Wednesday – Oil Preview Plus

194 thoughts on “Wednesday – Oil Preview Plus”

1. Nice EOG comments on Eagle Ford.

2. 10-year auction today could get ugly. It seems like there is a lot of worry about it so if it goes ok or good, we could rally further.

3. Hear ya V, market definitely needs that wall of worry to climb. I think we are up until earnings, then profit taking, anyone who misses gets trashed with little regard for valuation.

   EOG – getting marked higher. If you go back a couple of years in their chart you can see a big rally upon their analyst day when they announced oil plays. This should be more than just a quick move and is more than I expected, especially on the EFS. This is game changer on both growth and growth potential and now that its out I’ll be adding calls for the ZIM as well.

4. Analyst Watch:

   FBR initiating with Outpefromers on the some bulkers:

   SB, NM, GNK, also adds EGLE at Market Perform.

5. EOG call starting now:

   http://www.eogresources.com/investors/investor_pres.html

   also all the slide shows are on this page.

6. EOG saying they have another horizontal oil play they’re working on but that they not going to disclose today.

7. NG up 6 cents
   Oil down 50 cents

8. EOG doing a good job of showing the advantages of going horizontal oil vs:

   Canadian oil sands,
   Deepwater
   International

   Scalability of investment, high ROR

9. EOG reserve potential:
   Their potential reserves look goes from:

   130 mm boe + 14 Tcf

   to

   1.7 billion barrels + 29 Tcf

10. EOG Niobrara – very good rates, too soon to discuss EURs, would not disclose but it has gotten so much publicity that they have to talk about it some.

11. Haynesville/Bossier potential went from 3-4 Tcf to 10 Tcf

    Hornriver goes from 6 to 9 Tcf

    Uinta goes from 1.8 tcfe to 6.8 Tcfe (their only non horizontal play)

12. 2010 growth of 13% will have liquids growth of 47%

    2011 growth of 19% will have liquids growth of 60%

    2012 grows 21%

    these are AFTER the sale of significant gas property sales expected by year end.

13. re 12 – they have beaten Aubrey to the punch by a mile.

14. EOG 2012 liquids 3.3 X 2009 production!

15. EOG

    They think the Eagle Ford oil discovery will be one of the largest discoveries in the U.S. in the last 40 years.

    Drilled 15 delineation wells over 120 miles of the oil window of the play.

16. who has efs acreage 2nd question

    best plays in efs?

    hk,sm,rose????

    efs looking good

17. If I were them I’d sell their Trinidad operations off as soon as possible and reinvest in the EFS and Niobrara.

18. HK and PXD are probably your names with the most oil window exposure but also dry and wet gas, ROSE liquids rich and dry gas window, SM is there, APC, SFY. No one has this kind of oil position here.

19. CHK is in the EFS too, not sure exactly where all but should have oil window from legacy Austin Chalk at least plus a concerted effort to get oily.

20. EOG Niobrara (WY/CO)

    3 wells so far, high IPs on all but short histories. The first produced 50,000 barrels in 3 months. 2 more wells drilled but not yet completed.

    Niobrar – PETD, CHK

21. http://www.scribd.com/doc/29535533/Oil-Services-April-1

22. ZTRADEs – ZIM – EOG

    Added 6 EOG May 105 Calls for $2.78 with the stock at 100.50

    Added 40 April 110 Calls for $0.30 which I plan to be rather quick with but are obviously very high risk.

    See post today and comments below it for details on what I perceive to be a very strong analyst day presentation which is underway and should last a good portion of the day.

23. warning on PXD, everyone here in hedgie world has been playing that long into this day…

24. not saying it doesn’t work LT, just saying

25. here ya Jat, I’m playing it straight on EOG.

26. that opening presentation was fantastic. I am reminded of Shannon Nome’s upgrade of the stock at $83.00 on 11/3/09 on the thesis that EOG was quietly buying up all the oil shale acreage in the world. Well, here it is in pdf format.

27. EOG doing a big science fare on horizontal drilling and shales.

    Wish BOP were here, EOG getting sick on the science. Taking 15 nanometer slices of a piece of an EFS core, using Electron Microscopy to see both the pore sizes and the pore throat sizes. They can see the pore throats are big enough to pass oil molecules through them. EFS bigger than Barnett pore throats.

