Thursday – Oil Review, Gas Preview Plus TGA, PXD

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Market Sentiment Watch: Summer trading is supposed to be boring but this week has taken the cake. Maybe it's that people are, as usual this time of year, spent. Or maybe it's the fact that the Fed has noticed that the economy has turned peakish and is now signaling this after only a couple monthly reports that were out of step with reality (unlike last time when they waited 6 months to acknowledge the environment was deteriorating). Or maybe its the rare confluence of Wimbledon and the World Cup, but I'm contemplating taking up something as exciting as cross stitch to pass the time between ticks on my screens. Sheesh. Ugh. Sitting on hands until the market sorts itself.


Ecodata Watch:

  • Jobless claims: 457,000  vs 460,000 expected
  • Durable goods:  DOWN 1.1%, slightly better than expected 

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 TGA, PXD
  6. Odds & Ends

Holdings Watch

ZCAT (Zman Catalyst portfolio)

  • $6,000
  • 99% Cash
  • Positions for the quick view are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $6,700
  • 57% Cash
  • Yesterday’s Trades:
    • None


Commodity Watch

Crude oil fell $1.50 to close at $76.35 yesterday on a fairly benign EIA inventory report (see below) and a completely directionless summer equity market. This morning crude is trading off slightly.

Natural gas inched up $0.05 to close at $4.80 yesterday as a disturbance in the Caribbean wobbled on a line towards the Gulf and temperatures hit near record highs across a broad swath of the U.S. This morning gas is trading down a penny.

  • Tropics Watch: 93L continues to drift to the north west, tracking to skirt along the southern side of Cuba this weekend. Chance of development into a tropical depression now put back up to 40% in the next 48 hours. Longer range tracks put the low in the warm waters of the Gulf of Mexico mid next week.

Commodity Price Watch: Quarter to Date

  • Crude Oil

    • 2Q to date: $78.17
    • Street estimate for 2Q: 78.33
    • Conclusion: Little to any adjustment to analyst estimates due to oil prices this quarter.
  • Natural Gas

    • 2Q to date: $4.31
    • Street estimate for 2Q: 4.86 average, $4.72 median.
    • Conclusion: look for estimates to fall (especially for the unhedged who don't have exposure to Appalachian pricing) when analyst teams mark their estimates to market shortly after the 4th of July.


Natural Gas Preview

I'm at 75 to 77 BCF. Next week's number will be smaller however an expected short term cooling trend may color sentiment for gas for the next couple of weeks unless the Gulf of Mexico heats up. 

  • Last Week: 87 Bcf Injection
  • Last Year: 97 Bcf Injection
  • 5 Year Average: 86 Bcf Injection
  • 10 year Hi: 127 Bcf Injection
  • 10 year Low: 66 Bcf Injection

Street is at 80 BCF.


Oil Inventory Review

ZComments: Crude increased more than expected due to the highest level of imports this year. That should largely reverse back out of the system over the next couple of weeks. More important to crude and product prices, both gasoline and distillates saw better than expected numbers.






Stuff We Care About Today


TransGlobe Energy (TGA)

The Basics: Operations in Egypt and Yemen, based in Canada. Focus is Egypt first, then Yemen. Large potential asset back with 7 production and exploration blocks in the two countries covering a total of 5 mm acres .

Plan for 2010:

  • $63 mm: ( about 1/3 exploration, 2/3 development drilling)
    • Egypt - up to 24 wells
    • Yemen - up to13 wells on 3 blocks

Production History:

  • 2004: 4,991 BOEpd
  • in the interim, exploration, exploitation (refracs and water floods), this yielded a strong growth and by ...
  • 2008 production had jumped to 7,342 BOEpd
  • 2009 : 8,980 BOEpd
  • 1Q10: 9,694 BOEpd
  • 2010E: Target range of 10,000 to 10,500 BOEpd (70% of volumes from Egypt), which on the mid yields production growth of 14% on the mid.
  • 2011E: No growth guidance yet but anticipate low double digit volume growth at worst.

Reserves:  24.2 mm proven + probable


  • 0% royalty regime
  • Operating costs of 5.91 / BOE in 1Q
  • West Gharib - core of TGA production

    • 100% WI in 8 onshore fields
    • almost all of the company's production comes from here near the Gulf of Suez (7,053 BOE this past May)
    • they're onto a very tall oil column in at least 1 field (>1,000 feet of oil pay)
    • 2 rigs running (just added second rig for combination of exploitation and exploration drilling)
    • working everything from EOR to development to exploration targets
    • low cost refracs are showing excellent results
    • 7 oil wells drilled year to date, all successful
  • East Ghazalat
    • 50% working interes,  non operated working interest
    • drilled 2 oil wells with 250 and 300 boepd IP this year and two dry holes
    • should get news soon on a significant well in excellent reservoir rock
    • next well, the Sabar #1,  set for July TD
  • Nuqra Block
    • 71.4% working interest
    • 2.3 mm acres prospective for oil
    • underexplored area, mapping prospects
    • drilling set for late this year and early next 


  • 4 blocks  with 1.14 mmm acres
  • (2 producing blocks (making the  balance of TGA's volumes in 1Q)
  • 2 exploration blocks
  • Production largely operated by OXY 
  • LOE of $8.37 per BOE, higher than in Egypt but still very low.

