22
Feb

Merger Monday

Print Friendly, PDF & Email

 

SLB Makes It Official. Buys SII for $11 B (or $44.51 a share using Friday's prices).  While M&A activity is generally bullish in the near term (the service group is bid up slightly this morning) there is quite a bit of doubt that this will be the first in a series of big mergers in the oil service arena this year. There is some speculation that CLB will be the next name to go in the space.

 

 See TAT report over the weekend here. TAT will hold a conference call at 8:30 am EST today.

The Week Ahead:

  • Monday 2/22: No reports
  • Tuesday 2/23: Case-Shiller home prices, Consumer confidence (forecast 56, last read 55.9)
  • Wednesday 2/24:  EIA Oil Inventory Report, New home sales (forecast 355K, 342K last)
  • Thursday 2/25: EIA Natural Storage Report, jobless claims (forecast 460K), durable goods (forecast 1.5%)
  • Friday 2/26: GDP revision 4Q (forecast 5.9% vs last of 5,7%), Chicago PMI (forecast 60%, last read 61.5%), Consumer sentiment (forecast 73.7, same as last reading), existing home sales (forecast 5.47 mm vs 5.45 last)

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today - Energy Earnings Calendar Week 5, SU
  • Odds & Ends

Holdings Watch:

  • $10KP II:
    • $16,000
    • 22% Cash.
  • The Holdings tab has been updated with a NEW AND IMPROVED format on the quick view portion of the page. Updated for the $10 KP II and the ZLT. 

 

Commodity  Watch:

Crude oil rose 8% last week to close at $79.81. The 12 month crude strip is now trading at $81.55 with the back end of the curve gently sloping higher (March 2011 is trading $83.04). The  April contract takes over as the prompt month contract today and is currently trading at $80.54, up about 50 cents in early trading.

  • Iran Watch: Iran sees global demand rising in the second half of 2010, adding from 1.0 to 1.4  mm bopd and leading to an increase in oil prices according Iranian oil minister Mohammad Ali Khatibi. Khatibi also commented that he (like many others) see no changes in quotas resulting from the approaching March OPEC meeting.
  • Goldman Watch: The broker sees $85 to $95 oil later this year as the global economy recovers.

 

Natural gas fell 8% last week to close at $5.06. The 12 month strip is now trading at $5.49 and has support back around $5. Natural gas supply from the EIA for the month December is due out on the 26th; of late these reports have contained some suspect volumes, especially with regard to Wyoming volumes. Gas production onshore will need to show some sort of decline to keep front month prices from diving into the middle $4's.  This morning gas is trading off a dime, just below the $5 mark. 


  • Weather Watch:

    • Week Before Last: 239 HDDs which was colder than last year and normal and yielded last Thursday's 190 Bcf withdrawal report.
    • Last Week: 208 HDDs vs a prior forecast of 211; slightly colder than last year and normal for this time of year.
    • This Week's Forecast: 199 HDDs, also cooler than normal and year ago reading.

 


 

 

Stuff We Care About Today

 

---

 

SU Repair Schedule

  • Upgrader 1 damaged in a Feb fire is expected to be back online in early April.
  • Upgrader 2 will run normally during that time.
  • Full year guidance will be re-tweaked in May
  • Just watching for now but providing a time for repairs could prompt some stability here.

 

 

Odds & Ends

Analyst Watch:

  • Barclays cuts ratings on the solar names. ESLR, STP, LDK, YGE all see ratings and targets fall.
  • XEC - Target upped from $52 to $70 at Barclay's, remains Equal-weight rated.

Housekeeping Watch: I often use short hand or acronyms when I type to save time. Much of that stuff is spelled out on my dictionary page.

 

110 Responses to “Merger Monday”

  1. 1
    zman Says:

    I’ve seen a couple of stories indicating the next acquisition in oil service will be something like CLB or a seismic name. I’d add OII to that list of that.

  2. 2
    zman Says:

    TAT call ongoing.

    Should see 2,000 bopd this week.
    Expect to exit 2010 at a least 4,000 bopd.

    Analyst Watch: Pritchard cuts BEXP and XEC to Neutral.

  3. 3
    zman Says:

    TAT Call

    In Turkey, nearby CVX well they are hearing has good oil shows from the Cretaceous. They’re fold bet exploration well looks to be a end of 2Q spud.

  4. 4
    apbd Says:

    Site is slooooooow refreshing this AM.
    Thought you should know,
    apbd

  5. 5
    zman Says:

    Thanks AP, it’s an outside link, will try to track it after this call.

  6. 6
    zman Says:

    TAT Call – High level of interest, both sell and buyside on the call.

