12
Jan

Tuesday Morning Market Pause

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Market Sentiment Watch: Saw this headline earlier and think it fits what we'll see on the open "Alcoa Disappointment to Hit Stocks". Short, sweet, true. Another day with little in the way of economic data for the market to take guidance from probably means another red day open initially followed by lackluster trading.  The Davy Jones partners look like they will get some follow through today despite very strong runs yesterday and I have included some notes on yesterday's call with management in the Stuff section. Nice team effort in landing those positions!


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stuff We Care About Today - MMR followup notes
  4. Catalyst List Watch
  5. Odds & Ends

Holdings Watch:

  • $10KP II:

    • $31,700
    • 45% Cash

  • Yesterday's Trades:

    • HAL – Sold the (25) Jan $33 Calls (HZLAT) for $1.70, up 577%, with the stock at $34.60. I continue to own the Feb calls taken last week.
    • MMR – Added (20) February $15 Calls (MMRBC) for $0.60 with the stock at $12.65. See today’s post for thoughts here.
    • 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.


Commodity Watch

Crude oil fell $0.23 to close at $82.52 yesterday. Reports out late yesterday  indicate the EIA will trim its  forecast for 2010 global consumption again later this week. This morning crude is trading about a buck as the equity markets fall back on Alcoa's miss.

  • Early Read On Oil Inventories: (from the Reuters survey)
    • Crude: up 1 mm barrels.
    • Gasoline: up 0.9 mm barrels.
    • Distillates: down 1.7 mm barrels.

Natural gas fell 5% to close at $5.45 yesterday on a warmer forecast (we're getting back down to just about normal levels) and a surge in imports last week. This morning gas is trading down slightly.

  • Imports Watch: Big jump week to week on higher prices. Up 3.3 Bcfgpd from last week and 4.1 Bcfgpd from last year.  That's an extra 23 Bcf of supply over the prior week.

    • Canada: Jumped to 8.9 Bcfgpd from the prior week's 7.7 Bcfgpd.
    • LNG: surged to 3.5 Bcfgpd last week and up 2.8 Bcfgpd from year ago levels as the higher prices attracted volumes stored at sea. This is the highest import level via ship in recent memory, topping May 2007's elevated levels. Bears watching.
    • Both piped and shipped volumes were up to meet cold weather demand. Notably, Britain saw record demand last Friday as well and demand in Asia has been surging.

 

Stuff We Care About Today

MMR Followup Notes on Davy Jones Discovery (South Marsh Island 230)

  • Best resistivity they have seen in the Wilcox - 10 to 20 ohms .... > 20% porosity. Confirms lack of shale in the pore spaces. Pretty sure it is natural gas, as they thought before, given the heat and pressure it should be.
  • Mirror image of deepwater Wilcox sands seen at Kaskida, Tibor, and Shenandoah. Also looks like the Tuscaloosa play onshore (N. of Baton Rouge in the late 70's)
  • Will deepen to 29,000 feet; expect to see a couple more Wilcox intervals; lower Wilcox has more sands than the upper.
  • Sands full to base (filling the trap with hydrocarbons)
  • One big uniform structure that covers 20,000 acres  = "huge reserve". No big faults, sand section should repeat itself over the entire structure. Sheet sands just draped over the entire structure, nothing in the data to date to suggest otherwise.
  • They are in the Wilcox 8,000 feet higher than in the Blackbeard well (so it would be found in that well at 34,000 feet).
  • Moreover, the well results here positively impact 200 square miles of ultradeep projects; MMR has 12 or 13 other prospects that are drill ready prospective for the Wilcox.
  • 2  to 2.3 mmcfg per acre foot, to be conservative, may be higher, puts total reserves here > 3 Tcfe.
  • flow rates per well of 70 to 125 MMcfgpd look reasonable.
  • > $70 mm cost on this well but think they can drill the development wells for $100 mm (for 10 development wells) plus $50 to $75 mm to complete them.
  • Plan to recover at least 100 Bcf per development well, then drill infills later as needed.
  • Production test - goal is 1 year from now. Lot of ducks to line up to get that done properly.

Other MMR Stuff

  • MMR earnings next week.
  • 3 to 5 weeks away on more news out of Blue Berry Hill.
  • Hurricane Deep - within a month they will be able to see how the sands are developing.

Catalyst List Watch

Yellow highlights indicate changes from last week:


Odds & Ends

Analyst Watch:

  • EOG - Morgan Stanley cuts to Equal Weight
  • APA - S&P bumps price target by $13 to $133, maintains Strong Buy
  • AEZ - cut to Hold at Wunderlich
  • EXXI - UBS bumps price target $2 to $5.50
  • EXXI - Pritchard bumps target $1.50 to $4.50
  • PXP - UBS ups price target $4 to $39
  • CRT ups Davy Jones partner's targets: MMR up $6 to $21, EXXI up $1.50 to $7.50, PXP up $2 to $45.

166 Responses to “Tuesday Morning Market Pause”

  1. 1
    zman Says:

    30 minutes to the open. I see TPH is talking up asset sales at HK, the same day I add a comment about it in the Catalyst List. Weird.

    Oil down $1.50, same % drop as the move in Heating Oil. Blame a week’s worth of warmer (but still very cold weather). Despite the warm up yesterday, temps through the nation’s mid section were colder than normal while the midwest and deep south was much colder than normal. After Jan 20, the mercury looks set to dip back down and another big snow storm is setting up for this weekend in New England.

    Natural gas fought off a dime loss earlier and is now up a couple of pennies, maybe reacting a little more quickly to the changing forecast.

    EXXI called up a few cents, MMR up 50 cents. Equity markets for the moment still caring about AA.

    BOP, any HT or TT comments? My thought is HT will be in buy the opening slump mode.

  2. 2
    elijahwc Says:

    EXXI: Pritchard Snapshot

    Energy XXI Ltd. (EXXI-$3.68) – Raising NAV from $4.50 to $6.50 and price target from $3.00 to $4.50 and reiterating ‘Buy’ rating, driven by derisking the company’s Ultra Deep potential following yesterday’s announcement of a major discovery by EXXI and operator McMoRan Exploration Co. (MMR-$14.00) at the Davy Jones prospect in 20 ft. of water 10 miles offshore in the Gulf of Mexico at South Marsh Island 230. The well was drilled to a measured depth of 28, 263 ft and logs indicate 135 net feet of high quality pay in 4 Wilcox (Eocene/Paleocene) zones. High resistivity suggests the sands to be gas prone. Flow testing will be required to confirm ultimate flow rates; depending on equipment availability, flow testing can be done in ~1 year. MMR plans to drill down to ~29,000 ft to test deeper objectives, including lower Wilcox and possibly the Tuscaloosa (Cretaceous). MMR believes the Davy Jones Field, which looks to be prospective across its entire 20,000 acres, could require up to 10 development wells costing $100 MM each to drill and another $50-$75 MM each to complete. MMR suggested these could be 70-125 MMcfe/d wells. While the size of Davy Jones will not become clearer until more drilling is done, we believe it could contain at least 2 Tcfe of recoverable reserves. EXXI seems to be firing on all cylinders; production is accelerating, debthas come down, the company is a consistent cash generator and has the highest oil to gas mix of any GOM company. Now Davy Jones appears to be one of the largest discoveries on the GOM Shelf in decades, which along with Blackbeard and deepwater discoveries such as Tiber is validating the Ultra Deep concept, where EXXI is exposed to ~4 Tcfe of net unrisked potential.

