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Market Sentiment: Players are nervous and with no economic data today buyers may decide to sit out until the reset button is hit on the market sometime next week. SLB reported this morning and while they beat on the top and bottom lines, operating margins were lower again and the tone of the press release remained cautious as usual (see below).

In Today’s Post:

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


Holdings Watch:

  • $10KP II:
    • $21,100
    • 38% Cash

Yesterday's Trades:

  • None


Commodity Watch:

Crude oil fell $1.66 to close at $76.08 yesterday, after the EIA released a mixed to slightly positive looking set of inventory numbers (see below). The front month crude contract looks like this.  Crude's fall yesterday came amid a flattening dollar and the inventory numbers but was in part driven by fear that new financial market regulation would drive some players out of commodity trading. My sense is that 1) the details are still unavailable so it's probably early to get overly worried about that, 2) Barney Frank's comments of a "3 to 5 year time frame  for changes" tells me the proposed rule changes don't have widespread support in Congress, and 3) recent CFTC position limits are going to be set high  enough that they won't be much of a problem for a majority of trading firms, which means that firms will have time to "find away to trade via alternative vehicles. This morning crude is trading off twenty cents.

Natural gas closed up $0.12 at $5.61 yesterday after the EIA storage withdrawal came in bigger than an already swollen consensus expectation. This morning gas is trading up 10 to 13 cents.

Natural Gas Review


Going back to the end of my storage data (1994), we have not pulled over half a T from storage in any two week period (511 Bcf to be exact). In the heart of winter we topped 600 Bcf a few times in a 3 week span, sure, but never this much in two weeks.  This is what cold weather gets you no doubt but there has to be some decline in overall production, even with recent well completions (of wells that saw delayed completions due to lower prices). Moreover when you consider the recent surges in LNG and piped gas from Canada. Next week we are likely to see a number that's on the low end of the scale for this week of the year but forecasts for the end of January and February continue to firm towards a return to colder than normal temperatures. 

Storage May Trough Well Below Average. Note in the table above that we are, for the first time in almost a year and a half essentially back to being in line with the 5 year average storage level for this week of the year. If you look at graph G below you can see there are now fivee  cases out of the last decade’s weather (using historical withdrawal trends from current levels) that put gas storage below the five year average, several of them well below it. A month ago there was only one case that arrived below the 5 year average. If you get a repeat of either the 2001/2002 or 06/07 withdrawal seasons from this point on gas storage troughs at 1 Tcf (1,000 Bcf). A good level would be 1.5 Tcf for end of the withdrawal season storage.

On to the gas graphs ...



EIA Oil Inventory Review

ZComments:  We finally saw a pickup in distillate demand, better late than never, and expect more of the same next week. Also next week we are likely to see a dip in crude stocks, potentially a large one due to import interruptions (fog on the Gulf Coast) and a small bounce back in refinery utilization. The imports is likely to drive what I term a low quality beat on the headline number and probably won't be too much of a driver for oil unless it falls further today into the lower mid $70s. Notably, crude in storage fell below year ago levels for the first time since November of 2008.




















Stuff We Care About Today

SLB Reports Stronger Than Expect 4Q09 Results; Margins A Potential Concern

The 4Q09 Numbers:

  • Revenue of $5.74 B vs $5.452 B expected

    • Pretty Big Fall In Margins: pre tax operating margins fell 157bps to 19.5 ~ this is probably going to hurt the stock early as last quarter I think analysts came away expecting more flattish margins.  Part of this is pricing concessions which is how you get to the revenue beat.  
      • N. American margins resumed a downward path on mix and L American margins more than reserved gains last quarter
      • Europe / CIS/ Africa margins slid more sharply than the prior quarter
      • Middle East / Asia segment margins improved 66 bps which should come as some relief since they are high relative to SLB's other segments and a potential source of growth.
  • EPS of $0.67 vs $0.64 expected (range of $0.60 to $0.70)

Highlights: CEO Gould Comments:

  • Our outlook for 2010 remains largely dependent on the prospects for the general economy. At the end of the third quarter, we indicated that we were encouraged that signs were emerging that demand for oil and gas would begin to increase. Consensus forecasts predict that oil demand in 2010 will increase, particularly in the developing world, for the first time since 2007.
  • As a result, we feel that oil prices are likely to be sustained at current levels and that as our customers’ confidence grows, their exploration and production budgets will increase.
  • For natural gas activity we remain a great deal more cautious. Despite signs of some recovery in industrial demand and the impact of the recent cold weather, we consider that markets remain generally oversupplied.
  • Longer term we remain confident that considerably increased spending will be necessary to maintain sufficient reserves and production of hydrocarbons to meet the world’s needs.

Nutshell: No bounce in margins yet and probably weaker than most expected. Tone of the press release is still on the pretty cautious side near term. Stock marked lower early, but comments on the call will be key.

Conference Call: Today, 9 am EST.

Odds & Ends

Analyst Watch:

  • HAL - Raised from Hold to Strong Buy at Johnson Rice
  • Goldman upping Coal sector:

    • ANR price target $56 => $61
    • PCX $14 => $21
    • BTU $56 => $59
    • CNX raised to Buy
    • MEE cut to Neutral
  • XCO - raised from Underweight to Neutral
  • SLB - raised to Buy from Outperform at Calyon

Interesting Reading Watch:



233 Responses to “T.G.I.F.”

  1. 1
    zman Says:

    Analyst Watch:

    HK – raised to Outperform at Credit Suisse, target goes from 26 to 31

  2. 2
    bill Says:

    Great graphs!

    Re frac attack– good move

    I think the dems need a bipartisan win on something anything and a natural gas pact might be just the place.

    Pickens is predicting that he will get something by May

    Having our bus’s run on NG would be huge

  3. 3
    Wyoming Says:

    Bunch of bunk. For the un-initiated;

    Frac fluid additives are measured in gallons per thousand. In shale fracs, a friction reducers (poly-acrylamide) may be around 8 gallons of chemical for every one thousand gallons of fresh water it is mixed with. In a conventional type of frac (cross – linked) the largest chemical would be a guar based chemical we refer to as gel. Same type of stuff you would find in a yogurt or McDonalds shake. The gel is mixed in a diesel more than likely and once again, that slurry is mixed say 6 gallons per thousand gallons of water. Every vendor is different and concentrations will change. Other additives that may be added are like soap, say 2 gallons per thousand (gpt). In the case of the crosslink, there will be a metal used to link up the polymers, 250 deg F we use Borate, higher temps will use a Zirconate or Titunate. Smaller concentrations than the others mentioned.

    Of course all of this is know from the MSDS (material safety data sheets) that the Dept. of Transportation requires the CDL drivers to have. You know in case of an accident or something.

    Anything brought back to the surface is an unregulated oilfield waste. The worst component is any formation brine that may be produced and has to be disposed of. Of course the disposal wells are regulated to prevent any moron like the ones in Alaska who dumped toxic materials. These fluids are even tested before being sent down hole, to ensure they are classified as non-haz. They will test for heavy metals, the zenes, etc.

    And the disposal wells, of course they are regulated too, have to have mechanical integrity tests periodically. Most are deigned with fiberglass or lined tubulars. Annulus’ are tested for pressure containment ….. yup, just a bunch of Scooter’s and Skeeter’s in the oil patch. Apologies to any one on the site with those names.

  4. 4
    PackMan Says:

    Just read through yesterday’s thread; cracking up at the Obama bashing.

    As for the REAL President of Venezuela, he is busy accusing the US of causing the Haiti earthquake, claiming the US has an earthquake weapon.

    Do you think O is done reading Hugo’s book yet ?

  5. 5
    PackMan Says:

    Was a buyer of some SWN yesterday.

    Daily chart does not look pretty at the moment.

  6. 6
    zman Says:

    Wyoming – thanks for sharing. Separate topic of worry for the masses. Water wells that smell bad after a nearby well has been drilled. Any thoughts? Like maybe they smelled bad before?

    Pack – bash free zone today.

    SLB call about to start.

