Thursday – Gas Preview and Oil Review

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Market Sentiment Watch: Surprisingly strong energy group yesterday after a weak looking (but weather and time of the year influenced) set of numbers came out of EIA.  Follow through today will be depend on achieving the big kahuna gas withdrawal the Street is looking for now that holiday related industrial demand slumps should be out of the way. At 260 Bcf, consensus is set pretty high, especially given the surge in imports (both piped and shipped) we saw in last week's data (see details below). FST announced two record setting wells for the Granite Wash (details in the Stuff section). Otherwise, it's a slow day for energy news with earnings announcements set to begin trickling out of the space next week with MMR leading the way on Tuesday.

Ecodata Watch:

  • Jobless claims: 444K vs 433K expected,
  • Retail sales for December: Down 0.3% vs 0.6% forecast,
  • We get inventories at 10 am EST, forecast is 0.5%,
  • INTC reports after the bell.


In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - FST
  6. Odds & Ends


Holdings Watch:

  • $10KP II:
    • $28,200
    • 44% Cash
    • The quick view holdings on the Holdings tab have been updated.

Yesterday's Trades:

  • ROSE – Added (15) ROSE February $22.50 calls (RSEBX) for $0.70 with the stock at $21.20. I continue to hold the common as well and think that they could have news out anytime between now and their quarterly results on their Montana Bakken wells.


Commodity Watch:

Crude oil fell $1.14 to close at $79.65 yesterday, after the EIA released weak looking numbers. The front month contract chart now looks like this. This morning crude is trading up slightly. 

  • Don't Make Me Laugh Watch: The U.S. is "raising concern" over China's recent spate of oil reserve acquisitions.  According to David Shear, deputy assistant secretary of state for East Asian and Pacific Affairs ~ "We are pursuing intensive dialogue with the Chinese on the subject of energy security, in which we have raised our concerns about Chinese efforts to lock up oil reserves with long-term contracts,"  . Word to the wise buddy, China will take care of China. You need to worry about competing on the world stage, not begging them not to. 

Natural gas rose $0.14 to close $5.73 yesterday as the Street anticipated a large storage withdrawal today.  My sense is that even with a withdrawal of 260 Bcf (consensus estimate now) that further upside will prove difficult with gas capped for the near term at close $6. A large miss today will send gas back into the low $5s.  This morning gas is trading flat.

Natural Gas Preview

  • My number: 240 to 250 Bcf withdrawal
    • Last Week: 153 Bcf withdrawal
    • Last Year: 94 Bcf withdrawal
    • 5 Year Average: 97 Bcf withdrawal
    • 10 year Hi: 147 Bcf withdrawal
    • 10 year Low: 47 Bcf withdrawal
    • Weather: extremely cold, with gas weighted heating degree days at a season high 269, much colder than the normal reading of 224.
    • Imports - imports were up a whopping 3.3 Bcfgpd vs last week as LNG imports reached a new seasonal high at 3.5 Bcfgpd and Canadian volumes cranked up to their highest levels in the last 16 months.
  • Street Consensus: 260 Bcf (with a range of 194 to 272 Bcf (most however are right around the consensus)).  I'd note that if we get the consensus withdrawal, that would put storage at only 132 Bs over the five year average or about a 5% surplus. We haven't seen that small of a surplus since last February. If we get another extreme cold shot, which still looks likely in February, we could see storage trough in the 1.5 Tcf range at the end of the withdrawal season, setting a distinctly more positive tone in which to await further deterioration in the EIA supply data this year.


EIA Oil Inventory Review


CRUDE OIL - Big imports surge (probably short lived) and a notable increase in refinery throughput yield a much bigger than expected build in storage. Refinery utilization should be fairly flat over the next couple of months before rising seasonally. Crude's surplus is by no means out of hand should demand decide to reassert itself via products.









DISTILLATES - Despite the unexpected build, stocks fall vs the year ago and 5 year averages.


Stuff We Care About Today

FST Announces Two Big Kahuna Granite Wash Wells

  • Forest's 3rd and 4th wells in the Granite Wash play both come in at a whopping 37 MMcfepd and are far from dry gas wells:

    • Well #3:
      • 15.1 MMcfgpd
      • 1,200 bcpd (oil and condensate)
      • 2,400 bpd natural gas liquids
    • Well #4:
      • 16.0 MMcfgpd
      • 1,300 bcpd (oil and condensate)
      • 2,200 bpd NGL's
  • My inclination will be to chase as these will be tagged with the line, biggest onshore wells drilled in 2009 or 2010, much like their 2nd well was last Fall. The stock should smartly on the move and analysts will be taking numbers up early. I will be adding Feb and perhaps January calls, just out of the money early in the session today. 
  • Recall that NFX has at least 5 unannounced GW wells that it had deferred completions on late in 2009 due to low prices which should be in their 4Q release.
  • The Catalyst Watch will be modified next week to reflect this news.

Other Granite Wash Players (several of which should see positive price movements today)


(CXPO) - Look for my quick write up here tomorrow. 


Odds & Ends

Analyst Watch:

  • CLNE - Lazard cuts to Hold
  • MEE - target raised $5 to $58 at UBS. Note the recent number of upward revisions in this space. Refer back to my comments on coals last week here.

Interesting Reading Watch:

182 Responses to “Thursday – Gas Preview and Oil Review”

  1. 1
    zman Says:

    FST very much set for a strong gets stronger day so I’ll likely take some shortly after the open and then wait for the gas numbers, adding more on a 250+ number.

  2. 2
    milepost_43 Says:

    “like selling pans to miners”-Horn River Gas Basin frac sand……. —

    Forgot about this company till I saw Wed PR. Like the concept…missed the first 10x…maybe not the next…..