28. Did EOG just put on a big buy me presentation?

29. Ram – yep, going on all day, very good stuff.

30. Jat – it reminds me of their 2008 presentation which sent the shares zooming, albeit in a much higher oil price environment.

31. hk getting a move too

32. Oops Watch: Actually picked up 15 of those May 105s EOGs, typo in my trade system, will sell out 10 of them in a minute to get to 5 of those.

33. Z: Got the proxy info re EOG last night. Annual meeting 4/28 down in your neck of the woods (Houston). Papa has not raised salary since 2004. Has collected plenty of stock. 4 largest shareholders Davis Selected Advisors 23.7M (9.4) Blackrock 15.8M (6.3) T Rowe Price 13.2M (5.2) Capital Research Global Inv 12.9M (5.1). Management + Board own 3.5M. Not big ownership. I do not think that figure includes in the money stock options that are not exercised.

34. EOG’s Eagle Ford Shale discussion up next.

35. EF- keeps moving eastward…

36. Yep and the East is the good stuff. See slide 18

    http://www.eogresources.com/media/slides/ac_st0410.pdf

37. and slide 20

38. Oil inventories in 15 minutes

39. TAT at 3.75
    SSN pulling back to 0.71 today

40. HK is on the west side by the way in the oil window. PXD is on the east.

41. 35,36,37…does not stop at Lavaca county

42. Right, they’ve already made fun of HK once.

43. hey… good morning. Been traveling. Back. Not good for much yet… except to say KUDOS to z on that SSN trade.

    Damn. Wish I had done it.

    That was a heck of a great, real-time demonstration of what the ZIM is all about. And you have to stay tuned and move quickly on it. My bad. I lost out. Won’t sit on the sidelines next time.

44. reef — neophyte question on EFS… it charges the Austin Chalk, correct? So, can one just follow the AC trend to get a feel for the geographic lay of the land for EFS?

45. Thanks much BOP, great to have you back.

    These EOG EFS rates would be respectable from a much bigger well in the Bakken.

46. 44- you are a fast learner

47. East of Lavaca is APache and Conoco and EVEP

48. BOP – which would put CHK there in a big way from legacy production, their original boom / bust.

49. EIA Inventories

    Crude up 2.0 mm barrels
    Gasoline down 2.5
    Distillates up 1.1

    sort of close to the API numbers.

    Demand remained strong for gasoline, third week just over 9 mm bpd.

    Crude coming off slightly on the distillate build

50. EOG and HK are partners in some wells in EFS aren’t they?

51. Re 50 – that would be the Bossier in E. Texas

52. CHK + Austin Chalk… remember that period of history well. It wasn’t until they tried to extend the trend into Lousianna that it all went terribly wrong. CHK still HBPs that acreage? Woulda thought those wells would have died off yrs ago. reef??

53. More EIA…

    Crude imports were up big week to week so that explains the crude number easily. In fact, refinery demand rose 400,000 bopd week to week as well. They are liking the higher margins.

54. #51 – thanks.

55. EOG – East EFS – After tax ROR would still be 15% to $44.

    In the west the 15% return would be hit at $55 oil.

56. EVEP not moving on this Reef. Not yet.

57. EOG I’m sure this guy is a gereat operations guy but I really hate to have people read to me from the slides

58. PXD not moving either

59. EOG on a 10 minute break, time for the analysts to call into the home office squawk boxes.

60. jat #26 adds to my respect for Shannon in the future.

61. S&P not looking chipper, Nicky?

62. RMD – she was always smart, a bit of a banking schmoozer when at Lehman, but smart.

63. pretty huge CIGX news… for those who follow that little non-energy special situation…

64. KOG meeting with OPCO in NY on 4/14

65. In honor of BOP’s return:

    CIGX Star Scientific announces collaboration with Roskamp Institute on Beta-amyloid discovery and Alzheimer’s disease (3.31 0.40)

    Co announced that it has completed a “Research and Royalty Agreement” with the Roskamp Institute’s affiliate, SRQ Bio, LLC, under which the Institute will conduct research on a compound developed by the company’s Rock Creek Pharmaceutical subsidiary that medical researchers at the Institute believe may have an application in the treatment of Alzheimer’s disease. Preliminary testing of the compound has produced promising results when applied to cells, and the compound is being explored further for its application to treat a variety of neurological conditions, including Alzheimer’s. Preliminary tests performed by the Roskamp Institute show that when the compound developed by Rock Creek is applied to cells, B-amyloid is reduced. Also, the compound appears to encourage new neuronal cell growth. Results in cells do not necessarily translate to human testing, and additional work needs to be completed to determine whether the compound will have significant B-amyloid lowering effects in humans.

