13
Apr

Tuesday Morning Pause + Big HK News

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Market Sentiment Watch: Yesterday was perhaps the most boring day of the year. After the bell AA earnings matched lowered earnings estimates but missed on the top line. The outlook was OK.   This sets a poor tone for the opening this morning. I plan on being fairly inactive this week as market participants seem less than ready to carry things higher before getting confirmation from earnings season that it's safe to come out and play. The ZIM is back to all cash but it may take a shot at the HK news (see the Stuff section below) and the ZCAT is over two-thirds cash.


In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today – IPAA Day 2, SSN, HK, PXD
  5. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio):

    • $14,600
    • 71% Cash
    • The Holdings Tab Is Updated for the Quick View portion.
    • Yesterday’s Trades:

      • None

 

  • ZIM (Zman Inefficient Markets portfolio):
    • $17,300
    • 100% Cash
    • Yesterday’s Trades:
      • EOG - Sold the 5 remaining EOG May $105 calls for $5.10, up 88% since entry last Wednesday. I'm likely to buy into this name again before earnings in the ZCAT for a couple of potentially catalytic items.


Commodity Watch

Crude oil eased $0.58 to close at $84.34 yesterday, despite a weaker dollar. I call it profit taking. This morning crude is trading off 75 cents.

  • Early Read On Oil Inventories:
    • Crude:  UP 1.15 mm barrels
    • Gasoline: DOWN 1.0 mm barrels
    • Distillates: UP 1.0 mm barrels

Natural gas fell $0.06 to close at $4.00 yesterday. This morning gas is trading off a couple of pennies early.

  • Imports Watch: 8.3 Bcfgdp, up 0.5 Bcfgpd from last week.

    • Canada: 6.8 Bcfgpd, down 0.4 Bcfgpd from last year.
    • LNG: 1.5 Bcfgpd, up 0.35 from last year

Crack Spread Update


Key Takeaways:

  • Cracks continue to hold their own despite the recent run in oil prices.
  • Traders thinking oil may come in slightly in the next few weeks even as demand picks up on the gasoline side. 
  • I'm getting closer to going long refining however I want to wait out a hiccup increased refinery throughput of the past few weeks which hasn't fully rolled through the data yet in the form of higher gasoline production. 

Stuff We Care About Today

HK News Item #1 - HK Sells Midstream Assets

  • 50% interest in Haynesville midstream assets for $875 mm to Kinder Morgan ... much higher than expected
  • Total divestitures to date in 2010 are now $1.4 B, again, higher than the $1 B target, and there is a 4th monetization to still happen in 1H10
  • Production Guidance Falls by 20 MMcfepd to a range of 650 to 660 MMcfepd, attributed to the previously announced divestments, but still represents 31% YoY growth. 

HK News Item #2 -HK Provides Eagle Ford Reserve Estimates, Cuts Budget, Announces Big Well At Black Hawk Field

  • Guiding Capex DOWN by $100 mm. That's just about unheard of for these guys and is the result of a transition towards the Eagle Ford Shale oil window and away from other gas assets in their portfolio.  Should be viewed favorably by the Street who is always worried about Floyd's spending habits and potential to drop a deal on the heads of shareholders. I'll reiterated that at their last presentation, Floyd all but promised no equity deals for 2010 and 2011.  Importantly, capex is being reduced in the Haynesville program and upped in the oilier portion of the Eagle Ford Shale. HK noted that it expects 2010 revenues to rise because of this program shift (oil is trading at 3.5x natural gas on a $/BTU basis at the moment so this makes sense).
  • Black Hawk Field (oil window of the Eagle Ford Shale) Well #2 (the Lanik #1 H). IP of 930 bopd and 2.7 MMcfgpd. Recall their first well, the Krause #1H, IP'd at 1,150 barrels of condensate per day and 3.3 MMcfgpd (announced at Howard Weil).  This well is 20 miles from the Krause well, also in DeWitt County, TX.
  • Eagle Ford Acreage Now At 360,000 net, 63% in the oil window.  HK puts net potential risked reserves at 340 mm barrels for the oil window portion of the play. 
  • Nutshell: A good couple of press releases. 1) another asset sale for more $ than expected, 2) reduced capex almost always welcome here, especially when coupled with a shift towards a more oily program, 3) Big oily well in the Eagle Ford, and 4) An estimate for the Eagle Ford oil window that equates to 74% of HK's total company proven reserves. Sounds like its time for the ZIM to play, depending on the open. I continue to hold shares of HK in the ZLT.

IPAA Day 1 Takeaways - not much:

SFY - Interesting if you are looking for an oilier name with Eagle Ford Exposure, part of it in the oil window. I don't plan to chase it here but it is on the cheap end of things and I will watch it more closely this year.

Wll - look for more updates on Lewis and Clark by the Q2 conference call. Look for another set of wells on the 1Q call from their Sanish field operations.

 

BEXP - upgraded oil volume guidance

  • Montana Bakken well - results late 2Q/early 3Q (no change there)
  • Three Forks well in Rough Rider - drill 1st in 2Q (no change also),
  • Attributes the higher IPs to their drilling formula.
  • 5th rig in May, then add 1 rig every 4 months, to accelerate drilling program.
  • 3 wells completing now (see Catalyst List)
  • 2010 oil volumes up 125%, was 100%. Target now 5,189 bopd for 2010.
  • 2011 oil volumes up 100%

 

IPAA Day 2 Presentations We Care About: (all times EST)

SSN - 9:10 - Preliminary production from the completely completed Gene well was out last night. The well was producing slightly above the initial partially completed rate but was still cleaning up at the time of the press release. Expect another press release tonight with the final rate.

CLB - 9:35 - This name is my best guess at who will be taken out next in the Service space. Until that happens and it may or may not be soon I am going to get closer to the name again and may start trading the options again.

