30
Mar
Tuesday Morning And All Is Quiet
Market Sentiment Watch: Pretty much same as yesterday .... the rally continues on low volume and everyone is looking for something to break but .... not .... just .... yet.
Ecodata Watch:
- We get Case-Shiller home prices at 9 am EST (expected to dip 0.2% from December's read) and Consumer Confidence at 10 am EST today, forecast is 51, up from a prior 46. We get ADP numbers tomorrow with payrolls set to come out on Friday when the market is closed.
In Today’s Post:
- Holdings Watch
- Commodity Watch (with some graphs on natural gas demand)
- Crack Spread Update
- Natural Gas Supply Update
- Stuff We Care About Today
- Odds & Ends
Holdings Watch:
- ZCAT (Zman Catalyst portfolio, formerly the $10KP II):
- $9,700
- 56% Cash
- The Holdings Tab Is Updated for the Quick View portion.
- Yesterday’s Trades:
- SWN – Added 10 $41 April Calls on the New Brunswick news (see today’s post for details) with the stock near it’s opening price at $39.40.
- HK – Added (5) April $20 calls for $0.95 with the stock at $19.95. See today’s post regarding Howard Weil presentation comments regarding their Eagle Ford shale oil operations that went unnoticed in last week’s group sell down.
- $9,700
- ZIM (Zman Inefficient Markets portfolio)
- $9,200
- 78% Cash
- Yesterday’s Trades:
- SWN – Added 10 $41 April Calls on the New Brunswick news (see today’s post for details) with the stock near it’s opening price at $39.40. These will exit the door pretty quickly for this portfolio.
- $9,200
Commodity Watch
Crude oil rallied $2.17 to close at $82.17 yesterday, on the back of strong equity markets and a slightly weaker dollar. I would not be surprised to see it test recent highs in the mid $83s and then $85 this week. This morning crude is trading up slightly.
- Early Read On Oil Inventories: (from the Bloomberg Survey)
- Crude: UP 3 mm barrels. This sets the bar pretty low and I'm thinking we will not see this big of a build.
- Gasoline: DOWN 2.0 mm barrels.
- Distillates: DOWN 1.2 mm barrels.
- Crude: UP 3 mm barrels. This sets the bar pretty low and I'm thinking we will not see this big of a build.
Natural gas inched eased three cents to close at $3.87 yesterday. After the close, the EIA's Natural Gas Monthly gave bulls little to cheer about but given the month of the year and the much higher gas prices that prevailed during January, this should not have been much of a surprise (see more below). This morning gas is trading flat.
- Imports Watch: 7.2 Bcfgdp, down 0.6 Bcfgpd from last year.
- Canada: 6.0 Bcfgpd, down 0.7 Bcfgpd from last year.
- LNG: 1.2 Bcfgpd, up 0.1 Bcfgpd from year ago levels .... still no tsunami of gas hitting U.S. shores, well over a year after one was feared to arrive.
- Canada: 6.0 Bcfgpd, down 0.7 Bcfgpd from last year.
- Natural Gas Demand Bullets. The gas supply slide show is below the Cracks section of today's post but here are some quick bullets on the demand side. Of particular interest at this time is a strong rally in industrial demand that should not have been weather related as the January degree days were nearly flat YoY (with January 2010 coming up warmer than January 2009).
Crack Spread Update
Key Takeaways:
- Valuations remain cheap. Look for YoY improvements in earnings. Wow it has been a long time since I could write that.
- Gasoline demand remains robust in light of unemployment
- Refiner throughput remains severely curtailed
- The combination of #2 and #3 as we approached the driving season could lead to further margin gains.
- The small, upward move in the sector that started --- weeks back seems to have petered out.
Natural Gas Supply Update
Key Points:
- Gas supply inched up 0.7 Bcfpgd from December to January
- If you exclude Louisiana (which is rising rapidly) and the offshore segment (which is flat but erratic from month to month) you are left with the last graph in the series below which shows continued year over year declines.
- This data should get little in the way of scrutiny as the EIA has overhauled the way they look at production data (again) and that data will show significant revisions one month from now with the release of the February data.
- I expect the next couple reports to show more deterioration in aggregate supply as conventional production declines can no longer be masked by shale production growth.
Stuff We Care About Today
HK Follow Up Notes - Black Hawk and Red Hawk Discoveries
I left this out of yesterday's post ...
