Wednesday Slide Show – Natural Gas Supply and Demand + The Oil Preview (Advance Issue)

130 thoughts on “Wednesday Slide Show – Natural Gas Supply and Demand + The Oil Preview (Advance Issue)”

1. Asian off lows,

   Dollar slightly lower,

   commodities off lows,

   pretty flat and equity futures in the U.S. up slightly.

2. ADP Estimates U.S. Companies Added 13,000 Workers (Update1) 2010-06-30 12:33:18.265 GMT
   By Shobhana Chandra
   June 30 (Bloomberg) — Companies in the U.S. added fewer workers to payrolls in June than forecast, according to data from a private report based on payrolls.
   The 13,000 gain followed a revised 57,000 increase the prior month, data from ADP Employer Services showed today.
   Economists surveyed by Bloomberg News had anticipated an increase of 60,000, according to the median forecast.
   Companies may be reluctant to add to their workforce until there’s evidence the gains in demand will be sustained.
   Economists in a Bloomberg survey project a Labor Department report in two days will show payrolls fell this month due to a plunge in government employment of temporary workers for the census.
   "Private hiring is still pretty dire," David Semmens, an economist at Standard Chartered Bank in New York, said before the report. "Although companies over-fired during the recession and are now reporting better sentiment, they are in no great rush to hire."
   Projections in the Bloomberg survey of 36 economists ranged from 23,000 to 100,000 after a previously reported 55,000 gain in May.
   Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in February, when they overestimated the drop in jobs by 2,000. The estimate was least accurate in April, when it underestimated the employment gain by 199,000.
   Less Reliable
   "The ADP data appear less reliable when employment trends are changing, as they are now," Aaron Smith, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. "The ADP estimate lagged the deterioration in jobs in late 2008 and lagged again as employment leveled out in the second half of last year."
   Overall payrolls fell by 115,000 in June, reflecting a drop in federal census workers as the decennial population count began to wind down, according to the Bloomberg survey median ahead of the Labor Department’s July 2 report. Private hiring, which excludes government jobs, rose for a sixth consecutive month, economists projected.
   The Labor Department figures will also show the jobless rate rose to 9.8 percent this month, according to the Bloomberg survey median. Unemployment is hovering near a 26-year high of
   10.1 percent in October.
   Construction Down
   Today’s ADP report showed a decrease of 17,000 workers in goods-producing industries including manufacturers and construction companies. Employment in construction fell by 35,000, while factories added 16,000 jobs. Service providers added 30,000 workers.
   Companies employing more than 499 workers expanded their workforces by 3,000 jobs. Medium-sized businesses, with 50 to
   499 employees, added 11,000 jobs and small companies decreased payrolls by 1,000, ADP said.
   While payrolls have increased each month this year, it may take years to recoup the more than 8 million jobs lost since the recession began in December 2007, the most of any downturn in the post-World War II era.
   Federal Reserve policy makers this month said the labor market was "improving gradually," and reiterated a pledge to keep the benchmark interest at a record low for an "extended period" to help nurture the recovery.
   Toyota Jobs
   Manufacturers expanding employment include Toyota Motor Corp., the world’s largest automaker. Toyota said on June 17 it will complete a plant in Blue Springs, Mississippi, and hire 2,000 workers to begin production of Corollas by the end of next year. The company had mothballed the project 18 months ago as U.S. sales collapsed.
   The ADP report is based on data from about 500,000 businesses with more than 21 million workers on payrolls. ADP began keeping records in January 2001 and started publishing its numbers in 2006.

3. From Madison Wms morning commentary (this is just so wrenchingly sad, bad, and maddening —
    
   Deepwater Drilling & Local Impact – executives from BP XOM CVX NE RIG DO HERO HAWK, the API, and the National Ocean Industries Assoc. came away from a meeting with US Interior Secretary Ken Salazar without securing promises to end the moratorium. Multiple operators informed Salazar that they were in the final stages of mobilizing their assets to West Africa and the Middle East. According to a person familiar with the matter,  “…we were frankly disappointed at the lack of serious attention that was paid by the Dept. of Interior on the horrible economic impact that the Dept.’s policies are having on the industry and on communities along the Gulf Coast.”

4. Boone Picken's on cnbc this morning, didn't see BP relief well shutting anything till Sept at earliest.

5. charts are "fuzzy" this morning….???…using Firefox….like to read robry825 Sun night blog…seems this week may be especially interesting
   http://robry825.blogspot.com/
   "This upcoming week will be one to watch for changes as Tuesday marks both the beginning of a new month and the beginning of a new quarter. Gas flows tend to like to change around such days, as factories & retailers adjust to changing trends in orders and inventories in their scheduling of production and purchases for the upcomming new month or quarter."
    

