Market Sentiment Watch: The broader equity market seems to need a rest and Greek woes being back in the spotlight seems to be a good excuse. The EOG trades worked out fairly well yesterday and the company will take the "most changed large cap E&P" award 2 years from now. This morning a number of firms have revised there targets higher and I'll take the ZIM back to all cash today. I also plan on easing out of more ZCAT April positions today and tomorrow. Energy news should pick up next week with a sea of announcements out of IPAA and then earnings after that. Athabasca Oil Sands (ATH) comes public today in a $1.4 billion IP0 that should be worth watching.
Ecodata Watch:
- Jobless Claims came in at 460K vs 442K expected.
In Today’s Post:
- Holdings Watch
- Commodity Watch
- Natural Gas Preview
- EIA Oil Inventory Review
- Stuff We Care About Today - MCF and some other stuff
- Odds & Ends
Holdings Watch:
ZCAT (Zman Catalyst portfolio)
- $15,000
- 64% Cash
- Positions are updated on the ZCAT, ZIM, ZLT page.
- Yesterday’s Trades:
- Sold half (5) of the EOG April $100 calls taken yesterday for $5.00, up 219%, with the stock just over $104.
ZIM (Zman Inefficient Markets portfolio)
- $14,400
- 76% Cash
- Positions are updated on the ZCAT, ZIM, ZLT page.
- Yesterday’s Trades:
-
Added 5 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.
-
Commodity Watch:
Crude oil fell $0.96 to close at $85.88 yesterday, after the EIA released a mixed bag of numbers (see below). Crude is probably due for a bit of a rest. This morning crude is trading slightly lower on the back of a surging dollar.
- UK Watch: North Sea activity falls to 6 year low, lack of discoveries is inspiring many to sell assets and look elsewhere. Look for IEA production estimates to continue falling here.
Natural gas fell $0.08 to close at $4.02 yesterday. This morning gas is trading lower with mild temps and the dip in crude.
- EOG Comment Watch: They think supply is 2.5 Bcfgpd less than the EIA 914 data, which is much more than the 1% the EIA mentioned on Monday. They said it remains to be seen how much EIA will revise the numbers lower by but that long term they are not gas bulls as there is so much shale gas production capacity that will hit the market between now and 2012 that its easy to see gas prices being suppressed for the long term. Granted, with the switch to an oilier profile, the CEO is talking his book to some extent.
- Colorado State Hurricane Forecast: Yesterday, Dr. Gray forecast 15 named storms, 8 of them hurricanes.
Natural Gas Preview
- My number: 30 to 35 Bcf Injection
- Last Week: 12 Bcf injection
- Last Year: 17 Bcf injection
- 5 Year Average: 20 Bcf injection
- 10 year Hi: 68 Bcf injection
- 10 year Low: 39 Bcf withdrawal
- Last Week: 12 Bcf injection
- Street Consensus: 29 Bcf Injection
EIA Oil Inventory Review
ZComment: Imports covered up a rise in refinery throughput last week, leading to the bigger than expected build in crude stocks. Gasoline demand remains buoyant despite prices and unemployment leading to a bigger than expected fall in stocks there and while stocks remain in good shape, we are seeing an increase in production due to higher margins that could forestall further inventory reduction headway this Spring. On the distillate front we continue to skirt the bottom end of the demand range but I do expect, at some point, the much talked about inventory restock to translate into more trucks on the road and therefore more diesel consumption.
Crude:
Gasoline:
Distillates:
Stuff We Care About Today
MCF Operations Update
- Current production of 80 MMcfepd offshore (back up to pre pipeline rupture levels), 2.8 MMcfed onshore.
- The Nautilus well remains ontrack for product at June 30, adding 20 MMcfepd
- 3 more wells are set to be logged in May (Dude, Eloise South, and Paisano).
- Cash is up $2 mm to $80 mm from the last update 3 weeks ago. They remain debt free.
Other Stuff
- BEXP priced 14 mm share deal at $18. That’s 1 mm larger than expected … good demand.
- IPAA OGIS New York is next week - see presenters here . This is the bigger OGIS meeting, a who's who of E&P and pretty much everyone we talk about in the small and mid caps will be presenting.
- Scroll down to page 2, note the number of Bakken names on day 1.
- SSN presents on Tuesday which should just about coincide with their second update on their Bakken well.
- Scroll down to page 2, note the number of Bakken names on day 1.
Odds & Ends
Analyst Watch:
- EOG - Jefferies ups target from $113 to $127, stays at Buy
- EOG - UBS ups target from $97 to $112, stays at Neutral
- EOG - BMO raises rating to Market Perform from Underperform
- EOG - FBR ups target from $100 to $115, stays Market Perform
- MHR - Rodman ups target from $3.40 to $4.75, stays Outperform
MHR – Fun with #’s Department: Let’s bump the target price 40% off the EOG call yesterday!
MHR target raised to $4.75 at Rodman & Renshaw due to the addition of an Eagle Ford Shale value to NAV following EOG results (3.75 )
Rodman & Renshaw raises their MHR tgt to $4.75 from $3.40 after EOG yesterday highlighted its better-than-expected acreage position in the oil window of the Eagle Ford Shale, which it has tested over a 120-mile stretch from La Salle to Gonzales counties. ~75% of MHR’s ~15,000 net acres in the Eagle Ford Shale oil window are in northeast Gonzales County, nearby EOG’s acreage position. The remainder of its acreage position is further to the northeast in Fayette and Lee counties. If they apply the EOG math to MHR’s Gonzales County acreage, it would result in net upside potential of 30-35 MMBoe, or ~3x pro forma proved reserves.
