Week of 3/22/10

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I'm on vacation this week. Have a great week, I'll be infrequently in and out and will try to get to pressing things after hours.

94 Responses to “Week of 3/22/10”

  1. 1
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    Is it the end or just the beginning?

    “You can’t deliver on health care. We’re not going to pass universal health care with a 50-plus-one strategy.” The President made that statement in an interview while campaigning in October 2007. At the time, he also noted that “You’ve got to break out of what I call the – sort of – 50-plus-one pattern of presidential politics, which is you have nasty primaries where everybody’s disheartened, then you divide the country 45 percent on one side, 45 percent on the other and 10 percent in the middle.” The obvious irony is that the debate on health care reform personifies the 50-plus-one pattern and takes it to an extreme. Going into Friday, it was widely expected that the Democratic majority in the House would resort to the backdoor measure “Deem and Pass” so that individual Congressmen would not have to be on the record voting for the Senate bill. It does not matter if one is for or against health care reform, when the politics sink to that level, you risk creating more damage than good. The fact that House leadership seriously entertained this measure and it was not disavowed by the President is further evidence that Washington is as broken as the populace believes it is (maybe even more so). Cooler heads prevailed on Saturday after Democrat Dennis Cardoza of the House Rules Committee, who supports the legislation, asserted that based on principle alone he would vote against any “Deem and Pass” measure. In addition, those opposed to the bill made numerous assertions that the constitutionality of passage by such means was questionable. The House leadership finally recognized that such tactics would cause more harm than good.

    Since “Deem and Pass” appeared to be the plan as of the close Friday, many market participants were expecting that the House measure would be successful. The “Deem and Pass” debate illustrates the level to which the politics of health care reform have degenerated. The House is voting on legislation the Senate has already passed, but if introduced today, would not pass the Senate and would be unlikely to pass future compositions of the Senate. As Congress goes one way, the country is going another. The debate today centered on rules and procedures. Needless to say, the manner in which this legislation if being passed is unconventional. The House is voting on the very same bill that the Senate passed (which the House leadership bitterly criticized at passage), and then will be passing reconciliation amendments to it after the vote.

    The number of high profile kickback earmarks and the need to eliminate them in the bill have also added to the confusion. Constitutionality issues have been raised about both aspects of the bill, as well as the process. Senate Republicans are also seeking to use parliamentary procedures to stall/halt the reconciliation amendments which the Senate has yet to vote on. With the narrow margins by which the bill may pass and both sides seeking any technicality to advance their position, we suspect there will be a push by Republicans to get at least some part of the legislation in front of the Supreme Court. Although it should not matter, it is hard to forget that the President publicly embarrassed the high court at the State of the Union. Today the opposition’s mantra was “Kill the Bill,” tomorrow it will be “Repeal the Deals.” The Republicans will make repealing this health care bill the focus of the election. In a 2400 page bill, they will likely find some good fodder. Revoking or in the case of the court overturning, health care after it is implemented will be a tall task but even though the measures needed to pay for the legislation will commence quickly, most benefits will not start until 2014. One must ask how the already disenfranchised electorate will feel six months from now. We suspect the President’s campaign comments about the challenges of passing universal health care in a 50-plus-one manner were correct. Rather than believing this is the end of the battle for health care reform, we think it may be just the beginning of the phase where it gets ugly.

  2. 2
    milepost_43 Says:

    From IV MB EXXI Mar 24 presentation


  3. 3
    skimo Says:

    7:11AM Anadarko Petro provided an update on its successful deepwater drilling activity in the Gulf of Mexico and Mozambique. (APC) 69.99 : Co announced the Shell-operated Vito appraisal well in the Gulf of Mexico encountered more than 600 net feet of high-quality oil pay in thick subsalt Miocene sands. The Vito appraisal well has been drilled to a total depth of approximately 31,000 feet in approximately 4,050 feet of water. Another sidetrack appraisal well is planned for 2010 to further delineate the discovery. Also in the Gulf of Mexico, Anadarko announced that it was the apparent high bidder on 48 deepwater tracts in the Central Gulf of Mexico Lease Sale 213. Bidding alone and with partners, the company was successful on 48 of 53 total bids, representing expenditures of approximately $128 million net to Anadarko. The bids are subject to approval by the U.S. Department of the Interior’s Minerals Management Service

  4. 4
    PackMan Says:

    EIA data flawed


  5. 5
    elijahwc Says:

    COF Southcoast comment this am:

    Capital One Southcoast: Safe Stocks in a Pull Back?

    With bearish weekly nat gas inventory data and a rising gas rig count, we are increasingly concerned about a double dip in gas prices and the E&P stocks. We continue to think that natural gas will be $6+ long term, but we are concerned about near-term weakness.

    In our coverage group, the following stocks have upside potential to our NAV assuming $5 long-term natural gas and $80 oil: HK (cheap stock), PXP (under-appreciated discoveries, oil leverage), COG (cheap stock, Marcellus still works at $5 gas), ARD (oil leverage, beaten
    up), CRK (no debt), REN (no debt, oil leverage).

    In our coverage, the following stocks have more than 50% downside potential assuming $5 long-term natural gas and $80 oil: ATLS (levered), KWK (levered, Horn River barely economic at $5 gas), CRZO (levered), GMXR (levered and E TX Haynesville and Cotton Valley are barely economic at $5 gas

  6. 6
    tomdavis12 Says:

    BOP: ESV sold two 30 year old rigs that had been stacked for $95M. Comments from CFO J Swent ” Looking to upgrade our JU fleet and add to our deepwater rigs.” That seems to be the path of the entire group. I do not expect significant outperformance to come from this sector until NG can maintain $6.

