16
Feb

Tuesday Morning And All Is A Bit Greener

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Market Sentiment Watch: News flash: Lake Erie ices over for the first time in 14 years. Good thing they rebranded global warming as climate change or people might get confused. Markets continue to eye every scrap of news out of the EU and China with trepidation. This morning futures are called higher as Greek debt fears cool and the dollar inches lower. Gold and crude are moving higher as well.

 

The Week Ahead: Slow start then it gets busy on the data front.

  • Tuesday 2/16: Homebuilders Index (forecast 17, last 15),
  • Wednesday 2/17:  Housing Starts (forecast 590K), Import price index (forecast 1.1%), Industrial production (forecast 0.9%)
  • Thursday 2/18: EIA Natural Storage Report (10:30 am EST), EIA Oil Inventory Report (11 am EST), Jobless claims (forecast 447K vs 440K last week), PPI (forecast 0.9%, core forecast 0.1%), Philly Fed (forecast 17), Leading indicators (forecast 0.2%)
  • Friday 2/19: CPI (forecast 0.3%, core forecast 0.1%),

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today - UPL wrap thoughts, KOG, APC, GMXR
  • Odds & Ends

Holdings Watch:

  • $10KP II:
    • $13,700
    • 21% Cash.

Commodity  Watch:

Crude oil rose 4% last week to close at $74.13. The 12 month crude strip is now trading at $76.64, also up 4% last week.  This morning crude is trading up $1.25 plus.

-

Natural gas fell 1% last week to close at $5.47. The 12 month strip is now trading at $5.88 as the prospect of sub 1.5 Tcf end of withdrawal season becomes more likely.  This morning gas is trading up slightly slightly.

  • Imports Watch: Flat week to week at 10.5 Bcfgpd. LNG continues to be largely missing in action despite cold weather, with this past week seeing send out volumes from U.S. regassification facilities of 1.8 Bcfgpd. Canada continues to send elevated levels compared to what we saw in the fall but this season purge is nothing above normal levels.

LNG Note: There are 15.8 Bcfgpd of regas capacity in North America. There are estimated to be about 9 Bcfgpd of new global liquefaction capacity coming on line. Much of this is in Asia and much of that gas will likely stay local (moving from island to mainland primarily), but look for U.S. based analysts to haul out the gas tsunami banners as the year progresses and more facilities come on line. And I will continue to occasionally post this chart for their edification. In all seriousness however, I would expect prices in the U.S. to begin to rally in the second half of 2010 as declines in conventional production become more evident. I would expect that excess capacity in the Atlantic Basin will be attracted to those prices and act as a restraint upon significant rallies over $7.

 

  • Weather Watch: Still cold, staying cold for awhile. According to Accuweather's Joe Bastardi, there is no pattern break coming for the colder than normal weather for the next 20 to 30 days (he's is looking for a cold March).

    • Week Before Last: 225 HDDs which was a bit colder than last year and normal for this time of year and yielded last Thursday's slightly larger than expected 191 Bcf withdrawal report.
    • Last Week: 239 HDDs vs a prior forecast of 227; 143 last year and 206 normal. This should yield a big, 200+ Bcf withdrawal for this Thursday's report.
    • This Week's Forecast: 211 HDDs, slightly colder than last year and normal.

 

 

 

Stuff We Care About Today

UPL Wrap

  • This was Friday's Nutshell on their Earnings: This may be the only bit of green on your screen today. The results are the best I have seen from the group this quarter as is the outlook. The premium to the group in my opinion is well deserved at this time. This is one I track but don’t often traffic in. That will change in 2010 as the superior performance on production and costs and the superior margins afforded by better gas price realizations on an income statement that is partially protected to downside price risk is getting more of my attention.
  • See Comments from earning and from before their conference call here.
  • My post call quick thoughts:

    • The manufacturing style production of their Pinedale asset will be augmented with a small wedge of Marcellus production as they move that program from experimentation into the development phase this year.
    • Their capital program is conservative, especially in the Marcellus, which probably means they get more wells drilled for their planned dollars than they expect, meaning their could be slight upside to the 20%, 20%, 20% growth forecast for 2010, 11, and 12.
    • Narrowing of Pinedale (Rockies) differential is permanent.
    • I plan to add some exposure here soon.

Gassy Stock Multiple: (just putting UPL in with its gassy peers)

 

Looking at SSN for tomorrow.

KOG Operations Update

  • Dunn County, North Dakota Bakken wells #10, #11, and #12 at TD, #10 completed, the other two still waiting:

    • #10 or the MC #16-3-1H had initial production of 1,419 BOEpd from a 1,479' lateral with 12 stages which is very respectable rate for this well considering that most of the ones you read about these days with 2 to 3,000 BOEpd IPs also have twice the lateral length and more than double the number of frac stages.
    • #11 well completion expected in March.
    • #12 will be completed after the other two wells on its pad are drilled (#13, #14) and all three are expected to be completed in May.
  • Second rig mobilized for Red River duty in Montana for a two well program, in March or April
  • Three Forks a 2Q10 event.
  • I will update the Catalyst List tomorrow reflecting these events and future expectations.
  • I continue to own the common.

