Thursday Morning Pause

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Market Sentiment Watch: Greece back in the spotlight over higher than anticipated estimated deficits is causing the Euro to fall, the dollar to rise and tripping futures in the U.S. early this morning.  In energy land we have a number of service names reporting this morning with DO most noticeably taking a hit for reducing their special dividend.

Ecodata Watch:

  • Jobless Claims: 456K, down 24K from last week; forecast was 452K.
  • PPI: core up 0.1, non core up 0.7%,
  • We get existing home sales at 10 am EST, forecast is 5.29 mm.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today – WHX model, Earnings Briefs (DO, ESV)
  6. Odds & Ends


Holdings Watch:

ZCAT (Zman Catalyst portfolio):

  • $11,000
  • 51% Cash
  • Positions are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades:
    • None

ZIM (Zman Inefficient Markets portfolio):

  • $19,800
  • 83% Cash
  • Yesterday’s Trades:
    • ECA – Added (15) ECA May $33 Calls for $0.70 on the mid with the stock at $32.45, likely to add more after or during the call and after the oil inventory report.

    • ECA – Also added (10) ECA May $32 Calls for $1.15.


Commodity Watch:

Crude oil eased $0.17 to close at $83.68 yesterday despite the release of some rather bearish looking weekly data from the EIA. Demand continues to hang in there but production is running high early and this is bolstering already well stocked finished product inventories. If this rate of production continues look for crude to be capped for the near term at or just below current levels (see below). This morning crude is off nearly a dollar on the stronger dollar brought about by the renewed Euro zone fears.

Natural gas eased 2 pennies to close at $3.96 yesterday in erratic trading. Gas continues to be range bound during the shoulder season. This morning gas is trading flat.

  • Shell Comment Watch: Shell sees global demand for natural gas rising 50% by 2030 due to its increasing use for power generation. Shell sees demand from China alone doubling or even tripling by 2020 with strong growth in LNG coming from Europe, the rest of Asia, and a handful of countries in the Middle East. 

Natural Gas Preview

  • My number: 70 to 75 Bcf Injection
    • Last Week: 87 Bcf Injection
    • Last Year: 42 Bcf Injection
    • 5 Year Average: 41 Bcf Injection
    • 10 year Hi: 80 Bcf Injection
    • 10 year Low: 5 Bcf Withdrawal
  • Street Consensus: 78 Bcf Injection

EIA Oil Inventory Review





Stuff We Care About Today


Earnings Wrap:

ECA -  Bottom line, not a lot of surprises, good comments about costs and cost inflation appears to be fairly tame for them. Production guidance appears to be worst case scenario which would include voluntary shut ins. Should see some numbers rise here but not by much, more likely a quarter by quarter progression on the part of the analysts as you don’t want to get ahead on volumes and then have the company cut volumes back due to low prices as they have said they might.

WHX Model - Had a couple of requests to repost this:


Earnings Watch

DO Reports Better Than Expected Quarter But Cut In Dividend Probably Hits Stock Today

The 4Q Numbers:

  • Revenue of $859.7 mm vs $851 mm expected
  • EPS of $2.09 vs $1.93 expected


  • Utilization:

    • High specification floaters: 79% vs 81% in 4Q and 80% a year ago.
    • Intermediate Semis: still at 78%, flat with last quarter, down from 85%  a year ago.
    • Jack-ups: 63%, flat with last quarter, down from 73% a year ago.
  • Nothing in the way of forward looking market environment commentary other than some cautionary comments contains in the following adjustments to their special dividend.
  • Special dividend of $1.375 / share is a 50 cent reduction from their last one, attributable to a decline in day rates and a desire to retain more cash at this time. Management said they believe they can hold this level of special dividend through at least 2010.
  • This continues to be one of the highest yielding names in the drilling and service universe, with part of their yield tied to day rates.

Nutshell: Good quarter vs expectations on better margins but the large hit to the special dividend will hurt the name this morning.

