10
May

“Whatever It Takes” Monday

Print Friendly, PDF & Email

 

 

Market Sentiment Watch: The EU will do "what it takes" to defend the Euro, announced Trichet s the EU announced a $971 billion plan to stop the PIIGS from infecting the rest of Europe with their version of economic  swine flu. The dollar immediately sold off and futures in the States immediately went wild with the prospect of  a quick end (again) to Europe's troubles.  In energy land, we have a relatively quiet week ahead as earnings dribble to a stop. XCO did a deal in the Marcellus which I'll detail the ramifications of in comments as I'm having technical difficulties due to a nearby lightning strike this morning. We have two weeks until May options expiry and a revised Catalyst List has been included below.

 

The Week Ahead:

  • Monday 5/10: No ecodata release scheduled
  • Tuesday 5/11: Wholesale inventories
  • Wednesday 5/12:  EIA Oil Inventory Report, trade balance (F= -41.1B), budget balance
  • Thursday 5/13: EIA Natural Storage Report, jobless claims (F= 440K), import price index
  • Friday 5/14: retail sales (F= -0.2%, ex autos F= 0.2%), industrial production (F=0.7%), consumer sentiment (F= 73.5), Inventories for March.

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today - Earnings Calendar
  • Catalyst Watch Update
  • Odds & Ends

Holdings Watch:

ZCAT (Zman Catalyst portfolio):

  • $8,500
  • 87% Cash

  • Friday’s Trades:

    • None

ZIM (Zman Inefficient Markets portfolio)

  • $21,300
  • 62% Cash

  • Friday’s Trades:
    • XEC - Added (10) May $65 Calls for $1.20, on the mid of a very wide spread, with the stock down $4.80 at 60.20 on the day after earnings and in a very weak, oddly behaving tape.

Commodity  Watch:

Crude oil dropped 13% last week to close at $75.11. The 12 month crude strip is now trading at $81.94. This morning crude is trading up $3+.

 

Natural gas inched up 2% last week to close at $4.02. The 12 month strip is now trading at $4.85. This morning gas is trading up slightly.

Stuff We Care About Today


 

 

ROSE Reported Strong 1Q10 Results; Maintains Guidance

The 1Q10 Numbers

  • Production of 124 MMcfepd vs guidance of 120 to 125 MMcfepd (note they suffered declines due to lack of drilling offshore and in south Texas and volumes were off 22% from the year ago quarter but only 3% from 4Q09 levels.
  • Revenue of $70.1 mm vs $75 mm expected
  • EPS of $0.14 vs $0.06 expected
  • CFPS of $0.74 vs $0.69 expected

Highlights:

  • Eagle Ford Shale:

    • 61,000 net acres (78% considered either liquids rich or liquids rich prospective)
    • 11 wells drilled, 6 completed to date, 2 rigs running in the play
    • 22 MMcfepd net from the play (average well is 7.6 MMcfepd first 7 day IP; just over 60% liquids); recent wells have been trending higher.
    • Plans 25 to 30 wells here this year.
  • Southern Alberta Bakken Play (Northwest Montana):

    • 286,000 net acres, up 6,000 since late April
    • Still examining cores
    • Next step is vertical completions of at least 2 of the 3 wells drilled to date over the next few months with an eye towards determining best completion methods, then onto more drilling.
  • Guidance Reiterated at 145 to 155 MMcfepd.


Conference Call: Today, 11 am EST

Catalyst Watch Update

Yellow stuff is new or updated on the list.


 

Odds & Ends

Analyst Watch:

  • to be added in comments

 

 

137 Responses to ““Whatever It Takes” Monday”

  1. 1
    zman Says:

    KWK on the tape with earnings, also reducing capital program and production. CC same time as ROSE, so I’ll read the transcript.

  2. 2
    zman Says:

    I don’t recall pre market futures up in excess of 4% before. Strange times indeed.

  3. 3
    VTZ Says:

    The bankers loves free money.

  4. 4
    VTZ Says:

    I’m pretty sure that if the ECB knew that they could have just printed a whack of money all along to solve all their problems and it would make the euro rally they would have done it a long time ago.

    Then again, we are of course only thinking about the next 30 minutes, so right now it seems like a great idea.

  5. 5
    zman Says:

    V – saw earlier that the Fed window has been reopened to European banks.

    http://www.onenewspage.com/news/Business/20100510/10856893/Fed-Opens-Line-Of-Credit-To-Europe.htm

  6. 6
    BirdsofpreyRcool Says:

    “May you live in interesting times…” for sure!

    Never seen a pre-mrkt rally like this. “Whatever it takes” is what our Fed should have said after BearStearns (and before Lehman)… but I digress.