6. Z; your reveiw of the data is such a timesaver!  I just missed my limit order to buy more BEXP yesterday; i think there is a chance today.
    
   thanks for the great work!

7. John – Boone just being controversial like Simmons or does he think he know's something?

   MP – They look clear to me. Don't know what they look fuzzy to you.

   BOP – Salazar is a friend of higher oil and natural gas prices.

8. Thanks Paul.

    

   Emailed in from Nicky:

   we should make a low between now and the 1st and then turn higher for a few days.  Probably move up to test the 1070 – 1080 area, then down to 960 or lower.

9. He was just expressing his opinion.  Did mention Simmons btw, in thinking nuclear option was pretty crazy.

10. John – thanks. And he may be right, it may take a  month or two of tries, but I wouldn't characterize that as "September at the earliest". Big fan of TBP although I think he's beating his head against a brick wall with this administration.

    News flash: "It's Jobs Stupid" bumper stickers selling like hot cakes.

11. FWIW…. credit markets green and TED still declining (tightening). 
     
    IG -2bps tighter
     
    HY flat
     
    TED +36.2 bps
     
    HeadTrader saying we are trading on fear and fear-mongering, not fundamentals. 

12. TSLA = probably ought to take off my screen.

13. Houston Ship Channel halted due to Alex. Definitely going to be some weirdness in the imports numbers next week.

    BOP – roger that, fear factor in charge in front of Friday. I'm still guessing now White House speech this week about how great the jobs numbers are.

14. TNK-BP saying it may buy some BP assets, reason for the move in the stock today.

     

    BOP – clearly HT is right, analysts completely backing away from the market, as told by the poor showing on the upgrades/downgrades pages.

15. Group trying to bounce. Don't really trust, but already long just in case.

    SSN over $0.80. Nice arb to the $0.577 rights offering price.

16. BEXP actually green, color me shocked.

    SSN at $0.85. Guessing someone knows something about how well subscribed this puppy is.

    TSLA up 20%. Ugh.

     

17. HT right again… buy KOG below 3.30, hold, sell above 3.60.  Rinse and repeat.

18. Agreed BOP. Feeling the same way about TAT.

    Chicago PMI, lower but in line with expectations.

19. SSN at $0.90. Wow.

20. 30 minutes until oil numbers

    1 hour until everyone tunes out to watch the men's qf at Wimbledon.

21. SSN up on much larger volume today, especially given how early in the session it is.  Interesting. JB – any chart thoughts there?

22. … because it looks a little cup and handle-ish to me, with the old high in April at $0.94.

23. I'm looking at the smallcap ranks of 5/1/10.
    In Which categories does GMXR fall short. What do you believe there potential to be.

24. typo : should read 5/19/10

25. TED spread narrowing dramatically.

26. SSN – My accounts are showing a full allocation (for the second time after disappearing once).

     

    MD – my real issue with GMXR are management and gas prices. They get pretty pie in the sky in their presentations but have had to pull back production numbers a couple of times which really burned the name. Need to look at valuations again there but not really expecting a big rally in natural gas soon (this year) other than weather related spikes. 

27. Pati or anyone, have you seen an SSN allocation yet?

    Thanks Eld – noting that all the drybulk names hit their lows of the year yesterday which is not surprising but some of them are off 50% in the last 10 weeks. Ouch.

28. Salazar testifying about oil drilling…

29. Bill – you out there? This China slowing thing seems way over done as it pertains to the shippers. China may slow but going from 11% which is unsustainable to something like 9% is probably pretty healthy for them. The shippers have gotten pummeled over this. Not that I'd buy DRYS but at $3.60 it's like a perpetual call option. Even better, EGLE at 4.37, EXM at 5.19, NM at 4.85. Wow. Been awhile since I did a table on that group as I've just been watching rates slide. Any thoughts Bill or anyone?

30. ST debited my account the full amount but no shares.

31. BOP – don't see it, what channel?

32. RE: #21, SSN,  new P&F buy signal with the $1 print, added a 30 min chart perspective…
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
     

33. Site experiencing a little slowness, will activate back up if it persists.

34. Is SSN going to get sold off to net the premium once all those shares are available?

35. EIA Oil Inventory Report:

    Inventories

    Crude: down 2 mm barrels (2x what was expected)

    Gasoline: up 0.5 mm barrels (was supposed to be down)

    Distillates: up 2.5 mm barrels (bigger than expected)

    …

36. Bloomberg has it on live… probably on CSPAN somewhere too. 
     
    Good education on why we don't want to give a single person this much power over an entire industry.  He doesn't know what to do yet… he has some "personal opinions" but hasn't yet met with enough people to formulate a recommendation. 
     