Ty for mcf update..
peak sells 15,000 shares per month and i was wondering who steps up to the plate to buy these when avg trading vol is 30 k per day, (see below)
if they hit in one of those 3 wells its off to the races. Im out for now as the pl will not be as good as i hoped for with half their production offline for 40 days and ng at 4 but ext yr is setting up nicely with production up 25 %. now if we can only get back to 6 ng mcf will be a atm
Mr. Peak said “In the last month, we have repurchased 106,233 of our shares at a cost of approximately $5.5 million, or $51.70 per share. These shares have been repurchased from certain directors and employees and will be accounted for as Treasury Shares. This brings the total shares repurchased under our $100 million share repurchase program to 1,330,587 shares at a total outlay of approximately $57.3 million, or $43.05 per share. Our total fully-diluted share count now stands at 16,432,914 versus 16,514,147 at June 30, 2009.”
Hot Darn, z. You played the EOG update like a DRUM. Great real-time coverage for the board. Thank you.
Mrkt skittish this morning. Headlines point to Greece and fears the bailout will unravel. It was a pretty fragile “bailout” to begin with. Surprised? Hardly.
But mrkt taking a breather this a.m. Credit market trading wider after screaming tighter all last week. Frankly, there aren’t enough bonds around for investors to buy. Except US Treasury Bonds. There seems to be an aboundance of those… albeit well-bid yesterday.
TPH saying they will probably raise EOG’s NAV by 30%+….
BOP – thanks. So TPH is still evaluating the numbers? There was a lot to go through. I’d guess they wait until Monday to up it. I have not seen any numbers from Goldman or the other big houses, don’t have access to what everyone is thinking, mostly just the smaller and mid sized shops.
Bill – It’s hard to not like how the guy runs his company. Maybe one can take issue with the way he deals with the Street … but maybe not.
V or anyone have an idea how to get this ATH to show up on my U.S. based trading platform, would like to watch it debut?
SSN round 2
Still holding SSN in the ZLT. They present at IPAA on Tuesday and they may have the rest of their Bakken well fracced by then. They should at least have an update out as is standard procedure for them by then and I plan on selling out on that news unless they have something incremental to add on their future 7 drilling prospects which I don’t think they will. Will revisit the name after that after the inevitable bout of profit taking.
Analyst Watch
EOG – RBC takes target from $130 to $142. That’s more like it.
Do u anticipate any upside from the Tuesday call with ssn?
Yes
Morning all. Watch the 1174/75 area. An intraday move below there indicates we will likely test the 1159 -1165 level in due course.
Quote from TPH on EOG
“We’ll do bottoms up work to get at better details. Production targets hint at big rig ramp..first blush adds 30-70% to $102 NAV.”
Morning Nicky and Thanks.
ALERT ALERT ALERT
this will be huge for nna warrants fidelity symbol nnaws
http://finance.yahoo.com/news/Navios-Maritime-Acquisition-prnews-926803985.html?x=0&.v=1
nm has a spac nna ..the warrant trading at 68 cents allow you to buy a share of nna at 6 if a deal goes thru. nna is 9.85 so the intrinsic value is 3.85.
Upon completion nna will fall to about 8 meaning the warrants will be worth 2.00. No deal and the warrant expire worthless.
Now that a deal has been announce shareholders must vote.
I expect the warrants to be up 50 % to 100 % today. If you can get a few at 80 cents or less (doubtfull, might be a good day trade.
Thanks Bill, reading now.
Z: Does Joe B. agree with Dr. Gray’s forcast?
apbd
China is on ‘treadmill to hell’ amid bubble, Chanos says:
http://www.bloomberg.com/apps/news?pid=20601109&sid=an0ehK2dtdXg&pos=11
Chanos is one pretty astute guy for those who don’t believe China is a bubble.
Bill what is the warrant symbol?
APBD – Joe has been calling for a very active hurricane season.
Thoughts on mcf
– loss half of their production for half the qtr.
– bot back shares
– made a gold investment
-dug 4 cotton valley wells
– completed nautilus
– spudded 3 gom wells
– low ng enviroment
– still grew cash
I need to get back in name would like another pull back to 50
sd production lsst year was 120 bcf, mcf is 32 to 36 ncf or 25 5 the size.
ev for mcf is about 750 m
ev for sd is about 4 b
either mcf needs to go up a third or sd need to fall to 5 to be equivalent
nnaws at fidelity
nna is the underlying stock
could be nna-ws or nna-wts
depends on your broker
dont buy nna..
this is a play on the warrants and dont chase them above a buck
i show bid 84 ask 85 up 17 cents
oceanuant had a similar deal and the warrants wehnt up to 1.50 or so then they could get the vote and the warrants expired worthless
i think nm gets the deal done and if so the warrants could be worth 2.00
risk is no deal, warrants are worthless
Was being lazy, found it under NNA’, up 30%.
Group red with market, EOG up a percent plus, at 105, may have some more legs.
Thanks Bill, very interesting.
SPX right at Nicky’s 1175 level…
RE 7: I see ATH trading at 17.83 on my RBC account right now. Nothing special just ATH on TSX.
8 million shares of volume already.
TORONTO, April 8 (Reuters) – Shares of Athabasca Oil Sands Corp ATH.TO, Canada’s biggest initial public offering in more than a decade, dipped slightly in their debut on the Toronto Stock Exchange on Thursday before rising above their pre-market price.
Shares of the oil sands company initially dropped to C$17.85 in opening trades, then rose to C$18.07. The offering was priced at C$18 ahead of the market debut. ReutersLink ID=’ID:nN30177984′ / (Reporting by Jeffrey Hodgson; editing by Peter Galloway)
Credit indices tightening up from their morning wides. Seeing some bids come back into the mrkt.
z, still holding may eog’s right?
