Thursday – Oil Review and Gas Inventory Preview

Print Friendly, PDF & Email



Market Sentiment Watch: Nervous, teetering around the 200 day average, sort of overbought feeling, especially given recent light volumes.

BP Situation Watch: What's different now.

  • $20 Billion Spill Claim Fund
    • Set aside in quarterly payments beginning in the 3rd quarter
      • 3Q = $3 billion
      • 4Q = $2 billion
      • Each quarter there after $1.25 B 
      • So you're looking at 4.5 years to fill the tank here.
    • To be adminstered by Ken Feinberg, the 911 and TARP guy
  • $10 Billion in Asset Sales:

    • $10 billion primarily upstream, non cored assets
  • Capex Cut $2 Billion For 2011:

    • 2011 spending target cut from $20 to $18 Billion
  • Suspension of Dividend:
    • for the next 3 quarters at least. That's about $2.5 Billion per quarter not going out the door.
  • Cash Flow: Normally between $7 and $8 billion per quarter. BP is saying they will generate cash flow of over $30 B this year.

  • Containment Update:
    • BP added another production line yesterday, via a tie in to the BOP.
  • Testimony: CEO Hayward speaks before the The House Energy and Commerce Subcommittee on Investigations and Oversight today. Stupak has vowed that Hayward will be "sliced and diced".
  • Nutshell: This removes a certain amount of suspense from the shares and could spark a rally in the shares which seem to have found the $30 level as support. My sense is that analysts who previously downgraded the shares will be retooling asset models with an eye towards an upgrade here. Here's my updated back of the envelope math:


Ecodata Watch:

  • Jobless claims came in at 472K vs 450K expected.
  • CPI came in at -0.2% vs 0.1% expected
  • We get Leading indicators and Philly Fed at 10 am EST.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. EIA Oil Storage Review
  4. EIA Natural Gas Preview
  5. Stuff We Care About Today - WIOWIO Part III, SWN Asset Sale and Capex Cut
  6. Odds & Ends

Holdings Watch

ZCAT (Zman Catalyst portfolio)

  • $6,000
  • 97% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $9,900
  • 60% Cash
  • Yesterday’s Trades:
    • HAL – Added (10) HAL July $28 Calls for $0.62 with the stock at $25.75. Same reasoning as yesterday. I will take profits/losses in both sets of the June calls in the near future.
    • HAL -  Sold the (10) HAL June $25 calls taken yesterday for $1.74, up 308%. Will be selling the $26 strikes shortly.


Commodity Watch

Crude oil rallied $0.73 to close at $77.67 yesterday after the EIA reported less than bullish inventory numbers but stronger than anticipated gasoline demand (see review below) and despite a small re-rally in the dollar. This morning crude is trading off $0.60 following the jobless claims figures.

Natural gas tumbled $0.21 to close at $4.98 yesterday rage after the tropical wave crossing the Atlantic was downgraded to a minimal chance of development (this prospect was what made me pull the trigger on my HK calls on Tuesday). My sense is that gas is going to be prone to higher than normal levels of volatility this summer given the size of the short position and the number of storms that are expected, coupled with the warmer than normal weather that is forecast.  This morning gas is trading up slightly

  • Tropics Watch: Nada

Natural Gas Preview

I'm looking for an 85 to 90 BCF injection.

  • It was much hotter than normal and year ago levels last week
  • Imports were roughly in line with the previous week at 7.7 Bcfgpd (with 1.2 Bcfgpd coming from LNG). This LNG number is off slightly from the prior week so we have not seen any rush to take advantage of the recent bump in U.S. prices yet. 
  • Last Week: 99 Bcf Injection
  • Last Year: 113 Bcf Injection
  • 5 Year Average: 81 Bcf Injection
  • 10 year Hi: 114 Bcf Injection
  • 10 year Low: 56 Bcf Injection

Street is at 90 BCF.


Oil Inventory Review

ZComments:  Stronger than expected gasoline demand yielded a better than expected inventory number and the erosion in the YoY numbers I was looking for. One near term bit of caution remains for crude at this juncture in the form of a continuation of the bloat in Cushing crude levels despite relatively high utilization from midwest refiners. Without even higher levels, I would expect volumes coming down from the Bakken to increase inventories further into record territory, which could put a negative bias on crude prices, even as overall crude inventories slip closer to average.  The EIA's revision to the weekly report has taken some getting used but contains more data before and I will be taking a look into some more region specific data when looking at refining segment in the Tuesday piece starting next week.






Stuff We Care About Today




NFX - Diversified Mid Cap E&P

  1. Management - proven group of guys as both explorationists and exploitantionists of things they acquire on the cheap. Conservative guys.
  2. Assets - Diversified set of mostly U.S. land based assets, with oil projects in the Deepwater U.S. and in Malaysia and offshore China.
  3. Both management and assets remind me of a smaller version of APC.
  4. Production mix is 71% natural gas but they have oily plays in the Bakken just starting to ramp and overseas that will continue to, which will result in a greater % of oil going forward.
  5. Balance Sheet: 42% debt to cap.
  6. Valuation:
  • P/CF

    • 2010 4.8x
    • 2011 4.7x


SWN - Low cost, predictable natural gas player

  • Management has taken the company from concept to major player, leader in the Fayetteville Shale of Arkansas expanding efforts/expertise into the Bossier shale of east Texas.
  • This is another name that generally trades at a premium to the group due to the homogeneous nature of its reserves and the predictability of running what amounts to a gas manufacturing play instead of a true E&P company. 
  • Production growth is stout and predictable:
    • 2010 up 32%, 2011 will likely be similar.

  • 2010 has seen the name under-perform due to weak natural gas prices and a deliberately thin hedge position that was set up to capture rising gas prices.
  • Valuation:

    • P/CF

      • 2010 9.4x
      • 2011 7.3x
    • Reserves: this is where they do look a touch expensive at a little over $4 / Mcfe but I think much of that is attributable again to the type of operation they're running, referenced above. There simply is not exploration risk in their core play.

Tomorrow: CHK and ROSE


SWN Sells East Texas Haynesville Assets, Cuts Capex to Match


Asset Sale:

  • $355 mm to XCO
    • 31 Bcfe
    • 20,063 acres
  • or $11.45 / Mcfe (doesn't really work on a deal this small since there is obviously plenty of upside in their acreage so it's better to look at the per acre price of $17,694 which is more in line with current thinking). 