    No sense of urgency that people are holding their breath over this.  "La-dee-dah… can I have another cup of coffee, while I decide what to do about your livelihood?"

37. More EIA

    Production and imports decline from their peaks in the previous week

    Gasoline hit a new high for demand this year at 9.462 mm bpd

    Distillates backed off quite a bit

    …

38. More EIA

    Cushing inventories reflected the drop seen by API, falling from 36.8 to 36.0. That should help crude.

    So far crude off 30 from time just before report, now at 76.12.

39. BOP – CSPAN 1 – 3 have various views of idiots on parade now but they didn't bother to cover that particular one. Thanks for the headsup.

40. Haven't seen any debit or dist for SSN.  WFC stated that I wouldn't see anything for 5 to 10 business days after 6/28/10.

41. Schwab completed SSN allocation at fully allotted amount. Account looks right this morning except it won't compute market value.

42. Re 34. I would imagine once the shares are settled in the accounts there is certainly going to be some flipping. I think the name is worth over $1 and that that can be argued fairly easily. Will this prevent me from a taking a current 57% instant gain on the rights shares (assuming current price is available), um, well, probably not. Not in this lovely market. It just seems prudent to keep my original shares and the recently taken ones and punt some or all of the rights shares. I may not do it the first day, depends on how it trades. 

43. Representative — "why the blanket moratorium on offshore drilling when your own industry experts advised against that, given the unique circumstances of the BP spill?"
     
    Salazar — "because I want to"
     
    (paraphrasing… but that is the jist)

44. Skimo – me too exactly. I would bet that the full allocation still gets recomputed to a lower figure.

45. Re: SSN
    I had to call in to Schwab over the phone to request my allocation on Monday b/c the online system wasn't working.  Still don't see anything. 

    Went through the entire process with E-Trade only for them to call me yesterday and tell me I wasn't eligible b/c I bought my shares May 20, after the May 18 date.  Asked them why they sent me the offering paperwork and emails.  They said it's easier just to send it to everybody instead of filtering out just those ppl who held shares on the date.  Lovely.

46. V – the other thought would be to sell some of my original shares into this strength and see how I do in the rights offering. I've got shares in the $0.40s and a few more in the $0.74 area. So if I just want to keep it from getting overweight I can take some of those out in here. I do wonder a bit about the sudden strength today. Some Australian brokerage beating the drum on it? Hmmm

     

47. Representative — "why not lift the moratorium, in light of the fact that it is doing more economic damage than the spill itself?"
     
    Salazar — "Because oil companies haven't coughed up enough campaign contributions yet and haven't promised to build only windmills and solar panels in the future."
     
    (still paraphrasing, but gives a sense of where it is all going)

48. Mattlee – had to do the same thing. Am showing the shares and then another line with XXXSUB FOR RETEX  and the count on those shares. I did that Friday. They will send that stuff even if you aren't entitled because they hate trees.

49. BOP #47 – can you send me the link, I can't seem to find it?

50. BOP – that's like the government asking Apple why they haven't gone in a different direction to replace the computer. Sheesh. Still, if you want higher oil prices he's your man. I'm sure he'll be all over onshore fraccing when he's done botching up the offshore.

51. Geno — if you have a bloomberg, i can send you that link… it's on BB TV right now.

52. Geno — try this on bloomberg…. BBTV 267886 <GO>

53. BOP, apparently I'm not a subscriber -Thanks anyway.

54. re 47-Latest update-Salazar-"I'm going to be all over those oil companies like Al Gore on a Masseusse."

55. "SSN at $0.85. Guessing someone knows something about how well subscribed this puppy is. "
    Reminder: It needs to be.  The company has acreage that requires either a purchase or a drill bit on a timeframe in order to close the deal on the 60% of the Niobara.  And, this probally influences what happens on the other 40% as well.  Otherwise the deal sheet goes poof.
    #34 – Yes

56. Geno — look at it this way… at least you will be able to keep breakfast down.  This testimony is nauseating.

57. re 55. Partly true

    If the Unit is not formed and the drilling operations are not commenced prior to the leases’ expiration

    US$ 61.0 million

    This is the low end of the range on the acreage but certainly not "poof". I used the low end in valuing their remaining acreage.

