Thursday – Oil Review and Gas Preview Plus More E&P Earnings

Posted on by zman

 

 

Market Sentiment Watch: In energy land, oil is the new black. Even Petrohawk is getting in on the act (actually every E&P I can think of this quarter has promised any where from small to massive oily growth between now and some future quarter. Probably a good thing for gas prices as this, along with the idea that it's OK to announce you are producing smartly instead of IP-maxing for a press release, should curtail some volumes by 2H10. Not much to say about the broader market except that markets look ready to pause again in their Greek and other PIIGS based fears. With ratings agencies threatening further country downgrades there is sure to be continued market whipsawing in the near term. Tomorrow's nonfarm payrolls number may provide an opportunity for U.S. markets to refocus on something besides Molotov Cocktail throwing Greeks.


Ecodata Watch:

  • Jobless claims: 444K vs 440K expected
  • Productivity of 3.6% vs 3.1% expected

 

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 – Earnings Watch - GDP, CLR, EXXI, SFY
  6. Odds & Ends

 

Holdings Watch:

ZCAT (Zman Catalyst portfolio):

  • $10,500
  • 71% Cash
  • Yesterday’s Trades:
    • None

ZIM (Zman Inefficient Markets portfolio):

  • $26,600
  • 68% Cash

  • Yesterday’s Trades:
    • FST – Added (20) more FST May $30 calls for $0.50 with the stock at $27.70, opening lower with the group on Greek woes.
    • EOG - Added (5) May $210 Calls for $2.15 with the stock off $4 on Greek woes. I continue to hold the $115 Calls here as well.
    • EOG - Still averaging in, took another (5) of the May $110 calls for $1.75, with the stock off $4.80 on the day.

 

Commodity Watch:

Crude oil dropped $2.77 to close at $79.97 yesterday, after the EIA released  a mixed bag of a report. Crude inventories built more than expected on a surge in imports (possibly due to tankers rushing towards the LOOP fearing it would be shut down due to BP's spill) while both gasoline and distillates built at a slower than expected pace due to better than expected demand, especially on the distillate front which we'll be watching closely to see if a change in trend is in the making  (see below).  This morning crude is trading off slightly following the ECB decision to keep rates unchanged.

  • Nigeria Watch: President Yar'Adua succumbed to chronic kidney problems yesterday. Acting president Jonathon Goodluck will assume the presidency (he's been in charge since February) and my sense is that he is more conciliatory to the rebels and MEND in particular than his predecessor so we could be in for a quieter than normal spring as far as platform and pipeline attacks go. 

Natural gas eased $0.02 to close at $3.99 yesterday. This morning gas is trading flat.

Natural Gas Preview

  • My number: 75 Bcf Injection
    • Last Week: 83 Bcf Injection
    • Last Year: 87 Bcf Injection
    • 5 Year Average: 75 Bcf Injection
    • 10 year Hi: 107 Bcf Injection
    • 10 year Low: 38 Bcf Injection
  • Street Consensus: 80 Bcf Injection

EIA Oil Inventory Review


Crude:




Gasoline:  Word of near term caution on gasoline. This is the second week in which throughput at refiners rose and gasoline production fell. This fall, combined with benign gas imports allowed gasoline stocks to not grow as much as expected. I expect a snap higher on gasoline stocks with next Wednesday’s report.




Distillates:




 

Stuff We Care About Today


Earnings Watch - Brief Looks

GDP Reports Weak 1Q10 Results; Yells "Me Too" In The Chase The Oil Game

The 1Q10 Numbers:

  • Production of 88.6 MMcfedp (98% gas):
    • up 17% YoY
    • up 3% sequentially
    • guidance for this quarter was 88 to 91 MMcfepd
  • Revenue of $40.5 mm vs $46 mm expected
    • LOE continues to dive based on reduced salt water disposal and compression costs, and a greater percentage of Haynesville wells in the production mix (which are lower 
  • EPS of ($0.56) vs ($0.29) expected
  • EBITDA of $24 mm vs $27 mm expected

Highlights:

  • Capital spending dropped due to involuntarily completion delays.
  • Guidance:

    • 2Q of 87 to 91 MMcfepd
    • 2010: reaffirmed at 15 to 25% growth over 2009
    • Expected 5 to 10% of production will be liquids by year end.
  • Borrowing base increased to $200 mm; $100 mm in cash on the balance sheet.

Nutshell: Worth listening to a replay of the call, but am thinking it's in for a shellaccing today.

Conference Call: Today, 11 am EST.

 

EXXI Reports What I'd Call OK 3Q10 Results Given The Circumstances, Plan on Track, 

The 3Q10 Numbers:

  • Production of 25,400 (68% oil):
    • this was down from 26,000 BOEpd last quarter due to a previously disclosed pipeline rupture curtailing volumes of 2,400 BOEpd in the quarter.
    • YoY results aren't really comparable due to acquisitions.
    • 3Q exit rate was 27,000 BOEpd
    • My sense is that volumes should be about 30,000 BOEpd by August.
  • Revenue of $150 mm vs $145 mm expected
  • EPS of $0.18 vs $0.14 expected
  • EBITDA of $87.3 mm vs $95 mm expected (range was $84 to $117)

Highlights:

  • Davy Jones discovery well - no new data
  • Davy Jones appraisal well - drilling below 5,000' with a planned TD of 29,950'
  • Blackbeard East - drilling ahead at 15,200' on its way to 29,950' as well
  • Balance sheet: Long term debt down

Nutshell: The divergence between a beat on revenue and earnings and misses on EBITDA and CFPS appears to be attributable to a lower than anticipated tax rate. As far as rates go, their numbers for the quarter were OK, not great, even with the pipeline disruption I would have guesstimate a higher number based on their exit rates last quarter. I'd like to see Schiller go to "under promise and over deliver" camp but that's unlikely. In my book, this kind of miss, one caused by infrastructure snafu, is pretty easy to forgive, since the production will literally spring back when the pipeline is repaired.  

 

Conference Call: Today, 10 am EST.

CLR Reports Solid 1Q10 Beat; Revises Bakken Reserve Recovery Estimates Higher

The 1Q10 Numbers:

  • Production of 38,428 BOEpd

    • up 4% YoY, and up 2% sequentially
  • Revenue of $217 vs $215 mm expected
  • EPS of $0.43 vs $0.35 expected
  • EBITDA of $178 mm vs $160 mm expected

Highlights:

  • Bakken EURs revised up 20% from a prior 430,000 BOE per well to 518,000 BOE per well.
  • Bakken volumes were up 108% from 1Q09 and were up 28% sequentially.
  • Bakken volumes now account for 26% of company wide production.

Nutshell: Good to see them taking the confident step of boosting EURs. The number is still half that of some of the claims being made but their large acreage position and drilling results to date provide comfort that the move is still a conservative one. This is one of the more expensive names (perpetually) in the Bakken group not counting BEXP which is the most expensive of the companies of size and the market should welcome any tweaks to NAV the company can assist them with. I'll be listening to the replay after the EXXI call.

Conference Call: Today, 10 am EST.

