11
Jun

T.G.I.F.

Print Friendly, PDF & Email

 

Market Sentiment Watch:  Bored to death feeling in the market but bored green is more acceptable than bored red, at least to me, given that I'm long at the moment. Retail sales absolutely stunk this morning, coming in at -1.2% versus an expectation of +0.2%). Futures traded off immediately from flat pre release. We get consumer sentiment at 10 am EST (F= 74) . In energy land things remain slow but I do expect a pick up in news flow next week. With only 1 week to June expiry I've also included a Max Pain graph in the stuff section including many of our most trafficked names.  I'll have mini reports out on TGA and a royalty trust next week.



"Kick Ass" Watch

  • BP rallied 13% yesterday on speculation that bankruptcy speculation is premature and word that the U.K. will offer BP assistance in cleaning up the Gulf Coast.
  • Bowing to calls of "why hasn't the president talked to the CEO of BP yet???!!!", President Obama is now set to meet with BP Chairman Svanberg on June 16th, the day before BP CEO Hayward testifies before congress.
  • President Obama is set to talk with U.K. Prime Minister Cameron about the situation tomorrow morning. 
  • U.S.'s new estimate of flow: up to 40,000 bopd.
  • This estimate would put oil in the gulf at around 2 mm barrels.
  • The EPA can impose fines of 4,300 per barrel so that's $8.6 B right there.
  • BP now estimates the cost of cleanup and capping the well at $3 to $6 B. While this does not include fines and economic recompense, one has to assume this is a low ball estimate and will rise in the near future given the company's recent estimates.
  • Mexico also expects to sue BP and Co. when oil washes up on their shores late this year.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review
  4. Stuff We Care About Today - Max Pain, SSN update (please read all of it)
  5. Odds & Ends

Holdings Watch

ZCAT (Zman Catalyst portfolio)

  • $6,000
  • 88% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $6,700
  • 12% Cash
  • Yesterday’s Trades: None

 

Commodity Watch

Crude oil rallied $1.10 to close at $75.48 yesterday, closing at the low end of the mid May gap down ... it's first close over $75 in 3 weeks. This morning crude is trading off a dollar.

  • Nigeria Watch: New name to watch for here, Ateke Tom, is threatening to abandon the amnesty program "along with hundreds of followers" if the Nigerian government doesn't provide jobs and training soon. Tom and his rebels are unhappy over 8 months of delays with the new government following their surrender of weapons. Sounds like if there is no progress over the next 2 to 4 weeks the Delta could plunge back into chaos.

Natural gas eased $0.03 to close at $4.65 yesterday after the EIA reported a larger than expected injection to storage (see below). For the last couple of weeks, gas prices have seemed to have been buoyed by a teetering rig count so today's number may prove ito be more influential than usual. This morning gas is trading up slightly.

  • Tropics Watch: Nothing.

Natural Gas Storage Review


ZComments: Higher than I expected due to my failure to include the Memorial day holiday in my calculations. After that consideration, the delta would have been rounding error. The surplus to year ago levels has almost vanished and likely will vanish next week given this week's heat wave and last year's larger than average injection.


 

Stuff We Care About Today

Max Pain - 1 week to go in the June strikes. A look at a few of our most trafficked names.

 

SSN Operations Update

  • Gene #1-22H - 60 day average rate: 668 BOEpd (83% oil) with a current rate of 400 bopd. This is pretty good rate.
  • Gary #1-24 H (Bakken #3):