Balance Sheet:

  • Low debt level, with net debt less that $35 mm
  • Able to fund capex out of cash on hand and cash flow.

Valuation: Cheap

  • 2011: Street CFPS at $1.60 or P/CF of 4.7x
  • 2012: Street CFPS at $3.05 or P/CF of 2.4x (probably few people trust numbers out this far just yet but by 3Q, people will start looking to 2012 as the out year from 2011 now).
  • TEV to EBITDA looks even cheaper at 3.3x and 1.9x 2011 and 2012 respectively. One note of caution would be that small cap, growthy foreign oil plays often trade at cheaper multiples than what we are used to seeing in the States. Still, this is cheap even taking that into consideration.

Nutshell. Still digging into the individual plays and I don't currently own the shares but am looking to add a little more foreign oil exposure with growthy bent and this may fit the bill. We should have additional news here in the near term and if the stock continues to pull back I may take a toe hold pre earnings but want to work up a model prior to entry (working on that now).  More on this name tomorrow. 


Other Stuff:

  • PXD - announces Eagle Ford JV with Reliance Energy
    • PXD gets $1.15 B (had been rumored 3 days ago and promised as imminent on the last conference call), $266 mm up front, the rest in the form of a drilling carry.
    • for a 45% interest in 212,000 net acres ($12,000 per acre)
    • Production ramp to be massive: see 2,000 BOEpd in 2010 moving to 32,000 to 41,000 by 2013. PXD had production of 114.3 MBOEpd in 1Q10 so this is not small potatoes.
    • Good deal for PXD as it spreads risk and monetizes part of a play we hadn't even heard of 2 years ago for premium price. Should be solid news for other Eagle Ford players including largest player HK.
    • Continues to the recent trend of foreign energy heavy weights recognizing value in U.S. shale assets.
    • PXD will hold a conference call at 10 am EST.


Odds & Ends

Analyst Watch:

  •  TSO - upped to Above Average at Caris

113 Responses to “Thursday – Oil Review, Gas Preview Plus TGA, PXD”

  1. 1
    BirdsofpreyRcool Says:

    R&R upped E21 from “mrkt perform” to “mrkt outperform”

    And the crowds go wild.

  2. 2
    BirdsofpreyRcool Says:

    Credit off the worst of it’s lows this morning. Will report levels closer to mrkt open. Credit still trying to figure out how bad they want to be this a.m.

  3. 3
    zman Says:

    Thanks BOP.

    Nicky – got levels?

  4. 4
    skimo Says:


    Interesting, in that at the bottom of page three they compare their forecasts to NOAA and CSU.

  5. 5
    milepost_43 Says:

    Chavez takes over 11 H&P rigs….

  6. 6
    zman Says:

    PQ out with an update:
    Woodford continues to progress, two more wells to talk about by 2Q report

    Gulf coast discovery

    Also noting they add a small hedge, here.

    Here’s to SWN having done the same recently, just a suspicion but with the recent sale in E. Texas and the lower capex program now, it would make sense that SWN grabbed a little coverage during the recent run. It would certainly make the Street happier with the name.

    Re 5: Yeah, saw that. He should run for congress in the States.

  7. 7
    zman Says:

    Adding to thoughts on #5, if that were a U.S. car plant in VZ, Washington would be going ape-crap on Chavez. But who cares about a bunch of evil oil rigs?

  8. 8
    rseidman Says:

    Energy XXI (EXXI) upgraded by Rodman & Renshaw from Mkt Perform to Mkt Outperform.

  9. 9
    BirdsofpreyRcool Says:

    Happy to see that TED is not particularly worried this morning. Well… not any more worried than he was y’day. Sorta sitting there, holding his breath at +41.0 bps.

    Credit indices, however, are running around with their hair on fire (nod to ram, for that descriptive comment). Funny thing is, no one seems to care! Not a lot of client flow right now (so the Street is playing tennis with itself)… so tough to tell where this will fall out, or what it really means. Stay tuned. Could go any which way on NO FLOWS.

    IG +3 1/2 bps

    HY -7/16 pts

  10. 10
    BirdsofpreyRcool Says:

    #8 — thanks, rseidman.