 

Conference Call: Today, 10 am EST. I will be on this call

SFY Reports Better 1Q10 Results; Ups Volume Guidance

The 1Q10 Numbers:

  • Production of 2.04 MMBOE
  • Revenue of $109.8 vs $110 mm expected
  • EPS of $0.37 vs $0.34 expected
  • CFPS of $1.69 vs $1.65 expected

Highlights:

  • Eagle Ford:

    • 3 Eagle Ford wells with rates of 9.4 MMcfgpd, 9.0 MMcfpgd and one that produced 1,134 Bopd and 1.1 MMcfpgd. These are good results for this side of the play, especially with regard to that oily well.
    • These wells either producing at highly constrained rates due to line limitations or are awaiting surface facility completions.
    • 2 more wells are drilling current and another is drilled and awaiting completion
  • Lake Washington:

    • just more of the same, good new wells, excellent results from recompletion program
  • Production guidance increased:

    • goes from a range of 5 to 10% year over year volume growth
    • to a range of 8 to 12%
    • exit rate for 2010 upped from 27,500 BOEpd to 28,000 BOEpd

Nutshell:  Everyone likes upped guidance following a production and cost control based beat of the quarterly estimates. The name has been strong of late and I plan to listen to the replay here after the EXXI call.

Conference Call: Today, 10 am EST

 

Other Stuff:

 

Odds & Ends

Analyst Watch:

  • NFX - Citi starts at Buy, $66 target

 

321 thoughts on “Thursday – Oil Review and Gas Preview Plus More E&P Earnings”

  7. HeadTrader disappointed that the pre-mrkt rally fizzled… then turned south on same store sales for April coming in weak. However, he is pointing out that Easter came early this year, so that has an effect.

    We saw “buyers of risk” on the CDS desk, first thing this morning. That has changed now and credit spreads are wider again this morning (after closing near the wides y’day).

    To put a stake in the ground, here are the current levels… we will watch for changes during the day

    IG 108bps +3

    HY 96 15/16 pts -15/16

    TED spiking to 23.3 bps (vs low/tight of 9.6bps on March 16th). I start to worry when TED goes wider than 25… so, getting closer to that threshhold.

    Reply

  8. (reminder… TED spiked to almost 500 bps when Lehman failed… THAT was PURE FEAR. Just to put it in context.)

    Reply

  9. BOP: I am not sure what I have been right about. Even with lots of help here on the Zsite it sure has been tough to be long.

    Reply

  10. TGA announces good 1Q results and is moving ahead to expand to horizontal fracing in Egypt. http://finance.yahoo.com/news/TransGlobe-Energy-Corporation-iw-2528700036.html?x=0&.v=1

    “During the first quarter, the Company successfully fracture stimulated (“frac’d”) the Nukhul formation in Arta #9 during February, followed by three additional fracture stimulations (“frac’s”) in mid-March at Arta #2, #4 and #8. The wells have been placed on production and the early production rates indicate they will stabilize in the 100-300 Bopd range per well which represents a more than tenfold increase over the pre-frac rates. Total Arta field production has increased from an average of 130 Bopd in January 2010 to approximately 900 Bopd in April.

    The next frac program includes a four-staged frac in the Arta #12 horizontal well (drilled in Q4-2009) followed by a frac at Arta #6 and Arta #13. The Arta #12 frac will be the first multi-stage, horizontal well fracture stimulation in Egypt. This program is scheduled for late May, subject to the arrival of specialty equipment from Canada.

    The Hoshia, North Hoshia and South Rahmy fields are also being evaluated for potential Nukhul development drilling and fracture stimulations”

    Reply

  11. tomdavis — i hear you. You either sell and forgettaboutit…. or know what you hold and ride through the volatility. I have done the latter… but no one’s arguing that it’s not a rough ride.

    IG just touched wides of the day at +4 1/4, saw some buyers of risk, now +3 3/4

    Reply

  12. KOG option exercise and stock sale of 50k shs. by Catlin KOG COO strikes me as odd, isn’t there a blackout period prior to earnings release. Sale was on 5/3 at around 4.15 avg.

    Reply

  13. Greece = what happens when you close in to running out of other people’s money.

    Reply

  14. KOG — yep. Agreed that it seems like they should be in a black-out period. Will check on that and get back to you…

    Reply

  15. John – varies from company to company. In that case, since it’s basically part of his comp its not that odd to me.

    BOP – thanks for the HT comments, me too. TPH put it well that the silver lining is that the weekend isn’t far off.

    Oil back to trading at whole number support, broke 79, looking for support at 78. Oily names, which have been the more recent money favs will probably see exaggerated downside moves early as those new buyers jump ship.

    PXP call started.

    Reply

  17. PXP Notes

    2 granite wash well – in line with pre drill, first production by end of 2Q

    Nothing new on Davy Jones #2

    Reiterate full year guidance.

    Reply

  18. MCF on the tape with a press release talking about the impact on them of the BP spill (none so far). Then walks through how the Shelf wells are less complex.

    Reply

  20. E12 summary from Madison Wms —

    EXXI – 1Q results beat. 3Q EPS $0.18 vs. St est of $0.14, EBITDA $87.3MM, +33% y/y; 1Q production 25.4MBoe/day (64% oil) & ~ 27.0MBoe/d entering fiscal 4Q; reduced debt by ~$60MM last Qtr– operations are providing more than enough cash to fund the capital program & service debt, even as we accelerate E&D activity at our ultra-deep-shelf play; Davy Jones – DJ#2 well is currently drilling below 5,000’ towards a proposed TD of 29,950’, net cost on both wells $18MM to date; Blackbeard East – made tremendous progress, spud on March 18 & is drilling below 15,200’ toward TD of 29,950’; Lafitte – expect to spud this summer; conf call at 10:00 am ET, 631-813-4724, pin # 69781266.

    Reply

  21. EXXI chart request for JB, think we are looking at potential gap fill.

    BOP, can you listen to that call. I own the shares and no options at the moment so I have time. I want to get the word from RIG on thoughts surrounding Macondo issues.

    Reply

  22. z — yes. I’ll be on the E21 call… will try to post while listening, but not as key-nimble as you. (as i also have to take my own notes)

    Reply

  23. Citi Service analyst thinks RIG, CAL, HAL are oversold. Have seen a number of these comments.

    PXP Notes:
    California – it’s a political process and it turned against the governor after the BP spil. They are unwinding all of their agreements out there and moving forward.

    Reply

  25. CHOBR opening slightly green. Citi analyst saying if BP caps that well all of those names should see a partial recovery. Sounds right to me.

    Reply

  26. EXXI – opening higher, who cares about EBITDA anyway, lol? Thanks BOP, will circle back to the replay later today.

    Reply

  27. EXXI: Dahlman Rose suggests part of the C/F miss attributable to now considering Cvt Pfd as equity (as is proper).

    “Generating Free Cash Flow in the Face of Markets GOM Handwringing
    EXXI:

    ► EXXI reported recurring quarterly CFPS of $1.12/share vs. our estimate of $1.18 and consensus of $1.24 – though dilutive effect of preferred shares clouds cash flow beat. EXXI also reported EPS of $0.15/share vs. our estimate of $(0.05) and consensus of $0.13. The company’s discretionary cash flow was $67.9MM vs. our estimate of $62.5MM. The company’s preferred stock is now treated as dilutive shares because it trades well above par (issued at $100/preferred share, it now trades at $170/share). While production was below our estimates, the company’s realized pricing was stronger than we modeled and cash operating costs were also lower than our estimates. And the company generated 3.1% free cash flow above CAPEX in 1Q10 (12.4% annualized).

