17
May

Monday Morning And All Looks Jittery (In Progress)

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Market Sentiment Watch: Volatile. Futures were much weaker over night but were green by early morning ... only to flip back to red after Empire State index hit the tap. Euro now at a four year low. We had some technical difficulties and lost some of the post but will add back the Catalyst Update a little later this morning.

 

The Week Ahead:

  • Monday 5/17: Empire State Index, Home builders index
  • Tuesday 5/18: PPI (F = -0.2%, core = 0.1%), housing starts (F = 650K)
  • Wednesday 5/19:  EIA Oil Inventory Report, CPI (F = -0.1%, core 0.1%). Note that this would be the first inflation decline in a year and the lowest annualized core rate increase since 1966.
  • Thursday 5/20: EIA Natural Storage Report, jobless claims (F = 440K), Philly Fed (F = 22, last = 20.2), leading indicators (F = 0.2%, last read was 1.4%)
  • Friday 5/21: no eco data scheduled.

In Today's Post:

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

Holdings Watch:

ZCAT (Zman Catalyst portfolio):

  • $8,200
  • 91% Cash
  • Positions are updated on the ZCAT, ZIM, ZLT.

ZIM (Zman Inefficient Markets portfolio)

  • $21,900
  • 58% Cash

Commodity  Watch:

Crude oil fell 5% last week to close at $71.61. Crude continues to look weak in the near term due to technicals and bloated stocks at Cushing, despite a rally in products. Note that refining margins continue to move up and at a quickening pace. The 12 month crude strip has fallen below $80 for the first time since October and is now trading at $79.63. This morning crude off 40 cents having tested $70 overnight.

  • BP Watch:

    • “So far it’s working extremely well.” BP's comment on the oil siphoning process.
    • Expected to pump heavy mud into the well in an attempt to kill it in 7 to 10 days.
    • 60 minutes pointed to rumored troubles at BP's Atlantis deepwater development in the Gulf of Mexico and a U.S. official called the problems at BP systematic.
    • 60 Minutes also had witness reports showing that the rubber seal was accidentally damaged by a worker (pipe was moved while the annular was closed around it, resulting in part of the rubber seal being torn free). This would again point to conditions for which the BOP (and therefore CAM) was not responsible for the blowout.
  • Well Said Watch: Upstream comments on BP and the President.

Natural gas rose 7% last week to close at $4.31, buoyed by a smaller than expected injection and the end to what had been a rapid recovery in natural gas rig counts. I would not anticipate much more strength before real summer heat sets in. The 12 month strip is now trading at $5.01. This morning gas is trading up 8 cents. 

 

Stuff We Care About Today

Catalyst Watch Update

To be added later today.

Other Stuff:

  • The Mid Cap E&P Orange Charts should be ready for tomorrow's post. The small caps will be out later in the week.

 

Odds & Ends

Analyst Watch:

  • EOG - Lazard starts with a Buy rating and $135 target

 

106 Responses to “Monday Morning And All Looks Jittery (In Progress)”

  1. 1
    zman Says:

    Apologies for the short post, my bad for not saving more often.

    JPM on the tape with positive comments on APC, saying it could get an uptick if the spill is contained sooner rather than later. Kind of a “no duh” statement but a lot of people are focused on the names involved. CAM, HAL, BP, RIG and APC all marked higher on the catheter partial success over the weekend and the prospect for heavy mud injection in a week.

  2. 2
    BirdsofpreyRcool Says:

    Good morning.

    Frankly, I was worried that this morning’s opening would be worse than it might actually turn out to be. We shall see. But at 11pm last night, futures looked pretty ugly.

    Reflecting this, as well as increased demand for US dollars, LIBOR is higher this morning (and treasury yields lower). TED is back out to the widest it has been since Aug 2009. Still a long, long way from PANIC Mode… but, would like to see TED settle back to 25 bps or so.

    Credit Indices about flat to Friday’s close.

    IG -5/8 bps to 108 3/4

    HY unch’d at 96 3/4

    TED at +30.989 bps

  3. 3
    zman Says:

    BOP or Eli – would you have a look at the WLL 6.25% conv. perp. pfds?

  4. 4
    zman Says:

    Thanks BOP, watched the futures dive late night as well, didn’t see what really rallied them off the floor early this morning. The Germans are calling for Trichet to step down, can’t see how that would help at this point.

