23
Apr

T.G.I.F.

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Market Sentiment Watch: Greece opted to tap its life line last night and the markets are cautious. We have SLB this morning to wrap up the week's earnings reports before a storm of energy earnings (see Stuff section) hits next week. I'll have an updated Catalyst List with a few additions out over the weekend.


Ecodata Watch:

  • Durable goods comes out at 8:30 am EST, forecast is 0.0%
  • We get new home sales at 10 am ESt, forecast is 335K.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review
  4. Stuff We Care About Today
  5. Odds & Ends

Holdings Watch

ZCAT (Zman Catalyst portfolio)

  • $11,400
  • 50% Cash
  • Yesterday’s Trades:
    • None

ZIM (Zman Inefficient Markets portfolio)

  • $20,400
  • 74% Cash
  • Yesterday’s Trades:
    • ESV – Added (10) ESV May $50 calls for $1.30 with the stock at $48.50 following earnings and an upped dividend (see Stuff section below for wrap comments).

 

Commodity Watch

Crude oil inched up $0.02 to close at $83.70 yesterday despite a stronger dollar and fairly directionless equity markets that were significantly down in the morning.  This morning crude is trading flat.


Natural gas jumped $0.17 to close at $4.13 yesterday after the EIA reported a smaller than the Street expected injection into storage (see below). This morning gas is trading flat.


Natural Gas Storage Review


ZComments: Apologies for the broken record but this is the shoulder season and one smaller than expected injection isn't cause for celebration. Gas should continue to remain range bound until serious summer heat sets in. The fact that gas has not crept higher week to week in this last report is probably attributable survey variance and perhaps some increased displacement of coal for gas. The end of April may provide gas with a more significant event as the EIA revises its supply figures.


 

Stuff We Care About Today

Earnings Wrap (from yesterday's conference calls):

ESV Wrap :

  • 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, (added 3 rig contracts to drill through the end of the year while on the call),
  • increased dividend,
  • still has the ability to buy back shares.
  • ability to high grade the portfolio apparently improved.

DO WRAP

  • On cutting the special dividend:

    • rig rates have come off peak
    • management decided to hold onto more cash
    • can be maintained through at least 2010
    • this is not so much a reflection of future day rates but more of where rates are currently
    • it appears new builds can be absorbed by the market but they are being cautious
  • Asset acquisitions - won't comment on specific acquisitions so warned not to read anything into the raised level of cash build as a sign that they are looking to buy something.
  • Tone of the call was less enthusiastic regarding forward looking environment than the ESV call and management would not indicate what exactly it would take to repair the special dividend (wouldn't say if it would require day rates to head back to their former peak levels).
  • I'm watching but probably not going to play it soon as I think their could be an unlocking effect still to take place on the shares as some yield investors re-balance their portfolios.

SLB Reports "In Line" Quarter; Points To International Segment Recovery

The 1Q10 Numbers:

  • Revenues of $5.6 B vs $5.688 B expected

    • oilfield service revenue was down 1% sequentially, 6% YoY
    • seismic was off 14% sequentially and YoY
  • EPS of $0.62 (ex items) vs $0.61 expected,

Highlights:

  • North America was strong as expected

    • mention commitment drilling in gas plays and increased in interest in domestic oil plays sustaining activity through second quarter but then comment that visibility further out is less clear due to gas prices.
  • International margins were off due to bad weather in several markets (same comments from HAL re weather)
    • says higher oil prices are leading operators to contemplate higher activity levels.
    • they said last quarter they saw International margins bottoming in 2Q but now say they bottomed this quarter just past and "are now likely to resume a positive trend".
  • Outlook "confirms the optimism we expressed at the beginning of the year."


Nutshell: The Street should like the international margin comments and will probably take the comments regarding a lack of visibility in North America in stride. Will listen to the call before deciding to move as this is an OK  press release but not one that makes me want to jump immediately. 

Conference Call: Today, 9 am EST

 

Other Stuff:

  • Next Week in Earnings Land: NOV, STR, RRC, X, VLO, BRY, COG, CLB, FSLR, NFX, OII, WLT, WLL, APA, BEXP, CRR, LINE, SWN, COP, XOM,  CVX and many more.

Odds & Ends

Analyst Watch:

  • ROSE started at Buy at KeyBanc with a $32 target.
  • MHR started at Buy at KeyBanc with a $5.75 target.