  7. 7
    tomdavis12 Says:

    BOP: A seasonal trade for you. From the March option expiration to Memorial Day the OIH (reflecting strong gasoline season) has done this ’09 +28.69, ’08 +35.46, ’07 +31.18, ’06 +14.17, ’05 -.04. And if this does not work you can follow the most astute financial advisor I know who says “Sell! Mortimer Sell!”

  8. 8
    BirdsofpreyRcool Says:

    Thank you, Randoph.

    Seeing comments that gasoline prices are inching up. The west coast 1-2-3 crack spread stand just under $15.50/bbl. Pretty much at the high for the last 6 months, but no where near the $20+ of last April. Seasonality is on your side, however. But, lots of moving parts in the refinery industry. More than 2 or 3 yrs ago.

  9. 9
    BirdsofpreyRcool Says:

    Credit markets pretty quiet this morning, with stock futures firmly signaling RED and energy prices weak this morning. Just to give a numbers update…

    IG +93 bps (we rolled into a new index, which is about 5 bps wider than the old IG13)

    HY 99 1/4 pts

  10. 10
    BirdsofpreyRcool Says:

    Energy Market Insights from Madison Wms


    Energy Sector Overview: Oil Service Stocks (OSX Index) fell (2.7%) on Friday & (5.2%) over the past 2 trading sessions, while E&P Stocks (EPX Index) fell (1.9%) on Friday & (6.1%) over the past 5 trading sessions. The group has been supported by steady to higher oil prices, but hurt by a (30%) YTD decline in natural gas prices:

    · US Natural Gas Storage – surplus dramatically reduced by a very cold winter, currently at 1.61Tcf, 73Bcf above the 5-yr average & on pace to end the withdrawal season at ~1.55Tcf (73Bcf above average)—not horrible, better than last year

    · US Gas Rig Count: 939, +9.6% y/y & +40% from July lows, while the horizontal rig count (both oil & gas) is up +63% y/y to 711—abnormally high given current gas prices, largely due to a high degree of “forced drilling” to hold acreage acquired over last several years

    · US Natural Gas Demand: entering the “shoulder season” between high heating-demand season & the high cooling-demand of summer; DOE recently increased 2010 demand forecast by +0.7% or +420MMcf/d to 62.93Bcf/d, including Industrial Demand +0.5% or +80MMcf/d to 17.04Bcf/d & Power-Gen Demand +0.86% of +160MMcf/d to 18.67Bcf/d (+3% y/y)

    · Drilling Economics: a substantial majority of non-shale U.S. gas production (~85% of total) needs $7+/Mcf NYMEX prices to be economically viable & support cash flows which cover annual capex budgets

    · Production Decline Rates – industry-wide average decline rates of ~25-30%/yr = 15-18Bcf/d of yearly production losses; currently, ~20% of gas drilling is focused in shale plays which have higher IP rates, but also much higher decline rates of 70-80% in yr 1 – gas shale play activity will continue to grow as a % of the total, which will increase the overall average industry decline rate

    Crude Oil – April Nymex prices down this morning, after falling (1.8%) or ($1.52) to $80.68/B on Friday – prices continue to take cues from the US Dollar (DXY Index), which rallied +0.66% on Friday & +1.7% last week—recent strength driven by a surprise interest rate hike in India that sparked concerns that other emerging markets may tighten & attempt to curb growth

    Natural Gas – April Nymex prices are a bit weaker this morning, after bouncing off the $4.05 intraday lows to advance +2.0% or +$0.08 to $4.17/Mcf on Friday—decent oversold bounce, especially given the milder weather forecasts, bearish EIA weekly storage number & another increase in the BHI weekly gas rig count; the 12-Month Nymex Strip gained +$0.09 to $4.84/Mcf & Henry Hub cash prices fell ($0.18) to $4.02/Mcf

    · BHI Weekly US Rig Count: US rig count +20 to 1427 (+31% y/y), US land +21 to 1362 (+31% y/y), Gas rigs +12 to 939 (+9.6% y/y), Oil rigs +8 to 474 (+120% y/y), Horizontal rigs +9 to 711 (+63% y/y), OK +5 to 115 (-0.9% y/y), TX +5 to 595 (+38% y/y), LA +4 to 213 (+61% y/y)

    · Coal-to-Gas Switching – at current gas prices of ~$4.00/Mcf, likely begin to see at least a moderate level of fuel switching in power-generation sector, perhaps similar to March ’09 when ~2.5Bcf/d of incremental gas demand came from the power generation sources

    · EIA 914 Data (Jan) – report due out on March 31—we expect a bullish number that reflects a further decline in US gas production; recall, the Dec EIA 914 data (reported 2/28) was quite bullish & reflected a resumption of the decline in US production— US Lower 48 onshore production declined (0.9%) or (0.51Bcf/d) to 56.17Bcf/d vs. Nov; US production is down (0.76Bcf/d) below Feb ’09 peak of 63.58Bcf/d; State of LA was up +0.8% or +0.04Bcf/d to 5.18Bcf/d, via growth in the Haynesville & State of TX was down (0.3%) or (0.06Bcf/d) to 20.12Bcf/d, driven by declines in Barnett & Cotton Valley

  11. 11
    BirdsofpreyRcool Says:

    TechTrader out with a 55/45 SHORT call

    HeadTrader says to watch the banks to see if they turn out… if not, he would short the rally off the open for a few points.

  12. 12
    BirdsofpreyRcool Says:

    HT pointing out that JPM is green. XLF trading at the high for the day. Watch if these hold here.