    Mark these numbers… i hope to never see them again (because they speak of the pain leading up to the gain)

    IG -19 basis points to +100 1/2 spread to US Treasuries

    HY + 3 5/16 points to dollar price of 98 1/4

    TED +27.5 bps spread… back in from Friday’s wides… but not back under 25 (which is my own personal comfort zone)

  7. 7
    BirdsofpreyRcool Says:

    German elections over, ECB can finally act. Dirty little secret is that the ECB stands to make a LOT of money on this “trade.” Originating at low rates to buy Greek treasuries at a high rate. But, that gain comes out of the hides of the Greek People (as they are the ones who have to pay that rate… not their “govt”). ****

    **** Monday Morning Caution = Washington, take note. This is the path you are setting us on, setting up the US Taxpayer to pay off our Chinese and Middle Eastern “lenders” someday (sooner, than later).

  8. 8
    BirdsofpreyRcool Says:

    z — our KOG trades looking better, pre-mrkt. I won’t be in my trading shares for very long. I have a feeling this summer is not going to be a Big Easy.

  9. 9
    bill Says:

    300 sounds like alot but some stocks were really smashed last week

    we need a 4.75 move in wll just to make up for friday. then we can work on the other 4 days of last week

    same goes for atpg, exxi,others

  10. 10
    BirdsofpreyRcool Says:

    “our” meaning everyone who participated last week. It was a tough one. Hope it’s a long time before we see another week like it.

  11. 11
    BirdsofpreyRcool Says:

    TPH comment on MLPs this a.m.

    MLP’s and high yield spreads (AMZ – $297) – It’s OK to give up some yield to stick with quality. Last week’s saw extreme volatility and MLP underperformance (AMZ -9% vs. S&P -6%). High yield spreads to 10-yr. Treasuries +21% (up 85bps to ~500 bps). Similar spike in early summer 2008 when spreads quickly blew out +25%, AMZ -10%. Current credit spreads still way off Dec 2008’s fetal position levels of 1,500bps, but reminder that doesn’t take much to move need in very illiquid MLP market.

  12. 12
    tomdavis12 Says:

    Z: BP put out next two containment possibilities: 1. Smaller dome “Top Hat” 2. Tap into the riser.

  13. 13
    zman Says:

    Agree with Art Cashin’s comment this morning:

    “It’s not where we open, it’s where we close”

    Will be watching volume to see if buyers support the open pops.

  14. 14
    BirdsofpreyRcool Says:

    HeadTrader and TechTrader both out today.

  15. 15
    BirdsofpreyRcool Says:

    Credit indices holding onto their pre-market gains.

    IG -18 bps

    HY +3 1/4

  16. 16
    choices Says:

    #10-agree, BOP-I was out for a couple of ours on Thurs and missed the big flush-came back and could not believe it-not sure I could of stood in there when it went down to 1065 while it was happening-I’m still massively underwater but coming back-watching credit, thanks for the updates.

  17. 17
    zman Says:

    Analyst Watch:

    VQ – upped to Hold at CK Coop

    DVN upped to Buy at Argus

  18. 18
    zman Says:

    WHX likes the up days, up 13.5%.

    ROSE – thought the quarter was OK, operationally a little slow, especially in light of last quarter but that was to be expected. Conf Call at 11 am EST, I won’t be chasing options there as the spreads are wide, and it’s already put on a good bounce. I continue to own the common in the ZLT.

  19. 19
    zman Says:

    AEZ – nice run this morning, earning should be some day this week, see catalyst list, expecting their second Bakken well results, last one was big, especially for their first shot out of the gate, and this one is not far away.

  20. 20
    BirdsofpreyRcool Says:

    Pretty amazing rally in the Energy Kids.

    VIX just saw it’s largest drop (27%) in its 20 yr history.

  21. 21
    BirdsofpreyRcool Says:

    Sorry… VIX down 32% (not a mere 27%)

  22. 22
    zman Says:

    WHX blew out my $0.61 to $0.65 model expectation with a $0.70 number.

    Volumes didn’t decline as fast as I forecast, oil was about $2/bbl over me but natural gas came in way high at $5 instead of my $4 which means I was too conservative on my differential there as intended.

    Should auger for 12%ish yield there this year, will retool for actuals and have a model out tomorrow.

  23. 23
    zman Says:

    DJIA up 444
    SP up 52, that’s in line with the overnight fut highs.

    Nicky, got levels?

  24. 24
    choices Says:

    I “think” ES is approaching limit up!?

  25. 25
    zman Says:

    Bill – agreed re 9 and a lot of ground to cover.

  26. 26
    Nicky Says:

    Good morning and wow! 3rd biggest gap up of all time.

