02
Mar

Tuesday Morning

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Housekeeping Watch: I will be out of the office from 11 am to 3 pm EST for a funeral.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Catalyst List Update - big update, new stuff highlighted in yellow.
  5. Stuff We Care About Today
  6. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio, formerly the $10KP II):

    • $15,000
    • 22% Cash
    • Positions are updated on the ZCAT, ZIM, ZLT page.
    • Yesterday's Trades:

      • WLL – Sold the (5) March $75 calls for $3.20, up 109%. It’s been running which is nice and I continue to own the common but as for near term catalysts I’m sure I see one outside of it’s cheapness and a potential rally in oil. I’ll reposition this on the next pullback.
      • ROSE – Added ROSE APRIL $22.50 Calls for $1.10 with the stock off its highs today at $21.60. Looking for NAV upgrades in the morning due to the Alberta Bakken news and the Eagle Ford Shale program. The EFS will provide a series of catalysts this spring as wells are completed however the company has stated that it will be going back to quarterly operations updates so look for the next one around tax day.

 

  • ZIM (Zman Inefficient Markets portfolio)
    • $11,800
    • 88% Cash
    • Positions are updated on the ZCAT, ZIM, ZLT page.
    • Yesterday's Trades:
      • ROSE – Added (50) $22.50 Calls for $0.20 with the stock at 20.10, up 7%, prior to their conference call.
      • ROSE – Sold half (25) of the March $22.50 calls for $0.60 on the mid and easily, up 187% with the stock at $21.70. Call going very well but time to play with “house money”.


Commodity Watch

Crude oil fell $0.96 to close at $78.70 yesterday as another strong dollar day and a weaker than forecast ISM weighed. This morning crude is trading up 60 cents.

  • Early Read On Oil Inventories:
    • Crude:  UP 1.5 mm barrels
    • Gasoline: UNCHANGED
    • Distillates: DOWN 0.5 mm barrels

Natural gas fell $0.13 to close at $4.68 yesterday and looks like this having fallen in nearly straight-line fashion for the last two weeks. We are scheduled to get gas supply figures from the EIA today and I will have the supply slide show in tomorrow's post. This morning gas is trading up slightly.

  • Early Read On Storage: Street is looking for a 131 Bcf withdrawal.
  • Imports Watch: Down 0.8 Bcfgdp from last week and up 0.5 Bcfgpd from last year.

    • Canada: 7.8 Bcfgpd, down 0.8 Bcfgpd from last week.
    • LNG: 1.5 Bcfgpd, flat with last weeks levels.  Just not a big push here yet.

Crack Spread Update


Key Takeaways:

For the last couple of weeks I have been looking for the beginning of a seasonal increase in spreads. It looks like it may be starting but the action is still hesitant and I'd like to see gasoline demand remain elevated this Wednesday (though it's not like to

 

Catalyst List

 

Stuff We Care About Today

APC Investor Day, Today, at 8:30 EST, to listen click here. $6 Billion budget, guidance, operations update.

 

Upcoming Events:

  • WRES year end results on Wednesday
  • EXXI has its analyst day on Thursday

Odds & Ends

Analyst Watch:

  • KWK - Barclays upped target by $6 to $24, maintains Overweight
  • KWK - UBS raises target $1 to $18, maintains Buy
  • BRY - upped at RJ from Under to Outperform
  • XCO - Initiated at Barclays at Overweight with a $29 target
  • SD - Barclays cuts target from $16 to $12, stays Overweight
  • WLT - MacQuarie initiates coverage at Outperform with a $107 target.

 

196 Responses to “Tuesday Morning”

  1. 1
    bill Says:

    sd investor day on. Sounds like they might redirect resources to oilier opportunities and just produce enough gas for the oxy plant

    they need 7 per mcf to rationalize pinion field

  2. 2
    tomdavis12 Says:

    Z: Does the BP EFS news and the price they paid per acre give a boost to any of our others EFS players?

  3. 3
    zman Says:

    Tom – It doesn’t hurt, but am not sure how big an impact it has. That news was in the market about 2 weeks ago as media reported rumor, I recall mentioning it then so I don’t think it surprises people.

    Bill – Thanks. Listening to APC for now.

  4. 4
    zman Says:

    Bill – let us know what you hear at SD.

    On the APC call they are getting ready to talk about plays, mentioned Lucous once already.

  5. 5
    zman Says:

    make that Lucius …

    APC going for a $6 B budget, up nearly 50% from 2009 levels. Trying to accelerate several undeveloped discoveries.

  6. 6
    Jerome Blank Says:

    BEXP weekly, re: comments…sorry for the lack of comment on the new chart, its been a hectic morning,gettings kids to school etc.,but I wanted to at least get the chart posted…and TOS still has not fixed the exxi trade…no question BEXP is one strong stock, but I do have a few technical thoughts which I will post shortly…

  7. 7
    zman Says:

    APC – for the first time this year will really breakout their shale plays in how they talk about their data.

    JB – thanks and no worries, jut thought you were done without the comment. I think BEXP is near term ahead of itself but that it may take out that high in the $18s before it rests until the next set of news in the next two weeks.

    You may note today’s post is short on words, but I did a major upgrade of the Catalyst List (lots of yellow) and I plan to increasingly target those with the ZCAT before and the ZIM after (in some but not all cases).