  7. 7
    Wyoming Says:

    Tell them not to drill their water wells so close to their septic tanks. Landlords did that to some of the staff house we rented in Indonesia.

  8. 8
    Nicky Says:

    Morning all.
    Oil trying to hold the 75% retracement of the December to January rally which comes in at 75.46.

  9. 9
    jat Says:

    SLB comment on NAM margins being retarded due to some mix from Alaskan/Canadian projects… means that this QoQ NAM mgn decline is NOT a great read through, hopefully, for other OSX.

  10. 10
    zman Says:

    Jat – yeah, big project timing in Canada I think.

  11. 11
    1520sbroad Says:

    Saw Scotia started HK at a buy today as well

    They started SWN at a hold
    I haven’t read analyst note

    #3 very helpful for this un-initiated interested investor

  12. 12
    zman Says:

    SLB Q&A starting

    1520 – bet the SWN rating is due to their low hedge position in 2010.

    NG up 18 cents, forecast cooling.

  13. 13
    zman Says:

    SLB notes:

    “if prices hold where they are we will see a recovery in exploration”

    “I have no doubt we will have a significant upswing overseas”

    N America and seismic remain the wildcards.

  14. 14
    zman Says:

    GE actually bid up following 4Q earnings. Wow.

  15. 15
    zman Says:

    Jat – SLB call sounds better than the press release reads. Bet you a hat that HAL’s tone is more sunny next week.

  16. 16
    jat Says:

    Yup. Not to be too optimistic, but:

    Basically their NAM margin weakness was due to SLB-specific projects in Canada/Alaska.

    And they got some pressure pumping pricing in December on a per contract basis.

    And he’s bullish on Iraq but doesn’t have boots on the ground yet.

    These are good comments for other lg cap service with pumping exposure and Iraqi exposure.

  17. 17
    zman Says:

    “Russia is going to have to spend a lot more, especially in western Russia, to sustain production” ~ SLB.

    That’s your biggest oil producer, having had a big growth spurt last couple of year, now having trouble keeping up.

  18. 18
    PackMan Says:

    Look at that opening flush on SWN !

    Z any news ? I don’t see any …

  19. 19
    zman Says:

    Pack – just the rating mentioned above. Low volume, daily occurrence of late. I think it turns as the cold weather hits again. We were just at news highs here last week so I think its PT and worry over this warm weather combined with their leverage to gas prices right now (lack of hedges).

    Jat – He did point out how easily they will be able to play in Iraq though, legal, relationships in place.

  20. 20
    rseidman Says:

    Z: What’s with the LINE move?

  21. 21
    zman Says:

    RS – Don’t know. Volume spiked as it cut the floor of it’s recent base. I suspect someone punted on that and several someones then joined them. Raymond James cut them to Outperform a couple of days ago. No news from the company and I saw nothing in their IPAA presentation that was a concern. I hold them long term for yield until I find a better replacement (tough since I’m yielding 18% on my cost and I don’t see them cutting the distribution any time soon) but VNR is on my list of things to watch as a possible add to my yield names. Along with some royalty trusts I’ve been looking into. That’s real Slow Money in my book and CNBC would be wise to start a new show with that title. But I’m sure it would just put people to sleep as they got paid to wait.

  22. 22
    jat Says:

    I hear you on 19 but I’m drinking the Duroc Danner kool-ade. They have hundreds of people already there and based on gossip Andrew is pissed they got the jump on him. Not saying SLB won’t be there, they will definitely get back there, but the other one is ahead.

  23. 23
    zman Says:

    What’s that, Helix?

    I’m not long the SLB, just making sure that what he’s saying doesn’t mean ill tidings for my HAL position.

  24. 24
    zman Says:

    TRGL – can’t kiss all the girls but good for you BSJ.

  25. 25
    Nicky Says:

    SPX cash did get down to 1107 area (I had said 1100 – 1100 yesterday) and it looks as if we have now completed v down so look for a corrective bounce back towards 1122 – 1130.

  26. 26
    zman Says:

    Thanks much Nicky.

    BOP, you awake, any comments on credit (since it suddenly is in the news again) and anything from HT / TT?

  27. 27
    BirdsofpreyRcool Says:

    Good morning…. in the Better Late Than Never Category —

    TechTrader is 55/45 SHORT this morning. So, not a whole lot of conviction behind that trade.

    HeadTrader is embracing his Inner Bull and calling for a market bounce.

    Trading Desks across the board have seen a “buyer’s strike” over the last two days. I’ll be looking for color from desks at mid-day, to see if there are any “plain vanilla” accounts stepping up to the plate.

  28. 28
    zman Says:

    Speak of the devil, lol.

  29. 29
    BirdsofpreyRcool Says:

    “you awake”?? are you kidding?!! ha.

  30. 30
    zman Says:

    Buyers strike is my opening brief paragraph theme.

    Anyone see NFX news, got a news bug but no story. Expecting something but not this week (probably next).

  31. 31
    zman Says:

    SLB – Jat, he doesn’t very optimistic on aggregate service pricing in the NAM yet. That runs sort of counter to what I thought I heard Wyo say recently and also what I hear from operator comments. Is tat what you are hearing (doing two things at once is problematic when listening to the Greenspan of CEOs)

  32. 32
    BirdsofpreyRcool Says:

    Seeing my little high-beta stocks (not only in energy, by the way) getting slapped down pretty hard today. “Risk taking” seems to be outta favor.

    On that note, I think there should NOT be tax-payer backing of prop-trading desks, private equity, and hedge funds. The thing is, BHO is so untrustworthy (IMHO) that when he actually comes up with a good idea (this could be his first one, btw) it gets lost. He has “cried wolf” a few times too many. But, I do agree, the US Govt needs to get out of the biz of backstopping “market risk.”

  33. 33
    zman Says:

    Saw a poll this am that said 77% of America thinks President Obama is anti-business. If you want to go with the whole “he’s gone populist” story, could be good for the markets, as he scrambles to bolster his probusiness image, lol.

  34. 34
    BirdsofpreyRcool Says:

    KOG getting kicked in the head today. They should have results from well pair 10/11 in about two+ weeks. These wells are in the first area they drilled on the Rez, so they know the quality of the rocks there. Should be good wells.

  35. 35
    zman Says:

    BOP – MMR took a healthy rest yesterday with the rest of the group. That pulls on EXXI since they are still a single digit midget. MMR flat today, no follow through yet on that selling so barring a Friday plunge into the close, EXXI probably starts to notice that.

  36. 36
    BirdsofpreyRcool Says:

    For any “pro-business” rhetoric to be effective, you have to believe what BHO says (and not watch what he does). That gig might (finally) be up.

  37. 37
    BirdsofpreyRcool Says:

    EXXI is a total, Screaming Eagle BUY here. ’nuff said.

  38. 38
    zman Says:

    West – thanks for the 2 sisters updated last night.

    Coal stocks up but pretty muted in the face of this market, waiting for a bit more of a fall before adding pre earnings positions.

  39. 39
    zman Says:

    TRGL might be your Merger Monday name.

  40. 40
    BirdsofpreyRcool Says:

    It is amazing to me, how many of my “energy-savvy” investor friends/colleagues are not familiar with the EXXI story. (And another one has issues with the CEO’s expansive life style… think Aubrey meets Floyd… but, I digress.) So, “single-digit-midgit” status definitely affects how it trades. That can provide moments of opportunity… and weeks of frustration, sometimes. A reverse split might help the recognition factor too.

  41. 41
    Nicky Says:

    I can’t see this market bouncing unless commodities can catch a bid which is just not happening.

  42. 42
    zman Says:

    BOP – I try not to let the whole “gold chains on the chest hair” thing enter into my thinking.

    SLB call over – stock off the lows and could close green, market willing. Cautious as always but things are looking up.

  43. 43
    zman Says:

    Nicky – I can’t see oil bouncing until the equity market catches a bid.

  44. 44
    zman Says:

    Nicky – I think the front month needs to hold that $73 level, if not $70 in easy reach. I think we hold it.