Blackhawk (DeWitt County)
- Their Blackhawk well held up very well from IP to 30 day average. Pretty impressive for a shale well with a shallower than expected first month decline.
- Management also indicated the field is possibly better quality than their original Hawkville Field. Recall that HK thinks Hawkville is better/more economic than the best core area in the Haynesville.
- They clearly like this area as they have a second well already fraccing and three more wells now being drilled.
- They have 53,000 acres here in this 3rd Eagle Ford Shale development area.
Redhawk (Zavalla County)
- HK says that 350 bopd IP well at Redhawk EFS field was not optimally oriented.
- Their second well here is set to spud on tax day.
BEXP Small West Texas Sale
- 602K BOe of reserves sold to LGCY for $14 mm
- Works out to $23.25 per BOE which is nice but the size is too small for it to be much of a stock mover for either party.
- BEXP has recently made noises about upping their capital budget again and this could be part of that plan as they look for ways to add a fifth rig in the Bakken.
Odds & Ends
Analyst Watch:
- Nada
TPH out saying they think the BEXP sale is the first in a string of $100 mm worth over the next 12 months to help accelerate drilling in the Bakken. Can’t argue with that at all.
ATPG set to jump at the open. Not always the case but often these known events drive a quick pop with little follow through. It’s a scheduled event and not really news. Was it early. No, not to the original plan, maybe to a revised one. But anyway, these “news” items simply are not news.
March 30th, 2010 at 8:13 amCase-Shiller home index down 0.4%, a little more than expected.
March 30th, 2010 at 8:14 amGood morning…
TechTrader is 66/45 LONG for today’s trade
HeadTrader can’t believe that quarter end is this slow
I dropped the ball on HNR…. need to follow up there.
March 30th, 2010 at 8:26 amThanks BOP, saw the Harvest well, interesting.
March 30th, 2010 at 8:31 amyeah…old-time contact in the industry told me to pick that one up when it was 6.50, expecting good results from this well. Just didn’t get around to it. drat.
March 30th, 2010 at 8:33 amvolumes just feel pathetic…
March 30th, 2010 at 8:34 amhttp://finance.yahoo.com/news/Samson-Oil-Gas-Provides-an-bw-3302525947.html?x=0
March 30th, 2010 at 8:34 amThanks Skimo – what rookies. Too many press releases.
March 30th, 2010 at 8:36 amBOP – hear ya on volumes, profit taking going on in the group but on just nothing for shares.
March 30th, 2010 at 8:37 amSSN…apparently an operational update was released…the mkt does not appear to be pleased…
March 30th, 2010 at 8:48 amJB – It may be a buying op. The first Bakken well is still days away. I don’t own it, just watching.
March 30th, 2010 at 8:50 amNicky – got levels? S&P looks like it wants to bleed higher into quarter end.
March 30th, 2010 at 8:51 amLINE seems to have stabilized after all the deals etc. Got a lot bigger in this…thx for the analyses
March 30th, 2010 at 8:56 amWhole market seems to be trading by appointment. Waiting out the quarter end, the long weekend, the fact that payrolls will be released while the market is closed Friday …
March 30th, 2010 at 8:58 amConsumer confidence at 52.5, higher than expected.
March 30th, 2010 at 9:01 amMorning all.
Triangle is still valid until 1180.68 is breached. If its breached then we are likely already in v and of course headed higher.
I seriously question who is buying this market. By the look of the volume the answer to that is nobody.
March 30th, 2010 at 9:16 amIf the triangle plays out then we could see a pullback to 1166 for wave e before heading higher.
March 30th, 2010 at 9:17 amThanks Nicky, agreed few playing.
March 30th, 2010 at 9:22 amLine in the sand for the bulls is the 1152 area.
March 30th, 2010 at 9:23 amTom – what was the jist of the MS comments on SU?
Group slowly greening off the volumeless opening lows.
March 30th, 2010 at 9:25 am20 3 to 1 upside vs downside because SU already beaten up with their fires and mishaps.
March 30th, 2010 at 9:28 amThanks Tom – did they move numbers around? I’ve been watching the stock for a rebound. It hasn’t moved much at all of late. I’d like to see the latest CFPS if they have them as that should incorporate the latest thoughts on down time there.
March 30th, 2010 at 9:30 amMetals weakening again, dollar strengthening not that the indices seem to be keying of that at the moment.