Nutshell: SWN had said they’d cut back if gas prices didn’t get up and this little rally is not what I think they had in mind (too late and not enough on the 12 month strip). But this reduction is more related to the sale than prices and we still may see a further cut in spending later this year if gas prices remain low. I find it interesting that SWN did not cuts it's production growth rate, suggesting that the hit from the loss of the E. Texas assets will be offset by better performance from the Fayetteville shale. Lastly, I'd point out that by doing this deal SWN is getting spending back below cash flow and may be gearing up to make a push in their new area in New Brunswick. They also kept drilling rights on this land for the Petit and James lime so my sense is they really sold this area for peak valuation.


Other Stuff

  • BEXP spoke at Enercom in London today at 5:50 am EST  but I have not been able to access the archive yet, will update when I am able to listen. No new press release today however they
  • New Bakken IPO OAS priced at $14. Will have an over view here soon.

Odds & Ends

Analyst Watch:

  • BP - Collins Steward upgrades to Buy
  • BP downgraded at B of A, Barclays and Seymour Pierce.


175 Responses to “Thursday – Oil Review and Gas Inventory Preview”

  1. 1
    zman Says:

    OAS will be one to watch.

    The jobless claims numbers continue to disappoint week after week.

    If anyone sees what time the Hayward gets thrown into the deep end with a boot on his neck please let me know.

  2. 2
    Nicky Says:

    Good morning all. Z I think Hayward is on at 10am.

  3. 3
    zman Says:

    Thanks Nicky. Got my hot dogs and marshmellows all ready.

    Any thoughts for today’s action? Futures were in modest rally mode before jobs came out weak.

  4. 4
    Nicky Says:

    Hi Z – same as I said last night which is the futures would show some positive energy but I expect to see a reversal within the next two hours. We got our 1122 in the futures on the spike. May go there again when the market opens but I think this wave is almost done. Expecting a retracement to the 1080’s.

  5. 5
    1520sbroad Says:

    I say again – I like the WIOWIO features.

    On the SWN sale – I think over time SWN has shown that they are willing to sell down assets/acreage when they can get a good price and use the cash to fund other projects. I have always liked that sort of balance sheet management. SWN also doing another presentation today at Enercom right now.

  6. 6
    zman Says:

    Thank you very much. Read a piece saying that market has been very lately keying off moves in BP, that it turned back up yesterday as soon as BP did after the Fund announcement. Hayward is probably going to have a bad day. But I also heard that he may have additional monetary concessions to release during the testimony.

  7. 7
    zman Says:

    Thanks 1520. I was hoping for a pullback on this news originally when I had not yet read the release and assumed this capex cut was the previously threatened cut on weak gas prices. This probably doesn’t generate much of a dip at all since they seem to have left guidance alone.

  8. 8
    zman Says:

    Argentina absolutely schooling S. Korea.

  9. 9
    zman Says:

    1520 – Got a link to SWN’s presentation?

  10. 10
    zman Says:

    TPH is betting the money raised at SWN goes into “New Ventures”, me too, I think they’ve just funded phase 1 in New Brunswick which was a $47 mm commitment for 3 years. If this works (and there is a small player here making it work now) it could be another play in which they have it largely to themselves early and that gas market should be superior given it will all tumble down probably through Maine and into New England.

  11. 11
    BirdsofpreyRcool Says:

    Early note from XACS#1

    Twice in the past week the credit markets have tightened only to see the equity markets end the day marginally lower. This trend of credit market strength combined with equity market weakness is unlikely to continue. So the question becomes…is credit telling investors to get long risk or is the equity market correct to ignore the positive signs coming out of the credit markets.. We believe investors should trust the credit markets, doing the opposite has been painful for the past couple of years………………… Some credit positives to ponder….(1) The credit compression trade (High Yield outperforming Investment Grade) has re-emerged. (2) In four out the past 5 days money center bank credit curves steepen and their 5-year CDS spreads tighten. (GS included) (3) The corporate new issue calendar is back in businesses. (4)CREDIT SPREAD VOLATILITY CONTINUES TO TRACK LOWER. In our opinion, these are all very positive indications for credit…indications that the equity market’s ability to ignore is quickly disappearing. IF WE HAD A GUN TO OUR HEAD…WE WOULD BE CONFIDENT THAT THE NEXT 50PTS MOVEMENT IN THE S&P WOULD BE TO THE UPSIDE. At this point, the credit markets are opening tighter again this morning and are indicating that futures should be up in the +12 range.

  12. 12
    1520sbroad Says:

    Z – sorry didn’t see your #9.


    I was on another call – i think they are done with their presentation. No new slides that I saw. I will go back and lsiten to the replay.

    I do know they have started working up in New Brunswick. Nothing substantial but they are shooting seismic and doing pr work.

  13. 13
    zman Says:

    Thanks 1520, appreciate that.

  14. 14
    zman Says:

    Dollar index really falling back off now and oil up nearly a buck in the last 20 minutes.

  15. 15
    zman Says:

    … up a buck off the lows that is, oil now at 77.64 which is flat on the day.

  16. 16
    BirdsofpreyRcool Says:

    XACS#1 is clearly near-term bullish, based on the tea leaves that the credit market is leaving at the bottom of the cup.

    Me… not so sure. Guess the best part is that we are seeing corporate bond issuance restart… along with some equity IPOs. There was a couple-week period of Wandering Thru The Desert there… feels like we just got a Big Glass of Water. But, more desert to cross this summer, I’ll bet.

    TED is not behaving this morning. The spread is starting the day wider than y’day’s close. I hate that.

    So, with credit rallying (and doing so pretty strongly again this morning) and TED still with one foot in his cave, it just may be that the market looks to where stocks will take them.

    IG -3 1/8 bps… “collapsing,” as the credit desk says [which means “better” in corporate bond land]

    HY +7/8 pt… big move, on top of steady outperformance by the high yield group lately.


    Side note — I wish the “Stupak Approach” to “fixing problems” would curl up and die like the Wicked Witch of the West’s feet. It is a sick/sad way to run a country. And it will not end well.

  17. 17
    zman Says:

    Tesla IPO set for June 29, TSLA.

  18. 18
    zman Says:

    Re side note, ha, lol. Unlikely.

  19. 19
    zman Says:

    BP – Citi maintains Buy rating.

    Group opened slight green but lacks confidence.

    NG rallying before the gas numbers.

  20. 20
    zman Says:

    BP says ahead of schedule in drilling relief well.

    Coast guard says they’ll have 28,000 bopd of collection capacity in place by next week.

  21. 21
    elijahwc Says:

    HOS – not a name I’m involved with, but in the things you need to see dept, multiple inside buys are beginning to show up.

  22. 22
    zman Says:

    Hayward’s 11 pages of prepared testimony


  23. 23
    zman Says:

    Market back to that very spiky trading pattern, as …

    Leading indicators come in below forecast at 0.4%

    and Philly Fed falls to 8! from 21.4. Holy cow that’s an ugly number.