    Stikine¹s new focus on the potential production of Frac Sand from silica sources in north eastern BC (NEBC) represents a strategic opportunity in the market and a first for what is shaping up to be a massive gas play in region.Since the play is relatively new, frac sand products are currently being imported in large quantities from great distances to complete the early wells. Gas exploration companies and well developers are paying hundreds of dollars per tonne for frac sand delivered to the well head, the bulk of which is cost related to shipping thousands of kilometers.

  3. 3
    BirdsofpreyRcool Says:

    TechTrader says it’s a “coin flip” day.

    HeadTrader says he would buy any morning’s dip as the eco-data weren’t that bad. He also points out that we got a bank upgrade (that no one is talking about yet) and JPMO and INTC report after the close today.

  4. 4
    zman Says:

    Other Granite Wash names starting to see bids marked up. NFX, SM, CHK.

    Thanks BOP

    Milepost – I did the same with CRR on the ceramic side.

  5. 5
    zman Says:

    NFX and SM getting nice carries off the FST news which has that name up $2+. Options not yet open.

  6. 6
    zman Says:

    NFX > $52, new cycle high, looks like a breakout, JB, look ok on the PF for little resistance into the upper $50s?

  7. 7
    zman Says:

    EXXI – I have a news indicator but no story, anyone?

  8. 8
    zman Says:

    EXXI – Got it, started at Buy at Dahlman.

  9. 9
    BirdsofpreyRcool Says:

    z — DR put a PT on their “buy” rec?

  10. 10
    zman Says:

    BOP – All I have is a headline so far, expecting the note any minute.

    FST en fuego. NFX chasing it. Gotta like the Catalyst Watch.

  11. 11
    BirdsofpreyRcool Says:

    BB hasn’t picked it up yet either

  12. 12
    jiveyjr Says:

    NFX has early giddy up

  13. 13
    zman Says:

    Jivey – they have at least 5 GW wells to announce soon.

  14. 14
    elijahwc Says:

    Here be the DR Cliff Notes on EXXI:

    Initiates Coverage: Buy – Price Target: $4.50
    ► We are initiating coverage of Energy XXI Limited. (NASDAQ: EXXI) with a BUY rating and a $4.50/share price target. To leverage our coverage of McMoRan Exploration, and its recent success in the Ultradeep trend with the Davy Jones discovery, we are launching coverage of Energy XXI. While the corporate strategy differs, EXXI has similar large upside catalysts to MMR, as the two are partners in the Ultradeep trend. However, EXXI’s core GOM shelf assets are much oilier, have higher working interests, and it intends to use free cash flow to be a consolidator on the shelf. If it continues to find accretive acquisition, maintains its base decline and spends 25-50% of its cash flow on Ultradeep exploration/development, we think EXXI will grow production per share at a reasonable, sub-10% pace. ► EXXI is one of best vehicles for exposure to near term oil prices with short reserve life and 60+% oil weighting. EXXI is one of the oiliest names in our coverage space and its short reserve life (less than 10 years) means it is more exposed to near term commodity prices than companies with longer dated reserves and potential. Exposure to Ultradeep/Davy Jones comes with oil weighted cash flows and reserves. While EXXI has less net exposure to the Ultradeep trend than MMR, its base valuation is driven more by oil than natural gas. Current production is 64% oil (this relates to MMR’s 25%). If investors want exposure to Ultradeep development and exploration, but have concerns with natural gas prices, EXXI could provide an interesting vehicle for exposure. We estimate the Ultradeep potential is worth $1.75/share to our NAV. ► Recent strength in stock performance related to low-cost acquisitions, deleveraging and success in the Ultradeep. EXXI was one of the strongest performers in the E&P group during 2009 (up 230% vs. the EPX index up 54%). The performance was a result of improved oil prices, an inexpensive and deleveraging acquisition, and exploration potential/success. After a weak 2008, the move was warranted as the company quickly appreciated its difficult leveraged position and significantly lowered spending, retrenched and waited for an opportunity to redeploy its capital (which it did in Ultradeep exploration and through accretive acquisitions). ► Production profile should look attractive over next year with hurricane related production returning along with increased working interest in core assets. EXXI will be bringing roughly 5 MBOEPD of production back online over the next several months (relative to 3Q09 production of 10 MBOEPD). This coupled with the recently acquired working interests in assets which EXXI already operates, should provide a comfortable production boost in 2010 (up 37% from 2009) and should provide plenty of cash flow to stabilize base declines, find accretive GOM acquisitions and fund its portion of the Ultradeep drilling partnership. ► Consolidating the GOM through acquiring cheap/mature assets, managing the decline and generating free cash flow – should be a successful strategy if the company sticks with it. Because of EXXI’s current market cap, we think there remain significant opportunities to acquire mature assets for reasonable prices. We think if EXXI manages the decline of its assets well and it continues to find accretive acquisitions such as the December acquisition of the Mitsui properties, it can maintain production relatively flat, while targeting larger upside in its exploration program. ► Improving growth and cleaner balance sheet point to higher multiple (5.1x currently) and larger NAV ($4.50/share). We estimate sum-of-the-parts NAV of $4.50/share for EXXI. Also, in this market environment, due to the potential catalysts in its 2010 Ultradeep drilling program, we think it should trade at a significant premium to its historic EV/EBITDAX multiple of 4.3x. We also estimate the value of the proved reserves alone at $2.50/share, which provides a strong valuation base, and we think because of the longer dated potential, exploration and development in the Ultradeep, the stock should trade near it’s NAV of $4.50/share and a 6.0x multiple.

  15. 15
    tomdavis12 Says:

    Z: Fact or fiction. EXXI will be subject to a 1 for 5 reverse split.

  16. 16
    dij Says:

    Was sold out of the NFX FEB 55’s with a standing order @1.2. Bought back in at 1.75.

  17. 17
    zman Says:

    Tom – I’ve heard the rumor, don’t know if it holds water.