  45. 45
    BirdsofpreyRcool Says:

    z — #42 that’s mild. Try “private jets, wild women, and massive change-of-control payouts”… But, the history of the Oil Patch is filled with “expansive fellows.” Comes with the territory.

  46. 46
    Jerome Blank Says:

    KOG…gap down on the open below the 200 period SMA on the 30 min…ugly…this is where it helps to have confidence and strong stomach…lol…

    I’ll try to buy a reversal… so long as the lower triangle support zone holds…stay tuned…

  47. 47
    jat Says:

    Gould is typically conservative on all of these calls. Anecdotally, I have heard and read positive things that are pretty in line with Wyo/you. I think the big picture does move a bit slower than these leading-edge anecdotes, but I’m just reminded that I was speaking with operators in June/July who were admitting that they couldn’t push svc down much further. Now, cost inflation is and will be coming back. I understand that these boys have run a bit since the beginning of the year, that we still have service overcapacity in NAM, and that the stocks have now fallen back a touch with crude and overexpectations for early rewards. But the larger picture remains intact for me and my time horizon, and the movement I need is on my shoulders.

  48. 48
    Nicky Says:

    Z – just looking at gold which has been cremated this week. Has support here and then at 1075,1050.

  49. 49
    bloodystupidjohnson Says:

    RE:TRGL — I am going to make a crazy statement, not the first or the last, but as a shareholder with a longer term point of view, I would rather have TRGL make a decent partnership deal with a major, than being bought out outright. This way if the Paris basin is what they claim, then TRGL could become a hugh winner. It is much more risky, but I think it is a good spec with good risks/rewards. My handle is not bloodystupidjohnson for nothing.

  50. 50
    zman Says:

    Thanks Nicky, I have gold below coal prices on my market watch page so thanks for pointing it out. Things selling down, a bit of risk out of the market this week, doesn’t feel like baby and bathwater action yet though, just few buyers and perhaps recent entries getting dumped. Just glancing at the minute chart on crude, there is substantial volume (almost half of today’s) in this little 30 cent rally off the day’s lows. The drops in the chart came on very light volumes. So I wouldn’t call it panic.

  51. 51
    jiveyjr Says:

    FWIW, I took some LINE at 25.53…thx to whoever let me have it

  52. 52
    zman Says:

    LINE – could be a rumor of a secondary, after all it’s been, what, 3 months since their last one, and everybody’s doing it.

  53. 53
    bloodystupidjohnson Says:

    I notice that CITI has put out a sell on ACI MEE PCL but has kept a buy on ANR.

  54. 54
    bloodystupidjohnson Says:

    I mean PCX not PCL

  55. 55
    choices Says:

    saw interesting note: “long bernanke, short geithner.”

  56. 56
    zman Says:

    BSJ – did you want TRGL in the contest? Not sure who your pick was.

  57. 57
    Jerome Blank Says:

    KOG… updated charts and comments


    Adding a nibble at $2.40…

  58. 58
    1520sbroad Says:

    nice move off the lows for SWN –

    Z – any more info on the idea floated in yesterdays conversation about oil shows under/around the FS particularly in Southern portion ?

  59. 59
    choices Says:

    FWIW for the gold followers: RGLD (gold royalties) “usually”leads gold stk and gold bounces-RGLD bounced off 43 support this AM and is now green for the first time in several days-ie since this gold collapse started.

  60. 60
    1520sbroad Says:

    Jerome – i rolled thru your charts again early this morning – good stuff. Has helped me a lot with KOG in particular.

  61. 61
    bloodystupidjohnson Says:

    In the course of honesty my pick was VQ. I don’t think it would be sporting for me to change with this news out — though I would if I could.

  62. 62
    zman Says:

    58 – working on it. May have to buy RMD a cell phone.

    BSJ – I’ll let ya change because somehow I failed to record VQ and I recall you mentioning the name a month or two back. This doesn’t mean however that I’ve gone soft. No other changes by others please.

    “I can’t afford to make exceptions. I mean once word leaks out that a pirate has gone soft, people begin to disobey you and it’s nothing but work, work, work all the time.”

  63. 63
    zman Says:

    Reef – Any thought on when IOC has something more than two sentences to add about their possible oil leg?

  64. 64
    bloodystupidjohnson Says:

    Then make mine TRGL.

  65. 65
    VTZ Says:

    RE 59 – and gold is looking to recover the 1090 level which would also be a good sign.

  66. 66
    zman Says:

    1520 – I did check with a Fayetteville Shale permit guy and he’s heard nothing about oil as a main target in the play yet. Also checked traps on pipelines that might be built to move liquids, came up dry there but those are officially announced deals and so that’s not surprising.

  67. 67
    zman Says:

    64 = done.

  68. 68
    Jerome Blank Says:

    RE: 60, 1520…thanks, feel free to make any suggestions…

  69. 69
    bloodystupidjohnson Says:

    This correction, as long as it does not go too crazy, is good for investors. It washes out some of the bullish optimism that was building up in this market. The energy names are working off some of the “party hat” mentality that I have seen build up on various sites uncluding this one. Of course us value investors away like a little pain in the market and are notorious as kill joys.

  70. 70
    1520sbroad Says:

    #66 – i went back thru some of my notes on SWN and did note that they probably have seismic for almost the entire play by now. Would be an interesting twist…

  71. 71
    zman Says:

    Jerome – is there a point and figure name for the chart pattern being exhibited by MMR at this time Thor’s Hammer or some such? Also, if you have a book on PF you like tell what it is. I have a big Murphy book but the go is so dry and I don’t even know if he covers PF.

  72. 72
    zman Says:

    1520 – you prompted me to send a note to a pretty savvy oil focused broker friend to see if he has other traps to run. I bet the pipeline talk is just that at this point, just too early. They do have good coverage and I plan to look at the USGS stuff soon to see what’s down below 7,000 feet, some dolomite would be nice but I digress.

  73. 73
    zman Says:

    I stand by my MMR thoughts from earlier as it pertains to EXXI. PXP by the way got two days of fleeting respect and then back to the same thing. The discovery is worth more than nothing to them.

  74. 74
    BirdsofpreyRcool Says:

    “party hat”…?? yikes. Makes us sound like amateurs.

    We may get happy sometimes, but we ain’t amateurs here.

  75. 75
    VTZ Says:

    Nicky – Does the inability ot the dollar to break out and the increased volatility in addition to the recent spike in the dollar signal a potential turn to you?

  76. 76
    bloodystupidjohnson Says:

    PXP: one of those stocks that value investors hate. It seems to this investor that it is trading below where it is worth. They have had alot of success in backing Jim Bob and those properties are worth something. Then people remember them buying Haynsville at the absolute top of the market, them selling to OXY excellent properties at a take it or leave it price, and then selling TWICE stock at bargain prices to try to clean up the mess they made with Haynsville. Owning PXP makes you want to reach for a bottle of TUMS.

  77. 77
    1520sbroad Says:

    I’ll try my SWN contact – likely will be shut down by compliance 3.6 seconds in.

    Nice piece on jefferies this morning in the journal.

  78. 78
    zman Says:

    NG up 20 cents now on the front month, strip marked higher as well but not that much, puts the 12 mos strip right around $6. Very comfortable pricing as operators continue to reduce operating costs (on the whole).

  79. 79
    bloodystupidjohnson Says:

    Z: can you explain this — yesterday with PWE at 17.51

    PWEFC was 2.55/2.95 size 103 by 131
    PWEIC was 2.65/2.90 size 113 by 395

    So if you went out 3 months to Sept, you could have made 5 cents less for the same strike.

    Is this the efficient market at work — lol or am I missing something.

