Wrap – Week Ended 03/05/10


People Say The Nicest Things Watch:

Z –  absolutely brilliant call on the Rose calls yesterday, best I’ve ever seen. ~ RobBanks

Holdings Watch: It was a pretty good week.

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

  • $21,200
  • 45% Cash
  • Positions are updated on the ZCAT, ZIM, ZLT page.
  • Closed Trades Last Week:
    • WLL – Sold the (5) March $75 calls for $3.20, up 109%.
    • 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.
    • MMR  – Sold the 20 MMR MARCH $17.50 CALLS for $1.30, up 71%.
    • BEXP – Sold 20 (half) of the BEXP $17.50 March Calls for $0.85, up 16%.
    • ROSE – Sold the remaining $22.50 March Calls for $1.50, up 193%.
    • EXXI - Sold the (2) March $15 calls for $6.30, up 16%.
    • ROSE – Sold the 10 April $22.50 calls for $2.30, up 106%

ZIM (Zman Inefficient Markets portfolio)

  • $12,900
  • 100% Cash (No positions)
  • Positions are updated on the ZCAT, ZIM, ZLT page.
  • Opened and Closed Trades Last Week:
    • ROSE – Monday - Added (50) $22.50 Calls for $0.20 with the stock at 20.10, up 7%, prior to their conference call. See the post for details on the earnings and ops update released on Friday. Also see the post for guidelines on the ZIM (Zman Inefficient Markets portfolio). I expect ROSE to provide additional detail on the call today on their Alberta Bakken position and tests and may add a second tranche of options later in the day. I own these in the other options portfolio already and I own the common.
    • ROSE – Monday - 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”.
    • ROSE – Tuesday - Sold the second half of yesterday’s position (25 calls) for $1.00, up 378%, with the stock at 22.50.

 ZLT (Zman Long Term portfolio)

  • Had a good well. We closed the position in WRES, up 30% since entry last May.

 Wrap Comments Will Included In The Monday Post:


Market Sentiment Watch: S&P at 1,118. Wow. After a near rollover experience with just about all of the newsletters and TV pundits going bearish here we are above the 50 day SMA with market toying again with the idea of shoot to new highs. I plan on raising cash the higher the broad market goes. I think we are playing by some very simple technical rules now, with the first being, don't fall back below the 50 day at the 1,108 level. Notably, Greece is back in the news.

Earnings season is essentially over, with only a smaller names left to report (WRES today and it's not in the post yet because they tend to oversleep) and in that "so now what" lull often comes lower volume, listless trading. action This is not to say I see the market going lower in that period but that rallies are likely to be lacking volume confirmation and the first bit of negative news for the markets will likely send stocks back into the bear spin zone with a lot of "I told you so's" from those guys. So again, as the market drifts higher, assuming it does, I'll be looking to raise cash in the ZCAT with an eye on waiting out the coming series of red days that are somewhere down the near term road for the group.  The ZIM will only trade on the occasion of news and is back to 100% cash now. 

  • Eco Data Watch:
    • ADP Employment: payrolls drop 20,000 for February, fewest in 2 years.
    • ISM Services - we get these numbers at 10 am EST, forecast 51%

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Natural Gas Supply Slide Show - Not a big deal this month.
  5. Stuff We Care About Today - WRES, coal thoughts
  6. Odds & Ends

Holdings Watch:

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

  • $22,300
  • 39% Cash
  • Positions are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades:
    • 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.

ZIM (Zman Inefficient Markets portfolio)

  • $12,900
  • 100% Cash (No positions)
  • Positions are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades:
    • ROSE – Sold the second half of yesterday’s position (25 calls) for $1.00, up 378%, with the stock at 22.50.

Commodity Watch:

Crude oil rallied $0.98 to close at $79.68 yesterday as the dollar took a break from its recent rally, rally mode. After the close, the API released a fairly decent report on inventories with distillates showing a big draw down. This morning crude is trading up 50 cents.

  • OPEC Watch: The Cartel next meets March 17 and is unlikely to officially shift quotas or to openly chastise quota violations at the meeting. Saudi has said they plan to up shipments to Indonesia due to growing demand and other members have recently espoused that the market is well supplied but that they are comfortable with the $70 to $80 range for now. 
  • Stupid Pirate Watch: Somali pirates hijacked an empty Saudi tanker. Amateur hour ... don't they know you pick the ship that's riding low in the water?  Sheesh.  At least they are on schedule as the pirating season is busiest from March to May due to calm seas (ease of boarding).

Natural gas inched up $0.03 to close the day at $4.71 yesterday. Gas is range bound and has been trading closely with the weather forecast and is likely to stay sloppy throughout the next several weeks. This morning gas is trading flat.


  • Early Read On Natural Gas Storage: Street is at 131 BCF.

    • Last Week: 172 Bcf Withdrawal
    • Last Year: 101 Bcf Withdrawal
    • 5 Year Average: 112 Bcf Withdrawal
    • 10 year Hi: 30 Bcf Withdrawal
    • 10 year Low: 176 Bcf Withdrawal

Oil Inventory Preview

API Watch: Bullish on distillates

  • 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..

Natural Gas Supply Slide Show - Data for December 2009

  1. U.S. Lower 48 production inched 0.5 Bcfgpd (0.9%) lower from November ...
  2. ... but was still up 0.3 Bcfgpd from December 2008 levels.
  3. Texas production, the former driver of growth in the U.S. continues to slip
  4. Louisiana continues to grow at breakneck speed
  5. New Mexico and Oklahoma continue to show a gradual decline. I expect the former to continue and the latter to flatten
  6. "Other States" production was flat with last month but remains at historically high levels
  7. When you toss out the Louisiana growth, U.S. gas production is off just under 1.1 Bcfgpd, and the reason to do this is to examine what happens when things slow down in the Haynesville by mid 2011 as the major operators by then will have most of their leasehold held by production.

Stuff We Care About Today

EXXI To Host Analyst Meeting Tomorrow.

CRZO Earnings Conference Call Next Week, will take a look at reserves out this morning

GST Donelson 4 Well

  • Deep, Lower Bossier test drilled to 19,000 feet 
  • Had hole stability problems, will be plugged back to 18,100' and redrilled
  • Had a gas kick, and on logs see 2 sands that are productive in two of their other wells
  • Earnings next week.

WRES Reports 4Q - To Be Added When They Decide To Get Around To It...


Coal Update:

  • Coal stocks have been running hard, most recently on a rumor of M&A activity in the space (MEE to take out PCX is the current thought).
  • China slowing rumors have not impacted the group
  • Since my update on 1/26/10 (just before earnings hit), the eight names in the table below have risen 10% on average with WLT the clear winner at up 24%. WLT has also seen the most deliberate rally in EPS estimates, with the rest of the names mostly flat to down. 
  • Mulling puts on some group members like MEE but only for a short term trade.