  13. 13
    elduque Says:

    SLB CEO says current short-term weakness in gas prices should rapidly correct from higher demand and higher decline rates.

  14. 14
    elduque Says:

    Anybody know of any reason for the crappy performance of HK?

  15. 15
    john11 Says:

    08:31 ET 3/22/10 Macquarie Research upgrades XOM; downgrades CHK, GDP, HK, others

    Exxon Mobil (XOM) upgraded to outperform from neutral
    Chesapeake Energy (CHK) downgraded to neutral from outperform
    Goodrich Petroleum (GDP) downgraded to neutral from outperform
    Petrohawk Energy (HK) downgraded to neutral from outperform
    Marathon Oil (MRO) downgraded to neutral from outperform
    Rosetta Resources (ROSE) downgraded to neutral from outperform

  16. 16
    Nicky Says:

    Morning all.

    #1 – very good post BOP.

    Anyone English like myself I think is just standing back in wonder and amazement wondering why anyone would want the system we have had in place for decades. Our system in Britain is totally outdated, antiquated and cannot be paid for by the country. Its hard to imagine that anyone in the US will think last nights decision was a good one in decades to come.

    The overt tactics used to get the vote last night were even more shocking. And what I simply don’t get is that the majority of the electorate did not want it so why risk the wrath of the electorate. So I presume the answer to that is that the electorate does not understand and we know what is best for them and in time they will see that. However as most of Congress had not even read the Bill in full how did they even know what they were voting for.

    What I find more of a concern is Obama himself. I am struggling to find the right words but has becoming President of the United States gone to his head – the word dictator springs to mind.

    Anyway not meaning to get all political and a few TA thoughts.

    1152 is the line in the sand this week. There was always a chance we had a brief new high ahead. I am not sure we see it before the correction continues.
    Its hard to make sense of the indices today in light of the earlier weakness in energy, the continued weakness in metals. Will be back with more shortly.

  17. 17
    BirdsofpreyRcool Says:

    Nicky — thank you for sharing your thoughts on the British healthcare system. If you just read our media stories, you would think that is the way we all should go. I am astonished at this abuse of power. Even more so by Pelosi, than Obama. The corruption on display was mind-blowing.

    That said, economic data are good, Greece getting fixed (for now). The melt-up in stocks continues. It doesn’t feel like it should… but there is a lot of money on the sidelines. And we are in a recovery. However weak or slow it is.

  18. 18
    elduque Says:

    MMR and SD in green.

  19. 19
    BirdsofpreyRcool Says:

    CitiBank up almost 4%

  20. 20
    BirdsofpreyRcool Says:

    APC note from TPH… 600 FEET OF OIL. That is a lot. wow.

    APC – increasing NAV by $2 to $85 as Vito appraisal well finds 600’ oil (vs. 250’ in discovery well)… prospect reaching 500mmboe vs. previously thought 250mmboe… drilling 3rd appraisal well ~1mile south/west that could add ~$1/sh to NAV… continue to execute and have a strong pipeline of exploration ahead…

  21. 21
    Nicky Says:

    BOP re #17 – our hospitals resemble prisons, in fact your prisons are probably nicer! They are bleak beyond description truly. In addition if I were there now and I called to see a doctor the earliest I would get an appointment is a weeks time. It is a system stretched to its limits.

    I think any downside with the markets is limited even once we see a correction. I am looking at a gap that needs to be filled at 1127 on the SPX but we now have strong support between there and 1100.

  22. 22
    cargocult Says:

    BOP-why do you think APC is trading at such a discount to NAV, and what will have to happen for this to change.

  23. 23
    BirdsofpreyRcool Says:

    The energy sector isn’t offering short-term traders much of interest. Earnings season over, shoulder months in nat gas usage, nat gas prices hovering aroung $4.12… a number of “very smart, nimble hedge funds” have found it fairly easy pickings to make $$ shorting energy stocks. Especially the really gassy kids with less popular CEOs. Trades have a way of working, until they stop working. You could see the sector bounce back fairly quickly 10% or so as in the longer run, the sector tends to be driven by oil price headlines, not nat gas. And oil seems to have found it’s new neighborhood in the $80-ish block. Seems like a good place to live for a while.

  24. 24
    elijahwc Says:

    APC: Citi does a ditto of TPH note in # 20

    Flash: APC: Successful Vito Appraisal in Gulf of Mexico Sets Up Mega-Project

    Vito Appraisal Better Than Expected – Following Anadarko’s July ’09 deepwater Gulf of Mexico Vito discovery (APC 20% WI) in Mississippi Canyon that hit 250 net feet of oil pay, a Shell-operated appraisal ~1 mi away encountered 600 net feet of oil pay. Today’s results increase Vito’s oil potential to 300-500 MMBOE, perhaps more, or net to APC up to 4% or more of its total year-end proven reserve base.

    Sub-Sea Tieback Most Likely Development Option – Vito is located within 13 mi of Shell’s existing Mars and Ursa platforms, and thus an expansion of and tieback to one of these facilities is the most likely development plan with first oil in about 4-5 years. The Jim Thompson rig is expected to stay on location to spud another appraisal, with project sanction likely following results from the second appraisal.

    Additional Gulf of Mexico Acreage – Anadarko was the high bidder on 48 blocks for $128 million in last week’s Minerals Management Service (MMS) lease sale in the Gulf of Mexico. This included Atwater Valley Block 18 for $28.7 million located south of Vito, which may be a continuation of the same geological trend.