    1162 is a 62% retracement of the move down. So at this stage believe it or not the bear count is still alive. Could be a wave ii move.

    If we can get above 1177 its plain sailing for the bullish count…

  27. 27
    zman Says:

    Morning and thanks much Nicky

  28. 28
    choices Says:

    #24-sorry-wrong-limit up only applies in globex, 55 points-

  29. 29
    zman Says:

    Tom – right, it looks like they are going to try to junk up the well in the near term.

    LEI (Lucas) new Eagle Ford player

    Market hanging in near the highs pretty well a half hour into trading. Energy stock volumes OK, not outstanding.

  30. 30
    bill Says:

    ng up 3 %, sd up a putry 3 cents..what a dog

  31. 31
    baylor3217 Says:

    Is this a great opportunity to short the s and p? Seems like we’ve do e nothing but print a lot more money

  32. 32
    kiaora Says:

    I just went short SPX

  33. 33
    BirdsofpreyRcool Says:

    Credit indices finally giving back a little of this morning’s gains

    IG -17bps

    HY +2 7/8

    But that is still a heck of a one-day gain. Also seeing some new bond issues being announced today… we had several IPOs pulled last week, in the face of all that volatility. If the street can get a deal or two done here, that would be a stabilizing influence.

  34. 34
    zman Says:

    31,32 – that seems to be the early inclination of many. I’m sitting tight on my positions for now. I’m with BOP that it’s a heck of a one day improvement all around. Tomorrow they’ll hit the rest button again and may try to take it through Nicky’s level.

  35. 35
    zman Says:

    Dollar way off the lows of the day, putting the kibosh of the equity rally for now.

  36. 36
    zman Says:

    ROSE call in 15 mintues

    CXPO continuing to fall back to earth. I may get interested if it gets a $2 handle.

  37. 37
    bill Says:

    cnbc just said 30 stocks up for everyone down

    sd and ard in the latter

  38. 38
    zman Says:

    ARD – I think they are announcing their 1Q this week but not having a conf. call. If SD gets them, that will be the steal of the century.

  39. 39
    zman Says:

    ROSE call starting now.

  40. 40
    zman Says:

    STNG – relatively new tanker stock to watch. Dalhman picked up with a buy this morning and $16 target.

  41. 41
    choices Says:

    I had not seen this in the news-maybe just missed it-this should put more pressure on the USD.

    http://www.federalreserve.gov/newsevents/press/monetary/20100509a.htm

  42. 42
    choices Says:

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a5BwJAfaalEw&pos=6

    Goldman did not have a single losing trading day in 1st qtr-heh.

  43. 43
    zman Says:

    ROSE Notes:

    Adding 2 well completions per month.

    They will make guidance based on this rate.

    They are looking to add a 3rd frac crew.

    They have 5 wells waiting on completion now representing about 30 MM/d of incremental volumes.

  44. 44
    zman Says:

    XEC running nicely here.

  45. 45
    zman Says:

    re 41 see 5

  46. 46
    zman Says:

    ROSE would make a nice acquisition for someone wanting to jump on the get liquids rich bandwagon, with the higher percentage liquids window production in the Eagle Ford, and the large position in the s. Alberta Bakken play.

    350 locations in the Gates Ranch (oily) portion of their EFS position.

    It would make a lot of sense for someone like DVN or APC to take these guys out and it’s not expensive now on next year’s CF.

  47. 47
    zman Says:

    ROSE Notes

    Ablerta Bakken update:

    2010 focus on additional tests
    rig moved into field to do vertical fracs over next few months.

    Q&A about to start

  48. 48
    AAA Says:

    BOP,

    A bit offtopic, but a friend of mine was asking me about the GMAC paper. Apparently, they have 7.25% notes that mature 3/11 and were priced to yield 8% as of friday. Seems unlikely the government would let its $17 bill or so godown the drain in ten months. Also, Ally Bank, which they own, has 32 bill in deposits. I think my friend is mostly concerned about risk of default, which seems minimal at this point, wouldn’t you say?

  49. 49
    TEXWS6 Says:

    http://www.encana.com/news/newsreleases/2010/0507-michigan-basin.html

    Ready for MORE shale gas?!?!

  50. 50
    zman Says:

    re 49. Always. It builds the argument for putting cars on it. TEX, I do plan on playing with ECA more this year so thanks for that.

  51. 51
    baylor3217 Says:

    Anyone With an iPhone know how to force finance.yahoo.com to display the more classic view you get on your pc or laptop?

    It’s forcing me to some mobile view which quite frankly sucks.