Other News:

  • GMXR announces a nice Bossier test
  • APC does a deal with Mitusi in the Marcellus. Should be seen as a positive for APC and the other Marcellus players, especially the more focused names in the play like RRC

Odds & Ends

Analyst Watch:

  • (CVX), (MRO), (RDS.A) raised to Outperform at Bernstein while (TOT) and (COP) were cut to Mkt Perf.
  • (CLB) target raised $10 to $150 at Wunderlich

Interesting Reading Watch:

127 Responses to “Tuesday Morning And All Is A Bit Greener”

  1. 1
    italyinvestor Says:

    IOC out with an announcement and appears to be up in pre-market.

  2. 2
    zman Says:

    Italy – saw it, kind of a weird headline, “best case” not being a standard industry term. It also speaks to mindset, usually you talk about reserves with conservatism. That aside, 1.52 billion barrels, or 8.2 Tcfe, in their “best case” is a lot of reserves.

  3. 3
    zman Says:

    BEXP – max pain quite obviously $15 so I will be out of the Febs sooner rather than later.

    http://www.optionpain.com/MaxPain/Max-Pain.php

  4. 4
    italyinvestor Says:

    Z – no mention of oil which is what I think everyone is waiting on. Also looks like short interest is dropping off a bit. Perhaps Reef has some insight.

  5. 5
    zman Says:

    Italy – Last I recall he was trimming his position and displeased with management’s ability to get the project over the goal line there.

  6. 6
    zman Says:

    And Italy, I see they bagged one of the bad guys for you:

    http://news.yahoo.com/s/ap/20100216/ap_on_re_as/afghanistan_taliban

  7. 7
    zman Says:

    Crude back to $76, NG holding at $5.50.

  8. 8
    italyinvestor Says:

    Z – Yep. Just got back from a recon to AFG. We’re going to a pretty hot area come summer. I’m not sure but would you think that the TB might be interested in maintaining some influence in Mullah Mohammed Omar’s birthtown and the home of his original TB madrassah. Clearly a garden spot. Barader is a huge catch. I’ve been on missions that failed to catch him. We called him “The Ghost” who alwayse seemed to escape on a motorcycle when we swooped in. Anyway, he’s the architect of the TB’s 2006-2007 counteroffensive and is a capable and realistic operational/strategic thinker. Good see he’s off the board but we won’t likely see any big effect until net fighting season. THe TB have already issued this year’s macro guidance. Sorry for the divert, will get back to stocks on a rare day off!

  9. 9
    zman Says:

    KOG not flying on that news, at least not yet. Lot of waiting for the next catalyst goes as far as little stock timelines are concerned. People were expecting to get the #11 with the #10 as well so now that have to wait longer on that.

    Italy – thanks for the update, best of luck.

  10. 10
    zman Says:

    ZTRADE:

    BEXP – Sold half (30 calls) of the Feb $15s for $0.85, up 129%, with the stock at $15.85 (so the premium is pretty much toast as we enter the final week). I will hold the other half a little longer and I continue to hold the $17.50s (worthless) and the common.

  11. 11
    zman Says:

    Jerome had BEXP breaking back into X’s on the PF chart at $15.50, so mission accomplished there.

  12. 12
    zman Says:

    EXXID back to $20, MMR at $16.70, pushing what to me looks like a flag formation into new breakout territory. There’s the chance of news for these guys this week and I probably will be out of my Febs soon with the intention of participating with March calls and with my common holdings at EXXID.

  13. 13
    milepost_43 Says:

    OT Lake Erie ice…
    go to Erie, PA for 3 weeeks of smallmouth fishing about mid April…maybe later this year!!!
    …follow the ice breakup with pics from this site…
    http://coastwatch.glerl.noaa.gov/modis/modis.cgi/modis?region=e&page=1

  14. 14
    bloodystupidjohnson Says:

    Z: Many people on this site, excluding myself, follow NOG. However over the weekend I read a few of the fins and must say I am very impressed with its business model. What is your stock holding investment anaylsis of NOG?

  15. 15
    bloodystupidjohnson Says:

    All time favorite reply to a conf call question: From PENN (a gambling casino company)

    Q: How is 2010 going to do?
    A: “We don’t have a clue.”

  16. 16
    bloodystupidjohnson Says:

    Bill: MCF interview with Ken Peak — you and I might be the only big time fans of Peak on this site. If there are others, I apologize. Motley fool had an interview with Peak — http://www.fool.com/investing/general/2010/02/10/interview-with-an-oil-and-gas-contrarian.aspx

  17. 17
    Garyinhou Says:

    Morning Z.. thoughts on NFX this week?