    â–º 1Q10 production in inline with guidance, despite noise due to return of hurricane impacted production and Mitsui acquisition. EXXI reported production of 25.4 MBOEPD in Fiscal 1Q10, shy or our estimate of 28.4 MBOEPD. The quarter had significant noise associated with it due to the acquisition of Mitsui assets towards year-end and the return of significant production volumes from Hurricane/Pipeline related downtime. The company previously commented that it averaged 23.0 MBOEPD in January, and was producing 26.0 BOEPD in mid-February. Since the end of the quarter, the company has experienced problems with a third party oil pipeline that will likely impact 2.4 MBOEPD for the majority of the second quarter. We are modeling production of 24.6 MBOEPD during Fiscal 2Q10.

    ► Elephant in the room –– we expect the company to clearly distinguish between BP’s Macondo well spill in the Deepwater and Shelf Gulf of Mexico Operations. It seems that EXXI stock, along with other Shelf Gulf of Mexico operators, has been unduly punished with the ongoing struggles with the current oil spill drama. There appear to be two separate issues with the Macondo well, the initial blow-out and the failure to contain the leak. Both issues seem to be exacerbated by the deepwater depths (5,000’ of water). The use of a long drilling riser and the difficulty in remotely closing a Blow Out Preventer (BOP) on the surface of the ocean are not issues that would have arisen on the shelf. Key changes may be made in operations in the Gulf, but most will focus on deepwater issues (remote switches for BOP operation, rigorous testing of operability of Remote Operated Vehicle engagement of BOP, review of practices to ensure well control contingencies are not compromised, etc). Importantly, ongoing production and drilling is not being stopped in the GOM. And on the shelf, because of the shallow depths, the wells and rigs are markedly different than in the deepwater. A blowout on the shelf would have been controlled by last week.

    ► No significant update on Ultradeep – but the drilling continues and permitting appears to remain on track. The company provided an update of ongoing drilling at the Davy Jones offset appraisal well and the Blackbeard East well. Most importantly, the wells are currently drilling. The wells should remain on pace to have results in late summer/early fall.

    â–º Reiterating BUY rating and maintaining our price target of $23/share. We estimate sum-of-the-parts NAV of $22/share, of which, we estimate the current value of proved reserves alone are worth $15/share. While the proved reserves seem to provide strong valuation support, we also view the 3.1% free cash flow yield in 1Q10 (as a strong support. The stock should trade near it’s NAV of $22/share and a 6.5x EV/2011 EBIDTAX multi …”

    Reply

  28. E21 EBITDA actually beat/met several of the estimates… it’s just that one estimate of $117mm that sort of skewed the average (and screwed the pooch) for us.

    Reply

  29. Analyst Watch: Howard Weil

    FST target upped by $6 to $42. This is the sixth upgrade or upped target since the call. Still no love since the call due to Greek Week.

    Reply

  30. Thanks for that BOP, I saw the median was $91 mm, so not a bad miss or a meet depending on your perspective.

    Reply

  31. RIG selling off pre call, dragging service.

    Nicky – can you post fresh support numbers when you have chance? Thx.

    PXP call ongoing, lots of moving pieces but getting much more interested down here.

    Reply

  32. PEAK OF CONTANGO OUT WITH SOME INTERESTING COMMENTS

    We carry $75 million of well control insurance (8/8ths) in the event of a blow-out. This insurance would cover gaining control of the well as a result of a blow-out, re-drilling the well, pollution, cleanup and containment arising from an out of control well, and any resultant plugging and abandonment expense. We also carry $100 million of third-party liability insurance which includes sudden and accidental pollution liability. Recent proposed legislation could result in requirements for much greater insurance coverage that could extend as high as $10 billion. We would need to evaluate the cost and feasibility of obtaining such insurance.

    There will never be a 100% risk free exploration and production operation for offshore, or on-shore drilling. On the other hand the United States routinely spends hundreds of billions of dollars and sacrifices the lives of our young men and women to protect our access to Middle East crude oil. Somewhere in the national debate that is going to take place as a result of this disaster, there must be recognition of our continued reliance upon the imported crude oil and gasoline that drives our economy and makes our life style possible. Alternative energy is important and can and should play an increasing role, but for the next 20 years I believe we will continue to rely on natural gas and crude oil. Indeed, with our now widely recognized 100 years of natural gas reserves available in the US, the arguments in favor of increasing the role of natural gas as a fuel for both power generation and for our transportation needs are becoming ever more compelling. My instincts are that the industry will be subject to increased scrutiny and regulation. Higher exploration and operating costs will inevitably follow,

    Reply

  35. Credit rallying with stocks

    IG +3

    HY -3/4

    well off the wides of this morning.

    Reply

  37. Good morning all. My heading is spinning from the whipsaw pre-market! Still dissecting the possible counts but resistance is at 1171,1176,1180,1183. Support at 1158,1153,1147.

    Reply

  40. How does one pass a law retro active

    If i were BP, id say give immunity or clean up the mess yourself

    what would 10 b liability cap do for the industry? Id say it would shut the gom out to all but a few companies

    Reply

  41. EOG – down $10 since earnings. Doesn’t make a lot of sense as it’s giving back most of the run from the analyst conference but this market is trading charts, not reason, at the moment.

    Reply

  42. Energy yield names more of a mixed basket today but still seeing some selling. WHX bouncing 2% and am probably going to buy some more in the near future.

    Reply

  43. Z: My overpriced gold play $1.00 below where I sold. GGN. Yield 10%. Still overvalued but 10% may not be a terrible port in the storm.

    Reply

  45. #43-Tom, it has been a while since i looked but I think the distribution gets some favorable tax treatment as well, return of capital, cap gains, etc-at least for those of us who have cap loss carryforwards.

    Reply

  46. RIG Call Notes:

    Coverage of Deepwater Horizon was in excess of book value.

    See signs of stabilization and increasing activity in the jack up market.

    Remain cautious about any meaningful increase in dayrates in the shall JU market.

    Midwater market – sounds a little better

    Deepwater – remains an area of concern, absence of tendering activity in the >5,000′ water depth market.

    …

    Reply

  47. E21 CEO spending a fair bit of time explaining the diff between deep water and shelf and deep shelf. Very different animals.

    Reply

  49. re 47 – that’s was Peak hoped to do with his press release as well. Congress probably won’t bother to get the difference though. Look for guys like NOV and CAM to benefit from extra system redundancy requirements over the next several months. ESV and ATW probably benefit as well as their deepwater capable rigs are high spec and new (on the way in a couple cases).

    Reply

  50. Shell saying it shut in some production due to a fire at a major pipeline in Nigeria. This may be a warning shot from MEND to the new president mentioned in today’s post.