  52. 52
    BirdsofpreyRcool Says:

    AAA — those bonds are rated B3/B, so they are close to the bottom of the high yield market rating. I am not familiar with the current cashflow coverage of those bonds, so I don’t want to put my neck out and offer any opinion. The problem with GMAC is ResCap, their mortgage-lending subsid. But they are claiming they will be able to “ring-fence” the risk there. That said, GMAC itself reported pretty good earnings last week. Given where we are in the finacial cycle (and the fact that people are buying a few more cars than last year and those car loans ARE getting securitized and sold off), then I would think those bonds should pay off at par, when they mature next March. But, I am no authority on GMAC. I successfully avoided losing money on GM and related-entities for many years… just got into the habit of ignoring them.

    Thank you for asking, tho.

  53. 53
    zman Says:

    ROSE call over – continuing to like the story, not much incremental today other than their guidance can easily be beaten if they get another frac crew on the job in the Eagle Ford. I think the 2Q or at least the 3Q call will be a lot more interesting.

  54. 54
    tomdavis12 Says:

    Z: Did go over the CC for RIG over the weekend. The movement today is not fundamentals. Their quarter was mixed but good. They will be net debt free buy early 2012. Not bad from where they were after the merger. Of course this is assuming that the solution of the spill will allow the business model to execute as it has in the past. Maybe big assumption.

  55. 55
    zman Says:

    Baylor, no but let me know if you find out how. The CNBC app is pretty good by the way.

  56. 56
    elduque Says:

    go to pimco.com and read Gross’s latest monthly letter where he discusses the Gmac bonds.

  57. 57
    zman Says:

    Tom – I listened to their call on Friday. I still get that there is a lot of open ended liability there. I continue to get note after note entitled “cheap but risks remain” or something similar on it.

  58. 58
    zman Says:

    RMD – do you know when AEZ reports?

  59. 59
    zman Says:

    Gulf Coast oil imports unaffected by spill so far.

  60. 60
    BirdsofpreyRcool Says:

    AAA — Bill Gross equates GMAC with Fannie and Freddie… backed by the govt, so probably worth the risk for an 8% yield.

  61. 61
    baylor3217 Says:

    I purchased some spy insurance today for better or worse. That and my gold position are my two key plays to the downside.

    Vtz, gold is now past your 1202 level that you’re wanting to see on a close by a good ways. We’ll see where we finish. Is gold te most crowded trade in existence now?

  62. 62
    RMD Says:

    Don’t think AEZ has picked a date yet.

  63. 63
    zman Says:

    RMD – thanks, time’s short to do that. Did they have a call last quarter?

  64. 64
    BirdsofpreyRcool Says:

    Market update: SPX up 49pts to 1160, as US equities key off the strong Europe trading (DJ Stoxx 50 ends up nearly 10%) and Sun. evening announcements from the ECB/IMF/Fed/G7 for the move higher. Color from the desk – rally at the open driven by a round of short covering however as we head through the session institutions are largely on the sidelines and better for sale. Volumes today are on the light side, trending inline w/earlier last week and far lighter than the elevated levels of Thurs/Fri. Interestingly, while European equities are still trading near session highs, a number of indicators are moving off their best levels as we head into noon – i.e EUR up 0.9% (was up 2.5% earlier), Gold dn 0.9% (was dn 1.9%), IG 17.5 tighter (was -19.5), VIX dn 28% (was off 36%) and crude +$1.75 (was up $3.40), etc. BoE announcement this morning was inline w/expectations (held interest rate and purchase program levels steady). Technically, 1160 (61.8% retracement), 1171 (50day MA), and 1180 are resistance to the upside on SP500cash.

    Equity sectors: Financials are the top performer, up 5.5% on strength across the board. Industrials and discretionary are next, up 5.25-5.5% as investors cover shorts in the higher beta cyclicals. Tech is up nearly 5% on strength across the board, with internets and semis seeing the most outperformance. Materials are mostly in line with the tape amid a lot short covering and a relief rally in commodities. Energy is up 4%, lagging the tape a bit as the Gulf spill is beginning to come back into focus amid the positive macro news from Europe. Staples, utilities, telecoms, and healthcare are all lagging the tape, up 2.75% as investors look higher beta assets to chase performance.

    Commodities: Crude oil has come off its highs and is trading below $77, though up >2%. Natural Gas is trading near its highs above $4.15, up $0.16. Copper has been relatively flat since the open, up 2.5%. Gold has rallied off its lows, though down 1%.

    FX: USD (DXY) has rallied from its lows this morning and is trading near its highs just shy of $84. The dollar is trading close to its highs vs. the Yen, up almost 2%. The dollar is also near its highs vs. the Euro though still down ~0.8% today. The Euro has come off its highs vs. the Yen, though up nearly 3%. The dollar is near its lows vs. the Pound, down ~1.2%.