    Management financing additional frac equipment, “bank of Malone”, the chairman.

    In Selmo field (their mainstay oil play in Turkey) they are seeing much quicker completions than the locals. Also think they are going to be pushing up the current recovery factor by 25 to 30%.

  7. 7
    zman Says:

    Site should be faster, yanked a link site that was slow to respond.

    TAT call – pretty high level of interest. Need to do a little more work on understanding their Arpatepe area in Turkey. They are thinking they may go horizontal in this oil area.

    Comparing this to the Spraberry in 1950. Heck of a statement. At this point, they have to build it all from the ground up, roads, pipelines, etc.

    They also see a potential for the Doti (sp?) gas shale in Turkey.

    All the sell side coverage (all 3 of them) on the call.

    Turkish gas price: Prices expected to rise by 50% this year. Just saw a big increase in the price of gas imported from Azerbaijan.

  8. 8
    zman Says:

    TAT – year end call mid March. This was a good call, will go back and listen again for a couple of the play details. Basically they will double oil production from current levels this year without exploration (from infill drilling and workovers of existing wells). In the second half we should get some shots at improving on this through exploration. On the gas side, they are going from 0 to probably in the neighborhood of 7 to 10 mm/d with prices around $8 this year via a low risk program, also to be potentially augmented by exploration. That’s all from Turkey, nothing in their for Romania or Morocco where they’ve had some missteps (dryholes) and where the weather is causing a lot of problems in executing their plan.

  9. 9
    isleworth Says:

    Oppenheimer notes CHK is emphasizing liquids production growth and is aggressively expanding its leases in the liquids-rich Eagle Ford Shale, as well as several unconventional oil resource plays where it can use horizontal drilling techniques. Firm expects CHK to continue to monetize some of its interests in more unconventional plays to create value for its shareholders. Opco maintains Outperform rating on CHK shares, as it believes the upside potential far exceeds the downside risk from low natural gas prices. With shares trading at ~9x its projected 2010 EPS, Opco believes CHK represents a compelling value and is one of the most undervalued among peers. Firm thinks CHK’s biggest challenge is regaining investors’ confidence.

  10. 10
    zman Says:

    “Firm thinks CHK’s biggest challenge is regaining investors’ confidence.”

    ~ what a mouthful that is. Same applies to HK although the situation is different and people really should get over it on sitting around, waiting on E&Ps to sell things.

  11. 11
    zman Says:

    TAT up 6%. Rest of group pretty flat.

  12. 12
    elduque Says:

    I did some work looking at the price of HK relative to CHK over the last year. Needless to say HK looks cheap relative to CHK and its peer group. Do you have any explanation for its under performance?

  13. 13
    zman Says:

    HK isn’t cheap to the big names on P/CF. The underperformance is the result of HK’s unwillingness to operate within cash flow during a time of low gas prices. The secondaries burned people on the name, right about the time they got the balance sheet squared away to the point that further secondaries are not required at this level of spend. Much like CHK however, the company said it would be monetizing non core assets. With that statement, all the analysts stopped focusing on production and reserve growth and became deal watches. “don’t tell me about the next big monster well, tell me when you’ll sell the mid con” etc, etc. So now, the stock is in limbo. Top notch growth, falling operating costs (the monetizations will help that too), big inventory of undrilled prospects (probably 10 years worth), a much improved balance sheet, and capex largely secured by above market hedges. But until they sell some assets the stock will be flat. I’m thinking they will have some statements about their data rooms and progress on that front on this week’s call. Note also that whatever they sell is unlikely to cause them to reduce guidance and after the sales, they will probably walk guidance upwards for the rest of the year.

  14. 14
    bill Says:

    Its going to get colder later in the week.

    Im suprised with NG weakness moving in the opposite direction to oil

  15. 15
    zman Says:

    Bill – Yeah me too, big Texas snow coming tomorrow into the heart of the state. Our weekend here in the south was not quite balmy and we are headed lower again with another shot at snow as part of the Texas storm. This selling feels a bit over done. The strip is still well over $5. On the stock front, they seem to care a lot more about the S&P and oil at this point.

  16. 16
    zman Says:

    Link to this weekend’s TAT review:

    http://zmansenergybrain.com/2010/02/21/transatlantic-petroleum-tat/

  17. 17
    elduque Says:

    Thanks for the quick and thorough answer.

    BDI flat the last couple of weeks.

  18. 18
    zman Says:

    ELD – re BDI – yeah, after a real beat down session. Everything I see reads that if the Chinese slow down this year, it’s like breaking from 100 MPH to 85 MPH, still very fast, and the coal companies just don’t see demand slacking for met and thermal tonnage.