Conference Call: Today, 10 am EST

ESV Beats; Ups Dividend

The 4Q Numbers:

  • Revenue of $449 mm vs $435 mm expected
  • EPS of $1.11 (from cont. ops) vs $1.01 expected


  • Deepwater revenues now represent 30% of total (now $130 mm revenue vs $0 a year ago). I sometimes still think of these guys as a shallow water player so I need to update my thinking.
  • Newbuild commitment down to $1 billion, and rigs under construction are on schedule.
  • Jack-up rates still declining.
  • Premium jack-up utilization however, has improved "significantly" over the last 2 quarters and appear to be stabilizing.
  • Balance Sheet: Very strong for an offshore driller:
    • $1.2 B cash (vs $1.1 B last quarter),
    • undrawn $350 mm line,
    • long term debt of $257 mm.
    • Debt to cap remains at 4%.  
  • Backlog now at $2.8 B vs $3.0 B last quarter
  • Dividend upped from $0.025 to $0.35.

Conference Call: Today, 11 am EST

Other Stuff:

  • NE conference call at 9 am EST
  • BTU CC at 11 am EST
  • SLB reports after the close today



Odds & Ends

Analyst Watch:

  • Susquehanna starts:
    • WLL with Positive, target $101
    • SD with Positive, target $11
    • EOG with Positive, target $126
    • FST with Positive, target $34
    • EXXI with Positive, target $38
    • MMR with Positive, target $19
    • CHK, BRY, PXD started at Neutral
  • AXAS started at Buy at Wudnerlich with a $3.50 target.

140 Responses to “Thursday Morning Pause”

  1. 1
    john11 Says:

    ATPG at Southcoast conf today, here are presentation slides;

  2. 2
    BirdsofpreyRcool Says:

    Susquehanna = Duane Grubert (the old CRT Energy Analyst). Duanne is an ex-oil industry geologist who understands timeline and e&p risk and analyses the entire capital structure of companies (not just the equity tranche). If, for example, Duane has SD with a positive outlook, I would feel very comfortable taking a 2nd look at some of the bonds in SD’s cap structure.

    Basically, the guy “gets” risk. Both operational and financial. A cross-asset analyst with an industry background. Whose price targets are not correlated and callibrated to other sell-side PTs. It doesn’t get any more helpful than that.

  3. 3
    zman Says:

    Thanks John, got a link to the conference roster?

    Thanks BOP.

  4. 4
    BirdsofpreyRcool Says:

    z — of course, Duane follows far far fewer names than you do. Just mean to say that his work is helpful to us.

  5. 5
    zman Says:

    Iran starts war games in Strait of Hormuz


    BOP – agreed.

  6. 6
    john11 Says:

    In ATPG press release they mention that the conference will not be webcast.

  7. 7
    BirdsofpreyRcool Says:

    As long as we are spotlighting a few of the sell-side energy teams out there, I must say that Global Hunter has quietly amassed a Super Staff. In both e&p and services. They are doing some creative stuff over there.

    elijah’s MHR was one of them.

    I’ll go find out what the Trading Desk thinks now… back in a sec.

  8. 8
    zman Says:

    John – just saw same from another company, maybe the conference is not broadcasting.

    Tom – looks like you got your numbers on NE.

  9. 9
    zman Says:

    NBR – called higher this morning, positive comments from TPH there and I liked the cal but did not play. I may still, sounds like an improved outlook for them as they still have not seen gas rig activity back off and the oil rig count should continue to rally in N.A.M. On the international front they should have troughed 2 quarters back.

  10. 10
    zman Says:

    CLNE on the tape with another contract for vans on gas, this time with Verizon. Follows a couple of big contracts with AT&T.

  11. 11
    BirdsofpreyRcool Says:

    HeadTrader pointing out that this morning is “all about Greece again.” But that futures were 12 pts higher at 4:30 this morning. Pre-mrkt has been steadily deteriorating. Seeing that in credit too. Started morning with IG wider by about 1 bp. Now +2.25 bps.

  12. 12
    BirdsofpreyRcool Says:

    No Tech color this morning. But HeadTrader would buy any “sharp pullback” but not “if we just drift.” Sounds like good advice to me.

  13. 13
    zman Says:

    re 12 – yep, thanks.

    ESV – strong report, upped dividend getting positive attention in a sea of opening red.

    DO – good report but cut dividend seeing them take a hit.

  14. 14
    zman Says:

    NBR looks like it wants to go higher. What’s probably bad for gas prices is definitely still good for them. Not a great quarter but expectations were low after repeated misses. Outlook definitely improved there.

    ECA – down with group which is down on Greece, will give that a little more time to digest.

  15. 15
    zman Says:

    At some point the DO pullback becomes overdone, now down 6%.

  16. 16
    zman Says:


    ESV – Added (10) ESV May $50 calls for $1.30 with the stock at $48.50 following earnings and an upped dividend (see site for comments), conference call at 11 am EST.