Odds & Ends

Analyst Watch:

  • SLB - upped to Positive at Susquehanna
  • CCJ cut to Sector Perform at RBC
  • APC - Jefferies raises target from $75 to $88, rating Buy
  • APC - UBS ups target by $2 to $84, rating Buy

Interesting Video Watch:


195 Responses to “Wrap – Week Ended 03/05/10”

  1. 1
    isleworth Says:

    Wunderlich initiates EXXI with a Buy and price target of $25 based on their forecasted calendar 2010 cash flow per share of $5.65 ($5.70/share fiscal 2010) multiplied by their 3.8 times peer group multiple. Firm says Energy XXI has been able to acquire, explore, and develop assets profitably and now has significant, oily production from its core fields. Additionally they say, Energy XXI has a significant position in the Ultra-Deep Shelf play in the Gulf of Mexico that has become more viable with the Davy Jones discovery.

  2. 2
    BirdsofpreyRcool Says:

    Isle — thanks! I saw the headline and PT there and said that Mr. Dingmann must not be including anything for the ultra-deep. Aparently, that is the case.

    So, EXXI investment gets even better… 25% upside just based on current 2010 operations and cash flow… plus a FREE CALL OPTION on the ultr-deep stuff.

    You don’t get to see investments this good very often, imho.

  3. 3
    BirdsofpreyRcool Says:

    z — thanks for your great comments this morning. As tough as it is to believe we are back up, TED was telling us all along that Greece was a merely a road bump on the Highway of Life. No that it isn’t important (along with it’s broader implications, which is why the Bears were able to emerge from their cave and take the field to scare people for a while), but that it wouldn’t (shouldn’t) affect the U.S. stock market.

    That said, Greece is now officially “old news.” The Bears will find something else Smelly and Ugly to waive in the Market’s face — sooner or later. It just won’t be Greece.

    We will watch what Our Little Friend, TED, has to say about the next crisis. But, keeping some powder dry to take advantage of market panics is a fundamentally great idea.

    Cash TED at 11.7 bps. Frankly, that is too low.

  4. 4
    zman Says:

    Thanks Isle and BOP

    WRES continues to hit snooze this morning…still no release.

  5. 5
    BirdsofpreyRcool Says:

    z — reef pointed out that the tumble in ARD shares is probably overdone. He said he read thru the conf call transcript and believes the shortfall was from 20k (or so) of oil that the trucks didn’t pick up in the quarter. I don’t follow that name, but it sounds like it might be a $20 bill on the sidewalk. Care to take a quick look? (reef said i could pass along his comments.)

  6. 6
    zman Says:

    BOP – that also suggests Wunderlich is pretty comfortable with DJ given the pending news releases. MMR getting marked higher.

    WRES – still nothing. I’ll send my fourth “this is not how you treat the Street” email to them. Stop being a wall flower.

  7. 7
    bill Says:

    6.. bop , I took a quick look and concluded it was an overreaction and bot shares at the close (see my post from yesterday) around 4 pm

    they canceled a trucking contract effective 1/1/2010 and the shipper got pissed and didnt pick up 3 days worth of production 12/29-12/31

    they also had some gas that was shut in as the processing plant was maxed out

  8. 8
    bill Says:

    z any commnet on balancing item from eia

    tph says The revisions are mainly book keeping which 1) don’t impact 2009 numbers and 2) don’t “clear up” the balancing item. The balancing item implies overstated supply (or understated demand) of 0.6bcf/day in 2007, 0.4 bcf/day in 2008 and ~2bcf/day in 2009. Note: the balancing item is a reconciliation between the implied inventory change (from supply, demand, imports) and the actual storage change.

  9. 9
    BirdsofpreyRcool Says:

    ARD — thanks for the comments… TPH out with some luke-warm comments on the name this morning. But, i think it shows some whimpy-ness… i’ll let you decide…

    ARD Q4 follow-up – We’re not stepping up to buy even with ARD -18% yesterday. Why the plunge? (1) Production uncertainty – 4 rigs running expected to deliver 30+% 2010 growth, but downtime and well recoveries draw questions. (2) Downtime to continue another 12-18 months (3) Recurring downtime says ARD needs better risk management. (4) F-M PUDs booked at 28mboe/well, far south of 40mboe. (5) Waterflood PUD bookings feel aggressive given waterfloods on the drawing board for years.

  10. 10
    zman Says:

    BOP – saw a number of price target cuts there, have not had time to play. Happy to look at his comments.

    CRZO reserves look interesting.

    REXX pr looked boring, didn’t look at numbers vs Street though.

  11. 11
    zman Says:

    Bill – It’s a plug figure, I don’t generally think much about it. EIA is likely to revise numbers for last year with the next release next month.

  12. 12
    bill Says:

    TPH talking about uncertainties regrading ard and wrote about the name today and will write something tomorrow

  13. 13
    zman Says:

    Bill – just saw TPH comments, I agree that you see downward production revisions in the next report (they saw coming months).

  14. 14
    zman Says:

    HAL on my list of things not to raise cash in just yet, may double the $32 strikes this morning.

  15. 15
    zman Says:

    Rangel – leaving as chair of House Ways and Means

    ROSE gave me all weekend to ponder their press release.

    WRES giving me less than an hour until the call (and counting). Apparently they are still writing it. Item #2 on analysts hate list: no time to evaluate news before a conference call. Inexcusable.

  16. 16
    BirdsofpreyRcool Says:

    WRES — CFO/IR should be forced to give up lunch money for a year. This is just Bad Form.

  17. 17
    bill Says:

    15 lol

    Yeah, i see some companies releasing at 9.29, having a quick call, then filing the 10 k after the call like they are going thru the motions and dont want questions

  18. 18
    bill Says:

    928 still no release

  19. 19
    zman Says:

    WRES – they are always late but this is really late. Lame.

  20. 20
    tomdavis12 Says:

    Z: VNR out with some numbers today. Would love your take. Keep up the rants, love the passion.

  21. 21
    zman Says:

    WRES out, details to follow …

  22. 22
    zman Says:

    WRES – good 4Q production …

  23. 23
    BirdsofpreyRcool Says:

    WRES — didn’t add 2008 non-economic reserves back…

  24. 24
    zman Says:

    WRES – 8 net wells in CA, that’s good, also some exploration, maybe 2, that’s good as well.

    Reserves in a second …

  25. 25
    bill Says:

    I think reserves never come back do they?

  26. 26
    bill Says:

    exxi off to another good start

    ard no bounce back as tph is cautious

  27. 27
    zman Says:

    WRES – no big bump in reserves, in fact they are off from Sept 2009 levels. Prices are a bit low to where I thought on oil but that should not be a problem as they are still above levels seen a couple of years back when reserves were much higher.

    Stock is not going to be up on those reserve numbers, although the operations update and production and guidance won’t hurt it. I don’t see a big sell down here, just not the big reserves upside. I will decide during the call if I want to stick around due to the improved operations outlook alone, which was part of my original plan, or just toss it out, due to the lack of reserve re-growth.

  28. 28
    zman Says:

    Bill – they never get booked back through the income statement (offsetting a previous non-cash ceiling test impairment) but the reserves statement can see them back as a revision due to price.