DVN - 10: 00

EXXI - 10:30 - Listening anything on Davy Jones and for any changes to the 2010 ramp up plan.

KOG - 11:20 - Staying updated on BOP's best pick in the ZLT. If I were them I'd be looking at doing a secondary up in the $4 range. It would provide the opportunity to buy more acreage and accelerate their drilling program and no one could argue that they are serial filers as their last deal was over 100% ago on the shares.

HK is chairing the lunch

CHK - 1:35

TAT - 2: 00 - Looking for a mid April update.

CXPO - 2:25 - no interest at this level but keeping up to date.

Other Stuff:

  • PXD - 4th Eagle Ford well IPs at 19.9 MMcfepd; PXD calling their net position worth 11 Tcfe.
  • GMXR - has news out, will add comments in the comments section.

 

Odds & Ends

Analyst Watch:

  • UBS ups RDS.A and E to Buy,
  • Oppenheimer ups COP to Outperform

 

169 Responses to “Tuesday Morning Pause + Big HK News”

  1. 1
    zman Says:

    If all of that HK news doesn’t make the Street happy, I’m not sure what would.

    HK P/CF (based on the pre open price and current estimates)
    2010: 8.9x
    2011: 6.4x (cheap for the name, cheap for the growth rate, cheap for the group)

    RRC P/CF
    2010 12.3x
    2011 8.7x

    SWN P/CF
    2010 8.5x
    2011 6.6x

    UPL P/CF
    2010 9.4x
    2011 7.0x

  2. 2
    zman Says:

    IPAA schedule:
    http://www.ipaa.org/meetings/pdf/102010ogisnypresentationschedule.pdf

  3. 3
    zman Says:

    HDY and BRY speaking first, probably going to miss those.

    SSN at 9:10 a definite listen.

  4. 4
    BirdsofpreyRcool Says:

    HK is up a buck in pre… I’d call that “happy.” That was a great EF well.

  5. 5
    zman Says:

    BOP – not sure it was oil or condensate. The first well was bcpd, this just said barrels (not barrels oil or barrels condensate, hate it when they are not specific) so I’d guess that’s the case, still, a great well. The asset sale should make them all happy as they didn’t expect a price this big was possible, lot of naysayers on that.

  6. 6
    bondbuddha Says:

    Go Hawk!! 🙂

  7. 7
    BirdsofpreyRcool Says:

    From TPH… sums up the overall situation nicely.

    Gassy E&P companies take note (GDP – $18.51 – A) – Goodrich stock performance yesterday (and likely HK today) shows you EXACTLY where E&P investor heads are at. GDP +3% in tape (intraday peak +7%) with E&P index only +0.1% (and many names red). Why? GDP cutting gassy capex, shifting those dollars oily, staying within cash flow/balance sheet. Yes, it cost them some 2010 growth rate..but investors hate gas macro much more than slower growth.

  8. 8
    zman Says:

    TPH also putting a $140 NAV on EOG, largely due to the EFS.

  9. 9
    zman Says:

    SSN presentation about to start:

    http://www.corporate-ir.net/ireye/conflobby.zhtml?ticker=SSN&item_id=2726523

  10. 10
    zman Says:

    SSN in its presentation saying it has 46K net acres in the Niobrara, with one producer. Knew they had permitted a well but didn’t know about the decent sized acreage there.

  11. 11
    zman Says:

    SSN presentation:

    http://www.samsonoilandgas.com.au/IRM/Company/ShowPage.aspx?CPID=1119&EID=32689342&PageName=Presentation%20IPAA%20Conference

    Slide 13, shows you their small slice of the Bakken is on the east side of BEXP’s best part of Rough Rider.

  12. 12
    bill Says:

    isnt ssn fully value at 80 cents 60 m ev?

  13. 13
    zman Says:

    SSN Notes –

    The Gene well is still recovering fluids from the frac, should see a higher rate in the next pr, maybe tonight.

    next Bakken well, the Gary well, spuds May.

    They have 6 sections so 4 more wells on 640 and another 6 when they downspace.

    If you put 500,000 BOE on each of those which is neither conservative nor aggressive I think given the neighborhood that’s 6 mm barrels potential across 12 total wells. At $10 per barrel in the ground that’s 60 mm. That’s before you get to the Niobrara or their gas assets in the Rockies.

    Niobrara – SSN been there 3 years, acreage is adjacent to and just north of EOG’s position. Slide 21.

    Niobrara – doing a horizontal re-entry, expecting 300 bopd.

    Anyway, not falling in love, will be out this week (already out of it in the ZIM), just think it has a little more pop left in it.

  14. 14
    zman Says:

    Bill – I was typing while you were asking. Sort of maybe answers it in 13. It’s a penny stock so it could do just about anything. I think the Niobrara position could run it more off of EOG. But when people start selling it could really back off as well.

  15. 15
    kaman Says:

    AXAS anybody? anybody?

  16. 16
    zman Says:

    HK traded 245K shares pre market, up 4%. I’ll be looking at calls in the ZIM and ZCAT.

  17. 17
    BirdsofpreyRcool Says:

    TechTrader out with a 55/45 SHORT call today for a day-trade.

    HeadTrader said he wouldn’t pay too much attention to that call. But he also adds that it has been very tough to trade (and call) the intra-day moves b/c of such light volume.

  18. 18
    zman Says:

    BOP – thanks much.

  19. 19
    zman Says:

    Bill – that was a gross EUR, so 30% of 2 mm barrels EUR on that gets you to about $20 mm at $110/ barrel. They are calling gross closer to 750K per well.