  17. 17
    tomdavis12 Says:

    Z: 8 On CC will report later.

  18. 18
    zman Says:

    Thanks T, watching it drift up. DO’s special dividend cut probably good for all the other drillers.

  19. 19
    BirdsofpreyRcool Says:

    HeadTrader (or the parrot on his shoulder… sometimes it’s tough to tell the difference) is singing “If you’re not Long you’re Wrong” along with his coffee and donuts this morning.

    Credit mrkt holding in bettern stocks. Indicating that “this too shall pass.”

    On the other hand, why do anything in front of the President’s Public Bashing of The Cash Cow. Might be interesting to buy, just ahead of his speech… if mrkt lower then. Musing….

  20. 20
    BirdsofpreyRcool Says:

    HeadTrader (or his parrot) just said to someone “if we had drifted down that’s one thing… but no one had a chance to short or sell… so may as well buy now.”

  21. 21
    zman Says:

    ESV jumping faster than I would have thought.

  22. 22
    Nicky Says:

    Morning all. As always looking at a couple of possibilities with the count and trying to eliminate them as we go. My more bullish count required us holding the 1195 area which we have not really.
    Now looking at two further possibilities. One that we are in a large contracting triangle in which case we would test the 1188/92 area this morning. So far so good with that count.
    An alternative is we are working on the flat I mentioned the other day which would now have us in the C leg down and targets the 1181 area.
    Under both the above counts once they complete I am looking for wave 5 higher.
    Not got my bearish boots on yet….

  23. 23
    zman Says:

    BOP – that Susque rating this morning giving EXXI a boost off the bottom. No way the guy came with a Positive rating if he expected to get slapped with a secondary.

  24. 24
    BirdsofpreyRcool Says:

    z — being told that a 2ndary would not happen until EXXI (or E21, as some people call it) gets into the $25-35 range. I can live with that.

  25. 25
    zman Says:

    Thanks much Nicky, was just about to ping you on email. Was thinking last night I’d like a chart of your stuff with notes if you have it.

  26. 26
    BirdsofpreyRcool Says:

    And it would ONLY happen b/c there are some attractive, oily, shallow GoM properties to be snatched up. So again, I can live with that.

  27. 27
    Nicky Says:

    Z – keep thinking about trying to get a chart I could post with the possibilities on here. As you know I use my trading platform charts which I can’t copy on to here. I need to do something with stockcharts or something like that.

  28. 28
    Alhambra Says:

    That would be very appreciated Nicky.

  29. 29
    zman Says:

    DO call started, having a spot of trouble getting on it myself.

    Nicky – will look into it, maybe JB can offer some suggestions on that.

    Re 26 – agreed.

  30. 30
    jiveyjr Says:

    re: #2..thx; never know who is behind these opinions without help from you guys…

  31. 31
    Nicky Says:

    Roubini says sovereign debt crisis likely to spread:


    Moore Capital foresees the “potential breakdown” of the European Monetary Union. “The [Greek] bailout could have disastrous consequences… Sovereign-wealth funds have bought trillions of euros to diversify away from U.S. dollars. That’s supported the euro and allowed European investors to flee their debauched currency… When sovereign-wealth funds finally realize what they own, ….”

    WASHINGTON (MarketWatch) – Boosted by a federal subsidy to buyers, resales of U.S. homes and condos rose 6.8% in March to a seasonally adjusted annual rate of 5.35 million, a real estate trade group reported Thursday. Sales were up 16.1% compared with March 2009. Existing-home sales rose in all four regions of the country in March. “The tax credit has done its work,” said Lawrence Yun, chief economist for the National Association of Realtors, said in releasing the data. Median home prices rose 0.4% in the past year to $170,700, the NAR said. Inventories of unsold homes increased 1.5% in March to 3.58 million, an 8-month supply at the current sales pace.

    Santelli feeling ‘anxiety’.

  32. 32
    BirdsofpreyRcool Says:

    Missed snagging a bit of KOG at $3.50. Good stock, on sale there for a bit.

  33. 33
    BirdsofpreyRcool Says:

    POTUS starts his NYC speech at 11:55 EDT.