    Mozambique Update – Anadarko also provided final drilling results from its earlier Windjammer discovery (APC 43%) offshore Mozambique, adding 76 net feet of natural gas pay to its earlier disclosure of 480 net feet. Total gas potential of 1-2 Tcf is likely sufficient for a small LNG project. The Belford Dolphin rig is currently moving south to spud its Collier prospect within the next two weeks.

    Exploration Pipeline – Anadarko is drilling Dahoma (31% WI) offshore Ghana, and Heidelberg appraisal (44% WI) in the Gulf of Mexico with results for both in Q2.

    Reiterate Buy/High Risk Rating – With a 12-month target price of $80/share

  25. 25
    Nicky Says:

    BOP – I thought the Greece problem was back on the table. CNBC reporting they may need to go to the IMF and this from Bloomberg:


  26. 26
    DrLink Says:

    I’m totally AGAINST Government run health care but at the same time must say the current situation is also “broken.” My friend took his wife to the emergency room in Newport Beach, CA two weeks ago. Let’s just say the room was filled with people that had the appearance that they were not citizens of our country, nor did they look like they could pay for any care. He had to wait three hours until his wife was moved to a bed. She only spent 4 hours in a room and received pain medication and was released. After paying the doctors fees he got the bill from the hospital….it was $1500. He called up the hospital and said “Why did you not submit the bill to my insurance?” They said they did…the bill was $9400 and $1500 was his portion. $9,400 for four hours laying in a bed….please!!! Of course he was subsidizing the 40 people in the waiting room I guess. Sorry for the off topic but it’s a slow board today.

  27. 27
    Nicky Says:

    This is going to be the next shoe to drop imo:


    Apparently CNBC have given Rick Santelli an extended leave of absence after his fracas with Steve Liesman last week. Pity as he was the only word that ever spoke a word of truth but then i guess thats the last thing they want people hearing.

  28. 28
    Nicky Says:

    DrLink – I agree – changes are needed. But let nobody be under the illusion that the British way is the way to go. The care may be cheap there but you will die whilst you wait to get it!
    Out of interest is there anywhere in the world they do have an answer to the health system?

  29. 29
    Jerome Blank Says:

    MMR…intraday update…classic “bear trap” trading environment…MMR trading down and just printed the P&F sell signal with the $14.50 print, but has been basing near $15 most of the morning, consider holding longs from down hear until $14.50 clearly starts to break down…

  30. 30
    Popeye Says:

    DrLink that is my hospital and your description of the patients also applies to the doctors, nurses and staff.

  31. 31
    Dman Says:

    Nicky – two points:

    1. I can’t see any way in which this health care bill resembles the UK system.

    I don’t mean that this bill is better. It seems awful to me. I just can’t see why you claim it has similarities. In the UK, the whole system is paid for by taxes. That is, you pay the government and you get your healthcare.

    In this bill, as I understand it, individuals will get forced to pay what amounts to taxes to private companies. I can understand why that would get libertarians all riled up. It’s one thing to be forced to pay taxes to the king (ahem, …er .. I mean the Government. But to be forced to pay another private party boggles the mind.

    2. Do you really not understand why people want to change the system and why the (nonexistent) public option gets majority support it the polls?

    In the UK and other Western countries, there is no such thing as “well sure you paid, but now that you’re sick we’ve decided to drop your cover.”

    This is the thing that truly amazes me about the US system. Even those who are paying top dollar for “insurance” can find that in reality, they have no healthcare. None. And once your company decides that they don’t like you anymore (because you made the mistake of getting sick) then good luck getting another company to insure you.

    It is this mendacious aspect that is unique in the developed world. No other Western country tolerates such behavior. Politicians would simply get lynched if anyone tried to get away with that.

    There is also the fact that a lot of people don’t even have the privilege of playing “insurance roulette” because they simply can’t afford it. That means children are condemned to illness and presumably to death in some cases, purely because their parents are poor.

    So I’m just saying you don’t have to look to hard to see why people want change.

    As for *this* bill, all you need to know is that UNH popped nicely on Friday when it looked clear the bill would pass. This follows about a year-long rally as it became clear that contrary to his election rhetoric, Obama was *not* going to take on the insurers. The insurers are ecstatic about this bill and why not? They now have new “customers” being coerced into giving them cash!

  32. 32
    elduque Says:

    BOP are you still expecting positive news out of MMR/EXXI tomorrow?

  33. 33
    andy Says:

    DrLink – had to take my son to the emergency room last fall cause he got knocked a little woozy at football practice. tried to tell the trainer he was ok, but she insisted on it, saying the special football insurance would cover it. there was very little waiting, saw the doctor for about 3 min, mostly talking about football, and got a note saying he could return to practice. got a bill for $450 for the er and $150 from the dr. had trouble getting ins to pay and went to the hosp to tell them was still trying to get the money from ins. she then told me if i paid right away it would be a total of $250 for both. declined, and then she told me that ins would not pay the full amt and that i would have to pay the diff, even if they pd more than the $250. told her that was bs and not to bother calling me for the difference!! ins ended up paying $260, and now have a collection agency calling me for the diff!!! so i assume they jack up all the bills and collect what they can from ins companies, and still bill you.