    Reply

  51. RIG Notes:

    Sees costs up by $200 mm due to the Deepwater Horizon incident. That’s insurance deductibles and legal mostly. That’s preliminary.

    They expect to receive $560 mm in insurance proceeds ($481 mm received through today)

    Reply

  53. E21 — pretty much went directly into Q&A… get the sense they will stay here until everyone’s Qs are answered. They are doing a good job of showing they know what they are doing.

    So far, just “Mykonos is high and wet” = only negative comment so far.

    Trouble getting drilling rigs now… equipment getting tight. Have 30 lower-risk in-fill locations to drill… will start drilling 2 at MainPass in July. (would start now, but need a rig…)

    Reply

  55. RIG Q&A

    Comments on how industry could be changed:

    not sure if adding an acoustic control system to operate the BOP would be helpful given all the redundancy already in place.

    too early to comment on regulatory changes.

    RIG is not responsible for cleanup costs, that’s contractually on BP

    Reply

  57. Schiller just saying something we learned in geophysical class in the early 80s… “only takes 5% gas [presence] to make an ‘amplitude’ on seismic.” You can get a residual 5% nat gas in the water, if gas just passes through the reservoir. Just something to keep in mind, when people are pointing to “amplitudes” and “bight spots” as evidence that nat gas is present. It is… but not necessarily in economic quantities.

    Reply

  60. Jon – nothing that I see, but group seeing somewhat non-selective profit taking. Looks like they had a seller who dropped 50K shares and it has bounced since then. Volume for the day is not that high compared to average.

    Reply

  64. bill #59 — yes. straight to production. won’t bother with putting interim “flow test” equipment at DavyJones#1… will put a production wellhead on and away she goes. Also plan on hooking DJ#2 into the same system. Think both wells will be on line by end of calendar yr 2011.

    Reply

  65. Individual stocks definitely in “weak gets weaker” mode, no news just people bailing out of names that look weak, like EOG.

    BOP – time line seems to be getting stretched out there. Why the change of plan re flow test?

    Reply

  68. V – on most Grecian beaches you can’t throw a rock 5 feet without hitting a German. There are provisions regarding debt vs GDP for Greece to meet and I wonder at the country’s ability to stabilize if people think their vacations will be disrupted by the occasional riot.

    Reply

  69. RIG call over, nothing really revelational that would auger for the stock moving one way or the other from the call. Interesting to hear JU business showing increased signs of life as ATW was saying contract tenders have been slow across all markets of late.

    Reply

  70. z — don’t think it’s a change of plan. Think they have been saying this for a while. Why put an interim wellhead on for a flow test, when you can clamp a permanent one on and leave it in place. Might have something to do with not wanting to change out wellheads (or other equipment) on a high-temp and pressure well that you seem pretty confident you are going to produce.

    Wyo’s comments would be helpful here.

    Reply

  73. Why would you take the risk to test a well with a temporary wellhead and then have to kill it to swap out for a production wellhead especially with the BP press does not make sense.

    Reply

  75. re 73. Shallow water vs deep. And they have repeatedly talked about the test.

    Schedule starting to slip towards something akin to deepwater satellite drilling. Previously, my understanding was a flow test some time in 1Q11.
    I have to say that by pushing production back to the end of next year, you’re suddenly expanding the spud to production timeline to a degree that eats up the time advantage and going to this depth you invite more risk. Just thinking out loud.

    Reply

  76. HeadTrader saying that the bears are pushing on the mrkt… and to go ahead and let them push. It doesn’t make it easier to watch and doesn’t mean it won’t get worse. But, we could probably use a blow out bottom to clean the system out and calm things down.

    Doesn’t help that I am seeing headlines about Congress pushing the Climate Change Bill out, not caring about getting a republican or Lieberman on board. Guess they are using the BP crisis to “get something done.” ugh.

    Reply

  77. Will circle back to the replay when available. Never forget that Schiller is a very good gas finder and develop of deepwater oil and gas discoveries. But he’s also a salesman.

    Reply

  79. z — Schiller has been saying all along that he thinks they will be selling hydrocarbons from DJ#1 by 1Q11. He just made the comment that BOTH DJ #1 and #2 would be hooked up by “end of calendar year 2011.” They have both Halliburton and Baker working on 25k psi wellhead designs. Would not say why both… but that it is not a new-frontier-type of wellhead…

    Reply

  80. Energy XXI 1Q2010 Conference Call Highlights

    Management sees no impact from the oil spill on its operations, and does not expect any impact to occur

    · Production has not been affected in any of the company’s projects

    · In some areas, oil slicks are passing through and the company is monitoring air quality; if a problem with air quality is identified the Coast Guard will evaluate and if necessary MMS will also come to determine if production needs to be temporarily shut down

    The company emphasized that operating in the shelf is very different from operating in the deepwater

    · In the shelf the blowout preventers are on the rig, not underwater; this allows the rig operators to manually trigger the preventer if the automatic mechanism fails

    EXXI expects to complete the first Davy Jones well for production in the next 12-18 months

    · The company expects to use 25,000 pound equipment for the well, and expects all equipment to have been ordered by early June

    EXXI has 31 projects ready to drill on the Shelf

    · 50% of these projects are oil

    · The next focus for the company will be drilling in the Main Pass area

    The company is building a bi-directional pipeline lateral in Main Pass to minimize production disruptions

    · The decision followed several disruptions in the third-party Cypress pipeline

    · The pipeline is expected to be in service by the end of June at a cost of $5 million

    What to watch for

    · Results of Davy Jones 2

    Reply

  81. Ok, 79, thanks for the clarification, that sounded like some time warp there.

    Thanks for 80, great summary, much appreciated.

    Are we 4 months or so from TD on DJ#2?

    Reply

  82. Z: Spoke with NE yesterday. Surprisingly green. Nothing good or new. Just solid company that can go lower like this market.

    Reply

  83. #81 — kinda missed that little detail on the call… but think they said TD in 4Q of this year. Whatever that means.

    Reply

  85. Just taking a quick scan of the day’s comments…did not see fresh numbers from Nicky – but thinking we’ve crashed through some support levels she posted earlier this week?

    Reply

  90. z — #88 that’s a fair enough way to think about it.

    Credit getting hammered with stocks now. Buyers of risk just sitting on their hands, letting the bears have their way.

    IG +7 1/8bps

    HY -1 13/16 pts (wow)

    Reply

  91. Saw CNBC had the ever cheerful Chanos on this am. Have they trotted out that E-Waver who called the bottom by saying the market was about to crash last time?

    Reply

  93. Margin calls tomorrow-
    as mentioned yesterday, MLP’s dumped yesterday by someone fairly large, looked at PBT (trust), opening trade was over 600,000 shares, down almost 2 points-some fund(s) wanted out.

    Reply

  95. AEZ making an effort to hold daily lower triangle trendline support, might nibble on a little here…

    Reply

  96. Choices, yep. At least the WHX giving a chance to get more after a 10% sell off yesterday, only up 3% today.

    Reply

  97. BOP – Did Schiller comment on a 3rd calendar quarter average rate, say, something close to 30,000 boepd?

    Also timing of a Lafitte spud?
    thx.