  34. 34
    tomdavis12 Says:

    Z: I will try to keep my NE comments brief. Will forward the street reports available to me and add my take tomorrow. Net/Net they continue to execute very well. 6th quarter in a row of outperformance. Their contract drilling revenue was light due to a delay in rig delivery. I am very pleased with my position going forward. The two BIG issues for NE and the industry are Pemex (more for NE than anyone else) and PBR and Brazil. ESV is the rock star of the group right now because they have good balance sheet with their newbuilds in the perceived sweet spot (not JU’s). This group should be range bound with the BIG MONSTER Catalyst being tender activity from PBR in May.

  35. 35
    1520sbroad Says:

    Z – any reason Nat gas injection should be lower than last week? weather? what am i missing?

  36. 36
    zman Says:

    73 Bcf

  37. 37
    zman Says:

    1520 – I thought last week was too high so I was balancing my model a bit there and it turns out that seems to have been the case with the number coming in the middle of my range and below the Street. It’s all very squishy this time of year anyway and I’m sure I just got lucky.

  38. 38
    zman Says:

    That number should be a small help to NG names, looks like HK should lift, also should help my ECA trade from yesterday.

  39. 39
    zman Says:

    BOP – What’s he speaking on, have the TV on sponge bob again.

  40. 40
    1520sbroad Says:

    #37 – got it — good call

  41. 41
    zman Says:

    NBR walking higher, not chasing for now.

    ESV bounced off the $50 level, JB I have to ask you for another chart but could you give that one a quick look. Thanks.

  42. 42
    Alhambra Says:

    Re 39: http://preview.bloomberg.com/news/2010-04-22/obama-to-say-in-speech-tougher-market-rules-needed-to-avoid-future-crisis.html

  43. 43
    zman Says:

    Thanks A. By the way, did the site just suddenly start working for you or did you try something new?

  44. 44
    VTZ Says:

    The USD is right near a key level. If it still can’t break out with more “Greek woes” I’m on record with a target of 70-72 on the USD index.

  45. 45
    Alhambra Says:

    It just started working shortly after I posted that I couldn’t get on (of course). The day before it was on and off (mostly off). Glad to be back to normal

  46. 46
    BirdsofpreyRcool Says:

    #39 — POTUS is flying to NYC to give a speech on the “Risky Decisions By Wall Street That Led To The Credit Crisis.”

    Unless he also mentions Fanny and Freddie and Govt housing/lending policy and the Fed and the Rating Agencies and exporting US$s to China (via import imbalance) in the same speech, it will miss the Big Picture. Like laying blame on your arm for shoplifting… and letting the rest of your body off the hook.

  47. 47
    zman Says:

    BOP – re 46. I think he could catalyze stocks today if he takes a softer, “I don’t want to kill the finance industry” approach which it sounded like he was taking in that CNBC interview yesterday. I find it odd that GS gets charged on a Friday, and on Wednesday the whole “conflicting testimony” thing comes out AND THEN CNBC interviews the President on the same day and he says he had no knowledge the SEC was going to charge GS before he saw it on TV. Talk about distancing yourself from something that didn’t work. Or maybe that’s just my paranoid blogger sense acting up.

    ESV call in 10 minutes, stock hanging out near $50.

  48. 48
    BirdsofpreyRcool Says:

    “…no knowledge the SEC was going to charge GS…” Do people really believe that? ’nuff said.

  49. 49
    BirdsofpreyRcool Says:

    Agreed that stocks could (should) rally post-speech. Fear Of The Unknown is always worse than seeing the enemy in person.

  50. 50
    zman Says:

    ESV Conference Call Notes

    Iceland volcano not impacting N. Sea operations from a $ basis.

    Deepwater – RIG Ensco 8502 fire damage repairs completed sooner than expected, so it will be on schedule for deployment.

    ESV 8503 – on schedule,

    Continuing to market the other 3 new build rigs for late 2011 when they are delivered.

  51. 51
    zman Says:

    ESV Notes

    Jack-up market – sold 2 at attractive markets.


    DW – sees opportunities around the world. Still marketing the ESV 7500 rig that comes off contract later this year.

    Seeing an increase in plans for bidding. See demand increasing over the next several years, think this fits the delivery of their uncommitted rigs.

    Jack-up market: challenges remain. Expect the rate of decline in avg day rates to ease significantly as many of their contracts have rolled over to the new lower rates already.

    Gulf of Mexico – seeing rates increase as others have coldstacked a number of rigs. 90% utilization for premium jackups, seeing term and day rate increases. This is typically the first market to recover and it is recovering. They see running 4 rigs there through hurricane season.

    Mexico – 4 of 5 rigs contracted into 2012. See a term extension for the last rig soon.