    Corp. Credit: Corp. Credit is mixed with IG surging – IG 14 has tightened 17 ½ bps, while HY have lagged equities – with HY 14 gaining only 3 pts.

    Treasuries: The 2s have come off their lows a bit, but still giving back 8 bps from Friday to yield 89bps. The 10s have traded flat for most of the morning – dropping 12 bps from Friday’s close to yield 355bps. The 2-10 year spread has steepened from Friday to yield 266 bps.

  65. 65
    AAA Says:

    BOP,

    Thanks. Not a fixed income investor myself, but maybe I need to be. I just see a lot of people get into trouble chasing yield. The guy who was asking about the GMACs worked as a tax lawyer for a company that put together and marketed MLPs, and he thinks that business is too corrupt to get involved in.

  66. 66
    elduque Says:

    I wonder if we could have a little macro discussion around NG. I keep thinking that we should have seen the bottom. Why? All the cos. reporting were doing there best to switch to drilling for oil. Somewhere this has to impact the price, but also the mind set of the NG speculator. I welcome all comments, both yae and nae.

  67. 67
    TEXWS6 Says:

    NG discussion, don’t get me started! LOL!

  68. 68
    choices Says:

    Does anyone still follow IOC on this board?

    Thanks.

  69. 69
    zman Says:

    Reef still keeps an eye on IOC, I plan on listening to their call this week.

    Re natural gas. I continue to think it will be range bound through month end at the very least. There is simply no weather to get it off the lows as demand remains light at the moment. I think the falling gas rig count will help but its pace is awfully slow at the moment so it will be pretty insubstantial until you see the rig counts come back down in Texas and in LA onshore. I think the shift to oilier production profiles has not come with much of a reduction in gas production volume projections (well efficiencies, drilling efficiencies, backlogs of drilled but not complete wells all to blame for that). On the imports side, I continue to be unafraid of the never materializing tsunami of LNG. It obviously does not want to come to the U.S. for $4 an M.

  70. 70
    BirdsofpreyRcool Says:

    “Chasing yield” rarely has a happy ending. And is one of the many reasons I do not like bond funds (which are driven by investor money-flows). On the other hand, sometimes the market does hand you an opportunity. I will never touch anything related to GM or Chrysler, as I believe the US Govt stold money from private lenders and gave it to the UAW. Some illegal activity is just too egregious to overlook. I would imagine many fund managers feel the same way. The “headline” risk on any GM bond is too great to have to go in front of your credit committee to ‘splain why you thought “it would be different this time.” But that type of thinking is what allows inefficient parts of the market to exist too. And eventually, time (and grabbing for yield) means that Mr. Market has a fairly short memory.

    But you are right… Learning how to evaluate individual bonds is a worthwhile exercise, imho.

    Just a few thoughts.

  71. 71
    zman Says:

    Speaking of yield. I got asked over the weekend why I thought the upstream MLPs and RT’s had such high yields.

    My answer:
    Many of them are hedged at higher than current prices for natural gas. Part of the elevated yield is the ability to continue to do acquisitions and to rehedge to keep the distributions up is constantly in question. The other part is that with gas prices low, and failing to rally of late as expected with the downward trend in rig counts from 2008 to last Fall, the multiples for the E&P stocks have contracted. So on this basis, the MLPS and Royalty Trusts look more expensive on a $/ reserves and P/CF basis.

    My quest has been to find ones where I think the distribution or dividend is sustainable. I think LINE could raise it’s distribution next year and given that its coverage ratio (distributable cash flow / dividend) is high, it is safe all year to at least stay at this level, they are hedged through 2013 for oil and gas. MLP’s not suitable for tax free accounts as they have K1 but good for taxable accounts. This one should do a little better than a 10% yield.

    For WHX ( a royalty trust) I have a model (attached with tweakable assumptions) which is conservative and should put next twelve months yield at around 12%.

  72. 72
    zman Says:

    If WHX is going to outperform my model by 10% all year on distribution then I’d guess the underlying is ready for another move to new highs.

  73. 73
    baylor3217 Says:

    Thoughts on xec after this recent move with the market today?

  74. 74
    zman Says:

    Baylor – I liked the quarter and the guidance, but given that I don’t trust this market and that it has fat option spreads I’m likely to punt either into this afternoon’s rally (you heard it here first) or in tomorrow morning’s.