Someone who was listening to the UBS pit trader run the show yesterday said it was astounding. ‘Like a hungry lion with an insatiable appetite, nothing was going to get by his marching orders to lift the price at any cost.’
March 30th, 2010 at 9:39 amBill – by the way, TPH characterized the gas supply figures as bearish and ugh. Gas is up slightly now. I think they missed the boat on seasonality and the effect of higher prices.
Group continuing to green/de-redden.
March 30th, 2010 at 9:39 amBOP: Listened to JB talking about distance between DJ and John Paul Jones is 8 miles. Area between is Syncline. (Similar to Wyoming’s Powder River Basin maybe?). Is there any simple way to explain that to us non-geological types?
March 30th, 2010 at 9:41 amAntcline = a structure, like an underground mountain. Sedimentary rocks bent over the shape of mountain.
A syncline is the opposite, like a valley between the two anticlines.
Anticlines are traps for hydrocarbon reserves.
Synclines are not but they form a good barrier between them. You’ll hear the phrase that “the prospects are “syncline separated”.
March 30th, 2010 at 9:46 amz — you sure you didn’t get a degree in geology on the side? Nice explanation. thx.
March 30th, 2010 at 9:49 amBOP, Rock for Jocks babe, Rocks for Jocks.
March 30th, 2010 at 9:50 amGoldman and Exxon have both (essentially) called the bottom in nat gas. Could it go lower over the next week or two or three? Sure. But all fingers point to increasing industrial production coming down the pipeline. That is going to be the “surprise” here, methinks.
Would NOT want to be short nat gas here. And a lot of shorts are. They will have to cover… sooner or later.
March 30th, 2010 at 9:51 am#28… ha! Had a couple of your-types in my classes. As I recall, most of you never did your homework. 😉
March 30th, 2010 at 9:53 amZ, wuz the name of that Pizza place in Hot Springs “Shotgun Sams” you recommended last year…I forgot
March 30th, 2010 at 9:55 amSam’s
http://maps.google.com/maps/place?oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&q=hot+springs+pizza&fb=1&gl=us&hq=pizza&hnear=hot+springs&cid=7682918314156574339
March 30th, 2010 at 10:00 amNOG at $15. Missed it this time.
BEXP off today, a little worse than the group, expecting news any day in the next 2 weeks.
March 30th, 2010 at 10:01 amFirst support for SPX is at 1170, then there is a gap around 1167.70.
March 30th, 2010 at 10:05 amRE 21: Exactly wha I’ve been saying for months.
March 30th, 2010 at 10:09 amor since they’ve been bouncing around under 32 at least.
March 30th, 2010 at 10:10 amthx re: 32
March 30th, 2010 at 10:12 amPrice deck revisions. As the quarter comes to a close it’s that time of the year again when analysts need to tweak their oil and gas price forecasts to match reality for the just passed quarter and to take another fresh look at the coming quarters. Oil was slightly underpriced for 1Q and remains so into the out quarters. I would not expect analysts to do much in the way of raising their targets for 2Q-4Q as they are not that far below the strip.
For natural gas, look for downward revisions. The Street is 20% high to current prices. So if you are unhedged look for you EPS and CFPS estimates for 2010 to take a pretty good hit in coming weeks, depending of course on your leverage to natural gas. That means it’s likely guys like SWN will see their numbers get chopped back, and they will either cut capex or raise their debt/equity levels. I bought them yesterday for different reasons after they’d already been whacked via their share price but the pain may not be over their as house after house downgrades their numbers …. at the same time as natural gas prices are likely to be finding a floor.
March 30th, 2010 at 10:25 amI’ll have price deck graphs for #38 in tomorrow’s post.
March 30th, 2010 at 10:26 amDid you see where Dan Duncan with Enterprise died yesterday, good guy friend of the family.
March 30th, 2010 at 10:44 amKOG at $3.30
Yes, Raymond James wrote this this morning about him:
* Chairman Dan Duncan Passes Away. Sunday night, chairman Dan L. Duncan passed away unexpectedly in his home in Houston, Texas. Mr. Duncan co-founded Enterprise in 1968, took the partnership public in 1988, and has grown its midstream asset base into what is now: the largest, most geographically and asset diverse, publicly traded MLP. There will be no change in ownership or management for Enterprise Products Partners LP, Duncan Energy Partners, or Enterprise GP Holdings LP. We are extremely saddened by this news, as we have personally gotten to know Mr. Duncan over the years. Both a visionary business leader, pioneer of the MLP asset class and all that is midstream, as well as one of the greatest supporters of medical research, Mr. Duncan will be deeply missed.