    Wizard – I’ll have that E&P how to read what matters in the earnings report run through in tomorrow’s post.

  19. 19
    bill Says:

    looks bullish to me

    http://wxmaps.org/pix/temp1.html

    I agree, the selling is overdone and they will be rushing back in on weds and thursday

  20. 20
    choices Says:

    SLB getting slammed this am, lawyers are descending on Smith to determine if “fair price” was obtained, probably anti-trust investigation ensues.

    Z, any thoughts on the fits of this merger?

  21. 21
    zman Says:

    Bill – we get supply at week’s end, need to see those oddly high numbers in Wyoming back off. I could see a slight uptick in Texas due to delayed completions all hitting before year end which could spook gas bulls near term before it rolls back over with next month’s report.

    ROSE and SD acting well in here on no news.

  22. 22
    zman Says:

    Choices – I think SLB was just filling out the portfolio. Good fit, high price according to the service guys I read, SII would tell you it’s fair. I don’t think the lawyers have a leg to stand on if they want a higher price unless another bidder comes out which I don’t see happening.

  23. 23
    zman Says:

    Bill – here’s another for you. Big snows on the way.

    http://www.accuweather.com/news-seasonal-headlines.asp?partner=accuweather&traveler=0

  24. 24
    bloodystupidjohnson Says:

    Z: I suggest you read past fin on TRGL and their experiences in Turkey and Rom for a different view of this area. TRGL was in the exact same area as the TAT wells, they might even be the same wells.
    For example TRGL had Ayzli subsea issues (drivers can only work 15 min at a time, and the Black sea storms) can cause delay in the wells. Also at Dogu Ayazli, TRGL had production issues with the operator — TPAO. This was a few years ago so maybe the problems have been corrected for future drilling.

    Also you can keep track of the buying price of this gas buying googling BOTAS.

  25. 25
    zman Says:

    BSJ – Everything they have is onshore. They do have the typical regional work contract negotiations that result in slow downs but that is seasonal. These guys have much of their own equipment and are the operator. They’ve mentioned the frustrations of pipeline requirements over there but they are delivering on the volumes targets so far. That’s all with regard to Turkey. The other two plays are not really in the story right now. Thanks re BOTAS, will look.

  26. 26
    zman Says:

    Adding to 25. My timeline on these kinds of things is generally 6 months to a year. If it doubles or something silly like that early then I’ll cut it back and play with house money. I see potentially adding more at their mid month March call, we’ll see.

  27. 27
    zman Says:

    Got this from JD:

    I lost the link from this morning. In any event, the headline is that Bernanke’s testimony to the finance committee on Wednesday Feb 24 will be mkt friendly.

    This leak helps us get a feel for how the pulse of the market will behave this coming week.

    On Monday, Janet Yellen speaks at 11 am ET.

    On Tuesday, February consumer confidence will be reported. The previous CC report came in at 56, the consensus expects 56, but Moody’s expects 51. As a general rule, we often observe the stock market dipping into consumer confidence reports, and we also observe these reports tend to put a floor under the stock market. So, investor confidence will be rattled if there is a downside surprise in expectation. The rattling of investors will cause a swoon, and put a short term floor under the mkt, or the report will exceed the consensus and put a floor under investor confidence. Either way, a short term floor should be put under the market on Tuesday. Will it happen, I don’t know, but if it does, it provides a meaningful psychological structure to us for the balance of the week.

    The balance of the week begins with Bernanke’s testimony to Congress, which as noted in the subject title ahs been leaked as being mkt friendly. This would be consistent with some sort of floor being set on Tuesday early in the week. Yes, price must roll-over and digest last week’s gains, and yes, I see the markets are bid on the opening of the Sunday night’s Asian markets. Still, a slowing of last week’s bullish momentum and rotation lower into Tuesday’s consumer confidence report should surprise no one. Assuming a new floor of sorts is established by Tuesday, and Bernanke’s testimony on Wednesday, the mkt should begin to creep higher into Friday’s revised GDP report.

    The consensus vs Moody’s forecast for Friday’s revised GDP is peculiar as well. The adv-gdp was 5.7%, the consensus for the revision is 4.5% and Moody’s is 5.9%. Could the consensus be sandbagging the number? And why is Moody’s revision upwards rather than downwards along with the consensus. These are questions I will put to Moody’s later in the week. Regardless, what we do know is a downward revision will put downward pressure on the stock market on Friday morning, assuming there is downward pressure from the GDP revision. Only thing is that downward pressure will be offset an hour later when the friendly Chi-PMI comes out.