  24. 24
    zman Says:

    BP says captured 18,600 bopd on Wednesday, this is the first full day after the Q4000 vessel was tied into the BOP, should go up another 10,000 bopd by early next week.

  25. 25
    VTZ Says:

    Gold will probably breakout to a new alltime high today.

  26. 26
    DrLink Says:

    already doing their clean energy agenda instead of fixing the gulf leak…also bashing “corporations”

  27. 27
    zman Says:

    DrL – what else would you expect from Waxman, lol.

    Joe Barton calling the $20 B a slush fund with no legal precedent or standing. A shakedown.

  28. 28
    cargocult Says:

    Not bad opening remarks by Hayward. I think The Pres should have used his speech writer.

  29. 29
    VTZ Says:

    RE 23: None of the recent meaningful economic numbers have really exceeded expectations recently.

  30. 30
    zman Says:

    Waxman also lumped the rest of the oil and gas industry in with BP saying their is a disregard for safety. That’s crap.

  31. 31
    ilikericky Says:


    Hi all attached is Cramers take on MR BO’s speech yesterday.One of Cramer’s points is why did he not ask other USA Oil execs to help?He mentions also Statoil in the North Sea having experience Mr Olav Fjell or Andrew Gould-SLB,Lee Rayon-XOM or David O Reilley-CVX.

    Also can any of you tell me why he does not mention Natural Gas more?You have a surplus and soon could be exporting the stuff.

  32. 32
    zman Says:

    Spot on Nicky

  33. 33
    BirdsofpreyRcool Says:

    Nicky — Awesome Possum!!

    So, what’s next. 3-5 days of down?

    Credit still in green territory… except for TED (who is only greenish about the gills).

  34. 34
    zman Says:

    re 31. From turning down aid from other countries to not mentioning natural gas I have no idea. It does make for a distraction and something to even blame if the jobs situation doesn’t improve before November.

  35. 35
    zman Says:

    87 Bcf.

    Street was 90

    I was 85 to 90

  36. 36
    zman Says:

    NG holding up a dime.

  37. 37
    Nicky Says:

    I am undecided as to just how important today’s top is at this stage. Much will come down to the move over the next couple of days. Either way I think we will find support in the 1080’s. Likely the first low will come Monday/Tuesday of next week. At that stage will we then go and make a new high? Its possible but I am not going to call it that far out. As I think I mentioned before the astro is very very negative between the 25th and 30th of June so possibly any bounce seen next week will just be countertrend.

  38. 38
    Nicky Says:

    Support at 1105…

  39. 39
    zman Says:

    BP update:

    Pretty clear no one on this subcommittee is actually there to get answers. Otherwise they’d let him do his opening remarks and then ask him questions. Instead they are all basically reading the same statement telling him what a horrible company he runs.

    HAL is almost completely exonerated in my way of thinking at this point. Too many points in testimony where HAL wanted something and BP said no.

    CAM may be off the hook as well, not playing for now as I don’t care for those option spreads.

    RIG is still a very tough call as their business is suffering and they still may get roped into liability here.

    APC – I’m staying away. Love the company but BP has pointed out in the last 24 hours that it expects its partners in the well to live up to their obligations.

  40. 40
    zman Says:

    In other news, stocks red, but not terribly so. BEXP trading very poorly which is odd. There could be some flow of funds out of BEXP and into the newby, OAS, going on.

  41. 41
    Nicky Says:

    Right now the internals are not very negative on this move down which is a little concerning for the bears….

  42. 42
    VTZ Says:

    What would the bulls rally on here?

  43. 43
    zman Says:

    V – nothing that I know of from an economic data standpoint, most things have been squishy the last two months and now look to be rolling over.

  44. 44
    zman Says:

    NG still holding up a dime post the better than expected numbers.

    1 hour into Hayward meet and greet and he still hasn’t started his testimony. The search for truth, justice and the American spotlight is amazing to watch.

  45. 45
    bill Says:

    Joe Barton is my person of the day.

    Its amazing theatre to watch these clueless politicians assess blame and skew.

    I wonder if they would have the same venom if China held the lease.

    Who will want to be an “operator” in the future in the GOM?

    The liability (shakedown process) puts all little guys out of the gulf and the big guys too.

    The 75 m liability cap is out the window. So much for a being a nation of laws.

    Obama advisers are scheming to take advantage of this disaster to get reelected know doubt, drive up the price of energy, and then blame bp when it happens, Bush, and anything else that moves

  46. 46
    bill Says:

    lol the circus begins

    club her

    beat her

    taz her


    the admitted the oath and forgot to say so help me God

  47. 47
    zman Says:

    Hayward about to start, 1:20 into the meeting.

    Protestors stopped him. “May I suggest you use your night stick officer”.

    Just reviewing the storage data, NG prices are definitely getting a big boost from heat. This week’s forecast is 40% over normal. If that keeps up into July we will see mid summer withdrawals. Saw that in 2006 and we could be headed there again.

  48. 48
    bill Says:

    Cant the gov’t even screen the people in the hearing room?

  49. 49
    zman Says:

    Bill – My thought is that they don’t want to.

  50. 50
    zman Says:

    All of the Bakkens weak today but the new OAS, trading at $14.70.

  51. 51
    bill Says:

    I never knew they gave the oath and now omit “so help me God”

    When did the boneheads omit this phrase?

  52. 52
    andy Says:

    what price did oasis ipo at

  53. 53
    zman Says:


  54. 54
    bill Says:

    now a smirk gets attacked

  55. 55
    ram Says:

    What’s the quickest way to get a prospectus on the OAS?

  56. 56
    zman Says:

    Right here:


    I’ll have comments out in the morning.

  57. 57
    ram Says:

    Thank you. You are so efficient.

  58. 58
    zman Says:

    We try.

    Hayward to get grilled, sliced, diced and offered the hari kiri blade in 10 minutes.

  59. 59
    Nicky Says:

    Bill – my husband I and both just commented that his facial expression is terrible as he does look like he is smirking but as he always this way I am beginning to wonder if this is just how he is in repose so to speak. It reminds me of the German F1 driver, Michael Schumacher who as an even worse smirk on his face all the time.

  60. 60
    choices Says:

    Z, OAS-noted that shareholder, prob Chairman Nusz sold 11.6 mil shares, underwriters sold 30 mil in this offering-major shareholder cashing out (prob just partially).

    Does this offer any concern to you?


