Thursday Morning (In Progress…)

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Housekeeping Watch: I will be out of the office until around Noon EST this morning for a family matter. Posting early as there isn't much news and I don't know how stable the site will be today.

Market Sentiment Watch: UPS pre-announced strong earnings after the close yesterday and China's growth continues to go ballistic (growing even faster than expected). We had a hit and run success in the ZIM yesterday flushing HK calls before the stock rolled over and played dead on enormous volumes. The ZCAT then bought back the same April $23s and I'll be out of those later today almost certainly.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Odds & Ends


Holdings Watch:

ZCAT (Zman Catalyst portfolio):

  • $14,400
  • 42% Cash
  • Yesterday’s Trades:
    • EOG - Added (10) EOG May $115 Calls for $2.05 with the stock at $108.30.
    • HK - High risk trade. Added 20 April $23 Calls for $0.55 with the stock at 23.18, not moving with the group despite yesterday’s news, strong crude, and favorable broker comments from a number of firms. Seems odd. This will be another quick one. I continue to own the common in the ZLT.

ZIM (Zman Inefficient Markets portfolio):

  • $18,800
  • 100% Cash
  • Positions are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades:
    • HK - Sold the 60 HK April $23 calls taken Tuesday for $0.90, up 39% with the stock at $23.80.


Commodity Watch:

Crude oil rallied $1.79 to close at $85.84 yesterday, after the EIA released a much more bullish looking set of numbers than API did the night before (see comments below). Gasoline demand was particularly strong.

Natural gas edged up another $0.04 to close at $4.20 yesterday. Gas traders seem to be less than concerned about today's expected record setting sized injection. Gas remains range bound.

Natural Gas Preview

  • My number: 70 to 75 Bcf Injection
    • Last Week: 31 Bcf Injection
    • Last Year: 21 Bcf Injection
    • 5 Year Average: 23 Bcf Injection
    • 10 year Hi: 69 Bcf Injection
    • 10 year Low: 46 Bcf Withdrawal
  • Street Consensus: 81 Bcf Injection

EIA Oil Inventory Review

Crude:  Inventories fell instead of rising as expected due to a pullback in imports (which I had expected in last week's report) and due to another rise in refinery throughput. Refinery utilization is now 85.6%, higher than year ago levels adding approximately 0.8 mm bopd of oil demand relative to this time last year. Refiners are clearly capitalizing on recently not so terrible crack spreads.




Stuff We Care About Today

NOG Announces Secondary

  • 5 mm shares, or 11% of the outstanding share count.
  • The company had no long term debt and the expected use of proceeds is set for continued leasehold acquisitions, accelerated drilling and repayment of short term borrowings.
  • This won't be the last of the Bakken names in the next few weeks to offer shares to the market.


Odds & Ends

Analyst Watch:

  • To be added in comments.

113 Responses to “Thursday Morning (In Progress…)”

  1. 1
    zman Says:

    Analyst Watch:

    BEXP – target upped from $18 to $22, rating stays Outperform.

  2. 2
    andy Says:

    APA to buy ME stk called 24-25 shud be good for the triad!! i cant remember anyone picking them, this makes 2 deals and no winner!!! doesn;t speak too well for us!!!lol

  3. 3
    tomdavis12 Says:

    Z: CSFB raised price target for BEXP from $18 to $22 today.

  4. 4
    bill Says:

    I think pxp has exposure to Lucious which ME also had.

  5. 5
    tomdavis12 Says:

    Oops! didn’t have my coffee yet.

  6. 6
    BirdsofpreyRcool Says:

    andy — the APA/ME deal is exactly what we have been talking about. (Just not APA and ME specifically.) If investors don’t want to buy stocks (scared, valuation too high, mrkt ahead of itself, gonna double-dip), then COMPANIES will. And they will use cheap debt to do it.

    ME an oily offshore producer… making 63k boe/d in production from the GoM shelf and deepwater, the Permian Basin and some other “unconventional” onshore stuff. However, ME’s proved reserves of 181 mmboe are 47% liquids. There’s GOLD in those “liquids.”

    ME is also a partner in Lucius (OILY… along with PXP and APC) and Heidelberg.

    My fave ME discovery is called “Geauxpher.” A deepwater well they drilled with APA in 2008. (I just like the name… Go-fer in cajun).