    Wasn’t it R&R who were the first to drop E21 from “outperf” to “mrkt” when Macondo spewed? I recall opining that they were overly-jumpy. I opined incorrectly. R&R 1… BOP 0. So, it’s meaningful that they chose to upgrade, based on y’day’s operational update.

    Thank you R&R.

  11. 11
    zman Says:

    Mixed bag open on pathetic volumes.

  12. 12
    zman Says:

    USEG on the tape talking about wells BEXP will drill for them over the next 2 quarters. Nothing of real note other than an odd statement regarding the TFS test which makes it sound like it has been delayed, will check into that as we were expecting news on that in the next 1 to 3 weeks.

  13. 13
    zman Says:

    OAS backed off to just below where I bought it after 3 days of group action. I still like it, not concerned, not adding more as I want to give it a little time to ripen and investors prone to flippish behavior could get cold feet on the group and push it lower.

  14. 14
    zman Says:

    TAT getting a lift here but on weak volumes. I may start trading this one in the ZLT for shorter swings as it looks channelized. JB, any thoughts there?

  15. 15
    tomdavis12 Says:

    BOP: Bought some of the EXXI 10s ’13 @ 99 today. Is your cross borders analyst any less bullish than he was Friday with this weeks bond market performance?

  16. 16
    zman Says:

    Site a little sluggish today. Sometimes it helps to immediately refresh again if it looks stalled.

  17. 17
    BirdsofpreyRcool Says:

    Forwarded from HT …

    Is another leg down deserved? There is little economic data to support the current sentiment of the market, and now that the SPX is back at SPX 1084 support it is unlikely to hold. The most probable path would be a retest back to the SPX 1040 level (and it could happen quickly).

    Beside the economic backdrop, technically the most recent 4.5% failed rally at the 50% retracement (based on the difference of 4/26/10 high and the 5/25 low) at SPX 1131 is concerning. Why? An aggressive rally that can’t break the 50% retracement is typically classified as a “dead cat bounce” because it demonstrates little conviction and was most likely facilitated by short covering following the bigger 15% correction off the years high at SPX 1219 (set on 4/26/10). And yes, these are short term technical levels, but when viewed in light of the rally that started back in March of 2009, the diminished lack of economic underpinning given the low interest rate environment is a recipe for a bearish sentiment shift.

  18. 18
    BirdsofpreyRcool Says:

    tomdavis — XACS#1 has been out visiting clients this week. So have been berift of his insights the last few days. On the other hand, I can tell you that the High Yield Market (while it has dropped recently) is still viewed as a good place to be. By far the easiest (and best) way to tell this is to look at whether new high yield deals are getting done. For about 3 1/2 weeks there, they weren’t. Now they are. Technical money flows in HY tell you about 85% of what you need to know about that asset class.

    Also, the E21 10s continue to be just about the best thing I have seen, on a relative value basis, in the HY universe. E21 has said — and recently too — that they expect to do $100mm of free cash flow (after capex AND interest expense!) for their fiscal yr starting June 30th. That is a lot of “cash flow cushion” for those 10% notes.

    Nice snag at 99, by the way!

  19. 19
    1520sbroad Says:

    Z – nat gas history question – i remember a week back in the summer of 2006 when there was actually a draw from storage around this time of year. No hurricane influence i think it was just cooling/gas fired elctricity load. Any idea what the CDD number was then?

  20. 20
    zman Says:

    PXD getting hit a bit on this JV pricing. Valuation looks good, but it could be an expectation that they were going to get more cash up front than they are getting (and less of a carried interest going forward).

    Mortgage rates to new record low.

  21. 21
    Jerome Blank Says:

    Re: #14 TAT, I see the channel and updated the daily chart, looks like the topside trendline resistance area is at about $3.60, either a buy on a breakout retest of this resistance/support level or a pullback off $3.60 resistance to about $3.30 would be ideal…depending on what TAT does from here…

  22. 22
    tomdavis12 Says:

    BOP: Thanks. Since you might not have the same compliance constraints on you that Z has, are there a few names you can throw out in the high yield universe that might warrant our own further investigation.

  23. 23
    zman Says:


    that was second week of July 2006, CDDs were 86. This happens to be the forecast for this week’s CDDs however we are producing a lot more gas now, on the order of 60 Bcf per week more, so I wouldn’t expect a drop to negative unless we spike well above that or see hurricane based disruptions.

  24. 24
    zman Says:

    JB – TAT has had numerous delays in operations in the short time I’ve been following their story. Long term I think its great but the volatility short term may prove to be an opportunity. They don’t have the whole “under promise and over deliver” routine down yet. Thus, I’m thinking to start taking profits on the big ups so please keep that in mind. Thanks much.

  25. 25
    BirdsofpreyRcool Says:

    tomdavis — I will try to remember to mention any that I come across. HY is pretty well picked-over these days. That is what makes the E21 bonds stand out to me. But will keep an eye open for you.