  61. 61
    zman Says:

    Nicky – he has one of those faces that when he relaxes a bit, forms a smile. Kind of like George Bush. People hate that but people as a group are often pretty stupid. Individuals can be smart but people, well, to borrow another movie quote:

    “A person is smart. People are dumb, panicky dangerous animals and you know it. Fifteen hundred years ago everybody knew the Earth was the center of the universe. Five hundred years ago, everybody knew the Earth was flat”

    To me I could care less about the form, only about the substance. Same goes for the stupid flap over the Chairman’s “small people” comment. English isn’t his first language so he was looking for the colloquialism “little guy” and got it wrong. People should focus on the fact that he gave them $20 B when he didn’t have to and be pretty damn happy about that.

  62. 62
    choices Says:

    posted #60 before I saw #56-selling shareholder appears to be a group.

  63. 63
    zman Says:

    Choices – can’t say yet, still reviewing. In my eyes these deal either win or fail on valuation. I don’t like to see insiders punt with the initiation but it is commonly done. They have a good chunk of acreage in the Williston and growing production. I haven’t seen many of their wells but I see them in Sanish and around the Neeson. So still digging. First blush on acreage valuation, it doesn’t exactly strike me as overly cheap or expensive, but haven’t read the development plan yet.

  64. 64
    bondbuddha Says:

    OAS is an Encap deal, right? Pretty smart operators over there.

  65. 65
    BirdsofpreyRcool Says:

    Well… TED has decided to calm down a bit today… but the credit market is pulling pretty hard, to get him to move away from his cave. Pretty big moves in both investment grade and high yield markts… but stocks, they still don’t buy it.

    The two mrkts (credit and stocks) tend to converge at the end of the day… NO IDEA who is going to win the sentiment war today. But credit it giving it a very good go right now.

    IG – 4 1/4 bps tighter (wow)

    HY + 3/8 pt higher

  66. 66
    zman Says:

    Bond – yes.

    Thanks for those continued updates BOP.

  67. 67
    scoop006 Says:


  68. 68
    choices Says:

    #61-Z, agree, but that IS the problem-there is no substance, it is all form in the cable news sound bites, blather/pander from Congress-“slice and dice” will truly go down as just one of the low points in this mess-but so what-Stupak is not running again, maybe he is looking for his next employment as as a lobbiest but it prob will not be in the oil and gas industry

  69. 69
    bill Says:

    >Same goes for the stupid flap over the Chairman’s “small people” comment

    good point

    It seems no matter what they do they keep getting attacked

    I dont like the gov’t washing heir hands in this whole matter

    The MMS is supposed to regulate these activities..Where were they?

    Why isn’t salasar shown the door?

    They take royalties
    they take taxes on profits
    they take up front payments on leases
    they approve well design
    they approve changes to drilling plans
    they inspect

    They are partners

    Instead, we hear Obumma talking about 10 year of lapses

    There were no disasters 10 years ago, 9 years ago, 8 years ago

    No we have a disaster on obamma watch , 2 years into his presidency

    Also the clean up effort is a farce

    Multi agancies getting in the way of each other see today wsj


  70. 70
    bill Says:

    replaying the protester scene, it looks like the woman has a beard and a 4 foot asian was trying to hold back a 6 footer amazon woman

    Who is she/he
    What party is she in
    Who let her in

    I demand answers now!

  71. 71
    zman Says:

    Choices – So I just listen to these committee meetings to glean information on things like HAL’s centralizer request. CNBC is wasting their time talking about the CEO’s facial expressions. I have not heard one of the talking heads say, “wait a minute, if HAL wanted 3x the centralizers and BP said no, and the casing therefore wasn’t centered in the wellbord, that could have led to a thin spot in the cement job, which HAL has been blasted for having done a bad job on by congress and the POTUS.” Furthermore, we have evidence that SLB never ran the cement bond log, again BP’s decision, to check the integrity of the cement job bonding to the casing and therefore making a liquids tight well and you should arrive at the conclusion that it’s not HAL’s fault. Then move on with the fact that it’s not that big a piece of their business (the deepwater I mean) and the fact that HAL’s 2Q NAM activity and pricing are thought to be better than originally expected and you have a stock that is guilt free, down about 25% from recent highs, but that is going to be seeing rising estimates. But instead, they talk about BP’s goofy looking CEO. Ugh.

  72. 72
    bill Says:

    I replayed to see the so called smirk

    i just dont see it

    But if i was in Haywards seat I woulda LMAO
    and commented “What kind of nut house is this place”

  73. 73
    zman Says:

    Bill – re 69. It boggles the mind that BP’s CEO, who has only been on the job since 2007 and was brought in to fix problems is held accountable but Salazar who has I would argue a much less complex entity to oversee, with problems that were pinpointed in the prior administration gets off scott free.

  74. 74
    zman Says:

    Bill – I’d ask them why they approved my cookie cutter plan with all it’s obvious deficiencies. Could it be that they just didn’t care and just wanted the millions from the lease sale? I suppose they would then gang tackle and lynch me on the spot on live TV but at least I too would get a laugh off.

  75. 75
    zman Says:

    CrysB – thanks for the nod over on yahoo finance!

  76. 76
    RMD Says:

    JRCO downgrades ROSE on valuation.

  77. 77
    bill Says:

    votes on the floor, lol

    so we need a timeout to reload

    they are trying to set him up for perjury charge

  78. 78
    bill Says:

    why does dingleberry have to say submit for the record after every question

    dont they keep a record of these hearings

  79. 79
    bill Says:

    i love his mms comment

  80. 80
    Jerome Blank Says:

    CIGX breaking out on good vol…chart is still up

  81. 81
    scoop006 Says:


  82. 82
    zman Says:


    OAS – Added starter position of 1,000 shares for $14.94. New Bakken player came public today. Comments in tomorrow’s post.

  83. 83
    dij Says:

    Joe Barton has received 1.4 million dollars from the O&G industry.

  84. 84
    bill Says:


    you are 100 % on target

    a bunch of boobs , imho

  85. 85
    BirdsofpreyRcool Says:

    I went to Joe Barton’s website and sent him a message of thanks.

    What BP did was bad bad bad. What our own President did was worse.

    People thought Chrysler and “greedy bondholders” was a one-off (“it was a special situation, it will never happen again”). Then we had GM, doctors, Goldman Sachs, now BP. These are not “one-offs”… this is a pattern that if we fail to connect the dots will end up in all of us being shaken down by our own govt.

    History doesn’t lie. It is showing us a pattern. ‘Nuff said.

  86. 86
    zman Says:

    Bill – he’s telling Hayward to submit the details of the answer to the committee. But was asking questions that few large company CEO’s could answer under the circumstances, given that the records went down with the ship.

    What did he say about MMS, missed that?