  8. 8
    zman Says:

    Lot of people moving targets on KWK – by the way if you missed it in the KWK part of the Catalyst List, they mentioned a new Bakken find at Horn River Basin in Canada (it’s not new actually millions of years old but it hasn’t seen a lot of commentary to date). KWK is going to be interesting in 2010.

  9. 9
    BirdsofpreyRcool Says:

    Lucius… 600 ft of oil… they saying anything different?

  10. 10
    zman Says:

    Chile – read a lot of stories over the weekend saying a quake related rally would be short lived. Now seeing copper stories saying the opposite for you metals guys.

  11. 11
    BirdsofpreyRcool Says:

    TechTrader is 60/40 LONG today, for best scalping trade.

    HeadTrader saying people not believing this rally… but has the potential to move up… then people will chase.

    Credit Markets green.

  12. 12
    zman Says:

    BOP – not so far, big potential but he said 600 feet in the intro (ooooohhh, aaahhh), same as before and moved on. They should get back to it in the next 30 minutes.

  13. 13
    zman Says:

    Re 11 – Yeah, hear ya on “not believing” but many couldn’t believe it all year last year.

  14. 14
    BirdsofpreyRcool Says:

    The market climbs best, when it climbs a Wall of Worry. Agreed.

    That said, gotta keep an eye on Washington. Much as i hate that.

  15. 15
    bill Says:

    SD- spending time on new sec rules

    kinda like defining the meaning of “is” is

    Key term is economic wells- sec allows booking of wells if well is cash flow positive not to be confused with positive npv

    says other companies not showing pv-10 value but they are showing the volumes from “non economic wells”

    says if a well is cash flow positive you can report the volumes even though it has a negative npv at 10 %

  16. 16
    zman Says:

    Thanks Bill – If they start in on a long dialogue of “how we book” vs “how they book” I think people will come away somewhat enlightened … if they stay awake. They really need to focus on the 3 year plan.

  17. 17
    BirdsofpreyRcool Says:

    bill — really appreciate you reporting that stuff. thanks!

  18. 18
    zman Says:

    APC – 7 mega projects at present to bring on in the next several years. Says they are self funding over the 2010 to 2014 time frame. Assumptions look reasonable, exactly what people want to hear.

  19. 19
    zman Says:

    APC exploration this year

    Gomex 4-6 exploratory tests
    Brazil 2-3
    W Africa 6-9
    E Africa 4 -6
    SE Asia 3-4

  20. 20
    bill Says:

    Sd

    Sounds like they are going to redirect every penney of cap ex towards oil and away from ng. Only produce enough to satisfy oxy contract unless ng goes over 7

  21. 21
    zman Says:

    APC on a 10 minute break before getting to big projects, then exploration, so Lucius in the next hour or so.

    Analyst Watch: Deutsche ups SU to Hold.

  22. 22
    zman Says:

    Oaklawn Watch: (mostly for Jivey)

    The biggest, non-triple crown race since Seabiscuit ran against War Admiral is happening at Oaklawn the day before derby day. Rachel Alexandra vs. Zenyatta in the Apple Blossom, with stakes upped to $5,000,000. Should be a mad house. Every hotel room in town booked. Reserved seats selling on e-bay for hundreds of dollars. People renting their lake houses for five figures. And, the Sheik of Dubai has called to see if the Hot Springs airport can handle his 747. Suffice it to say, it is a really big deal.

    A friend has a box and I’ll be there (April 9/10) and I’ll buy a drink or three for any subscriber who shows up.

  23. 23
    elduque Says:

    When you get a minute during a slow period of the day, would you be kind enough to explain the best way to use the search function.

    mahalo

  24. 24
    zman Says:

    Listening to APC but its opex discussion at the moment, pretty high level.

    On search:

    Use the search window near the top of the page. This returns results either in a post (this will be highlighted in yellow) or in comments (if you don’t see yellow, the thing you are searching for it’s in comments of the day that came up for the search. The best way I have found to find it quickly is then to use the Find bar at the bottom of your browser (at least in Firefox). If that’s not up go to Edit, Find. Then use that bar to search for the same term.

    Also, if you can’t find something you can always ask me to look it up.

  25. 25
    zman Says:

    ROSE blooming through $22.30, old high for this cycle was $23.10. The high from the 2008 cycle was near $30.

  26. 26
    BirdsofpreyRcool Says:

    z — the ROSE is blooming again today.

    also, I see that you have MMR reporting Blueberry Hill maybe this week… is that true??

  27. 27
    zman Says:

    Asked for levels from Nicky, got this back:

    1122 and then the 1127 – 28 area.

  28. 28
    BirdsofpreyRcool Says:

    ha. Now i look “derivative.” But, was typing at the same time as you.

  29. 29
    bill Says:

    16

    >if they stay awake

    I know my eyes are feeling droopy

    17 ty bop 🙂 exxi looking good

    message boards say we should hear something anyday now

  30. 30
    zman Says:

    BOP – the timing is my best guess for when they could have data, honestly they could have been down two weeks ago. I figure the release comes with the Davy one.

  31. 31
    bill Says:

    22 wow-

  32. 32
    bill Says:

    Yawning at sd meeting carryover to the open..sd up 5 cents

  33. 33
    zman Says:

    re 31. I have two friends with lake houses there, one of them told me last night that a neighbor rented theirs for the weekend for $45K.

  34. 34
    1520sbroad Says:

    #22 – i would love to see that one. I saw Rachel Alexandra run last August in the Haskell Invitational at my local track (Monmouth Park). One of the most impressive horses i have ever seen. Terrible day – track was slop and she ran just a shade over the record time winning by six lengths.