EOG in “strong gets stronger mode”. If the market rallies I would think it will move significantly again today.
SSN trading up 20%, and I should add to my comments that if it runs before the rest of the results are out it could overly discount any further good news here.
Gary – yes, ZIM has Aprils and Mays, ZCAT has Aprils, updated here:
http://zmansenergybrain.com/subscriber-data/holdings-wiki/
BEXP hugging the deal price today. Tomorrow look for revised numbers from the book runners.
Bill, Is NNA in any way financially related to NM. This guy has more shipping companies than I have pants.
Nicky – early morning dip seems to have held your level, any updated thoughts, and where is resistance now? Thanks much.
BEXP moving back toward opening price 18.12…breaks that I’m adding more
Z – I was looking at the catalyst page regarding MMR news. What is your latest expectation? I am thinking of taking some MAYs over APRs as expiry approaches.
VTZ – I think news could be any day, generally not on a Thursday or Friday but these guys don’t time it that way. Blueberry Hill, which is not the main focus here, should be newsworthy any day now and they often cobble together a couple of wells for a press release. I did notice they are not at IPAA next week though Energy XXI is.
bill – bot some NNAWS at .82 pls keep us advised on what is going on thks
ARD moving on rumor of another bid inbound
just got some color from an energy buy-side friend of mine on BEXP. He didn’t do the deal but points out that it has become a “cult stock,” in his opinion. He says all the old dogs (like him) have been burned by Bud and are just trying to ignore it. But the young gunners LOVE it.
That said, when it comes to BEXP over the last yr… Young Gunners 1, Old Dogs (like me) 0.
31 Bcf injection. Pretty much in line given the weather.
CHK rumored second suitor for ARD
BOP – guess I’m both, have been burned by them in the past. Used to be the gang that couldn’t shoot straight. I have learned to be flexible as my hair turns gray.
Z BOP: If you take the Papa approach and move toward crude and away from NG over the next few years, sould a name like MMR slowly be switched to an EOG? Or maybe only into MMR strength?
Isle – I would have said CHK or DVN on that one myself.
MMR feeling the Hate Lasers today it seems. I think they are sitting on some positive operational news, on a couple of fronts. Just a bit of a head-scratcher as to why no updates. Heck, JimBob was putting out a PR as often as he brushed his teeth, there for a while. Mrkt hates the silence. Bet his hedge fund investors hate the silence too. Except for the short-sided ones.
Z: WHX — for what its worth department — Steel Partners filed a 13D on WHX — they now own 39.2% of WHX
http://www.valueinvestorwatch.com
In case you don’t know, Steel Partners is an activist hedge fund run by Warren Lichtenstein. Believe me, Lichtenstein will fight for his rights in any investment he is in.
Tom – Apples and Bananas can both be in the same basket. The finding cost for MMR, if the play works in the ultradeep, will be lower than most of the shale guys.
z — #46 yeah. Being dogmatic only really works if you’re a dog. Buy-siders have to sort through so many options that once they make up their minds on something, it’s tough to change.
Thanks BSJ.
re 52. I was a buysider and then a sellside when I lost money on them. Now I’m a mysider.
Re:52 I love your way of thinking,
tomdavis — i would hold EOG (although i don’t, personally) and MMR and EXXI all in one happy portfolio. All for different reasons and different event risk.
re: EXXI note to self… never bet against Lee Cooperman.
re 50, bsj Steel Partners position I believe is in WHX Corp, symbol WXCO, not our WHX, they’ve been in it for awhile and added a little in february.
More random thoughts… i would hold 2x more EXXI than MMR. But balance that with EOG. EXXI’s biggest risk at this point is hurricane season. One or two well-placed punches moves EXXI to the sidelines for a while. They can survive it… but will bleed freely from the nose for a bit.
AEZ moving off lows, IPAA next week, well number two in May. IPAA should give them a good forum to show their #1 well cores, logs, etc and to layout their plan.
Thanks John.
RE:58 John — NICE CATCH! I just saw WHX and typed the link. My face is RED — lol
Bill – what kind of time line are we looking at on this NNA warrant deal?
Credit mrkt continuing the slow grind back up (tighter, better). Since our red mrkt is largely attributed to FEARS about Greece and debt… it is worth remarking that the debt mrkt seems to be getting over it.
Canadian company says technology for completely “green” fracking in shales is here aready:
http://oilandgas-investments.com/natural-gas/industry-insider-explains-green-fracking-technology/#more-1682
BOP: No hate from me. My ideas like NE, can not hold a candle to what you and Z have come up with. Your ideas continue to be wicked good. Keep up the good work.
I guess after my fiasco on WHX it might be a bad time to mention another way to play a rise in nat gas prices — MIR.
MIR is an IPP that has mostly coal plants with 85% of its operating profit coming from the DC area. Its plants are very modern and low cost. A $1 move in gas would cause operating profits to increase by 10%.
I don’t own this stock. A friend of mine sugguested this idea. I am passing it along. But if the new changes in EIA reporting does cause nat gas prices to increase, my friend claims it might be a stock to watch. Its chart look likes a ski slope.
tomdavis — not feeling any hate… but thanks for the luuuuuuuuuuuuuuuuuv. Just want it to work out for us all.
BOP – Nice to see you are in good form with the “Hate Lasers” and dogmatism for dogs 🙂
Did you read the Asterix comics? If I recall, the dog was called Dogmatix.
WLL recovering, EOG looks like it still wants to move.
I’d point that $50 mm is a piddling little nothing of a breakup fee for the ARD deal if CHK is snooping. It would make Aubrey’s shareholders exceedingly happy from a production standpoint (if not a price / reserve standpoint which is lofty).