  18. 18
    BirdsofpreyRcool Says:

    elijah — thank you!

  19. 19
    zman Says:

    I took a couple of shots at FST and missed. Watching the chart on this little pullback from the opening highs. Will wait for the gas number at this point. NFX up 6.5%.

  20. 20
    BirdsofpreyRcool Says:

    tomdavis — the reverse share split was voted on during the last proxy. I don’t know if it passed or not. But, having EXXI eligible for margin trading helps the hedge fund holders and puts it on the radar list for mutual funds. so, in this case, a reverse split would be a good thing, imho.

  21. 21
    BirdsofpreyRcool Says:

    (“radar list”??)

  22. 22
    reefguy Says:

    Davy Jones- back to drilling and still in sand….

  23. 23
    dij Says:

    How about resistence for NFX at @55, the top June 2007 -January 2008?

  24. 24
    BirdsofpreyRcool Says:

    thinking they are going to come up with a LOT more than just 135 ft of pay in Davy Jones, in the final analysis…

  25. 25
    bill Says:

    traders covering before ng number

    what do you folks think

    does ng go up or down on the number

  26. 26
    tomdavis12 Says:

    BOP: I do agree with your point. The majority of reverse splits come from very weak companies, so it is just a head scratcher for me.

  27. 27
    zman Says:

    Jim Bob said on the last call he should see at least 2 more members of the Wilcox below 28,200, on the way to 29,000. Nice thing is, these are blanket sands, very little in the way of faults, so on a 20,000 acre structure, it’s like draping a thick hydrocarbon bearing blanket over a giant mountain. Nice. And the porosity being over 20% with that kind of pressure means an awful lot (technical term) of gas will be in those blanketed sands.

  28. 28
    zman Says:

    Bill – I think sub 240 could see some selling, despite its size. I don’t expect it to get cracked unless we get an extremely low ball number. Surprised by the number of guys who are right around the Robry number at 257.

  29. 29
    BirdsofpreyRcool Says:

    tomdavis — methinks Schiller is embarassed to be a penny stock. That, and more importantly, the stock will appeal to a wider base, if it’s above $10. Usually a reverse is a kiss o’ death for a stock. But, not in this case. People don’t want OUT of EXXI… they want IN. methinks, anyway, fwiw.

  30. 30
    elijahwc Says:

    VLCCF rates on the move:


  31. 31
    zman Says:

    Bill – flipside, on a very strong number, I don’t think gas has a lot of upside north of $6, maybe a short spike on something like 275 Bcf but keeping it over $6 even with storage well on the way to cold will be a function of weather and some actual noticeable declines in the monthly supply data.

  32. 32
    zman Says:

    Eli – Have seen multiple upgrades of FRO in the last 2 weeks.

  33. 33
    bill Says:

    robry is 277 now

    i think it goes down under 250 as well

    # 29 I agree and the little guys will like being able to have margin on it

  34. 34
    bill Says:

    seasonally the tanker rates always go up in q1..tankers stocks i like nat and tnp

    Not in them

  35. 35
    zman Says:

    Bill – re Robry – thanks.

  36. 36
    zman Says:

    TPH out pounding the table on HK again, talking up non-core asset sales and big production that more than offsets keeping the production numbers intact. I say no duh to that. These guys don’t beat numbers, they trounce. Makes me wonder at all the avoidance of the name by TPH after the last stock deal. Sour grapes then, want in the next deal now?

  37. 37
    tomdavis12 Says:

    BOP: The uninformed EXXI shareholder might look at that split and think ” Danger, Danger Will Robinson ” ( Just had to get one of my favorite movie quotes in )

  38. 38
    zman Says:

    CXPO – So far not all that impressed, valuation high, missed prior guidance. Interesting plays in S and W Texas. I’d like to see it fall more before I bite on the common.

  39. 39
    zman Says:

    FST backed all the way to “only” up 8% from 13%+ earlier. Still waiting.

    SWN flat on the day, largely unhedged in 2010, they should swing hard either way with the number.

  40. 40
    zman Says:

    Wizard, let me know when you are in.

  41. 41
    Bob Says:

    BOP- Remember pointing out the unusual SNS 20 for 1 reverse split on a $12 stock?. After the $240 split adjusted price, it quickly went up over $100 to $350, pulling back now to $304, still more than 25% above the pre-split number

  42. 42
    elijahwc Says:


    Pritchard Capital Partners, LLC –

    Neutral – Price Target: $26

    FST proving that it can replace and grow production from the Granite Wash, Haynesville, and Alberta Deep Basin after selling approximately $1.1 billion in assets. Early results from the Haynesville and Granite Wash have been encouraging.
    Event We are updating our estimates for 2010 to reflect FST’s divestitures and 2010 cap-ex guidance. Investment Thesis • 2010 Capex and Allocation: $600-$700 million with 75% allocated to the Granite Wash, the Haynesville and the Alberta Deep Basin. • Rig Count: Expects to have on average 20 rigs operating throughout the year (will reach target by end 1Q): four in the Greater Buffalo Wallow area, four in East Texas/North Louisiana, seven in Alberta Deep Basin, three in south Texas, and two focused on other areas. • 2010 Wells: 29-34 (9 non operated) Granite Wash wells, 12-16 Haynesville wells, and 35-40 Alberta Deep Basin wells • Granite Wash: First two operated Granite Wash wells had IP rates of 17 MMcfe/d (one-third liquids) and 30 MMcfe/d (two-thirds liquids) respectively. • Haynesville: First four operated Haynesville horizontals had 24 hour IP rates from 14 to 21 MMcf/d. Looking at the Louisiana SONRIS scout reports as of January 7, 2010, it appears that three of the wells are in Woodward field in Red River Parish and one is in Converse Field in Sabine Parish. It also appears that FST is currently drilling one well in Woodward and has three undrilled permits in Converse and two undrilled permits in Woodward. • Trading Sell: Recent outperformance (up 25% in past month vs. group 18% increase) likely to be tempered given stretched valuation. Valuation/Risks Our price target of $26 a share equates to an implied 6.5x 2010 EBITDA multiple and equals our per share NAV which is based on a $6.25/Mcf mid-cycle NYMEX gas price. Historically the company has traded at a 5.4x forward EBITDA multiple versus the peer group which has traded at 5.8x forward EBITDA (2005-2009 average) reflecting lower debt adjusted per share growth and the absence of a shale catalyst.