    Recall that earlier this week, APA bought out DVN’s offshore assets. (Nichols may well live to regret that sale.)

    All this is — of course — very supportive of EXXI and their OILY portfolio. And you get the upside from the Ultra-Deep play for free! (IMHO)

  7. 7
    BirdsofpreyRcool Says:

    Cool. TPH did the valuation (so i don’t have to)….

    Apache buying Mariner Energy (APA $106.79 – B; ME $17.65 – A) – Surprised APA paying big premium, but deal done right at our $26 NAV for ME. APA pays 4x 2011 CFPS, 5.5x EV/EBITDA and $60k/mboepd (in-line with APA multiples) while getting 2% accretion on financial metrics, +8-10% production/reserves and deepwater/subsea team to boot. APA’s NAV tweaks +$2/share to $126. Right up APA’s alley on Gulf/Permian assets and ME no longer has to sweat funding deepwater. APA stays Buy. Ccall 10amET

  8. 8
    tomdavis12 Says:

    BOP: EXXI new high. Congrats!

  9. 9
    BirdsofpreyRcool Says:

    TomDavis — going thru the metrics implied by the APA for ME purchase price… first pass getting a conservative PT close to $29 or so. And that is withOUT any contribution from DJ and Friends.

  10. 10
    BirdsofpreyRcool Says:

    EXXI — if i just use the Street’s estimate of FY 2011 (ending 6/30/11) of $6.25 CFPS x 4.0 = $25. But that ignores the cash/share estimate of around $2.50 by then. So, closer to $27.50 on a CFPS estimate that I consider to be on the low side.

    Again, without attributing any value to DJ. (Sick of hearing me say that yet??)

  11. 11
    BirdsofpreyRcool Says:

    ECO numbers kind of a mixed bad this a.m. and weighing on the opening. Initial jobless claims a lot higher than expected… as are continuing claims. But Empire Manufacturing showed people at work in NY State at a better pace than economists thought. However, overall Industrial Production came in low to estimates and capacity utilization did not change much from last month.

    We get Philly Fed data a 10am today and NAHB Housing report at 2pm.

    TechTrader is no where to be found.

    HeadTrader sticking to his “buy the dips until proven wrong” strategy. That said, he laments the low level of trading activity… although y’day it picked up a bit.

  12. 12
    BirdsofpreyRcool Says:

    ha! “mixed bag”… but “mixed bad” works ok too.

  13. 13
    elijahwc Says:

    Pritchard Capital recommends ATPG off the back of APA/ME

    Key Points
    • EPX Index has failed at ~400 level in its past two attempts. Today’s Apache Corp. (APA-$108.06) bid for Mariner
    Energy, Inc. (ME-$18.09) could provide the needed catalyst to propel the index significantly above the 400 level.
    • Recall when Exxon Mobil Corp. (XOM-$68.61) bid for XTO Energy, Inc. (XTO-$48.22) the EPX rallied approximately 20% in two weeks. Although the APA merger with ME is not as large as the XOM/XTO deal the merger should increase the bid premium currently discounted in the E&P sector.
    • To play the possible rally we would suggest focusing on oily GoM names such as ATP Oil & Gas Corp.
    (ATPG-$22.64) or WTI & Offshore Inc. (WTI-$11.04). For those that wanted to participate in broader upward momentum in the sector the Energy Select Sector ETF (XLE-$60.33) is one option, and for those who want leveraged upside the Proshares Ultra Oil & Gas ETS (DIG-$37.64) is the best option.
    • Recommend buying above positions targeting 440 as the upside level on the EPX and use 385 on the EPX as
    downside stop loss.

  14. 14
    BirdsofpreyRcool Says:

    Looking at the list of analysts covering ME and their price targets, only TPH got anywhere close to being “right” at $26. The rest of the analysts were grouped around $17 – $20/share. Just something to keep in the back of your mind.

  15. 15
    andy Says:

    BOP – Again, without attributing any value to DJ. (Sick of hearing me say that yet??)
    i love u saying that , because its usually preceded by some really good stuff!!!!

  16. 16
    BirdsofpreyRcool Says:

    elijah — you’re long and strong ATPG, right? Have you looked at WTI too?

  17. 17
    BirdsofpreyRcool Says:

    andy — i am happy to sit in EXXI for the next two years. Might buy some puts for hurricane protection… but, just can’t find an oily GoM horse that I prefer in this race. And I get to piggyback on MMR’s plays for free (funded out of FREE cash flow).