 

134 Responses to “T.G.I.F.”

  1. 1
    BirdsofpreyRcool Says:

    Greece Update – a lot of moving pieces once again on the Greek front. During the overnight session, spreads remained wide. However, Reuters reported this morning (starting to hit the market at ~4amET) that Greece will make a formal request to have the IMF/EU rescue package activated (Greece’s Papandreou made the request at ~5:55amET and another press event is scheduled for 7am according to wire reports). The news that an activation request was going to be made is helping to tighten spreads slightly (recall they were at record wides again early Fri morning) although the markets are still skeptical. We are still waiting on details on when, how much, and in what form, assistance will flow to Greece (it still seems like some countries, inc. Germany, could see internal legal challenges to their pledges of aid….although a Reuters headline this morning says that any delay in the German parliament on this issue wouldn’t jeopardize Greek aid). The EU Commission said it has only just heard of the Greek request this morning and will decide on the release of emergency loans to Greece after it has determined whether the aid request is valid. It was assumed that when the EU/IMF officials came to Athens this Wed to discuss the terms of an activation that such a request would be made and traders are viewing this morning’s announcement as an attempt to tighten spreads back to more reasonable levels. The markets still have their same concerns: 1) not clear if the IMF/EU rescue framework will be enough; 2) not clear if Greek populace will tolerate further austerity measures (judging by the continued strikes); 3) not clear if Greek statistics are even viable (see Thurs morning’s large revision to the prior budget deficit). There have been a lot of articles this week (starting on Tues morning in the FT) talking about how a Greek debt restructuring of some sort is inevitable.

  2. 2
    BirdsofpreyRcool Says:

    Fund Flows – from JPMorgan’s E Beinstein – HG bonds had $882mm of inflows on the week, up from $737mm last week and about $625mm the 2 prior weeks. HY fund inflows were $512mm compared with $282mm the week before. Equity funds had inflows of $2.1B, reversing 2/3 of the surprising $3.3B outflow last week. Money Market funds had very large outflows of $33B, similar to last week outflow of $35.6B

  3. 3
    BirdsofpreyRcool Says:

    Yesterday’s Trading Action

    stocks demonstrate strong resiliency, shrugging off a handful of meaningful negatives (inc. a bunch of weak earnings, further deterioration in Greece, and financial regulatory reform risks); sp ends up 2.7 points pretty much @ highs of the session. What caused the intra-day turn? Stocks caught a bid as the Obama address wound up and the president failed to unveil anything incremental to the market (i.e. the bulk of his text was out in the morning). In addition – as Europe closed the headlines out of Greece started to abate and US equities started to act better (a phenomenon we have seen in recent weeks). CNBC broke in later in the afternoon w/its second update on the GS/SEC case in as many days (on Wed CNBC broke in to report that ACA was aware that Paulson was short the CDS in question and today stated that ACA had a hand in selecting the underlying component securities, in some cases including paper that was of lesser quality; GS shrs, and the broader tape, rallied on the CNBC reports as they appeared to weaken the SEC’s case). A lot of the shorts that became aggressive on Fri laying out exposure on back of the GS/SEC headlines have been covering really since Tues as the market failed to break lower. There was never a ton of real vanilla selling on Fri or Mon. That said, a lot of the strength into the close Wed and again today is predominately short covering (vs. real money buying). While the desk did note some buy interest on the weakness this morning, larger vanillas aren’t chasing prices higher and remain largely on the sidelines.

  4. 4
    zman Says:

    Re 1. Sounds like a band-aid when what they need is a tourniquet. Germany may balk over the weekend. Maybe if they renamed Athens something like New Berlin.

  5. 5
    BirdsofpreyRcool Says:

    The whole idea that the likes of Greece, Italy, Portugal could share the same currency as Germany, France, Austria, The Netherlands when their economies, taxation, inflation, and general attitudes toward commerce differ so greatly… well, it just never made sense to me. Guess it’s like California, Texas, Iowa, Florida, NY, and NorthDakota all sharing the dollar. Still… just seemed like “if” and not “when” we would see something like Greece happen.

    I honestly don’t see how the euro will hold together in the long run… but that is probably just my Dogma showing thru.

  6. 6
    zman Says:

    Analyst Watch

    RBC starting refining sector today. VLO at perform, TSO at underperf, HOC top pick, FTO at Buy (wife still owns it and I will never hear the end of it).

  7. 7
    zman Says:

    Way to stick to your guns on EXXI by the way BOP.

  8. 8
    zman Says:

    SLB called up large on their earnings, putting some bids under the rest of oil service too.