  20. 20
    zman Says:

    ZTRADE – ZIM – HK

    HK – Added (20) April $23 Calls for $0.75 with the stock at $23.35, up on positive news on several fronts (see post) and in a weak market. I will likely add some in the ZCAT as well but likely will go with Mays.

  21. 21
    zman Says:

    ZTRADE – ZCAT – HK

    HK – Added (10) May $24 Calls Fro $1.10 with the stock at $23.20.

  22. 22
    elijahwc Says:

    GDP – “RBC Capital Mkts raises their GDP tgt to $26 from $24. GDP announced it has entered into agreements to acquire 50,000 gross (35,000 net) acres within the oil window of the Eagle Ford Shale. GDP is maintaining its $255 mln 2010 CapEx budget, but it is shifting $50 mln to leasehold, drilling and completion costs associated with the Eagle Ford. Goodrich plans to spud 7-8 Eagle Ford wells during 2010. They expect 2010 production to suffer from moving CapEx to Eagle Ford ramp and have have lowered their CFPS estimate by 6% to $2.44 in 2010. As oil volumes hit in 2011, they have raised their CFPS estimate by 5% to $4.79 in 2011. GDP trades at a 40% discount to our $31 NAV. Their new $27.00 tgt is based on a 13% discount to NAV.”

  23. 23
    elijahwc Says:

    Send in the clowns dept: Everybody gets a nice bump for going gassy except Tom Ward and Co @ SD. And, they probally got the best deal on assets assuming it gets done. Boy, do they ever dislike this guy.

  24. 24
    zman Says:

    ZTRADE – ZIM – HK

    HK – Added another (20) April $23 Calls for $0.65 with the stock at $23.20

  25. 25
    elijahwc Says:

    meant anti-gassy as in oilly in #23 above

  26. 26
    zman Says:

    To listen to PQ or DVN at 10 EST, that is the question. I’m going with PQ.

  27. 27
    zman Says:

    Eli – They just can’t hate him enough right now. He went from God to Goat in record time.

  28. 28
    zman Says:

    HK waking up.

  29. 29
    zman Says:

    HK broke up through its 200 day sma with this move. On balance volume poised to move higher.

  30. 30
    zman Says:

    Group greening, HK and EOG look like good candidates for “strong gets stronger” action today.

  31. 31
    ram Says:

    SSN initially looking like BTRSTN.

  32. 32
    zman Says:

    re 31. Yes, but news not entirely out yet so its the lack of a rate bump on the completed frac that I think they are selling. I don’t think it craters from here but the safest play of course would be to just punt and revisit later.

  33. 33
    elduque Says:

    There is a lot of shifting from gas drilling to oil. Eventually this has to help drive up gas relative to oil?

  34. 34
    Garyinhou Says:

    Z, thoughts on bexp rest of week into expiry?

  35. 35
    elduque Says:

    Is there any reason to like CHK prior to presentation?

  36. 36
    ram Says:

    Gracias.

  37. 37
    BirdsofpreyRcool Says:

    Bought some HK in the LT BOP portfolio. Will sit on this for 2 yrs or so. Like the growth within cash flow. Choosing to “believe” (for the last time) they will not issue equity until stock much higher. But, you HEAR this HK? This is the LAST TIME I believe your “fund out of cash flow” statements. ONE MORE equity issuance below $30 and it’s Bye-Bye Birdie!! Forever.

  38. 38
    zman Says:

    Listening to PQ

    BEXP – presentation was good. Potential for higher 2011 estimates off of the oil guidance, maybe a little higher for 2010. Stock probably keys off oil and the S&P more than anything else unless it catches an upgrade from one of the naysayer group but so far no evidence that is going to happen.

    Eld – no rush at least.

  39. 39
    zman Says:

    BOP = LOL. No kidding. His last presentation was nothing less than a promise not to issue stock in 2010 and 2011. At this point, they really don’t need to. On a stronger market day, the stock would be flying. I own the shares for the long term and am playing this news for the pop which is yet to come.

  40. 40
    zman Says:

    BOP – also note this is the first bit of Haynesville activity retrenchment from a big name we have seen. As they move to oilier prospects there will be more. If the stock does end up running on the news you could see others make the same decision, especially if rig performance is such that they can get their acreage held with a lower rig count.

  41. 41
    jiveyjr Says:

    I bot HK back too after being po’d time and again at them…but hey, looks like they’ve redirected themselves well

  42. 42
    zman Says:

    Almost all of the Gomex shelf names are slightly green, EXXI speaking at 10:55 EST.

  43. 43
    zman Says:

    PQ – hearing nothing new.

    DVN – not listening but the new streamlined story obviously not wowing anyone.

  44. 44
    bill Says:

    dvn

    story sounds good to me

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDAyOTR8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

  45. 45
    Dman Says:

    crude is testing the breakout point for 2010 and trying to decide if it wants to bounce. Oops, decided not to.

  46. 46
    elijahwc Says:

    IMHO, here’s the problem. DVN is now officially a VALUE TRAP. And, given the path that they have chosen can only be unlocked via some type of ATLS/Reliance Inds type of deal. Good luck. I own it. ughh

  47. 47
    reefguy Says:

    FYI- PQ…looking to sell Fayetteville

  48. 48
    Nicky Says:

    Good morning all. So far so good with the count which appears to be working on the corrective pullback this morning. I am still looking at the 1181 – 87 area but in truth it could stop at 1189.

  49. 49
    zman Says:

    Agreed Eli.

    Thanks Nicky.

  50. 50
    bill Says:

    gmxr getting thrased

  51. 51
    zman Says:

    Bill – no love for bad completions, gassy names today.

    HK a bargain here in my book.

  52. 52
    zman Says:

    ZTRADE – ZIM – HK

    Bought the final slug of my desired position. Added 20 more HK $23 calls for $0.50 with the stock at about $22.95, up 1.5% in a weak tape. Average cost is $0.65.