    • at TD, with a 5,647' lateral (kind of a middle of road length lateral these days in the Bakken).
    • will have 20 frac stages, up from 15 stages used on last well (the Gene #1-22H described above) which IP'd at 2,936 BOEpd once some mechanical difficulties were overcome.
    • Frac set for later half of July or early August, probably due to difficulty lining up equipment.
  • Next up, the Rodney 1-14H, to spud in August
  • No comments on their Niobrara plans.
  • Yesterday SSN announced they were lowering the price of their stock purchase plan (as the market has fallen and demand must not be stellar) and extending the deadline for deciding to take shares at the new offer price of $0.577 from June 10 to June 30th. Frankly I am not surprised given the damage the month of May wrought in the energy sector, the old deal price of $0.639 seemed less than generous.  I continue to hold shares in the ZLT but have a full boat at the moment so am unlikely to take this latest deal.
  • This morning SSN has a 2010 exit rate of 6,000 bopd net from their North Stockyard Field Bakken wells. Given that they have only six sections in the play, are drilling and completing the wells on a rather slow schedule and have less than 50% of the wells drilled to date, I find this number very hard to believe. Unless they complete two to three wells at in in short order around year and and we're talking about IPs over a very short period this claim makes little sense and if that's the case it is simply misleading. With all of the wells BEXP completes, and they are bigger, that company is just getting to this level of production. This is one of the things that you say when you are trying to get your offering done and if the stock pops on this, I'll be forced to take some profits. Pretty outlandish violation of the "under promise and over deliver" rule. I'll continue to hold some shares on the potential the Niobrara offers. 

Other Stuff:

  • CLNE - Another deal with Verizon on the tape, converting 501 Vans to natural gas. Seeing more and more of these deals.

Odds & Ends

Analyst Watch:

  •  Nada

Interesting Reading Watch:

 

 

114 Responses to “T.G.I.F.”

  1. 1
    scoop006 Says:

    Z You’re still a day behind. Today is T.G.I.F. June 11

  2. 2
    zman Says:

    Thanks Scoop, didn’t know I was off. My host monkeyed with something and set the clock off. Will look into it.

  3. 3
    milepost_43 Says:

    TGIF comment Retail sales absolutely stunk this morning,

    Watch out for ECRI WLI out noonish…believe the BIG BOYZ get it earlier….Another poor week in WLI and we could have a change in stance by ECRI.

    SEATTLE (MarketWatch) — The most prescient statistical guide to the health of the U.S. economy is set to turn negative on Friday for the first time since early 2009, an event that is going to spook super-bulls and give comfort to super-bears.
    http://www.marketwatch.com/story/economic-predictor-set-to-turn-negative-2010-06-10?dist=countdown

  4. 4
    elduque Says:

    Baltic continues to slide

  5. 5
    REgards Says:

    test….

  6. 6
    zman Says:

    We see you Regards … we have quite a few people on vacation today.

  7. 7
    zman Says:

    Not much of a swoon on the open, especially for the gassier names. HK continues to forge ahead.

    I have an email in with Nicky for some technical comments on the S&P.

    BP spill group positive on the open but not as exuberant as yesterday given the upped figures on the magnitude of the flow. I plan to hold my BP calls through Monday morning.

  8. 8
    Nicky Says:

    Good morning all. Levels I am watching on the pullback are around the 1070 area give or take a couple of points in each direction.

  9. 9
    zman Says:

    JB – voted

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280&cmd=show%5Bs190963945%5D&disp=P

    Thanks for the updated charts. HK looks like it wants to break on out. HAL still filling the gap.

  10. 10
    zman Says:

    Thanks Nicky, oil looking constructive off the morning dip. Tensions with Iran set to rise next week as EU and congress plan to add their own sanctions to the watered down U.N. plus Nigeria is back in the picture.

  11. 11
    zman Says:

    BEXP back to flat off opening oil related swoon. Starting to get more positive there again… good chance of well update next 2 weeks, could be next week.

  12. 12
    zman Says:

    Consumer sentiment 75.5 vs 74 expected. Best since Jan ’08.

  13. 13
    Jerome Blank Says:

    RE: #9, Zman, thank you much for the vote…

    HK…interesting bullish ascending tringle on the 30 min, testing topside trendline resistance for a third time…updated 30 min chart

  14. 14
    zman Says:

    JB – thanks much for the dotted blue lines, helpful.

  15. 15
    choices Says:

    TED not looking positive at all,

    http://stockcharts.com/h-sc/ui?s=$TED&p=D&yr=2&mn=0&dy=0&id=p35687854650&a=192312011&listNum=16&listNum=16

    JNK, HYG off a tad today, credit markets (I’m learning from BOP) indicative of very nervous equity mkt (prob in stating the obvious category)

  16. 16
    zman Says:

    Thanks for filling in for her Choices.