But it is such a small company it would need to be the first in a salvo of buys for Aubrey to make a difference to his profile. And on that basis, he would take a lot of flak for paying too much for the reserves.
Dman — my monastic childhood did not include comic books, sadly…
Just kidding. I do like “Dogmatix,” tho. Would be GREAT blog handle. Pondering….
BSJ – what fiasco? the ticker misttep? no biggie man. Did you have ARD the other day in the contest? I swear someone did.
Z – BOP. I always have struggled with the school of diversified investing vs if you could love only one. I am in the Papa camp of loving crude a little more than NG right now.
If credit mrkts are any indicator (and they often are), stocks could end the day in the green.
That said, hearing a lot about oil being DOWN today. Wow. Yeah… right. All the way back to $85. Some thwacking.
Crude is so easy to love right now. You are safely surrounded by a warm, fuzzy crowd, hugging itself and swaying softly to the tune of “We Are The World.”
Thing is, Reality has a funny way of bulldozing through crowds like that. Just when you didn’t think it could happen.
Just more random thoughts.
RE: 73 Not me
I don’t think crude trades much lower than here… and probably goes higher. But nat gas could be the surprise.
Tom – as am I. I think natural gas closes the year higher but it will be a slogging haul that way and not good enough for all participants and their current valuations. Makes me wonder about the lofty valuations placed on RRC and UPL.
BOP – I think natural gas will be range bound with spikes and slumps at least until EIA revises and the real heat sets in. Looking at this dip in OII and thinking about hurricanes.
Last random thought… you get 80% of the benefits of “diversification” by just holding somewhere between 8-12 stocks. That was one of the best things I learned in b-school. That and the reality of you can only watch so many at a time. So I fall into the “you only have x-number of favorite stocks… may as well own them and leave the rest of your $ in an index fund.”
This just in re BEXP deal:
Jefco broker says 4x (oversubscribed) and they upsized deal.
They upped it from 13 to 14 mm shares, with that kind of demand, I would expect them to be able to press it higher as partially filled secondary positions are filled out in the market over the next few days. The bookrunners should come with new numbers and targets tomorrow. I continue to hold 10 of the April calls in the ZCAT and the common in the ZLT and will be looking at Mays in short order. These guys speak at IPAA next week.
#80 Guess i’m thinking a bit longer-term. Like 6 mos out. But i stink like a flattened skunk at short-term trading… get lucky sometimes. But that’s why i buy stocks (and not options). I can afford to wait it out, if i think i know what is coming.
The SPX chart makes it a little hard to believe that there won’t be some kind of correction eg. back to 1150. The narrow channel that broke down on March 26 is just too cute & the volatility is so low as to be surreal.
But recently there have been a lot of bearish technical set ups that got all the technicians salivating but they were actually too perfect. *Everything* looked ripe for a correction … which then didn’t happen.
I think people have been looking for the wrong sort of correction, ie. a nasty crash. Maybe we’ll see a more waffly sort of time-and-price correction instead.
For us I suppose the big question is whether the broad market gets nasty enough to drag down the likes of EOG.
BOP – I took the gift of CIGX yesterday and booked it today. Thanks for that.
(my own personal BOPIM portfolio).
Any new thoughts there?
#65 – Dman – i have been looking at the “green/clean” fracking space recently. I am still unsure of how it all shakes out – there are a couple of technolgies out there to “clean” frac water that i have looked at – Ecosphere (ESPH is the ticker)is the one that looks like it has been used by some US gas producers with some efficacy. SWN has been using their process/technology to some degree. ESPH just put out a 10-k that is interesting reading.
Ticker – IEVM is another “green” frack company with a biocide product that has supposedly been used in the Marcellus.
Both of these companies are teeny tiny and both sport big burn rates, and likely will need major financing in the near term.
I will continue to look at the space as i think fracking is here to stay and a “clean” frack technology may be helpful to producers to mitigate NIMBY risks.
ZTRDADE – ZIM – EOG
EOG – Sold half (20) of the EOG April $110 Calls for $1.15, up 271% since yesterday’s entry, with the stock at $107.10. I plan to sell the other half later today or tomorrow along with the May $105s. I continue to hold the April $100s in the ZCAT.
42/45 gotta love it
was away for a few hours just back
Z: JanneyMS upped price target for CLNE to $30/sh today. If anyone would like to read, ask Z I will forward to him.
VTZ – loving the Interactive Brokers platform.
Just added 3 EOG May 110’s. They split the bid below my limit price and charged $1.69 commission. Incredible.
Tom – whoa, don’t put me in that position, thanks.
Z……Whew…..how do you pick those tops to sell??
36/68
yes nna was sponsored created by nm
nna is called a spac special pupose acquisition company
they raised 250 in june 2008 , 3 months before the market and shipping stocks crashed
assets are cash no liabilities , better than a shelf filing as they already raised the cash. When they sold/created nna, every unit sold consisted of one share of nna and 1 warrant. The units and warrants each trade separtly.
the cash has been accruing interest and is worth about 10.20 per share.
here’s the rub, if a deal is done, the sposor, (NM Navious Maritime) gets roughly 30 % new shares in nna at a 1 penny per share so nna is diluted, ergo the price falls. Thats why I said nna will fall to 8 with a yes vote.
But , if the deal gets a yes vote, the warrants come into play which allow you to buy 1 share at 6 of nna = (more dilution) If stock is at 8 and warrant exercise price is 6 warrants = 2
Now arbs could come in and gobble up nna at 9.80 and vote no and force liquidation and they get 10.20 and the warrant holders get 0
So with the warrants at 80 cents you have upside of 1.20 and downside of 0. i think the odds favor a yes vote
Z, you ask how long.. the vote will be late may according to the press release
they also said nm will be buying 60 m of nna.. there are 2 reasons for this.