  5. 5
    BirdsofpreyRcool Says:

    European mrkts all green…. have no idea why.

  6. 6
    zman Says:

    Analyst Watch:

    CXO target upped $10 to $62 at Ladenburg, rating Buy

    WNR upped to sector perform at RBC, makes sense to up the refining group in here as margins are blowing out higher and the stocks really have not moved much, especially in light of how much they’ve been hurt over the last couple of years.

  7. 7
    cargocult Says:

    Do you think the worst is over for refiners?

  8. 8
    zman Says:

    Volumes on the open looking very tentative. Not big sellers but not a lot of buyers with courage at the moment.

    Cargo – No, more like a calm and relief rally this summer before they get hit later in the year and next by increased imports. A lot depends on things like Cap and Trade which in its most recent form would have put twice the economic burden on gasoline made in the U.S. versus imported gallons. I think they get to post good 2Q numbers but beyond that, the medium and long term prospects don’t look all that great.

  9. 9
    zman Says:

    Analyst Watch:

    APA raised to Outperform at Howard Weil

    SD target cut a buck to $8 at Credit Suisse.

  10. 10
    zman Says:

    Nicky – got fresh levels for us? Market looks pretty sketchy.

  11. 11
    zman Says:

    West – AEZ filed proxy after the close on Friday but not a Q, a little odd that, don’t see a notice to file late, results should be out any day.

  12. 12
    cargocult Says:

    How can foreign refiners make products cheaper than we can at home? And what stops us from exporting NG?

  13. 13
    tomdavis12 Says:

    Z: MS today lists their low cost NG plays as RRC, UPL, & XEC. Would you add or subtract from that list?

  14. 14
    AAA Says:

    Dan Dicker, who writes on energy for RealMoney, has a column out suggesting the $10 contango in crude is highly likely to be signaling an imminent halt to the decline in spot prices. His reasoning is the carry trade is very attractive at this level of contango.

    I don’t have access to historical contango, so I can’t comment on how reasonable this is. He did have an interesting comment suggesting that contango is unusual for commodities. I know that crude has often traded in backwardation, but I would have thought that contango was the norm for physicals.

  15. 15
    Nicky Says:

    Morning all.Certainly a tentative market. Would have rather seen those lows last night put in during market hours.
    Big picture is the level that absolutely has to hold is 1044 – the Feb lows. So I am looking at a couple of options. We have two cycles due to put in a low in the early part of June. The question is can the price remain above 1044 into that date. The bullish count says we likely retest the 6th May lows but hold above 1044 and then go on to make a higher high into August. The bearish count says that 1044 does not hold and likely by early June we are around the 1000 level. If that is the case then the bounce into August is going to be a correction and likely take us back to the 1150 area before heading lower again into the fall to around 900.
    Short term there is a bullish cycle which is unlikely to top prior to the 19th May and should take us back towards last weeks highs before rolling over again and making that June low.
    Resistance is at 1146 – 48,50. Support is at 1126,1119.

  16. 16
    zman Says:

    Tom – that’s a decent list, I’d add HK. What do they mean by low costs? Low lease operating expense or low fully cycle costs? SWN has very low LOE as well.

    Cargo – even if foreign gasoline costs the same, the proposed cap and trade tax on it would be half that placed on the domestic refiners. At least that’s the last version I saw.

    Regarding LNG, nothing really stopping us and we do send some to Japan now. But Congress would likely get hot and bothered over the prospect of sending a lot of gas overseas if prices were not rock bottom here. Chenierre has applied for sendout permits on the Gulf Coast and I think they got them but that’s for gas that was imported to the U.S. in the first place so not really the same as U.S. exports.

  17. 17
    zman Says:

    re 15. Wow. Thanks.

  18. 18
    tomdavis12 Says:

    Z: 13 I believe they mean full cycle costs. Do you believe that the lack of energy space bounce from the weekend news is that they have not really solved the leak problem and just a lousy tape or the combo.

  19. 19
    elduque Says:

    do you have any idea when Cushing unplugs. With the out months significantly higher, it seems to me that is the main culprit.