    I saw Big Brown the year before and Rachel Alexandra would likely blow his doors off.

    I know they have been trying to find a spot for those two to race – glad to see it finally come to fruition.

  35. 35
    zman Says:

    BOP – just realized that means you read the post, lol. Awesome! 😉

  36. 36
    BirdsofpreyRcool Says:

    EXXI — msg boards are right. Think they are finishing up setting final casing and cementing. Just guesstimating… could hear as early as tomorrow or Thurs. Think they will say, “xx feet of net pay; cased; moving rig to new location; ordered wellhead for production testing, due Oct (unless there is some positive suprise there)”

  37. 37
    reefguy Says:

    thinking about an IOC reentry on reserve report as catalyst. It is due about March 15???

  38. 38
    BirdsofpreyRcool Says:

    reef — when are we supposed to hear about Blueberry Hill?

  39. 39
    reefguy Says:

    End of week i believe

  40. 40
    BirdsofpreyRcool Says:

    what is the best way to “play” BB Hill?

  41. 41
    zman Says:

    BOP – and recall that the other one, Hurricane Deep was either wet or had a mechanical issue (again).

  42. 42
    BirdsofpreyRcool Says:

    Actually, not sure if BBHill is going to be a “good well” or not. reef… any rumbles??

  43. 43
    zman Says:

    APC talking Eagle Ford.

    “last few wells are our best few wells, like in the Marcellus”

    75% of revenues coming from liquids

    4 to 6 rigs by year end.

    oil gathering system will be installed 2010

  44. 44
    zman Says:

    BB Hill, they have about 30%, don’t know who else has what %s here. It’s a 500 Bcfe target and this is an appraisal so that could improve.

  45. 45
    BirdsofpreyRcool Says:

    z — thanks. EXXI not a partner in BBH… so, not following as closely.

  46. 46
    zman Says:

    APC – Niobrara oil shale – Colorado/Wyoming. More folks talking about this play of a sudden, will be looking for the little guy play here. APC has 500,000 acres and has been a Wattenburg field play in the Niobrary (gas) until now.

  47. 47
    BirdsofpreyRcool Says:

    HERO — moving. Postively, for once. Wonder if they are making any headway with that deadbeat customer, Angola Drilling.

  48. 48
    BirdsofpreyRcool Says:

    sheesh… hasn’t happened to me in at least 15 yrs… HERO announced earnings this a.m. and I missed that vital piece of info. Blame it on a morning mtg and the fact the HERO changed their original reporting date.

    MY BAD. Reading now.

  49. 49
    jat Says:

    Any thoughts on inventories tomorrow?

  50. 50
    zman Says:

    ZTRADE – ZIM

    ROSE – Sold the second half of yesterday’s position (25 calls) for $1.00, up 378%, with the stock at 22.50.

  51. 51
    zman Says:

    Jat – expectations are pretty meager. I would expect gasoline demand to back off slightly but remain pretty good, not the 9 mm bpd of last week but maybe 8.6 or so. Should see continued upward (slight) move in distillates. I don’t have a good feel for crude imports this week either way other than to think it probably backs off a bit.

  52. 52
    BirdsofpreyRcool Says:

    z — liking the ZIM so far! nice round trip.

  53. 53
    reefguy Says:

    DJ trio–Is the expected announcement being built into the current price??

  54. 54
    zman Says:

    Reef – That’s the multi TCF question, lol, if the whole thing is 6 to 10 Tcf then last time I checked based on a reasonable gas price, I think they have running room.

  55. 55
    reefguy Says:

    MMR pushed thru $18

  56. 56
    zman Says:

    Thanks BOP, liking it myself. May have to take some $22.50 call profits in ROSE pretty soon as well in the ZCAT. $22.75 now.

    Thinking it’s getting close for BEXP as well, I think it suffers some PT later this week or next before the next set of wells hit.

  57. 57
    BirdsofpreyRcool Says:

    reef — #53 think it is at mmr… think exxi should still trade around here, based on 30k BOE/d of current (oily) production. But, no doubt, it would trade down on bad news from DJ. It should trade UP on good news too… but, a lot of people think there is a lack of catalyst there for months. I think they are wrong… but we shall see.

    what do you think?

  58. 58
    BirdsofpreyRcool Says:

    ‘courese, they go throwing numbers like 5+ Tcfe around… all the Triad should scoot higher. You do the math on 5+Ts… the numbers get big, fast.

  59. 59
    andy Says:

    z – i have noticed in recent weeks the energy stocks that start the day higher tend to outpermorm their peers for the day and conversly the ones that start weaker tend to underperform for the day. do u think u could post around 9:45 – 9:50 the 3 highest % moves and the 3 lowest % moves?

  60. 60
    skimo Says:

    Hero rec’d a $3 million payment against but still has <$25 BD

  61. 61
    BirdsofpreyRcool Says:

    skimo — yeah… original bill was around 31mm… so still facing a $28mm before tax write down. That hurts. But could be fairly quickly forgotten.

    HERO saying in their PR that they are seeing some recovery from the worst year in anyone’s memory. That is what people are going to focus on, i would think.

  62. 62
    zman Says:

    Andy – will look into it.

  63. 63
    RMD Says:

    I’m hearing CHK was AEZ’s buyer of the Fetter
    and Krejci fields.