1. support nna price because if the price goes lower you might vote no and say give me my 10.20 back
2. have more votes in the yes column
ZTRADES – ZCAT – BEXP
Added (5) BEXP May $15 Calls for $3.50.
Added (10) BEXP May $20 Calls for $0.70 on the mid, both with the stock at $18.10. The deal was oversubscribed and I think there will be follow on interest. They speak at IPAA next week which should give them an opportunity to layout their accelerated Bakken and Three Forks development plan and they should have 3 more wells to announce in the next 2 to 3 weeks.
re 92. Ancient Prussian secret.
Thanks Bill.
Dollar weakening, crude coming off lows.
VTZ: 30 FWIW ATH was told to wait two weeks after it starts to trade here in US. Was fearful of too many lockup shares coming out. Was told very good long term value Z: Sorry lost my mind.
Z – resistance is at 1182/4. It would ‘look’ better if this minor correction went a bit lower but it could be done.
T – no worries, if they find out I have something then it’s just work, work, work all the time.
Thanks Nicky. Thinking I need to take my strong dollars over for a Greek vacation this summer.
excel maritime tried this but their timing was off. They sponsored a spac call Oceanaunt..yes i owned that too. It was trading at 25 cents and when the deal was announce went as high as 1.50. But they had to get a deal done by June 2009 right after the market melt down and hedge funds needed there mney back and exm/okn couldnt get the yes votes and they liquidated
Navious , Nm got their start this way sold units with warrants and in NM and that one worked
Navious ceo has done a great job in this downturn with creative capital raising and buying new ships that others couldnt close on at 50 cents on the dollar paying 100 % cash. They havent diluted their shares like drys did and she own 20 % on NM. Nm is probably a buy right here in the 6’s but i waiting for a pullback into the 5’s. i think in 3 years nm will be over 10
She created NMM which is a bulker company that pays out a big dividend and they have dropped bulkers into the unit from nm. People that like income buy nmm. People that want growth buy nm
people that like to speculate by the warrants,lol
regarding nmm. everyone loves the divy and the price is up 75 % trading higher then the nav of the vessals.
To entice a yes vote on nna she will have to promise an 8 % divy or higher.
Tankers arent exactly hot right now and these are product tankers that haul gasoline. With refinery utilization low we dont need to import gas. The product tanker prices have fallen so if the economy comes back, so will the rates and values.
i think the warrants drift up to 1.25 pre vote and climb to 1.75 or so after a yes vote. They have another year if the bring a deal to the table so they will try to make this work one way or the other. They are highly incentivited to get the yes vote.
EXM was distracted by the finance chaos and digesting a huge acquisition qmar that they didnt bother pushing for their spac
Z great work on EOG, thank you very much!
Thanks John, liking that one myself. Offsets some not so good picks this expiry in DVN and now in SD.
tom ward and other insiders buying sd stock
http://eresearch.fidelity.com/eresearch/goto/evaluate/news/basicNewsStory.jhtml?symbols=SD&product=SECEDGAR&provider=TENKWIZ_&storyid=201004072107TENKWIZ_SECEDGAR_6880699&hlinks=vnhl
Thanks Bill, good to know. Didn’t he punt a lot more before the last slump?
Very good summation of where we are today:
http://www.hussmanfunds.com/wmc/wmc100405.htm
Z – it’s interesting to see on the EOG chart how the mid-December gap was filled (gap caused by XOM for XTO). I asked you if the XOM deal was a game-changer for other E&P’s and you said no. Sure enough all those gaps got filled. According to the theory of gaps, they get filled unless they are caused by seriously game-changing news. So now we come to EOG. I gather you think this is real serious game-changy stuff.
Enough for no gapfill? No pressure or anything 🙂
I also wonder if it will actually put pressure on other not-so-blessed oily names.
I looked at those SD filings they all fell under the following category;
“Contribution by Company to the Executive Nonqualified Excess Plan to match deferrals made by the reporting person for the first
quarter 2010.”
Unfortunately not actual buys.
#105 – 2 million shares packaged on the last financing in Nov ’09??
Dman – I think all gaps are filled in time. I think this is a continual evolution of the process started publicly 2 years ago and privately 3 years ago by EOG management. So good just got better. If it gets much better someone like CVX or COP will buy them. I personally think XOM bought the wrong E&P name and it sort of surprises me they took the gassier big cap E&P who had paid up big time to be in a number of plays versus the high return, low cost guy who was becoming more liquids rich.
how good is deal reporter
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_A/threadview?m=tm&bn=25838&tid=6992&mid=6994&tof=4&rt=2&frt=2&off=1
Dman — #85 Had to step out… back now. See mrkt GREEN. ha. nice. Anyway, did you see the SeekingAlpha link i posted late last night on CIGX? Talks about the latest development… and why the mrkt was so WRONG to sell it off yesterday. But, gotta love those INefficient Mrkts!! (I do.)
ard up while sd is down means something is cooking
SD made a lowball bid, even with the 50 m break up fee, it wouldnt take much to get a better deal done like 42 or 43 with collars which gives a certainty to value
sd deal is a crapshoot
108 good find
re 113, right, like their shot at Crusader.
Bill, many thanks for the updates on shipping. I think I’ll hang on to my NM. I’ve been with them thru thick and thin. Time for some thick again.
TISDZ up again, no reaction from the DJ Triad today. Still holding the second half of my MMR call position which is house money funded as of yesterday’s sale. I may add back some May on this weakness.
BOP – didn’t see the link, will look.
Z – your Catalyst Watch for NOG mentions 4Q results. Any date for that?