  20. 20
    BirdsofpreyRcool Says:

    XAC Strategist out with a “now and then” piece, comparing where we stand today vs Fall 2008. Bottom line = credit markets are a billion yrs away from where we were heading in Oct 2008.

    http://www.capmarkets.com/ViewFile.asp?ID1=137023&ID2=416556805&ssid=1&directory=6571&bm=0&filename=05.17.10_October_3_2008_Revisited.pdf

  21. 21
    zman Says:

    Contango is normal. This is a step one to be sure but it is the normal state for oil.

    Tom, just think it is weak tape. May that and some fears of D.C. comments.

    El D. Seasonally we should be near the peak. There is more oil coming down from the north that is exacerbating the situation this year but mid-continent refiners should pick up utilization in short order for the summer season and begin to work down inventories from the current peak levels.

  22. 22
    zman Says:

    EXXI VP buying a little stock.

  23. 23
    zman Says:

    Not tempted to dip into cash position more at the moment. Ugly tape.

  24. 24
    tomdavis12 Says:

    Z: 21 I show his cost is zero. Nice purchase.

  25. 25
    BirdsofpreyRcool Says:

    E21 VP exercised 5,000 options and simutaneously sold 1,822 shares. Looks like an exercise and hold, selling enough to cover the taxes to me.

  26. 26
    tomdavis12 Says:

    25 Agreed

  27. 27
    BirdsofpreyRcool Says:

    EGY on the move again… lots of behind-the-scenes catalysts to propell this Single Digit Migit higher. Having about $2/share in cash (and no debt) is not a bad war chest to have in this “we hate energy” mrkt.

  28. 28
    zman Says:

    Like watching red paint dry market. Very sideways at the lows for energy, and flattish for S&P. Almost nothing in the way of group news today, would expect updates from BEXP and FST in the very near term.

  29. 29
    Nicky Says:

    Crude heading down to test its overnight lows. I think the 69.50 level should hold this time around. Likely the SPX is going to want to test last nights lows too.

  30. 30
    Nicky Says:

    SPX looks to be working on a wave iv. In which case look for another move up above this mornings highs before turning lower again.

  31. 31
    zman Says:

    Thanks Nicky, just doing some research while this market sorts itself out. Keep the updates coming. BOP, is TED moving parallel to this downdraft in the S&P?

  32. 32
    Nicky Says:

    alternative is that we are already in wave v down and it is playing out as an ending diagonal.

  33. 33
    BirdsofpreyRcool Says:

    My “cash TED” index is actually off the wides of this morning… at 30.685 now.

    Credit idices slight low lower, tho… down from the greens of this morning.

  34. 34
    zman Says:

    If you missed 60 Minutes last night this was pretty telling:

    http://www.cbsnews.com/stories/2010/05/16/60minutes/main6490197.shtml?tag=contentMain;cbsCarousel

  35. 35
    mattlee Says:

    Z, I was just wondering if you had seen it. Sounded pretty damning for BP. Doesn’t appear to be helping any of the other players today, not that I expected it to.

  36. 36
    zman Says:

    Matt – yeah, I had brief comments in the post and I think it is what’s keeping CAM flat today instead of down with the reast as the witness pretty clearly said a worker broke the BOP by accident.

  37. 37
    BirdsofpreyRcool Says:

    TED back to wides of almost 31 bps

  38. 38
    zman Says:

    Only green on my screen is WHX.

    WLL and EOG getting clocked again due to oil exposure and the fact that they’ve been so much.

    Thanks BOP.

  39. 39
    zman Says:

    Nicky – Oil held your level. I suspect it will just mark the S&P this week from here. I also think that further downside for crude should be limited.

  40. 40
    Nicky Says:

    We are making new lows so I am more inclined to think this is a wave v rather than a b wave.

  41. 41
    elduque Says:

    Any thoughts on why HK is weaker than its peer group?

  42. 42
    zman Says:

    re 41. No. Doesn’t make much sense, could be that its just technically weaker. Very sloppy trading again out there today but if anything, that one should be performing better as it is a gas company and gas is trading higher today. Not that I expect that to matter on red market/red energy days but if you were looking for reasoning I would have been looking to the opposite kind of move there. Probably setting up for a potential buy on the analyst meeting. Lousy market.

    BEXP for instance down another 8%, should be a fairly important well out there this week or next (Ross area, 36 stages) and then end of June/early July 2 of their most important wells this year. But no one cares today.

  43. 43
    Nicky Says:

    Oil holding 69.50 still….