    It’s good to be John Schiller this morning.

  18. 18
    andy Says:

    has anybody seen the price of NOG deal and how it went??

  19. 19
    BirdsofpreyRcool Says:

    thing is… when everyone runs to the other side of the room (gotta get oily, gotta sell GoM assets, gotta get out of gas), they usually leave something of value behind.

  20. 20
    elijahwc Says:

    #16 ATPG yes, WTI no. I would tip the hat to West on ATPG with his breakout call a couple three days ago.

  21. 21
    skimo Says:

    EXXI rockin this am!

  22. 22
    BirdsofpreyRcool Says:

    west — KUDOS, sir!

  23. 23
    pwdrhound Says:

    MMR up 3.6% this morning on no news I can find. Something coming?

  24. 24
    BirdsofpreyRcool Says:

    powdrhound — APA’s acqtn of ME has put a bid to the entire sector… but especially to any GoM-focused players (like MMR)

  25. 25
    Dman Says:

    Eli – you referred to Pogo yesterday. Who is that?

    I do think there is a speculative blow off brewing.

    BOP – thanks for the EXXI

  26. 26
    BirdsofpreyRcool Says:

    Dman — pleased I could help. Thank you.

  27. 27
    Dman Says:

    BOP – #19 I guess HK might fit that bill

  28. 28
    BirdsofpreyRcool Says:

    Dman — #27… exactly.

    HK flopping around with a broken wing right now. Someone(s) still selling in what i think is a “get me OUT of nat gas, NOW” trade. This too shall pass… and I think we will look back on HK at $23 and think “I shoulda bought more at that price.” It’s a nice balance to my oilier GoM holding. Happy to hold here for several yrs too.

  29. 29
    1520sbroad Says:

    Agreed on #19 + 27 – someone still has the parking brake on HK this morning. I was away from the computer yesterday – were there any thoughts on HK’s strange move yesterday? Big cross trade maybe, early pin with someone trying to get out of an options trade? Some fund bailing?
    Any desk color?

  30. 30
    1520sbroad Says:

    Thanks BOP – I was writing as you were…

  31. 31
    Dman Says:

    BOP – I love it when you get the metaphors going.

    Even PXP getting some love. What’s the world coming to?

    Wonder if NOG does a BEXP, i.e. continue to rally after secondary.

  32. 32
    pwdrhound Says:

    BOP – thanks. I thought maybe the news Zman was anticipating was coming.

  33. 33
    cargocult Says:

    Taking profits in ME is a nice way to start the morning. Thank You Very Much who ever got me into this one.

  34. 34
    West Says:

    Kudos should go to Mr.JB our resident stock chartist wiz. Sincerely JB , I appreciate your hard work and willingness to do so many charts that have been requested. On ATPG there are over 20,000 April calls in the money that is over 2 million shares that the MMs may have to make good on this week. Of course there are 2 days to go before expiration.

  35. 35
    BirdsofpreyRcool Says:

    PXP in Lucius too… with APA and ME. Even the Flores Effect can’t cap it’s performance in the face of all the LUV flowing into the GoM right now.

    Nichols must be choking on his Cheerios this morning…

  36. 36
    BirdsofpreyRcool Says:

    APA conf call on now… listening. APA thinks it’s the “right time” to enter the GoM Deep Water. Seismic getting better, allowing companies to see deeper more clearly.

  37. 37
    elijahwc Says:

    Dman on Pogo yesterday, a cartoon character famous for his wonderful illustrations of the obvious as in “we have met the enemy and he is us”.

    But here’s what really interesting that makes one glad that you asked the question. If I am not mistaken POGO was also the name of a GOM based E&P co that later sold to ………was it EXXI??


  38. 38
    1520sbroad Says:

    PXP I think bought Pogo Producing in ’07. Only reason i remember is i went to a presentation of Pogo’s one year I think at IPAA and was impressed.

  39. 39
    BirdsofpreyRcool Says:

    EXXI bought some Pogo assets from Plains (PXP) who bought PPP (Pogo) in 2007.

  40. 40
    jiveyjr Says:

    thx for the charts JB…thx for many good picks BOP…

  41. 41
    BirdsofpreyRcool Says:

    APA — amazing what passes for occupying a “sell-sider seat” these days. Don’t get me wrong… most are pretty good. But some paychecks are unwarranted.

