoric conditions, we might see some friction thru this resistance zone, dialing down intraday we’ve had a bit of a time thus far breaking above $3.60…let’s see how things perform into the close…but how much more can we ask of EXXI being up 35%… RE #161, RMD…thank you…

  179. 179
    BirdsofpreyRcool Says:

    bill — note the difference in the short position between MMR and PXP. Lots of shorts got their panties in a twist on the DJ announcement today…

  180. 180
    bill Says:

    176 rofl

  181. 181
    BirdsofpreyRcool Says:

    JB… how about up 52%, like MMR… 😉

  182. 182
    zman Says:

    Thanks, bill planning to look at but have intermittent internet at the moment. Comcast.

    Eli = re 176, LOL

  183. 183
    zman Says:

    In case I get cut off again, thanks for the team effort on the EXXI trade!

  184. 184
    Jerome Blank Says:

    RE: #181…BOP…perhaps tomorrow…it’s basing well into the close…the 30 min looks great, higher lows, tight range…might even break into the close today…

  185. 185
    BirdsofpreyRcool Says:

    Jerome — have I told you lately, how great it is to have you around? Thank you!

  186. 186
    Jerome Blank Says:

    Re: #184 con’t… the P&F chart structure for EXXI improves a good deal with the print of $3.75…

  187. 187
    RMD Says:

    MMR volume in the options = huge, as you would think.

  188. 188
    reefguy Says:

    Is Ceo of EXXI on Cramer tonight??

  189. 189
    Jerome Blank Says:

    RE: #185, thanks BOP…KOG’s holding that daily trendline into the close…

  190. 190
    tomdavis12 Says:

    Z: I second that thank you to team EXXI.

  191. 191
    bill Says:

    tph called it a pxp discovery..maybe they dont follow the other 2

    _____________________________________

    Davy Jones discovery (PXP – $31.49 – B) – Resistivity good. Confirmation of hydrocarbons on well relog says 135 net feet of Wilcox pay on SMI 230. We see 80-165mmboe prospect worth $3.50-4.00/sh, so 3P NAV +$3/sh to $43. Next step is flow testing well to confirm rates from 4 separate zones. PXP’s ~28% share worth ~$525MM (midpoint); last week’s 6% outperformance (if all Davy Jones) says PXP relative should outperform by ~5% today. Also in well: MMR and EXXI.

  192. 192
    elijahwc Says:

    EXXI: there goes Bolivar

  193. 193
    bill Says:

    Capt on the exxi team

    all hail bop!

    hip hip hurrah!

  194. 194
    BirdsofpreyRcool Says:

    #192 … ?? does Schiller have a home there or something?

  195. 195
    BirdsofpreyRcool Says:

    bill — #193 too kind… actually, reef put in a lot of valuable quarterbacking behind the scenes on that one too. I just led the cheerleading for the bonds/restructuring/acqtn valuation.

    But thanks. Fun when it all comes together.

  196. 196
    bill Says:

    exxi closed 3.73 hod, i think bop called that too

  197. 197
    BirdsofpreyRcool Says:

    someone said that EXXI CEO might be on CNBC after the close… will add to the festivities, if true.

  198. 198
    bill Says:

    was a great team effort and ty for z in getting us all together

    great people on this site

  199. 199
    BirdsofpreyRcool Says:

    ha! bill… you crack me up. I think z made the HOD call first… I just 2nd-ed (and repeated) that.

  200. 200
    reefguy Says:

    mmr up 52.45%, exxi up 40%, PXP up 4.2%…..

  201. 201
    Jerome Blank Says:

    RE: #193…2nd that…by the way did EXXI print $3.75 before the close?

  202. 202
    RMD Says:

    MMR rumor: T Boone says $50, another quieter analyst who has been a patient believer for years (incurable optimist?) says $100…the blood is rushing to my toes, but MMR could become the next IOC.

  203. 203
    BirdsofpreyRcool Says:

    Energy investing — unlike most all other sectors — is populated by a very tight-knit group of people. Mainly in TX, OK, and LA. So, more than any other sector, knowing the Right Group to hang with, can make you a lot of money.

    Have to say, this site hosts so many quality contributors. Nothing else quite like it. Thanks, z!