  18. 18
    zman Says:

    Re 14:

    See this: http://zmansenergybrain.com/2009/12/02/nog-notes/

    I don’t currently hold the common, just been playing in the calls to date. Recently got the news I wanted in their Stallion well and think they will have a long list of low working interest wells to talk about on the 4Q call along with what should be high % volume growth for 2010. I like the fact that they run a small shop and have large acreage but little debt, outsourcing to operators who have experience in the play. Running with winners instead of learning how to be one the hard way and on my dime.

    Re 15. Sheesh, sounds like a refiner.

  19. 19
    zman Says:

    Gary – Funny, just got asked that in an email. I essentially said tough call as they announce tonight for tomorrow and it’s hard to tell whether or not small beats are being received poorly this season or if it’s just the poor market that earnings season came under. They are not ones to announce very big beats on the bottom line but at the same time they don’t often miss beating the mid point of volume guidance and they should have ok if not great LOE this quarter compared to guidance. I do expect them to lay out strong growth for 2010 and provide the basis for it via deepwater for 2011, to highlight the Bakken stuff, maybe talk Montana as well but probably just a nod, and to release another grouping of high IP granite wash wells in addition to talking about improved economics in the Woodford. I think I am going to stand pat on the name (holding Feb $50s and $55s and the common).

  20. 20
    zman Says:

    UPL up 2%, not really running on the post call Street comments out today. Pretty much in line with the group, really warming to the story having done more reading over the weekend.

  21. 21
    zman Says:

    Fair warning on the NOG by the way, will be coming out of Feb calls today.

  22. 22
    john11 Says:

    BSJ count me in to the MCF fan club been a stockholder of Ken’s company since 2003. Love the guy!

  23. 23
    Garyinhou Says:

    Thanks Z

  24. 24
    bloodystupidjohnson Says:

    RE:18 thanks — I don’t know why more small operators don’t work this way. It is really an excellent and low risk way to run what can be a very risky business.

    Re:15 What I loved about that reply, is that most CEO’s would give you a line of bull a mile long, even though in reality they did not have a clue themselves.

  25. 25
    zman Says:

    All the charts just got little gaps in them, S&P included. Not liking to see that when they are forming bottoms. Will see if I can find Nicky for a read on resistance. I thought 1081 was the near term level. At 1,085 now.

    BEXP trying to take out $16.

  26. 26
    zman Says:

    Eli’s MHR breaking out.

    My HAL $31s waking up, watching the PXD $50s for a similar move.

    Rolling through the Max Pain readings.

  27. 27
    zman Says:

    Max Pain

    ATW 35

    BEXP 15

    EOG 95

    EXXID 17.5 …. But I don’t think this one matters as it is so thin.

    HAL 31

    MMR 12.50 … and I don’t think this one matters as it was partially optioned before they broke out to a new range on the Davy news

    NFX 50

    NOG 10 – but again, pretty thin

    HK 24

    PXD 45 – close call with $50 level as well but still a bit of a end of the contract expiration.

    ROSE 17.50

    SWN 46 / 47

  28. 28
    zman Says:

    BEXP through $16 …. choices, choices.

  29. 29
    1520sbroad Says:

    BOP – any read on KOG’s release?

  30. 30
    choices Says:

    copper again strong today, coals, dry bulk shippers also strong.

  31. 31
    bloodystupidjohnson Says:

    Lake Erie: winter in Northeast Ohio has not been really cold, no sub zero temps, just annoying cold. I can’t remember the last time it has been above freezing. (Normal highs are now about 37 – 38). Highs have been in the twenties. lows in the teens. That’s not really bad, it is just that it does not get about freezing to melt any of the snow or ice. An yes, even though I like winter, I am getting tired of it.

  32. 32
    zman Says:

    1520 – she’s got meetings this morning, promised to pop in when possible.

    Choices – yeah, gold on fire too. Amazing the number of voices calling for a higher dollar and lower gold, oil, markets last week. The same voices who are always emboldened by troubling chart patterns. I’m not saying “it’s over” for the pullback but they need better reasoning that only a chart to convince me when they come after the bull.

    Crude tapping on $77, up $2.80

  33. 33
    1520sbroad Says:

    #32 – got it – i’ll be interested in her read…

  34. 34
    zman Says:

    BSJ – well, it is the shallowest of the Great Lakes. And Dman – I won’t bother posting the sudden flush of stories I see attacking Global Warming. I’d tell most of them that what happens next week or even this winter is what you call weather. What happens over decades is what you call climate. But … in the case of Bastardi, he does make a good case for a 30 year period of cold that saw low Pacific and Atlantic temps that ended in the late 70’s (when people were calling for an Ice Age) and then the 30 years of hot oceans we just went through which has culminated in Global Warming. And now his chart shows the oceans going into a cold cycle again and suddenly winter is colder. Hmmmm.