  3. 3
    elijahwc Says:

    Cap One Southcoast Snapshot

    MMR, EXXI, and PXP all roared on Davy Jones discovery: Yesterday MMR was up 52%, EXXI up 40%, and PXP up 4% (on a day when the average E&P was down 2%) on the Davy Jones discovery announced yesterday morning. What is priced into the stocks? Over the last several years, it has been our experience thatstocks tend to price in ~half of a discovery the day it is announced, with the other half coming over time as appraisal wells are drilled, reserves are booked, and the discovery goes on production. It seems to us like these stocks performed as well as could possibly be expected on this positive news. MMR describes the discovery as 100+’ of pay on a 20,000 acre structure, which could be a “Multi-Tcf” discovery. MMR expects minimal faulting based on its seismic data. Using 2 MMcfe per acre foot, this discovery could be up to 4 Tcf gross, but until we see several additional appraisal wells, it seems premature to assume the discovery is that large. The stocks priced in a 1 – 2 Tcf discovery yesterday based on the stock movement. We were thinking the stocks would be up half of what they moved yesterday. We continue to be surprised by the risk tolerance of Wall St. This is a big discovery, but not all big discoveries turn out to be as large as expectations: We can’t help but recall the multi-hundred Bcf expectations of JB Mountain/Mound Point, or Blackbeard, or MMR’s potential Main Pass Energy Hub, which have never materialized as originally expected. That history with MMR tempers our enthusiasm for yesterday’s announcement. That said, we shouldn’t mention those without mentioning Flatrock, which is turning out to be larger (500+ Bcf) than expected. Key takeaways from MMR conference call: 1) the discovery could be big (MMR said 2.0 – 2.3MMcf/acre foot could be conservative) and helps confirm MMR’s thesis that Wilcox sands prevalent in recent deepwater discoveries are prevalent in the ultra-deep shelf 2) these are going to be expensive development wells (about $100MM/well to drill + $50MM – $75MM/well to complete) 3) MMR estimates that it has 12 additional prospects in its portfolio that it believes could have exposure to the Wilcox sands. 4) MMR may pick up a 3rd rig this year to assist in what sounds like will be an aggressive drilling program for the next 3 years 5) sounds like MMR’s preferred funding mechanisms for development of Davy Jones will be bank debt, private equity, and/or vendor financing. Target changes: We are increasing our MMR target by $4 to $14, our EXXI target by $1.50 to $4.50, and our PXP target by $2 to $40 based on a 1 Tcfe discovery at Davy Jones valued at $1.50/Mcfe. At a 500 Bcfe discovery, our target prices would be $12 for MMR, $3.50 for EXXI, and $39 for PXP. At a 4 Tcfe discovery, our target prices would jump to $25 for MMR, $6 for EXXI, and $47 for PXP. As we obtain additional Davy Jones information we will adjust our target prices and ratings as necessary. We continue to rate PXP & EXXI as ADD, both with 22% upside to our NAVs. Our MMR rating (with 0% upside) is under review. What to watch heading forward, time line: MMR plans to deepen the Davy Jones discovery well to 29,000′ in order to test the deeper objectives (currently drilling at 28,262′). It will probably be a few more weeks until we get the results on the deeper drilling, but MMR expects to encounter additional Wilcox sands below 28.2K’. Next, MMR will drill an appraisal well later this year with a goal of a flow-test early next year and 1st production soon thereafter (sounded like by 2Q11).

  4. 4
    zman Says:

    EOG going to get whacked on the open on a Morgan downgrade, I may add some Feb calls on that.

  5. 5
    skimo Says:

    for those interested in met coal an article supporting higher met coal prices for east coast US
    http://www.reuters.com/article/idAFSGE60A0JT20100111?rpc=44

  6. 6
    zman Says:

    Nifkin – took another look at the CVX warning, I don’t see anything that would point to positive or negative moves for any one indie refiner out of that. Just more of what we already knew, tough times for those who live to crack oil.

  7. 7
    zman Says:

    Skimo – thanks, good find.

  8. 8
    zman Says:

    MMR – looks to be setting up for another, strong gets stronger day. Only thing on my screen that’s green in stock land. Aside from natural gas which is now up 9 cents.

  9. 9
    zman Says:

    ZTRADE:

    EOG – Added (5) February $100 calls (EOGBT) for $2.35 with the stock at $95.60 on a weak market day and a broker downgrade.

  10. 10
    cargocult Says:

    Strong demand for Met Coal should be good for Drybulk Shipping.

  11. 11
    BirdsofpreyRcool Says:

    Z #1 — had to run out to a mtg… back… you are CORRECT, sir! TechTrader and HeadTrader are both calling for “buy the dip.”

    TechTrader is 60/40 convicted that this is the right trade this morning.

  12. 12
    elijahwc Says:

    Favorite Serial Dilutor Roll Upper, MHR is also green.

  13. 13
    zman Says:

    True. The SEA shipper ETF has already had a good start for the year. I’m still mulling.

    BOP – Thanks!

  14. 14
    zman Says:

    Saw RAME doing a deal, expecting another little wave of secondaries.

  15. 15
    zman Says:

    MMR trying to fight off a little profit taking, despite the run, I think the name will have legs for awhile.

  16. 16
    bill Says:

    shipping webinar today

    go to capitallink.com

    Live Shipping Webinar Today – Forecasting the Future – Outook of Shipping in 2010. Tuesday, January 12, 2010 11 AM EST – Presented by Marshall Islands Registry

  17. 17
    cargocult Says:

    This time I’m paying closer attention to Bill when it comes to drybulk.

  18. 18
    zman Says:

    Thanks Bill

    NG up 11 cents.

    Things heating up in Nigeria again, attack over the weekend, 4 workers kidnapped yesterday.

  19. 19
    zman Says:

    BOP – sent you an email, did you receive? Maybe having a send out issue.

  20. 20
    zman Says:

    WRES creeping up. Have been holding for their 4Q (with their plan for 2010) and their reserve report. If I don’t like what I hear I will not wait for the story to improve this year but will go shopping elsewhere with that oil weighted cash.

  21. 21
    zman Says:

    Bloomberg survey putting the gas withdrawal at 257 Bcf. That’s a big one.

  22. 22
    VTZ Says:

    That puts the chances of disappointment high?

  23. 23
    zman Says:

    V – By my way of looking at it, yes. It gets hard to predict just how much gas was demanded when the cold is that widespread. Imports were way up so that makes getting to a number that high tough. I’m going to ride it out with my current positions. If you do get a number that high I think gas trades towards the upper $5s but little more for now. I think if we get a number closer to 225, the gas market should stay about where it is, that’s a big number and it should have another 200ish Bcf number behind it. If on the other hand you see a sub 200 Bcf number, which I don’t see happening, gas would cut $5 as people would deduce that many operators turned on the spigot so to speak to take advantage of these prices.

  24. 24
    jat Says:

    Fun thought: the last big large cap I remember MS downgrading was XTO.

  25. 25
    zman Says:

    MMR – fought off a steeper bit of profit taking, other of interest at the moment, watching ROSE drifting up on OK but not great volume for this time of day. Well news out of the Montana Bakken could be any day now through the release of quarterly results. I’m going to join bill in his rosebud calls I think.

  26. 26
    zman Says:

    Anyone see a comment out on Stone (SGY), stock off 6%, sort of interested in owning the common there this year.

  27. 27
    zman Says:

    Jat – hear ya on that one. Do you know if there is another energy conference this week aside from the GS panel discussions? I could swear I saw one but can’t find it now.