    Netted out, the balance of the stock market’s price action suggests digestive trading in the first half and ending the week more or less without any technical damage to speak of. This is without considering the Wednesday Feb 24 strike in Greece of 2 million workers from the GSEE.

    The 240 minute emini chart shows a strong correlation of the Friday Nov 27 – Friday Dec 4 rally to the Friday Feb 12 to Friday Feb 19 rally, both were roughly 52 points from low to high. The -34 point rotation following the Dec 4 high is roughly the correlation map I will be watching in the first half of this week, assuming a digestive trade unfolds in the first half. If a digestive trade unfolds, I will be looking for something in the 1078-1086 zone to support the stock market mid-week.

  28. 28
    bloodystupidjohnson Says:

    Z: If TAT is talking about pipeline issues, then it looks like some things never change. Pipeline issues was a major problem for TRGL.

    One plus in selling gas to Turkey, is that it is a nice hedge to US gas sales. There is no correlation to strip prices here to the price of nat gas in Turkey. Besides Turkey really hates having to depend on the Russians for their gas. There is no love lost between the two countries.

  29. 29
    bloodystupidjohnson Says:

    Correction from the other day, I said that the McClellan was over bought. That was a mistake, it is NOT currently over bought.

  30. 30
    Nicky Says:

    Morning all. Interestingly #27 coincides pretty well with the cycles too. That said I thought we would be weaker today than we are. I actually think the 1094 area should hold the market before we turn higher again.

  31. 31
    zman Says:

    re 28 – they said their gas gathering system (over 1,000 miles of pipe) is overbuilt due to govt. regulations. Almost done and they came in on budget but he didn’t see it changing anytime soon. He did use the word “hopeful” but you could hear him shaking his head.

    Thanks Nicky. Do you have S/R levels?

  32. 32
    zman Says:

    Coal and some oil service only things not really sliding today. Gas getting the attention of the XNG now, as it is down 8x the move of the S&P.

  33. 33
    bloodystupidjohnson Says:

    Z: TAT a Canadian company? When did Turkey, Rom, Monoc become a part of Canada? — lol

  34. 34
    Nicky Says:

    Support levels for spx are at 1103,1094,1086. Resistance is at 1112,1115,118,1122.

  35. 35
    zman Says:

    My little jest, it does at least trade on the Toronto.

  36. 36
    zman Says:

    Thanks much Nicky.

    Yellen says she does not support any increase in the Fed funds rate.

  37. 37
    bill Says:

    and this video talks about “harsh cold” coming tuesday thru thursday behind the low that hits new england

    see 2 minute mark

    http://www.accuweather.com/video-on-demand.asp?video=58063217001&title=Stormy%20for%20the%20East%20this%20Week

    all this portends a rally in ng, imho bwtfdik

  38. 38
    zman Says:

    Market on hold through Ben’s speech on Wednesday? GDP revision late week? Obamacare summit Thursday? Sheesh. Glad we have earnings coming up for a bunch of the mid caps or I’d be asleep.

  39. 39
    zman Says:

    Yellen on rates:

    http://www.marketwatch.com/story/keep-rates-at-zero-yellen-says-2010-02-22

    Bill – You’d think the Waxman story would lift, not lower natural gas prices.

  40. 40
    zman Says:

    Looking at what’s off today, and some things are off significantly on no real new, the volume looks more like a buyers strike. I’m seeing TA pieces again saying we are up a lot in the last 2 weeks, time for another pullback.

  41. 41
    1520sbroad Says:

    #40 – agree completely. INteresting block of mid caps all reporting within days of each other. Lots of overlap in my mind – SWN/HK/RRC/GMXR/GDP. All involved in Fayetteville, MArcellus, Haynesville, Eagle Ford, East Texas to varying degrees. I took CHK’s drillbit results to be fairly good in all those areas – hopefully the mid’s will show more of the same.

  42. 42
    elduque Says:

    Are you ahead of the curve re expected gas storage levels. If you are not something else is sure wrong with NG. If so what?

  43. 43
    zman Says:

    Eld – not sure what you mean. I still think we go to 1.5 Tcf for trough, that’s about 500 Bcf short of where we are now. Not sure where everyone else is. I expected a little shoulder season weakness and this may be it coming early but it looks like simple profit taking that snapped the $5 mark overnight which inspired more selling.

  44. 44
    elduque Says:

    Maybe another way of putting it is 1.5 Tcf going to be thought of as constructive for the price?

  45. 45
    zman Says:

    re 44. Ah, ok. I would think so. A lot is going to depend on how fast we see injections pile up on flattish weather YoY. I think this weakness is based on the degree day readings of the current time.