Dman – Apologies. It appears I failed to put the latest Catalyst List on that tab when I updated it last on 3/26. It is updated now. The NOG comment was achieved with the 4Q results.
http://zmansenergybrain.com/subscriber-data/e-p/catalysts/
115 ward has found a new way to make money, make an offer and collest $200 for passing go ie the break up fee
NG only down 8 cents now, about where it was pre inventories.
Crude off 50 cents.
Group looks bored.
116 fwiw, I like nm and if i wanted to own one bulker stock, nm would be it. Dsx i respect would be 2nd. All others need not apply
Im going to reenter it at some point, at the moment i like exxi,eog and ard better
I was really blown away by eog presentation.. it looks like a buy and forget about it.. relativly low debt, in all the right places, and getting oiler
#92 and #95
That explains it. I have always thought that Z had an app that popped up and said HOD!
robry has next week at 71 bcf injection
http://investorvillage.com/smbd.asp?mb=2234&mn=270901&pt=msg&mid=8830669
was 85 last night in boston
we had ac on last night so we might have to start counting cdd
RE: 7, 30: ATH IPO down over 5 percent. $18 IPO now $17.05.
Z, VTZ, or anyone: any feel for the value of Athabasca Oil Sands?
Bill – NFX is like a smaller, cheaper version of EOG, same plays except the Haynesville / Bossier, plus deepwater oil and gas. They have EFS, Cleveland, and Granite Wash in addition to Bakken and Southern Alberta Bakken. Nascent Marcellus position, and a maturing Woodford one, then all the other S. Texas stuff.
Z – you hearing any signs of life in trucking?
My neighbor the diesel mechanic shop owner says he is seeing some signs of life in the industry. Loads picking up to some small degree. Operators not delaying every bit of maintenance.
its been a while since i looked at the nna deal. i misspoke when i said the warrant were exercisable at 6 , its 7, so 1.50 sounds about right with a yes vote so 65 upside and 85 downside
Bob – I’ll leave that to VTZ, much more knowledgeable that I.
RE: 126 — how about GPOR — Wunderlick analysis Neil Dingmann thinks GPOR oil sands acreage (Grizzly oil sands) would be worth at least 600 million based on Athabasca IPO or over $14 per share.
Bill = SD going green. Maybe the market is on to your “cash the breakup fee checks” plan, lol.
RE: 128 — crazy way to play an up tick in trucking — TA. TA runs truck stops.
RE: ATH. They have the last large parcels of premier land in the oil sands and committed investors in the Chinese. I believe that ATH IPO’d at a good price and are well-funded. It was massively oversubscribed from what I hear and I will surely be owning some at some point. I wanted to watch trading today.
Please have a read of the prospectus as they have put-call options on 2 formations of land that essentially guarantees a couple billion worth of funding if the Chinese buy them out so that they can fund other properties and if they don’t get bought out it guarantees income.
I haven’t picked up any yet today.
DMAN – Price execution on IB is the best.
Athabasca Oil Falls on First Day of Trading (Update3)
By Doug Alexander
April 8 (Bloomberg) — Athabasca Oil Sands Corp. fell on the first day of trading after the Calgary-based company raised
C$1.35 billion ($1.34 billion) in Canada’s biggest initial public offering since 1999.
Athabasca Oil Sands dropped 4.7 percent to C$17.16 at 12:57 p.m. on the Toronto Stock Exchange, from the C$18 IPO price.
“Oil sands are a really, really labor intensive, cost- intensive investment proposition,” said Steven Conville, who helps manage about C$8 billion at Macquarie Private Wealth Inc.
in Markham, Ontario. “I’m not sure people are really into the sizzle at this point in time. People want steak.”
Athabasca’s sale of 75 million shares, or a 19 percent stake, valued the company at C$7 billion. The sale was the biggest IPO in Canada since Manulife Financial Corp., the country’s largest insurer, raised C$2.48 billion.
Canadian stocks fell for a third day as commodity prices dropped, with the Reuters/Jefferies CRB Commodity Price Index slumping the most this month. Crude oil fell below $85 a barrel for the first time in a week.
Realize that they have:
a) a proven asset
b) large land positions/probable reserves that scale well
c) speculative property that is outside of the Chinese partnership
d) good funding
In terms of valuation it’s hard to judge based on expectations of how you think their put-call options are goign to play out.
Don’t believe their development timelines wither, but believe that it will be developed.
Keep in mind you have lots of time to buy as they won’t be producing til 2013 minimum.
CHK denies interest in ARD
this is what nna would be buying
Type DWT Date(1) Purchase Price
—- — ——– ————–
LR1 Product Tanker 74,671 May 2010 $43.5 million
LR1 Product Tanker 74,671 May 2010 $43.5 million
Chemical Tanker 25,000 9/30/2010 $28.7 million
Chemical Tanker 25,000 11/30/2010 $28.7 million
LR1 Product Tanker 75,000 Q4 2011 $40.0 million
LR1 Product Tanker 75,000 Q4 2011 $40.0 million
MR2 Product Tanker 50,000 Q1 2012 $33.6 million
MR2 Product Tanker 50,000 Q2 2012 $33.6 million
MR2 Product Tanker 50,000 Q3 2012 $33.6 million
MR2 Product Tanker 50,000 Q3 2012 $33.6 million
MR2 Product Tanker 50,000 Q4 2012 $32.9 million
MR2 Product Tanker 50,000 Q4 2012 $32.9 million
MR2 Product Tanker 50,000 Q4 2012 $32.9 million
—————— —— ——- ————-
A few years ago these tankers were going for 52 m each. 33 m is below the cost to construct a new one
So if and when the market recovers , these tankers could be worth 20 m more (each) than the acquisition price
she is buying at the exact low in the market as financing has dried up for other buyers
nna also raised 250 m in cash and using only 125 m of it leaving 125 m for corp uses
The pr releases says they can pay out 50 % of ni.. I need to do a pro forma pl next..