  28. 28
    elijahwc Says:

    Cliff Notes from Wunderlich Securities:

    Buy – Price Target: $18
    McMoRan Exploration (MMR) yesterday announced one of the most bullish comments we have heard for years on the Gulf of Mexico Shelf. Though not tested, the Davy Jones found a 135-foot column of hydrocarbon-filled sands in the Wilcox section of the Eocene and Paleocene geologic trends that we believe could contain up to 2 Tcfe of estimated resources. However, the first well likely will not be tested until late summer (at best) with first production expected after 2011. We are maintaining our Buy rating, raising our price target to $18.00 per share from $12.00, and changing our valuation metric to a net asset value as the timing of the latest results are going to be difficult to predict. Key Points Davy Jones adds to ultra deep total resources. We believe Davy Jones and other ultra-deep prospects have multi-Tcfe of gross unrisked potential from the targeted objectives in the Miocene and older age sections that have been correlated to those productive sections seen in deepwater discoveries. However, further appraisal and development drilling is required to determine the ultimate size of the discovery, but it appears as if the trends could extend through much of McMoRan’s 150,000 gross acres around the play. Production could materially change. We believe Davy Jones could be at least 2.5 times bigger than Flatrock given there are 20,000 acres (four OCS lease blocks) with around a 30% ownership versus 7,000-10,000 acres at Flatrock with around 19% interest. Given Flatrock is producing around 300 Mmcfe/d gross, the ultimate production rate for Davy Jones could be significant, materially increasing McMoRan’s current production of 220 Mmcfe/d. Blueberry Hill and Hurricane Deep results only weeks away. Though we believe the gross unrisked potential of Blueberry Hill is likely 50% or less of Davy Jones and Hurricane Deep is likely 35% or less, the two prospects still would be material for McMoRan. In addition, results of these wells could give a good indication of how many of the five sands exist clear out to those plays. Even with the latest stock run, we do not believe success of both these wells is priced into the stock. Reserves could take off down the road. Though tests on Davy Jones could possibly take nearly all year, successful results at Davy Jones could add as much as 200% more reserves given the overall size of the prospect and the possibility of Eocene (Wilcox), Paleocene, and possibly Cretaceous (Tuscaloosa) sands. Raising price target using new valuation methodology. Given the uncertainty of the timing of the latest discovery and possibly others to follow, we believe net asset valuation is the best metric to use at this time versus cash flows previously. We are using 2008 year-end proven reserves until new numbers are released, coupled with the unrisked potential of five large exploration plays plus undeveloped acreage.

  29. 29
    BirdsofpreyRcool Says:

    Funny… MRR up, EXXI down. Swapped some more KOG into EXXI. Intend to trade the spread between those two a bit more.

  30. 30
    zman Says:

    MMR lancing into new territory now > 14.40, good bet EXXI wakes up, if that move holds for very long. Some might be wondering why it may take up to a year to production test this well but given the heat and pressure they will have to order some long lead items including a high capacity, very strong subsea tree. And you certainly don’t want to botch the well. As Jim Bob commented yesterday on costs, this one is over $70 mm and we spent $15 mm just trying to log the damn thing. Notice that the development wells are much cheaper drills but they want to get this well tested and a second delineation well drilled before they get rolling too fast on a development program.

  31. 31
    nifkin Says:

    SGY ha ops update las night on the close- also raised $250M thru note sale

  32. 32
    nifkin Says:

    Stone Energy Corporation Announces 2010 Capital Expenditures
    2010-01-11 21:01:10.845 GMT

    Stone Energy Corporation Announces 2010 Capital Expenditures Budget and
    Provides Operational Update

    PR Newswire

    LAFAYETTE, La., Jan. 11

    LAFAYETTE, La., Jan. 11 /PRNewswire-FirstCall/ — Stone Energy Corporation
    (NYSE: SGY) today announced that for 2010 the Board of Directors has authorized a capital expenditure budget of $400 million.  This figure compares with a $300 million capital budget for 2009 and excludes material acquisitions and capitalized SG&A and interest. Approximately 25% of the capital expenditure budget is expected to be spent on Appalachian drilling and acreage acquisition; approximately 25% is planned for Gulf of Mexico (GOM) shelf exploitation and approximately 15% is for GOM workover/recompletion projects; approximately 15% is scheduled for GOM deep water and deep shelf expenditures; and the remaining budget is for facilities, abandonment projects, and miscellaneous exploration projects.

    Stone also announced operational updates on the following activities:

    Appalachian Basin (Marcellus Shale Play).  In the third and fourth quarters of 2009, Stone drilled six operated vertical wells in the Marcellus Shale Play; four in West Virginia and two in Pennsylvania.  Four of these wells were completed and established the viability of the play on Stone’s acreage.  Each of the four wells tested at an initial rate between 0.5 and 2.0  million cubic feet of gas per day (MMcf/d).  The other two wells will be completed when weather conditions allow.  Stone’s working interest is 100% in four of the six wells and is 70% in the other two wells.  Additionally, Stone participated with a minority working interest (20%) in the drilling of two horizontal wells in West Virginia during the same period.  These two wells are the first in a four-well program which should conclude in early 2010, at which time all the wells will be completed.  Also in West Virginia, three previously drilled vertical wells (not operated by Stone) were completed with initial test rates of 0.5 – 1.5 MMcf/d.   Stone’s working interest is 50% in these three wells.
     With the prospectivity of the Stone-operated acreage validated by the 2009 vertical drilling program, Stone will enter the horizontal drilling phase in 2010.  Stone plans to participate in the drilling and completion of 12-15 horizontal wells this year.

    Mississippi Canyon Block 109 (Amberjack Field).  In December, Stone mobilized the HP 206 Platform Rig to its 100% owned Amberjack Field.  The Company initially performed a recompletion project to a shallower zone in the existing Amberjack A-25 well which is currently producing at a rate of over 500 barrels equivalents per day.  The rig will now be used to drill four exploitation wells targeting oil reservoirs and incremental reserves.  If successful, production from each well would be tied in almost immediately after completion.

    Vermilion Block 96 (Cardinal/Blue Jay – 100% W.I.). Stone recently drilled two GOM shelf exploitation wells in VR 96. The Cardinal well encountered 57 feet of gas in four pay zones, while the Blue Jay well encountered four hydrocarbon zones but was deemed non-commercial. Construction for the facilities and pipeline for Cardinal has commenced, with first production expected in the second quarter 2010.

    Garden Banks 293 (Pyrenees – 15% W.I.).  Stone and its partners are reviewing different development options for the Pyrenees discovery.  Current plans call for first production by early 2012.

    Hurricane Risk Mitigation Program.  The targeted decommissioning and well abandonment of higher risk platform facilities has been substantially completed. Approximately $65 million was spent in 2009 on our proactive risk mitigation program, previous hurricane abandonment and normal P&A work.  For 2009, 157 idle wellbores were plugged and eight platforms were abandoned.

    Production.  Volumes for the fourth quarter of 2009 are expected to be approximately 220 million cubic feet of gas equivalent (MMcfe) per day, slightly under the previous guidance of 225-235 MMcfe per day provided in November 2009. The shortfall is due to the unplanned shut-in from Hurricane Ida, a delay in the repair of two third party gas pipelines (which are expected to be operational in late January), and greater than normal weather restrictions in December which delayed recompletion projects.  Additionally, production from the Amberjack platform was down periodically during the fourth quarter due to the installation of the platform rig.  Stone still expects full year 2009 average daily production to be in the range of its previous annual guidance of 210-220 MMcfe per day.  The 2009 exit rate was approximately 215-220 MMcfe per day, with an approximate 50/50 split between oil and gas.

    Reserves.  Stone’s 2009 year-end estimated proved, probable and possible reserves are currently being engineered by Netherland Sewell & Associates
    (NSAI) with the final report expected during January.  Estimated proved reserves will decline from year-end 2008 levels due to production, negative commodity pricing revisions and other negative revisions to comply with the new SEC rules.  In 2009, the company focused on debt reduction, conversion of non-producing reserves to producing reserves to generate cashflow, and hurricane risk mitigation expenditures.  Accordingly, drilling additions to estimated proved reserves will be minimal in 2009 and will not offset reductions.  Stone has been preliminarily advised by NSAI that Stone’s 2009 estimated proved reserves will be approximately 410 billion cubic feet equivalents, with approximately 80% being proved developed reserves.