  80. 80
    Jerome Blank Says:

    RE: #71 MMR..bounced nicely off the P&F three box reversal at $15…ZMAN…great P&F chart spot…I think you are referring to a “High Pole Warning” … a person by the name, I believe, Earl Blumenthal, first recognized a P&F pattern very similar to the one forming in MMR…in the case of MMR it’s not perfected yet…the pattern forms when a column of Xs exceeds the previous column of Xs by at least 3Xs, in the case of MMR, there is a 5 col field followed by what is now a 19 box field, so the setup is valid…however, to perfect the signal, it then must give up more than half of its total gains in the next column reversal into Os. With MMR we only have a 3 box reversal…I look at the pattern as more of a “heads up” signal…

  81. 81
    choices Says:

    Z, WLL below 70-looks tempting.

  82. 82
    zman Says:

    President Obama says Ben will win second term despite growing opposition. Hmmm, so I wonder who the next Fed chairman will be, lol.

  83. 83
    1520sbroad Says:

    79 – not unusual for PWE options. Sometimes it depends on when the div gets paid as to where the bids trade. Their div typically hits right around expiration days. They are also a little thin volume wise.

  84. 84
    zman Says:

    Choices – yeah, watching that slide. I think the lack of enthusiasm from the Street of late is a function of the stock chart, not valuation. They are higher op cost than some of their peers and if you combine that with nervousness over oil prices you can get to analyst hesitation. I plan to own the calls again before the 4Q call and I continue to hold my shares.

  85. 85
    choices Says:

    #82-at least (not yet) not pushing Summers=disaster.

  86. 86
    bloodystupidjohnson Says:

    BOP: fear and greed or what I call the party hat mentality — we all get it from the best to the worst. It is common as my hooking into the woods — lol

  87. 87
    zman Says:

    re 79 – Don’t know anything about PWE. What 1520 said sounds fair.

  88. 88
    1520sbroad Says:

    BSJ – i’ve seen early exercises on PWE options as people take the stock early so they can grab the div. Typically that happens once you get deeper in the money.

  89. 89
    Dman Says:

    BOP #32.

    Somewhat amazed you are giving Mr O the credit for the idea. Volcker tried to sell it to the O-man a year ago, but he was too busy funneling taxpayer funds to Wall St and appointing Wall St minions to run the Treasury to give it any consideration.

    So what’s changed all of a sudden? Has it occurred to someone that despite re-invading Af-Pak he’s already a lame duck? “What?” he asks himself. “Did the rules change? I thought all you had to do was invade somebody and you get the full 2 terms!”.

    Anyways, on to more interesting stuff like EXXI. I accept the idea that it’s a screaming buy … but if the market stays bad we could see a bit of the gap being probed (though probably not filled). Unless there’s a near-term catalyst … when is the reverse-split supposed to happen?

  90. 90
    1520sbroad Says:

    Any of the monthly paying trusts, CANROYs etc have quirky options in my experience.

  91. 91
    Nicky Says:

    VTZ – the dollar is bumping up against key resistance which I did not expect it to break on first attempt.
    The move down in equities this morning has been a bit of game changer for me this morning. While not guaranteed of course the primary count now switches in favor of at least a bigger correction for indices.
    At this point I favor we have completed a v wave down this morning (although it could be that in fact we only completed iii and are now in iv with v down still to come) and we should stage a very decent bounce. Its a wave two in which case the most common retracement is 61.8% of the move down.
    At that point I expect us to roll over in another five waves down. What happens then will be critical. Cycles have favored upside into the spring/summer so my preference is that in fact the rally is not over and once the next five waves down is complete we will again rally.
    There are several variations on this count but they all keep us in the same direction short term.

  92. 92
    cargocult Says:

    Can you update me on AEZ and why it is interesting right now?

  93. 93
    zman Says:

    Cargo – They are drilling a Bakken well now I think, honestly I think its over valued for what they done to date, but it’s not one of my names and I’ll let RMD defend it should he wish too. Just not close enough to it to add value other than to say that I like others better in the play.

  94. 94
    BirdsofpreyRcool Says:

    “greed”… hmmmm…. seem to recall someone thinking that no smart person ever invested in energy during the 1st quarter… when EXXI was trading at $1.90. But, I’m all about “deep value investing”… so not gonna argue that a “correction” is a good thing. However to compare this site to other rah-rah sites… well… some things you just can’t take without responding.

  95. 95
    Jerome Blank Says:

    RE: #80 con’t ….I’d suggest…Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices , Thomas Dorsey…my copy is worn out, coffee spills, chewed, not by me…dog…

    I trade the charts quite a bit differently now and use a different strategy for relative strength, but a must read if you’re interested in P&F charting…very nice folks by the way…

  96. 96
    zman Says:

    Thanks JB re 95.

  97. 97
    BirdsofpreyRcool Says:

    Dman — #89. I’m all for good ideas/govt policy. Wherever they originate.

    Was telling another professional the EXXI story the other day. Have to admit, told him to come up to speed on the story, but wait for the reverse split, as weird things could happen for a short period of time. However, my friend also works for a large institutional, so easier for him to recommend a $15 stock than a $3 stock.

  98. 98
    BirdsofpreyRcool Says:

    #94 — correction — “not gonna argue that a correction is NOT a good thing.” As i think it is. Back-fill makes for a sturdier base from which to build.

    MMR suddenly en fuego. Interesting.

  99. 99
    VTZ Says:

    Nicky – I can buy that. I expect there to be one last good buying opportunity for gold that is just in time to shake out the weak hands and make everything start calling gold a bubble (those who haven’t already).

  100. 100
    zman Says:

    Crude off $0.50, back from the technical brink, what a difference an hour makes.

    BOP – hear ya on that re $3 stocks. A lot of the institutional guys I used to work with would own and EXXI personally well before they’d have HK in their own inventory. Publicly however, it has to be the other way around. Find out what a guy like Dan Rice is holding in his 401K and you’ll have an interesting list of winners/household names five years from now.

  101. 101
    Jerome Blank Says:

    UNG making another run at the daily 100 SMA today…we have a faily consistent channel now between the 50 and 100 day SMA…the base looks like it might finally be holding together…

  102. 102
    Dman Says:

    I can’t say I’ve seen many party hats here. One thing I’ve tried to learn from Z is that when the sector is hot, you need to stay in with calls until it’s not hot. Easier said than done (for me). But the fact is that if you sell when something has stopped being a screaming bargain, you miss out on most of what Mr Market will dish up in his manic phases.

  103. 103
    BirdsofpreyRcool Says:

    EXXI — timing on reverse split… no idea. Should be soon, I would think. As Schiller said as soon as he got the proxy approval, he was gonna do it.

    Will nose around a bit. Would love to know the answer there myself.

  104. 104
    Jerome Blank Says:

    KOG trying to fill this mornings gap…at resistance now at $2.50…

  105. 105
    tomdavis12 Says:

    51 Jivey Nice pick-up

  106. 106
    elduque Says:

    Ok BOP I just bt. some exxi at 3.49

    Thank you for being willing to pound away.

  107. 107
    Nicky Says:

    If the low is in for the indices for this wave down then the dow could rally back to 10565, which happens to be the 20dma and would be a 61.8% retracement of the move down.

  108. 108
    bloodystupidjohnson Says:

    BOP: who said no smart person ever invested in energy in the 1st quarter? If you are implying me then you are WRONG. I did question Z about studies showing a Feb to May up cycle in energy names and that Jan often sees corrections in those names. The studies suggest you stay out of energy in Jan, but buy in Feb (a first qt month).

    RE: EXXI – if one thinks a stock is cheap, I would be the last person to suggest not to buy it regardless of the month, the day, or the hour. Value is value and you can’t but a time table on it.
    In addition, if you remember I also touted MMR as good spec last Nov because Jim Bob had alot of success in this area with flatrock, etc..

  109. 109
    BirdsofpreyRcool Says:

    BSJ #108 — that was a great call on MMR. Quite the run from the sub-basement price of $7-something last November. Very nice call.

  110. 110
    Dman Says:

    Hey BSJ, calm down a little. BOP’s not insulting you.

    How do I know? Because she hasn’t started talking about “500lb fat suits of shame”, which is what happens when she gets really worked up.

    Honest, it’s easy to tell when that happens.

  111. 111
    BirdsofpreyRcool Says:

    Dman — ok… NOW i feel insulted!