  29. 29
    BirdsofpreyRcool Says:

    WRES — pretty beige report. No reason to buy, no reason to sell. Blah… so, would go either way.

  30. 30
    zman Says:

    I’m obviously missing something as to why they don’t recognize the oil here.

  31. 31
    BirdsofpreyRcool Says:

    z — i don’t get the WRES reserve report either… scratching at head madly right now.

  32. 32
    BirdsofpreyRcool Says:

    WRES — operationally, tho… stock should not be down.

  33. 33
    zman Says:

    BOP – I’ve been patient with them for some time now, up about a third on it since last May. Plan to listen, then decide. Am going to ease out of some positions in the ZCAT today though. Market just keeps going higher. A TA market guy telling me that RUT, S&P look overbought but that the MACD says they could go higher for a couple of weeks, which I guess gets you to a retest of the high on the S&P. I would suppose if it doesn’t break that level, then all the TA types in the world will, in unison, scream “LOWER HIGH!!!”

  34. 34
    zman Says:

    BOP – yeah, operations looked very solid, plan looks good (as in they are actually able drill). They redetermine next month and are up near their limit now, wondering with reserves again 4% lower if they see a problem keeping the borrowing base at $120 mm.

  35. 35
    zman Says:

    EXXI en fuego!

  36. 36
    BirdsofpreyRcool Says:

    EXXI analyst’s day tomorrow. We will have some insiders there on the ground. Should be a perky showing.

  37. 37
    BirdsofpreyRcool Says:

    The Wunderlich analyst is a whimp. NO UPSIDE from ANY ultra-deep in his PT. My cat could do that “financial analysis.”

  38. 38
    Nicky Says:

    Morning all. No changes really to what I said yesterday. I still think we will get the 1128 level on the SPX – it is the 78.6% retrace of the fall from 1151 to 1044.

  39. 39
    zman Says:

    PXP and MMR the weak legs on the stool today. Hmmm. I have to believe the Wunderlich guy is comfortable with the current goings on at Davy. Hopefully he’s not just trying to scoop the analyst day and is in the dark on the well.

  40. 40
    zman Says:


    Sold 20 (half) of the BEXP $17.50 March Calls for $0.85, up 16% (on the mid, a little slow) with the stock at $17.70. I continue to own the other half and the common in the ZLT.

  41. 41
    jiveyjr Says:

    it seems the reserve %’s are disproportionately weighted toward gas as opposed to the ongoing production levels on WRES…perhaps that has something to do with the reserve revisions being disappointing to us

  42. 42
    zman Says:

    Jivey – See the reserves switch over here due to price:


  43. 43
    zman Says:

    WRES call started by the way

  44. 44
    Nicky Says:

    Should 1128 be taken out then I am looking at 1133/34. I am hoping we pretty much work our way up to that level by the end of today.

  45. 45
    Nicky Says:

    Cycles ‘should’ turn more negative tomorrow but even then my preference is only for a correction. Likely 3 – 5 trading days.

  46. 46
    zman Says:

    Thanks much Nicky, that helps. Down side on that 3 to 5 day move?

  47. 47
    zman Says:

    HK – what the heck? Figures that it starts to move up when Nicky is looking for a broad market slide.

  48. 48
    Nicky Says:

    Z – most bullish count says SPX will only correct to 1105 – 1110. Medium bullish count says 1075 – 1085, more bearish says 1050 – 60.

    We should be able to narrow that down once the correction starts.

  49. 49
    zman Says:

    Thanks Nicky, is there a preferred count on those, that’s quite a wide range?

  50. 50
    Nicky Says:

    Z – if this is v up for the end of this move then don’t discount a sharp rally today or even after hours.

  51. 51
    zman Says:

    Nicky – thanks, I think Jerome referred to that as a shooting star last night.

    WRES – expect to fund 2010 budget with cash flow.

    Redetermination: has $90 mm borrowed on it, had not seen, that’s better than last quarter, which I think was $107 out of $120. They see at these prices continuing to pay it down. That’s good, means they can get that capex done.

  52. 52
    Nicky Says:

    Z – I would say my order of preference is 1. most bullish 2. medium bullish 3. more bearish.

    Cycles are leading me to believe that the pullback is not going to be huge.

    That said there are many that say we are making a far more significant top. One that will fall short of the previous high and then absolutely tank to the downside. Under this count we would be in ii up and about to embark of iii down. We will know it if it happens.

  53. 53
    zman Says:

    WRES – Operations Update

    Atlantic Rim – results of a workover project were mixed in their Sun Dog unit. 10 more wells here in the unit in 2H10. This is the gas part of the company.

    Whoa – big volume buyer coming into BEXP.

  54. 54
    bill Says:

    hk seems to be bouncing off low

    Jerome–how does the short term chart look?

  55. 55
    zman Says:


    Added 10 more HAL MArch $32 Calls for $0.85 with the stock at 31.95.

  56. 56
    zman Says:

    Bill – re HK, better late than usual.

  57. 57
    bill Says:

    mcf is breaking out on the upside for no good reason

    Im selling into the strength until I know more about their broken gas line. Half their production has been offline for a week. It’s costing them 200 k a day in cash flow

    maybe insiders know its no big deal but I have no clue

  58. 58
    tomdavis12 Says:

    Z: Gov’t selling their BAC warrants. Dick Bove had very positive long term comments re BAC. Dividend back to $1.55 in time.

  59. 59
    zman Says:

    WRES – only 1 question on the Q&A. That’s lousy.

  60. 60
    RMD Says:

    If anyone sees reports on VNR after the conf. call, I would appreciate seeing them. Thanks in advance.

  61. 61
    zman Says:


    Sold my position for $2.43, up 30% since last May. Results didn’t match my expectations on reserves. There are plenty of other fish in the sea.

  62. 62
    zman Says:

    RMD – I plan to be on that call in 30 minutes.

  63. 63
    zman Says:

    Crude up 4.1 mm barrels
    Gasoline up 0.7 mm barrels
    Distillates down 0.9 mm barrels

    Gasoline demand remained strong at 8.882 mm bpd

    Dist demand up again, good reading at 3.829 mm bpd, still low but better than it has been

  64. 64
    zman Says:

    EIA report:

    Crude imports were stronger for a second straight week, at 9.2 mm bopd.

    Cushing was up 100,000 barres (flat)

  65. 65
    zman Says:

    NFX attempting to break out for the fourth time from the current range.

    ROSE flat, after the rally that one has had, that’s pretty impressive that no one wants to take profits.

  66. 66
    Nicky Says:

    No reason not to expect oil to join in this rally now the data is out of the way.

  67. 67
    zman Says:

    Nicky – yeah, it was good data from a demand standpoint. Not sure what’s up with the two weeks of higher imports but it could have something to do with cashing in tanker loads prior to OPEC on the 17th that have been serving as storage at sea. Just a thought.

  68. 68
    bloodystupidjohnson Says:

    RE:WRES — still Z it was a nice piece of work.