  26. 26
    milepost_43 Says:

    Oilsands & XL pipeline…
    as I have mentioned my GOOG alert on XL has been flooding my inbox with negative alerts since the BP spill…and then this speech by Podesta At the Canada 2020 conference “Greening the Oil Sands,” ….
    “Oil extraction from tar sands is polluting, destructive, expensive, and energy-intensive. These things are facts. I think suggesting this process can come close to approximating being “greened” is largely misleading, or far too optimistic, or perhaps both. It stands alongside clean coal and error-free deepwater drilling as more PR than reality.”

    On Friday, a provincial court judge is expected to deliver a verdict in the case against Syncrude, which faces federal and provincial charges in the deaths of 1,600 ducks north of Fort McMurray, Alta.

    With the HBO special too, I am very concerned that about one more major O&G incident will result in a major setback for the O&G industry….

  27. 27
    zman Says:

    Re 22 – oh now that’s funny, thanks for the laugh. I can’t recall the last time I called Gloria in compliance and asked if I could trade something, anticipating the “well, do you plan to publish something in the next 30 days?” and me saying “who me? no, I’m asleep at the wheel there”.

  28. 28
    1520sbroad Says:

    #23 – thanks. I figured the new production would cancel it out. Was just curious on the CDD number. We moved into our current house at the end of June 2006 so i had direct exposure to that heat wave – this one has felt similar.

  29. 29
    zman Says:

    MP – have you watched it? Very much a case of “Roger and Me”. I hear you though, one more high profile case onshore and you’ll see emergency legislation at least proposed. At that point I think you want to be in some conventional resource names. Maybe someone like a DNR or an HK as the only place I can actually see a “moratorium” even coming close to being passed would be in PA part of the Marcellus … and HK and SWN are not there. I can tell you SWN is just about bullet proof in AR in terms of drilling stoppage. I am going to take a trip up there soon and produce my own 2 minute documentary of one of my dogs drinking out of stream near one of SWN’s wells.

  30. 30
    BirdsofpreyRcool Says:

    TAT — Cowboys (albeit successful cowboys) from West Texas ride into Turkey guns a’blazing and think they are gonna run the show. Cowboys get a lesson in how things are done in “Turkish Time.” Cowboys have to give up their horses and learn to ride camels. Cowboys learn to listen to the Local Tribesmen. Tonto Teaches Lone Ranger Lesson.

    Cowboys from West Texas will prosper. But not on their timetable. However, C from WTx are smart enough to start learning the local language. So, in the end, TAT should do well. But on Turkish Time. Not WTx Time.

  31. 31
    zman Says:

    1520 – It’s hot as a pistol here and my 1920’s craftsman, with plaster and lathe for insulation doesn’t stay very cool at 102.

  32. 32
    zman Says:

    BOP – I hear ya. I hate to hear managements blame rain. Know your weather and plan accordingly. OK, OK, I know it was the wettest year in history in Turkey so I forgive them that and still own it obviously but I really want them to soften their timelines. Also, part of the problem is getting equipment over there and not all of that was rain induced. At least they are doing a better job of getting their exploitation work handled than FXEN is in Poland.

  33. 33
    zman Says:

    NG storage in 5 minutes.

  34. 34
    BirdsofpreyRcool Says:

    TAT — I own. So, I agree with you.

  35. 35
    1520sbroad Says:

    #31 – yardwork has been painful. I am looking for a pure play on lemonade…

  36. 36
    Nicky Says:

    Good morning all. We haven’t been able to hold some key levels (1087) and I agree with HT that the path of least resistance is down. Resistance is at 1087, 1095, support at 1079.

  37. 37
    zman Says:

    1520 – Flipside is, we have tomatoes twice the size of a good sized baked potato, both Better Boy and Brandywines already ripening. And dozens of salad tomatoes for the last month.

  38. 38
    zman Says:

    Storage Injection: 81 Bcf – a little high to me, in line with the Street.

  39. 39
    zman Says:

    NG backing off a little on the number but not getting crunked yet and I doubt it will. Epperson doing a good job of fear mongering over the wave that could potentially be the first named storm of the year (ALEX) next week, saying one forecastor has it on track for the Macondo site. I have several tracks now taking it across the Yucatan and into the Mexico side of the Gulf before hitting the Mexico mainland. That would probably take gas back into the $4.25 to $4.50 range.

  40. 40
    zman Says:

    NG was up 3 cents pre number now flat. Traders there say “meh”.

  41. 41
    zman Says:


    Added (3) PXD July $65 calls for $3.10 with the stock at $65, off 3% on news that their JV in the Eagle Ford was completed ( a little buy the rumor sell the news at play here) and in a weak tape. This is an opening position and I don’t get the sense in this market that there is any reason to rush at the moment as pricing is pretty sloppy in E&P and in the market as a whole. I do think that the deal is a good one for PXD and that growth from the Eagle Ford will increasingly be a key driver the story going forward.