  9. 9
    zman Says:

    SLB call about to begin.

  10. 10
    zman Says:

    Ram, Bond, you guys able to get in here today?

  11. 11
    zman Says:

    SLB reading the press release. Ugh.

    ROSE starting to look interesting to me again, has been basing since the last leg up.

  12. 12
    zman Says:

    SD – sizable pre market volume. Eli – you are on to something with your comments last night.

  13. 13
    zman Says:

    HK announces Analyst Day on May 24

  14. 14
    BirdsofpreyRcool Says:

    TechTrader out with a 55/45 LONG call this morning.

    HeadTrader’s Parrot still squawking “If you’re not long, you’re wrong.” And pointing out that durable goods (when broken down, looking at the details) was quite positive. (HT said that, not his parrot)

  15. 15
    zman Says:

    Analyst Watch: NE EPS lifted at Stephens, remains their Top Pick.

  16. 16
    zman Says:

    SLB basically read the press release, Q&A starting now.

  17. 17
    zman Says:

    SLB – we have now severely restrained the acquisition pipeline.

  18. 18
    zman Says:

    SLB – Russia Watch – if they want to maintain their production level they will have to go back to work in Western Siberia and there are indications they plan to, via tenders.

  19. 19
    zman Says:

    SLB’s view of the current cycle – last cycle we saw a huge amount of natural gas projects overseas (LNG) ramping up. As this cycle gets underway, this cycle will be related to oil, inside or outside the United States. Sees confidence is going to grow, particularly in offshore projects. On land it will increase the oilfield enhancement projects.

    Gas will be very much affected by the amount of LNG just put on stream (duh) and the shale gas (double duh).

    Getting more deepwater activity earlier than we thought, which is part of the reason they are bumping up their capital spending now.

  20. 20
    zman Says:

    SLB – should stay strong today. Should carry HAL and WFT higher with it in my book.

  21. 21
    zman Says:

    SLB – “we constantly look for places where we’ve lost market share and we constantly fail to find it.” Independent data confirms.

  22. 22
    zman Says:

    SLB Notes –

    How do you see exploration side on deepwater and how this turns to development drilling?

    Deepwater – programs that have been announced seem to be happening, which is unusual. Rates coming down will inspire exploration.

  23. 23
    zman Says:

    SLB up 4%+ at the open. My sense is that it goes higher.

    ESV and ECA moving on up here.

  24. 24
    zman Says:

    SLB saying all the right things with a much more bullish (for them as they are notoriously conservative) tone. Stock tapping $72.

  25. 25
    1520sbroad Says:

    HK taking a page of out EOG’s book with an analyst day?

  26. 26
    zman Says:

    Running to a meeting, back in an hour.

  27. 27
    kaman Says:

    Anyone else watching AXAS? Buying seems to be ramping over last week regardless of overall mkt.

  28. 28
    BirdsofpreyRcool Says:

    OK… I feel a rant coming on… it’s Friday and I can’t control these by the end of the week, so here goes…

    I think HK can improve it’s standing in the Investment Community by showing that Mr. Stoneburner (and was there ever a more appropriate name for an E&P CEO?) is firmly in charge. And here is hoping he is! Rumor has it that Floyd Wilson (when not interviewing for Wife #4) was attracted to the Shiny Bauble of Common Resources and threw in a bid. This would have resulted in more stock and bond issuance. I shudder to think of the backlash there.

    Mr. Stoneburner had better publish his version of the Rules of the PetroHawk Game… make it very clear… then STICK to those rules. (Kinda like staying married to the same wife… which is not a page in the Floyd Wilson Playbook).

    I own some HK, but i swear, this is my Last Rodeo here. They don’t stick to what they promise to do (no stock issuance, organic growth) for the next two years, I will toss HK on the Rubbish Heap of Stinky Fish Heads for Life.

  29. 29
    1520sbroad Says:

    #28 – I couldn’t agree more. I will say that thus far in 2010 they have stated a plan and stuck to it – even dialing back the drilling a touch. I am hopeful this newfound discipline is here to stay.

  30. 30
    jiveyjr Says:

    Stoneburner made a presentation to Dallas Investor Forum a couple of yrs. ago with the stock at $26…told us buy it, it will go higher…with a wink said he didn’t want to own HK stock forever himself…

    been a hard hold but he’s impressive to listen to…have no idea re: Wilson…must be related to Charlie Wilson, deceased congressman from Lufkin somehow eh?