March 30th, 2010 at 10:46 am* Solid Enterprise Management Bench to Carry Legacy. As evidenced by Enterprise’s analyst day – just last Wednesday – the senior and mid-level management team of Enterprise is what we would characterize as a “deep bench,” with many years of experience, not only in the industry but also at Enterprise. Nearly all division heads that spoke possessed between 15 to 25 years of experience at Enterprise and share similar drive, integrity, and business ideologies/acumen, which we expect will continue to be the common thread for this partnership’s best in class approach to operational execution.
* Expect General Partner Support to Continue. We believe privately held EPCO (Dan Duncan and affiliates), which owns 78% of Enterprise GP and 27% of Enterprise, will continue to be a supportive general partner sponsor for all three entities. Recall, in September 2009, EPCO contributed $150 million to Enterprise in a private placement of securities, and from a structural GP/LP standpoint, we don’t expect any changes.
* Disproportionate Weakness in Units Unwarranted. Units of the Enterprise equities (DEP, EPD, EPE) underperformed on concerns regarding the future operational direction of the partnership and EPCO support. We believe Mr. Duncan has placed all entities in the appropriate hands and the transition, while regretful, should entail no miscues.
* EPD: Everything an Investment Should Be. Under the vision of Mr. Duncan, Enterprise has become most known for its energy value chain approach of building (or buying) an asset, linking it to the existing system, and then leveraging those assets, operational expertise, and associated synergies to provide flexibility/optionality to customers. As we outlined in our 3/26/2010 comment: “EPD: Analyst Day Highlights Value Chain Approach (Build, Link, Leverage), Enterprise remains a cornerstone holding for any yield-focused/total return portfolio, and we reiterate our Strong Buy rating. Given Enterprise’s financial flexibility, historical track record of consistency in operational execution, and attractive weighted average cost of capital (~7% all in), we are confident in the partnership’s ability to achieve our three-year (2010-2013) forecasted distribution CAGR of 5%+ and continue to believe the market is overstating the risk associated in facilitating such growth.
* A Lasting Legacy That Will not be Forgotten. While Mr. Duncan’s professional legacy will never be forgotten, we believe one of his most enduring legacies is that of intangible values, such as unmatched humility, example-setting dedication and perseverance, unsurpassed integrity, and unparalleled character. It has been an honor and a privilege to work with such a man who has lead by example and inspired so many. Mr. Duncan’s legacy will never be forgotten, and is alive and thriving across the Enterprise family of partnerships. Aside from the numbers, it is these core values and guiding principles that we should align ourselves with when considering any investment.
Slow news/trading day. Stepping out to lunch.
March 30th, 2010 at 10:48 amI am sorry to be giving lots of possibilities for counts here but its just the way it is right now and of course always the same with EW.
Another thought is that we may just be looking at a straightforward ABC correction and we completed B up this morning and are now in C down which will likely take us back to the 1158 – 1164 area.
The bullish count says the move down to 1169 just seen was wave ii and we are now starting iii of v up.
March 30th, 2010 at 10:59 amWow, didn’t miss much, looks like they want to drift the market higher.
March 30th, 2010 at 11:41 amNicky – I always appreciated the EW reads.
March 30th, 2010 at 11:41 amMIDDAY OVERVIEW
Market Update – very quiet trading again in the US; attendance/liquidity continue to dry up as the holidays kick-off (Passover started last night and equities are closed for Good Friday). Tape a bit more defensive than we have seen, w/most just trying to preserve returns into the end of the Q instead of making large moves in either direction. Asia traded well overnight, w/commodities leading the way (on the BHP news), but this strength not really translating into gains for Europe or the US. The US eco #s today were both positive (housing, confidence), but didn’t really give more than a transitory boost to stocks (the only number people really care about this week is Fri’s BLS #). We saw selling pressure at 11amET this morning led by the financials as people lightened up on the group ahead of a Volcker speech @ 12:30pmET (some concern, not surprisingly, that he will advocate for his “Volcker Rules”). Also weighing: in Europe the Greek 7yr issue from yesterday isn’t trading too well in the secondary market, raising some worries. However, selling not all that aggressive and buyers continue to come in on weakness (outside of financials, we are essentially flat). Technically, ~1177 a level (the peak so far today), then 1180, and beyond that, 1197. On the downside, people watching for a close under 1160.