    (…except that I’m laughing too hard to do much about it. LOLOLOL)

  112. 112
    bloodystupidjohnson Says:

    BOP: RE — EXXI — but not as good as this one — congrats.

    The funny thing about that study that I mentioned, is that so far it is holding to form. We have seen corrections in energy names in this later part of Jan. Now and until Feb option exp time the studies suggest in BUYING anything related to energy.

  113. 113
    bloodystupidjohnson Says:

    Z: lets say the above questioned study is correct and one is to buy some energy stock from here to May. What names would be on your buy list — forgetting the option aspect of it?

  114. 114
    BirdsofpreyRcool Says:

    elduque — #106 good to hear. Several of the savviest energy investors (and “special sits” guys) I know are EXXI stockholders. Everything comes with risk, but we are in good company on that one.

    Checking on the reverse-split stuff… hope to report back soon.

    Speaking of reporting back… would love to hear any high-level impressions/thoughts from Andy on IPAA. I suspect he is pretty busy, having taken a couple of days away from his real life… but a few general impressions would be useful. (Not to bug ya, Andy, or anything.)

  115. 115
    zman Says:

    Re 133 – I don’t buy them for seasonal reasons and answering on that basis puts me in the realm of giving advice, which I don’t do. I like what’s in the ZLT:

    see bottom of this page:

    and note that I punted GMXR since that was last updated (will update all over the weekend).

  116. 116
    Wyoming Says:

    A lot of whacko’s. My beer thirty has started, last 6 of Beck’s opened and I will throw in a movie quote, easy one:

    “Lighten up Francis”

    For the serious ones: NAM rig rate ~ 15k/day, international ~ 40k/day ; comparable.

  117. 117
    Nicky Says:

    SPX needs to get above 1115.89 otherwise we are susceptible to another swing down. Once we get above there resistance will be at 1122.

  118. 118
    BirdsofpreyRcool Says:

    From Strategist #3


    Then this…– *DJ Sen Boxer: New Fed Chief Must Represent A Clean Break – U.S. DEMOCRATIC SEN. BOXER SAYS OPPOSES SECOND TERM FOR BERNANKE

    A turf war coming?

  119. 119
    zman Says:

    re 116 Stripes

  120. 120
    VTZ Says:

    BOP – Bernanke as Fed chief decision has been sealed the whole time. All of this is just posturing.

  121. 121
    choices Says:

    #118-the one car funeral being organized.

  122. 122
    Wyoming Says:

    Z – Oui and BOP – Oui


    Breaking up is hard to do:


  123. 123
    bloodystupidjohnson Says:

    I am NOT looking for stock tips more like a list of things that should out perform outer energy names. For example maybe on that list would be SWN or RRC, both high growth gassers. That sort of thing. I am trying to get away from your shorter term catalysts into a longer term point of view.

  124. 124
    bloodystupidjohnson Says:

    PS on 123: I am using you more as a SCREEN, than a stock picker.

  125. 125
    zman Says:

    BSJ – Longer term I prefer SWN over an RRC or UPL. I see all of them growing double digits for multiple years, but I see the latter two suffering margin contraction in that time frame as their euphoria wears off. Out to May is not what I consider long term so I was a bit at odds with the question.

  126. 126
    BirdsofpreyRcool Says:

    I could slap Ben upside the head… but not for the reasons most people think.

    I find a Grand Canyon of fault with his actions from August 2007 through August 2008, but not after Sept 2008, as most do. In Fall 2008 he did what he had to do. But in Spring 2008 he was focused on “inflation” due to high-oil… this was wrong… and we all paid for it with the collapse of Lehman and the Financial Crisis. I think Ben did about the best he could do (without the benefit of hindsite) in the Fall/Winter of 2008.

    So, hope they keep him.

    What would you rather have, a battle-scarred General? Or someone who sat out the war? [As an aside — That is always something you want to ask a fund manager… have you had a near-death experience? If not, wait until he/she does, before investing with them.]

  127. 127
    VTZ Says:

    Volcker is someone I’d rather have if we were serious about monetary policy but obviously we aren’t.

  128. 128
    bloodystupidjohnson Says:

    Z: I was going to put LOL after 4 mth and long term, because even an idiot like myself realize that 4 months is NOT LONG TERM.

  129. 129
    Jerome Blank Says:

    EXXI…really close look at EXXI intraday…I labeled it 5 min EXXI so as not to delate the main chart…I think it’s now the irst chart…


  130. 130
    Jerome Blank Says:

    RE: #129…typo(s) …”first chart”

  131. 131
    bloodystupidjohnson Says:

    According to some press reports, Volcker is behind some of the new banking restrictions that were brought out yesterday. Volcker is a big supporter of Obama — go figure.

  132. 132
    BirdsofpreyRcool Says:

    Already seeing emails/IMs from PMs about shorting the financial mrkt if Congress boots Bernanke and Geitner. That would leaves Congress with too much power to infect monetary policy. The result would be that the mrkt get clobbered (to use one manager’s technical term).

  133. 133
    BirdsofpreyRcool Says:

    Volker put the last nail in Jimmeh Carter’s coffin. NO WAY BHO would put Volker in charge. The historic irony would be too rich.

    JMHO, of course.

  134. 134
    zman Says:

    BSJ – Specific questions are better than blank check, open ones, especially on a Friday. As I stress often, I talk about the short term stuff because the options work that I do requires it. But in my opinion, and in my personal portfolio, options should not go beyond 10% of assets (after all, an options portfolio can be wiped out at a bad turn of the broad market and that would be tragic to borrow a word). So I have a long view on commodities and plays and then everything I do, both short and long term, fits into that.

  135. 135
    bloodystupidjohnson Says:

    Z: As of this morning, I started to buy a little of ATW. I am still partial to deep water drillers, and have been debating between DO, RIG, ESV, but picked ATW because I think it is a better bargain than the other three. Of course with a more limited fleet it is more risky — so we can’t get everything we want — lol

  136. 136
    Dman Says:

    Anyone know anything about ELON? They do smart-grid technology. I’ve been interested in them for a long time, but I’ve got no edge in assessing the stock.

  137. 137
    Jerome Blank Says:

    BEXP is really looking good right now off that trendline support zone…check out the chart….

  138. 138
    zman Says:

    ATW is small but has some very nice built in earnings growth, head and shoulders above what you can expect from its peers between now and 2012 as they add two rigs to their fleet.

  139. 139
    Nicky Says:

    When is the Bernanke hearing supposed to be now anyway?

    BOP agree with much of what you say in #126. What I can’t get my head around is reappointing someone who could not see the crisis coming. My own view is that he is totally incompetent on many levels.

  140. 140
    zman Says:

    JB – Thanks, I own the common, and some currently worthless $17.50 calls. Was considering an add of the $15s but have been holding off due to the market. I would not be at all surprised to see them announce a central Rough Rider completion next week and perhaps one more Bakken well, could be one over in Ross Area.

  141. 141
    PackMan Says:

    That is some recovery in the energy names !

    I bought a couple early but punted them for small gains; they are grinding.

    Ex. BEXP was 12.90; now 13.75.
    SWN low was 45.39; now 46.90

  142. 142
    zman Says:

    MMR – Am considering taking half my MMR $15s off the table on the possibility that someone decides Monday is a good day to dowgrade them after this run. Low chance I do it but mulling. I continue to hold the $17.50s here.

  143. 143
    zman Says:

    re 139 – good question. I do think if they punt Ben the market will be discouraged having adopted a “better the devil you know” mentality.

  144. 144
    VTZ Says:

    Volcker is a figurehead of Obama. Maybe some of the regulatory bits are from him but definately not monetary or fiscal policy.

  145. 145
    VTZ Says:

    RE 132 – It’s not like easy money is going to change and that’s what the market wants.