  69. 69
    zman Says:

    Thanks BSJ

  70. 70
    Nicky Says:

    As this move can top out anytime here then a move below 1116 would confirm its done.

  71. 71
    zman Says:

    BSJ – What’s gotten into TRGL? Reflex rally or news I missed.

  72. 72
    bill Says:

    Warmer weather coming this weekend into next week. Maybe ng will move up on warmer weather, lol, cause it went down on colder weather

  73. 73
    bloodystupidjohnson Says:

    Z: In your years in the biz, can you think of any other company that has gone from one of the worst operators to one of the best over night like BEXP? I mean it was light a light switch. One sec a joke then next sec a king. I have been in the investment game a long time and I can not remember such an extreme and rapid turn turn around of a company.

  74. 74
    zman Says:

    BSJ – ROIL, later REM, on the shelf.

  75. 75
    bloodystupidjohnson Says:

    RE:71 — With lower cap stocks like TRGL, just one person buying or maybe stop selling can really push the price of the stock around.

    However my guess, which is worth NOTHING, is that maybe the secondary is finally been digested into stronger hands, and two, people are starting the hunt for shale plays around the world, (like the TLM and the Baltic basin) I posted yesterday), and are taking a flyer on a potential major shale play in the Paris basin.

  76. 76
    andy Says:

    z – what was the link u gave us a few days ago showing all the stks in an industry’s performance on the day?

  77. 77
    bloodystupidjohnson Says:

    RE:73 for me the story for the year has been the turnaround of BEXP. I mean Jim Bob had a hot hand in with the Flatrock area so Davy Jones was not a hugh reach. But BEXP and their success in the Bakkens is a hugh surprise. These are not merely good wells, but best of breed wells.

  78. 78
    zman Says:

    BSJ – management over at ROSE is very smart, thinking they are on the tip of the oilberg.

    VNR call starting.

    Andy – http://finviz.com/map3d.ashx

  79. 79
    zman Says:

    NFX – Jerome – Know you are busy but I would think you would find that chart to be highly interesting. If it closed here at 53.60, that would be a high close on a 4th attempt at breaking above the $48 to $53 range it has been in since mid December.

    VNR going through the press release….

  80. 80
    bloodystupidjohnson Says:

    ROSE is not really a surprise. Once they got the Calpine problem behind them they could start doing what they are good at, and that is finding stuff. The people over at FPA Capital have been major holders since they help fund the original buy out of the Calpine energy assets and those guys at PFA really know what they are doing.

  81. 81
    zman Says:

    That MEE for PCX rumor must be getting debunked today.

  82. 82
    Patipati Says:

    VNR press release:

    On 1/27/09 we filed a demand for arbitration against Oppenheimer & Co., with the financial industry regulatory authority. The arbitration demand sets forth our claim that Oppenheimer & Co., provided us with negligent investment advice and breached its fiduciary duty to us when it improperly purchased auction rate securities for our account. We are seeking damages in excess of $2.5MM (two million five hundred thousand dollars).

  83. 83
    zman Says:

    ROSE – wasn’t saying surprise, just saying I don’t think that stock is near done yet.

  84. 84
    Patipati Says:

    Whoops, sorry, wrong stock.

  85. 85
    zman Says:

    And I wish the guys BEXP uses for completions would do the upcoming ROSE wells, lol.

  86. 86
    zman Says:

    ARD taking it on the chin for another 8%. Getting more interested.

    VNR still going through the yada, yada.

  87. 87
    bill Says:

    mcf at high of the year

    i think this is a short covering rally

  88. 88
    zman Says:

    Noticing that MCF is tapping on $55, patience pays, nice call Bill.

  89. 89
    zman Says:

    Bill – promise I was typing at the same time, lol.

  90. 90
    RobBanks Says:

    Z – Wunderlich is valuing EXXI at 3.8x CFPS.

    Do you agree with a multiple like that as being valid?

  91. 91
    zman Says:

    Just drifting off on the VNR call, watching the SGY go through $18, sort of still interested but not by much.

    Rigs all moving, RIG update last night was I think favorable.

    My OII, the ROV and subsea work and umbilicals, etc, guys are moving on up without me.

  92. 92
    BirdsofpreyRcool Says:

    Jerome — EXXI printed a 21.00 then fell back. So, does that mean anything?? thank you.

  93. 93
    choices Says:

    Euro shorts getting squeezed big time, dollar longs not happy-hooray, Greece is over, on to Calif.

  94. 94
    bill Says:

    ARD is falling on its face again

  95. 95
    bill Says:

    Im happy to see HK finally coming off the map.

  96. 96
    zman Says:

    Rob – good question. It’s at the high end for the shelf players for a target for a forward multiple of CF, assuming that’s off 2010, consensus is a little lower at $4.87 but some guys are going to be over $5. I think you get torn between current valuation and what the multiples for a given group should be and upside potential in 2011 and beyond if DJ and some of the other DJ analogues work.

  97. 97
    zman Says:

    re 95… waking up from a nap.

  98. 98
    bloodystupidjohnson Says:

    For those interested in Canadian warrants, and who isn’t, here is a link to a great site. http://canadianwarrants.com/values/current.htm

  99. 99
    zman Says:

    ARD – don’t know the name well at all. My take a look here, this VNR call is putting me to sleep.

  100. 100
    zman Says:

    Anyone see any reasoning behind the Susquehanna upgrade of SLB today? Thanks.

  101. 101
    BirdsofpreyRcool Says:

    z — it’s at the high end… but EXXI is an oily-shelf-player. Not a high-IP, hi-decline nat gas treadmill runner. JMHO, of course.

  102. 102
    zman Says:

    VNR – thought I just heard they think borrowing base reduction on the way but that it won’t hurt their 2010 plans.

  103. 103
    zman Says:

    BOP – good point, longer reserve life correlates with multiple. Oiliness helps these days as well.

  104. 104
    RobBanks Says:

    96 – Wunderlich’s CF estimate for 2010 is $5.65.

    Sounds like that is higher than other analysts, and combined with a slightly high multiple it gives that $25 target.

    So maybe the DJ option isn’t quite “free”, but pretty cheap.

  105. 105
    zman Says:

    Rob – avg was $4.87, range is 3.80 to 5.50, this morning.

  106. 106
    cargocult Says:

    Any thoughts about trading out of a long position in CHK into ROSE or another?

  107. 107
    choices Says:

    ARD-volume still relatively heavy today but trades appear to mostly 100 sh size.

  108. 108
    zman Says:

    VNR – maintenance capex in line with capex this year, at $13 mm ish, sounds like a touch more needed. Good question.

  109. 109
    Nicky Says:

    Oil chart looking very spiky. Looks like a v and topping in line with the broader market.

  110. 110
    bill Says:

    99 ARD has no debt..not too many EP companies can make that claim

    They scaled back drilling in 2009 to conserve cash and production is falling off

    Cap ex is being directed to its oil opportunities

  111. 111
    zman Says:

    Cargo – I already own ROSE shares but am considering adding more, I’d like to see a pullback in this market before I do it but I may not get that.