    Bakkens continue to look constructive, especially WLL and little AEZ.

    I think BEXP plays catchup starting next week and into month end. Opening a third area (in Montana) and to a lessor extent, getting a successful TFS test in Rough Rider is key to this stock taking out its Spring highs.

  17. 17
    jat Says:

    What’s the thinking on gas for the next few weeks Z? Trade is definitely already on with gassys outperforming last two weeks.

  18. 18
    choices Says:

    Thanks for updates, JB-voted as usual.

  19. 19
    zman Says:

    As to Montana working, don’t know yet, rumors are that EOG’s well is good. On the TFS, given the success of others in the general vicinity I don’t doubt they will be able to talk about multi hundreds of new drilling locations at Rough Rider.

  20. 20
    Nicky Says:

    If I am honest this is now looking more bullish than bearish. Wonder if the move was made in the futures and its done.

  21. 21
    Jerome Blank Says:

    #18 choices, thank you…I appreciate your votes…

  22. 22
    zman Says:

    Jat – my sense is gas consolidates in the $4.50 to $4.75 level on the front month with the strip holding $5ish. Have already seen a couple of early tropical waves around Honduras giving the possibility of an early arrival to the storm season so that’s probably a little bit of support as well as unlike later in the season when the storms strengthen as they migrate across the Atlantic, these could be pop up storms.

  23. 23
    zman Says:

    Thanks Nicky, was wondering same. Oil being led around by the S&P. Dollar coming off from post retail sales highs.

  24. 24
    ram Says:

    What’s with the storm talk?

  25. 25
    zman Says:

    Ram – It’s that time of year.

  26. 26
    Nicky Says:

    an alternative is that the early drop we saw this morning was a wave iv and we are now working on v up which may complete around 1092

  27. 27
    zman Says:

    re 25. Actually it’s very early in the season to have anything actually develop but I’m watching the Central American tropics and seeing activity that’s a bit ahead early by my eye. Obviously we hope for a season with no major storms, much like last year, but that increasingly does not look likely. That’s supportive of natural gas.

    And for BP it could be what kills their dividend and sandbags their balance sheet.

  28. 28
    zman Says:

    BP – Coastguard saying containment processing capacity will hit 38,000 bopd by the end of June. That would be 18,000 from the Enterprise Drillship and another 20,000 from an as of yet unnamed FPSO..

    Separately, BP says they plan to siphon 50,000 bopd from the well. That’s an interesting trick for a well that they thought was only producing 5,000 bopd.

  29. 29
    zman Says:

    Ram – are you near the coast? Got oil on your sand yet?

  30. 30
    scoop006 Says:

    Z- In your opinion what effect would BP’s cutting/killing dividend have on the stock price. TY

  31. 31
    ram Says:

    Difficult to defend BP when numbers don’t add up. I do find it interesting that the UK is coming to BP’s aid. If X0M did something similar to any other country, we would throw X0M under a Mack truck,run over it several times and throw out what’s left in the trash.

  32. 32
    zman Says:

    Scoop – That is the B$ ? I think they will keep the current one, and then will look at having the upcoming ones. The market has essentially already discounted the loss of the dividend so cutting the divie in half just gets their yield back to normal. I don’t think, given their base of investors that suspending it entirely is in the offing but it could be and they have time to decide (I think June 27th). I think it would be prudent to cut it by half to bank cash because they are going to need it. I would also note that if they are subject to $40 billion in costs or some larger number, that’s still not nearly the end of BP as it would be a cash drain over 20 years and not an immediate cash call. Cutting the dividend could result in a loss of certain large shareholders which is would make capital raises more difficult. One option is for them to escrow the dividends (so you may get the dividend of the past some time in the future when the costs of the cleanup and economic recompense are better understood).

    So back to what happens to the stock. If they keep it I see the stock rising further. If they cut it by half I’d think it also goes up. If they eliminate it including this one then the name will have a pretty darn rough day or two but again, I think a halving of the name has taken the loss of the dividend into account.