  87. 87
    BirdsofpreyRcool Says:

    Joe Barton used to work for ARCO (which was later acquired by BP). If you were an oil company, who would YOU give money to? Maybe someone who actually understands the industry??

    Oh yeah… and BP’s number 1 recepient of campaign contributions?? BHO.

  88. 88
    bill Says:

    Just reported

    Salazar has never been on a rig and comes out of the correction/prison industry

  89. 89
    Popeye Says:

    How is NG holding up today?

  90. 90
    bill Says:

    >this is a pattern that if we fail to connect the dots will end up in all of us being shaken down by our own govt.

    I’ve conclude right or wrong , thats why some members of congress like regulations.

    Regulations are the means for the shake down

  91. 91
    zman Says:

    re 89 – up 8 cents.

  92. 92
    BirdsofpreyRcool Says:

    bill — i don’t have problems with regulations (most, anyway… SarBox was a disaster of epic proportions… and was passed under GWB). But this is not “regulations.” This is a threat and a shakedown that is beyond the bounds of current law. Maybe that law will be changed (which would be a disaster of epic proportions for all but the largest players in the GoM)… but, THERE IS NO LAW THAT REQUIRES BP TO SET UP A $20B SLUSH FUND. It was “nice” that they did that. But, it was still a shakedown, Chicago-style, pure and simple.

    For those who think I’m defending the wrong party here… just wait until YOUR company is in the cross-hairs of this Government. You will know what us “greedy bondholders” found out early in the game.

  93. 93
    Garyinhou Says:

    81 – November is just 4 1/2 months away…

  94. 94
    Alhambra Says:

    Z – Have you ever looked at OGX?
    Brazil Oil and Exploration owned by Eike Batista with former PBR mgmt, Paulo Mendonça, running the show
    tiker: ogxpy.pk
    website: http://www.ogx.com.br/cgi/cgilua.exe/sys/start.htm?sid=64&lng=us

  95. 95
    zman Says:

    A – I have not, interesting?

    My plan for the Bakkens is to hold at length: BEXP (but will scale it back), WLL, ROSE (but will scale it back as well probably after 2Q earnings), AEZ. KOG I plan to hold through 2Q and make a decision on how much I want to continue to hold or if I just want to start trading it around BOP’s and JBs thoughts.

    This OAS is interesting and I’d read up on it a couple of months back and will continue to get to know it over the next several months to see if it should get some more cash, currently allocated to BEXP, ROSE and KOG.

  96. 96
    guru Says:


    Can you list a brief synopsis of the reasons behind adding OAS to ZLT. It will provide a preview of the detailed analysis you are presenting tomorrow. Thanks.

  97. 97
    scoop006 Says:

    Re #81 I predict after Nov. elections Hillary resigns as Sec of State and challenges BHO for the presidential nomination

  98. 98
    zman Says:

    re 96 – uno momento

  99. 99
    choices Says:

    #81-I do not think there is a dime’s worth of difference between either party’s congressmen in the sense of competence, ethics-they all march to the same drummer, getting money, ie bribes, getting re-elected-the country’s problems be damned-there is no effort to solve the problems. Unfortunately, incumbants usually have an edge, maybe not this year, at least not as much.

  100. 100
    Jerome Blank Says:

    UNG…$8.50 holding as support, resistance now at the 200 day at about $9.20

  101. 101
    zman Says:

    re 96:


    Pure play Williston player
    292,000 net acres
    TEV is $1.0B
    No debt
    Cash of $375 mm or about $4/share

    They currently produce about 3,200 boepd in and around Sanish, and both sides of the Neeson Anticline. Some acreage is over in Montana as well.

    BEXP produced a little over 5,100 boepd last quarter and has about the valuation and about the same acreage position (in terms of size) if you count their Montana acreage while having debt to cap of 37% and much less in the way of cash on the balance sheet. Not to knock BEXP as you know how I feel about their catalysts and results to date but I see the same kind of potential in this name, and a stronger balance sheet with which to go after it. But it’s early in my understanding of exactly where they are focused in the Basin so I reserve the right to change my mind and punt if I were to place them well outside of the core on their non-Sanish stuff (majority looks to be Bakken light, not worse than that). It doesn’t look like it but I’m running some checks.

  102. 102
    zman Says:

    Testimony to restart in 10 minutes. They’ve interrupted this twice now for votes on other matters. Again, they want to get in jabs but they don’t want answers. Or that’s at least the way it looks.

  103. 103
    scoop006 Says:

    #99 You are correct & that is why very few elected politico’s object to the Chicago Shakedown

  104. 104
    zman Says:

    V – As you said, gold settled at record close, 1248.70.

  105. 105
    Paul in Kansas City Says:

    I don’t know about the rest of you but I am very divided on what to do here; glad I have my positions from last year and I have taken some profits; esp. from HGT, LINE, NS,; i’m astill holding COWSF and lukoil(painful that one); i have small positions in COP; ESV; and CAM. DVN seems so cheap. I sold BEXP and (still) waiting for that pullback; bad move on my part. Z and the rest; ideas very helpful!

  106. 106
    zman Says:

    Adding to 101, should have also mentioned that as a pure player, they have more leverage to oil than all of the names that will be their mid cap peers.

  107. 107
    Alhambra Says:

    Largest non-nationalized oil and gas company in Brasil (not PBR). Batista has paid for some good PBR execs to help build company and develop exploration opportunities. Paulo was head of Chief of exploration at PBR and brought other mgmt with him. Since he and his execs are well connected they know how to work the system, as he claims. 85% shallow water wells, roughly $40 million cost per well. Every well they have drilled since August of last year has been a hit, although they shoot for 60% success. They speak of being a 100 billion dollar company in a few years. He also runs all the logistics through his subsidiaries to “keep costs low”. I would appreciate any comments or analysis you or anyone else may provide.

  108. 108
    BirdsofpreyRcool Says:

    Credit markets still solidly green… maybe they will win over stocks today.

    IG – 3 7/8bps

    HY +3/8 pts

  109. 109
    john11 Says:

    CIGX trading well today, thx for the heads-up and comments yesterday..JB and BOP.

  110. 110
    BirdsofpreyRcool Says:

    CIGX being driven by rumor and innuendo y’day, today. Whatever. Until they actually launch (week of July 12th), I expect this stock will be pushed around. By both longs and shorts.

    That said, there is some cred-factors in the rumors. But that is one of the things I like long-term about this stock. Several ways it can go up.

  111. 111
    zman Says:

    S&P flat.

    HAL working higher.

    BP flat.

    Bakkens – uniformly down with oil and the new IPO (not down). KOG up 4 pennies, all others red.