  44. 44
    BirdsofpreyRcool Says:

    HeadTrader stating the painfully obvious… that mrkt is in “Sell the Rallies!” mode. However, he is in “add to LT positions” or buy 15-25% of a new LT position on any sharply down day. Like today.

  45. 45
    zman Says:

    Oil – Long term chart of oil shows that it rarely fails to bounce when it drops more than 10% below the 50 day moving average (currently 13%).

  46. 46
    zman Says:

    I may play some day trades in this market while we wait for the buyers to spine up.

  47. 47
    Nicky Says:

    support at 1115, 1108, 1100 (200dma)

  48. 48
    Nicky Says:

    Just realized SPX filled that gap I was on about last week (Friday after the crash). If we can get back above 1125 then this wave is done. If not it can extend.

  49. 49
    Nicky Says:

    #48 – should have said Monday after the crash.

  50. 50
    BirdsofpreyRcool Says:

    little KOG at 3.27. wow. People dumping (or rather, not buying) oil-linked names with both hands.

  51. 51
    zman Says:

    WILDZTRADE – ZIM – HAL

    Likely to be a day trade. Added (100) HAL $29 May calls for $0.16 with the stock at 27.20, down 3% in a weak tape. I expect the name to recover disproportionately on a market bounce but plan to be quick here. See site for comments on the BP spill. Obviously a high risk trade but oil appears oversold and the liability for HAL increasingly appears to be less than for BP and RIG.

  52. 52
    zman Says:

    Thanks Nicky.

    BOP – not much to do with reality at that price. Time for me to add more in the family accounts.

  53. 53
    BirdsofpreyRcool Says:

    KOG — seems like you could get a 10% bounce-back there without a lot of effort. 10% can make a person’s entire year, sometimes. sheesh.

  54. 54
    zman Says:

    BOP – you saw the circuit breakers for individual stocks will be set at 10%? I would guess that the shorts will watch all the little stocks this happens to on a weekly basis and attack them when they reopen. Law of unintended consequences.

  55. 55
    BirdsofpreyRcool Says:

    OVERVIEW

    Equities tried to bounce at the open but came back for sale, extending the move lower that we have been seeing for most of last week (ex out Mon’s massive short-covering rally). For a change, the big focus isn’t so much on the situation in Europe (although this remains a concern), but instead on the broader macro growth outlook (if anything, there is some talk today about an allocation into European equities, esp. big exporters like Daimer, as a play on the weaker euro; note that Europe went out flattish today, off its highs, but outperforming the US). Demand-levered commodity prices (copper, crude) continue to slump and are sending negative signals to investors – copper is off another 5% today and hitting multi-month lows (it broke under the 200day on Friday) while crude also slumps (breaking under $70 and also hitting new lows). Chinese equities were under considerable pressure overnight (off 5%), based in part on worries that growth in the country is slowing (see the Conference Board report out today as well as comments from Chinese officials indicating that exports are being impacted by the weak euro). On the US data/earnings front, there wasn’t a ton today, but what has hit the tape isn’t helping. The Empire Manufacturing Survey is the first eco data point for the month of May and it came in well below expectations (the reading is prompting headline like this – from Reuters – “Data hint US recovery pace is moderating”). LOW kicked off a busy week of retail earnings on a downbeat note as guidance came in a bit disappointing of the St. In addition to softening demand indications, US financials are one of the weakest groups today, off >1% (and off 11% from the mid-Apr peak). The Dodd bill is increasingly being a headwind for this group (the credit card amendment from Thurs night is refocusing investor attention on the fact that this bill could wind up being more neg. for the US financials than is generally thought). Rep Frank today noted in an interview that the current Dodd bill is tougher than what the House passed late last year and that the final bill would prob. mirror the Senate more than House. Meanwhile, in Europe, sov CDS spreads have been inching back out (although still remain well off the panic wides of a couple weeks ago) while the euro still hasn’t found a ton of support; investors are nervous about the region regardless of what happens (nation’s either won’t implement fiscal austerity plans needed to heal their budgets or they will cut too much and send economic growth plummeting).