Equity Sectors – tech eking out small gains and outperforming (some select buying in the semis, inc. WFR and MU, leading the group higher). People watching AMAT’s analyst meeting @ 1pmET in tech and then MU/RIMM earnings Wed night. Financials fall 0.7% and really accounting for the bulk of the market’s decline today (some financials selling ahead of a Volcker speech @ 12:30pmET). Also – we may be seeing some q-end positioning, selling the winners (i.e. financials) and nibbling at the laggards (tech); given that liquidity is only going to get worse over the course of the week, people may be starting some of their Q-end movement now. Industrials, staples, and telecoms are flattish (industrials act OK on back of the DHR preannouncement). Energy and materials are both mild laggards (the stronger dollar may be hurting; also – keep in mind both these groups had strong sessions on Mon).
Best Performing sp500 stocks: DHR, TMO, MMM, VZ, FMC, SVU, M, HOT, MAR, DNR
Weakest performing: CEPH, C, ATI, MEE, TIE, X, F, GENZ, HP, DFS
Commodities: Commodities are mixed this morning. Gold is trading near its lows, just below $1140 down ~0.7%. Copper has come off its highs and is up ~0.5%. Natural Gas is trading near its highs around $3.97, up ~3.3%. Oil has fluctuated throughout the day, and is now trading just south of $82.40, up ~0.3%
FX: USD (DXY) is trading near its highs with the market rolling over, trading near $80.50, up ~0.2%. The dollar is trading near its highs vs. the Euro/Pound, up ~0.5% and ~0.7%. The dollar is up ~0.4% vs. the Yen, opening strong and holding its gains. The Euro is trading near its lows vs. the Yen, down ~0.1%.
Corp. Credit: Corp. Credit is mixed with IG underperforming and HY trading in line with equities. IG 14 is out 1 ¼ of a pt. while HY 14 has lost ¼
Treasuries: Treasuries have sold off this morning along with equities. The 2s are yielding 106bps while the 10s have also weakened to 3.88%. The 2-10 year spread flattened a touch from yesterday to 282 bps
March 30th, 2010 at 11:57 amWest – do you have anything on Zavanna’s Stockyard Creek area wells?
March 30th, 2010 at 11:58 amSamson Oil & Gas – SSN
Off 20% today on a dry hole in Texas.
They are within about a week of having production data on their second Bakken well, the Gene #1-22H (30.6% working interest). You’ll note it was on the catalyst list as their first Bakken well but technically they deepened an earlier well to the Bakken so this is the second, although I think it has a longer lateral and definitely has more stages than the first well.
This is in Williams county, in the east side of what BEXP calls Rough Rider. This well is not far from where BEXP drilled their highest IP Bakken well to date, the State 36-1H, with an IP of 3,807 BOEpd.
This well is shorter, at 5,500 feet of lateral and will have fewer frac stages than the BEXP well but it could catalyze the shares. If this one works they have acreage for an additional 5 wells, not a lot but I’m not planning on being here very long.
Market cap here is about $25 mm U.S. so this is a sub single digit midget name. Net debt should be close to $7 mm.
The well that they are being punished for today was a 1 Bcfe potential Yegua bump in Texas. I think falling 20+% vs current reserves of 18 Bcfe is an over reaction.
I was not going to play but with the 20% off sale in the name today I’m going to take a little in the ZIM for a one week to 10 day hold.
March 30th, 2010 at 12:33 pmZTRADE – ZIM – SSN
Bought 5,000 at .4247 as per comments above.
March 30th, 2010 at 12:37 pmThe ZAAP Group, made up of Zinke & Trumbo Inc., Zavanna LLC and Palace Exploration Co., reports the completion of a 0.75-mile northeast extension of Stockyard Creek Field in Williams County, N.D. It’s the horizontal #14-10H Tofte, Section 10-154n-99w, that yielded 168 bbl. of oil and 32 bbl. of water, with approximately 160,000 cu. ft. of gas, per day on pump. Westport Oil & Gas Co. Inc., the operator of record, drilled the outpost to an approximate vertical depth of 9,809 ft. to the Buell interval of Mississippian Mission Canyon and then horizontally to a total measured depth of 11,954 ft. The ZAAP Group and Westport are based in Denver.