  35. 35
    bill Says:

    16 mcf

    i saw that, thanks.

    they had great q2 numbers and no one noticed, lol

    Mcf grew earning’s 50 % sequentially from q1 .83 a share to 1.21 in q2 and blowing away analysts estimates and the company blandly just reported results without even mentioning it.

    In fact, the earnings beat last year 2nd qtr when rates were twice as high. This is due to shut in gas volumes coming back on line and a mix of NGL and oil sales.

    The company has only 8 employees and slashes costs to the bare bone. In q 2 ng prices averaged 4.44 for MCF , Contango’s cash flow exceeded 5.00 per mcf due to their low costs and ngl and oil contribution.

    Now , if ng is current 5.50 and recently traded as high as 6.00 what do you think this qtr will bring. Who knows, but it certainly will be higher than last qtr average of 4.44 which relected prices from october thru december. Suppose it averages 5.44, thats 1.oo dollar more on 8 bcfs of production which = 8 m divided by 16 m shares is another 50 cents of pre tax margin, 30 cents after tax. SO next qtr could exceed 1.50 per share.

    MCF is a cash cow generating 1/2 m a day in cash 180 for the year. Peak is reinvesting 125 m of that 180 to grow reserves.

    His first swing , he hit a home run with Nautilus which is now being completed and will come online in july 2010. when it does production will grow 20 % from 85 mmcf a day to 105

    He also is hitting singles drilling 15 wells in the cotton valley were finding costs will be 1.33 pre tax per mcf and has an option for drilling 30 more wells

    His reserves are all producing, no money is needed to bring reserves to production.

    recent deals have prices reserves at 3 per mcf. Mcf is selling around 2 for proved producing reserves and should be trading at 75, imho. If ng prices improve this is an easy double.

    did i say debt free and 80 + m in cash

  36. 36
    zman Says:

    HAL on the tape with a $40 mm contract for services to COP in Bohai Bay, good to see interest there accelerating, that’s still NFX territory (they sold their original development but have another underway).

  37. 37
    zman Says:

    Just received from Nicky via email:

    S&P Resistance:

    I have 1087, 1090, 1092 and 1097.

    Will take a look at oil and get back to you.

    N

  38. 38
    dij Says:

    Z,
    When you said SSN for tomorrow, I assume that means a write up? Should I save any questions for then?
    Thanks

  39. 39
    bloodystupidjohnson Says:

    I love when Lake Erie freezes because it cuts off the Lake Erie lake effect snow machine — lol

  40. 40
    bill Says:

    is eia overstating production???

    EOG Resources Inc. is holding to its belief that the Energy Information Administration (EIA) 914 data is “consistently overstating” U.S. natural gas production and has modeled a decline in gas output of 3 Bcf/d by the end of this year, CEO Mark Papa said last Wednesday

  41. 41
    zman Says:

    Dij – yeah, a short one tomorrow. Not my normal cuppa but sort of interesting.

    Bill – great write up, my thinking exactly. As his cash flow grows, I’d like to see him continue to whittle the share count down which I suspect he just might later this year.

  42. 42
    zman Says:

    Bill – That’s what Papa, Aubrey, Floyd all have said. Several analysts now in that camp. I put a chart in last week showing shale vs conventional and you can see the conventional come off pretty quick with the rig count (in terms of timing) but the magnitude of the decline was smaller than I would have estimated.

  43. 43
    bloodystupidjohnson Says:

    RE: 34 There is alot to say in the big cycles of weather. The suns energy is not constant, and the earth wobbles around on its axis. If we wait another 10,000 years, the sahara desert will once again be another big lake (this is no joke, it happens every 20,000 years or so). So it very well be that Bastardi, who is a fan of cycles, could very well be right.

  44. 44
    choices Says:

    bond vigilantes may put some pressure on govt out of control spending.

    BOP, curious if you have any comments.

    http://www.bloomberg.com/apps/news?pid=20601109&sid=aBM9Dw8CyYRk&pos=10

  45. 45
    cargocult Says:

    Bill, thanks for the insight on MCF. And Z thanks for everything!

  46. 46
    sunshine Says:

    There seems to be a lot of buying interest in BEXP today -rumors?? ๐Ÿ™‚

  47. 47
    zman Says:

    BEXP continuing to walk up here, at $16.33 and I might add, about time but better late than never. I’d bet on news in the next week or two unless they hold all for the 4Q call which is possible. The only reason I see to go ahead and get news out would be a high rate well back over in their old stomping grounds at the Ross area, should be low risk as it is in a good spot near 3 old wells.