  75. 75
    baylor3217 Says:

    Anyone considering purchasing some RIG here? It’s getting slammed today compare to broader market

  76. 76
    baylor3217 Says:

    Re 74 thank you for the heads up on this afternoon’s rally hehe

  77. 77
    zman Says:

    Re RIG, I went with CAM instead as the liability was deemed to be fairly capped after reading comments from 2 joint company conference calls. It continues to falter as well as does HAL, BP, and RIG. I think they bounce when the flow from the well is staunched or maybe when it looks like its closer to happening. Today is another new low for RIG since the accident so I think you have new money into it already abandoning it along with longer term money that is coming out as well.

  78. 78
    zman Says:

    Dollar continues to rally off the lows, oil up less than a buck now.

    OPEC out over the weekend saying it may need to act to limit production again as markets are oversupplied.

  79. 79
    choices Says:

    #75-APC not participating at all today either-prob related to Gulf problem altho they are well covered w/insurance.

  80. 80
    VTZ Says:

    RE 61: Is gold the most crowded trade in existance?
    No, the most crowded trade in existance is being long US treasury bonds (and USDs are also a beneficiary).

    And no, gold is not even crowded yet although the volatility will really pick up now.

    Keep in mind that the net long position is largely offset by huge short positions (by large bullion banks, JPM, GS, etc). The equities are being held down even worse.

    I have no doubt that gold will continue to make new highs and ever since it broke $1034, you’ve all had my guarantee that we’ll never see <$1000 USD gold again and that still stands.

    If you want to look at the technicals and call it overbought, crowded, etc it doesn't bother me whatsoever. Sour grapes… just like at 940 when I said it was primed to breakout and everybody was telling me back to 650 but instead it went to 1224.

    Now it's on the verge of breaking out again and sure it might consolidate for a bit, but the Eurozone just gave me almost a trillion new reaons why it has more room to go. There is no current govt policy that is anti-gold.

    Keep in mind that most of the people who you talk to who own "gold", own GLD which is a sterilized position because the custodians just short against all the paper you supposedly own.

    The physical market will rule soon enough. Yes, it might be time for a consolidation, but we'll have a new high by the summertime.

  81. 81
    baylor3217 Says:

    Vtz ar eyou saying you wouldn’t own GLD? How would you own it?

  82. 82
    VTZ Says:

    I’ve said nonstop GLD is the worst possible “gold” investment.

    I linked an article the other day about it.

  83. 83
    cargocult Says:

    Any expectations re:SSN in the near future?

  84. 84
    baylor3217 Says:

    Vtz Do you have the link handy?

    I’m lookin at options

  85. 85
    zman Says:

    SSN – catalysts are in the post today, nothing really new expected until late month on the Bakken, a little longer on the first Niobrara re entry.

  86. 86
    VTZ Says:

    http://solari.com/archive/Precious_Metals_Puzzle_Palace/

    Just trust me that you dont want to own SLV and GLD.

    My recommendation is a basket of junior gold and silver producers that are unhedged and well-financed, some midcaps and then some bullion.

  87. 87
    Dman Says:

    Z – where do you think HAL stands in terms of liability?

  88. 88
    VTZ Says:

    I should have said or junior developers under the same conditions.

  89. 89
    zman Says:

    Re HAL – this is from MS, “HAL also has relatively limited exposure because investigating the cement plug, if it had even been been installed, which the company denies, would be very difficult.”

    My thought is that because they are HAL, they get hauled up to capitol hill and grilled without evidence. I’m no lawyer but all I’ve read would not put it on them. The quarter was good, the environment for them is improving on the international front and still strong on the NAM front so yeah, I’m tempted, but not yet biting.

  90. 90
    ram Says:

    VTZ – I started buying Morgan Dollars, investment grade and generic circulated, many years ago as a hobby. I feel somewhat vindicated to my family and friends that felt I was tossing my money.

  91. 91
    zman Says:

    There are quite a few analysts out saying HAL is largely indemnified, as is CAM. Last week I did notice BP pointing the finger at RIg however and this may get worse.

  92. 92
    1520sbroad Says:

    Of all the dumb things I have done in my investing career the one thing I wish i could have back was selling 50 morgan silver dollars that my grandmother gave me. I sold them while i was in college to help pay for a post graduation trip to the beach.

    What do you get for a generic circulated one these days?

  93. 93
    zman Says:

    XOM CEO Tillerson on CNBC now on offshore drilling.

  94. 94
    ram Says:

    I was at a coin show earlier this year and the “slabs”, generic circulated Morgans, were being bought at $15 and sold at $18. I went looking for deals and it seems those days are gone.

  95. 95
    ram Says:

    Sorry ZMAN for discussing non-energy.

  96. 96
    Dman Says:

    VTZ – the list of junior silver players is long. Can you point to a list of “good” ones?

    Also, I assume you are OK with CEF?

  97. 97
    1520sbroad Says:

    #94 – like i said – i wish i had that one back

  98. 98
    Dman Says:

    ram #95 – metals are “frozen energy”. Well, that’s my excuse anyway.