    Note to self: totally IGNORE any “energy research” from Capstone.

  42. 42
    BirdsofpreyRcool Says:

    jivey — thank you. My pleasure!

  43. 43
    1520sbroad Says:

    BOP – off topic – do you have any experience/color about Knight Libertas and their fixed trading desks? I know they have some former MS folks onboard

  44. 44
    BirdsofpreyRcool Says:

    I did with Libertas… not Knight. But, when I really flung bonds around, we worked with the largest shops. The small guys were good for off-the-run-ideas and taking out trash (if your position blew up). But, that’s for corporates and high yield bonds. Libertas used to have some good high yield ideas… but haven’t dealt with them for yrs.

  45. 45
    1520sbroad Says:

    #44 thanks

  46. 46
    BirdsofpreyRcool Says:

    hmmmm…. and I may be mixing up Libertas with Libra. So, memory a bit foggy there.

    Sorry. No help.

    High Yield at new highs today… making the melt up toward 102. wow.

  47. 47
    wcoaster Says:

    Even little RAME is perking up. Still cheap, still oily, under $5; I guess that makes it a buy this week.

  48. 48
    BirdsofpreyRcool Says:

    ATPG seems to be leading the pack this morning. Thanks for highlighting that first thing, Elijah.

    I shoulda put some $$ on that horse along with you. Good call.

  49. 49
    zman Says:

    Just doing a fly by.

    NG storage: 87 Bcf injection, high to estimates, higher to historics, pulling NG off 13 cents so far.

    Nice to see mid week acquisitions, good deal for APA, probably better for ME. Agree BOP’s valuation mets on EXXI, takes stock into up $20s w/o thought to Davy and the other ultradeep. Good for other shelf too, see SGY for an interesting chart, another name that needs to go away in my opinion. TISDZ now $1.50.

    HK trying to wake up. Volume elevated for this time of day but perhaps that seller is mostly mopped up now.

    NOG rallying on deal news reminds one of market treatment of BEXP, also makes me think the coming KOG deal won’t be a share crusher.

    EOG – another new high

    WLL – breaking on out.

  50. 50
    BirdsofpreyRcool Says:

    wcoaster — every time i overlook your ideas, i leave $$ on the table. Do you have any valuation metrics for RAME you can share? I will volunteer the fact that you are very very good (I recall you picked AEZ around $2). thanks!

  51. 51
    wcoaster Says:

    BOP – I’m just trading rugrats in this market – see NCOC. It’s still looking good with their latest asset sales/WC finaning package. Shorts and not-unreasonable skepticism only reason it’s still under $1.

  52. 52
    andy Says:

    bop – just to let u know you’re back to #1 in my heart (EXXI) , WEST is a close second (ATPG), and bill has dropped to third. what was the name of those warrants again?? just kidding, i still own a few. now am waiting for Z (HK) to reclaim his #1 spot!!!
    thks to all!!!!!

  53. 53
    Nicky Says:

    Good morning. Okay we can now throw the less bullish count out of the window which was an ending diagonal as it would have to have stalled below 1212.90. So we are now looking at the more bullish count which is that we are in iii of v. Just a stab at where it may end – 1215 -1217, then a pullback for iv of v which is likely to be to 1205, then v of v to 1222. Then a pullback again for 4 to 1205 before a final move higher in 5 which should be 1230 or higher. This is just a rough guide. It should take until the end of April to mid May to complete.

  54. 54
    BirdsofpreyRcool Says:

    andy — you are one tough Speed Dater!

    We need to get wcoaster to comment more… I think she would rank high on your short list too.

  55. 55
    BirdsofpreyRcool Says:

    Boy… i agree with APA mngmt’s comment re: “tough to keep acqtns confidential” in this mrkt. Frankly, was hearing buzz about ME about two weeks ago. But just not a name I followed. Interesting, tho.

    Where there’s a buzzzz, it’s not always a hornet’s nest…

  56. 56
    tomdavis12 Says:

    BOP 41 Totally agree

  57. 57
    andy Says:

    BOP – speed dating??? tried that a couple of yesrs ago. required many cocktails in advance. just as buying NCOC would also seem to require!!!!