  53. 53
    zman Says:

    EXXI call started

  54. 54
    andy Says:

    EVEP – CEO sees gas price 3.50 – 6.50 for next 10-15 years because of ongoing gas discoveries. thinks its very possible to see a merger of upstream MLP’s this year

  55. 55
    bill Says:

    exxi slides look the same as howard weil on 3/19

    states davy jones 200 ft of pay..is this new?

  56. 56
    zman Says:

    Thanks Andy

    Bill – that’s the same.

  57. 57
    zman Says:

    Market seems to be busy doing its taxes this week.

    KOG up next at IPAA.

  58. 58
    zman Says:

    HK threatening to go red, that does not make a lot of sense.

    EXXI – walking through a list of prospects, no DJ talk yet.

  59. 59
    zman Says:

    EXXI – Davy Jones

    flow test by end of this year, early next year, no change there. All parts necessary have been sourced.

  60. 60
    1520sbroad Says:

    Does HK “doing the lunch” mean they are giving a presentation or just sponsoring the lunch at IPAA?

  61. 61
    bill Says:

    exxi, only 100 k shares traded

  62. 62
    zman Says:

    re 60. They give their presentation during lunch, Floyd speaking.

  63. 63
    zman Says:

    KOG presentation starting now.

  64. 64
    zman Says:

    KOG presentation:

    http://www.kodiakog.com/pdf/KOG_IPAA-FLA.pdf

  65. 65
    elijahwc Says:

    IPAA snipets from Ladenburg

    “We attended Day 1 of the annual IPAA conference in New York yesterday. Attendance by investors and analysts was heavy. We would characterize the mood as serious, but not grim. While compared to last year, when commodity prices were far lower than now (see Table 1), things are definitely better. However, any investors seem a bit off-balance as they try to make sense of where the sector is headed. Specifically:

    On natural gas, the thinking seems to be, “how bad will it get, and for how long?”

    On crude oil, the thinking seems to be, “is it time to get into the stocks (or buy more) because the strength may continue? Or is it already too late?”

    On both fronts, among bull and bear alike, we would say there is a lack of conviction about which scenarios are plausible in outlining a “next act” for the commodities.

    Oil-levered names are getting big audiences, and plenty of scrutiny. However, yesterday we heard scarcely anyone even raise the question of whether crude oil prices were sustainable or instead are overheated. Mostly, investors seemed to be trying to scrutinize the oily names for chinks in their armor. For instance, for Bakken players, management teams were grilled on completion techniques, EURs, adherence to type curves, and quality of acreage, as they often are. To our surprise, the expectation that service costs and availability are on the verge of becoming a major problem in the Bakken again (rather than just something to take in stride) was very high. We heard one company, Brigham (BEXP-$18.42-NR), talk about extracting assurances from top management of their rig and frac vendors that crews and equipment would show up on time. (Implying that there is indeed room for doubt on those matters again.)

    One-line summaries of things that stuck with us regarding various companies whose breakout sessions we sat in on:

    UPL – Ultra (UPL-$48.83-BUY) anticipates that its 1Q10 realized pricing will be better than 1Q09, and that it will for the first time enjoy a positive differential to Henry Hub for its Wyoming production.

    BEXP – BEXP is firm on its position that “plug-and-perf” is the way to go for Bakken completions (aside from areas with highly favorable permeability like Parshall/Sanish) in its key areas, rather the use of cheaper “sliding sleeves.”

    AXAS – Abraxas (AXAS-$2.36-BUY) will still need time to work out exact net acreage numbers in its Williston Basin Bakken plays, due partly to poor title-related recordkeeping from prior owners, but the Company knows exactly how much acreage it has in the Southern Alberta Basin and is clearly excited about that play’s potential.

    CPE –In response to an investor’s question as to Callon’s (CPE-$8.29-NR) onshore acquisition plans, management said it was surprised to find how many small, unleased or somehow bypassed units still remained for lease in the the Haynesville (although probably not cheap), considering the play was rapidly becoming de-risked.

    WTI – W&T Offshore (WTI-$10.77-NEUTRAL) management again mentioned that it has an open mind about making acquisitions onshore, but also noted that it is being approached more to participate in deepwater partnerships on more reasonable terms than it has seen in some time.

    CRK – Comstock (CRK-$35.05-NEUTRAL) management discussed drilling the Haynesville in a low gas price environment, and we came away amazed anew at the relative difficulty of getting consensus on what the “good” areas of the play are, whether due to differences in shale thickness and clay content, or Upper (Bossier) vs. Lower Haynesville.

    CXO – Concho (CXO-$53.45-BUY) management expressed some measured optimism about the industry’s potential for Bone Springs targets in the Delaware Basin (another oil column with large amounts of resource in place) as an analogy to the Wolfberry in the Midland Basin.”

  66. 66
    1520sbroad Says:

    #62 – thanks. Seems like the market is waiting to see what they are serving for lunch…

  67. 67
    zman Says:

    … and I don’t know if the HK presentation will be webcast.

  68. 68
    Gtinvest Says:

    Here is the link:http://www.corporate-ir.net/ireye/conflobby.zhtml?ticker=HK&item_id=2726506

  69. 69
    elijahwc Says:

    FTK – Green mud name. Anyone in touch with this name?

  70. 70
    zman Says:

    Thanks GT

    KOG – 11 of 15 2010 wells will be long laterals. Gas line covering all wells by 4Q10.

  71. 71
    1520sbroad Says:

    thanks for #68.

  72. 72
    Dman Says:

    FTK – heard of them as a service play, didn’t know about green mud.

    Shares peaked at $55. now $1.48.