  48. 48
    zman Says:

    Sunshine – was typing before I saw your question. Pretty much my thoughts though, haven’t heard a rumor. Am close to punting the rest of $15s and waiting to see if my $17.50s will wake up. Planning own the stock for a bit longer but it is a pricey name and 4Q earnings should not be blow out by any means as volumes will be sluggish one more time before expanding in 1Q. That’s all well known though so expectations should not be high on the financials.

  49. 49
    bloodystupidjohnson Says:

    BEXP: I think BEXP might have been captured by the momo boys, so regular fundies might go out the window for a while. Of course BEXP might have good fundies, but I don’t think it is the main thing anymore.

  50. 50
    zman Says:

    ZTRADE:

    BEXP – Sold another 20 calls for $1.35, up 271% with the stock at $16.35. That leaves 10 in to play for any further upside and the still worthless $17.50 calls and the common.

  51. 51
    zman Says:

    BSJ – It is absolutely a momo Bakken name from time to time. The cheaper way to play the Bakken in momo fashion is WLL.

  52. 52
    zman Says:

    ZTRADE:

    BEXP – Added (10 – starting small) $17.50 MARCH Calls for $0.80 (on the high side of the mid) with the stock at $16.45. See comments on the site today re potential catalysts 47, 48. I am likely to come out of the last bit of my Feb $15s today.

  53. 53
    dij Says:

    Re:#41, thanks Z.

    EXXID, interesting up trendline developing, it actually ties in with the 2.5 low.

  54. 54
    zman Says:

    Housekeeping Watch: If you are supposed to be getting ZBLASTs and are not, please send an email to zmanadmin@gmail.com

    Subject line: email me
    along with your user name and desired email address.

  55. 55
    hoggzilla Says:

    ATPG is presenting at Enercom tomorrow. There is alot of speculation they will be announcing results of flow tests on Atwater 63 #4. Just thought I would pass it along.

  56. 56
    zman Says:

    Thanks Hog, here’s that conference schedule:

    http://theoilandservicesconference.com/schedule2010.html

    EXXID on there tomorrow as well.

  57. 57
    zman Says:

    ZTRADE:

    WLL – Added (5 – also starting small) MARCH $75 calls for $1.50 (low side of mid and easily with the stock at $70.89. This should be long enough to capture some Spring conference presentations and earnings next week. Expecting more strong results from their core Bakken program on the call.

  58. 58
    zman Says:

    Dollar Watch: Back through 80 on the index like a shot, at 79.82 …. continues to look spent to me, rolling over.

  59. 59
    jiveyjr Says:

    volume increasing on KOG on the 5′ chart…push thru 2.61 would be nice…

  60. 60
    jiveyjr Says:

    not to drive VTZ crazy but gold has completed a nice abc pullback on the daily chart. the resulting falling wedge experienced a topside breakout on this mornings gap up…hopefully it will follow thru for us gold bugs…..

  61. 61
    zman Says:

    Hackett of APC on CNBC with Cramer now. Good stuff.

  62. 62
    zman Says:

    Hackett just talking up the APC/Mitsui deal in the Marcellus today. Good deal for APC with a large carry in the first year. Also saying that congress and not the administration is the hold up on getting natural gas to be a real transportation fuel in the U.S., says progress is being made on that front.

  63. 63
    choices Says:

    It seems that it never stops with Goldman-Simon Johnson

    http://baselinescenario.com/2010/02/15/senior-goldman-adviser-criticizes-greece-without-disclosing-his-goldman-affiliation/

  64. 64
    zman Says:

    Jerome – how’s the BPENER look now?

    BEXP – noting the triple top break out here.

  65. 65
    zman Says:

    KOG acting pretty unimpressed with the pr. It was good news in my book, like to see the bigger IP and hear the talk about improving efficiency, just thinking people thought they’d get 2 wells, not one.

    NG off 8 cents, put a little crimp in the groups move near noon EST.

  66. 66
    zman Says:

    I’ll have an updated Catalyst List out tomorrow.

  67. 67
    Jerome Blank Says:

    Re: #64, We’ll get a better idea on any bullish percent changes at the end of the day…BEXP breaking out above the daily ascending triangle, MHR doing the same thing…

  68. 68
    zman Says:

    SSN up another 18% today, can’t see how to justify that on top of last week’s move.

    Just looking around at volumes today, a bit better than last week for this time of day. BEXP stands out in the group.

    Also noting SWN is poking its head up here, closing on its 50 day. Interesting as the thing has been so beat up.

    Meanwhile, UPL drifting higher without me. That’s just shy of its 50 day as well. Jerome – thanks for the read there over the weekend.

  69. 69
    zman Says:

    ZTRADE:

    MMR – Sold the last of $15 Feb calls (10) for $1.50, up 34% with the stock at $16.45. I may roll longer soon.