  42. 42
    Nicky Says:

    we should be getting close to completing a wave v down here….should lead to a bounce

  43. 43
    jiveyjr Says:

    I bot more HK on a long outstanding order at 19.36…must have been some chart point I liked…market likes it lower tho…

  44. 44
    VTZ Says:

    RE 26 – In the spirit of not turning this into a huge oil sands discussion I’m going to leave you with the following nuggets:

    -Don’t expect to tax oil sands until US coal (and consumers) are taxed on carbon. The US consumer is the biggest CO2 producer in the world and oil sands pales in comparison to the pollution from coal.
    -Any sort of American taxes exclusively on oil sands will incentivize more oil to the West Coast, so be prepared for the consequences

    It sure is easy to produce good sound bytes though.

  45. 45
    Nicky Says:

    possible target area for wave v is 1072 -1075

  46. 46
    VTZ Says:

    •Canada contributes 2% of global CO2.
    •Oil Sands contribute about 5% of Canada’s total GHG emissions.
    • The oil sands industry currently accounts for approximately 0.1 % of global greenhouse gas emissions.

  47. 47
    VTZ Says:

    And added to 46, the oil burned from oil sands would therefore be 0.3% of global emissions because consumption represents about 3 times more than the CO2 from production.

  48. 48
    zman Says:

    V – thanks for the stats. Do you have a reliable site that shows a country breakdown for CO2. Like to see US, China, at least Europe, etc.

    Nicky – nice calling again.

  49. 49
    VTZ Says:

    The energy input to create a bbl of oil sands oil is ~10-15% of the energy value you get out of it.

    If industry was producting 2.5 million bbls/day it would be 2.5% of the river’s mean annual flow.

    Maybe Podesto should get some facts straight.

  50. 50
    VTZ Says:

    And 80% of the water is recycled.

    500 km2 is currently disrupted by the mines/ponds.

    0.01% of Canada’s boreal forest has been impactedin 40 years and some of it is growing back (see Syncrude’s Bison land for example).

    Z – No, I don’t have a breakdown by country.

  51. 51
    BirdsofpreyRcool Says:


  52. 52
    zman Says:

    Thanks BOP

  53. 53
    crysball Says:

    BOP….RE 30…Hilarious…..you should be on SNL with chracterizations of West Texas Cowboys in Turkey.

    Hugo is at it again expropriating about a dozen H& P drilling rigs ….hope Barkak is not listening/watching , for new ideas on how to to BULLY the O & G industry.isn’t Venezuela a FUN PLACE to be.

    The PXD valuation of $12,000/acre on the Gassy side of the windwow should even help tiny LEI..which has been suffering of late.

    All IMHO

  54. 54
    zman Says:

    BOP = Tina Fey’s Oily Alter Ego.

  55. 55
    zman Says:

    V – SU looks like its forming a rounding base here.

  56. 56
    BirdsofpreyRcool Says:

    crys and z — thanks for the laugh, boys!

    LEI — seemed to droop when they reported Wall No.1 well. Granted, 91 bbls of oil in 24 hrs isn’t the definition of a “gusher.” On the other hand, it’s OIL. Were people expecting more?

  57. 57
    VTZ Says:

    RE 55 – Sold more assets from the PCA piggy bank yesterday too.

  58. 58
    zman Says:

    PXD Call Notes:

    45% of interest in 212,000 acres to Reliance from India.

    $1.15 B. $266 mm cash, close in 5 days.

    $879 mm in drilling carry.

    Reliance will fund 75% of drilling costs until carry is complete in 3.5 to 4 years.

    Expected future acreage acquisitions with AMI in 6 S. Texas counties with Reliance. 125 land brokers leasing for them now. Reliance will have 49% of new acres going forward.

    1,750 locations on the current acreage.

    Plan going forward:
    Will take until at least 2024 to drill all the current locations

    5 rigs running now, 2 more rigs are set to be added by year end.

    Over 10 rigs next year.

  59. 59
    zman Says:

    PXD Call Notes 2

    Have signed up 3 central gathering facilities (20 acres apiece) and a 4th about to be signed.

    70 miles of gathering lines to be installed this year, pipe is already on order.

    Will see ramp in production from the EFS beginning in 4Q

    The JV puts them in cash flow positive stance for the position which keeps the company as a whole in free cash flow mode.

    By the time the carry ends in 2013/2014, they will have significant cash flow and they will never go negative on CF from the Eagle Ford as a result of this JV.

    Assuming 8 – 10 MMcfepd per well, still learning, expecting costs to decline in the future, falling eventually to $7 to 7.5 mm for a 6 Bcfe EUR.