  31. 31
    jiveyjr Says:

    FWIW, for those stubborn enuff to hold WRES…it is back in the resistance range where the secondary was done….

  32. 32
    jiveyjr Says:

    I mentioned WRES to friends and am thankful it is back to where it is…4000% guaranteed to screw up putting a friend in a stock…

  33. 33
    jiveyjr Says:

    unless you or BOP that is…she makes her picks count

  34. 34
    BirdsofpreyRcool Says:

    jivey — i totally agree with you… i mentioned two very risky (but potentially high return) stocks on this board, b/c i think they have some unusual potential. But it is difficult to watch them bounce around and drag out in time, knowing that people listened to me. So, that said, I promise to post on this board when I think CIGX and PAYD are no longer on track to do what I think they can do.

    Timelines get stretched out far longer than I thought… and I do hate letting people down. So, will let you know if/when the recommendation changes in either of those two micro-digit midgits.

  35. 35
    jiveyjr Says:

    I didn’t buy either of those last two…but have made a enuff to buy a couple of ponies with KOG/EXXI and have some left over…you’re the best. most on here understand that you can only give us your best insight..which is invaluable..thx a lot

  36. 36
    zman Says:

    AXAS – I can’t get my hands around the story. Sounds like a “wannabe” in so many plays, no focus.

    HK – hear ya, I think they have to stick to the new discipline. Floyd flatly denies he is interested or bidding on Common Resources.

    Minnows swimming well today watch:
    TAT testing $4
    SSN inching higher
    WRES over $3 (oh well, can’t kiss all the girls)

    SLB – would have probably played but I could not skip my meeting

    WHX – getting back yesterday’s profit taking, still no news, but seeing good reports on distributions from MLPs. Royalty trusts probably put in very good numbers for the quarter.

    ECA waking up, I still think it has $34-35 potential near term but I won’t hang out that long to make sure as it is a ZIM trade.

  37. 37
    jiveyjr Says:

    damn did V put out another buy on gold…geez

  38. 38
    elduque Says:

    re SD, aside from bank line renewed, and being cheap relative to other E and P’s do you think it is moving with NG. Or is there another explanation?

  39. 39
    BirdsofpreyRcool Says:

    z — TAT… can you justify the price (given the country risk) based on their production and reserve profile? Or does it hinge on the (very justifiable) “Malone Mitchell III” aura. Thanks.

  40. 40
    zman Says:

    NFX cleaning up before earnings next week – they could have an Eagle Ford well to talk about with ECA.

  41. 41
    tomdavis12 Says:

    Z: Has the SLB call made you more/less committed to the on-offshore driller space.

  42. 42
    zman Says:

    El – re SD, Eli theorized last night that a seller was exhausted, taking pressure off the shares, sounds plausible.

    TAT – a doubling of oil production from start to finish in 2010, with another 50% in 2011 will give you a little multiple boost. They are also moving from 0 gas at the end of 2009 to something north of 15 mm/d this year in a $9+ gas environment. At 10x this year’s expected CFPS it’s high to normal E&Ps but not stratospheric.

  43. 43
    elijahwc Says:

    elduque for what little it is worth here is my 2cents from last night:

    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.

    Z – looking at the volume from 4/5 to-date SD has me thinking “in 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?

  44. 44
    zman Says:

    re 41. More committed to Service in general, renewed interest in deepwater although it will be a slow process there, probably too slow for options. I may just buy some ATW and sit on it. The other ancillary play there I am thinking of taking a piece of is OII but I plan to wait for the call as they have been rumored to be having some delays on their umbilicals biz.

  45. 45
    BirdsofpreyRcool Says:

    z — #42 thank you for your answer.

  46. 46
    zman Says:

    Eli – I’m not playing SD with options for now. If I did I might take May $7s.

  47. 47
    tomdavis12 Says:

    Z: Do you expect the litigation problems to keep RIG in the penalty box?

  48. 48
    choices Says:

    Z, not clear to me why SLB is so strong this AM, was it the tone of the guidance/Q&A-I’ve been watching this like a hawk and completely missed this move.

    Thanks

  49. 49
    zman Says:

    Tom – Don’t know, have not seen much on it yet. I prefer to look elsewhere unless it really beats them up. Tough situation all around.

  50. 50
    VTZ Says:

    RE 37: Volatility like this is expected. It will probably position to break the last resistance next week.