66. oil numbers taking down all energy names

67. Market taking down all energy names.

68. elijah — and it is not a drug… so, regulated by FDA, but doesn’t require the 3 phase approval process.

69. EOG Barnett discussion starting

70. CIGX- Thank you BOP

71. I like whats happening with CGIX but my physician wife reminds me that getting a product to market is way more problematic than drilling a 25,000 foot hole in the ground in the middle of the GOM. Are you sure no FDA hurdles? That said, a product and a stock are two different animals.

72. Thank you BOP

73. Good morning all. Z – re # 61 – did i not say two days ago that my preferred target area was 1190 and 1194 and then a reversal? My preference is that this is wave iv down and higher highs are still out there. Support is at 1182,1180,1178 and 1174. We would have to break 1174 for signs of a bigger correction.

74. Z, from the news on EOG it sounds like it is a significantly different company, reserve and CF wise. Is this news a game changer?

75. Z: Are you thinking of piggybacking any other call activity into other EFS players and their earnings? Or a little too early for that.

76. Okay if we are going lower then the bounce has to stall no later than 1187/88.

77. Cargo – I think it goes higher from here. The game got changed for them a couple of years back so this is a game enhancer.

78. cargo — there can always be FDA hurdles… even when there shouldn’t be FDA hurdles. But this is like bringing a new supplement to market, like aspirin. Not like bringing a new drug (like DNDN). 100% agreed on it’s easier to drill to 25k ft than to drill thru the FDA NDA process.

    Now back to our regularly-scheduled, all-energy, all-the-time programming.

79. Tom – I own the common in HK and ROSE, not looking to play any more small ball for now on it. If EOG dips again I may add more and I do plan to roll the EOG calls taken in the ZCAT yesterday, maybe tomorrow. Numbers here are going to come up here, both on 2011 EPS/CFPS but also on NAV, probably in a pretty big way there.

80. Z, any thoughts on SD/ARD?

81. Thanks much Nicky

82. EOG Rockies discussion starting (Bakken, Three Forks, Niobrara, Spearfish)

83. BEXP holding strong

84. Carat well being fracced now, this is their Montana test, next few days should have data.

85. 84 = EOG’s well, BEXP is about to spud a neighboring well.

86. EOG’s crude by rail system is fully functional and is exceeding their expectations.

87. EOG – 400,000 net acres leased in the Niobrara since 2008. First time to talk about it.

    In 3Q09 – Jake 2-1H, >50,000 bopd in 90 days. Then drilled 4 more wells.

88. Gold is likely to break out if it holds here for the close… could be an indicator of the broad market breaking out.

89. 2nd well did 700 bopd on a 2,000 foot lateral. Short due to drilling problem.

    3rd well did 1,100 bopd on a 5,000 foot lateral. He said open hole, unfracced on that but it is declining and has not stabilized.

    4th and 5th about to be completed. High pressure while drilling these.

    These are very impressive rates.

90. EOG is now 4th largest U.S. onshore oil producer. By 2012, they should be second only two Chevron.

91. EOG Haynesville/Bossier discussion starting

92. Southern portion of the E. Texas Bossier seeing better IPs, nothing new, north is weaker, south is a sweet spot. This is where EOG and HK are focused on the Texas part of the greater H/B play.

93. And SWN is in that area as well.

94. Sent those extra 10 unintentionally bought calls over the side, up 24%, good kind of mistake to make but too much exposure to keep. Now have the 5 May $105s and the 40 April $110s in the ZIM. Still have the 10 April $100s in the ZCAT taken yesterday.

95. #91,92,93 Question Z: Isn’t GDP in the area?

96. Eli – yeah but I think mostly to the north, up in Harrison and Panola, this is Shelby, Nacodoches, San Augustine. Could be wrong, maybe they have more acreage down there too, need to check.

    EOG doing a very good job of showing people how to give an all day presentation.