  64. 64
    zman Says:

    RMD – thanks for that, I have them on the Cat list now. Nice move for you there!

  65. 65
    RMD Says:

    I’m guessing #46 explains # 63.

  66. 66
    West Says:

    #46….PETD best small co play of Colorado Niobrara liquids.

  67. 67
    zman Says:

    Headed out, back this afternoon.

  68. 68
    zman Says:

    West – my old oil broker just sent me the same name, been awhile since I looked their way, will do.

  69. 69
    RMD Says:

    Also heard Duane Grubert left CRT Capital for Susquehanna last Fri.

  70. 70
    RMD Says:

    PETD; I listened to call because they do have big exposure. Can you spell “mgt issue”? Answering a question about the Niobrara, I think they said something like: we are suddenly aware of it and are going to look into it.
    But that is why no one pays att’n to the stock: boring other assets and sleepy mgt. I think it is selling for $1.00/proved mcfe.

  71. 71
    isleworth Says:

    Z- what are your expectations on WRES news tomorrow?

  72. 72
    bloodystupidjohnson Says:

    Companies seem to be looking for new shales plays. Since many are already leased up, companies are starting to look overseas. For example TLM has justed entered a farm in agreement with San Leon Energy to explore the Baltic basin in Poland. San Leon claims this 4-6 TCF recoverable nat gas from this play.

  73. 73
    bill Says:

    e&p looking good today

    exxi pushing 20.00
    mcf 53.70 on no news–half their production is offline, so maybe a quick fix is happening
    even sd up a little.

    Sd say’s they will generate 711 in ebida, int exp 228

  74. 74
    jiveyjr Says:

    if EXXI keeps going up, I’m going to have to call ’em back and buy that horse I wanted but passed on Sat.

  75. 75
    BirdsofpreyRcool Says:

    RMD — you get susque’s research? i am gonna MISS Duane Grubert!!!

  76. 76
    BirdsofpreyRcool Says:

    jivey… fingers XXd

  77. 77
    VTZ Says:

    Gold is breaking out of it’s range and positioning for a strong move to the upside when the dollar breaks down.

    New high on the way.

  78. 78
    BirdsofpreyRcool Says:

    yep… Duane has a change of business cards. ‘splains why i haven’t seen his comments this week.

  79. 79
    reefguy Says:

    that $20 number is a tough ceiling

  80. 80
    BirdsofpreyRcool Says:

    yep… gonna take more than mrkt enthusiasm to break thru that $20… but, we have the pending DJ results plus the investor day on thurs for exxi. Several ways to bust thru the glass in that ceiling.

  81. 81
    tomdavis12 Says:

    WLL New 12 mo High. Wish I had kept more.

  82. 82
    kiaora Says:

    VTZ–=what chart is best to follow gold?

  83. 83
    VTZ Says:

    COMEX Gold continuous contract is the best, imo.

    Lots of people use the HUI index to confirm moves in bullion with the equities or to demonstrate strong money flows in the space. Others use GLD.

  84. 84
    bill Says:

    ng was up early , gave up the gains and went negative, and unlike other recent days , held the line and came back up to positive levels.

    I’m not a chartist but maybe a base is forming that we can bounce off of. Ng now 4.73

  85. 85
    milepost_43 Says:

    50..I’m gone…thanks…

  86. 86
    baylor3217 Says:

    Thoughts on purchasing a large GLD position here? I’ve been waiting for the right time and averaging in.

    Is this becoming a crowded trade with Soros’ comments and GS saying it will be 1250 in the next 3-4 months and 1350 by the end of the year?

  87. 87
    baylor3217 Says:

    Also, thoughts on BEXP put position? It’s made quite a move here recently.

  88. 88
    RobBanks Says:

    Z – when you get back – absolutely brilliant call on the Rose calls yesterday, best I’ve ever seen.

  89. 89
    VTZ Says:

    Ask all your friends how many people own GLD and then determine for yourself how crowded it is. If people think this is a bubble then I can’t wait to watch people pile in by the truckload.

    I personally think the equities offer much better value and leverage to gold price although I hold some actual bullion. I would not purchase GLD.

    I do think that gold has managed to put in a short term bottom and it has some important support at 1080 and now 1120 as well.

  90. 90
    RMD Says:

    No, I don’t get Susquehanna; too bad as the few reports I have seen from Duane have been very thoughtful.

  91. 91
    BirdsofpreyRcool Says:

    RMD — thanks. Me neither. Will miss Duane’s stuff. He tended to look at the more interesting, off the run ones. Maybe someone else here get’s Susque’s research and can keep us posted.

  92. 92
    BirdsofpreyRcool Says:

    PXP finally waking up. Have to say, that is one irritating stock!

  93. 93
    bloodystupidjohnson Says:

    I see Z is into time travel. He has listed the ZIM portfolio start date as March 31 2010 and has already made trades there. lol lol

  94. 94
    Nicky Says:

    Afternoon all. I am still looking for the 1128 – 1143 area this week. We can throw the triangle count out of the window that I suggested yesterday. I am leaning bullish due to the cycles and the two bullish possibilities both see us topping in the above area. It is only the pullback that then differs. One has us correcting back to the 1108/1110 area and the other the 1080 area. I am looking for cycles to top out in this timeframe but likely late tomorrow.

  95. 95
    RobBanks Says:

    BOP – can I bother you for a quick explanation of what kind of tests are being done right now on DJ, and what the implications are for EXXI?