    Middle East, Indonesia, Pac rim – very competitive markets.

    Saudi tendering for more rigs again,
    SE Asia – big tender activity has subsided.

    North Sea – demand remains low due to low UK gas prices. Oil activity picking up later this year. Demand for heavy duty rigs remains strong.

  52. 52
    zman Says:

    Nothing negative on the ESV call so far except maybe the original deepwater rig, the 7500, not yet under contract as its current contract expiration approaches. Q&A soon.

  53. 53
    zman Says:

    ESV chart looks like a cup and handle to me with the start of the cup back in Fall of 2008 with the breakout of the handle occurring today.

  54. 54
    tomdavis12 Says:

    Z: The NE fleet is very similar to the ESV fleet. They also have an UDW white elephant the Globetrotter that is expected for delivery 4th quarter of 2011. They want $500K/day the market is supporting 450 – 475. If they get $500/day that will be .33 to the bottom line or more because there will be less shares outstanding. NE bot 2.1M shares in most recent quarter for 89M at an average cost of $42.21. They still have approvals in place to buy 10.8M more shares.

  55. 55
    zman Says:

    ESV – cost guidance pretty much stays the same, balance sheet never stronger, DW revenue will double this year, utilization remains high, and the Jack-up utilization improved. Due to balance sheet and outlook, they made the big dividend boost. They see it as prudent and stable. Could still let them buy back shares.

  56. 56
    zman Says:

    Seller hit ESV very quickly, I think they were worried about the deepwater rig not having a contract yet. The first question in the Q&A was on it and it was answered with them seeing it earning revenue through out the year.

  57. 57
    tomdavis12 Says:

    Z: NE conference reflects same opinion on everything you said @ ESV except JU market. They would call the pricing band stabile for the last year (thanks to RIG’s cold stacking) and they expect stabile pricing going forward. Self serving because their fleet has more JU’s than ESV. Point over looked re Pemex. Mid Jan ’10 NE @ 45/sh. sold off to $39/sh due to perceived cut backs from Pemex. They have not lost a single day on any one of their rigs yet.

  58. 58
    bill Says:

    Ng rallying due to 73?? Just got in

    Must be due to oversold condition

  59. 59
    zman Says:

    Bill – yeah, Street was looking for a bigger injection. We’re still range bound, but at least not falling off a cliff. If we were to spike lower this is one of the the times of year I’d be expecting it, no matter how short lived it would be.

  60. 60
    tomdavis12 Says:

    Z: Did ESV offer any color re PBR?

  61. 61
    zman Says:

    ESV – just got 3 more jack-up contracts signed for firm work for the rest of the year during the conf call (all in Gulf of Mexico).

  62. 62
    bill Says:

    >Risky Decisions By Wall Street That Led To The Credit Crisis.”

    yes wall street was foolish to buy mortage securities

    lessons learned> dont write mortgage securites

    People couldnt pay mortages because they were laid off due to govt policies but we cant debate that can we.

    Govt is perfect

  63. 63
    zman Says:

    Tom – not yet.

    Commenting that you still can’t get Hurricane insurance during the season in the Gulf of Mexico.

  64. 64
    tomdavis12 Says:

    63 You can but your deductibles are way higher

  65. 65
    zman Says:

    ESV – so they sold two rigs (jack-ups) but are saying that EPS will be unchanged. Basically the revenues and costs of the rigs coming out are offset by the improvement in the rest of the model. They were versatile rigs but not more capable and they sold into a market that they would not compete head to head for the foreseeable future so they took the cash while the offer was there. That’s the kind of portfolio management I like to see from rig operators. Constant optimization.

  66. 66
    zman Says:

    Tom – right, I think that’s what he meant, you can’t afford that kind of insurance anymore, not for a whole fleet.

    They are talking about positioning of the rigs during the season based on weather and soil data. Says their ability to operate through the season is improved over recent years.

  67. 67
    elijahwc Says:

    STR just feeling the luv on spin-off E&P business. This might be a good one.

  68. 68
    zman Says:

    Eli – they have drilled some really nice wells in E. Tx and I generally listen to their call. Will be tracking the spun out piece after it happens. May take STR but full plate at the moment.

  69. 69
    zman Says:

    The typical drilling cycle for a recovery goes GOMEX, Asia, and last N. Sea and then on a contract the reverse order. The Gomex is surprising them as to how fast it is recovering and now ESV thinks that Malaysia / Vietnam may pick up later this year. So same old, same old.