97. EOG Horn River discussion starting

98. EOG WITH A GREAT PRESENTATION

    Like the idea of lng export

99. bossman 80

    Consensus good deal for sd
    good deal for ard if sd is over 8
    deal may not get done if sd falls below 7.50, imho

    Fantastic deal for both if ng recovers and oil holds

100. Boss – didn’t see the question. Good deal for SD, maybe a great deal. For ARD it’s a tougher call. Some of it makes sense but not with what they had previously stated was their goal of getting oilier. They are getting sued which is no surprise and it may not get shareholder approval.

101. Gold is breaking out above resistance now. Rally is on!

102. eog is everywhere with best of everything

     efs,haynesvill, canada, bahken, marcelus

     wouldnt they make a good target for a major??

103. BOP – re 43, EOG was the next one.

104. ha! yep. EOG making a run for the border, as we speak.

     you ROCK, man!

105. Amazing – Greenspan points the finger at everyone else and takes no responsibility himself for the financial crisis.

106. “Denial” — American Heritage Dictionary = 1) refusal to grant the truth of a statement or allegation; 2) refusal to accept or believe something; 3) an unconscious defense mechanism; 4) Alan Greenspan

107. re 104. Actually they are the ones that rock, I’m just a fan. Felt like the 2008 presentation but thanks.

108. For those who want to read a great book on the financial crisis read THE QUANTS by Scott Patterson. The book is written in the style of moneyballs. Not dry, easy for anyone to understand the ideas presented. The Big Short by Michael Lewis and Too Big Too Fail by Sorkin have gotten more press, but THE QUANTS does a better job of explaining a process that almost brought the system to a halt.

109. So does the work that EOG has done on EFS and Niobrara, make CHK underpriced here?

110. ZTRADE – ZCAT – EOG

     Sold half (5) of the EOG April $100 calls taken yesterday for $5.00, up 209%.

111. Eld – don’t know the answer to that. It’s early in the Niobrara and EOG’s EFS is oilier than anyone else by acreage location, not sure it translates, definitely not a bad thing.

112. EOG summary stuff now

     CAGR for them through 2012
     Oil +50% / yr
     Gas +5% / yr

113. EOG risked reserve potential is now 52 Tcfe. They had proved reserves of 10.8 Tcfe at year end 2009.

114. EOG acreage cost $1.6 bil current value (per them) $8 bil

115. BOP – any thoughts on the likelihood of a deal up for KOG, especially in light of yesterday’s acreage adds?

116. EOG – good slide in the wrap up materials (28/35) showing they have the best peak month rate wells in the Bakken. A little in your face to BEXP on that one.

117. EOG International discussion starting

     Trinidad, China, UK, New Ventures

118. EOG – China – I followed this when BR owned the acreage, could be big, will know mid year.

119. China

     Jiao 64-2H on a 71,000 acre closure, produces from some verticals but this is the first horizontal tight gas sand well drilled here.

     Overpressured Triassic sandstone

     fraced six stages, flowed back 3.5 mm/d, were disappointed, but redesigned remaining stages, well then flowed 14 mm/d, now very encouraged.

     Think this is a Tcfe type opportunity, will decision it by year end. This is the most data they have released yet.

     will drill 2 – 3 more HZ before year end

120. KOG — z… i’ve been noodling about KOG doing a 2ndary to help fund the acreage acquisition. I gave it a pretty high probability of happening. The Chairman has been selling a few shares here… so I thought that meant they couldn’t be seriously contemplating a 2ndary. However, the sales seem to be through a 10b5-1 plan, so that doesn’t preclude the company from selling stock.

     Thoughts?

     The acreage add was great news. They have a 2nd rig now, so can put it to work generating cash flow immediately.

121. Favorite quote of the week:

     “the Welsh are kind of frugal with their vowels”

     EOG regarding one of their UK well names.

122. BOP – did they get their revolver redone yet? Thought they did not have it reworked by the time of the 4Q call. If so, I would think they could put it on there for awhile and not sweat as long as oil prices hold up. But at some point, it is smart to capitalize on the rally in the shares and get the float up so I think it is more than 50/50 he pops some shares off here. I don’t think his share sales will matter either.

123. And BOP, given how BEXP has RISEN following announcement of their secondary, I would think that the same may apply to KOG.

124. eog making points on non cash charges that i concur with

125. Bill – he may not like it but that’s the way the Street views it.

126. EOG – plan to sell $1 to $1.5 B of gas properties by mid 2011.

127. How did that Auction just go off?

128. re 127, mean the 10 year auction?