    Stone plans to release its year-end results on Tuesday, February 23, 2010, after the close of the market, and will hold its year-end conference call on Wednesday, February 24, 2010, at 10:00 a.m. CST. Anyone wishing to participate should visit our website at http://www.StoneEnergy.com for a live web cast or dial
    1-877-228-3598 and request the “Stone Energy Call”. In addition, Stone announced that it will hold its 2010 Annual Meeting of Stockholders on Friday, May 21, 2010, at 10:00 a.m., CDT, at the Windsor Court Hotel, 300 Gravier Street, New Orleans, Louisiana.

    Forward Looking Statement

    Certain statements in this press release are forward-looking and are based upon Stone’s current belief as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities that Stone plans, expects, believes, projects, estimates or anticipates will, should or may occur in the future, including future production of oil and gas, future capital expenditures and drilling of wells and future financial or operating results are forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extent of changes in commodity prices for oil and gas, operating risks, liquidity risks, and other risk factors and known trends and uncertainties as described in Stone’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (“SEC”). Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Stone’s actual results and plans could differ materially from those expressed in the forward-looking statements.

    Stone Energy is an independent oil and natural gas company headquartered in Lafayette, Louisiana, and is engaged in the acquisition, exploration, exploitation, development and operation of oil and gas properties located primarily in the Gulf of Mexico.  Stone is also active in the Appalachia region.  For additional information, contact Kenneth H. Beer, Chief Financial Officer, at 337-521-2210 phone, 337-521-9880 fax or via e-mail at CFO@StoneEnergy.com.

  33. 33
    Hoss Says:

    Z #27

    BMO today

    http://www.bmocm.com/conferences/2010UnconventionalResourceConference/default.aspx

  34. 34
    zman Says:

    Fun with math on EXXI

    Say they get their 30,000 bopd from their current stuff plus the stuff that’s offline due to hurricanes. Forget everything else they plan to do in the future for a minute. 30,000 boepd is 180,000 Mcfepd.

    10 wells at Davy Jones drilled over the next, say 3 years, to start.

    Each well is probably going to produce 75,000 to 125,000 Mcfepd. Call it 100,000 for simplicity sake. 10 x 100K = 1 Bcfepd.

    EXXI NRI is 12.8% so that’s 128 MMcfepd to them. If they just spend enough to keep the 180 MMcfepd flat, that’s significant production growth right there. But they are set with other prospects to growth production this year. Anyway, fun with math. Once they get a flow rate from the current well and a delineation well, they can start talking about permeability, not just porosity and that will help them talk about how many wells the 20,000 acre structure, forgetting another 7,000 acres updip, will require to develop and what the ultimate productive capacity of the structure will be. I left out declines on purpose as it’s academic at this point but it points to higher cash flow in any case.

  35. 35
    zman Says:

    Thanks Nifkin, for some reason it didn’t come up on my news page. Hmmmm.

    Thanks much Hoss!

  36. 36
    zman Says:

    HK – Listening to BMO presentation now. Stoneburner presenting, not Floyd. Just mentioned the EFS oil well, said they are drilling now, will have well results in a couple of months.

  37. 37
    milepost_43 Says:

    Not sure of source…from Dan W. forum

    Stone (SGY/$19.05/Market Perform) provides detailed company update. A quick
    rundown on the highlights of the release: 1) the company’s 4Q09 production
    will fall ~4% short of our estimate (and guidance) due to operational and
    weather-related setbacks. 2) A preliminary reserve report is guiding to 2009
    year-end proved reserves of 410 Bcfe, down ~20% y/y. 3) Stone announced a
    2010 capex budget of $400 million, up $100 million from 2009 (25% Marcellus,
    25% Gulf of Mexico Shelf, 15% Gulf of Mexico deepwater, 15% recompletions,
    20% other). 4) Marcellus Shale and Amberjack Field developments are
    progressing on schedule, but the company had a dry hole at its Blue Jay
    prospect. Bottom Line: This was clearly not a bullish release by Stone and
    the stock will likely be under pressure today. Please see this morning’s
    comment for additional detail.

  38. 38
    zman Says:

    Stoneburner giving a very good presentation. Much more professional than Floyd.

  39. 39
    zman Says:

    WRES up 7% … hmmm, looks like it is trying to break out on the chart.

    HK – thinks they will see a higher per well recovery factor in the Eagle Ford in the future, with a lower decline rate in the first year.

  40. 40
    zman Says:

    Jefferies looking for a 265 Bcf withdrawal on Thursday. That would be a record withdrawal for any week of the year according to my data set.

  41. 41
    milepost_43 Says:

    ML TA on Market..shoot me an email if you want a copy..milepost43@comcast.net

    Market Analysis Comment
    Up up and away – target range
    S&P 500 1200-1250
    Energy remains in a longer-term market
    leadership trend and continues to test
    major relative chart support. Above the
    relative downtrend line from mid 2008
    would help confirm a successful test.
    On an absolute price basis, the sector
    completed a base in late 2009 that
    supports the case for upside in 2010.
    In our view, crude oil prices are set up for
    further upside in 2010 and this has the
    potential to benefit the energy sector.

  42. 42
    zman Says:

    UPL presentation at BMO starting now, thanks again Hoss.

  43. 43
    john11 Says:

    HOUSTON, Jan. 12 /PRNewswire-FirstCall/ — Newfield Exploration Company (NYSE: NFX) and Anadarko Petroleum Corporation (NYSE: APC) announced today a joint transaction to acquire TXCO Resources Inc.’s (TXCO) assets in the Maverick Basin of Southwest Texas for up to $310 million. The final amount will be determined at closing, which is expected in mid-February 2010. The closing is subject to bankruptcy court approval.

    According to the terms of the transaction, a wholly owned subsidiary of Anadarko will acquire more than 80,000 net acres in this basin from TXCO for approximately $93 million and increase its operated working interest in these properties to 75 percent.

    Newfield will acquire substantially all of TXCO’s remaining assets in the Maverick Basin, which include more than 350,000 gross acres (300,000 net acres), for approximately $217 million. Current net production of the assets to be acquired by Newfield is 1,500 BOEPD, of which two-thirds is oil. The acreage has multiple geologic targets, primarily in the Eagleford and Pearsall formations.

    Newfield President and CEO Lee K. Boothby said, “This acquisition is consistent with our goal of focusing on large, domestic plays of scale. Including this transaction, we have added more than 500,000 net acres in long-lived resource plays over the last several months. Our acquisition of TXCO’s assets will mark an entry into the Maverick Basin and provide us with a deep inventory of potential locations – both oil and gas. We have been active in South Texas for more than a decade and our people have a proven track record of success. We will ensure that our team is focused on the right assets in this region to create long-term value for our shareholders. We expect to have an active drilling program in 2010.”

    Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration, stated, “The additional interest being acquired increases our position in this program and should afford Anadarko strong growth opportunities in the high-potential emerging Eagleford and Pearsall shale plays. The enhanced liquids yield we’ve encountered to date in the Eagleford offers significant value and balances the dry gas opportunities found in the Pearsall. We have been very encouraged with our early results, are pleased to add to our existing 180,000 net acres in this area and look forward to continued success.”

  44. 44
    jat Says:

    http://finance.yahoo.com/news/Newfield-and-Anadarko-prnews-1594976886.html?x=0&.v=1

    thoughts?

  45. 45
    zman Says:

    Just saw it pop up. This is the same deal that NFX was beat out on by APC last week. I think its a good move long term as the acreage will help them establish a new core area, I think they are getting a lot of acres on the cheap. I think NFX needs to get long the more economic EFS and thereby reduces its leverage to the significantly higher cost Woodford, which is what people think of when they think of NFX and its shale exposure. So now they have nascent positions in the Marcellus and the EFS.

  46. 46
    Gtinvest Says:

    z reference #40 Do you mean this past year of any year?

  47. 47
    zman Says:

    NFX – just got sent an @NFX of their Goldman comments, will have comments in a bit.

  48. 48
    zman Says:

    This @ NFX is their 2010 outlook, comments in a bit.