  70. 70
    tomdavis12 Says:

    Z: ESV looks like best performer YTD in this group. I put them in top 2 but will listen to RIG 5/5. NE management has pulled off an excellent operating performance but the two rig sale by ESV is the kind of thing that the street loves

  71. 71
    zman Says:

    WHX backing off that peak with the pullback in the market.

  72. 72
    zman Says:

    Tom – any thoughts on RDC at present?

    Platts has their 4th annual rockies producer conference next week. I think these may be webcast.

  73. 73
    bill Says:

    The president is on

    We are going to have a really big shoe

    We have the governah, we have the evil banks

    lets get it on

  74. 74
    zman Says:

    If he cracks the market lower I’m likely to add some more ESV.

  75. 75
    zman Says:

    ESV call over. Good tone, things improving, pristine balance sheet, spending less this year as their newbuild program winds down, increasing deepwater exposure, improving jackup market in the Gulf of Mexico, increased dividend, ability to high grade the portfolio apparently improved. All things the analysts on the call liked.

  76. 76
    zman Says:

    Has the President said anything new, threatening? Market up off the lows.

  77. 77
    RMD Says:

    Duane’s recommendations based on “differentiated shifts toward oil and material exploration discoveries” that are undervalued at $70 oil and $5 gas, prices he thinks the mkt will discount. All recommends ex. EOG also have takeout pot’l.

  78. 78
    Jerome Blank Says:

    #41 ESV..the $50 level looks to be topside channel trendline resistance…looking at it now…

  79. 79
    zman Says:

    JB – thanks, don’t knock yourself out, just wondering your thoughts re the short term upside.

  80. 80
    zman Says:

    EXXI getting a nice bump now BOP. Might still be a good paired trade there with a short on MMR.

  81. 81
    BirdsofpreyRcool Says:

    Not convinced that MMR is headed significantly lower. Sure that EXXI is headed significantly higher. That said, if one wanted to keep “neutral” exposure to the energy sector, I wouldn’t argue against that pairing.

  82. 82
    zman Says:

    MCF backing and filling for no apparent good reason today after tapping on $60 yesterday. 3 big wells to be at TD in May.

  83. 83
    Jerome Blank Says:

    RE: #79 ESV is a tough one to read…you can see from both the P&F chart and the weekly that the $50-$51 level is historically been and area of support and resistance over the past several years…ESV did break above the 200 SMA on the weekly which is huge, and now should act as support on any retrace…so short term,
    I’d have to say $51 is the nearest significant resistance zone…

  84. 84
    zman Says:

    BOP – was thinking 20 to 30% lower. I don’t see EXXI cutting numbers on their next conference call so was thinking that on good results there you may see a little transition between the two names. MMR should be dead money from a catalyst perspective for quite some time.

  85. 85
    zman Says:

    Thanks much JB, just doing another hit and run in the ZIM and that helps.

  86. 86
    bill Says:

    82, i wonder if someone knows something about those 3 new wells

    60 with 4 ng doesnt make sense to me and i love the name

    i bought some puts coming into earnings

    they will quickly be sold and converted to calls with any good news

  87. 87
    zman Says:

    EXXI back to $20.

    ECA trying to turn green along with a number of gas names. Weird day. PXP on the outperforming list.

    Grabbing lunch.

  88. 88
    Jerome Blank Says:

    CIGX intraday…interesting 30 min triangle consolidation…high risk…could go much higher if it breaks $1.90, or lower if it breaks $1.80, but it’s super easy to manage with tight stops….I’ll leave a chart up for a short time for any folks interested…


  89. 89
    BirdsofpreyRcool Says:

    PXP up on pending news/vote/decision or something out of California.

  90. 90
    BirdsofpreyRcool Says:

    JB — thank YOU. Until there is some more fundamental news out on CIGX, the Shorts seem to be in the Driver’s Seat there. But the potential for the stock to be much higher makes it a compelling risk/return that will play out over the next 8 months.

  91. 91
    tomdavis12 Says:

    Z: 72 RDC. Nothing important to add.

  92. 92
    Gtinvest Says:

    Bop, Here is the latest on the Pxp saga.