    CHK is such a different animal (essentially a gas Major) and I’m there for the long term so probably not a swap between the two. There are faster gas horses that I’m in as well (SWN, HK) so I feel like I’m pretty covered for a long term appreciation in gas prices when it occurs.

  112. 112
    zman Says:

    I really need to listen to the ARD call, thanks bill.

    Oil hitting $81, a bit above my comfort level. Stocks acting like they don’t buy the move; buying interest waning.

  113. 113
    Jerome Blank Says:

    Re: #54 bill…added an HK 30 min chart with shorter term perspective…

    #79 Zman, I agree…very interesting chart…updated the NFX daily…looking good.. broke out of the descending triangle, near P&F resistance at $54 as I write this…


  114. 114
    BirdsofpreyRcool Says:

    Davy Jones well #1 update… they are still conditioning the hole, prior to setting pipe and cementing. They are being very very careful… and it’s making for slower going than we guesstimated. Think that pushes off any Davy Jones Report Card into next week. But, so far, things going well, for a technically very difficult, very deep hole in the ground.

  115. 115
    zman Says:

    Thanks JB, I own the common and some $55 March calls which are coming back to life after that earnings release which I still argue was not at all bad. NFX probably moving on the ROSE Alberta Bakken comments, as KWK is as well.

  116. 116
    zman Says:

    Thanks BOP, from an MMR perspective that would allow them to be at TD on their BB Hill appraisal well. So could pr three wells at 1 time, the botched Hurricane Deep attempt and the BBH and DJ wells.

  117. 117
    RMD Says:

    Z, did you make it to the end of the VNR call?

  118. 118
    zman Says:

    … and with thought in mind could see the DJ Triad drifting higher into the weekend, with little regard for the market’s machinations around Friday payrolls.

  119. 119
    zman Says:

    Yes, that last guy asked some good questions.

  120. 120
    BirdsofpreyRcool Says:

    Adding to the argument as to why EXXI deserves an above-average multiple to it’s shelf-drilling peer group…

    EXXI is now —

    #4 GoM shelf oil producer, behind Apache, Chevron, and ExxonMobil (in that order)

    68% of production + 64% of proved reserves are oil

    Proved reserves of 76.1mm BOE divided by an estimated current 30,000 BOE/day production, gives them almost 7 yrs of reserve life.

  121. 121
    andy Says:

    z = bop -am confused by this map of sheridan county, montana.found on NOG’s website. KOG said they were going to spud their first well in mar. doesn;t this map indicate more/??

  122. 122
    zman Says:

    RMD – bet maintenance capex is $15mm, they do so many deals its hard to ever see with these kind of guys an organic rate. I was a little confused on what he said on the borrowing base, sounds like it will fall?

  123. 123
    BirdsofpreyRcool Says:

    #116 — from a PR standpoint, makes sense to bury the HD failure with the BBH and DJ success.

  124. 124
    RobBanks Says:

    VNR is hurting me today. I think the statement in their PR that they have good access to the equity market telegraphs a secondary at some point, which shouldn’t surprise anyone, but something must be causing this 5+% hit.

  125. 125
    zman Says:

    Montana KOG would be Red River, I think, will check.

  126. 126
    bloodystupidjohnson Says:

    RE: TRGL — of course one reason the the increase in price could very well be that people are confusing it with TRLG — LOL!

  127. 127
    Jerome Blank Says:

    Re: #92 BOP…EXXI, the $21 print was huge…EXXI now back on a P&F buy signal…just for a benchmark, the P&F price obj is now $29…I’ll be looking to buy pullbacks (now that I can trade it again…lol)….I added a 30 min chart perspective…

    The only thing that has me a bit cautious overall about jumping in too aggresively is that overbought $NYMO, it’s probably going to be even higher after today, getting a bit overheated…I find it to be a good indicator for shorter term pullbacks…


  128. 128
    zman Says:

    That map shows an acreage block with 3 oil wells on it, those are Red River wells, nothing like a Bakken in terms of production, good bread and butter, but not steak.

  129. 129
    RMD Says:

    VNR: I understood the maintaince capx answer to be $13mm in ’10 is below, but close to, their guess about necessary capx to replace production. My feeling was they had not really calculated the #; in light of their comment in the letter accompanying the 10-K, “Our business strategy is to maintain our cash flow by developing our existing asset base…”, I grade the answer as weak.
    Answer about growing production/share dependent on share price and price paid for acqs. = duh.
    Answer about offsetting zero hedges in ’12 and ’13 by making more acqs. totally lost me. Maybe time for more coffee.

  130. 130
    zman Says:

    127 – I hear your caution and am, on the whole, raising cash.

  131. 131
    zman Says:

    RMD – should have been an “off the top of head” answer, agree week. I came away less enthusiastic. I know I have to think different with the MLP and RT crowd re acquisitions but I’m not sure in this environment, after the run they have had, that they don’t see a little unlocking effect.

  132. 132
    zman Says:


    TAT – Added a second tranche for $3.27, brings average cost to $3.11.

  133. 133
    RMD Says:

    I’ll probably call mgt later; will update. Notice yield 50BP lower than LINE’s. No one asked about increasing distribution given 1.3X coverage for ’10 vs. making the next acq.

  134. 134
    West Says:

    # 125 Red River ARD comment, When I listened to cc I heard them say that the Yates Gas is not economical at current prices. This was one of their growth engines going forward. Fuhrman Mascho area development has exceeded capacity and it will take 12 to 18 months to build infrastructure to handle current and future production from ARD, BTA and EAC in this area. Local coffee shop talk is that they recently drilled a well on the wrong 1/4 section that they did not have a valid lease on place. They have been buying old leases in the area and some have lapsed for non production and have been top leased by other operators. Probably a legal battle , but not the kind of due diligence you would like to see from a company that already has execution problems…………………………ATPG, Spoke with investor relations this morning and that will be releasing 4th qtr results either M-T or Wed not sure. My gut is that they are waiting on 1st production to be hooked up and deal on titan to announce at the cc. The representative was very upbeat (which is his job) but went on to tell me that they were looking for upbeat news from Telemark. This stock is definitely not for the weak at heart, high beta. Risk reward play is that they have production from Telemark hooked up and they are able to monetize Titan for about 342 million this should put a little pressure on shorts. That said with the % short at present time I would not expect them to go down without a fight. Yesterday I bought some April 19 at 1.75 and April 20 at 1.20, with the thesis being the good news moves the stock 10 to 15 %.

  135. 135
    zman Says:

    RMD – yield now vs yield later, lol.

    West – thanks much.

    Dollar index back below 80.

  136. 136
    bill Says:

    on ard from ard

    – Oil sales in December were approximately 21,000 barrels less than expected due to the previous oil purchaser failing to pick up and transport oil the last three days of December.