March 30th, 2010 at 12:44 pmThanks West, so that was a 2,000 foot lateral, do you know when it was drilled. There seem to be several more recent (I’m guessing due to the longer lateral Zavanna wells here. The BEXP State 36-1 is also in the area.
March 30th, 2010 at 12:50 pmZ: Cyberspace musings ( rarely based on facts ) 1. CVX changed their past pattern of bidding for GOM deepwater by buying much more shallow in this last sale. A possible JV partner with a company like MMR. Did buy property next to MMR @ Flatrock. Were quoted as saying they like the sand structure near DJ. I don’t know that I believe any of this but my question is logging data. Is that info shared with others or is it treated like govt top secret info.
March 30th, 2010 at 12:59 pmFYI – RDC washes up on the beach:
Rowan Cos: Color on stock action (28.77 +1.14) -Update-
The stock spiked two points after Reuters reported that the company plans to focus on offshore drilling by spinning off its onshore and manufacturing divisions, its chief executive said. As part of its offshore drilling push, Rowan plans to expand its fleet in the deepwater market either by merging with another company that has deepwater rigs or by acquiring several rigs, in the longer-term, Chief Executive Matt Ralls told Reuters. The company, which had been delaying its plan to separate its manufacturing unit LeTourneau Technologies (LTI), prefers a spin-off as the unit’s client base are Rowan’s direct competitors, which is perhaps hurting LTI now. “We believe the company (LTI) will do better if it is separated from Rowan,” Ralls said, adding that customers need not have to worry about buying from a competitor… “Our aspiration over time is to go to a size in the deepwater where our cash flows in balanced markets come fairly evenly from both type of rigs (jackups and deepwater), overtime we would like to get to a fleet of several rigs,” the CEO said.
March 30th, 2010 at 1:09 pmCHK on the tape going oilly
March 30th, 2010 at 1:13 pmCHK Powder River one of seven oil plays
March 30th, 2010 at 1:14 pmZ, I will look later and see what I can find. I recently saw where CHK had leased 600,000 acres in the Powder River and southern extension Niobrara shale plays of WY and CO.
March 30th, 2010 at 1:18 pmTom – Case by case, in time it becomes public knowledge.
Eli – I don’t have the release yet.
March 30th, 2010 at 1:19 pmEli – you sure that’s new today?
March 30th, 2010 at 1:22 pm700,000 acres in Powder River. Only headlines right but WSJ is breaking the story and talking to Aubrey.
Is this an indictment of Washington or what? Or is it just smart following the money?
March 30th, 2010 at 1:22 pmCHK – People have just about been begging them to do it. Take what you know about horizontal drilling and completions and apply it to liquids. It’ll be years before they have to retool their marketing campaign to worry about oil as a big piece of the portfolio.
March 30th, 2010 at 1:29 pmHK moving on higher. I still have not seen a single broker note commenting on the significance of the HW presenation. Jat or anyone who has access to HW, could you send it over this way? Thx.
March 30th, 2010 at 1:30 pmAubrey on CNBC shortly. CHK going green.
March 30th, 2010 at 1:35 pmThanks for the headsup Eli. Thought he did a good job of talking about gas but they didn’t get to the new love for oil.
March 30th, 2010 at 1:44 pmHeres the Luv
WSJ: Chesapeake Has Leased Land In Rockies For Oil Drilling-CEO
March 30th, 2010 at 1:50 pmBy Ben Casselman
Of THE WALL STREET JOURNAL
Chesapeake Energy Corp., a top natural-gas producer, has leased land in the
Rocky Mountains to drill for oil.
The company and an undisclosed private partner have leased 700,000 acres in
the Powder River Basin in Wyoming, Chesapeake Chairman and CEO Aubrey
McClendon said Tuesday at Hart Energy’s Developing Unconventional Gas
conference in Fort Worth, Texas.
(This story and related background material will be available on The Wall
Street Journal Web site, WSJ.com.)
The move is a shift for the Oklahoma City company, which has until recently
focused on natural gas, not oil, and has avoided the Rocky Mountain region due
to depressed gas prices there. But in recent months, the company has
increasingly emphasized oil exploration due to the wide gap between oil and
gas prices.