  51. 51
    tomdavis12 Says:

    Z: For offshore over the next 6 months, I have ESV #1 and NE #2 for performance. ATW’s small fleet gives me pause but in this space increased cash flow and earnings is unusually good. I know the amount of JU’s gives you pause re NE. Remember 74% of all proven oil reserves can be reached by JU’s. They are the linemen. Alot of blocking and tackling just not as sexy as the Qbacks and wide receivers with the big contracts.

  52. 52
    jat Says:

    Re 48, for my opinion, tone of the guidance, the pull forward of the bottoming of international margins, the increase in capital expenditures and the implications for ’11 revenue growth, the great performance of NAM after a Q4 in which SLB lagged in NAM… all of these things mean that estimates are going higher and buyside confidence in those estimates will also increase, at least for the next month or so.

    Talking my book, quite biased, but that’s my view.

  53. 53
    choices Says:

    #52-thanks, jat

  54. 54
    zman Says:

    Jat – absolutely agree. Biding my time today.

    Tom – I hear ya. I think ATW sports the best earnings growth profile in the group by a long shot but they do have small fleet risk.

  55. 55
    zman Says:

    ESV inching into new territory.

  56. 56
    reefguy Says:

    GST bought some today…Marcellus horizontal has spud

  57. 57
    zman Says:

    Reef – little names running, could work, they never had anything in the Eagle Ford I take it … too far south?

  58. 58
    zman Says:

    ZTRADE – ZIM – SLB

    SLB – Bought (10) May $75 Calls for $1.07 with the stock at $72.15 (up nearly 6%) after earnings. See site comments today for more reasoning but suffice it to say the outlook for SLB is improved both in North America and in the International segment, the tone of the call was more optimistic and estimates are likely to move up from here making the stock sell for less of a premium than usual to its peer group.

  59. 59
    zman Says:

    Analyst Watch:

    S&P just raised ESV from Sell to Buy; target upped $16 to $56.

  60. 60
    zman Says:

    Macondo was capped by the way:

    http://www.upstreamonline.com/live/article213011.ece

  61. 61
    elijahwc Says:

    For the AAPL iThings fans this is pretty nice.

    http://www.pionline.com/apps/pbcs.dll/article?AID=/20100419/PRINTSUB/304199984/-1/TOPIC

  62. 62
    zman Says:

    Eli – thanks, the CNBC app for iphone is without equal. I’m waiting on the iPad for V2.

  63. 63
    elijahwc Says:

    story soon to appear on Dow: NY Regulators Issue Strict Rules for Drilling in Watersheds.

  64. 64
    zman Says:

    … followed by NY Regulators recommend raising your own sheep for blankets

  65. 65
    VTZ Says:

    Is the oil platform explosion going to cause any grief/scrutiny from regulators? I’m not familiar with offshore politics.

  66. 66
    VTZ Says:

    Why isn’t Greenpeace out there making a big scene like they do here?

  67. 67
    skimo Says:

    No seals in GOM. 🙂

  68. 68
    VTZ Says:

    No seals in Fort McMurray either.

  69. 69
    zman Says:

    V – Best guess would be yes, some, but no changes come out of it.

  70. 70
    zman Says:

    EOG starting to reverse early profit taking again. They don’t report until May but there are some notables from out list that may affect them next week including WLL and I think BEXP although I’m not sure that’s a good date yet.

  71. 71
    elduque Says:

    Rig count dropped, first time in 17 weeks

  72. 72
    zman Says:

    Rig Count Watch:

    Oil up 8 to 514 vs 202 a year ago.

    Gas down 17 to 956 vs 742 a year ago.

    Horizontal down 1 to 753, still right at the highs.

    From everything I’m hearing I would not anticipate a big drop in gas rigs any time soon. Pipe is going to get even more expensive. Will listen to the X call next week on that.

  73. 73
    zman Says:

    NG gain on the day doubled since the rig count number came out.

    NG up 13 to 4.26 now.

    Oil up $1.10 to 84.80.

  74. 74
    zman Says:

    SLB topping $73.

    EPS

    2010: $2.85 25x

    2011: $3.81 19x

    HAL is trading:
    2010 24x
    2011 16x

  75. 75
    zman Says:

    TS another name on the pipe idea to consider.

  76. 76
    1520sbroad Says:

    perhaps the pitter patter of nat gas shorts covering on the nymex with 30 min to go?

  77. 77
    zman Says:

    1520 – yep. Surpsied so little reaction for GMXR yet. GDP moving, even HK moving. EOG recovered all the profit taking (for the umpteenth day in a row).