    5 wells producing today, total 28 mm/d, about 40% liquids.

    Well no 6 comes on late 3Q, IP was 14 mm/d

    3 more wells waiting on those gathering facilities

    Frac biz relatively tight due to hotness of the play. They are arranging for 3rd party frac ops to be put in place and are also building their own frac fleet that will be PXD ownded and up and running in 2011.

  60. 60
    zman Says:

    PXD Notes 3

    Eagle Ford impact on the company as a whole.

    CAGR volume growth for 2011 to 2013 goes from old thinking of 10%+ growth to 15%.

    Will stay within from cash flow.

    Liquids goes from 45% in 2010 to 55% in 2013 due to the Spraberry, EFS, and Alaska.

  61. 61
    zman Says:

    PXD Notes 4:

    Starting up a rig to target the Barnett Combo area that EOG has been targeting, need to look at acreage there as EOG has been making some nice rates in the play, very oily.

    By 2013, they will 40 rigs running in the Spraberry and 14 rigs running in the Eagle Ford.

    Goal for next 12 months is to add more hedges out through 2012 and 2013.

    75% liquids based company now.

    Seeing CF doubling by 2013 over 2010.

    Should be some analysts making some long term Buy calls here.

  62. 62
    nifkin Says:

    Judge denies Obama administration stay on ruling that blocked deepwater drilling moratorium–Reuters

  63. 63
    zman Says:

    Thanks Nifkin, chalk one up for the whole checks and balances concept.

    Now I see that track Epperson was talking about.


  64. 64
    zman Says:

    Who originally asked about TGA and can you send me the email you sent last week again?

    Slip of the thumb on my iphone ripped it right out my gmail box. Please resend to zmanalpha@gmail.com. Thanks.

  65. 65
    zman Says:

    Analyst Watch: PXD

    UBS stays at Neutral following JV news.

  66. 66
    zman Says:

    From Bastardi’s pro site comments today:

    “Speaking of boiling, the next five days will be torrid for much of the nation. This should be the hottest June ever for what I refer to as the “energy box,” the area that approximates temperatures over the nation from the Plains on east, as it is an astounding plus 4.5! Inside this is a core, that if we went from Dallas to D.C. using Little Rock and Nashville as an approximation of a 600-mile-wide area with that as the center axis, we find temperatures near 6.5 above normal. Yet here is the wildest stat of them all… Not one record high in the bunch! It still may hit 100 in D.C. though on Sunday. “

  67. 67
    TEXWS6 Says:

    Re: Country CO2 Emissions,

    Don’t know if you guys use this engine, but it’s AWESOME!


  68. 68
    zman Says:

    Tex – thanks, had not seen.

  69. 69
    Gtinvest Says:

    looks like admininstration is capitulating on drilling ban:

  70. 70
    BirdsofpreyRcool Says:

    Yikes! Seeing headlines like this cross your bloomberg makes lunch feel a little uncomfortable…

    “Al Gore Behaved Like ‘Crazed Sex Poodle’…”

    Now i have to start singing “It’s a Small World Afterall” just to get that outta my head.

  71. 71
    skimo Says:

    BOP, please show some restraint. You don’t have to ruin everybody’s lunch. 🙂

  72. 72
    zman Says:

    If you have trouble getting in here you can ask questions/ make comments at


  73. 73
    zman Says:

    Italy planning solar incentives cuts of 18%. Can’t afford them. Germany was one of the biggest providers of tax incentives for solar panels, also Spain and a few others. German cut them back and now others are following suit.

  74. 74
    BirdsofpreyRcool Says:

    “iiiiit’s a small world aaaaaaafter all…
    iiiIIIIT’s a Small Wold aaaaaaaaafter all…
    it’s a small, Small WORLD!”

  75. 75
    AAA Says:

    BOP re 70, Bill Clinton has to be LOL. John Edwards and Gore are ruined and/or humiliated by incidents that wouldn’t even make the Clinton Top 100.

  76. 76
    milepost_43 Says:

    64..me…much appreciate your analysis…forwarded my 6-16 email about possible TGA “fairway”..

  77. 77
    zman Says:

    Thanks MP – I’m just getting started on the plays and then the model.

  78. 78
    zman Says:

    On the surface, I like what I see, history of making and keeping promises.

  79. 79
    Geno Says:

    BOP – Z – Al Gore’s a pig

    –She called him a “crazed sex poodle” and tried to distract him, pointing out a box of Moonstruck chocolates on a nearby table. He went for the chocolates and then offered her some, cornering her, fondling her and shoving his tongue in her mouth to french kiss as he pressed against her.

    –She said she was intimidated by his physical size, calling him “rotund,” described his “violent temper, dictatorial, commanding attitude” — what she termed a contrast from his “Mr. Smiley global-warming concern persona.”