58.  z — with respect to comments that hedge funds are closing their doors at an increased pace… there were two $1B funds that blew up a coupla weeks ago (Crosslink and Intrepid).  They have both been around for a while, so not newbies.  But, that is not particularly out of the ordinary.
     
    And on the other side of the coin, HeadTrader pointing out that he heard of 3 new $50mm HFs that opened recently too.  So, money still flowing toward risk assets.

59. BOP – Thanks for circling back on that, will relay to the interested party.

60. Yet more EIA

    Things that are supportive for oil in this week's report

    1) A second week of dropping stocks at Cushing, OK. If you combine the two weeks drop it is apparent that API has a pretty good handle on what's going on there. Midwest refiners are running full tilt (about 92%) which is 4% above the national average at the moment so this is helping to offset the flood of Williston Basin crude entering the area.

    2) Gasoline production was up last week which was part of the reason for the build in gasoline stocks today. It is at the point where it peaks on an annual basis.  Imports also took a big bump up.

    3) Gasoline demand was also up, in fact more than production, so without an anomalous bump in gasoline imports, stock's would not have built. It is unlikely that imports remain at this level. 

61. BOP – you have JD's thanks on that.

62. EIA Wrap – Got through all my data points. That was a bullish report except for a steep drop in demand for distillates, out of the recently elevated range and back to the lows. Couple of thoughts come to mind. Could be an EIA true up. Could be exports fell back away. Either way, refiners will need to cut production or the bloat there which is already out of hand will get worse. If they cut production of distillates to prevent that, this also necessitates cutting gasoline (since you make both, to varying degrees at the same time). Gasoline demand is not going to peak for another 4 to 8 weeks. Gasoline production should be just about topped out. That is good news for gasoline prices (staying high) and for oil.

63. Z, we both have Charlie.  Had the same experience, appearing and disappearing.  Now have my full allotment and debited. 

64. Pati – thanks for the feedback. I'd bet they get it sorted before the weekend.

    HAL getting a reprieve today, nice to see. All action probably moot pre Friday's payrolless number.

    The wife tells me it's really nice outside, low temp, low humidity, feels like Spring. I told her how terrible that is but she just doesn't buy it.

65. Z, Nice timing with the BP add.  It's up 3% today.

66. Site slow again. The good news is that according to my host's test, it is not my software, even though they insisted it must be. They're fired as of mid July. My humblest apologies for site delays until then.

67. AAA – thanks but it has a long way to go before I'm even remotely redeemed in the spill corner. Ugh. The new position was why I was asking about TBP's comment on September … that would be a bigger problem for them. He may be right but it's probably more like a coin toss and I'd still bet they get a bunch of tries and succeed before then.

68. … And then everyone can go back to trying to run calcs on liability at least with a capped barrel count.

69. BP…$29 is the resistance point to watch

70. Anyone see any comments on EOG by the Street? Below $100, down about $9 in 3 days and running counter to the group today.

71. Is it possible to calculate or guessitmate how much more the costs of drilling offshore is going to be relative to land, given unlimited liability.
    Will it even be economical to drill offshore?

72. Thanks much JB.

    BOP – any additional color from KOG on the decision to move the TFS back to a 4Q completion?

73. re 71. Very good question. I know the canceled/postponed the next lease sale but honestly, who will want to bid on new offshore acreage if any one well can end you?

74. S&P just can't get any traction. Starting to think market players are getting too bearish. Before you throw rocks at me, I'm not uber bullish or anything but honestly, a lot of stuff like energy names are way off with the broad market and yet that which they sell is doing pretty well. I'm not going to complain if I'm a Bakken guy about $75 oil. Unless China really rolls then oil is unlikely to fall very far and they continue to consume more and more natural gas, taking much of that supply away from the States.

75. I am probably the most bearish person on this site. I really think that it is going to take a long time to get us out of the debt mess we are in. However, things are not as bleak as they were in 08. I do think that most of this downdraft is Euro related and uneasiness in the credit markets. However, the TED spread is improving each day. I have loaded up on AEZ, HK, FCX and POT. Probably will add a little SU here as well. Not sure where the price of oil should be, but if it holds here, you got to love the onshore cos.
     