    Color from the desk – trends a bit on the quiet side today; really a buyer strike that is impacting trading as much as aggressive selling. Larger long-onlys remain on the sidelines for the most part still. As we slice through Fri’s lows (1126) and then take out the 1120 level (which is being viewed as an important level from the May 6 sell-off), people are getting nervous about a potential repeat of a few weeks back (1110 being watched as a big level – this is where the sp500 closed on 5/7 prior to the European bailout announcement).

    Equity sectors: Energy is the worst space in the market, falling 2.5% as oil dives below $70 for the first time since in over six months. Leading the space lower are E&Ps and coal stocks, which are down 4-7% or more. Materials are the next worse space, falling over 2% on significant weakness in metals and fertilizers. Metals are off 5% or more as worries in China send their respective commodities sharply lower. Industrials are also off close to 2%, led lower by higher beta names as investors look to cut risk amid Euro and China worries. Financials are off 2% on weakness in insurers and regionals. Discretionary is off over 1.5%, but in line with the market on weakness in retailers. Tech is in line with the tape on weakness across the board. Healthcare is off around 1%, but outperforming as it is slightly a bid to safety although pharmaceuticals are notably lagging. Staples and telecoms are off just slightly, outperforming as investors dump high beta names in favor of the lower beta groups.

    Technicals – This pullback should hold Mon’s 1113-1122 bull gap, and the 1100 200 day MA. Short term resists at 1155-1165. Thurs failed just shy of the 1175-1189 “book profit” zone. Favor a Spring-Summer trading range between 1200-1240 resistance and 950-1000 support.

    Commodities: Crude Oil has fallen below $70 and is down ~2.65% as commodities are weak across the board. Natural Gas sold off sharply near the open after moving past $4.40, though is still up ~0.45%. Copper has plunged this morning, and is down ~6.5%. Gold has fluctuated, but is trading near it lows around $1126/$1127.

    FX: USD (DXY) has come off its lows is trading close to $86.50, up almost ~0.5%. The dollar has rallied off its lows vs. the euro and is up ~0.3% vs. the Euro. The dollar gave back some of its overnight gains vs. the Pound – but has rallied a bit as stocks pull back midday. . The dollar and euro have recently sold off vs. the Yen, and is down ~0.3%.

    Corp. Credit: Corp Credit weak (similar to stocks); IG out >4bp on the day while HY is down ¾ of a point.

    Treasuries: The 2s have rallied off their morning lows and are yielding 77bps. The 10s have also moved a bit higher entering the afternoon – they are yielding 345bps. The 2-10 spread has flattened since last week to yield 265 bps.

    Europe : Europe is mostly flat this morning, with virtually all indices outperforming the S&P500. The Euro Stoxx 50 is being led by the historically defensive telecom, which is also one of the two sectors in the S&P to be positive. The Greek ASE is the weakest index, with Oil & Gas and Telecom each down >2.5%. The Swedish OMX has posted the best gain; best performing stocks include: Ericsson, Electrolux, and Nordea Bank. The French CAC is the weakest index (roughly in line with the S&P 500); weakest stocks include: Vallourec, Lafarge, and Alstom.

  56. 56
    AAA Says:

    re 54, stocks will be magnetized to the breaker price. If you’re holding a stock and it’s heading for limit down, you will be in a panic to get out.

  57. 57
    baylor3217 Says:

    Is there a case for averaging down on exxi here?

  58. 58
    zman Says:

    re 56 – agreed.

    re 57. I’m waiting for them to stop falling and trade sideways. End of month is the drilling permit moratorium end which could prove to be catalytic for the offshore players. Unless D.C. needs more time to review.

    I’ll have the mid cap E&P orange charts out tomorrow: PXP, KWK, DNR, FST, XCO, CLR, PXD, NFX, HK, RRC, XEC.

  59. 59
    BirdsofpreyRcool Says:

    E21 — the VP CIO/CAO thought so. He locking in his basis price on some stock options he exercised. That is something you do, when you are anticipating setting up for long-term capital gains. So, I would think yes. But that is for shares you think you can hold for a year.

    Guess the near-term risk is that E21’s lower-risk, infill drilling schedule is pushed back a bid, on MMS permitting delays. That is a real “risk,” but it is not a fact, yet. I know that E21 is trying to get all their wells permitted through FY2011 right now. Would like to see a PR if/when they get that done. That would calm some of this near-term worry. But “govt risk” is a very real risk… and “energy” is just the latest sector that has caught the attention of the GGG.