  49. 49
    zman Says:

    GT – never seen a weekly withdrawal that large. Biggest I have is 254 Bcf in Feb 2007 and 260 Bcf in January 1997. The average for this week of the year is just under 100 Bcf withdrawn.

  50. 50
    zman Says:

    NFX Notes 1

    Good oil wells announced in Uinta Basin (Rockies), 6x normal IPs with IPs in the mid to high 300 bopd range for 2 wells,

    They picked up a lot of acres in the Montana Bakken, 221,000 net acres, did a deal for 156K of those with the Blackfeet in Glacier County. This is where ROSE is drilling. NFX plans to drill 10 wells there this year. Good validation for ROSE.

    … more in a second …

  51. 51
    zman Says:

    I think 50 is very good for ROSE …

  52. 52
    elijahwc Says:

    Having received the big upgrade from Pritchard yesterday, Gary Evans and his SVP of Capital Markets, Brad Davis are doing a lunch call in the NY offices. Then on to BMO where they will present at 3:15 and warm the crowd up for either the RRC presentation or the Bull & Bear. I’m not sure which. I’m pretty sure however that the market cap of this company is going higher than the current 103mil.

  53. 53
    zman Says:

    EXXI up a dime now at 3.78; MMR up 38 cents.

    more NFX in a second…

  54. 54
    andy Says:

    bop – nice buy on EXXI this morn.

  55. 55
    zman Says:

    It looks like NFX’s Channel well was 860 bopd, this is the one near BEXP’s last two big 3,000+ boepd wells, hard to tell if that’s it or not on the map.

    Woodford – going more to super extended laterals, not much to talk about.

    This looks like half an update. Nothing on the Granite Wash, nothing on deepwater, and nothing on international operations. All good, but they did not go ahead and issue new guidance.

  56. 56
    BirdsofpreyRcool Says:

    thanks, andy. I hesitate posting my trades, as they don’t always work out right away… but, with EXXI one can keep an eye on oil prices, the mrkt, and MMR. If EXXI gets too outta whack with those benchmarks, I think it’s tradeable. It’s certainly liquid enough.

    I used to do this with CRK and CHK. For some reason, those two stock traded at about the same dollar-price for years (with similar debt ratings). You could swap between the two when one got too outta whack.

    With EXXI, if MMR is up and the mrkt is stablizing (I had TT’s 60/40 LONG call in my back pocket, along with Jerome’s $3.75 print milestone), it just seemed like EXXI was going to move higher.

    Anyway, looking less stupid now. Gotta say, z, I admire you for hanging all your trades out there for everyone to see. That is tough to do, on a daily basis.

  57. 57
    zman Says:

    FST presenting at BMO now, talking about increasing rates of return in the Granite Wash.

    Was at 6.5 Bcfe EUR, revised up to a 7.5 Bcfe type curve now.

    Thanks BOP, makes you think one more time before pulling trigger for sure.

  58. 58
    tomdavis12 Says:

    Z: After you read the MS comments about EOG maybe you could mention what you think of his valuation call. I have started to gain some respect for Richardson.

  59. 59
    zman Says:

    Tom – I can tell you after reading the first page his execution risk comment is unwarranted given EOG’s track record. Will have more in a minute but that struck me as a bit of a stretch. They are not overpromise types and there has been no sign of slippage in their liquids volumes as they have increased that portion of the portfolio. That combined with his comment about outperforming the peers by 6% in the back half of 2009 lead me to question if he really has much to talk about. 6% = no big deal.

  60. 60
    Patipati Says:

    VNR is taking a bit of a hit. Appears to be some insider option/selling. Anyone have any other news?

  61. 61
    zman Says:

    To – finishing thoughts on the Morgan’s EOG comment.

    NAV – could care less, not how that trades.

    EV/EBITDA – says high end of range but his EBITDA is 6% short of Street, despite a pretty lofty commodity price deck of $85 and $6.50 for 2010. So that’s a bit odd. I know from about a week ago that the Street was under $6 gas for 2010 and they are still mostly a gas producer. So it feels like he’s reaching for a reason to downgrade after the run it has had, despite the fact that numbers are not that elevated.

  62. 62
    bill Says:

    tph out with a report today on ng supply

    they predict declines and a higher ng price during 2010. They say the eia data is overstated. They are using HPDI data direct from NG producers

    If the Gov’t is right and TPH wrong NG prices would fall.

    i have my money on TPH

  63. 63
    zman Says:

    Pati – don’t see anything.

  64. 64
    zman Says:

    S&P noon time sell down has the group back on its heels again. NFX pairing losses nicely but not much else to talk about.

  65. 65
    zman Says:

    Stepping out for coffee.

  66. 66
    DrLink Says:

    elijahwc- you mentioned yesterday that the Cardium play will be the next Bakken- I agree. Do you have any others you would add to this list of Canadian Cardium players? Z,I hope it’s ok to go outside the box on different oil ideas on this board…? Thanks

    on tse…

    MEL
    BXE
    NAE.UN
    WTL
    PBN

    PWE on NYSE

  67. 67
    tomdavis12 Says:

    Z: Thanks for the EOG comments

  68. 68
    zman Says:

    DrL – absolutely.

  69. 69
    RobBanks Says:

    re 60, VNR

    Just a thought, maybe LGCY’s secondary after the close yesterday reminds investors that E&P MLP’s have run up tremendously, and that VNR is probably salivating to do a secondary at its current price.

  70. 70
    zman Says:

    Rob – was thinking same although the move is bigger on the VNR (but so too has been the move up of late). Still haven’t found anything else.

    S&P having its worst day since year end.

  71. 71
    zman Says:

    EIA oil preview:

    Street looking for medium sized builds in oil and gasoline and a 1.7 mm barrel draw on distillate stocks. This comes against a good sized build in distillate stocks last year so it should be supportive of HO, which in turn should lend support to oil.

  72. 72
    zman Says:

    Jerome – does EOG look like it has support around $94 to you?

  73. 73
    RMD Says:

    AEZ update: Wunderlich, not in offering, downgrades, CK Cooper, in deal, upgrades target from $3.50 to $6.50 – something more than”fine tuning”. Thinks will drill 3 net wells in ’10, 8 in ’11 with an average IP of 1,800b/d and is willing to value acres at $4,500/acre. Seems optimistic to me given we have not seen a well yet.

  74. 74
    zman Says:

    RMD – sour grapes and he was up 35% since initiating just over a month ago. Agree on the well IP being optimistic, their Goliath area is not over loaded with IPs of that size that I see. Have they commented on the well design of those 3? Lateral length, number of stages, Bakken or 3 Forks or Lodgepole targets?

  75. 75
    elijahwc Says:

    #66 DrL:

    PBG
    BNE
    WSX

    I’m long PBG and NAE.UT given the dividend streams.

  76. 76
    zman Says:

    DVN in 5 minutes at BMO

  77. 77
    zman Says:

    Crude down $2 at $80.50, heating oil leading it lower, that and the equity markets.

  78. 78
    zman Says:

    MMR volume on a weekly basis at all time record on my charts. Pretty please it is holding this level given the market action today. Not coming out of the $15s yet, planning to add more of them or something a bit higher.

  79. 79
    Jerome Blank Says:

    RE: #72, EOG…I see what you looking at…the $94 area provided a bit of flagging resistance on the way up back in the middle of December, this could help act as support on the retrace, if this does not hold …the next area of major daily support is in a zone rounded to between the 50 day daily SMA at about $91.00 and $93.00 the consolidation resistance zone from back in early Novmber…so I’m thinking the support zone just below $94 might be a bit stronger…

  80. 80
    zman Says:

    Thanks JB.

  81. 81
    zman Says:

    ZTRADE:

    MMR – Added (20) February $17.50 calls (MMRBW) for $0.59 with the stock just under $14.

  82. 82
    zman Says:

    DVN call started at BMO.