  204. 204
    reefguy Says:

    202- if you buy that thesis then exxi is about a $20 stock

  205. 205
    AAA Says:

    Z and BOP,

    Great call on #6 re MMR and EXXI closing at HOD.

  206. 206
    BirdsofpreyRcool Says:

    Jerome #201 — sadly… no.

    ha! But, tomorrow is another day!

  207. 207
    BirdsofpreyRcool Says:

    CRT just out with new PTs for the Davy Jones group …

    MMR $21

    EXXI $7.50

    PXP $45

  208. 208
    elijahwc Says:

    BOP Old saying. Not sure how to phrase this but, Bolivar the big bull is out of the barn and heading into the adjacent pasture anticipating the HOD. Opps, I’m probally in violation of terms of service. Forgive.

  209. 209
    zman Says:

    MUR on the tape with its first EFS well.

  210. 210
    BirdsofpreyRcool Says:

    tee hee hee… got the visual. thx. 😉

  211. 211
    zman Says:

    Good one Eli – terms of service, ha.

  212. 212
    zman Says:

    BOP – thanks for the CRT update.

    AA missed, 1 cent vs 6 cents expected, looking for deets.

  213. 213
    BirdsofpreyRcool Says:

    silly me… thought you were talking about the Bolivar Peninsula.

    ha! maybe you were…

    oops. am i fired too?

  214. 214
    milepost_43 Says:

    Lot of problems for drillers in the midwest/ne states….can you say $$$$$ of taxes/fees into state coffers….

    Water disposal Marcellus article in Columbus Dispatch

    SHALE EXPLORATION
    Gas wells’ leftovers may wash into Ohio
    Experts fear brine from Pennsylvania may end up here

    That’s why both support a bill in the Ohio legislature that would create a 20-cent-per-barrel disposal tax on brine shipped in from other states..can you say PA…. That’s four times as much as a proposed 5-cent-per-barrel tax on Ohio brine.

    http://www.investorvillage.com/mbthread.asp?mb=4288&tid=8420102&showall=1

    Posted 1/11/2010 12:11:18 PM by hotelonthemoon

  215. 215
    BirdsofpreyRcool Says:

    AA headlines saying it was a miss due to currency costs.

  216. 216
    zman Says:

    BOP – seeing that, thanks, good “get out of jail free” pass, those currency issues are.

  217. 217
    BirdsofpreyRcool Says:

    yaaaaaaaaaahhhhhhhhhh… hmmmm. Yes. Quite.

    Watching a/h trading to see if mrkt buys that trail-worn excuse…

  218. 218
    elijahwc Says:

    Jerome: Another famous old saying. “Every ship at the bottom of the ocean is filled with charts”, but then again yours are on top of the pond, so chalk me up with another vote for you.

    What’s with this fuzzy acclamation thing going on around here?

  219. 219
    zman Says:

    CNBC said it was halted, not seeing that. The quarter’s revenue was $5.4 B vs $4.8 B expected. So the analysts do appear to be asleep at the wheel on the cost structure.

  220. 220
    zman Says:

    AA down a buck and change.

  221. 221
    BirdsofpreyRcool Says:

    If Dow poops tomorrow at open on AA results, I just might follow bill into PXP. Planning the trade…

  222. 222
    zman Says:

    MMR – finally listening to replay of the call.

  223. 223
    West Says:

    Hey ANDY, tell Z what t-shirt you want and I will take care of it.

  224. 224
    zman Says:

    The Treasure Island warrants (TISDZ) closed up 20 cents at 70 cents as well.

  225. 225
    BirdsofpreyRcool Says:

    Jerome — EXXI trading at $3.78 in a/h… but that doesn’t count, does it?

  226. 226
    zman Says:

    $3.79 bid, lol. Still listening to that MMR call. UBS coming up with $2 extra for DJ on EXXI vs yesterday’s world as well I see.

  227. 227
    BirdsofpreyRcool Says:

    CRT’s $7.50 PT on EXXI is based on $65 oil and $6 nat gas + 1.5Ts from a DavyJones/Blackbeard discovery. They think that for every 1Tcfe that is found in those 2 project, it adds $3/share of NAV to EXXI. CRT muses that DJ could be 5Ts ultimately. hmmm…. that would be $15 of NAV to EXXI. Of course, it will take a yr or so to prove up those reserves, I would think. Still, worth the wait.