    Actually I have a better reason: I have been trying for some time to stop thinking of cash as being “money” and to train myself to think of gold and silver as “money” instead. I think we have now well and truly arrived at the point where there is a new (market enforced) gold standard and silver is tagging along.

    So when I close an energy trade, I want to “settle it” in precious metals. In practice, this just means keeping cash low and precious metals high. Given the problems with GLD & SLV, it seems to me that CEF is the only convenient place to sweep cash into in the above sense.

  99. 99
    VTZ Says:

    I try to avoid recommending juniors on the board because then people will expect BOP-like KOG returns, when in reality the plays have lots of variables… hence the basket approach.

    I have absolutely no issues with CEF and I too settle a large portion of my cash position that way.

  100. 100
    zman Says:

    No worries at all Ram, like to learn new stuff outside my bag from time to time.

    Matt Simmons on CNBC now.

  101. 101
    Dman Says:

    I may have missed this somewhere on the board last week, but do we have a handle on how ATPG stands in the wake of the GOM disaster?

  102. 102
    VTZ Says:

    Z – RE CNG vehicles. Have you seen any information/studies regarding the infrastructure cost to switch?

  103. 103
    zman Says:

    Dman – operationally unaffected. There may be a delay in new well permits but it’s unlikely to push anyone’s drilling schedules as near term wells are permitted well in advance of rigs being on location and turning to the right.

  104. 104
    occam Says:

    APC off especially hard in the last hour, and for the day. Is this overdone?

  105. 105
    bill Says:

    how bad was sd earnings/cashflow??

    they reported 147 m of operating cash flow

    100 m of that came from ap .

    ap is 300 m..looks like about 6 month payment cycle unless a bucnh of that tied to new oxy plant and they are waiting on payments from oxy to pay the ap

  106. 106
    zman Says:

    Re 104. Can’t answer that as I have not circled back to listen to their comments regarding liability. My sense from third party reads and knowledge of working interest is that they are responsible for their share of the associated well costs. BP not capping = BP, RIG, APC etc falling. I think APC will rebound sharply further down the road and as you know I’m a big fan of management and the other prospects of the company. But I’ve got my arms crossed and am watching it for now.

  107. 107
    zman Says:

    Bill – everything was light plus they cut guidance. This is what I wrote Friday:

    * EPS of $0.09 vs $0.18 estimate
    * EBITDA of $141.2 mm vs 168 mm expected

    Highlights:

    * Makes two Pinon field discoveries that aren’t full of CO2 too, which is sort of refreshing.
    * Talks up new oily profile (aren’t we all?) by ramping rigs in the Permian. Oil rigs jumped from 5 in the 4Q to 13 now.
    * Lowers guidance … again, but its not necessarily bad news as the reduction in total company production from 130 to 120 Bcfe is offset partially by the higher value barrels by the following:
    o an 11% in expected oil volumes and
    o a $60 mm drop in gas directed capex (7% reduction in total budget), which goes to $800 mm and gets the company to within a stone’s throw of expected EBITDA.

    Nutshell: OK, but not great quarter, good to see them finding some pure methane, would like to hear thoughts on the ARD acquisition because if they pull that off I’ll be back long the name as they got it for a song.

  108. 108
    tomdavis12 Says:

    Z: Will give you credit for your afternoon rally comment. Good call. I am happy I own more of your names than my own. lol 🙂

  109. 109
    RMD Says:

    I saw an article which said VZ is changing fleet to compressed nat gas; no time frame mentioned.

  110. 110
    choices Says:

    #104-news items out in last hour stating the four names, BP,RIG,HAL,APC may have credit rating risks

  111. 111
    zman Says:

    Tom = LOL

    1) I always have a 50/50 shot.
    2) Never underestimate the power of the margin call after a morning rally of magnitude that lasts into lunch.

  112. 112
    zman Says:

    RMD – yeah, I think they have to go head to head with AT&T in all aspects. CLNE is on at least one contract with them.

  113. 113
    zman Says:

    Thanks Choices, had not seen that. Seems rather broad brush to me.

  114. 114
    zman Says:

    XEC and WLL moving nicely again, good to see as we enter the home stretch on those May calls.

  115. 115
    zman Says:

    I’ll P/CF multiples out for all our highly trafficked names in E&P tomorrow and P/E out for service as it’s always good to end the quarter knowing where everything stands.

  116. 116
    choices Says:

    made the mistake of turning on CNBC for last hour coverage, Maria and her gang of merry commentators are completely hysterical-comment which stuck with me in the “duh” category was “this market volatility will slow the retail investor’s return to the markets-I have to believe the Main Street investor has finally decided that this casino is not for him/her-gold/silver must be the only answer.-

  117. 117
    zman Says:

    West – again I say, nice call way back when on XEC.