    Reply

  98. #93 – EPD, KMP, even PWE up in Canada (they did earnings though) all got dumped in the first half hour.

    Reply

  99. Lafitte will spud “later this summer”

    And Schiller did comment on the production capacity. Said that they are currently at 30k boe/d “capacity”… which means that if 100% of everything is working correctly, then that would be their daily production rate. However, in the real world, nothing every works at 100%… E21 is ecstatic with 95% and aims for 90%. Schiller said it is the “fluid handling” part of the equation that is tough to get to 100%. (Basically, more stuff goes wrong/breaks down with oil than gas, after you get it out of the ground… but it’s worth it, he said.)

    Schiller said that E21 is thinking they can get production capacity up to about 31.5kboe/d this year… which would mean 30kbod/d actual. This is the goal. They think they will get there by drilling infill and low-risk development wells. Sounds like they would like to be drilling several of those wells right now… but that rig availability on the Shelf has tightened up considerably. So, will be drinning 2 in-fills at MainPass “starting in July” that sounds like they could push the actual production close to the 30k boe/d mark.

    Reply

  102. re 101, meant Schiller, not your mentality. You ever shaken hands with Schiller? More ounces of gold on each hand than in VTZ’s account.

    Reply

  103. #102 — phew! Wondered what i did to deserve that swipe. 😉

    I know buy-siders who won’t buy E21 b/c of the Schiller sleaze factor. But, he knows how to run with (and deal with) the South Louisiana Mafia… so, comes with the territory, i guess.

    Reply

  105. That and he knows more about geology and deepwater and shelf production than most CEOs out there, having been head man on it at Ocean under Hackett.

    Reply

  107. Emails touting that the end of the market is nigh are starting to mount which is usually a good sign that we’re about to bounce.

    Reply

  109. GT – and I saw an LNG comment for each coast trucks deal this morning but can’t find the link at the moment.

    Interesting confluence of event. Haynesville rigs falling now through mid next year as economics are soft and people seek out the oilier EFS and Bakken to spend their capital on. New source of demand crops up in the form of transportation (very slow but its there and maybe worth talking about in 5 years), gas taking share from coal due to price, industrial economy recovering. Still thinking gas is $6 to $7 by year end.

    Reply

  110. #104 — remind me… what was so scary in November? But, yes, back to where were were on TED in November… and down from +70.0 bps from May 6, 2009.

    I’m OK with TED to about 25 bps… and we are at 24.9 now.

    Reply

  113. Ref 109 . Will try to find it. By the way here is you chance to steal clne. earnings after the close and cc call at 4:30 eastern.

    Reply

  114. Eld – $40 to $55 depending on the part of the field is the last best thinking I’ve heard on that. For much of the play you need $50.

    Reply

  115. Z- any thoughts on USEG? Mineral focus? Ton of cash….debt neglible. Someone on this board was commented that they expected very strong earnings there on next report……

    Reply

  116. Isle – I think that was Bill. I don’t have much in the way of thoughts on them other than they benefit often when BEXP announces big wells. I don’t keep track of which wells they are on the upcoming roster and I don’t model it so I can’t really say much about them that’s a value add. I do know that BEXP expands drilling they have an option to participate in some wells and that BEXP said they were a good financial partner and would not be cherry picking weaker wells for them to be included on. Next shot at BEXP update is probably 3 weeks from now.

    Reply

  119. RE 71
    Just what I was looking for. Appropriate for my Annual Mother’s Day Wet Tee Shirt Contest.
    apbd

    Reply

  120. GT – oops, that’s what I get for skimming a headline and not reading the story. My bad.

    Re 119. Long time no chat AP, glad to see you still have your sense of humor. Thanks for the CD at Christmas.

    Reply

  121. SFY down 10%, looks like profit taking hitting the names that are up the most regardless of results. Will listen to replay in a minute.

    Reply

  122. 115/116

    I own Useg but i dont believe I made an earnings forecast. I have no expections one way or the other. I like it as a value play..as you said tons of cash no debt

    They sold a piece of geothermal interests, recently

    I like their play on the Bahken and believe they want to get more oil exposure by doing more drilling deals

    Reply

  125. The Credit Market is wetting it’s pants right now. No polite way to put it. Sorry.

    IG +11 5/8

    HY -2 1/8

    TED +25.9

    HeadTrader is still laughing at people who think this is “2008 all over again.” And saying “mrkts go up and down.” That said, it would be nice to see this down leg finish up soon.

    Reply

  127. Thanks Nicky

    SFY: Listening for what people didn’t like here

    SFY Notes:

    Batch drilling started:

    In the Eagle Ford they have gone to batch drilling with a spudder rig drilling the vertical portion of their wells prior to another well taking over for the horizontal leg of the wells.

    Adjusted 2010 capex to take advantage of oil.

    Reply

  129. BP saying this event will change the offshore industry forever around the globe. Says they will consider the trade offs of exploring for new energy in the frontiers of deep water after leak is stopped.

    Reply

  132. not saying it can’t go down further… just not panicking here (like some), that’s all

    Reply

  133. SFY – not hearing anything that should be killing SFY like this compared to the group, they took in upper end of production guidance but increased reserve growth guidance for the year. Still listening, not going to nibble before tomorrow, if at all.

    Reply

  135. CHK replay: we are not Johnny Come Latelys to oil, but we owned zero acres in the EFS 9 months ago.

    Reply

  137. SFY Notes:

    Ahhhh, they went 1 for 4 in the quarter at Lake Washington (this is their big salt dome stacked pay play – drilling along the sides of the dome which is shaped sort of like a big underground mushroom made of salt). 1 of the dryholes was mechanical but even calling it 2 for 4 isn’t great for them here. It’s probably just an outlier of a quarter but I bet that’s what’s sapping the name today.

    Reply

  139. re 113 What is so compelling about CLNE, other than all of us who own NG and related stocks want to see the price at 8?

    Reply

  140. re 139. I still don’t own it as I’m trying to figure that out. They keep signing up fleet vehicles and keep adding stations. But I’m not sure some of the big gas companies couldn’t do the same and crush them. Although, there would be negative tax consequences for an E&P doing that.

    Reply

  141. CK Cooper raises AEZ targetfrom $6.50 to $8; adding 2nd rig makes AEZ more like operating cos with mkt values in the $6-10,000/acre valuation. Nav goes from $7.00 to 8.40.

    Reply

  142. KOG, really big sell orders came in at $3.80, seems like it’s really getting overdone at this point, unless the fundamentals for KOG changed in the last few moments, this is just the time to be looking to buy, not sell…

    Reply

  143. There is the thought that “energy is a dead sector” with no foreseeable positive catalysts. Some just doing the “get me out” trade. I don’t agree, but have black-and-blue marks from taking that stance.

    Reply

  144. IG +16 3/4

    haven’t seen a move like this in a long time.

    HeadTrader pointing out that “nothing has changed in our markets… just perception.” But the FEAR FACTOR is there…. and that is real.

    Reply

  149. Okay so I heard that the secondary party in Germany many vote against the bailout tomorrow. I have no idea how the whole thing works and whether that would mean that the bailout fails. But the voodoo is positive for tomorrow…..