  60. 60
    BirdsofpreyRcool Says:

    [few typos in 59… but you get the point]

  61. 61
    BirdsofpreyRcool Says:

    The permitting moratorium is only for deepwater wells right now, as I understand it. Am I missing something here, z?

  62. 62
    zman Says:

    BOP – I thought it was for all Gulf drilling, but that’s an assumption on my part, will see if I can pin down.

  63. 63
    BirdsofpreyRcool Says:

    Commentary from Professor Siegel from last Friday…

    http://www.wisdomtree.com/library/pdf/siegelcommentary/Siegel_Weekly_Commentary_05_17_2010.pdf

  64. 64
    zman Says:

    BOP – From what I can tell, it applies to everything that’s not state waters, so everything past 3 miles from shore.

  65. 65
    BirdsofpreyRcool Says:

    TPH saying “only new deepwater” ’til May 28th… but, will ask around a bit more. Thanks.

    Confusion reigns.

  66. 66
    tomdavis12 Says:

    Z: I am sending you a 37 page report from MS that was put out today specifically about the offshore gov’t freeze. I will not get to read til this evening. If you do please share.

  67. 67
    zman Says:

    BOP – this is because only the government gets to “demand immediate clarification”, not the rest of us.

  68. 68
    zman Says:

    Homebuilder confidence index at highest level since August 2007.

  69. 69
    BirdsofpreyRcool Says:

    HERO — well…. the fact that this stock is down over 30% since the Macondo blow out tells me that investors think everything in the GoM is frozen right now. HERO doesn’t have a deepwater fleet, mainly shelf and transition zone equipment. So, whether it’s true or not, the mrkt clearly beleives that all permitting in the GoM has been stopped.

    This piles on more financial distress on Gulf Coast cities already dealing with lost revenues from fishing and tourism. Irrespective of the fact that thousands and thousands of wells have been drilled on the shelf… and you have seen more oil spilled from bilge pumps on oceanliners, than from shelf rigs. Washington…. sheesh.

  70. 70
    zman Says:

    Re the offshore drilling, the report talks about jack up exposure. So that means Shelf and the floaters in the deepwater.

  71. 71
    zman Says:

    “Washington…. sheesh” ~ you said a mouthful sister.

  72. 72
    zman Says:

    Crude just following the S&P around by the tail. Down $1.20 at $70.40, well off the lows and above key seventy dollar psychological support. It feels bounce-worthy in here.

  73. 73
    zman Says:

    I’ll have the small cap Orange Charts out on Wednesday for:

    GMXR, PQ, GDP, ROSE, BBG
    CRK, BRY, WLL, SD, SM, SFY, EXXI

  74. 74
    ram Says:

    Are you going to create Orange Charts for the micro caps?

  75. 75
    zman Says:

    Maybe a few of them we talk about frequently.

  76. 76
    ram Says:

    Thank you.

  77. 77
    zman Says:

    Nicky – agree with your comment that you’d like to see the lows be hit during regular session hours. We did that now. Market starting to wake up a bit here post lunch.

  78. 78
    1520sbroad Says:

    #77 – I’d like to see us put in a low midday and then build into the close a bit. Thurs and Fri were both weak closes. NIce to see nat gas green again.

  79. 79
    zman Says:

    1520 – hear ya on that. I’m not normally so concerned about the day to day trading levels but it’s expiry weak and we’ve been down on the big indexes something like 10 of the last 12 sessions.

  80. 80
    1520sbroad Says:

    #79 – my thoughts exactly. I’d like to see the water find it’s own level here as we head to friday. Feels very buyers strikish.

  81. 81
    zman Says:

    Crude closing just north of $70.

  82. 82
    1520sbroad Says:

    JB – any thoughts on the first chart in your list – S&P Energy bullish percent – at the uptrend line, we haven’t see this level in quite a while.