  70. 70
    bill Says:

    do we have a gas problem?

    http://www.pennenergy.com/index/articles/newsdisplay/141207996.html

  71. 71
    Jerome Blank Says:

    EXXID…30 min intraday chart updated, support $19.50-$19.60…

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280

  72. 72
    Jerome Blank Says:

    Re: #71 correction…5 min chart updated…

  73. 73
    john11 Says:

    Interesting filing just out from Fidelity showing 15% holding in NOG (6,496,677shs)) up from 12.3% in November ’09 filing.

  74. 74
    zman Says:

    Thanks JB, John.

    On the NOG, I’m getting ready to roll out to March. Was thinking tomorrow for the sell.

    We get oil numbers on Thursday along with the gas numbers due to the holiday although we may get API tonight.

  75. 75
    isleworth Says:

    CXPO announces production results and drilling activity for the fourth quarter of 2009, year-end 2009 reserves and guidance for 2010 production and capital expenditures. Production Update Crimson produced an estimated 3.2 Bcfe of natural gas equivalents, or approx 34,800 Mcfe per day, during the fourth quarter 2009, compared with 4.6 Bcfe, or 50,300 Mcfe per day, produced during the fourth quarter of 2008. For the year ended 2009, Crimson produced an estimated 14.9 Bcfe of natural gas equivalents, or approx 40,900 Mcfe per day, compared with 19.2 Bcfe, or 52,600 Mcfe per day, produced in 2008. New production resulting from a very limited drilling program in 2009 was not sufficient to offset normal field decline in existing production. Fourth quarter 2009 production was also negatively impacted by approx 1,500 Mcfe per day by a retroactive dispute settlement related to royalty payments on certain lease use gas and a retroactive adjustment to production previously recognized from certain non-operated conventional properties. Average production associated with the December 29, 2009 divestiture of certain non-core Louisiana assets was approx 2,200 Mcfe per day for the fourth quarter of 2009 compared to approx 4,900 Mcfe per day for the fourth quarter 2008. Co says ” As we proceed with our drilling program during 2010, we anticipate production to increase ratably during the year, resulting in an average rate of between 35,000 and 39,000 Mcfe per day for the year. Proved reserves at December 31, 2009, as estimated by Netherland, Sewell, and Associates, Inc., our independent reservoir engineering firm in accordance with new reserve reporting guidelines mandated by the SEC, were 97.5 Bcfe, with a PV-10 value of approx $176.4 mln. Capital expenditures for the fourth quarter of 2009 were approx $5.3 mln, with approx 80% of the expenditures related to our East Texas resource play. Co says they have forecasted 2010 capital expenditures to be approximately $50-$56 million compared to the $21.4 million spent in 2009.

  76. 76
    VTZ Says:

    RE 60 – Doesn’t drive me crazy :). If the USD falls below 79.50 it could be in for some technical momo pain.

    BSJ – I have a nice Cardium report for you if Z is kind enough to send me your email.

  77. 77
    zman Says:

    Thanks Isle, had not noticed they put out a pr, will mull that, don’t think I’m interested until it chops $3 but will have a look on a reserves basis and circle back.

  78. 78
    zman Says:

    ZTRADES:

    NFX – Sold the 3 Feb $50s for $3.10, down 12%. I continue to hold some $55 Feb strikes and the common.

    NFX – Added (10) March $55s for $1.80 with the stock hovering around $53. They announce 4Q results after the close.

  79. 79
    zman Says:

    RRC running hard now on the APC / Mitsui news, up 6%. That’s helping the other shale centric names, including UPL, SWN, and the bigger caps like CHK. Can’t be hurting NFX. Wondering if we get any details on NFX’s Marcellus activities tomorrow; thinking it is too soon to hear much on their Eagle Ford stuff they just bought into.

  80. 80
    1520sbroad Says:

    Z – how much marcellus exposure does NFX have relative to the other players?

  81. 81
    sunshine Says:

    JB Does the current BEXP price action look “tired” based on your work? Voted ๐Ÿ™‚

  82. 82
    zman Says:

    1520 – they took on a pretty good sized chunk for them, I think it was 170 K acres. As far as that stacks up against most others they’re medium fry. I’d bet its not meaningful to them for 3 years.

  83. 83
    1520sbroad Says:

    I was just looking thru their most recent presentation – 2/2/10 – they are looking at mid 2010 for initial marcellus drilling. I knew they did that 50/50 deal with Hess. I didn’t realize at the time how big it was.

    I’ll be interested to see what some of the marcellus “newcomers” have to say after they drill their first wells. SWN, NFX both in this group i guess. Also interested to see how the permitting/water issues truly play out there.

  84. 84
    zman Says:

    ZTRADE:

    BEXP – Added another (10) of the March $17.50 calls for average of $0.675 with the stock at $16.10.