    So this slips into q1 2010
    q3/09 q4/09
    revenue 36.1 42.4
    eps .31 .24
    expectations .27 .35


    q1 2009 q1 2010
    revenue 20.2 45.0
    eps acts/exp .17 .42


    Oil prices are firm, they are 80 % oil no debt and if you can thold out to next qtr revenues and earnigs should double y-o-y

    The problems yesterday was caused by the earnings miss caused in part to deliveries slipping and sec adjustments that were treated like operating expenses

    They also mentioned on the call they want to buy out llc partners in current producing wells (thus getting proved producing wells on the cheap)

  137. 137
    zman Says:

    Expecting the ZCAT to add NOG calls soonish for earnings I guess next week, would like to do it on a big bad red day since they are somewhat thin.

  138. 138
    zman Says:

    re 136 – oil lifting timing issues are easy to forgive. Happens to big and small players (NFX and APA report it from time to time overseas, just part of the business and its just shifted).

    Ok, going to listen to ARD replay now.

  139. 139
    1520sbroad Says:

    #127,130 – jobs number on friday may provide a short term pullback. Lots of weather influence may mean an ugly number. That pullback may not last long if the market gets convinced it is a one time blip…

  140. 140
    zman Says:

    Lots of weather influence could also lead to trepidation going in but easy forgiveness once the news is out.

  141. 141
    RMD Says:

    West great color on ARD.

  142. 142
    zman Says:

    SD = another day in purgatory. Watching.

  143. 143
    bill Says:


    94% of those capital expenditures in 2009, were related to Arena’s Fuhrman-Mascho property in Andrews County, Texas

    The 2010 budget will support the drilling of 300 or more wells at Fuhrman-Mascho compared to the 176 wells we drilled in 2009. We will continue to focus on the development of our existing oil assets in the Permian Basin and Oklahoma

    all this means is they will not be spending money in colorado or anywhere else for that matter. Maybe they spin off thoses “hot” colorado leases

  144. 144
    1520sbroad Says:

    140 – true. I like trepidation followed by forgiveness.

  145. 145
    West Says:

    ARD, think this probably a good place to pick up some for long term appreciation. I bought earlier so looking for bottom fishing here. Interesting on the cc that they said they had been looking at the Bakken for possible expansion but nothing to report at this time.

  146. 146
    zman Says:

    ARD – still listening to the call, looks like the bottom on the stock will be a TA level, either here, near $32 or perhaps just under $30.

    I have not yet heard a rationale behind the jump in future development costs, is that essentially the re offitting of the Furhman-Mascho field?

  147. 147
    Nicky Says:

    the move off the top looks corrective so I am expecting everything to move higher yet.

  148. 148
    andy Says:

    was considering shorting WRES and found it was not shortable. out of curiosity looked up ATPG, EXXI, KOG, MMR., which also were not shortable on fidelity, which is usually able to short when other are not

  149. 149
    zman Says:

    Still listening to ARD and reading notes on the call as they come in, thanks for those.

    EXXI – profit taking has it red on the day and down a buck from $21 high.

  150. 150
    zman Says:

    Thanks Nicky.

  151. 151
    bill Says:


    We are initiating coverage of XCO with a 1-OW rating and a $29 price target. XCO combines a liquid balance
    sheet with acreage positions in both the Haynesville and Marcellus shale plays which, we believe, positions the
    company to be a top-tier growth company in coming years.
    􀂃 After repositioning the company’s asset base and balance sheet last year, 2010 could mark the beginning of an
    aggressive growth profile driven by the Haynesville and Marcellus shales. 4Q10 volumes could grow 50-60%
    over the ’09 exit rate.
    􀂃 Current development plans could generate 30% CAGR production growth over next five years.
    􀂃 Haynesville–~54k net acres concentrated in DeSoto Parish sweet spot where first 26 completed wells averaged
    22 MMcfe/d initial rates.
    􀂃 Marcellus–~186k net acres concentrated in central PA. Completing 1st horizontal well in coming weeks;
    expected to be meaningful growth contributor in late 2011 and beyond.
    􀂃 Assuming $5.50 gas in 2011 through 2014 and company’s latest 5-year plan, program could be funded from
    available liquidity and cash flow.
    􀂃 Believe asset base warrants growth premium. Execution in H’ville and Marcellus are critical

  152. 152
    zman Says:


    Sold the 20 MMR MARCH $17.50 CALLS for $1.30, up 71%, with the stock at 18.20.

    Added (30) MMR MARCH $20 CALLS for $0.35, upping my leverage and risk to future news.

  153. 153
    bill Says:

    ON ARD

    they said

    jan was running 7500 boe day and feb was 8000 day
    assuming march runs the same and we hold to same pricing as q4 (its higher now)
    i get 46.7 m in rev for q1

    JAN 31 7500 232,500
    FEB 28 8000 224,000
    31 8000 248,000
    704,500 46,745,076

  154. 154
    Jerome Blank Says:

    EXXI, nice 30 minute time frame “hammer” right at first support…

    HK still holding up back within the daily triangle…

    NFX continuing to press against P&F resistance at $54…

  155. 155
    choices Says:

    Bought some DUG and TWM-trying to check if my record of total misses will remain unblemished in betting against this market.

  156. 156
    zman Says:

    Bill – thanks, having to listen to this call in broken up fashion, they’ve lost some credibility with the Street on letting the field operations deteriorate as much as they have. My sense is, and its early for me to have an opinion is that it gets a dead cat bounce soon but that it is relatively dead money until their as of yet undated analyst meeting.

  157. 157
    zman Says:

    Where can I get a listing of P&F terms on the internet?

  158. 158
    bill Says:

    tph said it best

    Stock thoughts – Was a 17.5% hit too much yesterday? We’re still staying away as conference call details added quite a bit of uncertainty around the near-term prospects for production and longer-term valuations based on reserves. If there is one thing the market doesn’t like, its uncertainty

    imho, there was an over reaction

  159. 159
    VTZ Says:

    A few places I read are calling for a break of support in the USDX at 79.70 and if it does then a significant break below 79.30ish could it goes all the way to the mid 76 range.

    Would be pretty bullish for oil.

  160. 160
    zman Says:

    Bill – I looks like it but now near all the coming quarters there is going to be an asterisk by the earnings estimates, fear that they brick on production. If these things were one time and not somewhat randomly recurring until they are really fixed I’d be in right now given the reserves, balance sheet, decline in the stock. I could see a couple of hold out analysts cutting it later this week or next as they fail to get assurances out of management. I’d like to play it for a bounce but I’m not there yet.

  161. 161
    bill Says:

    One last thing, ( I promise)

    tph questioning whetether than can grow
    30 % this year

    well, if last year was 2,000,000 then 30 % is 2,600,000

    based on yesterday conf call they are doing 720 k boe for q1 and 4 times 720 is 2880 so what the hell is the problem, lol!!