  34. 34
    Nicky Says:

    Interesting insight, based on one state that tried the mandatory healthcare insurance…. the test balloon that is Massachucetts… “Since adopting universal coverage, insurance premiums in Massachusetts are the highest in the nation and the state is now poised to impose cost controls in an effort to stop the financial hemorrhage, says Don Brunell, president of the Association of Washington Business…”

  35. 35
    DrLink Says:

    Popeye, I don’t get your point about the doctors, nurses etc etc. My wife is one half Mexican and one half Russian. I’m not a racist, and these days one is accused of not being sensitive and politically incorrect to mention the two words “illegal immigrants” and their impact on the finances on California education and health care, so I was trying not to stereotype, but my friend said their was no way these people could pay that king of bill that he was being forced to pay….of course we won’t talk about the public unions that are also sending us to the poor house.

  36. 36
    Jerome Blank Says:

    BEXP…nice intraday move off that $15.25 support level…

  37. 37
    cargocult Says:

    I’ll say it again, we are already paying for the uninsured by way of higher premiums on the insured. The uninsured are not being turned away from emergency rooms which are the most expensive way to provide medical care. Interestingly, the opposition to this bill never presented a positive alternative vision, only dredged up tired accusations of socialism and government ineptitude. Maybe this signals the end of Newt’s marketing leadership.

  38. 38
    Dman Says:

    #28 Good question. It’s interesting that the “debate” always refers to the UK system, which is probably the weak sister of the Western public health systems. You can take a look at a long list of countries:


    etc etc.

    Probably none are perfect, but they all have a decent shot at solving the problem. Of course, the reality is that unless you have infinite resources, someone somewhere has to call a limit to what treatment is available. In the US, it is an insurance company, not a doctor, who makes that call.

    In the systems listed above, it is the doctor who makes the call, bearing in mind that their hospitals don’t have infinite budgets.

    If a new experimental drug exists, but it will cost a $billion (extreme but not totally unrealistic example), well the public system can’t provide it. But in reality only billionaires can ever get such options. And of course, if you happen to be a billionaire in a country with a public health system, you can always spend your $billion on that drug.

    It is important to realize that there are always complaints about any health system, due to the infinite resources nonavailability problem. But I would just point out that in no other Western country is there any political pressure to adopt a US style system.

    Even in the UK, despite all the complaints about the NHS, nobody is demanding a US system. Actually I hear mixed reports about the UK system. Some glowing, some like Nicky’s.

  39. 39
    elduque Says:

    I have family in Canada. They are all satisfied with the system. They realize that it is not the same as here, but everybody is insured.

    What is lacking in this country is compassion.

  40. 40
    BirdsofpreyRcool Says:

    elduque — MMR has to give an update on Davy Jones… it would be consistant with what they have been doing with operational updates. As the last string of casing has been set and cemented at DJ, at the very least, I would expect an update on that well. Any day now.

    They might be waiting until they get an idea of how long it will take to get a wellhead for DJ. With a wellhead in place, MMR could run a production test. That is the best way to conclude what and how much that well can contribute. It also allows MMR to go partner-shopping with a glossier marketing brochure. However, given MMR’s cash flows and capex commitments, perhpas they can’t wait that long (thinking Oct, maybe, for a 20k psi wellhead to arrive). So perhaps we will hear about a deep-pocket partner sooner-than-later.

    Wouldn’t THAT be a nice “snapping sound” emminating from Jerome’s bear trap!

  41. 41
    BirdsofpreyRcool Says:

    eldugue — lack of compassion? I hope you don’t seriously believe that statement.

  42. 42
    elduque Says:

    Thank you re 40. Is there anything that could go wrong with DJ operationally? Or does the fact that the casings have been set and cemented remove the risk.

  43. 43
    Dman Says:

    BOP – #41 see 3rd last paragraph in my #31

    I think that might be what elduque is driving at.

  44. 44
    Dman Says:

    BOP – would GDP be amongst your list of CEO-challenged energy shorts?

  45. 45
    Patipati Says:

    Healthcare is a very diff. subject. In Napa we have Clinic Ole, funded by the vintners and the Napa Valley Wine Auction. It serves basically Hispanics, illegal or not; pay by ability; and offers care for just about everything. They refer patients out to specialists if necessary.

    A friend, newly retired board certified pediatrician, offered his services for free 1Xweek when he moved here, and they would not take him because he did not speak fluent Spanish.

    I do not know how this bill will affect them; maybe they have to become an HMO.

  46. 46
    Dman Says:

    #26, #35 It’s true that the healthcare issue can’t be divorced from the fact that the US has been exporting jobs whilst importing people for the last 30 years. A policy that points toward poverty. And a country in poverty won’t have a good health system no matter what Congress passes.

  47. 47
    Dman Says:

    Nicky – how do you like the NG chart for a long trade around about here? Or to put it in the alternative, do you think it wants to take a look at a retesting a 2-handle ?

  48. 48
    BirdsofpreyRcool Says:

    elduque — #42. I hestitate to say that “all risk has been removed.” But with the last 5k ft (or so) of open hole now behind steel and cement, I can’t think of anything near-term. I will be looking for an update tomorrow morning. MMR presents at HW tomorrow and I have to think they will talk about the status at DJ. And since HW is not broadcast, seems to reason they would put out a PR. The CEO is quite the showman… I have heard he has a “knock your socks off” presentation on DJ. The timing of a PR would be perfect tomorrow morning.

    That said, things sure don’t always turn out the way I think they should. ha.

  49. 49
    BirdsofpreyRcool Says:

    Dman — I have never met with GDP mngmt, so no personal insight there. People sure hate seem to be leaning on the natty gas producers pretty hard, tho. Does GDP produce much oil/NGLs? Are they funding 2010 capex out of cash flow? Is production headed up and to the right this year? Answering “no” to any of these questions puts you in the Short-Sites these days.