  146. 146
    West Says:

    Current Issue – Vol. 90 Num. 4 – January 22, 2010Rosetta Spuds Third Wildcat on Blackfeet Reservation
    Glacier County, Montana
    Houston-based Rosetta Resources (Rosetta) has commenced drilling their third wildcat within the confines of the 1.5-million-acre Blackfeet Indian Reservation in Glacier County, Montana. Located on the western flank of the Sweetgrass Arch in northern Montana, the company has moved in CapStar Rockies rig No. 21 and is turning to the right at the Tribal Riverbend W #07-4H, nw-nw 7-36n-9w, a projected 11,230’ horizontal Devonian Souris River test that will spot in the nw-nw 7-36n-9w. The bottom hole is scheduled to terminate in the sw-sw 7-36n-9w.

    This active Rosetta drillsite is little more than a mile to the southwest of a dry hole drilled by Cenergy Exploration at the #1-32 Swenson Warren, sw-se 32-37n-9w. Drilled to the Mississippian Madison to a depth of 5,775’, this hole was abandoned in 1983. The company ran two DSTs in the hole, one in the Lower Cretaceous Bow Island and the other in the Jurassic Sawtooth. The Bow Island interval at 4,447’–4,465’ reversed out 730’ of mud while the Sawtooth test from 5,637’ to 5,700’ recovered 20’ of slightly gas-cut mud with the sampler containing 1,300 cc of mud. No additional tests were performed, and the hole was plugged. Log tops of this failure include the Rierdon at 5,540’, Sawtooth at 5,636’, and the Madison was picked at 5,671’ under a KB elevation of 4,282’.

    The W #07-4H drillsite scales some 6 miles southwest of another recently drilled Rosetta wildcat, the Tribal Riverbend #12-13H. This 10,675’ horizontal Bakken prospect is roughly a mile west of Landslide Butte Field, a vertical Mississippian Sun River and Madison oil pool that has produced more than 861 k bo and 925 mmcfg following its discovery in 1966. The nearest hole to the #12-13H drillsite to penetrate the Bakken section is almost a mile to the east at a dry hole drilled by Beren Corp., the #1 Johnson, se-se 12-37n-9w. This hole bottomed in the Devonian Souris River at a depth of 6,984’. The company set 5½-inch production casing to 6,355’ and perforated the Madison, Banff, Bakken, and Nisku with negligible results. No additional testing was conducted, and the hole was abandoned in 1981.

    Rosetta’s first wildcat drilled on the reservation, the #31-16H Tribal Gunsight, se-se 31-34n-6w, is a 9,150’ horizontal Devonian Three Forks test. No information has been released by the operator; however, field reports have indicated that this well will be a discovery and has tested up to 1,200 bopd. This indicated discovery is nearly 1 mile northeast of a dry hole that had good shows in the Devonian. Drilled by Flank Oil, the #1 Bugbee, se-sw 6-33n-6w, bottomed in the Three Forks at a depth of 5,350’. The company perforated the Three Forks section open-hole from 5,028’ to 5,030’ and swabbed up to 10 gallons of oil per hour. Deemed noncommercial, no production casing was run, and the hole was abandoned in 1958.

    Two miles west of this active drillsite is the huge Cut Bank Field complex, a stratigraphic-type trap that is considered a class “A” oil and gas field. First discovered in 1926, this pool has cumulated more than 171.6 mmbo and 650 bcfg from the Cut Bank, Madison, Bow Island, Kootenai, Sunburst, Lander, Moulton, Black Leaf, and Dakota. Production is coming from depths less than 4,500’. With more than 1,000 holes drilled within it, this reservoir is currently producing from nearly 600 wells and is averaging 23,731 bo and 130 mmcfg per month. There is no Devonian production within the field at this time. Rosetta currently has an option from the Blackfeet tribe involving almost 200,000 net acres located on the reservation.

    Another company that is making hole on the reservation is Denver-based Anschutz Exploration (Anschutz). The company has moved in SST rig No. 17 and is drilling ahead at the White Calf #1-4, sw-nw 4-30n-10w, a proposed 9,534’ vertical Bakken test. This remote wildcat is some 7 miles southeast of Two Medicine Field, an anticlinal trap that is bounded on the east flank by thrust faults. This pool, which has been shut in since 1982, was discovered in 1954 by Union Oil at the Morning Gun #31, sw-sw 18-31n-11w. This hole tested up to 10 mmcfgpd and 250 barrels of condensate per day from the Mississippian section near 9,000’. This hole was plugged in 1955 because of a lack of market. Several offsets were drilled to the discovery well, and the field cumulated more than 275 mmcfg, 11,510 bc, and 17,223 bw from the Mississippian.

    The nearest hole to the White Calf #1-4 active drillsite is 2 miles to the southwest at a failure drilled by Atlantic Richfield (Arco), the #1-7 MaGee, se-nw 7-30n-10w. This test bottomed in the vertical section of the Duperow at a depth of 10,200’. The company conducted DSTs in the Blackleaf, Sun River, Sunburst, and Potlatch. The only show was across the Potlatch interval at 9,445’–9,482’, where Arco recovered 10’ of slightly oil- and gas-cut mud with the sampler holding 2,000 cc of slightly gas- and oil-cut mud and 1.0 cf of gas. Production casing was run to 10,198’, and the Sun River, Cut Bank, and Duperow were perforated with negligible results. This hole was plugged in 1984.

    This latest venture by Anschutz is the seventh test planned by the company on the Blackfeet Indian Reservation. To date, Anschutz has drilled three prospects on tribal lands, none of which have been completed as any type of discovery. The company has at least three more prospects to drill, not including their active site.

  147. 147
    Nicky Says:

    re 143. That would be my hunch too. That said I wouldn’t be surprised to see them sell the market if he is reappointed too!

  148. 148
    zman Says:

    Thanks for the update West.

  149. 149
    tomdavis12 Says:

    Z: Read thru the CSFB report on HK. It seems that the Bakken boys got the most love in the 4th quarter last year. Now some of the NG bears seem to be waking up. The analyst over there Wolffy finally has some nice things to say. Maybe two weeks of big withdrawals and the gassy boys are starting to receive some love. HK, CHK, SWN APC

  150. 150
    Wyoming Says:



    Denninger has a sense of the dramatic.

  151. 151
    Wyoming Says:

    Has anyone taken STR as a takeout?


  152. 152
    zman Says:

    Tom – analysts are such fair weather fans. We should get a non notable withdrawal next week which may cloud their long term view but after that, more big numbers on the way and note how easy the storage comps to last year get in February in Graph F in the gas section in today’s post.

  153. 153
    zman Says:

    151 – Nope. Decent morsel that would be.

  154. 154
    Wyoming Says:

    I’m STR’s Huckleberry.

  155. 155
    Jerome Blank Says:

    EXXI updated intraday 5 min chart…


  156. 156
    zman Says:

    SLB not happy post call. Analyst wanted more conviction I assume.

  157. 157
    BirdsofpreyRcool Says:

    When I think about Congress, monitoring “systemic risk” and setting monetary policy… well… just hafta post this joke someone just sent me. “Trading Desk humor,” so beware.

    A Congressman was seated next to a little girl on an airplane when the he turned to her and said, “Let’s talk. I’ve heard that flights go quicker if you strike up a conversation with your fellow passenger.”

    The little girl, who had just opened her book, closed it slowly and said to the total stranger, “What would you like to talk about?”

    “Oh, I don’t know,” said the congressman. “How about global warming or universal health care?” and he smiled smugly.

    “OK,” she said. “Those could be interesting topics. But let me ask you a question first. A horse, a cow, and a deer all eat the same stuff — grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?”

    The legislator, visibly surprised by the little girl’s intelligence, thought about it and said, “Hmmm, I have no idea.”

    To which the little girl replied, “Do you really feel qualified to discuss global warming or universal health care when you don’t know shit?”


  158. 158
    Jerome Blank Says:

    EXXI , buying pressure coming in …adding @3.49…

  159. 159
    zman Says:

    CXPO – on the tape announcing rig contract procurements, one in E. Texas (1,500 HP for the Haynesville) and one for a Liberty Cnty 2 well program (one of those a Yegua test). This is a non-news press release but something little guys often do to get noticed. Stock took a trip under $4 last few days, don’t think we’ve seen the lows. Still watching.