  118. 118
    zman Says:

    Beerthirty.

  119. 119
    Gtinvest Says:

    Very constructive news on CHK!
    http://finance.yahoo.com/news/Chesapeake-Energy-Corporation-bw-2218931215.html?x=0&amp;.v=1

  120. 120
    zman Says:

    Thanks for the heads up on CHK. People definitely like them selling down interests and bringing that future cash flow forward quickly.

    BOP or anyone, do you follow FXEN, used to be a hobby of mine to watch them struggle along in Poland. Numbers out, may put in the post.

  121. 121
    elijahwc Says:

    GT #119 on CHK: That is indeed big news.

    RMD you called this part, “Chesapeake plans further midstream asset monetizations from its wholly owned midstream subsidiary, Chesapeake Midstream Development, L.P. that primarily owns gas gathering operations in the Haynesville, Fayetteville, Marcellus and Eagle Ford shales. Some of the monetizations may be completed with a subsidiary of the company’s 50/50 midstream joint venture with Global Infrastructure Partners L.P., which acquired Chesapeake’s gathering assets in the Barnett Shale and certain of its gas gathering assets in the Mid-Continent in 2009.”

  122. 122
    zman Says:

    HESS buying into Paris Basin partnership with TRGL.

  123. 123
    elijahwc Says:

    #122 Dog finds Bone!

  124. 124
    zman Says:

    Yep, that’s probably worth me buying it in the after market for the move it’s going to have tomorrow, most probably a 10%+ move in the morning.

  125. 125
    RMD Says:

    at a quick read , CHK is raising $5 B to repay $3.5 B and invest the remaining $1.5 B, plus lots of other $ raising moves: that doesn’t look like “live within cash flow” to me.

  126. 126
    zman Says:

    re 125 – living within the entirety of the cash flow statement, lol.

  127. 127
    zman Says:

    ARD on the tape with an easy beat of CFPS, $1.09 announced vs $0.93 consensus.

  128. 128
    john11 Says:

    HOUSTON, May 10 /PRNewswire-FirstCall/ — Noble Energy, Inc. (NYSE:NBL – News) announced today that the Deep Blue exploration well on Green Canyon 723 in the deepwater Gulf of Mexico reached a depth of 32,684 feet. The well found hydrocarbon pay in multiple Miocene intervals. Noble Energy and partners are proceeding to sidetrack the well to determine the extent and commerciality of the pay zones encountered. Noble Energy operates the well with 33.75 percent interest. The Company’s partners in the well include BHP Billiton Petroleum (Deepwater) Inc. (31.875 percent), Statoil USA E&P Inc. (15.625 percent), Murphy Oil Corporation (NYSE:MUR – News) (9.375 percent), and Samson Offshore Company (9.375 percent). Sidetrack operations are expected to take up to 45 days.

  129. 129
    zman Says:

    Just to be clear, that’s a different Samson.

  130. 130
    john11 Says:

    Ooops..Didn’t know that…thanks Z

  131. 131
    elijahwc Says:

    #125 that would be “live within our cash flow” which could be considered to be plural, as in mine and yours. Gotta luv Aubrey.

    RMD the company you mentioned the other day that began with a “A” that was involved in the same area as MHR, symbol or name please.

  132. 132
    TEXWS6 Says:

    sampson vs samson LOL!!

  133. 133
    zman Says:

    Tex – I thought so too but there’s no P in SSN and the above press release doesn’t have one either.

  134. 134
    bill Says:

    127

    ard outstanding results, i was only expecting 1.00

    im baffled why these dopes did the sd deal

  135. 135
    bill Says:

    help for injections??

    http://www.accuweather.com/blogs/news/story/31384/killing-frost-in-the-northeast.asp

  136. 136
    zman Says:

    Bill – maybe for next week’s report yeah, since we apparently can’t get summer to start early.

  137. 137
    West Says:

    Z, thx for the nice words on XEC. I may have missed it here but they got upgrade to Strong Buy from Raymond James today. I would think that we might get a few more upgrades this week after last week’s CC. Depending on market action add to XEC on pullback without nose dive…….Wolfberry: For those with interest in the Wolfberry play go to CXO’s presentation ….http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc4MTA4fENoaWxkSUQ9Mzc3MTQ1fFR5cGU9MQ==&t=1…here is address to recent article in Midland Reporter Telegram Oil Report, May 2, 2010…..http://www.mywesttexas.com/articles/2010/05/02/business/oil/top_stories/completing_the_wolfberry.txt

Leave a Reply

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®