  46. 46
    Jerome Blank Says:

    Anyone follow AXAS…there is an interesting technical pattern unfolding…any catalyst in the near term that could move the stock or any fundamental reason to be cautious on the stock… thank you much…

  47. 47
    zman Says:

    JB – I keep an eye on them. Lots of balance sheet machinations of late. Improving but these guys have had about a dozen new incarnations over the last decade. They are not a Bakken wanna be, will check to see if they had spud their first well yet.

    Choices – did you ask something about SD over the weekend?

  48. 48
    bill Says:

    I think traders are jumping the gun on spring is coming..that coupled with no one cutting production.

    i think the eia data later this week will show an increase in production

    Demand has been up but so has production

  49. 49
    Jerome Blank Says:

    Re:#47 Zman, AXAS…thanks…the stock is holding up fairly well today and is basing right at the lower trendline of a bullish ascending triangle, a good low risk spot to buy, but I won’t buy unless it’s relatively sound (at least floats in water)…

  50. 50
    BirdsofpreyRcool Says:

    Saw this note from the Jefferies desk… don’t think it takes into account hedges or production costs… still, it’s what’s driving mrkt action in the energy sector today.
    ————————————–

    We are seeing hedge funds aggressively short nat gas levered names this morning after its recent run and the commodity breaking $5 support. Here is an idea of names most levered to the commodity: % Change in NAV for Each//$0.50 Change in Nat Gas:
    KWK 19%
    CRZO 17%
    PQ 15%
    GDP 14%
    GMXR 14%
    FST 13%
    CHK 12%
    CPE 12%
    ME 12%
    PVA 11%
    VQ 9%
    UPL 9%
    HK 9%
    ATPG 8%
    COG 8%
    NFX 7%
    EOG 7%
    SM 7%
    DVN 7%
    EXXI 6%
    APC 6%
    WTI 6%
    RRC 5%
    MMR 4%
    SFY 3%
    BEXP 2%
    WLL 2%
    CLR 1%

  51. 51
    zman Says:

    JB – I have mulled playing them since their reorg activities. They still have a decent amount of debt. I thought I recalled their first well in the Bakken had not yet spud, that’s a 2Q10 event. Could be some hype going into that completion although I’m not sure where that hole is going down ( they do have small interests in a number of wells in the play). They also have the Eagle Ford Shale buzz phrase attached to their name (very small acreage position, no timeline on first spud there). They are calling for big growth this year but I haven’t looked at that hard. Anyway, looks like it could be set up for a run on the chart … need to do some more snooping but I probably won’t touch it.

  52. 52
    choices Says:

    Re #47-thanks for the followup, Z.

    http://seekingalpha.com/article/189738-sandridge-energy-attractive-value-desirable-acquisition-target?source=email

    I posted this article over the weekend on SD with the author of course pointing out the high debt load of SD but also noting the consensus cash flow/sh at approx $2. I have not been able to determine what the debt service req for 2010-asked if you had seen anything on it. SD has conf call @9AM 25 Feb but their last presentation did not address debt load or debt service req.

    Thanks again.

  53. 53
    Jerome Blank Says:

    RE: #51, Zman, thanks much….

  54. 54
    zman Says:

    Thanks BOP – I’d guess that’s with hedges in place. SWN would be at the top of that list given their decision not to hedge yet. Note the Bakken names at the bottom of the list along with MMR. Subash had gotten very bullish on gas the other day, wondering if this little break in gas prices is causing him to waver.

  55. 55
    Nicky Says:

    Z – has March oil actually gone off the board or is it at the close today? Just wondered as it seems to be hanging out around the 80 number.

  56. 56
    zman Says:

    March expired Friday to may knowledge. April is trading up 3 cents at $80.10.

    I do see what you are talking about as March is showing up 4 cents today, but it should have died Friday as per the expiration on this chart:

    http://charts3.barchart.com/chart.asp?sym=CLH0&data=A&jav=adv&vol=Y&divd=Y&evnt=adv&grid=Y&code=BSTK&org=stk&fix=

  57. 57
    Nicky Says:

    Yes CNBC are still showing March too. I think it may go off the board today.

  58. 58
    zman Says:

    Need a little assist, working up how I look at E&P earnings and I know I’ve done this before but can’t find it. Wondering if you guys have questions on how I look at the quarters as they come out, am describing CFPS and EBITDA and why I look at them and not EPS, anything else need answering on this topic? Thought I might run down cash costs as well, but what else?