  83. 83
    milepost_43 Says:

    TGA updated May presentation…worth a look…am very long Sept calls……..

    http://www.trans-globe.com/investors/presentations-and-events/documents/May2010CorporatePresentation.pdf

    Focused on Egypt and Yemen
    Combined 7 international blocks with 5.0 million acres
    Low-risk production growth plus high-impact
    exploration
    Prospect size: 5-50 million barrels
    2010 plan
    Up to 37 wells (up to 24 in Egypt)
    Exploration/Development/EOR projects
    Capital spending (2010: $63.0 million) funded
    entirely with cash flow and working capital:
    fiscal prudence

    37 wells: 10 exploration, 27 development
    Development budget of $43.0 MM targeting 3,000 Bopd
    of new production, 8.7 MMBo of 2P reserve additions
    Exploration budget of $20.0 MM will test 87 million
    barrels gross or 37 million net (unrisked rec. mean case)
    Exploration COS ranges from 10% to 25%

  84. 84
    1520sbroad Says:

    Tiny ESPH (possible frac water cleanup story) should put out their 10-Q after the close. I have followed them and will be reading carefully. They are barely a single digit midgit. I have a toe in the water.

  85. 85
    zman Says:

    Don’t call it a comeback but 1520’s market plan is working. Market for S&P and for crude sticking with Nicky’s comments.

  86. 86
    Jerome Blank Says:

    RE: #82,…1520, $bpener, the update is calculated end of day, but it seems the trendline should hold…

  87. 87
    bill Says:

    drybulk report

    http://shipping.capitallink.com/shipping_weekly_review/market_commentary.html?senddt=2010-19

  88. 88
    zman Says:

    Thanks Bill. Rates still ticking up nicely in that space. Someone is not anticipating a global slow down just going by the rates.

  89. 89
    dij Says:

    Is this of any import?

    May 17 (Reuters) – EOG Resources Inc (EOG:…) on Monday
    sold $1 billion of senior unsecured notes in two parts, said
    IFR, a Thomson Reuters service.
    Barclays, JP Morgan and UBS were the active bookrunning
    managers for the sale. Wells Fargo Securities was the passive
    bookrunner for the sale.
    BORROWER: EOG RESOURCES INC (EOG:…)
    TRANCHE 1
    AMT $500 MLN COUPON 2.95 PCT MATURITY 6/1/2015
    TYPE SR NOTES ISS PRICE 99.795 FIRST PAY 12/1/2010

  90. 90
    zman Says:

    dij – sounds like a debt swap, will look. Can’t believe it would be simply additive to the balance sheet.

  91. 91
    BirdsofpreyRcool Says:

    dij — it is important in that it shows how easily EOG can place debt. That was announced this moring…. and completed this afternoon. Good spreads too. 5-yr at T+80 and 10-yr at T+95. EOG is pretty highly-rated, tho, at A3/A-, and has almost $26B in equity market cap… so it’s nice to see that they didn’t have any problem, placing debt on a volatile day.

  92. 92
    dij Says:

    Thank you, both experts. It came across the fido automatic news feed.

  93. 93
    BirdsofpreyRcool Says:

    EOG doesn’t have any near-term maturities of any size… and only about $2.8B of total debt outstanding… and nothing drawn under their $1B revolver. So, perhaps it’s to put money into their pocket as they go shopping for oily properties.

  94. 94
    BirdsofpreyRcool Says:

    Almost got my 10% swing on KOG today. But, it wasn’t much fun.

  95. 95
    zman Says:

    savedbythebellbeerthirty

  96. 96
    zman Says:

    re 93. Odd. $1B is big for them. They are not big acquirors, last deal I recall was about $100mm, they prefer to lease cheap acreage and have repeated commented against M&A.

  97. 97
    choices Says:

    This mkt appears to be in a distribution mode, weak all day, and then gunning it into the close.

  98. 98
    Hoss Says:

    Happening now, On CSPAN or internet via link below – Lamar McKay of BP

    United States Department of Homeland Security
    Testimony before the United States Senate Committee on Homeland Security and Governmental Affairs
    on “Gulf Coast Catastrophe: Assessing the Nation’s Response to the Deepwater Horizon Oil Spill”

    http://hsgac.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=393fed6e-f565-4964-a0c7-a2b7a1728f4c

  99. 99
    BirdsofpreyRcool Says:

    Under SEC law, they would have to say if they had any immediate plans for the money. But, yes… given that EOG only has $2.8B of total debt, an available revolver, AND a commercial paper program (backed by the revolver, i’m sure), it’s interesting that they chose to issue here. Must think combo of 1) attractive borrowing rates, locked in for 5 and 10 yrs, and 2) some tasty prospects down the road. Or, 3… who wants to be caught in another CREDIT CRUNCH. This world is a wild and wooly place… don’t think we are headed back to The Abyss… but, not a bad idea to place some reserve cash on the ol’ Balance Sheet.