    Planning to punt my remaining Feb calls here either today or tomorrow.

  85. 85
    zman Says:

    From Nicky re Oil:

    Looks pretty bullish short term. But I am not quite sure why fundamentally! The only bearish count I can see is that this is a wave ii and we are currently in the c of ii. Still looks like it could run a bit more even with this count. Resistance around the 78 area maybe a bit lower.

  86. 86
    zman Says:

    Dollar continuing to get thumped, 79.66 on the index, down 0.8%.

  87. 87
    zman Says:

    Dollar Story:

    http://www.marketwatch.com/story/dollar-slips-vs-aussie-after-hawkish-rba-minutes-2010-02-16

  88. 88
    zman Says:

    Bit surprised CCJ isn’t up more with the President backing new nukes in a big way.

  89. 89
    zman Says:

    Food for your NFX thoughts:

    http://zmansenergybrain.com/2009/10/21/nfx-reports-solid-3q09-results-pre-call-note/

    Note the comments about this new batch of Granite Wash wells being longer laterals.

    Also note they have yet to come with 2010 guidance, my guesstimate is they say 7 to 13% or thereabouts, vs 6 to 10% in 2009. I think any midpoint less than 10% growth will be a disappointment to the Street.

  90. 90
    zman Says:

    Wyoming – thanks for the LaChance rig photos. Ouch! You should post that with the link trick you do. That looks expensive!

  91. 91
    Jerome Blank Says:

    Re: #81 sunshine…thank you for the vote…I’m going to try and take a closer look at BEXP tonight…there are a # of conflicting technicals developing…for the moment, I’d much rather buy BEXP down, after a pullback…I’m sorting out the price…

  92. 92
    elduque Says:

    Any thoughts on today’s price action on Nat. Gas.

  93. 93
    zman Says:

    91 – Hmmm. Not sure which technical negatives. It looks like a breakout from a short base on the third try which I’ve always seen as a pretty good thing, especially if it comes on higher volume following a period of diminishing volume. It’s not in extremely high RSI territory. I do see that it is into resistance territory on the weekly chart if you go back about 20 months. Granted, on the fundamental side, I certainly think the valuation is a bit stretched but it’s been that way for a bit now so I’ll be interested to here about the TA negatives.

  94. 94
    zman Says:

    92 = profit taking on a slightly warmer forecast for this week. Still going to be colder than normal for awhile, this Thursday’s number should top 200 Bcf quite easily sending up below the 2 Tcf mark with 5 or so weeks left in the season. Should get to the 1.5 Tcf trough which should keep gas range bound in $5 to $6 land with maybe a shoulder season dip in April into the $4s before recovering.

  95. 95
    zman Says:

    Lots of things in and around the hot plays suddenly looking better on the charts, take SFY for instance in the Eagle Ford, the weekly chart there looks very interesting.

  96. 96
    zman Says:

    and WLL may run into earnings as it has a habit of doing, due 2/24.

  97. 97
    zman Says:

    Many of the coals breaking up through their 50 day ema’s today. China fears fading as fast as Greek fears it seems.

  98. 98
    West Says:

    ATP to Present at The Oil & Services Conference VIII
    HOUSTON, Feb 16, 2010 (BUSINESS WIRE) — ATP Oil & Gas Corporation (NASDAQ: ATPG) CFO Al Reese, Jr. and COO George R. Morris will present on Wednesday, February 17th at The Oil & Services Conference VIII in San Francisco. Highlighted will be an update of the activities at ATP’s Telemark Hub including the results of the recently completed well test at Atwater Valley 63. The bullet points and graphs that will form the basis of the 2:20 p.m. PT presentation will be posted to ATP’s website, http://www.atpog.com, tomorrow morning and can be heard live at http://www.atpog.com as well as http://www.investorcalendar.com/CEPage.asp?ID=155184. Management will also be available for one-on-one meetings upon request at the conference or via sthornton@atpog.com

  99. 99
    zman Says:

    S&P breaking through more resistance, now over 1092. Looks like a near term test (tomorrow) of 1100 is in the cards.

  100. 100
    zman Says:

    Group has been resting since just before lunch, looks like it’s going to run into the close. Nice to see the recovery after the last couple of weeks.

  101. 101
    Jerome Blank Says:

    Re #93, …BEXP, noticed a few interesting technical issues developing not necessarily negatives…I should be more careful on how I say things, conflicts might be a bit premature…

  102. 102
    sunshine Says:

    JB #101 ????

  103. 103
    zman Says:

    ATW, PXD – another day like today and those will be alive and kicking.

  104. 104
    Jerome Blank Says:

    RE: #`102, sunshine, standby…

  105. 105
    sunshine Says:

    Standby…..I got 6 minutes. ๐Ÿ™‚

  106. 106
    zman Says:

    Somebody wake me when NFX hits the tape.