    –Suddenly, she said, he “flipped me on my back, threw his whole body face down over a top me, pinning me down.” She said she loudly protested, “Get off me, you big lummox!”

    –Later, she said, he tried to lure her into the bedroom to hear pop star Pink’s “Dear Mr. President” on his iPod dock.

  80. 80
    BirdsofpreyRcool Says:

    All Together Now…

    “iiiiit’s a small world aaaaaaafter all…
    iiiIIIIT’s a Small Wold aaaaaaaaafter all…

    it’s a small, Small WORLD!”

  81. 81
    Jerome Blank Says:

    CIGX trying to break out above the daily bull flag…

  82. 82
    BirdsofpreyRcool Says:

    Thx JB. CIGX is bugging the sh*t outta me… and ruining my evil plan to add more at 1.55.

    One thing to note, however, there are a lot of shorts in this name… and they get aggressive on the last day of the month… and very aggressive on the last day of the quarter. So, maybe I get my chance next Wed. Just a thought.

  83. 83
    Jerome Blank Says:

    Re #82: BOP, I would have a tough time sleeping being short CIGX from this level, based on technical’s huge buy opportunity if it does retest to $1.55…

  84. 84
    BirdsofpreyRcool Says:

    yeah… i may have to readjust my add-to price. Thinking i’m Hoping for a little too much Change there.

    thanks, JB.

  85. 85
    zman Says:

    test test test

  86. 86
    zman Says:

    Copied from the other site:

    Unless/until we can get back above 1090 we are likely looking at lower lows. Support below 1072 is at 1069,1065.

  87. 87
    zman Says:

    re 86, that was from Nicky.

  88. 88
    ram Says:


  89. 89
    zman Says:

    Wowugly market into the close.

  90. 90
    Jerome Blank Says:

    BP breaking below the previous low of $29…can’t be helping the mkt into the close…

  91. 91
    zman Says:

    BP at new low after a stronger than group start to the day.

    Is anyone having site slowness now?

  92. 92
    VTZ Says:

    Site is fine for me. Gold battle for weekly close is going to be extremely important and volatility is likely to explode soon.

  93. 93
    scoop006 Says:

    site A-OK

  94. 94
    zman Says:

    JB – typed 91 before I saw 90. No doubt you are right. Ready to get this week off the books. Everyone is again talking 1040 S&P.

  95. 95
    zman Says:

    Thanks Guys. They did something earlier that locked me out for an hour. Now extremely fast at least for me. Apologies for the intermittent service of late, a real headache on this end too.

  96. 96
    zman Says:


  97. 97
    zman Says:

    RIMM and ORCL on the tape beating #s.

  98. 98
    tomdavis12 Says:

    Z: If the judge is denying the US motion, why is that not perceived as a positive for energy?

  99. 99
    BirdsofpreyRcool Says:

    End of Day Summary

    Market Update – the break-out rally of 6/15 proved to be nothing more than a head fake as momentum strong enough to push us meaningfully up and out of our trading range (1110-1050) proved fleeting; all the fast-money traders who got long last week on back of the encouraging trading patterns have turned sellers this week (Tues’ 1.6% sell-off in particular was a big momentum breaker). There were a bunch of negative data points being cited to explain the weakness, but the fact of the matter remains that large long-only money never bought into the rally that commenced back on 6/8 and we are simply drifting back into the middle of our month-long trading range. There hasn’t been a ton of big long-only sellers, but there is a big buyers strike, which is allowing the tape to fall lower. Volumes were on the light side and there hasn’t been a lot of panicked selling. Fundamentally, some of the items cited to explain the weakness: 1) fin reg reform proving more draconian than even reduced expectations (esp. the FNM/FRE items discussed on Politico overnight); 2) slew of neg. consumer discretionary headlines (BBBY, NKE, DRI today, BBY last week, etc); 3) cautious comments out of tech (inc. DELL’s commentary today at its analyst meeting that Europe + consumer has moderated some); 4) increased concerns out of Europe (in particular the dramatic widening of Greek sov debt spreads this week, although people are saying that a lot of the widening has to do w/index rebalancings occurring as a result of Greece’s rating downgrade a few weeks back). The housing figures in the last couple weeks have all signaled that activity retrenched meaningfully following the expiration of the tax credit (although the homebuilder stocks seem to have found their footing in the last few days) while the labor market remains sluggish (the next big data point on this front will be next Fri’s BLS report).

  100. 100
    zman Says:

    re 98. Maybe because the administration is appealing and is also going to reword the moratorium to be narrower (and also to get around the judges ruling). The new moratorium is said to exclude some development activities from the ban. Also, because I think MMS or whatever they are now calling it (mms.gov has changed) is going to drag its feet on any permit issuance no matter what the judge says.