    Must be quite a story there somewhere…

  73. 73
    zman Says:

    HK presentation begins 12:45 EST

    new slides here:
    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc2NDg1fENoaWxkSUQ9Mzc1MDgxfFR5cGU9MQ==&t=1

    Bumps E.F.S. reserves from 8.5 Tcfe
    to 9.8 Tcfe + 340 MM barrels
    from the March Howard Weil presentation.

    Their old presentation was looking for $1.0 B in transactions this year.

    They’ve now done $1.4 B

    Bossier slide (#15) has more detail, big ECA, CRK, COG, and EOG wells

  74. 74
    zman Says:

    More HK slide detail.

    That second Black Hawk well (EFS oil window) was a restricted rate IP, it is condensate rich.

    3 more wells drilling now in Black Hawk area.

  75. 75
    RMD Says:

    Eli #65 useful summary. Good to see what mgts said.
    FTK had a CFO go there last yr. that was smart, and then left 8/5/08. (In looking this up I was sstruck by the amount of mgt and BoD turnover there has been in the last 2 yrs.)

  76. 76
    zman Says:

    HK in 10 minutes.

    Oil off only 65 cents now, back above $83.

    NG rally on, up 2%.

  77. 77
    elijahwc Says:

    FTK: RMD & Dman thanks for the feedback. This is very early on and yes, this company has been a disaster. Last year was simply survival mode. Interesting it managed to keep it’s NYSE listing and found a couple of former investors to refi them with a 144 cvt that provides unusual flexibility for a distressed company . I wonder at that. Anyway, I’m told that I need to be there. Based in Houston. Anybody?

    Just digging right now. Need help.

  78. 78
    elijahwc Says:

    Also, Will SSN turn green on the close? Inquiring minds want to know.

  79. 79
    zman Says:

    Eli – Dunno, sort of doubt it but again, news after close today or tomorrow, could make that happen. It’s already put in a good show so if it does or doesn’t move on that news I’m going to punt and revisit.

  80. 80
    zman Says:

    HK presentation starting…

  81. 81
    zman Says:

    HK – reduction in capex is largely due to falling rig days, last well at 23 days vs 70 days 14 months ago.

    Diverted some cash to EFS.

    Cut back on the “other” – conventional gas production in NW LA.

    Deal with Kinder Morgan – HK will run KinderHawk 50/50 with Kinder. Big capacity, revenue stream from other operators for treating, moving gas.

    HK Hayensville wells avg just about twice other operators on EUR they think. They’ve defined 5 distinct producing areas with distinct producing and completion issues.

  82. 82
    zman Says:

    … more HK…

    Hayneville – restricted rate program

    slide 14, new choke size of 14/64″ = a “lot more EUR”, won’t say how much bigger now. The restricted production well catches up with the bigger choke wells at about the 200 day mark. All wells going to this.

  83. 83
    zman Says:

    … more HK ….

    Bossier shale – lots of well control from all the Haynesville wells.

    Eagle Ford Shale
    Hawkville area 228K net acres leased at $200 / ac average. Current cost is $3,000 /ac.

    all the original wells in EFS are migrating to the 5 to 6 Bcfe range each, cost half what a Haynesville well costs.

  84. 84
    zman Says:

    Nicky – looks like you were right on the slide stopping at 1,189.

  85. 85
    zman Says:

    Floyd – “Politics have stuck their nasty frickin nose in our business”

    “…and now the EIA data is wrong and gas is still $4. Everyone thinks we should be an oil company. This is a big bunch of bullshit.”

  86. 86
    bill Says:

    floyd on a roll, lol

    says he is the only gas company not moving to oil

    take on politcians and ny “experts” that talk about something they know nothing about

  87. 87
    zman Says:

    Makes you ask why the President doesn’t tell GM to produce natural gas consuming cars. The U.S. essentially owns GM, right? Sheesh.

  88. 88
    DrLink Says:

    Floyd for President!…Wish Congress/Obama heard the end of the presentation.

  89. 89
    bill Says:

    87 some politicians dont want to help out hydo carbons of any types plus those states oklahoma texas lousiana all bush states

    no interest in chk??? I want to hear Aubrey talk about him getting oilier, lol

  90. 90
    Gtinvest Says:

    Just to put things in perpective: Iran is 3rd in natural gas vehicles while the us. is 17th.

  91. 91
    kiaora Says:

    re. #88 sent it in to Glen Beck…..Obama will hear it

  92. 92
    1520sbroad Says:

    #90 – hmmm… Isn’t TBP on capitol hill this week? Maybe Floyd should tag along

  93. 93
    zman Says:

    TBP speaks tomorrow afternoon.

  94. 94
    zman Says:

    …in front of the ways and means committee.

  95. 95
    VTZ Says:

    TBP on squawk box tommorow morning as well

  96. 96
    bill Says:

    anyone have the link for chk?

    here are the slides

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc1MzEyfENoaWxkSUQ9Mzc1MTgxfFR5cGU9MQ==&t=1

  97. 97
    Nicky Says:

    re #84. Its starting to take on the look of an ending diagonal. The pullback was shallow and we have 5 seen waves up off this mornings low. Look for a small 3 wave pullback and then higher. If its an ED then target area would be 1206/10.
    Bearish alternative has this as a b wave up with a c wave lower to come before moving higher.

  98. 98
    bill Says:

    i found it

    http://www.corporate-ir.net/ireye/confRegistration.zhtml?ticker=CHK&item_id=ew,2726387,1,104617,977185,1461352,2&from=iro

  99. 99
    1520sbroad Says:

    Boustany from Louisiana is on the Ways and Means – Floyd should be on the phone with him pronto to encourage him to listen to TBP. I think there are a couple of Texas reps on that committee too

  100. 100
    VTZ Says:

    ATH reversed a bit today now fighting to stay green on more volume than yesterday.