  58. 58
    Dman Says:

    Eli #37 thanks. Shoulda googled it 🙂

  59. 59
    BirdsofpreyRcool Says:

    andy — just goshin’ you back…

    not kidding about wcoaster, tho. so, I am going to put NCOC on my screen. thanks!

  60. 60
    Nicky Says:

    VTZ – not sure if you are around but taking a look at metals they look ready for another surge. There is a cycle high due for gold by mid May.
    Gold has resistance at 1172 -1175 and 1185 – 87.

    As far as oil goes as long as it can hold on to 83.50 on a closing level then it too can move higher into early May. To get some upside really going it needs to close above 87.75.

  61. 61
    andy Says:

    someones still buying ATPG april 25’S for 10. hmmmm

  62. 62
    andy Says:

    BOP – goshin’ ????? maybe u mean joshing?? and i was just paying u a compliment!!!!

  63. 63
    VTZ Says:

    Nicky – I was going to bother you for your thoughts, but held off.

    I do agree that metals look incredibly strong and will undoubtedly move to new highs. I believe any consolidation will occur between 1130 and 1145. I would however like to see it challenge the 1160 threshold as many times as possible although very little strong resistance is overhead until the 1224 highs.

    With regards to the HUI it appears to be supporting the move as does silver. A breakout in HUI would mean that the equities could also challenge the highs and would mean wider participation by some fund money into the equities.

    I believe that we are poised for a big summer move and a new high. The asset class as a whole is underinvested and more reasons than ever to make a charge. I refrain from going on a rant/tirade about the reasons.

    Thanks for the comments Nicky. It’s much appreciated.

  64. 64
    West Says:

    Andy, please don’t forget that I also liked SD. I have the tailpipe hung in my window pretty bad on that one. Forced me to roll down a few windows and air out the strategy.

  65. 65
    BirdsofpreyRcool Says:

    andy — compliments make me blush and commit typos…

    By the way, i always thought the Speed Dating thing would be kinda fun. After all, you know, within about 5 seconds, if you’re interested in talking to someone (or not). It’s kinda like that with stocks too.

  66. 66
    Dman Says:

    BOP – I haven’t forsaken you!

    I did sell KOG too early, but that was my fault, wasn’t it? Thought I could buy it back. Doh!

    Heard anything on FTK?

  67. 67
    Dman Says:

    Yeesh! NOG up 7% post-secondary. KOG down 1/2 % because they haven’t done theirs yet. They need to get with the program, dump a whole lotta shares on us and they’ll be at $4.50 overnight.

  68. 68
    BirdsofpreyRcool Says:

    Dman — haven’t stuck my nose far enough into FTK to have an opinion there yet. Thanks for the push, tho.

    As far as KOG goes… i still think they will make a push to buy (private) Peak Energy. Guessing it would be a stock-and-cash deal… so some new stock would have to be floated. Hope to reload the position at that time. Unless some “foreign” entity buys KOG first.

  69. 69
    andy Says:

    bop – you’re right about the 5 seconds, then its a problem to last 3-5 minutes w/o insulting the other person. that’s why lots of cocktails are needed!!!

  70. 70
    Nicky Says:

    If we take out 1208 on the downside we are likely to test the 1200/1203 area before moving higher.

  71. 71
    zman Says:

    Thanks for the levels Nicky. I’m back, taking care of some paper work and don’t have a lot to add at the moment. Watching a few names with April calls for potentials sells but the market is pretty boring at the moment, could use one last run up here for the week on a couple of things.

  72. 72
    Jerome Blank Says:

    KOG…for folks looking at KOG…updated the 30 min…KOG is trading at a low risk spot…easy to manage with stops below a lower intraday trendline break…suggest stops below $3.75…


  73. 73
    BirdsofpreyRcool Says:

    DBLE — someone must think they are sitting on Niobrara acreage. If they are, it’s dumb luck. The CEO is honest… but he is honestly NOT an “oil-finder.”

  74. 74
    zman Says:

    BOP – hear ya on that, just could not get that interested in that name. SSN has 46K net acres in the Niobrara and if you look at their IPAA presentation you can see that the acreage is adjacent to and just north of EOG’s acreage.

    Big players in the Niobrara:

    then a bunch of smaller names including my old WRES (no longer owned) and DPTR (had puts when it fell but no interest now), SM, PETD (which I find interesting), and some smaller names.