“The economics just compel you to look for oil rather than natural gas right
now,” Mr. McClendon said. “If you’re in this industry, you have to be very
adaptable.”
CHK – Streets going to love this. Lots of banking again.
March 30th, 2010 at 1:58 pmGroup continues to green up very slowly. NG up 7 cents.
March 30th, 2010 at 1:59 pmFrontier and Niobrara formations = CHK, EOG & smalls DBLE & BBG, PETD?
http://billingsgazette.com/news/state-and-regional/wyoming/article_85137dde-3180-11df-a7a6-001cc4c002e0.html
March 30th, 2010 at 2:12 pmEli – those are the names on my Niobrara, PRB, Green River list, yes.
March 30th, 2010 at 2:27 pmSo no one has seen an HK piece since their presentation at Howard Weil last week. Wow.
March 30th, 2010 at 2:34 pmJB – when you get a chance could you look at SSN again? Ty.
March 30th, 2010 at 2:38 pmNot to be one of those guys who says something, like that listed in #1 above … but ATPG is red after a big post market, pre market pump.
March 30th, 2010 at 2:42 pmState debt may be coming back to the concern radar:
http://finance.yahoo.com/banking-budgeting/article/109211/state-debt-woes-grow-too-big-to-camouflage
March 30th, 2010 at 2:44 pm#71 – I’m reporting you to ATPG’s 5th largest shareholder, David Einhorn at Greenlight Capital. lol ………….
March 30th, 2010 at 2:50 pmEli – yes, please do send him this link on how to subscribe.
http://zmansenergybrain.com/about/subscription-procedures/
March 30th, 2010 at 2:52 pm#70 SSN…bounced right off the 200 day SMA on the daily…I bought some near the 200 day, but since I also bought within the broken triangle my avg prince is about .46
March 30th, 2010 at 2:55 pmQuip of the day: Google statement, says search disruptions must have been result of change in China’s “Great Firewall”. Says search traffic in China now back to normal.
March 30th, 2010 at 3:00 pmJB – so going forward, what’s your box size on SSN? What’s resistance there?
March 30th, 2010 at 3:02 pmJerome do you have a target on ssn?
March 30th, 2010 at 3:04 pm#77 Zman, the box sizes get really funky at these levels…I’m using P&F for perspective…it’s in X’s, that’s the most we can say…the 200 day SMA is the support benchmark at .37 …key resistance is .55…
March 30th, 2010 at 3:11 pm#78 Popeye…my thinking was that SSN had a decent chance of trading back to major resistance based on the V type reversal on the 30 min off the daily 200 day SMA…so I’d like to see SSN trade back up to resistance at .55 to confirm that matters are starting to look more promising, at that point I’ll see how it trades…especially with the potential catalyst not too far off..
March 30th, 2010 at 3:19 pmThanks much JB, that’s exactly what I was looking for. Very helpful. Some Aussies and those who operate in Australia and New Zealand have to provide operations updates, however minor, on a weekly basis. They should be able to report something meaningful in their next one.
March 30th, 2010 at 3:23 pmBOP – any thoughts on the new CLR debt?
March 30th, 2010 at 3:24 pmCLR debt = $200mm 7 3/8 Senior Notes due 10/20. Callable 10.15 @ 103.69. Rated B1/BB and issued at 99.105 of par, or T+362 bps.
$200mm is a small issue so won’t be included in the HY index. Therefore, no “pressure” for PMs to own. +362 bps seems about right for a BB rated company… but once “high yield” gets below +400 bps, I tend to lose interest (and spend my time scratching amongst the equities). Also, it’s a 144a issue, so QIB institutional buyers only, for now. Comes with reg rights, tho… so, at some point, CLR will register the bonds so normal people can buy.
March 30th, 2010 at 3:36 pmLINE on the tape with a $1.3 B 10 year 9% note offering, balancing out their 15 mm unit sale the other day.
March 30th, 2010 at 3:36 pmLINE: filed $500mm Sr. notes, did $1.3B. Big demand I guess.
March 30th, 2010 at 3:45 pmThanks BOP.
RMD – guessing same. They upsized their units deal the other day too.
March 30th, 2010 at 4:00 pmThis is what a “recovery” looks like. Companies can raise debt. They use that debt to do shareholder-friendly things… like buying assets. Or, if they still don’t get no respect, buy back their own equity.