  112. 112
    BirdsofpreyRcool Says:

    john — ha! I posted my comment b/f i saw yours. So the “whatever” was NOT aimed at you!

    CIGX stock has a lot of potential. But need to get the product out so it can go from being a “story stock” to a “revenue and market growth” situation. Should happen in 1st part of July.

  113. 113
    BirdsofpreyRcool Says:

    Just as the stock mrkt goes red again, credit going greener…

    IG – 4 1/4 bps (that’s a BIG move)

  114. 114
    elduque Says:

    Bill- are you still following the ARD/SD situation and if so, I would appreciate any further comments you might have.

  115. 115
    elduque Says:

    Baltic keeps falling

  116. 116
    choices Says:

    Rep Miller, R-FL asks Rep Barton, R-TX to resign ranking committee position.

  117. 117
    BirdsofpreyRcool Says:

    choices — #116 = comment #99 in action.


  118. 118
    AAA Says:

    I understand the anger many here have of congress and in particular of their efforts to demonize the oil industry. I really think our sympathy for BP should be limited however.

    This is a company that clearly cut corners on this well, even after their disasters in Texas City and Alaska, both due to corner cutting also. While they were pennypinching on well safety, they were contributing millions t oobama and the same democrat party that wants to basically put the industry out of business. They spent who knows how much running those ads touting their green credentials. They were a major sponsor of that global warming scare group and have been a leader in cheerleading the global warming activists. They have contributed funding to many of these activist groups. They employ a top democrat inssider/fixer, John Podesta, as their Washington lobbyist.

    I see a company that is all talk and political correctness, but has been responsible for three of the biggest energy-related disasters in North America. Even the other majors have called them out for unsafe and substandard procedures. I want to see them bled dry over all the damage they have caused. This weasel Hayward should be fired, as should most of their oil execs. There have to be consequences for this level of wrecklessness.

  119. 119
    zman Says:

    BP has Hayward too muzzled in my opinion. The question on the cement bond log was asked in a way that had him fall back on “that’s to be determined by our investigation so I can’t answer yes or no yet”. I would have asked whether they always run one or not. Why they didn’t run one here. The congresswoman asking said that her industry expert said you always run one. I guess she meant in a deepwater well and if that’s the case, I don’t know the answer there. I know that onshore you don’t run them all the time. Wyo, TEXW, Gino, any thoughts either on and off shore as to how often you’d run a cement bond log? 100%, 50%, 10%, just throw me your best thought?

  120. 120
    BirdsofpreyRcool Says:

    AAA — couldn’t agree with you more on your statements about BP. I used to work for Amoco, then ARCO… both of whom were bought by BP and saw their “best practises” decline dramatically. I can’t think of a major oil company who more deserves vilification and derision than BP.

    But that is not the point. I may hate the LoudMouth at the movie or concert we are all attending… but it doesn’t mean that the Concert Authorities can drag him out, beat him up, and throw him in jail. Next time, the Concert Authorities might pick on the guy who is not clapping the loudest… or dancing out of sync.

    (ok… bad analogies… but you get my point.)

  121. 121
    zman Says:

    Would someone look at the BP options on the June $45 calls, showing big volume and a weird, out of this world, price.

  122. 122
    zman Says:

    re 120 – LOL.

  123. 123
    ftc88 Says:

    Z – re: Hal July 28’s. Interested in knowing your thoughts on why you picked the 28’s vs the 27’s — lower entry price plus potential for bigger percentage gain??? Thanks.

  124. 124
    BirdsofpreyRcool Says:

    (P.s. “bled dry” means i lose my small pension from Amoco someday… and lots and lots of good people here in the US [ex-Amoco and ARCOids) lose their jobs. It’s like bringing down Anderson for the mistakes of the Eron Audit Team… waaaay more harm than good was done with that move. OK… it’s more than just an “audit team”… but I’ll bet that BP cleans up their maintenance act after this. Thing is, if you fire Tony Hawyard and all his groupies, they will still be filthy rich. The “small people” are the ones who will be hurt the most. Just asking for a little perspective here.)

  125. 125
    zman Says:

    FTC – just leverage and how high I think it can go relative to that strike with JB’s TA in mind. Yesterday’s peak price on HAL had those options up 38%, now up 8%. I didn’t track the 27s but I think the 28s are not nearly a stretch to get a double in the calls vs a probably a 50% in the 27s.

  126. 126
    scoop006 Says:

    #121 Scottrade shows 4,054 calls

  127. 127
    ftc88 Says:

    Z – 125. Thanks.

  128. 128
    scoop006 Says:

    126 continued @0.01

  129. 129
    zman Says:

    Scoop – thanks, so volume which is odd for where that is. My price is showing 13.50 to which I say “woohoo” and then “impossible”.

  130. 130
    scoop006 Says:

    #129 Scottrade says its a close out “cabinet” trade

  131. 131
    AAA Says:

    Z, re 129, you must be looking at the puts.

  132. 132
    zman Says:

    AAA – no, it was the calls, just a badquote.

  133. 133
    AAA Says:

    Maybe they switched them, because the 45 June puts are 13.30-55.

  134. 134
    bill Says:

    elduque, Yes , Im still in ard. I think the deal gets done as the terms were sweetened so even if sd doesnt move, there is money to be made on the arbritage.

    Longer term, it depends how you feel on NG and how SD is positioned.

    SD is probably the most highly levered name I know. Thats a huge negative with weak NG prices. Most still view them as a NG play although their last 2 acquisitions make them ore oily, land based

    Im bullish longer term on NG. I like NG prices over 7 and good money can be made Ive been wrong the last 2 years.

    With drilling moritoriums, more regulations, cost in the gom going up, perhaps the pickens plan gets adopted, ng is going to look better in the future.

    I’m also in chk,gxmr,hk,mcf

  135. 135
    zman Says:


    Market weak but so far refusing to sell off. CNBC taking the day off to watch Hayward. Market seems to be trending with whichever direction BP is taking at the moment.

    Feinberg on the tape saying Gulf oil spill victims should file their claims ASAP.

  136. 136
    bill Says:

    Is it Thursday? lol

  137. 137
    bill Says:

    Im tempted to buy BP here

    BP 1
    Congress 0

    I listened to BP earnings calls pre disaster, Hayward was a control freak in those calls.

  138. 138
    BirdsofpreyRcool Says:

    FWIW, credit still very green going into the stock mrkt close…

    IG -3 bps

  139. 139
    bill Says:

    Here is a picture of a bird, oh my!!