they need to target a divy of 8 to 10 % to make this work, imho
they are borrowing 334 m at 2.75 over libor
We haven’t posted Cross-Market Strategist #2 in a while… so, here you go. Bottom line = do not short this stock market. Credit Market is indicating conditions are in place for several years of upside. It’s just that stocks don’t realize that yet.
http://wjb.na.bdvision.ipreo.com/NSightWeb_v2.00/Handlers/Document.ashx?i=d2100431121a418598c9059445e3ee4a
http://www.tradewinds.no/shipsales/article556897.ece
industry newspaper on deal
VTZ, BOP, BSJ thnx re ATH. I bought some at $17.10 for a VST “ZIM” type trade,
Nicky – S&P through your resistance, next stop? Thx.
http://files.irwebpage.com/reports/shipping/0Ti9Xj6PxQ/fw_week_14_2010.pdf
says product tanker rates are about 12 k a day
whats 5 yr libor going for 3 % or so??
If yes, the debt is costing 5.75 % per year
interest cost per day per ship would be 4050 per day
depr cost per day is 3858
operating costs are about 4000 per day
so pretax ebitda is 7,000 k per day
and net income is break even with cash flow of 3.9 per day after int costs
so if they are allowed only to pay divy on net income there is much ni there
if it 50 % of cash flow, thats another matter
pre tax ebitda 8 less 4 for int and 4 for depr = o net income
bill — LIBOR-based debt usually prices off 3-mo rates and pays and resets quarterly. 3 month LIBOR is currently 0.294%
re 144. Good run through.
So the borrowing rate would start at 3.04% for the first 3 mos. But of course, it is not a fixed rate… and ST borrowing rates will go up when the Fed starts their rate hike program.
Z – any reason for the opening spike down in NFX ?
Probably just oil and market. Same goes for the one in WLL.
TPH out with some trading desk color… seeing 2:1 better sellers and some short activity ticking up. But mentions that the long-crude / short-nat gas trade is getting long in the tooth. Thinks you start to stick natty toe in the water next time nat gas hits 3.80-ish.
BOP – any idea if KOG has the log from the T/A well on the new acreage?
Is anyone out there still following IOC? I did a little short term trade buying on the post lawsuit drop in price and it has recovered a bit. I have no sense if this has resolved, if there is some news pending or if it has just crept up with the general market recently. Any insight out there?
Also thanks to all for the great calls and for what we in the military call “Crosstalk on the command net.” Lots of great sharing going on here and I appreciate being able to benefit though I don’t have much to offer.
Z – you’re out of HK calls just now, correct?
Italy – not following closely at the moment, maybe Reef? Glad it’s working for ya! Stay safe and as always, if you see OBL, poke him in the eye for us.
Dman – yes, since Tuesday afternoon, just holding common.
z #152 — no sir, I do not. And i feel terrible about that.
Re 156, Well, I’m sure they got it if there is one, more likely a bit of core.
SD / ARD. Just a different prespective but I think why this is appeals to ARD mgmt is that SD will jump the drlg rig count up 15 rigs in the Fuhrman-Mascho within a very short time. They have already deployed 6 rigs onto the acreage that they purchased from FST and closed 12-09. ARD had bid on that same acreage and lost out to SD. Unfortunately ARD mgmt team had lost some crediblility with the investment community after their recent 1st quarter cc which they really came off as not being able to execute a game plan. Worst part for them is that most of these problems had been there for more than a year…If SD really starts executing on FST and ARD property which would all be infill drilling with average time to drill San Andres less than 2 weeks with cost of $500,000 and 65 million of ARD’s money , thats 130 wells. That gets you oily very quickly. I like the deal and the trade on SD is simple for me with down side known. If SD gets the deal done and executes the drlg program, their stock price should move a greater % than ARD will be able to obtain at anything less than a $ 45.00. Buying common of SD and Sep 6s & 8s……………Z, side note on EOG Carret well, now I know why we couldn’t find anything out. EOGonce again proves that they are THE best E&P company.
Tom Watson 67 @ Masters
30 million shares of ATH traded today so far.
West – good points. I’m guessing that ARD has more tertiary recovery opportunities than have C02 for as well.
Re Carret – right, exactly. BEXP well to spud not far off, there’s also a little private in there with a couple of holes.
west ty for 158 and bop ty for libor answer.
ard was going to spend 200 m in cashflow this year to drill 300 wells, 75 per qtr
all the issues ard had with infrastructure, will still be issues
sd will have major problems with ng unhedged in 2011 and i wonder if the equity is really worth 8 per share with ng under 4
BEXP kicking into green, not big volume on that move though, still, good to see the follow on action.
z – long term, like 3-5 years, do you like NFX over EOG?
Is NFX management better/worse? Is EOG going to get oilier faster?
Any reason not to own both?
Last answer first. No reason not to own both. Managements are different with NFX a little more explorationist and willing to go out on a limb a little more although that has worked well for them. EOG is more balance sheet conservative.
NFX is smaller but more diversified than EOG, which noticeably lacks Gulf of Mexico exposure.
Both have a very large set of drillable prospects in plays in which they have demonstrated repeatable success. Neither of them have nearly as much reliance as they did in the past on exploration success, but both have events this year which could provide the stocks with legs higher. Both have extended their RPs (reserve life) in the last few years. Both are getting oilier.
adding to that, EOG is getting oilier faster.