  162. 162
    Jerome Blank Says:

    Re: #157 stockcharts has a good outline of some of the terms and patterns…


  163. 163
    West Says:

    KOG, here is article from Rocky Mountain Oil Journal about KOG’s offset operators STR development wells. If you go to recent STR presentation and look at slide 16 they have 80,000 acres with most of it under the Lake. Of interest is the acreage horseshoes around KOGs and they want to increase their oil footprint. Of course no one wants to overpay and KOG doesn’t have to sell……………………………….Current Issue – Vol. 90 Num. 9 – February 26, 2010Questar Commences Three Forks Operations
    McLean, Mountrail, and Dunn Counties, North Dakota
    Salt Lake City–based Questar E&P (QEP) has commenced operations at a Three Forks test in the tri-corner area of Mountrail, Dunn, and McLean counties, North Dakota, 4 miles northwest of established horizontal Bakken production at Heart Butte Field. The company has moved in a spudder (Majors rig No. 27) and is drilling surface hole at the MHA #2-06-01H-149-92, se-se 6-149n-91w, Dunn County. Bottom-hole location is expected to be in the sw-nw 1-149n-92w, beneath the waters of Lake Sakakawea. This is the first of two prospects that QEP plans to drill off the same pad. The other proposed test is the MHA #1-06-01H-149-92, se-se 6-149n-92w. This wellbore is planned to evaluate the horizontal Bakken.

    As previously reported in the RMOJ, this activity by QEP is part of two, 1,280-acre laydown units created by the company to evaluate both the Bakken and Three Forks. These new drilling units include sections 6-149n-91w, 1-149n-92w, 31-150n-91w, and section 36-150n-92w. Plans call for the company to drill two tests utilizing the same drilling pad for each unit, for a total of four prospects. Each unit will have one Bakken and one Three Forks attempt. Should these tests become commercial, they would be incorporated into Heart Butte Field. QEP also released the following reservoir, fluid, performance, and economic data regarding the Bakken/Three Forks potential:

    Reservoir Data

    Reservoir pressure:
    5,680 psi

    Gas/oil ratio:
    500 scf/bbl

    Porosity of net pay:

    Thickness of net pay:

    Water saturation:

    Reservoir temp.:

    Drive mechanism:
    Solution gas drive


    Bubble point pressure:

    1,280 acres

    Fluid Data

    Oil gravity:
    43° API

    Pour point:

    Gas gravity:

    Gas BTU:
    1,500 dry

    Performance Data

    4,854 mstbo

    Oil EUR:
    450 mstbo

    Gas EUR:
    225 mmscf

    Recovery factor:

    IPF oil/gas:
    920/460 bopd/mcfgpd

    Pertinent Undiscounted Economics

    Well life:
    31.58 years

    Oil price:
    $56 bbl

    Gas price:
    $6.30 mcf

    Total revenue:
    $20,365,332 (gross)

    Capital cost:
    $6,500,000 (gross)

    Operating cost:
    $2,960,,000 (gross)

    Total sev/adv taxes:
    $2,342,013 (gross)

    Total BTAX cash flow:
    $8,563,321 (gross)

    BTAX payout:
    3.37 years

    BTAX return on investment:

    Six miles west of the active MHA #2-06-01H-149-92, QEP continues to drill ahead at the MHA #1-06-31H-150-92, se-sw 6-149n-92w. This horizontal Bakken attempt, located near the McKenzie county line, is roughly 2 miles northwest Heart Butte Field and nearly a mile south of Lake Sakakawea. Representing the first prospect drilled by the company in Dunn County, the bottom-hole location for this sideways attempt will be one township north in the nw-nw 31-150n-93w, beneath the waters of Lake Sakakawea. Estimated length of this lateral will be approximately 10,000’. All of the current QEP activity in Dunn County is located within the confines of the Fort Berthold Indian Reservation

  164. 164
    zman Says:

    TSO – saw Cramer talking about it. Refiners all up today, it’s the demand being up again for distillate and the gasoline number not backing off much either, was mused about yesterday post. I’ll be watching to see if the group has any kind of follow through.

  165. 165
    zman Says:

    Beige book headlines read positive but market selling off.

  166. 166
    zman Says:

    Our perhaps it was the President’s speech earlier.

  167. 167
    BirdsofpreyRcool Says:

    the sell-off followed the President’s speech. surprised?

  168. 168
    zman Says:

    ARD – NGL comment once they build their own processing plant, it looks like a $16 mm plant cost, takes them from slight discount to NYMEX to a big boost over NYMEX as the get to keep all of the liquids instead of trading them to the processor for their services. Sound like 2009 is a “take the pain” year that puts them in charge of their destiny. Hear and with the electricity shortage that it looks like they will have addressed in 12 to 18 months.

  169. 169
    zman Says:

    167 – ha, no.

    BEXP seeing a bit of pt, not thinking to add it back unless it crunks through $17. Do plan to be long some (besides the common) for Monday just in case they pr some more wells. I do think however it will be the following week or two from now.

  170. 170
    zman Says:

    Ok, finally done with the ARD, just reading some comments on it as well. Best guess is estimates fall here for the next week or so, dead cat bounce of significant size, maybe 5% happens and then dead money until the meet and greet in Tulsa.

  171. 171
    Nicky Says:

    Market held 1116. That could have been iv C. Needs to get going back to the upside.

  172. 172
    zman Says:

    Nicky – Nice call.

  173. 173
    zman Says:

    CPC got back to me on the busted HDD forecast for this week, it is now available as 171, which is 1 HDD over normal and 12 short of last year’s level. This is data for this week, and put us in the running for about a 100 Bcf or just under withdrawal next week. This week, last I checked, was still at 131 Bcf withdrawal. Those two numbers get us to withing about 100 Bcf of the 1,500 trough with basically 4 weeks of winter left.

  174. 174
    zman Says:

    ARD down $3 to LOD. There are some trust issues here between management and the Street on guidance. The more it falls the more I get comfortable in a trade for a dead cat bounce here. There were a number of things on the call that said this is a big deal but that they are on it and will get it solved in a fairly timely fashion. This beating looks overdone.

  175. 175
    zman Says:

    Bill – any thoughts on shipping stocks at present, saw EGLE beat and DRYS was in line. Group seems to be moving a bit here.

  176. 176
    Jerome Blank Says:

    CPE really on a rip today…I’ve been watching trying to get this on a decent pullback…

  177. 177
    zman Says:

    Wow, that is up. Don’t see news other than their release date next week. I had joked with Reef about that being the next big mover about a month ago. Then they got an mms settlement and off to the races.

  178. 178
    BirdsofpreyRcool Says:

    i think CPE is being thrown in with the Ultra-Deeps. They could have acreage in some of the right places, just by accident.

    That said, they want to crawl out of the water and re-emerge as land-dwelling animals.*** Not sure they have the equipment to do that. It would involve evolving… not sure they can make the jump to being a higher Life Form. But, that’s jmho.

    *** sell their GoM interests

  179. 179
    BirdsofpreyRcool Says:

    It’s kinda funny, really. Investors and analysts not willing to give EXXI much (or any) credit for the Ultra-Deeps… but, they are willing to drive the value of CPE up on that. We shall see if anyone wants to buy CPE out of their wet acreage… guess it depends on where it is.

  180. 180
    zman Says:

    BOP – I hear they are putting geos typse on task on their acreage on the Shelf for that purpose. Who knows, maybe they’ll take it private again.