  93. 93
    tomdavis12 Says:

    Z: If you want to trade the rig space keep your eye on what PBR does with their tenders in May. Rigzone had an article that Chine signed a deal with Brazil. Money for oil. If China becomes godfather to PBR, their quest to find oil might ramp up. Wall St concern re PBR is the ramp up would cost more capital than Brazil would want to spend. With a godfather maybe not. The other issue that NE took a shot at was weather PBR could get the rigs they need from in house (Brazilian yards). RIG rained on that parade last CC. So if they need many and have to go to the market place, that will be the cocaine for rigs to jump in price. Just my 2cents.

  94. 94
    BirdsofpreyRcool Says:

    Thank you for filling in the details, Gtinvest. Appreciate it.

  95. 95
    Gtinvest Says:

    You are wonderful contributor to this site.!! If you would feel comfortable it would be nice to see your history on the site.
    Thanks !

  96. 96
    BirdsofpreyRcool Says:

    That is nice of you to say, Gtinvest. Thank you.

  97. 97
    bill Says:

    If that gets passed in calif, i think its worth 10 % to pxp price

  98. 98
    1520sbroad Says:

    OT — I think it was BSJ here that was following the Cohen family and the ongoing saga at RAIT financial trust. If you are out there BSJ they put out an interesting press release this morning in addition to declaring preferred divs

  99. 99
    Jerome Blank Says:

    Interesting techincal structure on $spx daily…


  100. 100
    zman Says:

    Long lunch, market rallied since I left, good to see some names creeping to new highs including EOG.

    WHX getting some profit taking at the same time.

  101. 101
    tomdavis12 Says:

    Z: ESV +50% day trade NICE. πŸ˜‰

  102. 102
    zman Says:

    JB – Re 99. Forming a wedge.

  103. 103
    Jerome Blank Says:

    Re:#102, yep…I think most would consider it a continuation triangle or wedge…thinking that every technical eyeball in existence is probably watching this… for a break one way or the other…sure seems like the pressure is up right now, notice the $spx refused to break below the 20 period SMA…

  104. 104
    zman Says:

    Tom – thanks, that’s kind of the way the ZIM is supposed to work. Went to lunch with a buddy who has a buddy who runs a hedge fund and he was impressed by their 12% return last year. This is the point where I smiled and nodded.

  105. 105
    1520sbroad Says:

    #104 – hmmmmm. I’m sure they have a 12 page power point presentation/explanation about their strategy too.

  106. 106
    zman Says:

    Eli – I would think that crossing $5 would be another big event as far as who can own MHR.

  107. 107
    Jerome Blank Says:

    MHR daily chart added back today…

  108. 108
    zman Says:

    Deepwater Horizon sank. 11 still missing. That stinks.

  109. 109
    zman Says:

    SSN – should get another update in next 2 to 3 days regarding a post tubing installation flow rate. Stock has held in well near its highs considering that it ran 75% on the initial Bakken well news.

  110. 110
    Gmlgdc Says:

    Picked up BG wants XCO to drill 120 Haynesville wells this year. They have firm deliverablity contract on LNG and are going to use this gas for those contracts and sell the LNG overseas where it is worth more. Have not confirmed this but just heard it. Exco will produced on a pinched choke 5M per day

  111. 111
    zman Says:

    re 107 – Thanks JB. I am still contemplating re-entering puts on them. I don’t think the Street is done being disappointed with the guidance and with the lack of near term catalysts in the name. I think the chart could be vulnerable on a Monday downgrade to your $10 to $11 range.

  112. 112
    zman Says:

    GMLGDC – makes since to choke it down and extend reserves if they are going to try and fill LNG order with it, maximizing the reserve recovery. I’d guess take it to Chenierre’s new facilities at Sabine?

  113. 113
    zman Says:


  114. 114
    zman Says:

    Listening to the DO replay. Stock down 5% even pretty much all day.

  115. 115
    zman Says:

    Thinking I will be playing SLB in the ZIM tomorrow. Not going to play it in advance in the ZCAT.

  116. 116
    reefguy Says:

    SD/ARD- when is this to close???

  117. 117
    zman Says:

    “second or third quarter”

  118. 118
    Paul in Kansas City Says:

    You nailed the ESV trade; I’m long the stock and have been as it was too cheap to sell; I struggle with what service/driler name to buy.

  119. 119
    Jerome Blank Says:

    WRES has a nice 30 min intraday chart structure…added a chart

  120. 120
    zman Says:

    Tom – DO comments on PBR. They are our largest customer so don’t want to comment about their activity. Regarding the 28 requested rigs, everyone understands how difficult to fulfill due to construction capacity but they have done difficult to achieve in the past … it will take time but they will get the problem solved.