  96. 96
    choices Says:

    Baylor- Concerning gold trade, I watch CEF rather than GLD-GLD has never been audited and CEF has regular audits. Premium is creeping up but still low.

    http://www.centralfund.com/Nav%20Form.htm

    If the bet is on gold however, the royalty play RGLD stands out as it has no risk on operations, it is purely a royalty play. I agree that more leverage is in the stks rather than bullion.

    http://www.bloomberg.com/avp/avp.htm?N=ceo&T=Royal%20Gold's%20Jensen%20Discusses%20Royalties%2C%20Acquisitions&clipSRC=mms://media2.bloomberg.com/cache/vUunB1tbql2o.asf

  97. 97
    Popeye Says:

    BSJ re: 93 it would really be helpfull if Z or I could make trades in the past.

  98. 98
    RobBanks Says:

    re 96: CEF is 41% silver, so not a pure gold play.

    For regularly audited 100% gold bullion in the vault of a major Canadian bank (I think), GTU is a good way to go.

  99. 99
    RMD Says:

    Apparently there is a rumor about that Blueberry Hill is dry? FWIW.

  100. 100
    bill Says:

    99 dont like that one

  101. 101
    bill Says:

    66/70

    took a position in petd

    i like their hedges and i like the valuations

    Doesnt look like they will get hit too hard on the ye write downs

    Production in 2011 will be lower than 2010 due to them slowing down drilling activity

  102. 102
    BirdsofpreyRcool Says:

    Rob #95 — sorry… have been on calls.

    The last log that MMR tried to run at DJ was a repeat formation testing tool. It failed to get any samples of the targeted zones. So, they pulled it out of the hole and set about completing. That means swabbing (cleaning, conditioning) the uncased part of the well bore, then setting casing pipe, and cementing behind the pipe.

    We had heard (and hoped) that MMR would be able to do a production test. I’m not a petroleum engineer, so i am going to explain this badly… but, basically, they thought they might be able to borrow a wellhead from BP in order to cap the well and control a flow test from one (or more?) zones. This would have given pressure and production rates and allowed them to say with more certainty how many recoverable hydrocarbons are proved up with this well. It would also allow MMR to make more educated assumptions about the size and scope of the Davy Jones Prospect.

    Guess they couldn’t get the wellhead. So, next step is to get a firm to manufacture one and ship it out to the well site. We think they are working with Cameron on this… but, it’s a major piece of specialty equipment, so probably won’t be completed and shipped until beginning of 4th quarter.

    Would have loved a production test, like, NOW. “Now” works well for me. But, this is big, dangerous, hi-pressure and hi-temperature stuff… so, I’m not going to get “now.” “Later” will have to do.

    Just waiting to hear the details of the timeline for “later.” But, I have no doubt that Davy Jones is a major discovery. And there is no sign of H2S in the well either. We think it will be nice, dry gas. Just hot and hi-pressure gas. Good stuff.

  103. 103
    RobBanks Says:

    BOP – thank you very much for the detailed response.

    Are expecting the results of a particular kind of test to be announced any day now? That’s the impression I’ve gotten from the posts on the board.

    What would you expect each proved mcf to be valued at when the time comes?

    TIA

  104. 104
    Dman Says:

    VTZ – I notice that AUY has had quite a deep correction. Know anything bad there?

  105. 105
    BirdsofpreyRcool Says:

    Testing is over. Waiting to hear how they (MMR) wants to present the results (total feet of net pay, expected 1P reserves, 2P maybe, implications for the overall prospect) and lay out the timetable to production test and then sell the hydrocarbons.

    I would HOPE the mrkt would value the 1P reserves at $1/mcf at least. But, that is the billion dollar question. This DJ #1 well is probably going to be a 100 Bcf reserves well… but what that says about the reserves of the overall DJ Prospect… well… that’s what we are waiting to hear.

    Duane Grubert’s NAV model for EXXI held that for every 1Tcfe of recoverable reserves at DJ, it was worth $15/share of NAV for EXXI (He originally said $3/share, but that was pre-reverse split). You can haircut that number any way you want… but, the impact on EXXI should be sizeable over time. Very sizeable.

  106. 106
    reefguy Says:

    EXXI now print north of $20

  107. 107
    Dman Says:

    #98 40% silver doesn’t sound like a bad thing to me

  108. 108
    bill Says:

    106 giddy up

    buy that horsey

  109. 109
    RobBanks Says:

    BOP – thanks again, now I understand what we’re waiting for.

    One last question – does Grubert’s NAV model of 1 Tcfe being worth $15/share mean 1Tcfe gross or does it mean 1 Tcfe net to EXXI?

  110. 110
    RobBanks Says:

    107 – agreed, 40% silver is a good thing IMO, just pointing out that CEF is not a pure play on gold. CEF is good one stop shopping for actual gold and silver in a vault.

  111. 111
    jiveyjr Says:

    KOG comes alive WOW

  112. 112
    BirdsofpreyRcool Says:

    #109 gross recoverable.

  113. 113
    andy Says:

    bop – so duane is saying if its a 5t well , that’s worth $75 to EXXI’s NAV?

  114. 114
    DrLink Says:

    speaking of gold PHYS just ipo yesterday. will hold phyiscal gold. Eric Sprott knows gold

  115. 115
    BirdsofpreyRcool Says:

    andy — kinda boggles the mind, doesn’t it. One caveat, that is an NAV calculation… and stocks rarely trade all the way up to their NAV. But, yes… the numbers are huge.