    Reply

  150. Re: #143, …just when it feels like you should sell everything in the worst way,(like now) that always seems like the time to buy…”just get me out” is almost always wrong….how is energy dead? Are we parking our cars for good, heating with firewood…closing up industry…anyway…I digress from my regular scheduled technical analysis…I’m buying

    Reply

  151. MLPs: one desk guesses that since a lot of volume is being done by UBS and Knight, who do lots of retail orders, stocks are getting hit by stop loss orders. AMZ at its 200 day MA.

    Reply

  152. in July 2008 we were only starting to see banks blow, people laid off, defaults rising, and interest rates had yet to be pushed down.

    Now, most banks that were gonna blow, blew… not hiring, but not actively laying off either… defaults kinda stabilizing (certainly in corporates… is not in Greece)… and interest rates are (more than) accomodative. We are not in the position of hurdling headlong and leveraged into a recession at this point. It’s not much of a recovery… but we are at a different part of the cycle than May 2008.

    I’ll shut up now.

    IG +18 1/4

    Reply

  153. JB – absolutely agree. Not panicking but not stepping further in front of their fear for now either. Nothing changed from when these same stocks were making 52 week highs on Monday. This happens from time to time and energy is by no means alone. CNBC showing people getting pummeled to the ground by police is probably not helping.

    Reply

  154. Not that I blame the police at all, takes a lot of restraint not to hit back when people take a swipe at you, chaos.

    Reply

  155. If 1130 can’t hold then look for 1110. Seems crazy to me! Surely thats gonna be a buying opportunity?

    Reply

  158. #153 should say…buying carefully…for example, look at WLL, trading down to major P&F support, holds the buy signal until a print of $81, the low? so far $81.06, super easy place to manage a long try, stop below $81…

    Reply

  159. z – any thoughts on LINE. Absolutely going off a cliff.

    I own it along with you.

    Reply

  160. LINE off 12%, in line with many of the other energy yield names. Expected higher yields elsewhere does this from time to time in the energy yield arena. This is one of those times. I hold it for the yield, which looks safe, and has a shot at see the distribution bumped up maybe next year. To me the action in the group is noise, maybe loud noise and I am close to buying some more WHX but will wait out payrolls tomorrow.

    Reply

  161. Thanks. Hard to buy in this market. I can’t believe how many of my holdings are down more than 10% today. Last three days have wiped out my whole year to date.

    Reply

  162. Actually, the indices are pretty much back to where they started the year.

    Reply

  163. down 400

    leg 2 of melt down to depression

    some amazing moves exm down 20 % in 1 day

    Reply

  165. Handicapping CNBC. Guy commenting just now about the bulls having “given up” today on oil. He doesn’t know what he’s talking about regarding that. 50 down on the S&P is 4.2%, $3.30 down on oil is … 4.2%. Come on, get some people who have traded before. Oil trades in exaggerated, high beta style swings to the broad market, it should be down $6 on a day like today, so saying the bulls have capitulated, given elevated stocks, ok but not great demand and rising domestic production, with oil still in the upper $70s is, not to put to fine a point on it, moronic.

    Reply

  173. Nicky – yes, can’t recall last place they set levels but should be soon.

    BEXP down $3.

    S&P fell 20 points while I typed the last bullet.

    This is the kind of thing that keeps my cash positions high now.

    Reply

  174. 740
    750
    760
    770
    780

    no circuit breakers

    830

    capitulation

    fear

    death

    taxes

    more govt spending

    870

    we are all screwed

    Reply

  185. blood is flowing in the streets… biggest down dow day since 1987…. IG credit blew out in the biggest percentage move ever… wow.

    tough to step in and buy… but i sure would not be a seller here.

    Reply

  187. Nicky — i was on the phone with a guy who was out of the office… i was saying “down 500… now it’s down 600… 700… 900…” I think it’s pretty amazing that he could keep driving.

    Reply

  188. pg low of 39.37 now 60.88 after 10 minutes

    the systems are broken

    who wants to invest in markets like this

    Reply

  190. ZTRADE – ZIM – KOG

    Bought 1,000 shares for $3.61 after what could best be described as a very bad market discombobulation. Earnings tomorrow.

    Reply

  191. Tried two other trades in options before that but couldn’t get filled close to reason. So I took the best option without an expiration date that I know of at the moment … KOG.

    Reply

  193. Hedge Fund Mngr friend saying he thinks the trading machines got overloaded and glitched.

    I’LL SAY.

    Reply

  195. Well, at least I’m up on my KOG, ticked options would execute but I’ll take it.

    We better have congress check into those circuit breakers, lol, they can protect us from anything.

    Reply

  197. It makes being down “only” 450 pts on the Dow not feel so bad now.

    Reply

  198. I’ve been in the markets since 1991 pretty much every day. That kind of selling crescendo is exceedingly rare … like Haley’s Comet coming around except you don’t know when it’s going to happen. We may get a retest of the lows yet though but I rather doubt it. I think a higher low could set up the intraday reversal to inspire some serious volume hunting. I’d say the odds of that would have been better were we not due for nonfarms tomorrow.

    Reply

  200. Program Traders went haywire… everyone crushed into one corner of the room.

    Way to keep dry powder and know how to use it, z.

    Reply

  203. Thanks BOP, would of had it 15 cents lower if I weren’t messing with an options screen too and being a cheap skate on my limits.

    Pisani saying it may have been a bad trade on PG that sent it over the brink. Wow. First thought, truss up that floor broker. Second, the system is more fragile than I thought.

    Reply

  204. ha! I have been in markets pretty much every day since 1991 and i have NEVER seen anything like that.

    Reply

  205. Not sure the system is “fragile…” That’s not quite it. But the system is dominated by computer trading. And sometimes the ghost in the machine does highly unpredictable things. Or, in this case, all the ghosts got together and said BOO!!! to their programers. All at once.

    Yes. That was scary.

    Reply

  206. Z: 199 ’87 was like this. Program traders were to blame. Started the circuit breaker need.

    Reply

  207. BOP – your eyes were wide shut then in October 2008, maybe not quite this bad but there were some no bid moments then too 80)

    Reply

  208. Experienced a day like this once years ago when I was on the CBOT floor…traders were running out of the bathrooms with pants down…it was a surprise rate adjustement or something of sorts….

    Reply

  211. z — i was living The Dream as a fund mngr in Oct 2008… i only WISH my eyes were wide shut then. No… today — in amplitude (high) and frequecy (quick) — exceeded Oct 2008.

    Reply

  212. JB – I’m always surprised by the speakers in the bathroom at those places but no keyboards. Guess it wouldn’t be sanitary.

    Reply

  214. another thing congress can investigate and regulate

    lets blame the banks naaah lets just say wall street

    Reply

  215. I know several traders and the whole pants down thing relates to frequency. It happens a lot with them.

    Market in having a so now what moment.

    re 215, yeah, right, ugh.

    Reply

  218. Yeah system broken, down 1000 in 10 minutes doesnt make sense, it should take 2 or 3 days

    confidence is broken no matter what the cause was today

    Reply

  221. Bill – If you really think so than let me bring up DUG which has not been talked about for some time.

    Reply

  223. Cargo – CS Street Smart Pro is up right now. Didn’t crash but did look sort of delayed for a bit there.

    Reply

  225. BEXP still down 10%… fear in the market place and the fact that it’s been an outperformer and has an expensive multiple.