  83. 83
    choices Says:

    Z-question on option strategy-what delta do you look for when selecting the option strike-I’ve made some fairly stupid decisions on some options lately with very small delta-if and when the stk moves, it hardly shows up.

    Thanks.

  84. 84
    bill Says:

    pxp closed friday at 31.49 before the mmr news

    Right now its at 31.70

  85. 85
    zman Says:

    Choices – good question, it’s a judgement call. Let me get back to you after I stop listening to this DVN call so I can try to put something together that’s intelligible.

  86. 86
    RMD Says:

    http://www.chron.com/disp/story.mpl/business/energy/6810361.html
    a Houston Chronicle article on MMR discovery.

  87. 87
    RMD Says:

    #74: using BEXP’s Rough Rider metrics and decline curves.

  88. 88
    zman Says:

    RMD – hear, ya, BEXP would put the IP closer to 2,100 boepd now. But nevertheless, goliath is a bit east and north of there if I’m reading this map right.

  89. 89
    zman Says:

    VTZ – SU about to speak at BMO.

  90. 90
    VTZ Says:

    Questions about the fire and asset monetization no doubt.

  91. 91
    Jerome Blank Says:

    EXXI intraday…if you run a simple trendline beginning with the low price point on a 30 minute bar/candle beginning with yesterday’s low price on the gap up… and continuing the trendline up at all the 30 min lows thru today, you’ll see the trendline is continuing to hold… still consecutive higher lows on the 30 min as we speak…

  92. 92
    zman Says:

    SU moving from 320,000 bopd now to 1 mm bopd 2020. No acquisitions required. Talking about lots of opportunities to improve efficiency, says they are one of the least efficient of their peers following the combination.

  93. 93
    BirdsofpreyRcool Says:

    Jerome — so, all else equal (and oil doesn’t fall outta bed), where would EXXI be this time next month?

  94. 94
    zman Says:

    SU estimating at some point there will be a $1 to $2 carbon tax per barrel.

  95. 95
    zman Says:

    NG moving to its HOD into the NYMEX close (up 14 cents); Crude off the lows, still off $1.70

  96. 96
    VTZ Says:

    Did they imply that was the net cost to offset/mitigate or did they mean that it would be like a direct tax that could be mitigated with projects/offsets?

  97. 97
    Jerome Blank Says:

    #93 BOP…right now, I’m watching to see if EXXI can hold this 30 min intraday trendline…lol
    (I don’t know how to post the smile faces!) …unless there is a major unforeseen change, I’m holding to at least the P&F price target of $7, don’t know if we make it in a month, but who would have thought we would be at these levels today without the benefit of hindsight…

  98. 98
    zman Says:

    They said they are doing things to offset/mitigate, didn’t outline costs, said the $1 to $2 per bbl is a tax. Said he was happy Copenhagen was over.

    Also said they will try to keep op costs in the $31,32,33 range going forward but talked about getting that down by $10 at some point (maybe due to size, was not clear).

  99. 99
    zman Says:

    CRK call on now.

  100. 100
    BirdsofpreyRcool Says:

    Jerome — I figured EXXI would make it to $4… either by Feb (on DJ results) or by Dec (on increased production). As it stands, we get both DJ and increased production. Next biggie will be what happens at Blackbeard… don’t know the timing for any decision there. z?

  101. 101
    zman Says:

    Great line from CRK CEO – in life, you treat things as either trash or treasure. And we treat the stock of the shareholders as treasure and that’s why, if you want it, you have to buy it in the open market.

  102. 102
    zman Says:

    BOP – Blackbeard decision timing unclear to me, they may go in and deepen it by about a 1,000 feet or drill another well there.

    Next catalysts for MMR will be Blueberry Hill and Hurricane Deep, next month or so on those. Doesn’t help EXXI though.

  103. 103
    BirdsofpreyRcool Says:

    #101 — LOL. And THAT’S why CRK and CHK no longer trade around the same dollar price. Priceless!!

  104. 104
    BirdsofpreyRcool Says:

    B’Hill and HD don’t directly help EXXI… but, anything that continues to prove up the thesis will help.

  105. 105
    dij Says:

    JB
    That EXXI trendline is matched by the one on top for the highs. A nice channel.

  106. 106
    zman Says:

    Hurricane Deep is also called Flat Rock south, so if its successful, it could boost MCF.

  107. 107
    zman Says:

    Iran nutbag watch:

    http://news.yahoo.com/s/nm/20100112/ts_nm/us_iran_bomb_professor

  108. 108
    zman Says:

    Been bidding Feb low strike BEXP for hours, not going to get it.

  109. 109
    zman Says:

    Jerome – MMR, any thoughts beyond wow is that extended? The long term chart is pretty interesting. Yesterday was the single most important day in that company’s history in my opinion.

  110. 110
    bill Says:

    My screen is red except for Rose

    Any reason why they are bucking the trend?

  111. 111
    bill Says:

    107, I hope we are doing stuff like that, but i think its another country

  112. 112
    zman Says:

    Bill – not really, been that way all day. Did you see my comments about NFX entering ROSE’s Montana Bakken play in a big way? That could be giving them a bit of positive sentiment.

  113. 113
    zman Says:

    Bill – I hope he believes we are so he can go all hormonal and do or say something the U.S. and allies in the region can’t ignore. That issue is a ticking time bomb, so to speak.

  114. 114
    zman Says:

    CNBC breaking away from reporting on the EIa’s STEO to cover some stock cheat getting out on bail. That’s useful.

    STEO shows small reduction in oil demand as expected, sees higher price for natural gas in 2010 than in last forecast. Will look over and have any comments in tomorrow’s post.

    Choices – I will have a response to your question in tomorrow’s post.

  115. 115
    zman Says:

    MHR speaking in 5 minutes at BMO

  116. 116
    cargocult Says:

    Will MMR or EXXI neeed a secondary offering to get at all this gas? They were talking $70mm+ per well.

  117. 117
    zman Says:

    Cargo – yes, at least in the case of MMR. It’s probably a ways down the road. The first well is the most expensive one. The next wells they talked about being much cheaper which makes sense. For now MMR has a lot of cash >$200 mm and an untapped revolver (this revolver may shrink a bit due to reserve pricing on their earnings call next week but I think not a big deal). The timeline will be ordering the long lead time items for testing this first well (a year from now) and drilling the first delineation well. I would expect them to want to see the stock higher before they due an equity deal bt Jim Bob did say how its hard to get money for exploration from the markets but easy to get it for development projects and that financial types would soon be pitching them on all manner of deals.

  118. 118
    zman Says:

    With 117 said, I think its possible that if their next two wells show positive indications of results in the next month or so that the stock would be headed significantly higher and they might pop off a secondary.

  119. 119
    RMD Says:

    88: and there are still no wells to provide datapoint #1. Thinking bearishly, what if Tong Trust was dry: ugh.

  120. 120
    zman Says:

    Eli – This doesn’t look like the MHR of old. Hmmm.

  121. 121
    bill Says:

    >Did you see my comments about NFX entering ROSE’s Montana Bakken play in a big way? That could be giving them a bit of positive sentiment.

    no i missed that, I need to get more familar with it

  122. 122
    BirdsofpreyRcool Says:

    Dow Theory Signals U.S. Stock Gains to Last: Technical Analysis
    2010-01-12 20:18:10.716 GMT

    By Lu Wang
    Jan. 12 (Bloomberg) — U.S. stocks may keep rallying after the biggest annual gain since 2003 because Dow Jones indexes tracking industrial and transportation companies hit simultaneous highs, according to followers of Dow Theory.
    The Dow Jones Industrial Average and Dow Jones Transportation Average climbed to the highest levels since Oct.
    1, 2008, yesterday, after rising more than 15 percent in 2009.
    Dow Theory, developed by Wall Street Journal co-founder Charles Dow in the 1800s, holds that moves by the industrial average must be “confirmed” by the transportation average to last.
    “It’s a bullish development,” said Ryan Detrick, a Cincinnati-based analyst who studies chart patterns to predict prices at Schaeffer’s Investment Research. “When you have transports confirming industrials, that kind of says the economy is indeed coming around.”
    U.S. manufacturing increased more than economists forecast in December, according to government data released last week, and China announced record imports on Jan. 10. The Standard & Poor’s 500 Index, the benchmark for U.S. equities, has surged 68 percent since sinking to a 12-year low in March as the yearlong contraction in American gross domestic product ended. The U.S.
    government lent, spent or guaranteed up to $9.66 trillion to end the financial crisis.
    During the 10-month advance, the market hasn’t experienced a correction, or decline of more than 10 percent.