129. EOG – 15 minute break, then Q&A starts. Great presentation.

130. re 127 – they gave it an A

     BOP re 106 – lol!

131. Why are we still listening to Greenspan, see headlines scrolling across saying he is saying subprime loans not to blame for crisis.

132. BOP – What do you think is behind the reversal in CIGX with lots of volume?

133. EOG Q&A

     Gas Macro – they think supply is 2.5 Bcfgpd less than the EIA 914 data, which is much more than the 1% the EIA mentioned yesterday.

     Storage shows that supply / demand is 3 Bcfgpd tighter this past winter than the past winter.

     Market has not responded to that by the growth announcements of so many public companies.

134. EOG Q&A 2

     Definitely not bullish on gas by 2012.

135. Well EOG sure made me look like a dummy by not picking any up yesterday.

136. PXP ramping?

137. ram — #132 hot money players who don’t really know (or care) what is fundamentally going on here. Just “sell the news,” i guess. I bought a lot more, avg cost 2.77. So that tells you what i think.

138. EOG Q&A

     Capex for 2011/2012?

     Run rate for acreage adds is less going forward. $300 mm this year of the $5.1 B.

     Can’t give a number on the out years, but they will police their debt situation by not exceeding 25% net debt to cap. If they want to grow the oil side faster than they have outlined they would sell even more gas assets or do JVs. Not shares. Not debt.

139. U.S. Treasury 9-Year 10-Month Notes Yield 3.9% at Auction
     2010-04-07 17:08:07.597 GMT

     By Kristy Scheuble
     April 7 (Bloomberg) — The U.S. Treasury Department sold
     $21 billion of 9 10/12-year notes at a yield of 3.9 percent, the highest since June 2009, as demand rose relative to the last auction of securities with the same maturity.
     The auction yield was lower than the 3.948 percent yield traders anticipated in a Bloomberg News survey before the auction.
     The bid/cover ratio, which gauges demand by comparing the number of bids to the amount of securities sold, was higher at 3.72, indicating stronger demand. At the Treasury’s last sale of the notes the ratio was 3.45.
     Indirect bidders, a group that includes foreign central banks, bought 43.1 percent of the amount sold, compared with
     35.1 percent in the prior auction. Primary dealers bought 40.6 percent, compared with 47.3 percent in the previous sale. Direct bidders purchased 16.3 percent.
     The yield on the notes sold today was the highest since the
     3.99 percent at the June auction, the Treasury said. At the previous auction, the notes yielded 3.735 percent. In when- issued trading before today’s sale, the notes drew yields ranging from 3.91 percent to 3.92 percent. In trading after today’s auction, the benchmark 10-year note yielded 3.90 percent.
     The Treasury sells all its bills, notes and bonds on a single-price basis. Notes are awarded at the highest yield needed to sell the securities.

     Auction Details

     At today’s auction, 99.62 percent of the bids that were filled came in at the high yield of 3.9 percent. The low yield submitted was 3.82 percent, the median yield was 3.874 percent, and the coupon rate was 3.625 percent. The price was 97.763192.
     Tenders totaled $78,076,074,700 and the Treasury accepted $21,000,258,700 of the bids. Competitive bids awarded totaled $20,897,524,100. Non-competitive bids awarded — including those sold directly to individual investors — totaled $102,734,600.
     For its own accounts, the Federal Reserve bid and was awarded $1,537,283,200.
     The notes will be dated Feb. 15, settle April 15 and mature Feb. 15, 2020. The CUSIP number on the notes will be 912828MP2.
     The minimum amount for Strips was $100.
     Strips stands for Separate Trading of Registered Interest and Principal of Securities. Coupons are separated from a note or bond and become a security. The remaining face value bond becomes another security that is known as a zero-coupon note or bond.

140. The direct bidders number is pretty high.

141. Thanks re bond stuff.

142. so… why is PXP finally moving??

     LOS ANGELES—Several anti-drilling groups are expected to unveil a controversial agreement that they say will eventually end drilling off the coast of northern Santa Barbara County.

     In 2008, three respected Santa Barbara nonprofits signed a confidential agreement with Plains Exploration & Production Co.