    I need to go get a hankie

  140. 140
    West Says:

    I’m stilling playing the SD side of the trade for better leverage. Putting odds at better than 70% that the deal gets done and going to 80% Monday if no other offers appear. The ecconomics of ARD really only work for co that has it’s own drilling rigs and service cos. because of the cost structure. SD has one or two deals that they will do after the merger that will help their cash position greatly. The other players Energen and CWEI don’t seem to want all that debt for high price infill drilling locations.

  141. 141
    BirdsofpreyRcool Says:

    So… stock going to follow credit up and go green into close? Looks that way…

  142. 142
    zman Says:

    Bill – I own a few thousand $ worth of calls that will expire worthless tomorrow. Offsetting that has been the run in HAL. Same play, less risk. I think that you will see some more upgrades and downgrades on the name tomorrow and Monday. I honestly don’t think congress has laid a glove on the guy. I do wish he’d do a better job of educating some of the morons in congress. He just isn’t defending himself or BP as well as he could. For instance, the comment from one guy about the other wells in the Gulf that could have the same problem, commented that its hundreds of BP wells that this could happen to. The guy obviously doesn’t know the difference between a well in progress and a completed, producing well. Kind of hard to have the BOP fail for one thing when there is no longer a BOP on the ocean floor. These people should have to take a basic class before they get to ask a technical question. I’d offer to have them in here but I don’t have that kind of patience and I frankly don’t want their money anywhere near as much as they seem to want mine.

  143. 143
    Dman Says:

    Is anybody else looking at the 50 day & 200 day cross in crude?

  144. 144
    bill Says:

    140– I think sd pops up post merger

  145. 145
    zman Says:

    Dman – yep. I don’t think it comes off below $70 which is pretty much OK with me.


  146. 146
    choices Says:

    Anadarko: Has Received Bill From BP On Gulf Spill Cleanup

    By Isabel Ordonez, Of DOW JONES NEWSWIRES

    HOUSTON -(Dow Jones)- Anadarko Petroleum Corp. (APC) said Wednesday the company has received a bill from BP PLC (BP) for costs associated with cleaning the oil spill in the Gulf of Mexico but added it wasn’t involved in negotiations for an escrow account to help pay for its long-term damages.

    Anadarko Spokesman John Christiansen told Dow Jones Newswires in an email statement that the company has been invoiced by BP and that the company is ” reviewing it.” The company wouldn’t say how much it is being asked to pay.

    The Houston-based company said BP hasn’t contacted it regarding the establishment of the $20 billion escrow account the oil giant agreed Wednesday to fund.

    “We were not involved in the negotiations,” Christiansen said.

    Anadarko has a 25% in BP Macondo’s well, which has been spewing massive amounts of oil into the Gulf after Transocean Ltd’s (RIG) rig, leased by BP, exploded and sank in April.

    -By Isabel Ordonez; Dow Jones Newswires; 713.547.9207; isabel.ordonez@ dowjones.com

  147. 147
    bill Says:

    who make’s the blow out preventor

  148. 148
    BirdsofpreyRcool Says:

    bill — CAM. But it was modified by BP a few years back, so the BOP is NOT under any type of CAM warranty.

  149. 149
    AAA Says:

    Another last half hour ramp in the futures. Cue Cramer for more bellyaching about it.

    Hayward should have come to the hearings dressed as a pinata, just to show he was a good sport. Actually, I wonder why he showed up at all. Who volunteers for a Stalinist show trial?

    As for APC, I’d love to be their law firm. Their response to BP’s “invoice” will be the legal version of the raised middle finger. Let BP sue for their share. What’s the worst that can happen? If APC loses game, set and match, they are still only liable for their share. Why pay anything now?

  150. 150
    BirdsofpreyRcool Says:


    now THAT’s funny!!

  151. 151
    zman Says:

    The BOP is made by CAM.

    Choices – the very reason I have not yet touched APC. I’d bet the bill from BP is bigger than APC’s insurance coverage. If they billed them through today, that would be about $400 mm.

  152. 152
    BirdsofpreyRcool Says:

    “the legal version of the raised middle finger”

    (that should have shown up between double >’s…. note to self, don’t use double >’s)

  153. 153
    zman Says:

    Also, there is evidence that the BOP had two pieces of drill pipe in it (at least) sitting side by side. It was never designed to shear two pieces of pipe.

  154. 154
    zman Says:

    APC – I think they have to weigh participating in the clean up and being seen as someone who had 25% of the well and was willing to benefit from a successful company versus someone lower than BP, someone who refuses to pay their share. So maybe they give the bird and then get seen as lowly scumbags who won’t pay for scrubbing birds. I think they could argue that BP was guilty of criminal negligence and therefore they don’t have to pay but I’m sure the media will roast them if they refuse to help on the Gulf. APC has a lot riding on the deepwater.

  155. 155
    AAA Says:

    If I was running APC, not only would I refuse to pay BP, I would sue them for the expected value of my share of the well. Liability here is not based on negligence. It is a contract issue. They had a duty to use best practices and exercise due care and they failed. That is a breach, and APC is entitled torecover damages based on their expected profits from the well.

  156. 156
    zman Says:

    I’m not a lawyer so if you say so then you say so.

  157. 157
    zman Says:

    Congressman grilling CEO over modifications made to BOP back in 2004. I’d tell them it was done during the past administration…works for Obama.

  158. 158
    crysball Says:

    Regarding the CAM BOP, was there not an issue with maintenance of the Hydrulic Pressure lines to the BOP actuator???……At least one of the hydraulic lines was known to be leaking, prior to the event, which was a maintenance issue not withing the control of CAM.

    Also Transocean recoreds on the BOP show it was removed for previous malfunction (due to a previous problem on a previous well beyond the control of CAM.

    ALSO BP modified the BOP against the advice of others.

  159. 159
    BirdsofpreyRcool Says:

    crysball — my point exactly. According to the industry experts I’ve spoken to, CAM is compeletely off the hook with respect to any liability arising from the Macondo Blowout. For a variety of reasons.

  160. 160
    BirdsofpreyRcool Says:

    disclosure… I own CAM here.

  161. 161
    zman Says:

    CAM’s BOP

    Installed in 2001, 1 year warranty
    Maintenance contract not with CAM
    2 pieces of pipe in the BOP (maybe, looks like it) so the it did not fail from a design standpoint either.

  162. 162
    BirdsofpreyRcool Says:

    z — thank you for providing the reasons.

  163. 163
    Dman Says:

    O-Man meets BP

    “I believe you’re the British guy”

    “Er, yes I am, but you know, we don’t actually call it British Petro…”

    “Never mind, how’s the cleanup going, have you plugged that thing yet?”