  116. 116
    BirdsofpreyRcool Says:

    clarification — that is the size of Davy Jones, the Prospect. Not Davy Jones #1, the well. I expect the well to prove up around 100 Bcf of reserves. So, to fully produce the 5 Tcf (5,000 Bcf, if you will), would take 50 wells. That takes a lot of time. Years and years.

  117. 117
    RobBanks Says:

    BOP- thanks.

    I’m making a serious math error here, but I can’t find it.

    1 Tcfe x 12.5% net = 1.25 Bcfe divided by 1000 CF = 125mmcf x $1/mcf = $125mm divided by 56mm fully diluted shares = $2.23/share.

    Or is Grubert valuing the mcf’s at a much higher level?

  118. 118
    BirdsofpreyRcool Says:

    Rob — since it is an NAV calculation, he is valuing it at much higher prices, discounted over time.

    My $1/mcf is just my back-of-the-envelope check. The minimum of what i think a proved mcf would go for. This stuff is offshore, tho, so the $1 is a discount to onshore nat gas.

  119. 119
    RobBanks Says:

    BOP – Understood. Thanks.

  120. 120
    VTZ Says:

    Dman – I don’t follow Yamana really anymore.

  121. 121
    BirdsofpreyRcool Says:

    Rob, or anyone else, give me your email address and I’ll send you Duane’s last report on EXXI, dated Feb 2nd. He doesn’t throw out the $15 NAV/1T gross, but you can infer it from his price target using 1.5 Tcfe.

    I have his report with the $3/1T NAV (pre-split) too.

  122. 122
    RobBanks Says:

    rowbeartoe@yahoo.com

    Thanks. I tried to BS my way into getting CRT’s reports, but they wouldn’t go for it!

  123. 123
    kiaora Says:

    BOP….email: kiaora-7@comcast.net

  124. 124
    DrLink Says:

    BOP mikelink@cox.net thanks

  125. 125
    BirdsofpreyRcool Says:

    Rob — lol. Good for you for trying!!

  126. 126
    jiveyjr Says:

    jiveyjr@bloomberg.net

    thanks BOP

  127. 127
    john11 Says:

    Bop..please,
    jfgeer@comcast.net
    thanks.

  128. 128
    BirdsofpreyRcool Says:

    sending… lemme know if you don’t get it

  129. 129
    bondbuddha Says:

    jplaton@bloomberg.net, tks BOP

  130. 130
    tomdavis12 Says:

    BOP Comments from CSFB re HERO. Outperform rating. Our thesis is based on the potential for an improvement in GOM activity levels, which has thus far been on the rise from cyclical low levels (from 18 JU’s in Sept to 39 today). I can forward if you have an interest.

  131. 131
    BirdsofpreyRcool Says:

    tomdavis — thanks! I like CSFB research… don’t get their equity stuff anymore.

    LM.Canaan@yahoo.com

  132. 132
    zman Says:

    Re – WRES – just a big upgrade in reserves due to oil prices and a good look at their plans, a resumption of drilling sometime in the near future in Ca.

    re 81. WLL. I just hold the common at this point.

    re 88 – Hey thanks, I liked how that one is working out. I will probably send the ZCAT Marches out the door soon on ROSE.

    re 93 BSJ – It should read 3/1/10

    re 99 – Hurricane Deep is what I recall from the PXP call as being dry, will check the transcript

  133. 133
    zman Says:

    ZTRADE – ZCAT

    ROSE – Sold 2/3rds of my March $22.50 ROSE Calls (40 calls) for $1.35, up 104%, with the stock at $23.25. I continue to hold the other 20 of these, the April $22.50s, and the common in the ZLT.

  134. 134
    ilikericky Says:

    Me to please aud26111@yahoo.co.uk

  135. 135
    zman Says:

    SD – anything interesting on that call Bill? Whole lotta nuthin going on with the name.

    SWN down a third day post call.

  136. 136
    Dman Says:

    Z – I like the new portfolio names, FWIW. The 10KPII was a bit awkward. What’s in a name? Well, I only ever made one bet on a horse at a racetrack. Horse was medium odds but I like the name. Stupid, yeah, but it won 🙂

  137. 137
    Dman Says:

    Question for Z & BOP:

    Seems to me that we are going to see crude creeping up this year, give or take a China implosion. If crude gets much above $90, it will crater the Western economies & stockmarkets. So if we are looking at oil stocks, is there any subsector that would be least correlated to the broad markets?

  138. 138
    zman Says:

    Dman – I was told not to use Z Alpha and Z Omega but I liked the symmetry of it, plus it is close to Before and After, which is the idea. The ZCAT tries to get in front of the move. The ZIM (inefficient markets) capitalizes on the event after the press release has hit, if there is a lag or a backwards initial reaction.

  139. 139
    zman Says:

    “it will crater the Western economies & stockmarkets.”

    Please know that I fundamentally disagree with that statement.

    I will have to think about your last sentence.

  140. 140
    choices Says:

    BOP-thanks in advance for the report(s)

    plentywood@fastmail.fm

  141. 141
    zman Says:

    Re WRES – was asked how I’m thinking about the report tomorrow.

    My answer: I’ve been in for about a year here. Pretty content to see it through the reserve report. If those in the ground reserves don’t get back on the books I will punt, plain and simple. I do think there will be time to get in after the release as issued as most people are asleep at the wheel here.