     In exchange for promises that included eventually ending its local drilling operations, the groups agreed to lobby for the company’s proposal to expand drilling off Platform Irene.

     The terms of the agreement, however, remained confidential—a sticking point that ultimately killed the project during the public approval process.

     The groups now say they’ve revised and strengthened the agreement and plan to release the details to the public at a press conference in Santa Barbara on Wednesday.

143. EOG – thinks the Eagle Ford oil play will rival the Bakken, Alaska, and the deepwater GOM.

144. BOP Thanks. Bought more again.

145. EOG Z, Merrill asked your sell international question. He likes the returns on international right now. He probably also likes the prestige of international and travel to those places-Ha

146. 143 – Wow.

147. Skimo – re 145, yeah, heard that and his answer makes sense, he’s a ROCE guy through and through and that LNG gas in Trinidad is tied to contracts on methanol/ammonia and to oil prices.

148. Papa has cooled on W/ Europe due to challenging logistics. Hard to get access to acreage, etc. I recall EVG having this same issue with CBM efforts in Ireland.

149. EOG presentation over, stock at $104.60. Time for analysts to run back to the office and retool models tonight. Guessing we some upgraded targets in the morning.

150. Z/bill, re:99/100, thanks!

151. ZMAN – Are you going to retool your model to verify the analysts?

152. I no longer model ones like EOG, beyond back of the envelope. Their NAV targets should move up significantly on the whole. CFPS less so as operating costs rise with their oilier nature.

153. Anyone hear yet if BEXP prices tonight?

154. Nice move on PXP Eli.

155. something is really happening with pxp. The average volume is 2.26 m current volume 6.83m

156. GT see 142

157. Plains Exploration Announces California Offshore-Drilling Pact
     2010-04-07 18:53:02.218 GMT

     By Jim Polson
     April 7 (Bloomberg) — Plains Exploration & Production Co.
     announced a California offshore-drilling pact in which the company agreed to assure land donation in exchange for drilling.
     The announcement was made on the T-Ridge Project’s Web site
     http://www.t-ridgefacts.com/2010/04/07/environmental-coalition-
     and-pxp-release-revised-t-ridge-agreement/.
     The pact requires state approval, Plains said.

158. Nicky – S&P breaking your levels.

159. Quick drop in EXXI.

160. Z – it went a little higher on the bounce than I expected. I thought 1188 would contain it. 1174/75 is very important.

161. re 159, just looks like market, not stock specific.

162. re 161, I see that now. Hasty comment on my part.

163. Z: Cautious comments from Ben and Fed official Hoenig given as reason for weakness.

164. No biggie, I was just saying. Never can tell who’s just watching one or the whole group.

165. Mrkt dropped on news that consumer credit shrank $11.5B in February… this was a lot more than expected.

     Big whoop.

166. I see the GDP 5s of 29 are back above 91. Thanks to Elijah, i pick up some bonds last week around 87. They are convertible and puttable at par in 2014. Seemed like a nice place to park for a while. Thanks again, Elijah!

167. Got this from RJ on EOG pre call (which I think is lame compared to mine but I’m probably biased). Note the rating.

     “EOG Resources (EOG/$97.38/Market Perform) analyst day highlights. In the heavily hyped Niobrara Play, EOG’s Jake 2-01H produced at 555 Bbls/d for its first 90 days, but will be tested further before moving into development mode. In the Eagle Ford, EOG now has 505,000 net acres and reserve potential of 900 MMboe, and has drilled 16 delineation wells. EOG also announced that it plans to divest $1.0-1.5 billion in North American gas assets in 2010/early 2011, which along with a $1 billion credit line and our projected $2.8 billion in operating cash flow, should narrow (but not fully close) the gap in funding the 2010 cap ex budget of $5.1 billion (vs. our $3.5 billion estimate). Growth of 13% in 2010 was reaffirmed and EOG introduced a 2011 rate of 19%, both in-line with our model. Reserve potential went from 6 Tcf to 9 Tcf net in the Horn River Basin, and from 3-4 Tcf to 10 Tcf net in the Haynesville/Bossier. Bottom line: We like EOG’s increased oil exposure vis-à-vis the Niobrara and Eagle Ford, and shedding non-core gas assets to fund cap ex is a no-brainer.”

     My RJ guy tells me the analysts have yet to comment to the troops during or following the call. Also lame but maybe an upgrade in the morning.