One ace that SD does have is that Malone Mitchell III owned all the surface and almost all the minerals under the Pinon field which SD acquired in the trade and this would allow them to drop their rig count down to single digit in the Pinon without any lease problems.
re 165, 166, thanks.
BTW, just finished my first quarter here on ZEB. I would like to thank everyone. This is a great site.
Although I’m ultra conservative and small time, plus I’ve some of the best trades, I’m up about $23k this Q on stocks I never would have heard of if not for ZEB.
So $189 plus risking some capital has turned out very well.
West – thanks again, good thought, gives them plenty of flexibility re their rig fleet. Don’t they have to drill to comply with OXY?
Rob – great, glad to hear that!
re 168 – I’ve missed some of the best trades. Wish we could edit these posts.
I”m thinking that is the part of the field that they would continue to drill and develop. This is the part with the high CO2 concentration that they have been waiting on plant to come on line to produce because at present that gas is no saleable. Probably a liitle more complicated than that but they are working on a lot of options. Believe me Tom is frustrated right now because drilling and developing is what he does best. Remember when they had 30 rigs going in the Pinon. That is what he will do with those oil properties and like EOG said this will not hurt the price of oil.
sd chart is amazing today
im going to lighten up on ard at 38 and above
165 Rob,
None better than z, imho
Great posters as well
NNAWS
bid 91 ask 92
nna 24000 bid at 95 ask 98
selling 40 % my position at .99
letting the other half ride
bill – while we/re talking about good trades -NNAWS just sold 1/2 at .92 thks
congrats 10 % a day isnt bad
i think the deal gets done and the only open question is where does nna trade post deal
rob banks – u catch that one too???
z = also caught your BEXP trade (Apr) – 45% in about an hour. 1/2 of that gone too. thks glad i stayed home to do taxes today.
Thanks Bill, obviously you are no slouch yourself.
ZTRADE – ZCAT – BEXP
Sold the last 10 April calls for $1.50, up 618%, with the stock at $18.90. I continue to own the May calls taken earlier today and the common.
andy, no, it was too complicated for me, but I’m glad it worked out for those who made the trade.
I did catch the SSN trade, tho. In at 44 cents and out a few days later at 74 cents was fun!
Andy – Well it does beat just doing your taxes.
Nice one Bill re NNA warrants! Up 45% on the day.
rob i missed the SSN. met mgt and didn’t like em so i let emotion get in the way of a z beauty!!!
CRZO out with offering
CRZO going after Niobrara shale to get oilier faster. Seems this is the next land grab.
Z; great trades wirh respect to BEXP calls; I missed that!
Z, Look who’s changing their tune! Surprise! Not that he’s ever right about timing on anything, but I guess Pickens needs to go straighten em all out again.
Washington won’t endorse natural gas as an important bridge fuel to other sources of renewable energy, Cramer said during Thursday’s Stop Trading!
Paul – Thanks.
Positions updated
http://zmansenergybrain.com/subscriber-data/holdings-wiki/
BedTime Market Strategist
Endangered Species?
We have to be honest. It is mildly disconcerting when it appears as though stock market bears may soon outnumber giant pandas on the list of most endangered species. There were two predominant themes as trading commenced today. First, dominating the early hours was the macro weakness of Greece. The second theme and catalyst that ruled the day in the U.S. was the Same Store Sales Reports from retailers. By BTIG’s count, 23 retailers exceeded expectations while only 2 missed. Market participants were well aware that March 2009 was an easy comparison month, but the one-sided positive skew of the results and accompanying increases in guidance is hard to ignore. Without a doubt, U.S. markets should be more concerned with the health of U.S. consumers but the start of a U.S. rally following Europe’s close was simply too easy. In the near term, it is a sign of underlying market strength, but it could be an early sign of investor optimism emerging. It is healthier to see fear in the market to keep investors honest. Don’t get us wrong, the atmosphere is still one clearly closer to caution than exuberance. The wall of worry remains intact. Our favorite sentiment indicator AAII has not flashed an optimism sell signal since early 2007, but we expect we will see one later this year. We will continue to watch this trend, but we are hopeful the bears are simply hibernating.
Greek Soap Opera.
The Athens composite was down 5% before a modest rebound to close down 3% while Greek yields pushed higher and CDS blew out to new spreads above 450 basis points. German and French banks came under early pressure as the market is attempting to force the EU leadership to take out their EU-IMF “Bazooka.” The ECB, which was preparing to return to its pre-crisis collateral standards, scaled back the normalization process to the benefit of Greek Sovereign debt. ECB President Jean-Claude Trichet attempted to talk up the Greek situation. He noted that Greece will not default and the unsubsidized EU-IMF framework is workable. If the plan does not provide some subsidy, then Greece might as well pay the high rates in the market. It will be interesting to see how Greek bonds and CDS react when the EU politicos inevitably float the story of potential subsidies. By this time next week, speculator outrage and German spies will likely be back in the headlines. We can’t wait to see what tomorrow brings.
Good evening…a few noteworthy macro P&F technical developments…NYSE Bullish percent, $BPNYA was the last major index, but finally went on Bull confirmed status today…so $BPNYA, the S&P, $BPSPX and the dow, $BPINDU are all now on bull confirmed status, which longer term means…Ok to buy…what’s interesting is that many of the individual bullish percent sectors are at fairly extreme bullish percent levels…the dow is at 96.67, meaning that all but one of the dow stocks are on a P&F buy signals…the interesting standout is the S&P energy sector bullish percent, $bpener, which looks to be the only sector stuck in full blown Bear confirmed status which triggered on 3/30/10…I wonder if we are going to see a catch up reversal…so far, the $bpener really hasn’t moved much even as the major indexes reversed into bull confirmed status…very interesting…