  100. 100
    zman Says:

    Thanks Hoss, watching now.

  101. 101
    dij Says:

    I am ony repeating this as it was of some interst, and I cut some of it off. Including all the details:

    NEW YORK (Dow Jones)– EOG Resources Inc. (EOG:…) has priced a $1 billion offering of senior unsecured debt in two parts via active bookrunners UBS Securities, Barclays and JP Morgan on Monday. Available terms are as follows:
    Amount: $500 million
    Maturity: June 1, 2015
    Coupon: 2.95%
    Issue Price: 99.795
    Spread: 80 basis points over Treasurys
    Call: Make whole call at Tsys +15 basis points
    Settlement: May xx, 2010 (flat)
    Debt Ratings: A3 (Moody’s)
    A- (S&P)

    Amount: $500 million
    Maturity: June 1, 2020
    Coupon: 4.40%
    Issue Price: 99.743
    Spread: 95 basis points over Treasurys
    Call: Make whole call at Tsys +20 basis points
    Settlement: May xx, 2010 (flat)
    Debt Ratings: A3 (Moody’s)
    A- (S&P)

  102. 102
    zman Says:

    Lyondell refiner fire.

    http://news.yahoo.com/s/nm/20100517/us_nm/us_refinery_operation_lyondell_pasadena

  103. 103
    zman Says:

    AEZ filed Q.

  104. 104
    bill Says:

    comrade Chavez

    http://www.tradewinds.no/firstpage/article559663.ece

  105. 105
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    Euro-Rail Pass.

    Not surprisingly, the U.S. Equity market commenced the week in the same fashion that last week ended, taking marching orders from the Euro. Overnight, the Euro’s descent to 4 year lows versus the Dollar kept U.S. investors tentative, and the early jitters meant sell buttons still had hair triggers. Yet again, one only needs to monitor the intraday trading between the Dollar Index and S&P 500 futures and it paints a picture of financial markets on auto pilot (see chart below). Lately, the inverse relationship between the Dollar index and asset prices appears just as strong as it ever was during the previous two years.

    The Euro’s ability to find a level today was a rare positive that developed in the currency. Between 8 am and noon, the Euro registered an intraday higher high and higher low, something that has not occurred since the EU launched its “Shock & Awe” offensive. The fact that the currency found itself strengthening back towards the intraday highs as U.S. equity markets drew to a close provided an opportunity for Equity market buyers to step in and wager that the overnight lows in the currency may hold over the near term.

    The S&P 500 settled just above 1135 level, this is the top of range which began to get carved out during Friday’s session. For the second consecutive session, that level has come into play as resistance and as such, it is shaping up to be important going forward. Also for the second consecutive session, the S&P 500 rallied approximately 1% in the final 30-40 minutes of trading.

    It is interesting to note that as of today’s close, since the EU’s “Shock & Awe” intervention, the Stoxx 600 in Europe is up 4.6%, while the S&P 500 is only up 2.35%. For an apples to apples comparison, the Euro currency has lost 2.8%, bringing the Dollar denominated return for the Stoxx 600 to 1.8%. The CAC 40 in France has similar Dollar denominated returns of 1.6%, while returns on Italy’s MIB are 2.4%. The FTSE in the U.K. and the Ibex in Spain are both flattish in Dollar terms and Athens is down 2.5%. The Dollar denominated performance winner is also the country viewed as the largest beneficiary of the weakened Euro, Germany, which is up 3.3%. Obviously, U.S. markets were outperforming by a healthy margin prior to the EU announcement, but major intervention provides an interesting benchmark from which to measure.

    The EU announced that the first €20 Billion of the Greek aid package is being transferred today. Successful delivery of the funds and prevention of their disappearance through Greek accounting will likely serve as an important first step in a long process of EU policymakers rebuilding credibility. We expect volatility to begin dissipating. Should this occur, then going forward, the key for U.S. Equities will be to illustrate that individual stocks can begin charting their own course as opposed to chasing currency markets.

  106. 106
    zman Says:

    re 104. We couldn’t come to an amicable agreement so we just stole them.

    re 105. Thanks. Had noticed the 1,135 level too.

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