  59. 59
    bill Says:

    http://www.accuweather.com/news-story.asp?article=4

  60. 60
    bill Says:

    58

    who has the biggest non cash write off per mcf

    sd will have a massive loss. Im not sure if any of their reserves are economic at 3.87 but if you ignore the one timers ,that seem to be a qrtly occurence, they will have positive cash flow

    yes i like to see cash cost per mcf and gross margins per mcf

    sd is well hedged but their costs are high

  61. 61
    choices Says:

    #58, Z-not sure if this relates to your question but a topic on this board which I consider crucial is the extent that cash flow will cover debt service, ratio or other. On earnings calls, the cap spending guidance, whether it can be covered from cash flow or revolver, etc. or it appears that more debt or secondary is necessary.

    I really appreciate your going outside of the standard CNBC reporting of EPS-it is almost meaningless until a person drills down to look at what consititutes the numbers.

  62. 62
    zman Says:

    Choices – I look at that in the orange charts on the E&P tabs. You can see annualized interest vs EBITDA. Even in the highest debt holders, coverage rarely gets down (at least in my names) to a level where you think they can’t pay the debt service.

  63. 63
    1520sbroad Says:

    #61 – agree – cash flow vs. hedges vs. CAPEX vs. debt service vs. tapping a revolver vs. the serial equity offering skeleton.

    Not sure there is a question in there but loads of discussion/analysis at reporting time.

  64. 64
    zman Says:

    Adding to 62:

    Scroll about 2/3 of the way down, you’ll see EBITDA / Interest.

    http://zmansenergybrain.com/subscriber-data/e-p/metrics/c-large-cap/

    I will be updating all of the charts just after earnings season ends.

    Regarding SD: They should have interest expense of a little over $200 mm this year with EBITDA projects at $724 mm, so they have pretty fair coverage, shouldn’t be a problem. Again, I’ll update that when I see their balance sheet for year end.

  65. 65
    PackMan Says:

    HK – any thoughts going into earnings which are b4 the open tomorrow ?

    Looks like a nice big flush ahed of that.

  66. 66
    choices Says:

    Thanks, Z for 62 & 64. I think SD’s B/S will be viewed with a lot of interest.

  67. 67
    zman Says:

    Pack – re HK – it won’t be about the earnings. They nearly always beat on the top line. They’ve already put out reserves so it won’t be about that either. Guidance unlikely to change (would go up if it did but I don’t think so in front of asset sales). I think if they talk about timelines on asset sales they go up. If not a big beat could buoy the stock short term but the same worry will be evident with the Street (that they outspend available cash flow this year). Several analysts upgraded the name over the last 4 weeks so look for them to see the call/earnings as positive. But the big move would come from either an asset sale (too early) or timing on one (good chance they say by mid year) or from maybe an oil find in Zavala Cnty (I think too early too, probably April). My reason for the Friday add was that it has simply been overly beat down for no good reason. The name has good hedges in place for this year, a strong balance sheet, and a plan that can be ratcheted back easily without abandoning the drive to get acreage held should prices really fall off.

  68. 68
    BossmanG Says:

    BOP, thanks for 51, do you (or z?) happen to have one vs. oil?

  69. 69
    zman Says:

    Boss – My list would be on the orange charts under % of production gas, you could simply reverse that graphic to get oil weight as a quick read. I don’t have a sensitivity to CFPS or EBITDA quick at hand at the moment.

  70. 70
    zman Says:

    S&P slightly green, looks like strength in the financials (because the gun is off them and on healthcare this week, lol?!) is offsetting weakness in everything else.

  71. 71
    1520sbroad Says:

    I think a few weeks back there was some discussion about PWE options and their quirky trading. (BSJ? VTZ? maybe?) Since their earnings last week the trading in those options has gotten noticeably more liquid – bids at the mid go off easier than i have ever seen. Lots more interest, volume good, stock has always traded with good volume but the options have been spotty. Still have to be careful with the ex-div date as PWE pays monthly.

  72. 72
    Nicky Says:

    so is this 6 or 7 up days in a row for oil?

  73. 73
    zman Says:

    5 days on the April contract. We took a break on 2/12. The bottom started on 2/8 so if you go from there it’s up 9 up with 1 down in the middle.

  74. 74
    VTZ Says:

    http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle/print

    Who’d have thought Rollingstone could nail it better than CNBC?

  75. 75
    zman Says:

    Nicky – that oil chart lays right down with the S&P by the way.

  76. 76
    RobBanks Says:

    Genuity just raised TAT price target to C$5.00

  77. 77
    zman Says:

    Thanks Rob, they were at $4.40 before that. Wunderlich may be upping their target as well by the sound of the analyst on the call, hard to say. Initial euphoria wore off fairly quickly though not on volume. I’m a holder now so I’ll probably give it at least 6 months to work out as per above.