  50. 50
    BirdsofpreyRcool Says:

    “hate seem”…??

    was struggling with how to put that… “hate” or “seem to be leaning”… kinda just squished the two statements together in an ungainly way.

  51. 51
    PackMan Says:

    yeah, everyone it seems has their horror stories about DR / Hospital / Insurance billing and reimbursement.

    I won’t bore you with my stories.

    Suffice it to say however, if I don’t like the bill or the reimbursement, I tell the Dr and / or Ins Co. or Hospital to work it out amongst themselves.

    If you hold firm on this stuff, you can beat them back good. Its just an enormous pain in the neck however.

    It happens with everything. Eyeglasses; Eye Dr. appointments; Dentists; Crowns; ER’s etc. The hospitals will bill you $6 for a Tylenol if you let them.

  52. 52
    Nicky Says:

    Dman – I suppose the similarities with the UK is that everyone is going to be forced to pay. We paid the government in the UK here it is going to be the insurance companies. And I understand here that if you don’t pay they are going to fine you and take it straight out of your bank account! Same as the IRS.

    As to why don’t I understand that change is needed – well I actually said I could see why people wanted change.

    As to the fact that in the UK you will get treated one way or another. Under our NHS system in the UK the waiting lists run years. The treatment when you get it is not top notch, the facilities are at best third world. Sure the Brits say they love it – the majority think its free when in fact its not! And ultimately the UK just cannot afford it hence all the run down facilities and the waiting lists. Also if you are an immigrant in the UK (illegal or not) you are entitled to treatment as are the rest of your family wherever in the world they are located! It is a system that is totally abused.

    Now if you go privately in the UK it is actually more expensive than here. Since we have lived here occasionally my family has to be treated for something and it is less than the deductible. I actually think that the charges to see a GP are extremely reasonable considering the service and facilities I get here. Where it all goes to hell in a handbag here is the ‘bigger stuff’. For example my daughter was treated for a kidney infection. She spent a week in a walk in clinic being treated 24/7. At the end of that week the bill was around 3k. The doctor told me that if they had had to admit her to hospital I would have been looking at nearly 40k.
    So therein seems to lie the problem here.

    At the end of the day however, health care is going to cost. I think the UK has proved that if you pay very little you are likely to pay the price. Subsidized health care may sound like a great idea but with an increasingly elderly population it just doesn’t work.

    Okay so the proposals here are different. But if people could not afford it before then how can you ensure they will be able to afford it now? And will it lead to a cut in services if people are paying lower premiums? I don’t profess to know any of the answers – to be honest I am not sure there is even an answer because at the end of the day most likely we all would like to pay a lot less for healthcare but we do not want to see a compromised service.

  53. 53
    Nicky Says:

    re nat gas. I think it puts in a low around this area – I don’t see it below the 3.8 area.

  54. 54
    PackMan Says:

    41 Elduque; I second what BOP said; as John McEnroe would say “You cannot be serious !”

  55. 55
    PackMan Says:

    BEXP moving nicely off its lows …

  56. 56
    Dman Says:

    PackMan #54 – Can I just say that John McEnroe seems an unlikely ambassador for compassion 🙂

    I’ll never forget the time that he was caught out counting his tantrums. They changed the rules on the number of warnings you get before forfeiting. I think it went from 5 to 4, but poor John hadn’t kept up with the rules.
    So after getting a few warnings, he still thought he had another tantrum to spare. Bu when he threw it, they threw him out of the tournament! He protested that the thought he still had one tantrum left. I’m sure *that* protest was sincere.

    But all of the apparently sincere uncontrollable rage he produced on court was actually just cynical gamesmanship.

    There’s yer spokesman for compassion.

  57. 57
    BirdsofpreyRcool Says:

    ha, Dman… don’t think John McE is a spokesman for “compassion.” But his is highly quotable in his quest for “is that really a serious statement?”

  58. 58
    RMD Says:

    CMT for BSJ from Canaccord: EV/proved boe $8.68 vs. $16 for senior producers and $81 (?) for intermediates, so acq. would be accretive. Target C$1.75 equals proved developed NAV; 2P NAV is $8.48.

  59. 59
    PackMan Says:

    EXXI has had some weird movements today …

  60. 60
    jiveyjr Says:

    I don’t think the HK chart even qualifies as a “flying T***” formation…I still hold a few painful shares of that

  61. 61
    jiveyjr Says:

    BEXP bouncing off the 50 day sma on nice volume…wish I’d bought mine down there but no not me; I get too excited most of the time to trade rationally

  62. 62
    BirdsofpreyRcool Says:

    Pack — sure would like to see EXXI close above 18.87 today. I show that as the 50 day smoothed moving average.

    An awful lot of stuff trading weird today.

    HK… didn’t think we would see a 19-handle on that one anytime soon. Nat gas won’t stay on the Hate List forever. It was pretty darn cold in Dallas this weekend… even though it was sunny and mild in Washington DC and NYC.

  63. 63
    West Says:

    JB, thx for the great charts. voted

  64. 64
    Dman Says:

    Interesting view of the healthcare bill from a conservative viewpoint:


    I’d like to find out more on just how tight the crackdown on insurance company misbehavior will be. If it is serious, then this guy might have a point. Call me skeptical though.

  65. 65
    Dman Says:

    BOP – speaking of the hate list, sugar is down another 5%. How dare it after I nibbled on SGG last week! That chart is something to behold. Obviously traders think the world is sweet enough already.

  66. 66
    Jerome Blank Says:

    West…thank you

  67. 67
    elduque Says:

    BOP – Until the corporate market rolls over, I agree the market should be ok. However, this is the last week that the Fed supports the agency market, I believe. That should make things a little more interesting.