  33. 33
    zman Says:

    31 – Ram I agree with you on all points.

    BP is hard to defend. Based on a track record of cutting corners and of obviously low balling the scope of this problem.

    I’d add that the U.S. government is also culpable here to a high degree. They sold the lease for consideration in the millions. They reap royalties and taxes for production. They approved an obviously bogus spill plan.

  34. 34
    zman Says:

    And as to your XOM comment, the U.S. would be in serious talks to nationalize their assets by now.

  35. 35
    ram Says:

    Unfortunately I am still in Nowhere Northern Kentucky. Should be back in Florida this weekend. I do plan on staying at different Gulf Coast spots this summer to support the local economy.

  36. 36
    choices Says:

    Mayor of Orange Beach, AL on news last eve-very angry, oil on beaches, in backwater bays, booms not available or not working-hard to watch.

  37. 37
    zman Says:

    I understand where I was at spring break, Gulf Shores, smells like an airport tarmac. Very unfortunate. One real estate company said they expect Gulf Coast beach front property to be down 10% for 3 years. I think it’s pretty early to be able to gauge that.

  38. 38
    Jerome Blank Says:

    UNG…could interpret the price action on the daily as an interesting bull flag forming at the 100 day SMA, the long term trendline and 100 SMA are beginning to act as support now, so far, UNG is not rolling over, as it has quickly done in the past in this resistance zone, a breakout of this consolidation could target the 200 day above at $9.25, if not holding long term, stops are a bit challenging, the problem is that the usual area for stops, say below the consolidation low at $7.89 falls right into major support, so you could stop out just to see a big reversal higher, to avoid being stopped out prematurely, suggest postion size for stops under the 50 day SMA…

  39. 39
    scoop006 Says:

    Re #32 Thanks for an insightful answer. If they do not defend the dividend I think the stock sees $25. JMHO

  40. 40
    choices Says:

    slow day comment-CEO of DO on Kudlow last eve-very solid (IMO)comments about policy, results of spill-obviously, adamently opposed to 6 mo moritorium-says one of their rigs is already heading for Africa-cannot afford down time, but horribly for jobs, local economies.

  41. 41
    pwdrhound Says:

    I may have missed mention of this, but what is the cause for the move in APC? I didn’t see any obvious moves? What do you think of taking a stock position at this point?

  42. 42
    zman Says:

    Thanks choices. Sounds to me like the moratorium will be lifted before 6 months is out.

  43. 43
    zman Says:

    Group / market just ran into a brick wall before lunch, at Nicky’s level.

    AEZ continuing to drift higher, it’s quiet so I’ll beat a dead horse here and say that I expect these guys to be a mini BEXP over the course of this year in terms of catalyst driven action.

  44. 44
    Popeye Says:

    It’s time to bring in Kevin Costner and Chuck Norris to fix this thing.

  45. 45
    zman Says:

    Re 41.

    APC is moving in tandem with BP. News would be the U.K. coming to the aid of BP, should learn much more about that tomorrow. I’m frankly still up in the air about short or long term positions in APC. Great management, great assets. Less ability to financially deal with this spill if they are roped in with BP to pay all legitimate costs. I need to go back and listen to the most recent call to see if they addressed the possibility that they will be in on costs beyond containment and cleanup. I have not touched it yet but if they are off the hook for economic recompense then I think it is a steal down here.

  46. 46
    zman Says:

    Dollar index rebounding, chart is the inverse of the S&P minute chart.

    Oil tracking S&P tick for tick so there you have it.

  47. 47
    zman Says:

    Re 44. Probably ought to add the A-team and McGruber in their as well.

  48. 48
    elduque Says:

    TED spread continues to widen

  49. 49
    zman Says:

    BP holding at $34, rebounding at any uptick in the S&P. So if the S&P bounces I would expect to see new highs.

  50. 50
    Dman Says:

    Z – according to catalyst watch you expect something in late June from AEZ?

  51. 51
    Geno Says:

    Use the “Geno”, need I say anything more?