  160. 160
    cargocult Says:

    BOP How do you feel about Goldman Saks monitoring “systemic risk” and setting monetary policy?

  161. 161
    BirdsofpreyRcool Says:

    cargo — recalling those congressional financial panels from a yr ago last fall, i’d feel a whole lot better about Goldman than Maxine Waters, given the choice.

  162. 162
    zman Says:

    Ben watch:

    Sounds like they will bring it up for a vote when they know they have the 60 votes they need to confirm him.


    Story mentions not bringing it up if they don’t have the vote count but his term expires 1/31, what happens if they haven’t done it by then?

  163. 163
    Jerome Blank Says:

    KOG…nice to see KOG close this morning’s gap and try to move higher, if this keeps up there will be a nice daily “hammer” right at support…

  164. 164
    cargocult Says:

    BOP-By the way, no need to worry, the HMO’s know what’s best for us and global warming, if it’s real will not be our problem.

    A neighbor of mine slipped on some wet grass last night, twisted his knee, and I drove him to the emergency room because he was in extreme pain. He was worried because he had no health insurance. I told him not to worry about it because those of us who have insurance are absorbing the costs of guys like him anyway. A few vicodin and he was feeling just fine about it.

  165. 165
    skimo Says:

    If they haven’t voted, the next in line will become interim, I believe and Ben will be out.

  166. 166
    zman Says:

    JB – any thoughts on the ROSE chart here, backed off this morning on the market, not falling this afternoon as the market retreats again.

  167. 167
    cargocult Says:

    Well it seems like every Sec of Treasury etc has worked for Goldman including the current one.

  168. 168
    zman Says:

    Thanks skimo. I was thinking the President would then appoint a new candidate on Feb 1. Market would likely zip higher, in real rah rah fashion, if they find the votes to keep Ben.

    VNR – just when I think, hey it’s falling into my range, it jumps back up. Honestly, I should just pull the trigger and collect the check and not worry about it.

  169. 169
    choices Says:

    #157-BOP, I do not think there is any danger of Congress doing anything to the detriment of Goldman and others-Congress is owned by the financials and other large interests-admin also with Geithner and Rahmbo-with Supreme Court decision of yesterday, it may not be long before each Congressman walks around like a NASCAR driver with company logos on their suit jackets as to who their sponsor is.

  170. 170
    bill Says:

    bho ready to speak

    buy puts now!!!!

  171. 171
    bill Says:

    folksie style to start

    did he arrive in pick up truck

  172. 172
    zman Says:

    Rob – Do you know anything about VNR? It’s an MLP, not a trust, but looks interesting.

    Bill – of course, you could have said the same about his predecessor and made money on it for several years, lol. I personally wish they’d all take a long TV vacation.

  173. 173
    bill Says:

    down 99..going for a walk or a drink

  174. 174
    zman Says:

    TISDZ – dribbling higher. This is the treasure Island area play on the ultra deep of which Blackbeard is a part. Their SEC filings make for good reading, like spinning the wheel at the entrance to the Casino.

  175. 175
    BirdsofpreyRcool Says:

    choices — i believe in free speech… McCain-Feingold was a hideous bill… right up there with SarBox.

    So what, if congressmen walk around with endorsements and corporate logos sewn to their suits? At least you know who they will favor.(Key is to not send much $$ to Washington, so they don’t have the power to dole goodies out. Small govt, not “crony capitalism.” But, I digress.) With the vote in MA, I have to admit, the American People are smarter than I thought they were. On the other hand, Dems get 70% of the contributions from Wall Street…. and yet, the public thinks the Reps are “in bed with Wall Street.” So, while smart, the American People still have some more learnin’ to do.

    Dangerous political comments… but it’s Friday.

  176. 176
    cargocult Says:

    Choices 169- what a great idea! We ought to require them to wear logos. A “truth in voting” law.

  177. 177
    BirdsofpreyRcool Says:

    P.s. I’m a Libertarian in spirit. So I want minimal govt. Big Govt under Republicans is almost as bad as Big Govt under Democrats.

  178. 178
    BirdsofpreyRcool Says:

    cargo — hear hear!

  179. 179
    baylor3217 Says:

    Re 177 AMEN. I wonder if BHO recognizes how many peoples fortunes are tied to the stock market with ERISA passed decades ago.

    Every time this idiot opens his mouth the market plummets, which should make for some very easy money making opportunities 🙂

    Gotta love idealogues.

  180. 180
    zman Says:

    Easy, energy please. I think Pack has a political venting site if you want the address.

  181. 181
    BirdsofpreyRcool Says:

    sorry — just can’t hold back the horses sometimes. Will put the blinders back on.

  182. 182
    Jerome Blank Says:

    RE: #166…ROSE…charts and comments…


  183. 183
    BirdsofpreyRcool Says:

    Recall Jerome nibbling KOG at 2.40 this morning. Nice way to make some $$, JB. Staying focused.

  184. 184
    zman Says:

    Tom – got through that HK note. Not a lot of teeth to their upgrade, probably explains the price action today (up a dime).

  185. 185
    tomdavis12 Says:

    HAL before market Monday 1/25 cons .27 VS .87

  186. 186
    baylor3217 Says:

    my apologies z. Just as it pertains to our money, I guess it can get political.

    For the record, I’m an independent and think both sides are out for themselves.

    I’ve made my last political comment.

  187. 187
    tomdavis12 Says:

    Z: I read there is great value, they are just not willing to give them credit until they take care of funding shortfalls. No different than CHK disdain.

  188. 188
    zman Says:

    … adding to 184. I think what get’s HK higher this year is 1) asset sales, 2) stability of natural gas prices, 3) a potential Eagle Ford oil play, 4) beating guidance quarter after quarter after quarter.

    Jerome thanks as always, appreciate the comment.

  189. 189
    zman Says:

    Pickens on Fox Business:


  190. 190
    1520sbroad Says:

    Z – is this frac legislation weighing on any one name more than the others? My personal take would be RRC just because they have such a big Marcellus position and the local situation there seems to be more anti drilling? I guess i am looking for catalyst names if the legislation does in fact get shoved aside.

  191. 191
    cargocult Says:

    The only problem I have with your minimal govt ideas is that it still leaves us with really big business, really big banks, big defense contractors, big unions, big bad guys(drug cartels), etc. The control over our lives does not go away with the demise of big govt. We just diminish our power to effect change within those organizations. See yesterdays movie on republic vs democracy. We have an oligarchy, not a republic.

  192. 192
    zman Says:

    Baylor – Hey, no worries man, just trying to stay off a slippery slope there, wasn’t you at all, I probably encouraged it a bit much over the last few days and for that, you have my apologies. And I don’t mind the information at all, just want to leave the name calling and such out as its not really needed. Seriously, Packman has a site for that.

  193. 193
    zman Says:

    1520 – As far as I can tell no, it would hit them all, a lot, were it to happen. I don’t think it happens, less now than I did before.

  194. 194
    zman Says:

    In 189 above, Pickens is calling 2012/13 peak oil.

  195. 195
    AAA Says:

    re #116, that was Lee Marvin in The Dirty Dozen.

  196. 196
    Wyoming Says:

    I miss Tater 🙁

    AAA, I think you should get the victory as TDD should trump Stripes anytime. I mean, who would argue with Lee Marvin? Except perhaps Charlie Bronson in Death Hunt or Once Upon a Time in The West.

  197. 197
    zman Says:

    SP @ 1,101 with an hour and ten left to go in the week, lotta fear out there.

  198. 198
    Nicky Says:

    Major major major support at 1085.

    1100 psychological.

    I think somewhere between 1090 and 1100 ends this wave.

  199. 199
    Nicky Says:

    What happened to Tater?

  200. 200
    zman Says:

    Re 199. He took a full position.