This is what puts a floor under the market, at this point in a recovery.
March 30th, 2010 at 4:03 pmRe 87, yep, yep, yep.
March 30th, 2010 at 4:04 pmOK — rereading #87… didn’t mean to sound so “blinding statement of the obvious.” Just that we have come to the other edge of the liquidy crisis. Crisis over. Time to focus on equities.
For the most bang for your equity buck, be willing to look at companies that manage a fair load of debt on their BS. They will outperform companies “with clean balance sheets,” at this point.
March 30th, 2010 at 4:23 pmIf the wheels fall off this nice equity ride in a year, what would be the first tip off before the nose dive?
March 30th, 2010 at 4:31 pmTalking with EVEP I wouldn’t be suprised if they announce an acq. next.
March 30th, 2010 at 4:38 pmram — the credit market started to crash about 6 mos before equities, last time. But usually, these cycles are good to go for several years. The difference this time around is that we are starting a recovery with an 800-lb ball and chain strapped to our ankle… our own US Govt regs, taxes, and — most dangerously — a Mt. Everest of debt. So, have to watch corporate bonds… a back up in treasury yields is not inconsistant with a rally in stocks. As a matter of fact, that usually happens. But we are in uncharted territory, with the amount of debt and unfunded liabilities at both the state and federal level.
Watch the yield curve. When it goes inverted, start to worry. (it was inverted for almost 2 yrs before this last mrkt meltdown, so it’s only one sign…) Not every inverted yield curve means a down mrkt, but an inverted yield curve preceeds a down mrkt 100% of the time.
March 30th, 2010 at 4:41 pmThanks. I’ll listen for the flares.
March 30th, 2010 at 4:54 pmBedTime Market Strategist
Holiday Holding Pattern.
It was another slow trading session in the U.S. markets. The S&P 500 attempted an early rally but the move quickly ran out of gas as the Dollar began to strengthen. The IMF lowered Germany’s growth forecast for this year and next year, which fueled additional Euro weakness and kept a lid on the lackluster action in the S&P 500. For 2010, the IMF reduced the German GDP forecast from January’s forecast of 1.5% to 1.2% and the 2011 forecast was reduced from 1.9% to 1.7%. The IMF sighted slower than expected export growth and “continuing banking fragilities.” We recognize the IMF is simply catching up to the market, but it is interesting to see how they quantify the situation. The key data from the IMF report is on page 29.
“Simulation exercises suggest that German banks could suffer significant losses from commercial real estate investments in the U.S. and Spain, and more generally from exposures to Southern Europe. The simulations also suggest that a reassessment of risks associated with claims on Southern Europe could have a large impact on capital flows within Europe, as German (and also French) banks would significantly reduce their foreign claims to restore capital ratios.”
The IMF breaks down the “Geographical distribution of Foreign Claims on International Banks,” for Germany, France, the United Kingdom and the United States. By a wide margin, the United States has the least exposure in Southern Europe, with only $118.5 Billion of its $2.58 Trillion in foreign claims. The U.K. has the second lowest exposure at $236 Billion of its $3.69 Trillion in foreign claims. German bank exposure is $523 Billion of $3.46 Trillion and French exposure is $781 Billion of $3.57 Trillion. Based upon those stats, it looks like the downgrade of French growth should be in process.
There is a touch of irony here. In his memoir, Treasury Secretary Paulson recounts an episode during the Bear Stearns meltdown when Deutsche Bank CEO Joseph Ackermann asked why Deutsche should do business with any U.S. investment bank. There is no doubt, Ackermann gets high marks for exercising good judgment, on the other hand, his tact was reminiscent of Bear Stearns during the LTCM crisis in 1998. Earlier this month, Ackermann found himself lobbying for a Greek rescue commenting “If we can’t stabilize the country, then the next problem after Greece would be the banks.” Ackermann also stated that “If it really comes down to a question of rescue or no rescue, I’m convinced it should be a rescue.”
March 30th, 2010 at 9:50 pmThanks for that color BOP.
March 30th, 2010 at 9:52 pmz — you just never sleep, man, do you.
March 30th, 2010 at 10:10 pm12V Tv For Caravan Ebay
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April 16th, 2015 at 12:56 pmbraces flossing alternative
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July 31st, 2015 at 12:03 pm