    V – can’t read that link.

    S&P approaching HOD.

  78. 78
    Nicky Says:

    Thanks Z.

  79. 79
    zman Says:

    Interesting to see EXXID/MMR sell off together earlier and then rally back together as well. Hmmm.

  80. 80
    zman Says:

    TAT flat. Didn’t hear anything on the call that was a concern in my book, pretty much in line with the mid Feb report, on the whole everything seems positive, just continental drift in the names.

  81. 81
    PackMan Says:

    Z – 67 . Thanks. I wasn’t around much last week; took a few days w/ the family, so I haven’t seen or caught up w/ Friday’s comments.

    Yes, it has been beaten down, so usually I like buying down here (22 ish).

    Recovered nicely off the lows; will probably hold into earnings.

  82. 82
    zman Says:

    Pack – re HK – to be clear, I don’t see well news as a catalyst on this report. The numbers should be close to consensus as they preleased volumes and said costs were in line. And I don’t see guidance going up. So why do I own some options in front of the call? Because of the beat downness, because they just might talk about asset sales, because it could get a relief rally if they don’t announce a secondary with the earnings release (and I really don’t see a deal coming with the quarter, but then I didn’t see one back two quarters ago when they dropped a deal concurrent with massive production news). But really, I think the best thing they can do for the stock is to keep spending where it was before the press release. Raise that at all and the reaction is likely to be a $20 to $21 stock.

  83. 83
    choices Says:

    Vol huge on SLB-79 mil, seems to be “trying” to hold at 200 day line.

  84. 84
    VTZ Says:

    RE 74 is that link broken for everyone?

    The last piece is cut off but it should say “print” although it still works for me to click. Weird.

    http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle/print

  85. 85
    zman Says:

    Guys with catalytic well news likely this week: SM, WLL, BEXP, and maybe SWN (which is getting thumped today over its lack of hedges). SWN could have a big well or two in E. Tx and in the southern Fayetteville Shale. They also could tell people they grabbed some Spring hedge volumes during that spike in prices towards $6 a few weeks back.

  86. 86
    zman Says:

    V – Is is a subscription, I get redirected to a weird looking site.

  87. 87
    zman Says:

    Nicky, are you still good with all this?

    1110 was the 62% retracement level. Next resistance is 1115, 1118,1122. Firm support is at 1090.

  88. 88
    VTZ Says:

    No subscription… this?

    http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle

  89. 89
    zman Says:

    Anyone have the Pritchard piece on BEXP today?

    V – no luck, oh well. What a throw away day.

  90. 90
    choices Says:

    V-still does not work.

  91. 91
    zman Says:

    I’m surprised the market isn’t off more today as well. From a story on the new healthcare proposal:

    “For the first time, Medicare taxes would be assessed on investment income, not just wages.”

  92. 92
    skimo Says:

    v site worked for me, although I don’t recommend reading on a full stomach.

  93. 93
    zman Says:

    Beerthirty

  94. 94
    1520sbroad Says:

    Here’s to beat downness as a catalyst.

  95. 95
    zman Says:

    HK should have earnings out sometime after the close.

  96. 96
    bill Says:

    i show sd with ebidta of about 150 m and int of about 50 m or 3 to 1 coverage

    for 2010 550 and 220 of interest

  97. 97
    PackMan Says:

    Z – I gotcha on HK. I am simply comfortable owning some stock at $22. If it goes down; I’ll sell covered calls and hold. If it goes up; I’ll either do that or sell it and take the profit. Not in the options.

    Hope I am still comfortable with this strategy tomorrow !

  98. 98
    PackMan Says:

    91 — yeah, you are right.

    Probably b/c this health care thing is DOA.

    No way that gets passed …

  99. 99
    PackMan Says:

    HK … I thought it was before the open tomorrow ?

  100. 100
    zman Says:

    Pack – they usually release at night and then have the call the next day, didn’t see a specific time in the pr saying otherwise.

  101. 101
    zman Says:

    re 98. Power to the sheeple.

  102. 102
    bill Says:

    fst is out

    http://finance.yahoo.com/news/Forest-Oil-Announces-Fourth-bw-1630641740.html?x=0&.v=1

  103. 103
    bill Says:

    fst had a nasty non cash 1 time write off

    Due primarily to a non-cash ceiling test write-down of oil and gas properties in the first quarter of 2009, Forest reported a net loss of $923.1 million, or $8.85 per basic share, for the year ended December 31, 2009.

  104. 104
    choices Says:

    #92-I think it was Mother Jones last month which had a main article titled “Too Big to Jail” -do not find such articles in the “main stream” press.