  52. 52
    skimo Says:

    Did anyone see the comment thatthe administration changed a draft after approved by “experts” http://www.foxnews.com/politics/2010/06/11/white-house-rejects-claim-skewed-expert-opinion-justify-drilling-ban/

  53. 53
    AAA Says:

    Re #45, my (limited) understanding is that APC is liable for expenses pro rata to its working interest. It is not at all obvious to me however that they would be liable for the expenses of BP’s arguably gross negligence. Obviously I’m not an expert in oil and gas law, and I would expect this issue to have been hashed out in the past. It seems odd that there hasn’t been more commentary on it.

  54. 54
    zman Says:

    Ski – yes, saw it 2 days ago in Upstream. Pretty slippery. The experts told the Admin to stop saying they were in favor of the moratorium because they are not.

    Dman – yes, their first long lateral Bakken completion. They are in good real estate for Bakken completions and by all rights this should be their biggest (out of 3) completion to date.

  55. 55
    Dman Says:

    HAL gap filled

  56. 56
    Dman Says:

    WHX marches to it’s own tune, doesn’t it? Almost like it trades on a 1 or 2 day delay or something.

  57. 57
    zman Says:

    Little selloff in BP from the days highs as Pelosi comes out saying BP should kill their dividend.

  58. 58
    Geno Says:

    Orange Beach no oil yesterday, some the day before looks like it is back today with more expected. Talked to a local business owner who said there are massive cancellations. They say the press is killing them. They are done for.

  59. 59
    pwdrhound Says:

    Re: 45…. thanks for the quick summary. Will continue to follow them.

  60. 60
    zman Says:

    Dman – it trades more closely with the yield names than regular energy.

    Out of EVEP, LINE, MVO, PSE, SJT, VNR, WHX all green except LINE.

  61. 61
    zman Says:

    re 58. That stinks.

    Pelosi also saying BP should be subject to unlimited liability with or without proof negligence.

  62. 62
    Geno Says:

    Need to repeal the jones act and get everything available wolrdwide over here before the first hurricane

  63. 63
    Paul in Kansas City Says:

    BP has significant international assets and I find it hard to believe that they can be forced into so easily liquidating them to appease US interests. BP had $54 Billion in revenue in non US sources (US $26 Billion per Q1 Group results) and can you imagine foreign governments bending over because of Congress and Administration outrage? Now how this shakes out to provide investors a way to valeu shares is difficult to say the least.

  64. 64
    choices Says:

    That is the problem I see with APC-iy trades with BP, its share of liability not defined, a cloud of litigation will hang over the group for a long time, and worst of all, whenever a politico feels like pandering, which is almost always, their statements have an immediate effect on stk prices, BP and APC, more so than HAL and RIG.

  65. 65
    dij Says:

    On the MP watch, 108 is it for SPY.

  66. 66
    zman Says:

    Big BP investor SLI says fully supports CEO Hayward, says it believes BP doing its utmost to contain spill.

    Interesting list of Top 10 holders:
    http://finance.yahoo.com/q/mh?s=BP+Major+Holders

  67. 67
    zman Says:

    Choices – I’m going to be transferring my play here soon more to HAL and adding CAM again soon. I agree they are volatile and I went in because I thought this was overdone and the possibility of BK was remote.

  68. 68
    dij Says:

    #65, more. That 108 number would militate against a precipitous drop in the next five days. Further!, I would wager that the actual closing for EOG next week will be betweeen 105 and 110.

  69. 69
    haluansinua5555 Says:

    hi z
    where do u post ur trades like evep line mvo pse vnr whx the trades whic u r out

  70. 70
    zman Says:

    dij – I wonder if that Max Pain on BP is telling or if its just the usual on a stock that has moved so quickly.

    Hal5555 – trades are posted in comments here when they occur and in email. Then they are listed on the ZIM, ZCAT, ZLT page at upper left. In the energy yield space, I currently hold WHX and LINE in the ZLT (long term portfolio).

  71. 71
    Dman Says:

    The gassy trade is on all right. When CHK starts acting like a decent stock, something is up.