  101. 101
    DrLink Says:

    5:37PM ATP secures $150 mln senior term loan and option for additional $350 mln Loan (ATPG) 10.92 +0.13 : Co announced that it has priced a new $150 mln First Lien Senior Secured Term Loan facility. The facility replaces the existing undrawn $100 mln revolving credit facility and additionally provides an option to increase the first lien loan by up to an additional $350 mln (for a total of $500 mln) as the co’s Adjusted Consolidated Net Tangible Assets value grows. In addition, the facility offers provisions to expand it incrementally by $350 mln which would increase the size of the loan to $500 mln as the value of our assets grow.

  102. 102
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    Lacking Inspiration.

    It was another sloppy session today for equities. Equity weakness in Europe and Greek Credit Default Swaps testing their widest levels ever created a weak tone early. Then news of a proposal by House Republicans to make the banking sector liable for the losses at the GSEs in the liquidation fund portion of the FinReg bill was another indication of how lost the legislative body is. First Congress creates the GSEs. The GSEs crowd the banks out of their vanilla home mortgage business, forcing them to embrace riskier businesses like derivatives and securitizations. Now the GSEs have hundreds of Billions of Dollars in losses, and the House Republicans want to lay it off on the banks who are dealing with their own losses. Barney Frank must have been chuckling to see the Republican members of the House do his heavy lifting for him. Senate negotiators rejected the measure. Needless to say, today’s round of negative headlines was enough to move Bulls to the sidelines. Trading was slow and one interesting divergence was the fact that Treasuries did not catch a bid despite the Equity weakness.

    One of the data points lacking inspiration was the Initial Jobless Claims report. The bottom line is that 457,000 beating a 463,000 claims estimate is not enough to make a difference. Small expectations beats at these levels do not provide any additional help to the economy. Without resumption of the downward trajectory, Non-Farm Payrolls and the Unemployment Rate will not improve. Considering it has become a key focal point, it is only appropriate to provide the proper context. Going back over 40 years, the current levels of 450,000-475,000 on a 4 week moving average are consistent with adding nothing in Non-Farm Payrolls per month, and still losing approximately 30,000 Private Sector Payrolls (Table 1). Even the 425,000-450,000 range indicates flat Non-Farm Payrolls. The key threshold that needs to be broken is 425,000. At that point, approximately 100,000 Non-Farm Payrolls are being added, most of which are Private Sector (Table 2). That rate is still not enough to bring the Unemployment Rate down, but it is a very healthy start. The true sweet spot arrives when initial Claims drop below 375,000, then the economy is adding 200,000 Non-Farm Payrolls, 170,000 of which are Private Sector. That is the point where Unemployment starts declining and the recovery gains real momentum.

  103. 103
    zman Says:

    SSN on the tape with a sizable asset sale in the Niobrara.

    Selling half their position to a large independent for between $61 and $79 mm. Best guess would be it’s either EOG or CHK.

    SSN’s total enterprise as of the close today should be about $52 mm.

  104. 104
    BirdsofpreyRcool Says:

    This Financial “Reform” bill is rotten to the core.

    Ground ZERO in this mess is Fannie and Freddie (the GSEs)… and this “bill” is so BASSackwards that is just beyond all sense of reason. Who is in charge of our money?

  105. 105
    BirdsofpreyRcool Says:

    This is just too true to be all that funny….


  106. 106
    zman Says:

    So based on the SSN news out tonight, they’ll have around a buck a share in cash, then the rest of their Niobrara and their Bakken assets. Not sure how it doesn’t at least double tomorrow. Hmmm, checking further. …

  107. 107
    zman Says:

    SSN trading up 26% in the after market tonight. That would get them about to parity with cash assuming this deal happens.

  108. 108
    crysball Says:

    Re SSN there is also a secondary offereing to existing shareholders *(which requires exerciseby the 27th of June @ 57 cents share). Expect that exercise will be a slam dunk……….but will hold the upside share price increase down.

  109. 109
    crysball Says:

    Z ,

    @8PM EDT Crown raised 93L to 60% prob.

    Might this help on shore Gassy stocks tomorrow.

  110. 110
    RMD Says:

    I’ve been driving al week so missed much. Thanks for the Al Gore news; sounds like the guy who invented the internet invented Bad Lines also.
    #30 BOP Were you a writer for John Wayne westerns before you became a market sage?

  111. 111
    zman Says:

    Crys – re 108, possibly, also, the deal is not a done deal, may not happen at all.

  112. 112
    zman Says:

    Crys – taking into account current shares, price range paid for these acres, minimum of that range on their remaining acres, and a pittance for their Bakken position, I put back of the envelope NAV at $1.50 to $1.75 with a large chunk of that being cash.

  113. 113
    zman Says:

    Yep, 93L looking more like it will be Alex, tracking to Yucatan, then Gulf.


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