    Reading a book now “Too Big to Fail” by Sorkin-again, need a strong stomach.

  105. 105
    milepost_43 Says:

    XL pipeline on-ramp meeting for MN & ND oil producers…

    Montana Hosts Keystone XL On-ramp Meeting – Montana Governor Brian Schweitzer and North Dakota Governor John Hoeven are hosting a special Keystone XL “on-ramp” meeting in Billings, MT on Wednesday, March 3, 2010 from 10:30 until 3:00 PM at the Lewis and Clark Room in the student union building at Montana State University Billings. The meeting will provide the opportunity for oil producers in Montana and North Dakota to discuss the possibility of an on-ramp for the TransCanada’s Keystone XL pipeline. If you plan to attend, RSVP to Jackie at jacwilliams@mt.gov or call 406-444-5634.

  106. 106
    zman Says:

    FST – looks like 4 cents light on EPS but slightly ahead on EBITDA.

    Nothing new out of their Granite Wash play

    A little blurb on their Haynesville plans, nothing earth shaking there either. Amine plant online will allow them to produce future wells from their 1 well Sabine Parish program for 2010 at unconstrained rates.

  107. 107
    isleworth Says:

    SEC Form S-4/A Filing by EXXID just hit SEC

  108. 108
    zman Says:

    re 107 – that’s a note swap notification.

  109. 109
    BirdsofpreyRcool Says:

    BedTime Market Strategist gets a little political tonight. But, what the heck, it was all about headlines out of Washington today anyway.
    ——————————

    Nine Lives and Counting.

    It is apparent that the Northeast has begun to thaw because there are headlines out of Washington again. It is hard to ascertain whether it is arrogance, ignorance or perseverance motivating the Administration on Health Care. We have seen traders who do not know when to throw in the towel. We thought the Massachusetts’ election was like the risk manager tapping the President on the shoulder telling him to liquidate, maybe he is going rogue. We cannot comprehend what makes the President think that Republicans will give him Health Care legislation on his terms now that they actually wield a modicum of influence. Senate Minority leader Mitch McConnell makes a salient point that the American people did make a statement about this in the latest round of elections. It is either political brilliance we have yet to recognize or insanity in the form of doing the same thing over and over and expecting a different result. Forcing such a large program through using reconciliation is an option, but that will not be pretty and will only backfire on the incumbents up for re-election who support it. We are amazed that with all of the global fears about sovereign deficits, someone in the White House has not advised the President to seek better timing. If anything, it appears the Administration continues to fuel the Republican rationale for running out the clock.

    Letter of Recommendation.

    The other political news today was the 5 former Treasury Secretaries voicing their support for the “Volcker Rule.” The news is not the names of those who signed the letter but those who did not, most notably, Robert Rubin, Larry Summers and Hank Paulson. The simple fact is every Treasury Secretary has their own respective baggage but the letter was primarily signed by statesmen of a different generation. More importantly, the signatories from this generation were in the post during the creation of the imbalances that led to this mess. That hardly lends credibility, and many in the financial community would say it undermines it. The support for the “Volcker Rule” from the likes of George Soros and Jeremy Grantham is what has the real potential to sway the debate.

    It would surprise most in Washington that a large portion of Wall Street believes new rules are necessary. When the reforms are unveiled with an overdose of populist rhetoric, the industry fears reprisals, not reform. During the President’s announcement of the “Volcker Rule,” he described it by noting that “Banks will no longer be allowed to own, invest or sponsor hedge funds, private equity funds or proprietary trading operations for their own profit unrelated to serving their customers.” We all know the Senate Banking Committee hearing at the beginning of the month essentially sunk the “Volcker Rule.” Interestingly, former Fed Chairman Volcker described part of it differently in response to a question from Senator Corker.

    SEN. CORKER: If they wanted to sponsor a hedge fund so that a client would know that the Volcker Bank was creating a hedge fund and was going to seed capital, could they do that just to know that the bank had an investment there and it was a good enough investment for their client to be involved in? Would that be illegal under this proposal?

    MR. VOLCKER: Well, it would not be illegal as I understand the question because the bank can sponsor a hedge fund.

    SEN. CORKER: Even if they were just putting seed capital in it to show good faith?

    MR. VOLCKER: Yes, sir.

    There is a distinct difference between the President’s definition and Volcker’s response to the question. Just like with Health Care reform, the President’s “it’s my way or the highway” approach only further entrenches his opposition. While President Obama is “A Great Communicator,” he has a long way to go before he ever gets close to rivaling “The Great Communicator.”

  110. 110
    zman Says:

    HK on the tape …

Leave a Reply

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®