    ‘Significant’ Drop

    Richard Moroney, who manages $160 million at Hammond, Indiana-based Horizon Investment Services and edits the Dow Theory Forecasts newsletter, says stocks need a “significant”
    pullback followed by a rebound to new highs to establish a “full-fledged bullish signal.”
    “That would be the final confirmation that the move since March is the first stage of a bull market, rather than a bear- market rally,” Moroney said. He has 20 percent of his stock fund in short-term bonds because of the risk of a correction.
    The Dow industrials fell 0.6 percent at 3:15 p.m. in New York today and the S&P 500 lost 1.1 percent after Alcoa Inc.’s earnings trailed estimates and China moved to cool economic growth.
    “In Dow Theory terms, the advance that started in March is still in force,” said Philip Roth, chief technical market analyst at Miller Tabak & Co. in New York. “More than likely, a decline here is probably a minor affair.”

  123. 123
    zman Says:

    Bill – just that ROSE has drilled a Bakken/Lodgepole test in N. Montana and went ahead to drill wells 2 and 3 without releasing results on the first. Now NFX has acquired 221,000 acres in the same area with plans to drill 10 wells this year. This is around an old Montana oil field (Cutbank) and I just thought it was encouraging that NFX is jumping in without any public results of big wells there in decades. They must like what they are seeing and I’d guess hearing.

  124. 124
    choices Says:

    #114-thanks, Z.

  125. 125
    bill Says:

    this is bad for calif producers

    might explain some of pxp move

    Facing multi-billion-dollar budget shortfalls, the California legislature has warmed up an old proposal to levy a severance tax on oil and gas production to fund the state’s struggling higher education system. The measure, Assembly Bill 656 (AB 656), was voted out of the lower house Revenue and Taxation Committee Monday with a “pass as amended” recommendation, sending the proposal to the Appropriations Committee

  126. 126
    zman Says:

    Eli – Not liking the MHR guy’s style, just gives me a weird feeling, talk down the old people, play up a couple of potential wells with a “you do the calculations closer”. He may be right but the assets are all over the map and I’ve got enough on my plate … pass.

  127. 127
    bill Says:

    volume picking up in rose

    700 k shares today

    11-Jan-10 20.56 20.58 20.23 20.37 425,000 20.37
    8-Jan-10 20.38 20.61 20.05 20.50 339,300 20.50
    7-Jan-10 20.63 20.71 20.21 20.47 251,600 20.47
    6-Jan-10 20.57 20.75 20.32 20.71 628,500 20.71
    5-Jan-10 20.59 20.86 20.30 20.70 533,900 20.70
    4-Jan-10 20.16 20.81 20.16 20.69 416,400 20.69
    31-Dec-09 20.08 20.48 19.80 19.92 318,100 19.92
    30-Dec-09 19.82 20.29 19.68 20.14 338,800 20.14
    29-Dec-09 20.41 20.62 19.80 20.04 439,600 20.04
    28-Dec-09 19.77 20.20 19.51 20.16 425,200 20.16
    24-Dec-09 19.66 19.91 19.46 19.62 87,500 19.62

  128. 128
    bill Says:

    126, lol

  129. 129
    elijahwc Says:

    Z He’s a banker. Last time around he rolled 100m into billions to XEC. As he says “we do a couple EF and a couple MS get get to raise equity @ $5 shr by year end and everybody will be happy about it. Thats the plan and lots of people made lots of money last time around.

  130. 130
    zman Says:

    Eli – sweet, good luck, I can’t kiss all the girls.

  131. 131
    RMD Says:

    126: Hang in there Eli, NOG mgt was promotional and Z warmed to it in time….

  132. 132
    zman Says:

    RMD – I don’t own the common, just some Feb options. I have very little experience with NOG but what I heard on the last two presentations did not run in the same vein. And they are a lot further along than say, a new and improved MHR or something like an AEZ.

  133. 133
    zman Says:

    CXPO – down another 5% to $4.

  134. 134
    isleworth Says:

    CXPO to the dump; what happened there?

  135. 135
    zman Says:

    CXPO – Just watching it bleed. I would imagine the the buy reports are being polished by the bankers.

  136. 136
    zman Says:

    Other MLPs getting hit too, see EVEP, not so much on LINE yet.

  137. 137
    zman Says:

    Beerthirty

  138. 138
    BirdsofpreyRcool Says:

    rather a weird day, for some reason.

  139. 139
    bill Says:

    rose up a little more after hours

    Jan. 8–The office towers of downtown Houston are full of small oil and gas companies with scars to show for years spent in a sometimes brutal business. Rosetta Resources (ROSE), though younger than many of its rivals, has already collected a few of its own.

    Spun off in 2005 from power generation company Calpine Corp. (CPN), Rosetta had an especially bad run of luck early on. Battles with its former parent cast a shadow over the company that continued until late 2008. Then came the worst recession in decades.

    The company, however, has continued plowing ahead. Indeed, it has recently emerged as a rising star among small-cap oil and gas exploration and production companies, as well as a darling of investors.

    The optimism stems chiefly from the company’s good position in emerging oil and natural gas shale plays in North America, aggressive growth plans and a well-regarded management team led by CEO Randy Limbacher, ConocoPhillips’ (COP) former exploration and production chief for the Americas.

    Since early November, the company’s stock price has risen nearly 40 percent to about $20 per share.

    “The market is definitely giving these guys a vote of confidence,” said Duane Grubert, an analyst who follows the company for CRT Capital Group in Stamford, Conn.

    It’s a big turnaround for a company that had such a rough start.

    Rosetta launched in July 2005 after buying all of Calpine’s (NASDAQ-OTCBB:CPNLQ) domestic oil and gas exploration and production assets for roughly $1 billion. But Calpine’s (NASDAQ-OTCBB:CPNLQ) bankruptcy the following December brought trouble. In Chapter 11, Calpine (NASDAQ-OTCBB:CPNLQ) sued Rosetta, claiming it underpaid for the oil and gas assets, igniting a legal fight that would drag on for more than a year.

    “We were handcuffed,” said Michael Rosinski, Rosetta’s chief financial officer.

    Eventually, the two companies reached a settlement in which Rosetta agreed to pay about $12 million to resolve the claims and another $85 million to complete the original transaction. Yet more struggles were ahead.

    The economic downturn that began in late 2008 sent crude oil and natural gas prices plummeting, spurring producers of all sizes to scale back drilling programs in 2009. Rosetta continued production in its core areas of South Texas, the Rockies and Northern California. But it used the slower period to strengthen its balance sheet, prune its portfolio and acquire acreage in emerging hot spots.

    Last year, for instance, the company doubled the size of its position in the Eagle Ford gas shale play in South Texas to about 52,000 acres. Other Houston oil and gas companies, including ConocoPhillips (COP), Swift Energy (SFY) and Petrohawk, are also in the Eagle Ford.

    The move proved timely. Companies with stakes in U.S. shale gas plays recently have been buoyed by Exxon Mobil’s (XOM) $41 billion deal in December to acquire Fort Worth’s XTO Energy (XTO), a major player in Texas’ Barnett Shale, as well as by a cold winter that has increased demand for natural gas for heating. At the end of 2008, Rosetta’s proved reserves were 95 percent natural gas.