  75. 75
    zman Says:

    EOG just keeps on keeping on.

    Market in general drifting up since the end of NYC lunch time. GOOG tonight could provide the morning push I’m looking for to exit a few last April calls.

    HK – still mired, still elevated volume.

    TAT took a quick run at $4 and then backed off. I continue to think that oily little name has an improving story. On the gas side they are now getting $9/Mcf, more than double their U.S. small cap peers.

  76. 76
    Dman Says:

    ftk up nearly 9%

    NOG likewise.

    Z – I’m trying to learn up on NOG & how it compares with the other names. Do you have a quick summary of how you look at it?

  77. 77
    ram Says:

    ZMAN – HK seems to be pinned at 23. Not a question.

  78. 78
    jat Says:

    vtz, are you hearing anything on long lake volumes?

  79. 79
    BirdsofpreyRcool Says:

    Dman — nice call on the FTKs! Need to get a round toit!!

  80. 80
    VTZ Says:

    jat – This month or in general?

    In general they are being hush hush because their volumes are nowhere near what they expected and they look foolish for building a gasifier because the NG price is so low anyways.

    I don’t know anybody who works there so I’ve heard very little since the initial startup.

  81. 81
    RMD Says:

    BOP TPH got $26 correct, mgt was high. Just found ME slide (calculating vs. some really bad comparables) which got to $43 – $60. Taking away the $1.4-2.2B they credited to Lucius and Heidelberg and using the low end of their range got to $28/share…and I thought I was the only one who dreamed Big!

  82. 82
    1520sbroad Says:

    Z – i’m looking forward a bit to the last week in april when the EIA restates/modifies the 914 data confusion. I have seen several newsletter types commenting on this as a “major nat gas catalyst”. I don’t typically believe what that type of information source puts out there. Curious as to your thoughts and whether you think the 914 release itself has the potential to be a driver for some volatility/interesting price action for may options.

    My own thought is that the release will be a volatility inspiring event. However, I don’t like to put many eggs in a basket tied to a government agency admitting they were incorrect.

  83. 83
    zman Says:

    Occam – check your email.

  84. 84
    isleworth Says:

    CXPO knocking on $4 door

  85. 85
    BirdsofpreyRcool Says:

    Thanks for that follow up, RMD. Hearing that Lucius could be a 2B bbl field, when all is said and done. That is a very large number. But don’t think much was priced into the stock. That said, I think APA got a heck of a good deal.

  86. 86
    zman Says:

    re 82. I agree volatility. EIA clarified that they would not be revising by more than 1%. That’s not enough to really move the needle on gas prices at this point. So if it does come out to 1% that is supportive but not rally, rally material. EOG thinks the number is more like 2.5 Bcfgpd too high but not sure if EIA will go that far or will go that far all at once. This is only the first revision that will occur and they will be revising all of 2009 at some point this fall but not at the end of this month. So in a nutshell, I think it could be price supportive.

  87. 87
    Jerome Blank Says:

    AEZ trying to test topside trendline resistance…see 30 min..

    #34, #40 West, jivey …thank you for the kind comments…

  88. 88
    Popeye Says:

    My screen shows accum in HK today.

  89. 89
    jat Says:

    Re 80, was just thinking about the past few months. Know they installed a bunch of ESPs in the last little while, trying to get a read on what they’ve accomplished. Think they were around 18 gross during February, needed the March read.

    That and I don’t have a clue if OPTI will preannounce them or not.

  90. 90
    1520sbroad Says:

    #86 – thanks. I will be looking to sell calls in the back half of April with the idea that call premiums may see a bump higher as we approach the EIA release. then another 3 weeks until those calls actually expire may allow for some of that premium to come back out if the EIA moves the needle only slightly. A take on the sell calls friday of expiration buy them back on monday type of idea.

    Earnings season overlaying this may throw some more interesting volatility into the mix.

  91. 91
    zman Says:

    re 84. Too bad they don’t have puts.

  92. 92
    zman Says:

    re 90. That’s a pretty savvy idea.

    NG down 20 cents today. Obviously we have nothing in the way of weather but just as obvious should be that this was a record injection, so production may be lower than the EIA has it but it is nonetheless still quite elevated.

  93. 93
    zman Says:

    SSN broke 70 cents to the downside. Should be a bit more news on their well within the next 4 to 5 days. Attention soon to turn to the second well in May.