  72. 72
    jat Says:

    lol

  73. 73
    Wyoming Says:

    Don’t make this harder than it really is or appears to be:

    http://www.brainyquote.com/quotes/quotes/r/rahmemanue409199.html

  74. 74
    Nicky Says:

    Its possible we need to see another wave lower to complete this correction. If so I would be looking at 1073,1070,1067 for support.

  75. 75
    milepost_43 Says:

    #3 ECRI WLI
    MarketCurrents: 10:47 AM The ECRI’s Leading Index turns negative for the first time since early 2009, falling to an annualized -3.5% – though the business-cycle watchers say that just means growth is going to slow noticeably. The steep decline in the index suggests GDP growth has peaked for this cycle, not that growth won’t continue, chief Lakshman Achuthan says.The Institute’s Lakshman Achuthan, however, remarked that “While the plunge in WLI growth to a one-year low assures a significant slowing in U.S. economic growth in the coming months, the recent weakness has not lasted long enough to signal a new recession threat.”

    I would add YET!!

    WLI now at 123.2 was there early Aug 2009 with S&P 1000ish….

  76. 76
    zman Says:

    Pretty directionless at the moment, grabbing some coffee, back in 30.

  77. 77
    Nicky Says:

    1087 is pretty important here – above it and then 1089 and we could see lift off.

  78. 78
    choices Says:

    Legal discussion on Gulf Group FWIW:

    http://money.cnn.com/2010/06/11/news/companies/Parloff_legal_BP.fortune/index.htm?source=yahoo_quote

    APC has been remarkably silent which may be a good strategy-maybe not so good for its shareholders but at this point it may not be prudent to talk about its strategy.

  79. 79
    andy Says:

    nicky – about at 1087 – u get more bullish abov that or above 1089? thks

  80. 80
    Nicky Says:

    1087 is the 20 dma Andy and proving to be resistance and 1089 would be a new high. Either way I think we crack that level next week. Today is the day we may see weakness but not much so far, next week looks more bullish at least into the middle of the week.

  81. 81
    zman Says:

    London times says BP preparing to defer dividend.

  82. 82
    Bob Says:

    Not sure if this was posted previously. “Gasland” won the U.S. Documentary Special Jury Award this year at the Sundance Film Festival, and will be aired on HBO June 21. It documents how the fracing procedure is contaminating groundwater. The Director got interested when he was offered a $100,000 signing bonus from a driller for leasing his 20 acres in eastern PA. Says accidents happen so frequently that it is almost part of the process. The clip of the homeowner lighting the water coming out of his kitchen faucet is rather dramatic.

    Trailer:

    http://www.youtube.com/watch?v=dZe1AeH0Qz8

    PBS interview:

    http://www.pbs.org/now/shows/613/index.html

  83. 83
    scoop006 Says:

    HK – June $21P = 3K contracts

  84. 84
    zman Says:

    PBR probably gets a boost out of the moratorium. Cheaper rigs.

  85. 85
    zman Says:

    Re 83. That’s almost just a big bet against gas next week.

  86. 86
    elijahwc Says:

    PXD: Raymond James out today with their shameless theft of Z’s Catalyst List concept. They repeat the rumor that Reliance Indus will be PXD’s Eagle Ford JV Pntr.

    Z, do you have a copy of the report? If not I’ll forward it.

    Shameless just shameless folks over at RJF.

  87. 87
    zman Says:

    Eli – I don’t think I do have a copy. I saw an old one though and found it to be an inferior product.

  88. 88
    elijahwc Says:

    # 87 Then I’m sending the report your way so that you may contact them and aprise of the minimum hurdle rate for “Catalyst List Certification”.

  89. 89
    zman Says:

    Friday drift mode engaged. More people watching Uruguay V. France than this market.

  90. 90
    tomdavis12 Says:

    Z: BHI rig count up 21 to 1527.

  91. 91
    tomdavis12 Says:

    Z: Data just out that port activity on the West Coast up 25%. Bullish.