    Investors have also paid special attention to Rosetta’s roughly 240,000 acres in an area known as the Alberta Basin Bakken Shale in northern Montana, thought to be one of the most promising emerging oil fields in North America. Crude oil prices back around $80 a barrel have made such prospects especially attractive.

    “I think the love affair of investors with the Bakken Shale is what has contributed to Rosetta’s stock price appreciation,” said Rehan Rashid, an analyst who follows the firm with Friedman, Billings, Ramsey & Co. in Arlington, Va.

    The shale positions, if they deliver, could make the firm an attractive takeover target in coming years.

    But Rosinski said that is not the company’s aim. “Our goal is to be a strong, stand-alone, independent oil and gas company,” he said. Nor does Rosetta have any plans to seek joint-venture partners to help develop its existing shale acreage, as some of its competitors have done, he said.

    Rosetta recently set its capital spending budget at $280 million, part of which will go to further development in the Eagle Ford and Bakken plays. The company also forecasts double-digit production growth, to a range of 145 to 155 million cubic feet per day, and growth in proved reserves, which at the end of 2008 stood at 398 billion cubic feet equivalent. The company has not released proved reserves estimates for 2009.

    “Our plans for 2010 reflect the significant progress we made in 2009 to create inventory for growth from existing assets, as well as from successful exploration activities,” Limbacher said in a recent company statement, adding “our efforts to transform Rosetta have paid off.

  140. 140
    elijahwc Says:

    Z – Jim Bob just sighted down at the Bull and Bear explaining to MHR’s Gary Evans how to put the polish on promotional and kick start a low price higher. Believe he said something about talking geology instead of deals and getting T Boone to ask the questions.

  141. 141
    BirdsofpreyRcool Says:

    elijah — #140…. that’s a HOOT!

  142. 142
    BirdsofpreyRcool Says:

    API

    Crude +1,206k
    Gasoline +6,824k
    Distillate +3,595k

  143. 143
    elijahwc Says:

    Yep BOP and now Aubrey shows up cause he and Jim Bob need to explain to Gary how you buy art for the corporate HQ.

  144. 144
    BirdsofpreyRcool Says:

    elijah — STOP… you’re killing me!! lolol

  145. 145
    BirdsofpreyRcool Says:

    next thing you know, Aubrey will be giving wine tasting tips!!

  146. 146
    jat Says:

    APIA on BBG showing a ginormous crude imports up from 8.7 to 9.7 while refining imports are flat from 14040 to 14105 and overall utilization is flat.

    Basically, this API data is puke worthy.

  147. 147
    bill Says:

    oil down 2.50

  148. 148
    RMD Says:

    Longer term thinking: CHK started talking about international exploration a year ago on cc.s, and hinted on their TOT call that STO might have something to say on their early Feb. cc. It strikes me that like TAT promises in the Paris Basin, the indusrty will probably find A Big Bunch of gas, now that they have started looking, in places no one has looked for (shale) gas before.
    Add XOM/XTO.
    Add MMR, dare I say MCF?, in the GOM.
    The industry might find too much over the next 3-5 yrs. and hurt USA prices, narrow the EEC/USA spread since I’m guessing most will be found near the EEC, maybe even free up LNG cargos (who knows).
    I did not see a single comment about the fact that CHK is willing to sell calls on 2014 gas at $7.50-$8.00 because they think gass will be less than that between now and then; if memory serves, this is a big change in expectations from last year.
    My guess the next stock moving event will be an international find of size, or spinning the conventional assets into an MLP after listening to the cc. replay.
    Just thinking out-loud fwiw, but I’m getting more bearish on gas.

  149. 149
    zman Says:

    Re:

    “I did not see a single comment about the fact that CHK is willing to sell calls on 2014 gas at $7.50-$8.00 because they think gass will be less than that between now and then.”

    They have only 7% of their 2011 hedged. I did not see 2014. How much gas do they have hedged then? I’d bet it is very small. If you look at their gas plays like a portfolio, as they do, there will be those plays that are lower return, like a Fayetteville shale, which is might make sense to take the hedge on, vs others, like the Haynesville, where you wouldn’t feel as much need to lock in on. I think the fact that they said they were worried about a double dip in gas prices last week should be of more near term concern on the gas price story and I think that the fact that they are still so lightly hedged in 2010 and 2011 is more pertinent to gas prices in the medium term. Recall that many E&Ps get to throttle back on drilling next year for getting acreage into HBP; this means that if prices aren’t high, they’ll slow down again.

    Re international shale: Yes, I think you will see it several but that it will take several to be a stock moving even, unless you just mean as it pertains to CHK and then one will likely take it into the $30s. Best guess is central Europe (Poland, Germany), the S. Africa (this will be CHK), then Russia, and then China. Different economics than LNG as you are talking about longer time to get volumes up and pipelines built as you drill thousands of wells, build gathering systems, and large diameter pipes to market vs big target drilling of LNG (also takes a lot of time but is logistically probably easier than exploiting an area the size or the Haynesville. Haynesville, though a big target, is still going to take a very long time to develop, Marcellus much longer.

    Re “I’m getting more bearish on gas”. I forget, when were you bullish, lol?

  150. 150
    zman Says:

    API data with notes:

    Crude trading off 65 cents in the after market at 80.15.

    Crude Oil Inventories: UP 1,206 KB
    Crude inventories rose in the week as
    imports jumped 995 kbd to 9.73 mbd and domestic production rose 81 kbd. Crude
    runs increased 91 kbd to 13.89 mbd. Cushing inventories fell 895 kb in the
    week.

    Can’t fault any of the above, big jumps in imports happen, especially when prices rise. Good to see Cushing actually fall some.

    Gasoline Inventories: UP 6,824 KB
    Gasoline stocks soared higher
    despite a 72 kbd increase in demand to 8.94 mbd while imports were unchanged at
    719 kbd.

    The preceding paragraph makes no sense at all. You have basically flat refinery utilization from the first paragraph, higher demand and flat imports. That should not yield a monster increase in gasoline inventories.

    Distillate Inventories: UP 3,595 KB
    Distillate stocks saw a
    large build in the reporting week as demand fell 450 kbd to 3.59 mbd and imports
    rose 165 kbd to 408 kbd.

    Makes a little more sense except that demand really should not be falling.

  151. 151
    zman Says:

    Completely obvious watch: Going to be a rough open tomorrow. Will still be ugly but glad I’m almost entirely in Feb calls and cash in the $10 KP II.

  152. 152
    Jerome Blank Says:

    RE: #105..hi dij…nice spot on the topside intraday EXXI trendline…I was focused on the lower trendline support today, seeing that $3.65 was such an intraday ceiling…but the channel held, I’d really like to see EXXI moves higher off support from here tomorrow, $4 would be the next likely topside channel resistance zone which I believe was BOP’s initial February target…

  153. 153
    Jerome Blank Says:

    RE: #109…MMR…agreed, it was an amazing day…dialing out on MMR to a 10 year weekly, the current price is still far from the $35 high set back in june of 2008, so it’s got plently of altitude remaining …right now MMR is hitting some resistance at the 200 week SMA…dialing back down to the daily chart, from here MMR reverses back into o’s on a print of $13…one upside to at least a little pullback is it will make stop placement easier to set up…

  154. 154
    RMD Says:

    CHK said twice they were selling volatility by selling calls on ’13 and ’14 gas at $7.50-8 becasue they expected prices in those years to be less than that.
    Did not listen to % hedged closely; I’m sure it is in their slide show.
    LNG: I don’t pay attention, just thinking out loud.

  155. 155
    zman Says:

    My sense is they are taking a different tone in the last couple of months, with the hope of creating a new demand market for natural gas in transportation. Instead of saying gas is scarce and prices will rise into the future, they are saying gas is abundant, will stay cheap, and therefore should be seen as something we should put in our cars.

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