  94. 94
    zman Says:

    EXXI up best now amongst Shelf names, will have some comps in tomorrow’s post.

    Strangely enough, I still hold 20 EXXI 22.50 calls from quite some time ago in the ZCAT along with 10 MMR $16s, both of which came to life on this deal, although only barely. Will cash those partial tickets in the morning.

  95. 95
    BirdsofpreyRcool Says:

    z — very curious what you come up with for EXXI. Don’t forget to factor in a cash build for FY2011… they are underspending cash flow.

  96. 96
    BirdsofpreyRcool Says:

    I would think (hope?) that some of the analysts who follow EXXI would make a few adjustments to their models tonight… will be curious if anyone comes out with an upped PT manana.

  97. 97
    zman Says:

    BOP – just a comp list of metrics from me …. $/ Mcfe reserves, $ / flowing barrel, etc based on current TEV and implied price based on the ME deal.

  98. 98
    elijahwc Says:

    Housekeeping note: ARD which gapped slightly past 38 on the deal announcement is now back to 36 and falling within 1.75 of the 34.25 lift off price.

    I mention this because these folks have named their price. Furthermore, they don’t even want to be in the business anymore having passed on any continuing involvement at SD.

    And they have oily assets that anyone should be able to easily extract. The folks at ARD & SD excepted of course.

    May be a buy in the making.

  99. 99
    zman Says:

    Beerthirty come early. Don’t forget to pay the taxman. Or extend. Or both.

  100. 100
    Dman Says:

    BOP – bought back my CIGX here. Need some non-energy diversification 🙂

    Although if their product works, more people will be capable of riding bicycles, thus easing the energy crunch. See, there *is* an energy link.

    EXXI – strong finish.

  101. 101
    BirdsofpreyRcool Says:

    Dman — put some more CIGX in my Mom-in-law’s portfolio this afternoon (after speaking with the largest holder). ’nuff said.

  102. 102
    BirdsofpreyRcool Says:

    Guess GOOG didn’t hit the “whisper numbers.” Trading off initially on earninings release. will come down to company’s forward verbage on conf call.

  103. 103
    elijahwc Says:

    So, that fast mover , “Convexity King Gary Evans” accelerated his EOG adjacent purchases and increased his Eagle Ford acreage by a third. thx RMD

    Magnum Hunter Resources (MHR) Increases Its Eagle Ford Acreage and Gives Update on the Eureka Hunter Pipeline in the Marcellus Shale

    · Magnum Hunter Resources (MHR; $4.65; Buy; Disc 1) has significantly increased its Eagle Ford acreage in the oil window. With almost 20,000 net acres. A rig will arrive May 20th and drill 3 wells back to back. These wells will cost $5.5MM and have expected EURs in the 250Mboe to 500Mboe range. The company noted that they border EOG’s (EOG; $109.29; Not rated) acreage and that EOG is restricting IP rates as a way to maximize EURs, up to 700Mboe.

    · EOG has successfully petitioned the Texas Rail Road Commission to eliminate spacing rules in this area. Allowing the company to drill 4 wells in a tight spacing with parallel laterals and simultaneously frac to increase recovery levels. Will be interesting to see how this unfolds.

    · Expect the company to announce more acreage and/or JV’s in the Eagle Ford. However, acreage prices are out of control with original leases in the $300 to $500 per acre range. Currently $1,500 going to $3,000 or $5,000, very fast. The CEO stated the perm and porosity in the Eagle Ford is better than the Bakken.

    · Expect a JV for the Eureka Hunter pipeline in West Virginia to be announced in the next month. MHR is pushing back drilling until pipeline completion, most likely September. Previous owner of the company’s Marcellus acreage had drilled 31 vertical wells which gives them a lot of well control data and also holds acreage by production.

    · The company has pre-purchased all of the steel pipe required for drilling as the U.S. has recently slapped China with import tariffs. China was supplying up to 35% of pipe to the market. Industry sources close to the CEO indicate inventories are all but depleted, steel mills are cranking up production and the industry can expect price increases.

  104. 104
    tomdavis12 Says:

    Z: Another board is posting that a top 10 holder of HK has liquidated 6M shares this week. I do not have any way to check out.

  105. 105
    tomdavis12 Says:

    Oops sold thru FBR.