    WLL breaking out big time on the daily chart. Still holding my deep in the money $75 call there.

    Heck, even ECA waking up.

  78. 78
    1520sbroad Says:

    SWN with a nice move… HK has had a big parking brake on it – nice to see it still can catch the wave when it comes.

  79. 79
    zman Says:

    SWN – been hearing takeout rumors there. I think it’s more likely they take someone else out in the FS. (HK would fit Reef’s comment the other day).

  80. 80
    tomdavis12 Says:

    Z: What kind of wine will you be opening this weekend?

  81. 81
    zman Says:

    Nothing fancy. Root:1

  82. 82
    1520sbroad Says:

    79 – I would agree on the HK FS acreage idea. I think they have some shared wells in there already or maybe it was that they were sharing seismic? Would certainly be a fit for SWN at the right price.

    No idea on SWN takeout – you would know better than anyone I know…

  83. 83
    zman Says:

    SWN ops some of their wells.

  84. 84
    1520sbroad Says:

    some more good action in those HK May 24s – somebody just picked up about 1000 contracts

  85. 85
    elijahwc Says:

    SD – Okay, color me confused. Briefing.com is commenting that “This week we’ve seen notable insider buying in the following stocks:

    * SandRidge Energy (SD) 10% Owner Fairfax Financial Holdings bought 11,530,000 shares at $7.02-7.69 on 4/7-4/20

    Last night I noted the Form 4 that was filed saying they sold 7 million on 4/20.

    Further examination further shows 3.5 acquired between 4/7 and 4/16

    Beats me as I’m pretty sure Fairfax is not a short termer in just about anything. Something more here?

    Stock bottomed and is going higher.

  86. 86
    tomdavis12 Says:

    Z: I going for a Pinot Noir J 2007 Russian River Valley.

  87. 87
    zman Says:

    J makes a nice sparkling white too.

  88. 88
    Alhambra Says:

    Turley and Tablas Creek for me- I was in paso robles last weekend and picked up a few bottles

  89. 89
    zman Says:

    A – I hope to be out that way in June or July. It’s so slow on the site around that time you may not notice I’m away.

  90. 90
    Alhambra Says:

    May be better to watch the vines during that time.
    NFX rolling today. Are you thinking about playing that one for earnings?

  91. 91
    elijahwc Says:

    SD digging deeper.

    Well Tom Ward got him one heck of a partner…..all of the filings are either purchases or in this last filing the creation of a mandatory convertible preferred.

    http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=6902538

    From the footnotes:

    Explanation of Responses:
    1. Following the transactions reported herein, 277,000 Common Shares are held by V. Prem Watsa and the remaining Common Shares are held by subsidiaries of Fairfax Financial Holdings Limited, including, following the transactions reported herein, 897,600 Common Shares held by Odyssey America Reinsurance Corporation. United States Fire Insurance Company no longer holds any Common Shares.
    2. Each Preferred Share is convertible into 12.4805 Common Shares, subject to adjustment under certain circumstances.
    3. The Preferred Shares are convertible at any time at the holder’s option.
    4. After February 20, 2014, Sandridge Energy Inc. may cause all outstanding Preferred Shares to automatically convert into Common Shares at the then-prevailing conversion rate if certain conditions are met.
    5. The Preferred Shares are held by subsidiaries of Fairfax Financial Holdings Limited, including, following the transactions reported herein, 69,000 Preferred Shares held by TIG Insurance Company, 88,800 Preferred Shares held by The North River Insurance Company and its subsidiaries, and 487,600 Preferred Shares held by Odyssey America Reinsurance Corp. and its subsidiaries.
    6. 8.5% Convertible Perpetual Preferred Stock (Preferred Shares)

    This is a complete end run on the street and he really upgraded his shareholder base.

  92. 92
    tomdavis12 Says:

    Z: HK over $23 **** That is my sign for happy feet.

  93. 93
    jat Says:

    re 90, subash out very positive on nfx today.

  94. 94
    zman Says:

    Jat – has he mentioned more granite wash and the EFS well or is he just saying how cheap it is?

  95. 95
    Nicky Says:

    Afternoon everyone.

    Still favoring the upside despite the fact that it is so laborious. I am still favoring a push towards the 1224 plus area although I have one count that would allow for a small pullback first.
    Cycles are not favored to top this side of the 27th April.