  181. 181
    BirdsofpreyRcool Says:

    Maybe. They are better as a private company anyway. That way, they only screw banks and bondholders.

  182. 182
    BirdsofpreyRcool Says:

    Andy — was ARD available to borrow at Fido? Sure looks like the short-sharks are taking chunks out of their side right now. Ouch.

  183. 183
    zman Says:

    Speaking of screwing up, I will circle back to WRES in due time to figure out what I botched there. 30% up but was looking for better than that today. Good to see the operations working but when I go back in it it will be for the right reasons and not a transition to them.

    TAT looking to make a new closing high on the year, more work coming on that name.

  184. 184
    zman Says:

    Tempted to take a piece of the ARD, when it string together a few hours of sideways trading I imagine someone will try to burn those shorts back.

  185. 185
    jiveyjr Says:

    on WRES…I read the press release again carefully and noted that the change in pricing methodology from year end pricing to monthly avg. had the following effect:

    135.4 Bcfe $443.1 million using old price method..

    97.5 Bcfe and $241.3 million using new monthly pricing method….

    also noted that some gas reserves booked last year fell out because they were no longer economic….anyhow, was surprised by the big effect monthly pricing had and also surprised that they said reserves were now 50/50 more or less oil vs gas….

    thought the stock held up pretty sell today…I sold a chunk here at the office and also thought operationally things still sounded okay…just better places to be for now as Z said….

    not like we haven’t had plenty of winners….

    nite all

  186. 186
    bill Says:

    please explain why a 15 cent miss is worth 10 bucks and 1/2 billion in market cap. This analyst says its worth 7..

    Caris & Co. analyst Ann Kohler dropped her rating on the stock by one notch and cut her price target to $37, down from $44.

    Production problems related to electric outages increased significantly in the fourth quarter, and costs are rising, she wrote.

    “Given management’s near singular focus on production growth at the expense of understanding and addressing the infrastructure shortfalls, ARD has been placed in the ‘credibility penalty box,’ she wrote.

  187. 187
    bill Says:

    175 I was on the egle call this am

    Id stay away from all names at the moment. Egle had a number of 42 m ships on order that are being delivered that are worth 32 m and no banks are lending, the other issue is management is grabbing all the earnings for themselves. i would not touch drys under any conditions as the ceo is a madoff type self serving crook

    Unlike the EP names, the shipping stocks havent taken their one time asset write downs
    + for vessals overstated on the balance sheet and the highly levered names really dont have a positive net worth.

    One name I like and feel is being well run is Navious NM but id stay away from this name and wait for a pull back.

    I think DSX is being managed by good mgt as well

  188. 188
    bill Says:


    Do institutions just dump when a name goes down? Maybe its margin related selling..Im baffled. TPH didnt give them a vote of confidence. i guess they need to raise some money to curry tph favor

    Ard had some operational issues, so what.

    The company is debt free and 90 % oil. How many E&P companies are debt free.

    I know of 2 names MCF and ARD

    In the conf call they stated

    that jan ran 7500 boe / day
    feb was 8000 boe /day
    and march was currently at 8500 day

    do the math thats 720,ooo boe and 48 m in rev for q1

    they will beat in q1 and beat big.

    unlike others, they live within cash flow

    They prudently cut back production when oi; fell to 30 bucks, that was a good move. At 80 its a cash cow

    I admit, I got into this name for a trade. it looks like Im going to be holding this for a while.

  189. 189
    bill Says:

    ty for 173

  190. 190
    bill Says:

    Question HDD and impact to withdrawals

    What is breakeven number?

    I see

    2/13 was 239 and we had a -190 then
    2/20 was 208 and we had a -172 then
    2/27 was 204 and the forecast is a -130

    Wait a second hdd only fell 4 and that impacts the weekly by 42??

    This week the forecast is 171,

    Z How do you model the HDD and the number tia

  191. 191
    bill Says:

    comrade salazar..

    While oil and natural gas producers, particularly independents, would disagree, Interior Secretary Ken Salazar Wednesday said that proposed onshore and offshore fees and taxes in the Obama administration’s budget for fiscal year (FY) 2011 “are not going to put anybody out of business.”

    Testifying before the Senate Energy and Natural Resources Committee, Salazar said, “We are not, as some people would claim, taxing the oil and gas industry to death.”

    Sen. John Barrasso (R-WY) accused the Obama administration of trying to “drive the [natural gas] industry into the ground” with new fees and taxes. He said revenues from oil and gas drilling in Wyoming were $93 million in 2008, and dropped to $10 million last year. Barrasso attributed the drop to restrictive Obama administration policies.

  192. 192
    Jerome Blank Says:

    Good evening…updated charts with comments on…


    Double “star” formation in the $spx…not able to hold on to the highs…


  193. 193
    BirdsofpreyRcool Says:

    JB — thanks!

    is a double star bad??

  194. 194
    West Says:

    Bill just a couple of thoughts on ARD. The management has to be viewed as not taking care of business and overwhelmed by problems that they should already have programs in place to resolve . I was recently in this area and it is amazing the amount of drilling, completions, pipelines and flaring of gas that is taking place. The Electric company use to be a Co-op and converted to a stock company and has been reluctant to make large capital investments and has had some financial problems during the recent downturn. So there will be no help from them in the near future. Several operators are in the process of building their own gas powered electrical generation plants but as ARD alluded to this is a regulatory nightmare and at least a 12 to 18 month process. Just the shear amount of capital that is being invested in this area and resulting increased production by independents and to name a few, CWEI, EAC, HES, EGN, CVN, WLL and ARD has overwhelmed the infrastructure. It takes less than a month to drill and complete a well. To design, engineer, obtain regulatory approval and build a gas gathering system can be as short as 6 months to years that evolves with the on going field development. In Texas the Railroad Commission will not allow you to indefinitely flare or vent large quantaties of gas. So if you don’t get hooked up you have to shut in well production. So as ARD has said they are 12 to 18 months away from a near term solution…………………………As for the stock action in ARD sure it was an overreaction to the down side but remember they are many people that want the price of stocks to go down. There were probably a tremendous number of stops activated with the drop adding even more selling pressure. Also many money managers were forced to sell their positions with a 25% drop in price, thats just part of their job to conserve capital. Just my opinion but they will not be in any hurry to get back in the stock after that type price action. If you have a long term horizon this is probably a good buying opportunity. I bought some yesterday thinking that the selloff was over done and was rewarded with an additional 10 % reduction in price today. I would have to say that their conference call was very uninspiring and unpolished which didn’t help the matter. Sometimes these engineers have a hard time with these CCs ……Price action looks like a well executed short shark attack or computer programs that kicked in and that kept working. Sometimes fundamentals don’t have anything to do with stock price, this is something that we all have experienced and didn’t enjoy. This will probably be daytraders paradise for the next little while so be aware.

  195. 195
    电动调压器供应商 Says:


    […]Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Wrap – Week Ended 03/05/10[…]…

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