  101. 101
    jat Says:

    VTZ, any thoughts/ hearing anything on SU production for March-April?

  102. 102
    VTZ Says:

    April should be back to normal and likely close to full rates because they should have excess diluted bitumen (dilbit) built up from the outage and I guarantee they will be trying to prove a point that they can be good operators, especially since they announced the completion of repairs on April 1 for the start of the month.

    March production at ~245 kbpd was as expected and similar to the Feb numbers, lower margin bbls.

  103. 103
    Dman Says:

    eli – wish I could help on the FTK. Everywhere I look the articles are very out of date. No one wants to know you when you’re $1.50. Oops, now $1.57 …it’s getting some energy love.

    Its got options … lowest strike $2.50.

    Just took some Septembers for the hell of it. Figure it can’t get much worse, could get better.

    Did they give you a reason why you’ve got to be there?

  104. 104
    zman Says:

    CHK – sounds like they may pull back only slightly if at all due to lease holding requirements.

  105. 105
    zman Says:

    Slide 25 in CHK presentation, very cool acreage valuation slide.

  106. 106
    Dman Says:

    Crude sneaking up while EOG drifts down, not quite LOD.

  107. 107
    bill Says:

    Aubrey sounds pretty calm despite the turmoil in the ng business

  108. 108
    zman Says:

    http://www.corporate-ir.net/ireye/confLobby.zhtml?ticker=TAT&item_id=2726540

    TAT webcast about to start

  109. 109
    elijahwc Says:

    #103 No, thats why I’m hunting. Plus previous experience has been good. Think I will take a research position as well. Just for drill.

  110. 110
    zman Says:

    JB – when you get a chance, can you update your thoughts on HK, I think it broke the channel range you were talking on 4/5. Thx.

  111. 111
    BirdsofpreyRcool Says:

    elijah — did FTK come from Bo?

  112. 112
    zman Says:

    TAT – starting from the beginning on their story, pretty good if you have not heard it before.

  113. 113
    zman Says:

    HK = big volume today, waking back up again since the meeting and with the market.

  114. 114
    zman Says:

    Crude flat on day.

  115. 115
    elijahwc Says:

    The Lizard likes Hawks??

    HK: Raising estimates and price target to $29 from $27 on higher midstream sale proceeds, resource potential; BUY
    HK: [WSS] – 04-13 1:35 PM
    [Contact: Equity Sales Desk – 800-223-4080] Midstream sale proceeds above expectations. Petrohawk’s sale of 50% of its Haynesville midstream properties for $875 million creates significant liquidity,and was well above Street expectations of around $500 million. The transaction takes pro forma liquidity to $1.8 billion vs. our prior estimate of $850 million. We estimate that Petrohawk’s debt to cap goes to 44% by year-end 2011 vs. 52% on our prior estimates.

  116. 116
    zman Says:

    Oil down 60 cents now, very jittery.

    TAT plans unchanged in this presentation so far.

    Turkish gas market is just under $9, about $7.50 net. They see upside to price there near term.

    on the oil side, see going from 2,000+ bopd now, to 4,000 this year, and 6,500 bopd by end of 2011. Same plan, 18 wells this year for $25 mm total.

  117. 117
    zman Says:

    TAT MOU with Turkish National Oil Co (TPAO), unconventional there means shale and tight sands.

    In Turkey, historically, if they didn’t have 18% porosity they’d mark it is uneconomic and abandon it. Those wells have been drilled all over the basin and abandoned. They plan to re enter and frac three of these later this year. Bringing in their own frac equipment about mid year.

  118. 118
    zman Says:

    TAT – Paleozoic Trend

    Southeastern Turkey – these are the Arpatepe wells they’ve been acidizing. By end of this year they see having an interest in 12 producing wells. That’s more than I think they said last time. I knew of 3 wells, thought they were just doing 6 more wells.

    Liceanse 4175 – large surface anticline. 100 KM away from a big similar looking field (didn’t call it an analogue) in Iraq. Has oil seeps, sitting next door to the middle east.

  119. 119
    Dman Says:

    BOP – trying to decipher your #111

    Do you mean the O-man?

  120. 120
    zman Says:

    TAT – good presentation, he ran out of time before he got to Morocco and Romania but that’s probably just as well as they aren’t the focus. Will be interesting to watch the stock as they test the big Turkish structure near the Iraq border around mid year.

  121. 121
    elijahwc Says:

    BOP #111 – No, I don’t know Bo? Bolivar?Are you in touch? I think this is a good old fashioned turnaround with maybe a sale down the line. Trying to quantify.

  122. 122
    BirdsofpreyRcool Says:

    Sorry… was asking if FTK was being bantered about by Bo McKenzie. It’s a name i haven’t heard for years.

  123. 123
    BirdsofpreyRcool Says:

    elijah — i think i am going to snoop around FTK. Just sounds interesting.

    TPH trading desk saying there are seeing a lot of short action today. Esp in land drillers and E&P [which pretty much covers almost everything we follow].

  124. 124
    zman Says:

    Does interactive brokers have live commodity quotes?

  125. 125
    BirdsofpreyRcool Says:

    CPE — methinks the mrkt finally figured out that The Emperor Has No Clothes here… shorts finally getting some vidication. Think it was a short-covering “melt-up” going on here for the last coupla of points (at least).

    z — you listen to CPE’s presentation? Any reason to think differently?

  126. 126
    zman Says:

    Max Pain HK = $21

    http://www.optionpain.com/MaxPain/Max-Pain.php

  127. 127
    Dman Says:

    BOP – #123 but they forgot to hold crude down and NG up 3.4%

    If they keep at it, names like NOV will get interesting. One reason I’m intrigued by FTK is simply that I’ve lost track of a lot of the service names with interesting technology stories.