    I welcome your comments.

  68. 68
    Nicky Says:

    Would sure like to see us make a higher high here. Would count nicely as a wave v. We have a larger 45 day cycle which is not due to roll over before tomorrow. Last time it rolled over it led to the 100 point pullback on the SPX to 1044 so it is worth paying attention to.

  69. 69
    andy Says:

    BOP – u got anybody that’s going to see the “knock your socks off” presentation tomorrow?? MMR acting pretty well – just bot a little more.

  70. 70
    andy Says:

    nicky – don’t understand 68. could u explain what u said?? thks much

  71. 71
    BirdsofpreyRcool Says:

    elduque — “someone” is in the investment grade CDS index market, pushing it wider. Since the CDS is the playground of the GlobalMacro Hedge Funds, i’ll just bet that someone is buying IG CDS in anticipation of just what you mentioned. The cessation of the Fed training wheels on the Agency bicycle. Well, you gots to grow up and support yourself someday, if you want to be an Upstanding Member of Society (even if you get to stay on your ‘rent’s health insurance ’till you’re 26… you gotta spread those wings at some point!)

  72. 72
    BirdsofpreyRcool Says:

    andy — yes. Not only is he going to the presentation, but he has dinner with another one of the Triad CEOs tonight. So, will get the FULL rundown.

  73. 73
    BirdsofpreyRcool Says:

    Are the REITs running today too? They tend to be the most eco-sensitive part of the market…

  74. 74
    BirdsofpreyRcool Says:

    Energy-Only Trading Desk Color

    Trading Desk Color
    Buyers better 2:1 on the desk in a light day. Digestion of political news and tax implications weighing on MLP and their dividends, chatter high in this space. Mostly quiet elsewhere on equities. $4 nat gas still drawing attention, however past buyers seem to have lost all the hurry up to own gas levered names. Hearing more and more short gas long crude pairing…it has been working and don’t see why it would stop, especially with health care vote over and dollar holding steady….for now, thank you Greece.

  75. 75
    BirdsofpreyRcool Says:

    andy — thx for sharing your buy on MMR. Can’t “rinse and repeat” if you skip the “wash” stage. 😉

  76. 76
    BirdsofpreyRcool Says:

    CDS Desk pointing out that stocks outran credit today.

  77. 77
    bill Says:

    Usually on Mondays Z mentions the hdd data for last week and this weeks forecast

    Last week,hdd was 110


    this week the forecast is for 109 hdd

    so essentially the same number -11

  78. 78
    BirdsofpreyRcool Says:

    EXXI — for anyone nervous about cash flow and/or oil and gas prices, pages 34 and 35 of EXXI’s HW presentation should make you feel better. They make ME feel better. And EXXI is just so darn OILY too. Have to admit, by far the Fave of the Triad.

  79. 79
    BirdsofpreyRcool Says:

    bill — #77 super cool. thanks! i’ll post the bloomberg estimate, as soon as they get around to posting it.

  80. 80
    Nicky Says:

    Hi Andy re # 68. There are several cycles working on their respective highs. The strongest of the short term cycles is the 45 day cycle. The earliest it is likely to top out is tomorrow and it could still extend for several trading days. I always try and work the cycles with Elliott wave to come up with a potential path the market will follow. In the near future we ‘should’ see a correction back towards the early 1100’s on the SPX. I think it possible that we are working on a larger wave iv correction before a final wave v up for a more important high next week. So we may see a more important top made in the next day or so or just more sideways to down consolidation before new highs. The high that is finally made in the next week or so should lead to a correction of the 45 day cycle.
    The last top of the 45 day cycle gave us the 100 point correction to 1044 so this is a cycle that can lead to strong moves in each direction. As long as 1044 contains the next correction then higher highs will be ahead into the summer.

  81. 81
    elijahwc Says:

    LINE falls 2.3% to $25.40

    LINN Energy announces acquisition of Antrim Shale Properties in Michigan for $330 mln, public offering of units and amended five-year $1.5 bln credit facility (25.99 -0.39)

    Co announced today that the Company signed a definitive purchase agreement on March 21, 2010, to acquire natural gas properties in the Antrim Shale of northern Michigan from HighMount Exploration & Production LLC for a contract price of $330 million, subject to closing conditions. The Company anticipates that the acquisition will close on or before April 30, 2010. Co said, “The Antrim Shale properties are excellent additions to our asset base, with a low decline rate and current production of approximately 30 million cubic feet of natural gas per day. These properties also offer upside potential through low-risk drilling and optimization opportunities. Combining these quality assets with our high rate-of-return horizontal drilling program in the Granite Wash area and oil-focused projects in the Permian Basin balances our portfolio of opportunities moving forward. In addition, the equity offering and credit facility amendment announced today will provide us with the financial flexibility to continue pursuing growth through acquisition.” To partially fund the acquisition, LINN Energy is extending a public offering of 12,000,000 units of its limited liability co interests pursuant to an effective shelf registration statement on Form S-3ASR filed with the Securities and Exchange Commission. In connection with the offering, LINN Energy has granted the underwriters a 30-day option to purchase up to an additional 1,800,000 units. Co also announced that it has received commitments to amend its revolving credit facility. The amendment will provide a $1.5 billion facility with a $1.5 billion borrowing base and extend the maturity to March 2015, subject to final documentation. The covenants will be substantially unchanged from the prior facility

  82. 82
    elijahwc Says:

    More LINE:

    Co announced plans to commence a private offering to eligible purchasers of $500 mln in aggregate principal amount of its senior unsecured notes due 2020. The Co intends to use the majority of the net proceeds from the proposed $500 mln notes offering to reduce debt under its revolving credit facility. A portion of the proceeds will also be used to unwind certain interest rate derivative contracts.