  43. 43
    BirdsofpreyRcool Says:

    thanks, Bob. It’s rare, but it does happen. Depends on if investors feel “trapped” in a penny stock or not, pre-split. EXXI seems to have a fair amount of liquidity, so don’t think people feel “trapped”… but it lacks the marginability and $10 minimum that makes it more attractive to various flavors of fund managers.

  44. 44
    elijahwc Says:

    FST: Today from B&S

    Boenning & Scattergood Inc.

    Outperform – Price Target: $34

    Positive Granite Wash Update; Reiterate as One of Top Picks, Increasing Price Target to $34
    Key Points: Forest announced that its third and fourth operated horizontal Texas Panhandle Granite Wash wells tested at 37 MMcfe/d (~60% oil and NGLs) each. This compares with its first two horizontal wells in the play, which tested at 17 and 30 MMcfe/d, respectively. The 3rd and 4th wells were drilled and completed with ~4,200 foot laterals and 9-to-10 frac stages with an average cost of ~$6.8 million. Forest hopes to continue to reduce well costs. FST is currently operating four horizontal rigs on its 94,000 net acres in the Granite Wash play with plans to drill 20–25 operated wells and 9 non-operated wells in 2010. Importantly, Forest has tested ~80+% of its acreage in the play with vertical wells and also does not expect to have any takeaway capacity issues in the play. Overall, we believe that Forest’s 10-12% “organic” production growth target from Q4 ’09 to Q4 ’10 could prove conservative with continued success in its Granite Wash program.

  45. 45
    zman Says:

    Re 44

    It’s a no brainer that numbers for FST will come up. Note that these were not extended laterals or massive frac stage count wells. Those concepts will get tested in the play this year. Most likely by NFX and CHK.

    NG back to even on the day pre storage.

  46. 46
    tomdavis12 Says:

    Z: FST has a bond 7.25 of 6/15/19 rated B1/BB-. If you can buy @ par, maybe today’s news could lead to an upgrade.

  47. 47
    zman Says:

    Tom – Dunno, debt to cap is about 60%, coverage will be improved, would need to take a look at their covenants. Reserves per well here have got to be in the > 10 Bcfe range which will be a big plus. This is now most likely the most economic onshore play in the U.S.

  48. 48
    zman Says:

    Gas selling off with a minute ’til the number, down 7 cents.

  49. 49
    elijahwc Says:

    Reverse splits. This reminds me of one of my biggest winners a little seismic company called Digicon which became a company called VertasDGC which tried and failed to get together with Petroleum Geo-Services eventually sold to another major. Seitel maybe? It all started with a 10 for 1 reverse split.

  50. 50
    bill Says:

    ng selling off into the number

    a leak????

  51. 51
    zman Says:

    266 Bcf,
    with a revision

  52. 52
    bill Says:

    266 is great

  53. 53
    bill Says:

    whats the revision

  54. 54
    zman Says:

    That’s a good number, the revision is minor, just 5 Bcf.

  55. 55
    bill Says:

    R=Revised. Reported revisions for the week ending January 1, 2010 lowered working gas volumes from 3,123 Bcf to 3,118 Bcf. As a result of these revisions the implied net withdrawal for the week ending January 1 changed from 153 Bcf to 158 Bcf. These changes resulted from resubmissions of data from one or more respondents.

  56. 56
    bill Says:

    so yoy fell 271

  57. 57
    bill Says:

    John Harwood does a better job than Gibbs, imho

  58. 58
    zman Says:

    2,852 Bcf in storage puts up 103 Bcf high to year ago levels and 121 Bcf high to the 5 year average. Looked like some folks tried to scare the market lower, hoping that if they sold, there would be a cascade on a lower number should it happen.

    Re CNBC – but the kid doing the natural gas report did a lousy job.

  59. 59
    zman Says:

    The revisions have the effect of raising last week’s number from 153 to 158 Bcf and keeping this week’s number at 266 Bcf. Traders wanted to sell, maybe they point to the weather and say, “well, that’s it” but I don’t see this as bad at all and I’m thinking we see a reversal before the end of trading. But, it is natural gas, the most volatile commodity on the planet…so you never know.

  60. 60
    bill Says:

    Im very happy with the ng #.

    bastardi is calling for coler weather after the warm up and the warm up is only a warm up to normal numbers

    I think the yoy number comes down to 0 in a matter of weeks and to me thats the real news

  61. 61
    bill Says:

    cooler, i need a new keyboard

  62. 62
    zman Says:

    Hear ya bill

    Last week Storage:

    up 9.9% from year ago
    up 11.1% from 5 year avg.

    As of this report Storage:

    up 3.7% from year ago
    up 4.4% from 5 year avg.

  63. 63
    zman Says:

    Looking at a SWN short term trade, down $1 now, on this gas pullback.

  64. 64
    zman Says:

    Volume on the front month NG contract declining now, stuck down about 18 cents at $5.55.

  65. 65
    zman Says:


    SWN – Added (20) Feb $55 Calls for $0.43 with the stock off 2% after natural gas retreated in the face of a strong storage withdrawal of 266 Bcf. See site for further details on storage today.