    Speaking of which, I’m thinking of buying back my CIGX. Anything new there?

  128. 128
    zman Says:

    BOP – yep, agreed, kind half payed attention but I don’t think the run’s been justified.

  129. 129
    zman Says:

    Dman – another couple of points lower and I think OII gets interesting. Some analysts saying they have done a poor job winning umbilical contracts of late … we shale see. Name can really run on a real hurricane. Also, although rates in DW are slipping a bit, I don’t hear much about ROV utilization falling anytime soon.

  130. 130
    Dman Says:

    #127 clarifying last line .. i.e.

    “speaking of interesting technology stories”

  131. 131
    Dman Says:

    Yikes. SPX green.

  132. 132
    zman Says:

    EXXI – I came away from the presentation thinking the story remains the same. I don’t see a real near term catalyst, and nothing on Davy for awhile. Maybe something out of MMR soon on BBHill with some closing comments (for awhile) on Davy.

  133. 133
    VTZ Says:

    RE 124: It has futures contracts and if you have 30 USDs in commissions monthly you get your stock, options, futures and bond quotes free. otherwise its 10$ a month.

  134. 134
    zman Says:

    Thanks much V, and you like the way it works and they execute?

  135. 135
    VTZ Says:

    If you want all the CBOT options and futures quotes its another 61 USDs a month.

    I like the flexibility of IB. You can do basically anything you can think of. There are plenty of features I don’t even touch.

  136. 136
    VTZ Says:

    The execution is the best.

  137. 137
    Dman Says:

    ATPG gave a nice dip today, which I only just noticed. Nice looking chart, as JB has mentioned.

    I really should look at JB’s charts more often. They are excellent.

  138. 138
    elduque Says:

    i nominate think or swim. or with negotiating at TDameritrade you can get the same commissions.

  139. 139
    elduque Says:

    I have been long CHK for ever. They seem to be one smart operators. Why does the stock languish?

  140. 140
    Dman Says:

    V – #133 thanks I didn’t know that. I haven’t yet got around to signing up for quotes: I’m using thinkorswim for live quotes and entering orders into IB. It keeps telling me off for trading “blind” 🙂

    Z – it took me about 2 days to get used to their system. Very happy with it. Kind of strange that their execution is the best and their commissions are the lowest, but that seems to be the case.

    Their trading platform was a bit heavy for my somewhat underpowered Mac Mini. So I switched to a PC (under Linux) and it runs beautifully. Of course you can also run it in Windows but I can do without the security problems.

  141. 141
    BirdsofpreyRcool Says:

    Dman — #127 the next thing to look for in CIGX will be their CigRx launch in the Richmond, VA area at the beginning of June. inVentiv is handling all the marketing and distribution for the product in the USA. I think there is also an “informercial” planned. Now that the agreement with inVentiv has been finalized, the margins on the product are better than I had been expecting.

    There could be other unanticipated announcements (like the Roskamp one), but there could also be radio-silence until the end of May. I am very happy to wait here, as risk of “not holding” exceeds risk of “holding,” IMHO. That said, news vaccums mean the stock price can do almost anything… and there are a LOT of shorts flinging poo at CIGX right now.

  142. 142
    Dman Says:

    BOP – #141 thanks very much.

  143. 143
    zman Says:

    Thanks much V – just giving that some thought again.

    Eld – Gassy and can’t / won’t change at a time when people want them to. Honestly they are hedged enough for this year that prices have little impact on cash flow. Stock just doesn’t want to move until they diversify towards a more balanced state.

  144. 144
    zman Says:

    There’s even a Reuters story out today saying natural gas production will fall as producers turn to oil, lol. And still there’s no help for SD. Ugh.

  145. 145
    Dman Says:

    Z – #144 the NG chart looks like some kind of turn is in progress.

  146. 146
    zman Says:

    D – I would not think it would have much in the way of staying power to it just yet, maybe if we get a heat wave. Best chance for a pop near term is end of April with data revision.

  147. 147
    dij Says:

    #144 SD, ARD sure looks like it wants to fill that gap. Isn’t SD near some support?

  148. 148
    isleworth Says:

    Z- re 126 max pain for HK. What are your views on this calculation and its value?

  149. 149
    zman Says:

    Isle – there is some gravitational pull to that spot. I think for HK and EOG it’ll have less influence as there has been news that resets the level a bit. But there is definitely something to it in the last couple of days before expiry.

    On HK there have been three price target upgrades today that I know of, don’t know by how much. Potential exists for an upgrade here.

  150. 150
    West Says:

    JB, Looks like charts confirm major breakout move on ATPG ? Lots of positive things finally coming together for the company. Increased their production by 10,000 bopd since the first of the year.

  151. 151
    zman Says:

    EOG back to green, WLL nearly back from $2 loss. More of a much ado about nothing day. Oil trading north of $84 again, API after the bell and gas strong, stocks sort of just stuck in neutral.

  152. 152
    zman Says:

    Beerthirty.

  153. 153
    isleworth Says:

    No max pain for INTC holders :-)))))

  154. 154
    zman Says:

    Nor for CSX ones.

  155. 155
    andy Says:

    BOP – can i buy those ATPG 3-year notes announced last night??