  228. 228
    BirdsofpreyRcool Says:

    JPMo musing that there could be 6Ts at Davy Jones… only time (and more wells) will tell.

  229. 229
    zman Says:

    EXXI bid 3.84, close 3.68
    MMR bid 14.50, close 14
    PXP bid up slightly as well.

  230. 230
    zman Says:

    MMR – should have news on Blueberry Hill in 3 to 5 weeks.

  231. 231
    PackMan Says:

    EXXI — woweee. Boy did I get out way early. Who would have thought this would double in 2 weeks on the heels of that offering ?

    Not me…

  232. 232
    PackMan Says:

    congrats to all who rode it higher

  233. 233
    Jerome Blank Says:

    RE: #225, BOP…interesting topic…after hours trading in P&F charting is a controversial issue…there are good arguments both ways, especially when you chart 24 hour mkts, like currencies, but with stocks the majority viewpoint is to create charts based off the traditional day time frame hours…I believe this is what Stockcharts does…especially with stocks, you can get some fairly abberrant price action after hours creating false signals…with stocks, I use only the day time frame…

    RE: #218, elijah…thank you…much appreciated…

  234. 234
    RMD Says:

    #35 MMR; Just read it. how skeptical do we need to be, and how much does one well, which has not been tested,tell us? One skeptic in #35’s question section reminded us that Jim Bob was highly optimistic about the sands in Abrazzo until they tested dry.

  235. 235
    zman Says:

    RMD one well mapped with seismic and paleo, with high porosity, with a pile of highly pressure, hydrocabon bearing sand, with more to drill. With a good log on it now we know the hydrocarbons are there. On a 20,000 acre structure that is not faulted. You won’t see a production test here before Fall so I don’t know that it isn’t much higher (based upon the 2 to 2.3 Mcf per acre foot thrown out on the call) before they have even a chance to mess it up.

  236. 236
    PackMan Says:

    For your entertainment, I present the following graphic, as it applies to Harry Reid:

    http://3.bp.blogspot.com/_RMfq9Mo5T2Y/S0pr0q7IFjI/AAAAAAAACHc/emUJe9gvmOo/s1600-h/flowchart1.jpg

  237. 237
    RMD Says:

    Pack, that’s funny, and tragic.

  238. 238
    TEXWS6 Says:

    Z,

    Never saw email…

  239. 239
    zman Says:

    TexW, apologies, got you mixed up with something West was asking for.

  240. 240
    PackMan Says:

    Z – you have been on quite a roll w/ your options picks … congrats !

    Sadly, I am playing catch-up; reading about all your great plays after the fact.

  241. 241
    Hoss Says:

    Pack

    You ought’a get a kick out of this then.

    http://www.retro.ms11.net/InvestorMind.gif

  242. 242
    zman Says:

    241 = LOL

  243. 243
    PackMan Says:

    Hoss 241 — I second Z’s LOL !

    I think that must be me at #17 …

  244. 244
    zman Says:

    Definitely a comment count record broken today. Thanks for all the contributions from the team, making 40% on the EXXI common (taken before the news) and 100% on a set of MMR Feb calls (taken after the news) is pretty cool.

  245. 245
    Wyoming Says:

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    Save $200, register before January 15! Register
    http://www.informz.net/hartconf/event.asp?eid=3526

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    EXPANDED AGENDA! DUG 2010 features a day and a half of expanded focus on the Marcellus, Haynesville and Eagle Ford Shale plays. Hear from operators on emerging and established shale and tight-sand plays, including the Barnett, Fayetteville, Horn River, Pearsall, Utica, Huron, Granite Wash and Deep Bossier; water and frac issues, technology, economics and more.

    Agenda
    http://www.dugconference.com/Agenda/

    Register before January 15th and receive a $200 early bird discount on your registration.

    OR, register by phone: 703-891-4804.

  246. 246
    nifkin Says:

    Z- dont know if there is an answer on this but which of the refiners would be hurt the most on the CVX miss?

  247. 247
    zman Says:

    Nifkin – yeah, I don’t know that it matter more to one than another. It may but I didn’t look to see if they got more specific than the downstream segment bricked. I will look and see if there is much in there but the miss on that side of the business is not very surprising.

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