  66. 66
    West Says:

    Granite Wash.Highlights from recent in depth article from Oil & Gas Investor , October ,2009, Hart Publications….. The Granite Wash covers an area approximately 160 miles long from the SE in OK to the NW into TX Panhandle and is up to 30 miles wide. It is made up of a series of Washes at depths of 300’to 19,000′. The prospective Wash zones can be as thin as 10′ up to 4,000′. All most all of these zones have been drilled thru on the way to the deeper Morrow formation which has produced tremendous amounts of gas for years. The Upper Granite Wash zones are much oilier with liquid yields of 60 to 70 bo/mmcfg. Some areas are prone to water production which can be a problem. From Forest section of the article, ” The opportunity to stack laterals off the same pad or even stack laterals out of a single wellbore could reduce cost further. ‘This is an area where we can run mutliple rigs for mutliple years and hammer the effiencies.’ “

  67. 67
    nifkin Says:

    any thoughts on DVN weakness? underperformer all day today

  68. 68
    bill Says:

    BHO doesnt like obscence bonus

    i wonder what he thinks about al gore making a billion

  69. 69
    zman Says:

    Nifkin – don’t see anything, looks to just be reversing out yesterday.

    Bill – I wonder at the fact that almost no one talks about these bonuses being paid largely in stock with 5 year vests, incenting the recipients to not trip up their companies.

  70. 70
    zman Says:

    NG – trading sideways at 5.55, volume still dwindling. More hedged gassy names seem to be weathering the pullback a little better.

    When you look at the next several weeks of comps, there are some big numbers out there but it still appears that this week’s weather should erode the YoY surplus in next week’s report.

  71. 71
    zman Says:

    Analyst Watch: Sidoti cuts ROSE to Neutral

  72. 72
    zman Says:

    Bastardi saying brutal start to winter, followed by 10 day break, then look out.

  73. 73
    zman Says:


    Wondering if the link above will work for you guys, I bought the pro site which it says I can share.

  74. 74
    bill Says:

    it wants a log on

  75. 75
    bill Says:

    try cut and paste 🙂

  76. 76
    zman Says:

    Can’t it’s a video.

  77. 77
    zman Says:

    15 minutes until POTUS on banks.

  78. 78
    Patipati Says:

    zman, link doesn’t work. needs signin

  79. 79
    Popeye Says:

    It looks like you will have to repost the content Z.

  80. 80
    Popeye Says:

    Hk is working today.

  81. 81
    zman Says:

    It’s a video of Bastardi’s maps. He is basically calling for this warm up to very warm, surprising people and then a return to a nasty winter, maybe as cold as the last few weeks for February in the South and Northeast.

  82. 82
    bill Says:

    for 8 bucks you can get 2 months at accuweather

  83. 83
    zman Says:

    Pop – Yeah, that was the hedged gassy name in particular I was thinking about as holding through this little dip in gas (still flat lining on the table down 15 cents).

    SWN – someone with volume noticing the disparity today.

  84. 84
    zman Says:

    E&P and gassy service (thinking HAL) staring at the gas numbers in disbelief. As long as the president doesn’t tax the market to death I would imagine we get a rally soon.

  85. 85
    bill Says:

    this bastardi musing is worth 8 bucks all by itself



    Consider this.

    The average increase of CO2 per year is 1.5 parts per million. That is .00000015 increase per year as far as total atmospheric concentration. The human tough is .05 of that, which means the evil we are contributing is responsible for .000000075 of the total CO2.

    The distance from London to our world headquarters here in State College, Pa., is 5791.4 km. This is 579,134,000 cm. Which means that the equal of about 43 cm if you were to take a step west-southwest to be closer to the AccuWeather headquarters if you are in London. I would take a step the same distance and we would be closer by 86cm… So in a journey from State College to London the CO2 that humans contribute is less than a half meter.

    Now imagine if you were asked to pay taxes on the rate of CO2 increase. In other words, your tax rate is set to the amount of CO2 man puts into the air. On 10 million pounds, your tax would be 7.5 pounds. Of course, if we had all this global warming your CO2 is causing that would be more than enough to pay for grit since it wouldn’t be snowing anymore.

    Sorry if such a tiny amount ruins any delusions of grandeu

  86. 86
    zman Says:

    XNG flat on down 19 cent gas front month, a little less of a decline in the strip.

    OIH outperforming the broad markets today.

    So the stocks really not overly concerned about the warmth. I have to say the back half of January forecast now looks a bit warmer than normal around this area but will still be cold enough to keep the heat on in much of the producing region throughout much of the day and all night.

  87. 87
    zman Says:

    Just in from T Boone:


    I’m going to get straight to the point of this email.

    We imported 4.35 billion barrels of oil in 2009 at a cost of over half a million dollars per minute.

    Yes, you read that correctly.

    4.35 BILLION barrels imported in 2009.

    Over $500,000 dollars spent per MINUTE on foreign oil.

    That’s another $265 BILLION siphoned out of America’s struggling economy, and we still haven’t adopted a real energy plan to reduce our dependence on foreign oil.

    For this reason I’m going back on the airwaves with a new television advertisement this week. In the ad, I encourage Americans to contact their Members of Congress immediately in support of the NAT GAS Act. You can view the new ad here

    If you haven’t already signed the Energy Independence NOW petition, I encourage you to click here and sign it as soon as possible. If you’ve already signed it, forward this email to 2 of your friends and ask them to sign it. This is important.

    55,000 people have signed the petition in the past week. Let’s keep sending the message to Congress over and over and over again until they finally hear us and pass legislation to end our dangerous dependence on foreign oil.

    We WILL get this done.


    P.S. Please share this email with your friends and family.

  88. 88
    bill Says:

    I really admire T Boone

    he was vilified as a green mailer and pizzed off the dems when he “swift boated” Kerry.

    The guys over 80 and really is showing leadership on this issue when most his age would be enjoying life.

    I guess his work is his life

  89. 89
    BirdsofpreyRcool Says:

    Not to be a cheeleader… but Jerome called it again yesterday. Little KOG making a run for the border today. Nice work, Jerome!