  156. 156
    bill Says:

    144 painful to watch as sd falls everytime they buy something

    for fst they paid cash but offered conv pref and arbs or pref buyers shorted their common

    the ard deal they fixed the conversion price and again arbs shorted to lock in price

    the boobs at ard either have serious problems with operations, bullish on natural gas, or complete nincompoops…maybe all of the above

    i never heard of a takeover with so little skin in the game and a fixed conversion. 2.50 cash is about 100 m and ard has 70 m so sd has to come up with 30 m less than a buck a share for ard and issue its worthless paper

    sd has a negative net worth and the wells arent profitable with ng under 4

    so if the wells arent profitable whats the value of undrillable land= nothing imho

    so this is a brilliant move by sd if he gets it done

  157. 157
    bill Says:

    the volume this afternoon really picked up in exxi

    pre conf 100 k, then 400 k more this afternoon

  158. 158
    RMD Says:

    bill #156: I’m with you. Seems SD was toast if gas stayed at $4 given their debt load; this acq. is essentially a big equity offering in disguise which had to get done to keep the banks happy. They paid up/overpaid to get ARD to go along, perhaps bagging SD as I suspect problems with the operations or some other problem.

  159. 159
    RMD Says:

    I liked the PQ presentation at IPAA; using 3-D for the 1st time with good results in the Woodford seemed like the key.

  160. 160
    BirdsofpreyRcool Says:

    andy — #155. Short answer = No.

    Notes are 144a, so “Qualified Institutional Investors” need only apply. If/when APTG registers those bonds, then us normal people can buy. Until then, only the Big Boys.

    They are 2nd lien bonds, right behind the banks. Actually, ATPG is issuing the notes to pay down bank term debt… basically, locking in fixed rates. They are also refinancing their bank revolver at the same time. It’s a $1.5B issue and is secured. Would be surprised if it is not well received.

  161. 161
    elijahwc Says:

    #156 – SD needs to knock on DVN’s door. That way they can be double ugly and happily equally delusional.

  162. 162
    zman Says:

    SSN – flow rate update on the tape. 859 bopd with 1 MMcfgpd, or 1,027 BOEpd, oil is 45% of total production at this point. Frac fluid is still being recovered and they will update production here again when production is stabilized. This is lower than the prior day’s update of 960 bopd and 1.075 MMcfgpd or 1,139 BOEpd, with an oil cut of 40%. Market may sell it off a bit more on this news but as they said in the prior report, the oil cut is expected to reach 70% as the well cleans up. Either way, a respectable IP for a mid length Bakken lateral completion.

  163. 163
    Jerome Blank Says:

    RE: #110 HK…added a 30 min chart perspective for HK…despite the pullback at the close…HK has a nice ascending triangle formation on the 30 min…looking for a a small pullback to support at the lower triangle trendline at about $23 which corresponds and falls right at daily 200 day SMA support…good spot for an aggressive long try…protective stops should be under the 100 day daily SMA which today closed at $22.74….

    #137 Dman…thank you for the compliment…

    #150 West…I agree…it looks to be on above avg vol…

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280

  164. 164
    zman Says:

    Thanks much JB.

  165. 165
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    The Comeback Country!

    The pieces are starting to come together. In Sunday’s “Bedtime,” we noted that we were entering the phase where market consensus begins to shift to “normal recovery.” It is also the phase where the recovery story starts to go mainstream. The latest issue of Newsweek titled America ‘s Back! has begun to spread that message. Wall Street traditionally goes the other way on Newsweek covers, but we have to give Newsweek some credit. In the beginning of August, they declared the recession over and although they will likely be a couple of months early when NBER finally declares the trough, Newsweek’s call was better than many others. Just yesterday, NBER conferred “No Trough announced.” The Business Cycle Dating Committee explained that “Although most indicators have turned up, the Committee decided that the determination of the trough date on the basis of current data would be premature.” They cited the number of revisions necessary on the current data for their pause. Needless to say, if the revision trend remains upwards, they will confer a trough soon enough.

    There was a wrinkle in our theory today as the NFIB’s Small Business Optimism Index, which has been unable to gain any traction at any time during the recession, dropped to its lowest level since last July. This recession has been one in which the big have gotten bigger (and stronger) and the small have gotten smaller. Investors have the benefit of the fact that only the big are in the S&P 500. Of course, the recovery still has additional progress to be made but the ingredients are there. The question is how long will it take for them to cook? Main Street may finally start to see a rainbow (that was last week’s Economist cover) as job growth materializes and positive data points are reported. If the earnings reports from Intel and CSX due tonight serve as any kind of indicator as to how the rest of the season will fair, then our broadening recovery theory is likely to gain traction. If this impressive rally that has occurred over the past 13 months is destined to enter some type of upside blow off, the stage is currently being set for it to happen in the next few months as the recovery belief spreads. As noted Sunday, we are Bulls and we prefer not to see a blow off move because it means the end of the rally. Instead, we prefer to see the slow steady rise consistent with a healthy move. That being said, with every piece of decisively strong data, the odds of a big move rise. We continue to remain focused upon the 1250 level of the S&P 500, it is more of a question of how long will it take to get there.

  166. 166
    West Says:

    JB, thanks for the great charts. A question if you have time. Do you have a preferential chart that you use to make initial buy.

  167. 167
    Jerome Blank Says:

    #166 West…in broadest terms, I primarily use the daily chart in conjunction with standard box size P&F charts…I use the 30 min to fine tune, for example, a standard box size on a $25 chart, say is $1, that’s a lot of airspace, so I find the 30 min helpful to narrow the field once a trade sets up…I also use the 30 min to find intraday opportunities that form on promising daily set-ups, like ATPG or HK that may not be evident looking only at the daily… recently I started using the weekly charts a bit more frequently for longer term support and resistance perspective…

  168. 168
    West Says:

    Thanks JB

  169. 169
    PackMan Says:

    Newsweek: As you may or may not know, Newsweek has become a tabloid and a wholly owned subsidiary of Obamafandom, so its not surprise they are out pumping the economy.

    Many grains of salt are warranted when it comes to Newsweek.

    And, oh yeah, that wrinkle in Small Biz optimism. And housing too. And employment.

    IMHO of course.

    It is quite interesting how many are now talking about 1250 as a target.

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