  96. 96
    elijahwc Says:

    SD – for those unfamilar with Fairfax and Prem Watsa he has a cult following in the deep value community and as many of you know they go to great legnths to ape each others holding once one of their own makes the case. And if wrong they just buy more.

    Know I know why this goes higher.

    Little history of Fairfax (FRFHF) below.

    http://en.wikipedia.org/wiki/Fairfax_Financial

  97. 97
    jat Says:

    it is all the usual, plus the new acreage in s. baaken

  98. 98
    zman Says:

    Jat – thanks.

  99. 99
    zman Says:

    Planning on cashing some tickets in the ZIM before the close.

  100. 100
    elijahwc Says:

    FTK power lifting up 20%+ thru 2.10

  101. 101
    West Says:

    SM has excellent Niobrara horizontal well on south edge of Silo Field in Wyoming. You can look at EOG’s recent presentation to see the area. The well is testing at between 1200 and 1500 bopd from a 5k ‘ lateral. Possibility that this well has not even been fraced yet but hit an overpressured highly fractured zone. Jonah Gas has staked 19 drill sites in this area.

  102. 102
    zman Says:

    West – Thanks, second source on that today. Area flows well unfracced. EOG has a ton of permits filed.

  103. 103
    elijahwc Says:

    West – on a relative basis the Niobrara cabel has started to outperform Bakkens. The universe as I see it are DBLE PETD BBG CHK EOG ROSE SSN WRES and now you have identified it SM. Thanks

    Any other names?

  104. 104
    zman Says:

    CRZO and CXPO, ME too but they’re gone, so that’s APA.

  105. 105
    zman Says:

    104 was re 103.

  106. 106
    BirdsofpreyRcool Says:

    Comments from the trading desk … Not that much volume in stock trading, but no one wants to sell ahead of the Monday Rally and stocks getting marked up.

  107. 107
    elijahwc Says:

    Thanks Z

  108. 108
    zman Says:

    BOP – wonder if Germany has anything to say re Greece over the weekend that jeopardizes that Monday rally plan.

  109. 109
    West Says:

    Nio plays also NBL, with a lot of acreage.

  110. 110
    BirdsofpreyRcool Says:

    z — #108, probably.

    On the other hand, maybe M&A Monday is back. FLOODS of money flowing into corporate and high yield bond funds. And where there is cash, there is bond issuance… for stock buy-backs, capex, M&A, expansions… all good equity-enhancing stuff.

  111. 111
    zman Says:

    ZTRADE – ZIM – ESV

    ESV – Sold the (10) $50 May Calls for $2.90, up 120%.

  112. 112
    elijahwc Says:

    http://www.nytimes.com/2010/04/24/science/earth/24drill.html?partner=rss&emc=rss

  113. 113
    elijahwc Says:

    THX West

  114. 114
    zman Says:

    ZTRADE – ZIM – ECA

    ECA – Sold the (40) May $33 Calls for $0.80, up 44%. I continue to hold the $32 strikes.

  115. 115
    West Says:

    I’m playing SSN for Nio play for recompletion of well that already tested oil in place before newer fracs were available in this area. They just got permits for these wells in Goshen Co., WY

  116. 116
    BirdsofpreyRcool Says:

    Speaking of Niobrara… DBLE is up… a lot. Someone clearly thinks they are sitting on some juicy acreage. That may well be… but it would be Blind Luck. CEO is an honest guy… but he couldn’t find oil in an unopened can of Valvoline.

  117. 117
    zman Says:

    West, right me too. Don’t have a good sense of timing on that, you?

    WLL taking off in front of earnings next week, making me think they are ready with data on the next Lewis and Clark well.

  118. 118
    baylor3217 Says:

    how bout the spread on the WLL May 75 call.

    Bid – 10.70
    Ask – 12.50

    with only 25 contracts changing hands today in what appears to be one transaction for $12.40

    That’s all through my ameritrade.

  119. 119
    zman Says:

    re 116 = OUCH

    OK, enough for me. Beerthirty. Have a great weekend.

  120. 120
    elijahwc Says:

    SSN West I’m a me too with you on that one.

  121. 121
    elijahwc Says:

    #116 but BOP he issued these, DBLEP, of which I own a few. Kinda liked them to go along with the MHRprC. Like Sherlock Holmes I am simply addicted to the 7 percent solution (or higher).