  90. 90
    BirdsofpreyRcool Says:

    (“cheeleader” = cheerleader… with a Boston accent… ha!)

  91. 91
    zman Says:

    NG starting slip again, down 24 cents, took out some stops at 5.50.

  92. 92
    bill Says:

    90 LOL

  93. 93
    Jerome Blank Says:

    RE: #6, #23 NFX charts & comments…


  94. 94
    zman Says:

    Strong work man. You vote in the lower right hand corner of that link in 93.

  95. 95
    zman Says:

    MMR getting a boost on the Dahlman rec on EXXI, coming up as a news story now, stock looks to be about to get on out of that holding pattern. Yes it’s up a lot, but if they are roughly a third of a 5+ Tcf structure, it will continue to rally.

  96. 96
    bill Says:

    the banks caused detroit problems


  97. 97
    West Says:

    continuing to add to KOG on breakout…

  98. 98
    BirdsofpreyRcool Says:

    #96… something Hugo would say.

    I call 100% BullSh*t on that statement. And I have Truth on my side, to back that statement up.

    Sad stuff.

  99. 99
    zman Says:

    MMR … and there it goes …

  100. 100
    bill Says:

    did something happen at kog today

  101. 101
    Wyoming Says:


  102. 102
    BirdsofpreyRcool Says:

    PXP really not seeing much of the luv, from it’s piece of the DavyJones action. At some point, that will have to change, I would think.

    Have you looked at PXP, Jerome??

  103. 103
    bill Says:

    96,98 this revisionist history and anti business attitude has me worried

    Oil companies will be next as they want 5 dollar gas

  104. 104
    bill Says:

    mmr – wow

  105. 105
    BirdsofpreyRcool Says:

    EXXI waking up again too… PXP next…

  106. 106
    bill Says:

    I kept pxp loser and sold my winners mmr


  107. 107
    zman Says:

    PXP – all other things being equal, they should not be down since the news hit. Less of an impact yes, down no. When you look at potential reserves vs current proved, it just means a lot more to EXXI and MMR than it does to PXP.

  108. 108
    BirdsofpreyRcool Says:

    #107… totally agree. But there are some different catalysts for PXP too. Think as more comes out about the APC/PXP Lucius well, the more the market will sit up and take notice…

  109. 109
    bill Says:

    107,thats why i kept it

    I think it will move sooner or later

  110. 110
    bill Says:

    Calif was talking about raising taxes on producers in the state, pxp and vq took a hit that day

  111. 111
    Jerome Blank Says:

    Re: #102 PXP, I’ll check it out…

    Thoughts on MMR resistance points…


  112. 112
    zman Says:

    NFX still not expensive, highly likely we see estimates, which are now called down on a yoy basis for 2010 march into positive territory when they launch their official guidance and release results in the GW. At present, they trade at 4.7x 2010 CFPS of $11.20 (with 2009 at $12.01)

  113. 113
    zman Says:

    Re 111. Thanks, that’s handy.

  114. 114
    skimo Says:

    ref 96- How about a tax on politicians- the cause and effect of the housing bubble is much more attributable to that group than banks. We can tax their life long annuity received for really mucking up our country’s finances.- ok I was just day dreaming, sorry

  115. 115
    Patipati Says:

    Zman, we haven’t talked about WRES for quite a while. 2 bills pending in CA for tax of 12.5 or 10%; haven’t passed YET. You are still holding?

  116. 116
    zman Says:

    Yes, I’m still holding. Want to see 2009 reserves and 2010 plan. I think I commented last week that I will lose patience and sell out if I’m not pleased with 2010 plan. The last time I heard them speak I was not impressed with the presentation.

  117. 117
    zman Says:

    Reef or RMD (or anyone else who has thoughts here), got any more positive thoughts on CXPO to sway me? I’m looking at TEV/EBITDA and reserve valuation and finding them expensive. I’d like to see them fall towards $3 or $2.50 at this point and I think it could happen if $4 breaks. The stock is off 25% from the offering price, an offering that boosted the share count by 300+% and took debt to cap down to 50%. I’m aware of Zavana cnty prospect, wondering if you have a more pressing catalyst here? That seems a ways off which could lead the stock lower as we wait.

  118. 118
    RMD Says:

    #117 CXPO: did you get my email? Forgot to mention how impressively Barclays and Credit Suisse botched the offering, which is usually a BAD sign.

  119. 119
    zman Says:

    RMD I don’t see anything, was it today?

  120. 120
    zman Says:

    Bob – you are a golden god for the UV Plus recommendation, monitor 6 up and running in a snap.

  121. 121
    RMD Says:

    MMR (dreaming big here) the only down gap to fill is at $22.38 on 10/1/08.

  122. 122
    RMD Says:

    119 I resent.

  123. 123
    zman Says:

    Got it, it was yesterday.

  124. 124
    zman Says:

    RMD – thanks, my thoughts as well. Expensive.

  125. 125
    Bob Says:

    Z-no problem; easy inexpensive way to expand platform

  126. 126
    jiveyjr Says:

    very good public chart list on stockcharts Jerome..thx

  127. 127
    baylor3217 Says:

    Thoughts on POT on this recent pullback?

    I’m thinking about a WILDB trade in the January 115s or picking up some Feb 115s.

  128. 128
    skimo Says:

    Z SLB not really mentioned lately. No catalysts upcoming?

  129. 129
    skimo Says:

    Z, no recent comments on SLB. Any catalysts coming for this guy or is valuation already too high?

  130. 130
    baylor3217 Says:

    I also have some NFX Feb calls here. Thoughts on the recent runup and possible profit taking today or stay in for a while longer?