  142. 142
    rseidman Says:

    BOP, sorry for so late, but, me too, please. rseidman@frontiernet.net

    Thank you

  143. 143
    Dman Says:

    Z – the premise is that obviously the Western economies are in a much more precarious condition now than during the last oil spike, because debt levels have soared without any meaningful growth a pay for it. So an extra 10% in fuel costs means someone can’t make their debt payments. Or if they *have* to make the payments, they then have to cut fuel consumption, i.e. cut economic activity. Also, the last spike was pretty fast and a lot of people/industries could ride it out. We now have steadily rising prices and so the effects will encroach steadily too.

    For Asia, I guess they are less sensitive, since they have all the money and no debt, and most of them never drove anything in the cheap oil era.

    But, having said all that, I’m keen to hear your contrary view.

  144. 144
    reefguy Says:

    PQ- +18% last five days

  145. 145
    reefguy Says:

    Bop- gonna take a bite at that MMR apple?

  146. 146
    Dman Says:

    Z – separate from the above: Marc Faber has recently mentioned MUR. They’ve had quite a correction. How would you classify them from 10000 ft ?

  147. 147
    BirdsofpreyRcool Says:

    reef — had HeadTrader with an alert at 17.70 all day. gee… you think i should up the bid??

  148. 148
    VTZ Says:

    Z – Just an idea. Can we have an email registry where people can choose whether or not to post their email to exchange info from others?

  149. 149
    reefguy Says:

    yes to 17.85

  150. 150
    zman Says:

    Re 144, took eye off ball on a busy earnings day last week, watching the run, will look at on a pullback. I kind of think the group is going to see a string of red days in the not too far off future.

    Dman – I’ll have to think about if I have a view on it. I’ve run the numbers on gasoline and diesel between here and $100 and the per capita daily cost is tiny to the average joe in the U.S. Bigger consumers should have had time to hedge out their costs given the gradual rally so if they can’t they’ll either get a bailout or die (I’m thinking airlines but it could apply to the U.S. post office or other big transports).

  151. 151
    DrLink Says:

    Arena (ARD) being taken to the woodshed for higher dd&a and non cash charges, ouch

  152. 152
    BirdsofpreyRcool Says:

    reef — you’re probably right with that level.

  153. 153
    zman Says:

    Re MUR – that’s a mini major where I’m not up on the exploration side of the game enough to have a value adding comment.

  154. 154
    zman Says:

    148 – I’ll look into it.

  155. 155
    reefguy Says:

    ARD- BORING management, no debt…oily and down 18% today…I am thinking about it

  156. 156
    zman Says:

    NASA saying Chile earthquake may have shifted earth’s axis and made our days shorter. You don’t see that sentence every day. Someone call Al Gore.

  157. 157
    reefguy Says:

    Trading PXP shares for ARD…

  158. 158
    zman Says:

    RMD – can’t find the Blueberry Hill dry hole rumor.

    On the PXP call Flores did say this about Hurricane Deep:

    Hurricane Deep, we ran into some well problems right above the objectives, and we liked to abandoned the well. We had an underground blowout with the Chevron operator, and we’re probably going to be drilling new wells here, probably later this year, early next year to replace it. It’s an insurance claim. We have made an insurance claim a long time, but we should have net-net no loss of capital. Our opportunity is just going to be a timing issue that we didn’t get down on the well. We had some casing failure issues that we couldn’t avoid.

  159. 159
    zman Says:

    Reef – that’s probably good for a bounce. I’m just not that tradey.

  160. 160
    rseidman Says:

    BOP, many thanks

  161. 161
    bill Says:

    135

    sd– nothing other than more of an oily focus

  162. 162
    zman Says:

    Bill – thanks much, will be watching them to see if they find a footing in this 7.50 to 8.50 base range.

  163. 163
    DrLink Says:

    ARD- I’m in also…

  164. 164
    zman Says:

    WLL – punched higher to breakout early but is closing near flat.

    NFX – I find the weekly chart interesting there. May double my $55s tomorrow on weakness or strength. Starting to get more recognition as someone with a plan to get oilier, and as an Alberta Bakken play.

    HK – still in the relative penalty box but am think my lower strikes are going to work this time.

  165. 165
    zman Says:

    EIA still has not released the natural gas monthly with data for December.

  166. 166
    zman Says:

    Tomorrow we get ADP employment figures before the open and ISM services after it.

    Unemployment still looms on Friday but am reading where a lot of forgiveness will be given to the numbers due to all the snow.

  167. 167
    RMD Says:

    158: story-teller lives in The Big Easy FWIW.

  168. 168
    jiveyjr Says:

    you guys don’t forget to vote for our buddy JB…a vote a day is pretty cheap

  169. 169
    Dman Says:

    reef – why is ARD clocked so hard?

  170. 170
    zman Says:

    RMD – when did he come up with the rumor?

  171. 171
    zman Says:

    RMD – according to this they were still drilling as of yesterday.

    http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2?p_wsn=240409

  172. 172
    zman Says:

    That link above is for state lease 340 (Blueberry Hill offset appraisal well)

    see slide 15 here:
    http://www.mcmoran.com/presentatn/2010/MMR_4Q09CC_JAN10.pdf

    target depth is 21,850′, still drilling at 21,372′ as of yesterday.

  173. 173
    RMD Says:

    170: he passed it along this AM.