  122. 122
    West Says:

    SSN, I would think as much as Terry likes to flash that they have something in their weekly press release in the next 2 weeks, with operations to commence in the second quarter. They should be able to drill out plug with workover unit and may be able to bypass having to get a drilling rig. The rigs are getting harder for the small guys to line up for 1 well programs. SSN is kinda of option that doesn’t expire pricing, very much like where KOG was this time last year.

  123. 123
    BirdsofpreyRcool Says:

    elijah — you are One Smart Cookie!!

    The best way to play any company that Mr. Dole runs is to get paid to hold it… and take a position that is senior to the equity tranch. Well done.

  124. 124
    elijahwc Says:

    Thx BOP I have always tried to capture the coupon when it exceeds historic equity returns over most and maybe all periods. The rest of my friends are working to hard.

  125. 125
    BirdsofpreyRcool Says:

    Working Hard and Working Smart… Not always an area of intersection between those two sets.

  126. 126
    zman Says:

    Good on Schwab. The ESV’s went for $2.91, not $2.90 and the ECA for $0.82, not $0.80, even though I was hitting bids. That’s pretty fair of them.

  127. 127
    elijahwc Says:

    And West, SNN in addition to the recent new NS permitting, I believe that the workover is within 4 miles of EOG’s biggie that they are fix’in. Also, don’t they have spacing for seven to maybe 12 right on top of the BEXP mules in the Bakken.

    I just love single digit numbers that are undercap’d, thin, unknown, underloved and the smallest house in a great neighborhood.

  128. 128
    zman Says:

    Eli – they have 3,600 acres in the Bakken just west of BEXP. 2 wells drilled to date. 4 more to go on 640’s or 10 more on 320s which they may opt to do.

  129. 129
    zman Says:

    ZCAT, ZIM, ZLT page updated:

    http://zmansenergybrain.com/subscriber-data/holdings-wiki/

  130. 130
    Dman Says:

    I don’t know nuttin’ about DBLE, but the chart is very bowl-like. Actually, more of a beaker really. Do beakers count?

    BOP – heard anything on the FTK? I’m guessing today’s bump was hot money chasing anything service-related. But is it smart money too? This is the question.

  131. 131
    BirdsofpreyRcool Says:

    Dman — Kudos on FTK. All I have gotten from my network are Blank Stares when I ask about the company. Most recall it was a very high-flier a coupla years ago… but since the train wreck, they have just let FTK slip off their radar screens.

    Funny thing, I can’t find any fundamental (or public) reason why the stock is up like it is. Think combo of “smart money” accumulation (for some currently-unknown reason) resulted in a chart pattern that the Mo-Mo Monkeys jumped on. But, where there is smoke, you usually find fire… just how large (or small) is that flame? Don’t know. You come up with anything??

  132. 132
    Dman Says:

    BOP – FTK was Eli’s idea. I just jumped on board. But yeah, I suspect something is up.

    It could be as simple as “service is picking up & they are now not going away, so they need to get valued higher”. Or there could be something specific, which seemed to be what Eli’s source implied.

    Anyway, if service continues to rock, this could be a good speculative/trading stock. The fact that it is off the radar of almost everyone can’t hurt. Although today’s spike will put it on the Mo-Mo radar fer sure.

    Nice call on the EXXI (again).

  133. 133
    elijahwc Says:

    FTK: In THEORY, a b flat, plain vanilla improvement in business, particularly in the specialty chemicals division.

    Also, they did some balance sheet restructuring earlier this year with some “old friends of the firm” that will help them go bankrupt later than once believed, if at all, if things don’t work out. Yikes!

    Also, they had a properity clean mud a couple of years before it was fashionable to do so and couldn’t make it work at the price points. Perhaps things are different now, but I dont know.

    Finally a CFO for hire with a turnaround resume is close to management and believes that they are investable again. Maybe he will even pitch in and help.

    lots of ifs, whats and maybe’s here and what we need is some boots on the ground that can confirm sales.

    Meanwhile the mo-mos are clearly discovering the name.

    Someone pointed out the 2.50 strike calls about a week ago. If bought its been a handsome return. Are Congrats in order Dman?

  134. 134
    Dman Says:

    #133 Well it was a small position & as usual I took profits too early. But it was certainly a win for my new “act now, understand later” approach. Somewhat disturbingly, that approach is doing OK.

    The Sept 2.50s were the only calls with non-insane IV, so there wasn’t much choice involved.

    We can hope that the Mo-Mo Monkeys will drop the ball and give us another look at it. Alternatively, being what they are, they could push it to $4 by mid-Monday.

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