  121. 121
    zman Says:

    Thanks Paul, watching the ECA trade from yesterday starting to slowly inch back up. Their call was a good one but it has not yet wowed people.

    EOG new high again. Nice looking chart, stock still not expensive. Earnings are two weeks out, clustered with a bunch of names now including WLL and HK.

  122. 122
    RMD Says:

    Anyone know END? Just listened to replay of IPAA. Sounds as if utilities in the EEC will pay “strategic” prices for N. Sea gas (they sold one bit for $25/boe) and say they are intent on getting the value out. Slide 6shows large production growth coming from the R Blocks, Cygnus, Bacchus, & Columbus between ’10 and about ’13. Mgt seemed enthused, but that’s all I know. (Has a $81mm 6% cvt with a $5 strike due in ’12.)

  123. 123
    zman Says:

    RMD – I keep an eye on them. Management is solid. They just had a good well the other day. Aren’t they diversifying back into the states as well.

  124. 124
    tomdavis12 Says:

    Z: Keep in mind that DO’s relationship with PBR is what PBR wants. Lower prices longer commitments. DO has to protect the dividend and PBR loves to undercut pricing.

  125. 125
    zman Says:

    Tom – just relaying, listening to the call I can tell why this one has been dormant all day down here. Less optimistic tone across the board. Not awful by any means but kind of a snoozer.

  126. 126
    tomdavis12 Says:

    Z: DO doesn’t like to bite the hand that feeds them.

  127. 127
    zman Says:

    TRGL moving, such the rumor stock.

    Tom – me either, it’s a bad idea.

    FST looks to be finally breaking out now.

    Guessing NFX moves back to its highs before the earnings calls, should be plenty of news from them on the call and in their @NFX publication to move that name to its next leg up. Including possible an EFS well and definitely more granite wash wells (of the liquids rich variety) as well as a step by step summary of this year’s deepwater development activations.

  128. 128
    zman Says:

    Not going to play “buy the dip” with DO. They just sounded a bit too cagey this quarter and with the dividend cut and some of the sort of elusive reasoning for it I feel there are equal chances of a bounce or a further fall as yield seeking investors re-balance their positions based on the new lower dividend.

  129. 129
    zman Says:


  130. 130
    RMD Says:

    123 yes, into HS and Marcellus, plus S. TX, NM, MT and Ala.

  131. 131
    tomdavis12 Says:

    Z: DO is all about the Tisch’s and what they want. Never been impressed with management or operations. Usually hear negatives about how they run their business.

  132. 132
    jiveyjr Says:

    off to do what I love the most; play the ponies…but voted for JB first..thx everybody

  133. 133
    Jerome Blank Says:

    Re: #132, jivey, thank you…KOG’s looking good…

  134. 134
    Patipati Says:

    JB, much appreciate the excellent charting. Voted!

  135. 135
    zman Says:

    SD on the tape reaffirming their borrowing base.

  136. 136
    Jerome Blank Says:

    Re: #134, Pati..thanks much…

  137. 137
    zman Says:

    XCO on the tape admitting to the gas flow in water well issues gmlgdc indicated 2 days ago.

  138. 138
    elijahwc Says:

    its called dancing:

    “Co commented on a well control event in Caddo Parish, Louisiana. EXCO encountered an unexpected gas flow in a well being drilled on April 18, 2010 at a depth of 1,533 feet, and control of the well was established with standard contingency measures. No injuries or damage to drilling equipment occurred. The source of the unexpected gas flow is under evaluation, and plugging and abandonment procedures are underway.”

  139. 139
    elijahwc Says:

    SD – This is important. The good news is that the next to the last block of stock (7 mil shrs / $50 mil proceeds) sold on 4/20. The bad news is that the seller was Fairfax Financial who are Buffetish.

  140. 140
    elijahwc Says:

    Z – looking at the volume from 4/5 to-date SD has me thinking β€œin the money May 7’s @ .75”. Only .15 cents premium. While I don’t know if Fairfax was indeed the next to last block or who will be, I am pretty confident that this dog can hunt again as sufficient time has elapsed to allow SD shareholders to vote with their feet on the ARD transaction and that the aforementioned volume is indicative of this. Do you see a better entry or strike? No rush, enjoy kids and dinner, and then prepare a massive brain dump to post in the wee hours of the am. lol w/a great single malt!

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