  106. 106
    zman Says:

    Tom – sounds about right. I have not been able to confirm it from my contact net. But we heard FBR moved a lot of the shares yesterday. Volume was too high just to simply be early pinning.

  107. 107
    BirdsofpreyRcool Says:

    My guy said it was Fido, continuing to sell down.

    My bloomberg screen shows Fido at 10.35%… so would have thought they had to file w/in 48 hrs of any moves, until they got under 10%. Maybe i’m wrong. Or maybe Fido has the shares divvied up in a way that gets around immediate disclosure. We shall see. But I know that Fido woke up on morning and decided they had too much exposure to the energy sector, so handed SELL orders on energy holdings to their traders.

  108. 108
    bill Says:

    cog having issues


  109. 109
    bill Says:

    No one wanted mcf when ng crossed 6 and it languished mid 40’s. Now, with ng at 4, they cant get enough at 58 +

    I still like them longer term with an 80 to 85 target but nervous about q3( qtr ending march) with 1/2 their production offline for 40 days.

    Maybe, I should just ignore the bumps in the road, buy it, and forget about it

  110. 110
    BirdsofpreyRcool Says:

    bill — i just love it when you think out loud on the board… i can almost see those wheels turning in your head. thx for sharing.

  111. 111
    elijahwc Says:

    rmd LEI???? lol

  112. 112
    Jerome Blank Says:

    A few chart updates …

    EXXI …30 min chart perspective added …next short term resistance zone at the daily channel line at $23…

    HAL looks really good…daily chart updated…

    AEZ breakout…

    MMR testing topside daily descending triangle resistance…interesting chart…

    NOG perfects a “bear trap” with a $16.50 print tomorrow…

    PXP…new P&F buy signal…

    Other charts that look technically interesting…MPET, DPTR, WRES, PQ, XEC…more technical comments to follow tomorrow…


  113. 113
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    Quiet Calm.

    Today was a session where the news flow and economic data appeared to cancel one another out. Fears about Greece appeared to balance out the positive influence of yesterday’s upside pre-announcement from UPS. Then Initial Jobless Claims posted another poor showing in which the Department of Labor blamed Easter, again. At least they are not still blaming Christmas. The claims data was afforded a pass because the Empire Manufacturing Report beat expectations by a wide margin and one of its key leadership segments was Employment (see chart). The Philly Fed also registered another uptick in Employment. Both surveys also registered upticks in the Average Workweek (see chart). When trading finished today, the end result was a 8 basis point gain for the S&P 500 on volume that was nearly 20% heavier than the 2010 average.

    Currently, a great deal of market focus is on technical and sentiment indicators hitting extreme levels, i.e. RSI, low Vix, low Put/Call, New Highs, etc. Some solace can be taken in the fact that AAII’s 62% Bullish reading while optimistic is still not in “Sell” territory, but as we noted a few days ago we expected it to get there in coming months. Another fact in which investors may also find some comfort is that despite the S&P 500’s 8.6% gain year to date and a 16+% rally off the February 5th low, in the 71 trading days year to date, the S&P 500 has not registered a single up 2% day. In fact, there were only 2 sessions where the index added more than 1.5%, and one of those was the first trading day of the year. For context, of the 252 trading days in 2009, 27 posted gains greater than 2% and 28 sessions posted losses of greater than 2%. In both cases, 11% of sessions accounted for larger moves. In 2008, 12% of sessions registered gains in excess of 2%, and 16% of sessions registered losses greater than 2%.

    When market participants consider the contraction of the Vix to the lowest level in over 2½ years, concerns of complacency rise. Simultaneously, memories of 2006-2007 emerge. That was a financial liquidity fueled environment and to highlight just how calm it was, let us remind you that there were only two sessions which posted gains larger than 2% and none where the S&P 500 lost 2%. Interestingly, 2007 was nearly as mild with 6 sessions posting 2+% gains and 11 posting 2+% losses. In February 2007, New Century started to fail. In June, the Bear Stearns credit hedge funds imploded, and by August, the credit crunch erupted. One difference between now and then is that back then, nobody had their guard up. Despite the sentiment indicators, today most market participants still have their guard up. When encountering a low volatility environment, especially one following a cathartic long bear market, investors should keep in mind that coming out of the last ugly bear market from March 2003 until July 2007, the S&P 500 never posted a 10% correction.

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