    “Well, no, not yet. Actually, it so happens you might be able to help”

    “Me? I’m a community organizer. How could I help. Oooh, I see … with the pelicans… yeah sure I can help organize that”

    “Er, no actually Mr President, the pelican clean-up community is already well organized. But the thing is, it so happens you have a lot of nuclear weapons and if you don’t mind me saying, some of them are really quite big and the Russians found that …”

    “Oh dear, it looks like our 20 minutes is up. Have to leave it at that. Glad we got everything organized”

    Bush Jr. meets BP

    “Howdy British guy!”

    “Er, hi, Mr President”

    “Oh never mind with all that ‘Mr President’ stuff. I hate that stuff. Like when I met your Queen, I was supposed to call her ‘Your Majesty’. I hated that. Anyway, how’s it going with that sucker in the Gulf?”

    “Er, well, you see …”

    “Are you telling me that sucker could go down?”

    “No, it already did go down”

    “Oh, right. So what are we talking about? Say listen, why don’t we continue this on the golf course. I mean, you’re a nice guy. I like you, I really do. But I really need some practice out there and we could still talk and stuff.”

    “Sure, no problem”

    John McCain meets BP:

    “Tony, glad you could make it”

    “Thanks for finding the time”

    “Well, lets get down to business. The thing is Mr Blair, we need …”

    “It’s Hayward, Tony Hayward. Tony Blair was the PM a while ago”

    “Oh right, sorry about that… you kinda sound the same. And look the same come to think of it. Anyway, how are we going to put a cork in that thing?”

    “Actually, we think you might be able to help. You have a lot of nuclear weapons available and the Russians found that …”

    “The Russians! What have those Russians been up to? The gooks used a Russian missile to shoot me down, did you know that? You can’t trust those Russians, I’m telling you”

    “Er, right, but the thing is, we think that if you use a nuclear weapon…”

    “Nuclear weapons!? I love nuclear weapons! Do you think if we nuked Iran, it would help with the Gulf situation? Is that what you’re telling me? Because I like that idea …”

    “Well, no actually, Mr President, we were thinking more of …”

    “Bomb bomb bomb, bomb bomb Iran, Bomb bomb bomb, bomb bomb Iran, Bomb bomb bomb, bomb bomb bomb Iraaeeeeaaaan!” (to the tune of ‘Barbara Ann’)

    “Ah, well, sorry but we don’t think that will help. We actually want you to set off a nuke deep below the Gulf…”

    “Nuke the Gulf!!?? Are you out of your mind?? What about Iran, what will they think if we start nuking ourselves??”

    “Honestly I don’t care what the Iranians think, it really doesn’t matter”

    “Doesn’t matter!! But don’t you see? If we start nuking ourselves, Iran will think they don’t need to bother with their nuke program. And then we’ll *never* get to bomb them. What a disaster!”

    “I see your, um, point but look, why don’t you let me explain the details …

    … 5 hours later …

    “OK Tony, but just to be clear, you’re saying that we’ll only need one or two nukes under the Gulf.”

    “Yes, …(stifling a yawn) … that’s right. One should be enough. Two for sure”

    “Great, so we’ll still have about 4998 nukes left to hit Iran!”

    “Well, sounds about right”.

    “That’s great! Glad we got everything under control.”

  164. 164
    zman Says:


  165. 165
    PackMan Says:

    Problem Solved: http://www.youtube.com/watch?v=yghFBt-fXmw&feature=youtu.be

  166. 166
    BirdsofpreyRcool Says:

    BedTime Market Strategist — echos what VTZ was saying earlier

    Barely a Push.

    The S&P 500 managing to pull out a small positive session was impressive, but needless to say, the weekly claims data was frustrating. We know we sound like a broken record, but we can’t help but be bothered by the fact that Initial Jobless Claims remain stubbornly elevated. The 4 week average remains near its highest levels since March. There was talk that the number may have been skewed by the Memorial Day holiday, but we have heard that about every other holiday this year and the number never drops to account for it. The poor claims number was followed by an equally uninspiring Philly Fed number. As a result, the positives from yesterday’s Industrial Production report and today’s LEI were essentially negated.

    The LEI was pretty impressive considering the negative influence of last month’s stock market selloff. The key differentiator in the LEI was the negative to positive swing in M2 Money Supply. M2, which has stagnated most of the year, recently just hit new highs. In the past, we have noted that the ramp up of M2 would be a key indicator for the Fed to commence its exit strategy. Although M2 is at a new high, it is not at a level that should cause alarm. M2 is only up 1.75% year over year and the latest push higher has managed to keep it from falling below the Fed’s targeted growth of 1%-3%.

    It appears the major derisking is over (for now). Volume has contracted as investors have squared positions to a comfortable level. Risk spreads have stabilized and in some cases, modestly contracted. The Vix continues to work its way lower and the S&P 500 continues to consolidate around the 1100 level. These are positive technical developments but it will be important to get some sign that this economic softness is temporary in order for a sustainable move higher to emerge.

  167. 167
    BirdsofpreyRcool Says:

    And you think it’s NOT a “slush fund”??


  168. 168
    zman Says:

    Packman – I’m trying to work. Stop making me bust a gut. Wow that’s funny.

  169. 169
    Geno Says:

    Been out all day never run a cement bond log on a well until we have a completion rig on or just before it is on but all onshore

  170. 170
    zman Says:

    Geno – You’re not saying you always run them once your about to complete?

  171. 171
    VTZ Says:

    BOP –

    M2 May be rising but M3 is contracting and M0 is still growing (which is quite ridiculous considering where we came from). No wonder asset prices have stabilized.

    Keep in mind the recent Shadowstats headlines:
    • 5.9% M3 Annual Decline Deepest Since Early-1930s Banking Crisis
    • Post-World War II Record Drop in Inflation-Adjusted M3 Signals Intensifying Business Contraction

  172. 172
    Geno Says:

    We move the drilling rig off and then come back later and run a bond log just before we complete the well to see if we have to squeeze or if we have bond on the zone of interest

  173. 173
    West Says:

    http://phx.corporate-ir.net/phoenix.zhtml?c=136094&p=irol-EventDetails&EventId=3156263…… XEC presentation from London today if you have an interest. These Yegua wells are unbievable $150 million yearly investment is yielding $ 400 million in income. That should have cash flow of a billion $ and E&P expenditures at the high end $900 mil. On slide 14 Permian Basin the blue circle labeled White City is current Avalon Shale exploration area. The active players are privates Yates Petroleum and Marbob both based in Hobbs, NM……….Not much of a pullback in the name compared to some. Very expensive options, recommend the common for retirement account especially on a big red day in the market.

  174. 174
    PackMan Says:

    Z – 168- LOL

  175. 175
    zman Says:

    Thank Geno, West.

Leave a Reply

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