168. SWN falling back like the unhedged gassy name it is when one of the biggest gas bulls of all time has given up the cause. RRC, UPL others doing much the same.

169. BEXP interesting to see it hold up despite oil, the market, and a secondary. Numbers going up there up deal closure.

170. Z – can you clarify #168? Which bull?

171. Thank s BOP. My GDPANs are printing 38.50 today. As long as GDP fails to out of business its a nice payday.

172. Mark Papa, CEO EOG

     “Definitely not bullish on gas by 2012. We are not long term gas bulls”

173. BEXP – C K Cooper out in front of the offering.

     Reiterate Buy – Price Target: $23 from $20
     Stock Deal Drives Growth
     Brigham Exploration announced an offering of 13MM shares of
     common stock to fund the acceleration of Bakken/Three Forks (3F)
     development in its core areas of the Williston Basin, dubbed
     “Rough Rider” and “Easy Rider”, where it holds 161,900 net acres.
     The company plans to increase the number of operated rigs from
     four to eight by May, 2011, drilling 33.1 net wells in 2010 and 44.6
     net wells in 2011. We expect the infusion of equity to be a
     significant driver of production, earnings, cash flow and reserve
     growth. The combined increase in production and higher oil price
     deck results in an increase in EPS/CFPS from $0.25/$0.81 to
     $0.42/$1.12 in 2010 and from $0.37/$1.10 to $0.82/$2.03 in 2011.
     We have increased NAV/Share from $18.17 to $26.04, reflecting an
     increase of about $5.00 for the higher price deck and an increase
     of about $3.00 for the accretive effects of an accelerated drilling
     program.
     •••• After adjusting for the new well program, our production estimates
     increase from 7,200 BOEPD to 8,716 BOEPD in 2010 and from
     9,134 BOEPD to 14,298 BOEPD in 2011. We note that our
     production estimates are preliminary, not based on company
     guidance, and may vary with the timing of when new wells are
     brought on production. Additionally, we have increased our oil
     price deck from $70/Bbl to $80/Bbl to reflect our more bullish view
     on oil. By implementing a more aggressive drilling schedule, we
     estimate BEXP’s new plan shortens the time to develop unbooked
     prospective Bakken/3F well inventory in its core area from 12 years
     to 8 years, reducing the time-value discount from 44% to 35% and
     enhancing NAV.
     •••• We reiterate our BUY of BEXP and increase our price target from
     $20 to $23, reflecting an increase to NAV from the acceleration of
     drilling. BEXP is the leading operator on the western part of the
     Williston Basin Bakken play. As cited in previous research reports,
     the acceleration of drilling was just one of several meaningful
     positive catalysts for BEXP shares in 2010. Additionally in 2010,
     the company plans to drill wells to test the potential for infill and
     3F development at Rough Rider. During the first half of the year,
     BEXP is also scheduled to drill a Bakken well in Montana, where
     the company holds 82,000 prospective acres.

174. Methinks BEXP does just as excellent a job of managing their bankers as they do PR. And drilling.

175. #172 Thanks Z

     For those interested, a gap filled today in POT from early March.

176. In my experience POT has caused a lot of gaps

177. In memory?

178. Sorry eli..couldn’t help myself.

179. john11 — elijah’s statement just begged for it… lol

180. john11 – remind me, what are begging forgiveness for?

181. In #175 I was going to ask “Can someone remind me who is the local POT guru here?”

     But I thought better of it.

182. Thanks Eli – CK was way behind on 2011 numbers, now they are slightly ahead of the Street.

183. WHX new 18 month closing high today, should be about a month out from their next distribution announcement.

     beerthirty

184. EOG looks like a pretty clear break out here and on strong volume from today, will be interesting to see the revisions to numbers tomorrow through Monday.

185. Z, BOP and board, just thought I’d say THANKS to y’all for a great 2010 so far. This board is great for both ideas on stocks and for helping me improve my general investing analytics(not hard to do given my starting point). I appreciate all of you, especially Z and BOP!!!

186. Thanks Skimo, nice of you, glad to be a help.

187. skimo — wow. That is so nice of you. Thank you.

     Personally, i think the 2010 Award For Best Bang For Your Buck (so far) goes to z for that SSN trade i’m still crying about missing. That one was WoW-sters.