  107. 107
    zman Says:

    CHK on the tape with an operations update, reserves, reserves look in line…

  108. 108
    zman Says:

    CHK – 3 nice Granite Wash wells in that release, IPs of 21.8, 21.6, and 20.6 MMcfepd – all from the Oklahoma side of the play.

    On the Texas side they also put up some nice results. I’ll have a fresh granite wash players list in tomorrow’s post.

  109. 109
    bill Says:

    chk must have a huge write off for the sec rules

    they have sub 1.00 finding costs if you include carries but exclude write offs.

    i wonder what it would be if they excluded carries and included write offs 5 + lol

  110. 110
    zman Says:

    CHK liking the guidance and the well highlights after hours.

  111. 111
    VTZ Says:

    Gold at an all time high in euros today.

  112. 112
    VTZ Says:

    BSJ Re 76: My friend at Peters and Co says that there are many who think Viking is the next Bakken or Cardium.

  113. 113
    zman Says:

    VTZ – can you send that report to me? Where’s Viking?

  114. 114
    VTZ Says:

    When I get home. I’m at the airport and don’t have it here.

    Viking is eastern Alberta and western Saskatchewan. Further north than Bakken.

  115. 115
    zman Says:

    Thanks much V. Ironic on the gold price, eh? After all the talk that it was doomed to $600.

  116. 116
    VTZ Says:

    I don’t even care what anyone says about gold. because it’s obvious that it needs to be >2000 and I can wait for the huge gains in the mega-shorted juniors. All this drop did was let me pick up the last of my position that I didn’t want to add at 1200.

    When I said people think it’s the next Bakken/Cardium, I should add that the oil in place in only smaller than Cardium although there are those who believe the economics could be superior to Cardium and potentially the Bakken.

  117. 117
    VTZ Says:

    The funny thing is this is the only time when I don’t have an exit strategy for a play/position because I know the move is going to exceed expectations so I am taking a wait and see approach.

  118. 118
    zman Says:

    NFX on the tape, walking through it now.

  119. 119
    dij Says:

    NYT:

    Analysts point to a wide range of companies that are potentially on the market, including EOG Resources, Southwestern Energy, PetroHawk Energy, the Encana Corporation, Chesapeake Energy, Devon Energy and Anadarko Petroleum.

    http://www.nytimes.com/2010/02/17/business/energy-environment/17merge.html?ref=global-home

  120. 120
    sunshine Says:

    Is it a barn burner or just O.K?

  121. 121
    Jerome Blank Says:

    Good evening…chart and comment updates…

    $bpener
    McClellan $nymo
    $spx close up
    $wtic candle view-light crude
    $wtic Avg true range
    BEXP
    BEXP-added a 30 min chart to highlight support zones

    #93,#105 sunshine, sorry for the confusing comments earlier, things were a bit hectic…Re: BEXP, Zman was right, vol picked up on the breakout…hopefully the chart changes tonight frame the picture a bit better…

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280

  122. 122
    zman Says:

    not done yet

  123. 123
    zman Says:

    NFX quick take:

    The 4Q09 Numbers

    * Production of 64.6 Bcfe (71% natural gas) vs a range of 63.3 to 65.3 Bcf, so high end of range
    o vs 65.5 Bcfe last quarter
    * Costs – they have been improving
    o LOE was $0.91 vs $0.81 last quarter. Guidance is a bit higher, bears some scrutiny as it looks like the international side is dragging it up a bit.
    o Guidance was $0.83 to $0.89
    * EPS of $1.40 (ex items) vs $1.35 expected
    * CFPS of $3.32 vs $2.99 expected

    Nutshell: Good quarter. Bottom line beat on EPS and CFPS with strong guidance for 2010 volumes. Costs look a little high during the quarter (that can be end of year stuff) and in the guidance (that could be management bagging the Street). With volumes set to grow 8 to 12% (and I had said it would be 7 to 13% on the site yesterday) and oil and gas prices remaining elevated to what they were last year (especially given NFX’s strong hedge position), it’s hard to see how Street numbers don’t go ahead, with spoonfed guidance in hand, and rally from the current levels. At present the Street puts 2009 CFPS at $11.98 and 2010 at $11.29, it just won’t stay that way.

  124. 124
    zman Says:

    JB – thanks, makes sense.

  125. 125
    West Says:

    ATP is currently releasing the Ocean Victory after completing the AT 63 #4 well. The well was tested from two zones at a combined average rate of 10.7 MBoe/d (87% Oil). The well will now be tied into the ATP Titan in preparation of first production later this quarter…..

  126. 126
    West Says:

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjcwNzg2OHxDaGlsZElEPTM2OTA3MHxUeXBlPTI=&t=1

  127. 127
    West Says:

    # 126 is link to new ATPG presentation hopefully it will work .

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