    Reply

  227. Now that was a HOLY SH&& moment.

    Also a reminder to have some ridiculous below the market buy orders.

    Can you imagine buying AAPL at 200 today ?!

    Crazy. At one time my account showed a $340 Million margin call !

    Not remotely correct of course; but mind blowing.

    Reply

  230. JB – LOLOLOL. I was just thinking that a lot charts will have been broken. And some others may have filled gaps. The best of these in my book is the daily chart of EOG. It filled the analyst day gap up. Now it is free to get up and move about the cabin.

    Reply

  231. I use Street smart Pro. It worked fine through the excitement. It will never be as good as the old CyberTrader platform though.

    Reply

  232. WOW just came back from a long lunch and see that we just passed financial reform.

    Reply

  234. crazy trade for quick fingers in hk during this ridiculousness.. 13.89 low back to 19.50

    Reply

  235. BOP – where’s your rally monkey? Or is it Wyoming’s monkey now? Anyway, wondering if HT has a call on the close, as we just got my higher low.

    Reply

  236. LOLOLOL…

    HeadTrader left early. He had a plane to catch for a long weekend. I’m thinking he is paying up for drinks on the flight right now.

    Reply

  240. No problem ski. I run it on one set of monitors and have to say that as usual, it vastly outperformed the Thomson platform on another set. Thomson = Reuters = Micky Mouse, poor mans tin can and string version of a Bloom.

    Reply

  246. #186 — so did anyone take advantage of all that blood??

    I bought a little EGY… they report next Tues. But, there were much bigger, better, more liquid bargains out there. Like KOG. wow.

    Reply

  247. BOP – up 8% on that day trade, staying through earnings but then out as it’s in the ZIM. Wish I were a better day trader but oh well.

    Reply

  252. Wow. Words can’t really describe what we just went thru. Like seeing a purple cow in a pink field against a madras sky. Couldn’t believe what I was seeing.

    Reply

  254. BOP #186 & 247, I sold some TWM into it. Here’s the problem. The MS/SB Geo-trader system accepted the order and locked down. Shades of ’87 it still hasn’t reported either a fill or price back.

    Reply

  257. Folks something additional happened as the internet as a whole slowed up this afternoon.

    Reply

  258. elijah — wonder if they are going to unwind your trade on some “glitch” ruling. I’ve seen that happen…

    Reply

  261. BOP, could you ask your question about the temp BOPs. I am not sure exactly what you need clearing up.

    One thought that entered my mind in the early posts. The blow out risk on the shelf is night and day to the deepwater. With a Jack Up rig, semi-sub or even a Tension Leg, the BOP’s are in the wellbay to below the rotary table. If they require an Acoustic Ram, all they will need to do is buy a clapper.

    Reply

  262. pass the tequila!! where’s the salt? hand me a lime and never mind about the worm.

    Reply

  263. Wyo — you missed a heck of a day! And that is a Good Thing.

    E21 is not going to install a wellhead to “flow test” DJ#1. They are going to install full production equipment. Then just produce the well. Actual production obviates the need for a flow test.

    Question is… is a flow test wellhead (or whatever) different from a production wellhead? Does it make sense to skip the flow test and jump right to production?? It assumes, I assume, that you have a pretty good idea of what you have. Right?

    Reply

  264. With the limited info, no they are the same tree.

    Either they are really low on funds and need cash flow or they are really confident that it is commercial. Unfortunately, if they start to run production logs and other evaluation techniques, you still won’t know if they are concerned it is under-performing or gathering info for a drilling campaign.

    Did not miss anything, have not traded other than selling all my options last month. All cash, except for some joke IRA’s.

    Reply

  266. Wyoming — I wish I had more info… but that is pretty much all they said. One thing I can think of is that they will (should) have better logs from DJ#2 by the time the install the production equipment at DJ#1. They were unable to run all the well logs and sampling tools they wanted… in part b/c of the high temps… but also b/c the diameter of the hole was too narrow to run some physical sampling tools.

    Anyway, thank you for answering the question. And I’m glad you didn’t miss today’s thrill ride. Hopefully, we will be talking about today like we did 1987… in that it only happens about once every 23 yrs.

    Reply

  267. One other thing, with the current environmental sensitivities, they may want to avoid flaring and any possible sheen that may be created.

    Reply

  270. I am sorry; w/ all the 50 day or 50 week touches; this can’t be a fat finger, or computer error, or coincidence.

    Too many charts trended down all day then exploded down.

    Financial “reform” passed today.

    Let the conspiracy theories loose !

    Reply

  271. Salazar on the tape saying no new offshore permits until they get to the bottom of what happen at BP. Report to the President expected May 28.

    Reply

  272. Nasdaq on the tape saying they will cancel trades that were significantly above or below the market during a 20 minute period today.

    Reply

  273. I guess “significantly above or below” will be defined just like a socialist defines how much is too much money for a person to have.

    I feel for any people that get screwed in this

    Reply

  274. Nasdaq and NYSE both busting trades that were 60% above or below the market between 2:40 and 3:00 EST.

    Reply

  275. z — that stinks. But i’ve seen that happen before… just not to the entire mrkt.

    Reply

  276. They should be using a smaller threshold. You can’t tell me that the APPL trades that triggered 50$ down were legit but it’s not 60%… market is so rigged

    Reply

  277. Given the wide range (60%), I don’t think it will affect many names. PG was down 50% at one time and I think they said those $30 trades stand.

    Reply

  278. Frankly, by cancelling trades, it will probably make the market MORE volatile tomorrow than it would have been. The mrkt corrected itself and found “clearing prices” for securities that traded today. By cancelling trades, you have undone the clearing prices and created more confusion. Hope not. But we shall see.

    Reply

  281. That’s just it… how do you define what is “legit”? Down 20, 40, 60? How much is too much? If i got stopped out at down 59% but down 60% is what is considered “fair”… how’s THAT fair to me??

    Reply

  282. That’s BS that those PG trades stand too.

    Hi, I’m a decade long holder… please have my shares for what I bought them for in 1998…

    Pure bullshit.

    Reply

  283. #281 — does that mean no new “drilling permits” on anything offshore? Or no new acreage permitted offshore? If, let’s say, E21 wants to start drilling one of their 2 in-fill wells in MainPass next month, does this stop them?

    Reply

  284. BOP – I’m sure all the people tomorrow would take a lot of volatility to have the shares they got stopped out of at ridiculous prices back.

    Do you see a problem with the PG trades?

    Reply

  285. VTZ — yep… the number ONE reason i don’t leave stop losses out there.

    Reply

  286. No new drilling permits will be approved until May 28th. I would assume that those two wells are already permitted.

    Reply

  287. PG — ha! yes. Clearly. But, like I said above, I’ve seen them unwind trades that are clearly glitches (like PG) before… but never the entire mrkt.

