Monday Morning And All Is Well

Posted on by zman

 

 
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 thoughts on “Monday Morning And All Is Well”

  2. 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.

    Reply

  3. 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.

    Reply

  4. 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)

    Reply

  6. 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.

    Reply

  9. 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.

    Reply

  10. 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!

    Reply

  11. 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.

    Reply

  13. 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.

    Reply

  15. 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.

    Reply

  16. 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.

    Reply

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

    Reply

  18. 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.

    Reply

  19. 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.

    Reply

  20. 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.

    Reply

  23. 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.

    Reply

  24. 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.

    Reply

  25. 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.

    Reply

  30. 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

    Reply

  32. 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.

    Reply

  33. 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….

    Reply

  35. 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.

    Reply

  36. 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..

    Reply

  39. 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.

    Reply

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

    Reply

  41. 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.

    Reply

  44. 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.

    Reply

  45. 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?

    Reply

  46. #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.

    Reply

  47. 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.

    Reply

  49. 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

    Reply

  50. 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.

    Reply

  52. 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 …”

    Reply

  53. 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.

    Reply

  54. 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

    Reply

  55. 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

    Reply

  57. 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.

    Reply

  58. 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.

    Reply

  59. 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%.

    Reply

  65. 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??)

    Reply

  66. 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.

    Reply

  67. 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.

    Reply

  68. ZTRADE:

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

    Reply

  69. 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.

    Reply

  70. 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.

    Reply

  74. 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.

    Reply

  75. 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.

    Reply

  76. 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

    Reply

  80. 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.

    Reply

  81. 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.

    Reply

  83. 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)

    Reply

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

    Reply

  85. 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.

    Reply

  86. 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.

    Reply

  94. 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.

    Reply

  95. 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…

    Reply

  96. 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.

    Reply

  98. 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.

    Reply

  103. 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.

    Reply

  104. 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.

    Reply

  106. 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…

    Reply

  107. 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.

    Reply

  116. 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.

    Reply

  117. 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”…..

    Reply

  118. 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.

    Reply

  120. 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

    Reply

  121. 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

    Reply

  122. 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.

    Reply

  126. 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….

    Reply

  129. 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.

    Reply

  132. 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…

    Reply

  134. … 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.

    Reply

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

    Reply

  139. 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

    Reply

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

    Reply

  146. 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.

    Reply

  149. 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.

    Reply

  153. 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

    Reply

  155. 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.

    Reply

  157. In the past, Flores has monetized his gom discoveries.

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

    Reply

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

    Reply

  160. 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.

    Reply

  161. 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…

    Reply

  169. 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.

    Reply

  171. 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.

    Reply

  172. 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.

    Reply

  176. 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…

    Reply

  177. 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…

    Reply

  182. 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…

    Reply

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

    Reply

  189. 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.

    Reply

  193. 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.

    Reply

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

    Reply

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

    Reply

  200. 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.

    Reply

  201. 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!

    Reply

  206. 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.

    Reply

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

    ha! maybe you were…

    oops. am i fired too?

    Reply

  212. 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

    Reply

  215. yaaaaaaaaaahhhhhhhhhh… hmmmm. Yes. Quite.

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

    Reply

  216. 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?

    Reply

  217. 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.

    Reply

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

    Reply

  224. $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.

    Reply

  225. 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.

    Reply

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

    Reply

  229. 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…

    Reply

  231. 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…

    Reply

  232. #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.

    Reply

  233. 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.

    Reply

  238. 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.

    Reply

  242. 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.

    Reply

  243. Registration is open for the 5th Annual Developing Unconventional Gas Conference, March 29-31, 2010 at the Omni Fort Worth Hotel.

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

    KEYNOTE SPOTLIGHT
    Hear a keynote address from Aubrey McClendon, Chairman and CEO, Chesapeake Energy Corporation, speaking on natural gas issues in 2010.

    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.

    Reply

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

    Reply

  245. 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.

    Reply

Please comment below

This site uses Akismet to reduce spam. Learn how your comment data is processed.

s2Member®