  174. 174
    zman Says:

    Ok, thanks, will look at the link above tomorrow to see if they’ve stopped. I supposed he could be thinking they should be in the gyro sand by now.

  175. 175
    nifkin Says:

    ARD On the call they admitted that they will likely have more problems with plant downtime over next 18 months.
    -lost 600 Boepd in 4Q09, had some spill over effect into Jan when trucking problems happened.
    -PUD reserves have dropped in terms of EUR’s; well performance suffering
    -company still says that 30% prod growth should happen for 2010, Q1 ok as well
    -current production is over 8,500 Boepd
    -new processing plant should cost $16M but may take 18 months to get designed an permitted.. that seems like the sticking point

  176. 176
    zman Says:

    ZCAT and ZIM pages updated.

    http://zmansenergybrain.com/subscriber-data/holdings-wiki/

  177. 177
    Hoss Says:

    BOP,

    RE #121 EXXI reports

    If your around and have the time

    hoss_electric@cox.net

  178. 178
    zman Says:

    API showing some bigger than expected numbers, both ways.

    Crude: UP 2.665 mm barrels – that’s high, could be reflecting a build in imports they didn’t show, but EIA did a few weeks back.

    Gasoline: UP 0.909 mm barrels – that’s in line

    Distillates: DOWN 4.074 mm barrels – that would be a big bullish looking number this late in the season. Not a surprise not just given the cold snaps in the Heating Oil using regions but the persistent cold there. Snow clears and it’s time to fill tanks that are at rock bottom levels.

  179. 179
    BirdsofpreyRcool Says:

    hoss — i can’t seem to get an email to you… will try again…

  180. 180
    bill Says:

    z eia is out with monthly numbers

    comments?

  181. 181
    zman Says:

    Crude acting like it could care less about API number. HO up modestly.

    Bill – thanks for the heads up. Their excel files are not yet updated, will have something out either tonight or in the morning.

  182. 182
    zman Says:

    Looking at the PDF, the changes on a Bcfgpd basis look very small, down but just barely, not as much as the 914 data show. This also shows other states up, not down like the 914. This is closer to the numbers I had expected 914 to show last week, flat or even up was the thought then, so we are essentially flat. I’ll have the slide show out in the morning. Will also take some looks at demand.

  183. 183
    Hoss Says:

    BOP,

    Thanks,

    try an “underscore” between “s” and “e”

  184. 184
    BirdsofpreyRcool Says:

    Hoss, did you get it yet??

  185. 185
    bill Says:

    Just listen to ard conf call.

    They switched vendors to pick up oil (trucks) and the vendor stiffed them by not picking up oil last 3 days 21,000 bbls and plant shut downs 21 days that lost 55,000 bbl of production . They also had higher dda as they took some write downs.

    The sec pricing revision wasnt called out as a separate line item so it was treated as an operational miss

    they would have blown away numbers without these 2 items

    i expect a bounce back when people come to their senses

    Thanks for the heads up as I nibbled at a little on the over reaction

  186. 186
    milepost_43 Says:

    Glad to see Govs are still pushing…should be good for ND and MT CO pricing if they can get more capacity..
    BISMARCK — Gov. John Hoeven says he and Montana Gov. Brian Schweitzer plan to meet on Wednesday with TransCanada Pipeline officials.

    The governors and oil industry leaders in the two states will talk with TransCanada about possible connections for local producers to the company’s Keystone XL Pipeline. The pipeline will carry crude from Alberta to refineries in Texas.

    The Wednesday meeting is in Billings.

    Hoeven says state officials also are working with Enbridge Pipeline, which is considering expanding pipeline capacity in North Dakota.

  187. 187
    Hoss Says:

    Yep

    Thanks BOP

  188. 188
    zman Says:

    Here was the pre 4Q WRES piece:

    http://seekingalpha.com/article/185658-wres-reserves-preview-some-food-for-thought

  189. 189
    BirdsofpreyRcool Says:

    #188 — cool. Thank you!!

  190. 190
    BirdsofpreyRcool Says:

    hey, z… can we vote for you on Seeking Alpha?

  191. 191
    zman Says:

    Thanks, better yet, tell your friends 😉

  192. 192
    BirdsofpreyRcool Says:

    you keep it up with ZIM and ZCAT and I won’t have to tell ’em… they’ll be knocking down your door.

    that said, it’s not like people should come and go, based on what’s hot and what’s not. You have to stay in the game, to know when to take your shots. So, in good times and rough ones, know that i’m lurking around. Gots to be ready for that fat slow moving antelope to wander too close to the patch of weeds i’m waiting in.

  193. 193
    isleworth Says:

    EIA Natural Gas Monthly is out……

  194. 194
    zman Says:

    Thanks Isle, I’ll have the monthly slide show out in the morning but I can tell you its pretty neutral.

  195. 195
    Jerome Blank Says:

    Re: #168, jivey…thanks very much for thinking of me…I appreciate the vote…

    Updated the BEXP daily and weekly and the $spx chart…added an alternate perspective daily BEXP chart…I’d like to get to more charts in the morning….

    The $NYMO is getting into the overbought zone again closing above 62 today…I noticed that several strong stocks were displaying “shooting star” type price action into the close, this combined with the same prince action in the $spx suggests that we may be getting closer to one of those pullbacks, offering perhaps another good buying opportunity…$BPNYA and $BPSPX now back into X’s…

  196. 196
    Jerome Blank Says:

    RE: #195 con’t…To check out the chart changes….

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

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