    Reply

  289. KOG – sort of in line to low on the quarter but I think that’s splitting hairs given how small they are.

    Before you get excited about those rates in the first North Dakota paragraph listed here:

    “These wells continue to be strong producers totaling first 30-day equivalent production of 22,275 BOE/d and 19,061 BOE/d.”

    Realized that those are cumulatives, that that’s a typo and shouldn’t be listed as per day results. If they were, dependence on foreign oil solved by KOG, lol.

    Reply

  290. #285 — yes, i do understand. Today was like nothing i have ever seen before (even in Oct 2008, when i did have my eyes wide open…. as a matter of fact, my mouth was pretty wide open during much of that time too, as my jaw spent a lot of time on the floor… don’t want to ever live thru the Fall of 2008 again).

    Reply

  291. Heard that PG specialist at the NYSE slowed trading deliberately in a fast market which is standard procedure. The stock diverged away from the exchange and went to $30 while it didn’t go below $56 at NYSE. So the NYSE specialist was attempting to act as a calming force but the delay in his bids allowed the other market to legitimately trade at the lower levels. Don’t shoot, I’m just the messenger.

    Reply

  293. KOG — big, fat question… how are they going to fully-fund their capex for 2010… don’t think cash on the BS + FCF is going to get them there.

    Reply

  294. you know, z… i can joke about a lot of things… but Fall of 2008 is not one of them. It was like watching my world blow up, in relatively slow motion. I knew what “they” should be doing… but they didn’t do it, until it was one second to midnight…

    I will never, ever, ever “forgive” Bernanke for that. Ever.

    Reply

  295. LOL… you can’t watch TED blow out to almost 500 basis points and NOT be scarred for life.

    Reply

  296. True re KOG. The probably have $45 to 48 mm left to spend this year, put up against that $10 mm in cash, some prepaid tubulars and other equipment and that leaves a gap of say $30 mm for cash flow to cover. Maybe they do $15 mm rest of the year, that leave $15 mm, which could be taken on the revolver. I’d figure a small deal, say 5 mm shares at $4+ would make sense any time as well, preferable after they get results back from their first test of the TFS.

    Reply

  297. KOG — hoping they say something about the credit facility on the call. And if they don’t talk about the funding gap, I’m not gonna ask on the call… but will follow up off line, after.

    Reply

  298. Note at the bottom of their press release so credit facility is still not finalized:

    In evaluating its business, Kodiak considers earnings before interest, taxes, depreciation, depletion, amortization, gains or losses on foreign currency, stock based compensation expense and accretion of abandonment liability, (“Adjusted EBITDA”) as a key indicator of financial operating performance and as a measure of the ability to generate cash for operational activities, future capital expenditures and servicing of borrowings under a potential future credit facility

    Reply

  300. I’m confident they will. They’ll definitely get asked about it.

    Talking heads on Kudlow tonight talking about credit freezing back up.

    So KOG might want to hurry the process along.

    Reply

  301. In 297, left out the words “operating cash flow” I was thinking may they do $15 mm rest of year in operating cash flow. Given their trajectory and current oil prices it’s like to be more like $20 to $25, so the gap isn’t huge.

    Reply

  303. Slow going thru the charts, but so far FST is one of the few stocks that held its P&F buy signal…good clue as to where this stock is going when conditions improve….

    Reply

  304. zman,

    I am looking forward to your site search lesson. I just searched for your WHX buy and couldn’t find it.

    I like yield, even though I am 20 years from retirement.

    Which do you like more VNR or WHX? and why? [not looking for anything in depth just your thoughts] I seem to recall VNR had a lot of room to grow dividend.

    thanks
    mimster

    Reply

  306. In MLP’s I’m in LINE, don’t know VNR as well but I’m content with the potential for upside in an E&P fashion that LINE may receive from its granite wash acreage.

    WHX cost basis is in the ZLT on the ZCAT, ZIM, ZLT.

    I put ZTRADE WHX in the search box at upper left, which pulled up a list of posts. Then searched for WHX using the find box on the browser on the April 16th post, comment #53

    http://zmansenergybrain.com/2010/04/16/t-g-i-expiry-2/

    I then put WHX model in the search box, that pulled up a short list of posts, clicked first one which was April 20th (this would have been the second time I presented that model). Went back to the find box on the browser with WHX and that takes me to the model on that date:

    http://zmansenergybrain.com/2010/04/22/thursday-morning-pause-3/

    Reply

  308. RMD – I’m a writer, not a software engineer. It’s not hard, it took me 10 seconds to do the searches.

    Reply

  309. This from Bullmarket.com
    Today really has to be one of the most frustrating days for us in a long time. And no it’s not because the market got hammered. As we were writing what was going to be a Q&A on MLPs, the market really nosedived, likely due to program trading, and MLPs were particularly hit hard. As we were trying to quickly find a few MLPs to add once we noticed what was happening, they started to rally back. We would have almost added any one we’ve written about in the past, but settled for one – MarkWest (MWE, $28.00, -2.06, Spy) and at a higher price than we were initially looking at. Unfortunately, some great prices were very ephemeral, like ONEOK (OKS, $57.11, -2.21, Spy) under $50 or El Paso Pipeline (EPB, $25.97, -0.82, Spy) around $24. If this happens to MLPs in the future where the group suddenly falls -8% to -10% or more, buy first and ask questions later. Unless the reason for the fall is that the government is taking away their preferred tax status, the trade should work out well.

    Reply

  310. I cc-ed amd [asted 307 to myself. Thanks.
    VNR:
    1. was mucho (it is near 5/5) upset about comment that decline rate is 16% on PDP. Probably not apples to apples. There are various offsets and they are converting gas wells to oil/liquids and recompleting in different oily zones, but co. agreed either 16% decline is wrong or the audited 15 yr. reserve life is wrong! Guess they will be correcting this soon.
    2. stock ex. dividend on Wed., record date Fri.. Did not mention hearing about some derivative related trade involving high yielders going ex.
    3. Upset overpaid at 424/boe and $133,000/boe/d vs. other recent acq.s much lower valuation: you are ignoring op. costs which is why we put that in the press release (my bad: lots of releases, reading fast, did not pick up on the subtle hint). Paid under mkt 5-5.5X Eda because op costs were $5/boe vs. typical op costs of $15-20.
    4. gas drilling continues because co.s hedged gas prices AND locked in drilling costs to get leases HBP.
    5. Co. very pleased that this deal gets them visible cash flow to offset the runoff of hedges in ’12. I still got the sense a deal is coming to fund some of the latest acq.
    6. Co. was as flabbergasted about the day’s action as I was. Could not make it to my house for a recovery drink tonight.

    Reply

  315. BP took the yellow pod out of the BOP today. The BOP is damaged but they are rewiring the pod, which like the brain of the BOP and will reinsert it I guess Friday, to check pressures inside the BOP. They are then thinking to either put a second BOP on top of the first or access mud circulation port on the first bop to put heavy mud in and kill the well. Can’t be easy a mile under water.

    Reply

  316. They’r also lowering the coffer dam dubbed Macondome tomorrow which will go over the bigger of the two remaining leaks at the end of the riser.

    Reply

Please comment below

This site uses Akismet to reduce spam. Learn how your comment data is processed.

s2Member®