188. I like IPI better than POT

189. Will the BEXP financing mean less wells with USEG going forward?

190. Occam – Good question, don’t have a good answer. At last check, they were saying USEG are good partners, that they were not looking to ditch them. But they certainly need them less now.

191. BEXP priced 14 mm share deal at $18. That’s 1 mm larger than expected … good demand.

192. Z, your SSN trade was sensational!

     But there was another excellent one: TGA, June and September options.

     I cannot remember who brought that to the board.

193. This guy does a good job of laying out the argument of why I thought the CIGX news was so compelling. I think sellers definitely “got it wrong” today.

     http://seekingalpha.com/instablog/121-james-altucher/62309-did-cigx-just-find-a-cure-for-alzheimer-s-disease

194. BedTime Market Strategist

     Cruise Control Off.

     It is fairly remarkable to note that today’s 59 basis point sell off was the largest down day since late February. In addition, volume picked up and exhibited signs of life. Volume on down days tends to be 15%-20% heavier than up days, so today’s 15% increase from the 20 day average was not atypical. The trading action today was interesting due to the equity market’s varying sensitivity to different catalysts. The Greek credit situation has resumed its deterioration over the past week and a half, but it is not detectable unless you are looking specifically at Greek yields and spreads. This morning, U.S. equities followed Crude lower after the inventory report. We are at the point in the cycle where lower Crude prices are positive, not a negative. Both equities and Crude rebounded. When selling as much debt as the U.S. is selling, it is a positive to see higher yields attract numerous buyers. As such, it is hard to see a downside to the strong 10 Year Treasury auction with the highest bid to cover in at least 16 years. Yields were pushed back to levels where they broke out after the March employment report. The market traded to its lows following the Fed speeches, but rebounded into the close. The odd nature of the action may be reflective of jitters manifesting or investors squaring themselves away before earnings season.

     FedSpeak.

     This afternoon, FedSpeak was what initiated the larger moves of the day. Chairman Bernanke continues to sound very dovish and today, he tied the nation’s fiscal imbalances and deficit problems into his speech. “The arithmetic is, unfortunately, quite clear. To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off–until the day they cannot be put off any more.” To us, that sounds like the Chairman foreshadowing a possible continuance of easy policy in order to help Americans endure the adjustment when the fiscal bill comes due in the near future and taxes go up. This could also explain the heightened level of dovishness emanating from the Fed as the recovery unfolds. On the flip side is Kansas City Fed President Thomas “The Hawk” Hoenig asserting that the Fed should “initiate the process” of raising the Fed Funds rate to 1% “sometime soon”. Hoenig’s rationale was that “Small reversals in rates would leave policy highly accommodative and supportive of our economy’s recovery but would put more weight on mitigating the risk of longer-run financial imbalances.” The irony of that statement is that 1% was the trough level at which the Greenspan Fed kept rates in 2003-2004, fueling the housing bubble and imbalances that created this mess (coincidently Greenspan denied this again today). Hoenig is correct that 1% is still very accommodative (it fueled the housing bubble), and there will likely be a point in 2010 where the market and economy could handle such a move, it is just not now with a 9.7% unemployment rate. If prepared, market participants would prefer a continued “normalization” in one shot hike to 1% in late 2010 if they think the Fed will be on hold again for some time. Although Hawk Hoenig might like such an idea, and we might like such an idea, it is highly doubtful that Big Ben likes such an idea.

     It’s all Greek to me.

     Returning to the Greek situation, nobody ever believed the problem was solved, especially when Germany opted to lean on the IMF. Despite the lack of a real solution, the markets did allow spreads to contract in March. This recent blowout has been a non-event in U.S. equity markets. Even more surprising, it has also been a non-event in the French and German equity markets. German and French stock markets continue to hover near 52 week highs, yet they house the share of the banking systems that have the most exposure and the most to lose. We have asserted and continue to maintain that the EU leadership could find a solution if they had the will, they apparently don’t and incompetence has aggravated the situation. We also know better than to have much faith in elected officials fixing problems – the current scenario is the case in point. What we do know is that the divergence between the weakness in Greek bonds and the strength of French and German equities (especially bank shares) needs to be resolved. The obvious interpretation is if German and French shares roll over, then the problem is accelerating and vice versa if Greek yields collapse. It might take a little market shock to motivate European politicians to find a real solution.

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