  131. 131
    jiveyjr Says:

    baylor in addition to whatever Z might say if you click on Jerome’s link from above he has a chart on NFX posted that could give you some help….# 111

  132. 132
    zman Says:

    Re SLB – I have to think Andrew is a little more bullish on the Q4 call on Jan 22 to lead off service sector earnings. Rig counts are up in the U.S., international projects have not really been backed off as much as some were thinking and pricing power is expected to return. I’m in HAL now but may switch.

    Re NFX – Was considering a punt of my $50s and remaining in my 55s for NFX. I may sell both if the market looks stalled with an eye towards buying them back before earnings. Still cheap but it’s had a good run here and NG is paying a lot of attention to the forecast which may sap my gains. Mulling, would punt both for sure if $55 acts as a ceiling in the immediate future.

  133. 133
    zman Says:

    One hour until close of NYMEX, gas back over $5.50, but down 19 cents. Close will be interesting. Forecast slightly on the warm side through month end down here and in the east before cold creeps in from west to east in 2 weeks.

  134. 134
    kiaora Says:

    Z…is FST looking tempting in this range?

  135. 135
    skimo Says:

    Below article from this morning. Pickens shifting from wind to gas. May explain his letter re 87. Notice Pelosi is on shareholders list for CLNE.
    Pickens Slashes GE Wind Turbines Order
    Natasha Gural, 01.14.10, 10:45 AM EST
    The oilman turned wind advocate is concentrating on natural gas for now.

    The oil tycoon turned wind advocate is again shifting his focus. It once was wind. Now it’s converting trucks to natural gas.

    Texas billionaire T. Boone Pickens announced Thursday he has halved his order for wind turbines from General Electric ( GE – news – people ), indefinitely postponing plans for a Texas panhandle wind farm.

    The oil tycoon turned wind advocate will still receive 300 turbines for wind farms in and Minnesota , but those planned for a project in Texas will not be delivered. The original deal, made in 2008 between Mesa Power and GE, was for 687 wind turbines at a cost of $2 billion.

    “We are pursuing projects in Minnesota and to place a number of the 333 turbines,” Jay Rosser, spokesman for Pickens’ hedge fund BP Capital Management, said in a statement.

    Pickens says he will still build a wind farm in the Texas panhandle, but the 81-year-old chairman is turning his attention to natural gas. He is launching an advertising campaign urging Congress to pass legislation that would help pay to convert trucks to run on natural gas. Pickens is director of a natural gas company called Clean Energy Fuels Corp. ( CLNE – news – people ) that would benefit from such legislation. House Speaker Nancy Pelosi and her husband own stock in that company.

    John Podesta, President Clinton’s White House chief of staff, joined unlikely ally Pickens in a joint news media briefing Wednesday about legislation that would offer big tax breaks to fleets of heavy trucks that switch from diesel to natural gas

  136. 136
    bill Says:

    Id have less problem with the bank tax if the politcos were more honest. ie

    We need to tax those business that have money to cover our domestic spending program.

    to that end we will hit the 50 largest corporation with more taxes and individuals.

    instead they villify, deflect blame and bullshit us

    Oil & gas is next.


  137. 137
    zman Says:

    Kia – yep, but I think I’ll hold the cheaper NFX for that play. Honestly, the lack of support from natural gas is a bit of bugger here and I think I can wait. Analysts seem to be shying away on the group at the moment and while I generally don’t care what they think, I could see some downgrades on the pop ala BEXP last week. I’m still mulling there as well though.

  138. 138
    zman Says:

    Kia – If you could tell me how much INTC is going to beat by tonight it might help my process, lol.

  139. 139
    zman Says:


    NOG – Added (10) February $12.50 Calls (NOGBV) for $0.75.

  140. 140
    Jerome Blank Says:

    RE: #102, PXP…PXP has a very interesting chart…beautiful triangle breakout…charts and comments…


  141. 141
    zman Says:

    re 139, probably over paid for those by $0.05 as I went to split and didn’t dumb down by offer enough.

  142. 142
    zman Says:

    Jerome – did you get my email about your link?

  143. 143
    zman Says:

    Weekly and monthly charts look pretty interesting on NG / UNG.

  144. 144
    Nicky Says:

    Afternoon all.
    Been tied up with family visiting for what seems like months!

    Indices: Mondays high of 1149.75 is key. If taken out I expect to see 1158 -1170. There is a 45 day bullish cycle which is currently overriding some of the smaller more negative cycles and likely to last until 21st January or after. The more negative short term cycles could keep us in a consolidation pattern with support at 1143, 1137,1127,1115.

    Oil I still reckon wants to take a pop at the 85 – 90 level before we see a decent correction and will likely tie in with a high in the indices.

    Metals I think are working on a wave ii correction. Gold could get back to 1170 – 80.

    That said USD remains key yet again. It needs to hold the 76 level.

  145. 145
    RMD Says:

    CXPO: I wish I knew the IPO pitch Barclays used to sell (try to sell?) the deal. I don’t get it, other than the one monster well.

  146. 146
    zman Says:

    Happy New Year Nicky!

    Thanks much, any color on natural gas technicals you have I’d like to hear.

  147. 147
    zman Says:

    RMD – I went through a lot of pages last night scratching my head on them. Looks like they paid up via acquisitions for the production growth they talk about, high prices I might add, got in over their heads on debt, cut back and production looks to be swift to fall there so they do a deal and pitch is as a hot play gas name. Thanks for the input.

  148. 148
    kiaora Says:

    beat by .02

  149. 149
    Jerome Blank Says:

    #Re: #142…perfect, just sent a reply

  150. 150
    zman Says:

    JB – email back at you, need a name for it.

    Kia – that number leaves me on the fence. Top line beat as well?

  151. 151
    bill Says:

    More of Pennsylvania’s public lands may be auctioned for natural gas leasing next year after an offering Tuesday on 32,000 acres generated $128.5 million — twice the revenue budgeted

  152. 152
    tomdavis12 Says:

    Z: Tonight pricing for new issue BWEN – Broadwind Energy. Underwriters JP Morgan & Macquarie. Book like it should work well.