  201. 201
    jiveyjr Says:

    I bin shartin X all day to keep my finger off the buy button on these oil/g names…did take a little NFX earlier in addition to the LINE…

  202. 202
    Wyoming Says:


    Have not seen him post in awhile, the poli debate reminded me of the one we had a long time ago.

    Meant to ask. Do you use eSignal or any other EW type charting program?

  203. 203
    Nicky Says:

    Hi Wyoming. No I don’t. I just trade of the charts on my trading station.

    Re 200 – what do you mean Z?

  204. 204
    zman Says:

    Nicky – he took a full time job.

  205. 205
    Nicky Says:

    re 204 – oh ok. you made it sound like he had a trade gone wrong that wiped him out! Me just mis-reading it.

  206. 206
    1520sbroad Says:

    #199 – i thought you meant he finally moved into the cave.

  207. 207
    zman Says:

    I think I left a word out.

    Guessing Asia gets whacked Sunday night in the U.S., wondering what the market wantss at the moment, guessing it’s clarity on the financial regs and Ben. Perhaps Congress noodles on that over the weekend.

  208. 208
    Dman Says:

    But Nicky, a “full position” shouldn’t be *able* to wipe you out 🙂

    I do miss the reports from the cave.

  209. 209
    RobBanks Says:

    Z- VNR

    Haven’t looked at it in a long time. Gassy and well hedged as I recall. I’ll look this weekend.

    Perhaps people are dumping LINE for VNR today. No clue why that should be, I think they’re both due for a secondary.

  210. 210
    RobBanks Says:


    I can take that back – volume on LINE is 10x that of VNR. Who knows?

  211. 211
    choices Says:

    Ugh-went for a walk, came back, pretty much a free fall.

  212. 212
    Wyoming Says:

    Is it me or does 75.70 look really important?


    click on it to expand

  213. 213
    zman Says:

    XNG down exactly the same % as the the DJIA, SPX.

  214. 214
    milepost_43 Says:

    WWWHHHEEE…as the car picks up speed down the hill …applied my $5 rule earlier today…ready for BLACK MONDAY……..

  215. 215
    zman Says:

    TT certainly got that one right. Yuck.

    Noting EXXI sell off with everything else but quick to bounce as well. MMR going to end up slightly, interesting chart that one.

    HAL earnings Monday, stock ending off almost as much as SLB although I’m betting their story sounds better on the call.


  216. 216
    bill Says:

    157 roflmao

    ps id rather gs monitor risk than barney

  217. 217
    bill Says:

    whats the 5 dollar rule

  218. 218
    Nicky Says:

    Black Monday seems a bit predictable – I personally don’t see it. Most likely quite the opposite.

  219. 219
    BirdsofpreyRcool Says:

    Nicky — I love it, when you go all contrarian on us. Thank you!

  220. 220
    BirdsofpreyRcool Says:

    General feeling is, mrkt continues to fall/be weak until Ben is confirmed.

  221. 221
    Nicky Says:

    Maybe they confirm him this weekend!

  222. 222
    BirdsofpreyRcool Says:

    That’s why it’s tough to short here… it could all be over very quickly.

    Or… they could drag this thing out and continue to dig the hole deeper. We shall see.

  223. 223
    milepost_43 Says:

    217…only costs $5 to get out and $5 to get back in…….

  224. 224
    elijahwc Says:

    So lets end this bummer of a week on a high note. BOP and rest of you EXXI debtholders gonna like this.

    Analyst Watch: what? someone’s writing up EXXI paper along these lines “Energy XXI’s solid proved reserves, expected healthy cash flows andmanageable debt level make the company’s Senior Notes attractive.”

    …….core strategy of acquiring mature properties in the Gulf ofMexico and profitably exploiting them has resulted in a financially strongcompany with a healthy proved reserve base of 76.1 MMBOE. We esti-mate proforma EBITDAX for FYE June 30, 2010, to be $371.6 million,while CYE December 31, 2010, EBITDAX should be in excess of $400million. With a debt enterprise value of slightly over $650 million andfuture capex spending of approximately $100 million per year expectedfor the foreseeable future,…………. Energy XXI has extremely strong interest cov-erage……..Weeee!!! The company should generate $150 million or more of free cashflow annually for the next several years at current oil and gas prices, which could be applied to debt reduction ( or given to Jim Bob ) or additional acquisitions. JohnSchiller Jr., Energy XXI’s Chairman and CEO, has stated that a “key goal” is to further strengthen the company’s balance sheet, a conservative stancewhich should be viewed positively by debt holders. With the Senior Notescurrently trading slightly below par and offering a YTM of over 10%, weview Energy XXI’s Senior Notes as an attractive opportunity for fixed-income investors, especially considering that the SPDR Barclays Capital High Yield Bond ETF currently has a YTM of 9.14% along with a longer duration. They … believe that there are adequate cash flow protections to allow for a “clear margin of safety ( Seth Karlman chimnedd in on this one)”withrespect to repayment of the Notes at maturity or full investment recovery in the unlikely event of a reorganization. The recent MitEnergy acquisition was very positive for all security owners of Energy XXI.On December 22, 2009, the company closed the acquisition of MitEnergy from Japan-based Mitsui & Company, Ltd. MitEnergyowns oil and natural gas interests located in the Gulf of Mexico shelf. The purchase price was $283 million. This acquisitionessentially doubled Energy XXI’s interest in the same group of properties that were purchased from Pogo Producing Company inJune 2007. Energy XXI was the logical buyer of these assets as they are the non-operating half of the properties which the com-pany already operates. The MitEnergy acquisition brings with it proved reserves of 22.9 MMBOE at an attractive cost of $12.30/BOE. The acquisition increased total proved reserves for Energy XXI by 43%, from 53.1 MMBOE to 76.1 MMBOE. Post-acquisition PV-10 has grown 51% to $2,501.7 million (using strip pricing as of November 16, 2009), while daily production in-creased 42% to a current level of approximately 27,000 BOE/d. The company expects to bring on an additional 3,600 BOE/d inthe next several months as damage from hurricanes is finally fully repaired. CEO John Schiller Jr. described this acquisition as a“watershed event” which will double the company’s interests in the most oil-weighted and highest-margin properties in the com-pany’s portfolio. They believe that the MitEnergy acquisition added materially to Energy XXI’s intrinsic value. Perhaps most important for EXXI bondholders was the fact that the MitEnergy transaction was financed with equity.In order to finance the MitEnergy acquisition, Energy XXI sold 94.1 million shares of common stock at $1.90 per share and 1.1million shares of convertible preferred stock at $100 per share, for total net proceeds of $276.1 million. Financing this attractiveacquisition almost entirely with equity has resulted in a substantial increase in security for note holders of Energy XXI. ”

    Martini Time

  225. 225
    elijahwc Says:

    BGB Securities lightly paraphrased above

  226. 226
    zman Says:

    I’m with you Nicky. Besides, Reid just said he’d vote to confirm Ben.

  227. 227
    BirdsofpreyRcool Says:

    elijah — thanks! That was a glowing write up.

    One thing to add… the reserves that EXXI bought from Mitsui for $12.30/boe were originally purchased from Pogo at something like $22/boe. This transaction was indeed a “watershed event” for the company, as it brings a Niagra Falls of cash flow, over the next few years. Thanks again.

    EXXI 10-ers are free to do the Happy Dance, if they so wish. They earned it.

  228. 228
    choices Says:

    This should prob go in the nutbag watch:


  229. 229
    VTZ Says:

    Seems unanimous from the chartists that we are due for a big cyclical rollover in the S&P and rally in the USD.

  230. 230
    Jerome Blank Says:

    A few tweaks to the charts from last week, EXXI, KOG…I’ll add a few more changes soon to NFX and MMR

    Also added a few broad mkt charts and comments, energy bullish percent, $bpener and McClellan Oscillator, $NYMO…


  231. 231
    Fotos Ugg Says:

    Fotos Ugg

  232. 232
    new condo launch Singapore 2017 Says:

    new condo launch Singapore east


  233. 233
    6 derbyshire floor plan Says:

    Peak 2 at Cairnhill Penthouse


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