  92. 92
    VTZ Says:

    With world cup and summer holidays I would not be surprised if the markets were like this until post July long.

  93. 93
    zman Says:

    Thanks Tom – Gas didn’t even notice the small bump in gas rigs.

    Oil up 16 to 561 vs 183 YoY

    NG up 7 to 954 vs 685 YoY

  94. 94
    zman Says:

    Thanks again Tom

    V – I agree.

  95. 95
    Paul in Kansas City Says:

    does anyone feel nat gas gets put under pressure due to “rising rig count”?

  96. 96
    VTZ Says:

    I really don’t see gas sustainably above 5 for the foreseeable future with the exception of hurricanes.

  97. 97
    zman Says:

    V – agree again. I think we continue to be range bound. Heat and the threat of canes make the upside a little higher but otherwise, production remains at a record for this cycle onshore … we’re just not seeing the declines in the conventional gas and you have to think that some of the older thinking about the base decline of the conventional U.S. component, which is probably 80% of the gas, is much shallower than previously thought.

  98. 98
    zman Says:

    re 95 – I think gas gets pressured if we take out the very recent highs (a few weeks ago) any time soon. One thing the rig count is not capturing is the liquids rich drilling in places like the EFS and Granite Wash wet sections. That just looks like gas drilling to the rig count but in fact is going to be wetter. Of course, the gas component of those wells is still going to be higher than what you saw from a conventional wellbore just 3 years ago. Also, the horizontals continue to be drilled faster and faster so a better thing to look at than rig counts is miles of horizontal drilled. 2 years ago it was common for a Haynesville well to get down in 60 or 75 days. Now some are doing 25 days. TEXW probably could tell you exactly how fast they’re getting down. Same in the EFS with an even faster learning curve and the increased use of PDC bits. Was 45 days, now many at 18 days. So each rig is going to get that many more wells drilled per year.

  99. 99
    Jerome Blank Says:

    UNG, but the UNG daily chart sure starting to look interesting, forming flag doing what it needs to do , at least so far…

  100. 100
    Paul in Kansas City Says:

    great comments; thank you

  101. 101
    zman Says:

    I would bet the best source on the rig efficiency is Simmons, will dig about as I really should try to quantify it a little better but don’t have the surplus minions to tackle that job alone.

  102. 102
    bill Says:

    Iran is going to test the blockade and obama next week

    Im betting on Israel

  103. 103
    Pati Says:

    Nicky, you have been spot-on. Your voodoo is incredible. Thank you.

  104. 104
    scoop006 Says:

    #103 I concur, TY

  105. 105
    zman Says:

    re 102 and 103 agreed.

    BP not at best of levels of the day but still up 3%. BP calls bids at best levels of day. I think Obama heeds call to walk the middle road with U.K. tomorrow.

  106. 106
    Dman Says:

    When was there a road the O-man didn’t want to walk the middle?

    Funny thing is, that way you can get run over in two directions at once.

  107. 107
    zman Says:

    SP 1089

  108. 108
    zman Says:

    Strong close.

    Happy father’s day.

    Beerthirty.

  109. 109
    dij Says:

    Z:,

    I would not step into a BP prediction!!!!

    Where are we now with the spy move up and the terrible credit spreads?

  110. 110
    tomdavis12 Says:

    Z: Other than the relief drill for Aug. is there anything you have seen that BP is shooting for 100% containment?

  111. 111
    dij Says:

    #109 although, chart wise, 38 looks pretty good.

  112. 112
    john11 Says:

    Father’s day next week, but actually it should be everyday. Great weekend all.

  113. 113
    zman Says:

    John – woops, and I already have the kids on my breakfast for tomorrow.

  114. 114
    elijahwc Says:

    Interesting read borrowed from another location on gas pipeline infrastructure.

    Pipeline companies are now looking at reversing directions on pipelines initially intended to run west-to-east. This “backhaul shipping” may become more prominent as shale gas development continues in the east.

    http://oilprice.com/Energy/Natural-Gas/Great-Divide-Developing-in-U.S.-Natural-Gas.html

Leave a Reply

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

s2Member®