  153. 153
    tomdavis12 Says:

    looks like

  154. 154
    zman Says:

    KOG 2.70. Wonder if Lynn has a new presentation for next week at IPAA.

  155. 155
    bill Says:

    Bop , are you listening to our esteem congressman Mr Barney Frank?

  156. 156
    tomdavis12 Says:

    Z: Sorry BWEN is a secondary. My bad.

  157. 157
    zman Says:

    Jerome’s charts have been added to the blogroll links at upper right under JB’s Charts.

  158. 158
    bill Says:

    How do producers benefit from run up in spot prices. Who benefited in the florida upsurge??


    In Florida, spot natural gas traded between $14.12 and $14.99 per MMBtu for most of the report week, falling below $10 on Tuesday, January 12. Apparently driven by much-below-normal temperatures and high demand, the Florida spot price rose to levels not recorded since June 2008. Low temperatures in the State dipped below freezing, with temperatures ranging from 5 to 10 degrees below normal during the report week. Gulfstream Pipeline, which transports natural gas from Louisiana to Florida across the Gulf of Mexico, reported significant linepack problems as a result of high demand in the State.

  159. 159
    zman Says:

    Spot will have a pull on futures, but on the brief runs like that, the trader who had un nominated gas to sell. Certainly not FPL if you read the interesting stories link at the bottom of today’s post, lol.

  160. 160
    jiveyjr Says:

    KOG’s got game today….

  161. 161
    bill Says:


    I dont understand the trader role and how to capitalize on it.

  162. 162
    jiveyjr Says:

    now Z…can you talk Nicky into putting her elliot wave charts on stockcharts????

  163. 163
    john11 Says:

    Back from too much travelling…just wanted to say; truly awesome work going on here, thank you all very much!!

  164. 164
    john11 Says:

    And Z most of all mucho gracias.

  165. 165
    BirdsofpreyRcool Says:

    bill — #155… stepped away for a mtg. Thank goodness.

    Jerome — you have my undying and awestruck esteem for your charting (and timing) skills. You called the KOG breakout yesterday. Speechless.

    I have NO IDEA why KOG is running. Lynn has been very quiet lately. He presents at IPAA next Wed (which Andy will cover for us, in person). Other than that, periodically M&A rumors swirl around KOG. One day, I expect those rumors will turn into reality…

  166. 166
    BirdsofpreyRcool Says:

    z sent a msg saying the Internet Gods will not let him thru the Pearly Gates at present. He is working on redemption as we speak….

  167. 167
    andy Says:

    jerome – u still have that KOG u bot yesterday?? i hope so cause u deserve it for all the work u do for us.

  168. 168
    Jerome Blank Says:

    RE: #165, BOP… thank you much for the compliment…I hope your dad is holding on…

    Re: #167, andy…yes, thanks, I’m going to look for a good place to add again…perhaps on any retest of the breakout…

  169. 169
    BirdsofpreyRcool Says:

    Jerome — my Dad thanks you… and I still own a fair slug in an IRA. So, count me in too!

  170. 170
    zman Says:

    Back up.

    Thanks much John.

    SWN coming off the lows nicely.

    NOG recovering, should have news in the not too distant future there.

    Wow KOG breaking out of a long term base.

    NFX holding on for 5% gains off the FST news. PVA up 7% as well, also in the table of GW players above.

    NG closed around $5.57, basically fought off a dive below $5.50.

  171. 171
    JD Says:

    POT: the daily RSI almost touched 80 on Jan 7 and the stock headed down. 1st support was the green 21d avg, next stop appears to be 112.33, which is the 50d. On another daily chart I see support at the 21d near 114.75 but the RSI is still pointing down. In the second weekly chart the stock has formed a double top and the RSI is headed down. The MACD is pretty flat to up which is still positive longer-term. I would be inclined to see if the stock finds support most likely near the 50day and the RSI and MACD begin to point higher before entering a long position.

  172. 172
    Jerome Blank Says:

    KOG intraday update…dialing down to the 30 min chart…KOG hit resistance at $2.85 after the high vol rally tapered off a bit, the pullback is on decreasing vol…so right now, if anything, this pullback looks like a buying opportunity…

  173. 173
    zman Says:

    Feeling a little vindication on the SWN buy on the dip. Jerome, any thoughts on doing a chart there?

  174. 174
    zman Says:


  175. 175
    BirdsofpreyRcool Says:

    Watch for INTC… street is expecting a beat… so, it’d better be “bettern expected”

  176. 176
    bill Says:

    40 vs 30 a beat

  177. 177
    BirdsofpreyRcool Says:

    HeadTrader said that institutional investors were going to key in on GMs… looking for 60%. Sounds like that is within the range that INTC is guiding to.

  178. 178
    zman Says:

    INTC at $22+ AH.

    AA results fading from memory…

  179. 179
    Jerome Blank Says:

    RE: #173 SWN charts and thoughts….


  180. 180
    zman Says:

    Rogue Storm Watch:

    “An El Nino based rogue storm for the Gulf states occurring Friday afternoon into Saturday will produce gales up to 50 mph and 10- to 15-foot waves,” said Accuweather forecaster Joe Bastardi said in a posting on the company’s website.

    The storm is expected to hit the western Gulf by mid-day tomorrow, moving through the central and, finally, eastern portion of the Gulf by Saturday.

    “The threat of disruption will be on a similar level to that of a weak tropical storm, with heavy winds and high seas,” said Bastardi.

    Survey says: No real impact on prices

  181. 181
    zman Says:

    Re 179. Thanks. Was thinking that if it broker yesterday’s low it could try for a test of the $50 day at $46.

  182. 182
    Wyoming Says:


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