  83. 83
    RMD Says:

    LINE: acq is cheap relative to their valuation, but Antrim shale? I thought that was CBM which didn’t work at low gas prices. Paid $330mm, $1.24/m, $11,000/m/d. Raising $33omm in stock and $500mm in debt, so more acqs. must be on the way: “Transactions we announced today will position us to capture opportunities as they become available,” said Mark E. Ellis, President and Chief Executive Officer of LINN Energy.

  84. 84
    occam Says:

    When G W Bush announced that he was a “compassionate conservative”, I waited to see some compassionate actions…and waited, and waited, and waited…

    To me, the phrase “compassionate conservative” is an oxymoron, at least as applied to the U. S. neocon movement in the last decade. I could be dissuaded from this view if someone would produce a good list of compassionate actions from such “conservatives”, but I imagine that won’t happen, because probably such a list would be quite pitiful (pun intended). Talking the talk is one thing, but then walk the walk. As the saying goes, the proof is in the pudding.

    I am somewhat distressed by the large amount of political posting on this board. I thought I remembered that it wasn’t supposed to happen here. Lately its been hard to find then energy relevant posts in all the noise. Sorry to add to it, but I couldn’t let the responses to Elduque pass unchallenged.

  85. 85
    zman Says:

    Occam – I’m not a huge fan of the poly-sci as I don’t see it as helpful in making me money. On the other, I think there is way more here re energy than you are giving “the board” credit for.

  86. 86
    elijahwc Says:

    MHR: Initial filing of equity securities:

    Ponce de Leon Victor is Vice President of MAGNUM HUNTER RESOURCES CORP

    We are now officialy drilling for the Fountain of Youth.

  87. 87
    Jerome Blank Says:

    Good evening…a few updated charts and perspectives..

    UNG-this has been one of the most difficult trades i’ve ever been in, I planned for it to be long term, but it ain’t been easy…I’ll have more to say about this soon…



  88. 88
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    It’s a Relative World.

    Late last night, the House of Representatives passed the landmark Health Care Reform legislation that the Senate passed in December. Democrats hailed the measure, commenting that it is about time the United States caught up to the other industrialized nations of the world. The question investors are asking themselves is whether “catching up” to other developed economies means trading the U.S.’ traditional 3-4% growth rate for the 1-2% growth rate and higher unemployment rates of its European counterparts. As we noted last night, it is unlikely that the health care debate in the U.S. is over. The good thing for health care investors is that the passage of this bill marks the pinnacle of the U.S. health care reform movement and should mitigate the nagging uncertainty in the sector. The U.S. equity markets exhibited no ill effects today from the legislation’s passage, similar to the Senate’s approval of the bill in December. Back in December, the Dollar sold off following the Senate’s passage. Today, the Dollar felt no ill effects, largely because EU leadership continues to send mixed messages about the debt crisis among “Club Med” countries. In other words, European debt concerns (Greek CDS moved to their highest level since the start of the month) offset U.S. deficit concerns, and that is the benefit of being viewed on a relative basis in a mediocre world.

    Tail Risk.

    Google’s announcement that it will stop censoring Chinese internet searches at Google.cn and instead route the searches to uncensored Google.com.hk had only a mild, if any, influence upon today’s trading. Nonetheless, a breakdown in the relationship between any high profile U.S. company and the Chinese Government always has the potential to escalate to a diplomatic crisis. In turn, a diplomatic crisis with your largest creditor is a tail risk event. The White House has already taken the middle road, expressing disappointment that an agreement could not be reached. The NY Times reported that Sergey Brin said there was a back and forth with the Chinese government and although there was a lack of clarity, “There was a sense that Hong Kong was the right move.” China’s verbal response, which came after the close, was somewhat more acrimonious using terms like “discontent” and “indignation.” The statement indicates that the Chinese government is embarrassed by Google’s actions and the question is how will Beijing react? Will Beijing simply block searches from Mainland China or will it be more serious and for example, arrest Google employees? Will the feud escalate to a level where Washington will need to get involved? If so, then the markets have a problem.

  89. 89
    BirdsofpreyRcool Says:

    Official word from our Man at HW …

    MMR is hosting a dinner for investors tonight. Given JimBob’s ability to tell a pretty interesting story and get people fired up about his prospects, Our Man thinks we could see buying in MMR (and possibly the other two Triad Members, EXXI and PXP) tomorrow.

    Here’s to holding that positive thought overnight and into the trading day tomorrow.


  90. 90
    Wyoming Says:




    Lets see if this one works.

  91. 91
    BirdsofpreyRcool Says:

    Wyoming — that worked well. Thanks. Do you have any preferred names in the stocks mentioned?

  92. 92
    tomdavis12 Says:

    Wyoming: Thanks for sharing

  93. 93
    Wyoming Says:

    They usually have their covered names at the end of their documents and the ratings. Their nomenclature is a little weird but usually explained in the small writings.

  94. 94
    If you liked that checkout this All 44 US Presidents are linked and compared in this Epic historical doumentary on American Presidential Politics.A great reference tool for the 2012US Presidential election with Obama vs Romney.It will change the way you v Says:

    If you liked that checkout this All 44 US Presidents are linked and compared in this Epic historical doumentary on American Presidential Politics.A great reference tool for the 2012US Presidential election with Obama vs Romney.It will change the way …

    […]Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Week of 3/22/10[…]…

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