76. Group / market looking very holiday like. BEXP does more volume usually in the first 30 minutes of the day.

77. Test – please ignore the next 10 comments.

78. Ping

79. Pong

80. Ping ping

81. Pong pong

82. The only thing slowing me down is wordpress time out for comments. FKeditor deactivated.

83. Lightning fast at the moment. Keep the plug in offline.

84. That was slow again.

85. yep

86. That is really slow

87. Thanks to the little bird who sent this re my EOG comment

    From Jefferies:
    Niobrara deal casts concern over what many believe could be the next big onshore shale oil play… earlier this week Voyager (VYOG, $3.57, NC) bought 50% of Slawson’s 48,000 net Niobrara acres for $313/acre, well below the previous range of $1,000-$3,000/acre. VYOG agreed to pay Slawson $7.5 million up-front and participate 50/50 on all wells drilled in the AMI. The Slawson/VYOG acreage is primarily located in Weld, CO and Laramie, WY. Companies with high relative Niobrara exposure include EOG (EOG, $100.24, Buy), Noble (NBL, $60.27, NC), Rex (REXX, $9.83, NC), and Petroleum Development (PETD, $26.21, NC)…ek

88. BP up 5% now. Hmm.

89. NG trading flat

    Crude trading back up to pre inventory report levels. I’m sticking with my comment about that being a bullish report.

90. Moody’s to possibly downgrade Spain.

91. Does anyone have the Wunderlich initiation piece on VYOG. It was a few days back as I recall. That price per acre puts some interesting spin on the SSN deal. As in why is VYOG’s acreage buy so cheap, is it well out of the area we think will be the fairway? Digging. And putting VYOG on the watch list.

92. Latest from XACS#1
    ——————————

    Similar to last Friday, the CDX IG14 Index has tightened 3.5bps (3.0% move) and the SPX is flat. Historically, 3.5bps of spread tightening, intraday CDS/SPX volatility relationships, and current index levels would indicate that the SPX should be in the +8 to +11pt range. If we used yesterday’s volatility relationships it would indicate that the SPX should be up in the +16ish range. Regardless of equity market’s decision to go its own way…equities are biased to rise based on credit market activity…….. The divergence of credit and equity market performance during rallies and their convergence during sell-offs does not appear to indicate that another credit market crisis is around the corner, in our opinion. The ability of the credit markets to continue to work through deals even when the equity markets are in turmoil, as well as the steepness of investment grade credit curves, indicates that credit is repricing itself rather than indicating that underlying assets are overvalued. Overvalued underlying assets breeds default risk and inverted credit curves. The shape of credit curves and the divergence might actual indicate a growing shift in investor concerns away from company Balance Sheets concerns to the Income Statement. Slower than expected economic growth is unlikely to cause a surge in investment grade defaults, but slower growth will likely make it more difficult for investment grade companies to meet revenue targets in 2H10. Funding decisions will still provide positive BS events…ie ACAS and Sprint…. but IS worries can exist and persist even when credit and BS concerns wax….for example….bank preferred shares are only down modestly compared to their equity.

93. VYOG – $7.5 mm for 50% working interest in Slawson’s 48,000 net Niobrara acres. Slawson is a very good operator in the Bakken, planning 3 test wells starting in July with completion expected by October, then a continuous program through 2011, bringing total well count to 60 by end of 2011 – that’s ambitious. VYOG getting in for quite the song on those acres ($312 /ac). This simply must not be the happy hunting grounds that EOG is looking at. But it is in Weld County. West, Reef, anyone, got a clue why so cheap on the buy in? Digging myself.

94. I just don’t get it… why does HK continue to get kicked in the beak? Is Fido STILL selling??

95. I think advocates of deepwater drilling are kidding themselves if they think things will go back to normal once this well is capped. We have seen the only real strategy for dealing with a blowout is to let it spew oil for three months while relief wells are drilled. You don’t have to be a radical environmentalist to see flaws in that. The Gulf is like a football player who suffers a serious concussion. Another one anytime soon may be deadly.

    We have seen that regulatory oversight is weak, and even a major oil company can make incredibly irresponsible decisions. The cleanup fund and liability caps are vastly inadequate.

    Ultimately, the increased costs will be borne by the resource owner, the U. S. taxpayers. If fees are increased to cover future spills, it will have the effect of lowering what companies will pay for drilling licenses. What the government can do with existing leaseholders will no doubt be the subject of lengthy litigation. There is a certain Hugo Chavez quality to granting a lease, getting paid fo rit, then vastly increasing the costs the leaseholder must incur. At some point, I fully expect obama to propose creation of a national oil company that would have exclusive rights in deep waters, all in the nmae of environemntal protection of course. Call it FNM II.

96. http://www.qepres.com/……STR will spin off QEP at the end of closing today. STR will remain the regulated entities and QEP (Questar Exploration and Production) will be a major E&P co. KOG would be a strategic fit around their Lake property on the Reservation.

97. BOP – Kind of looks like it, volumes have been stronger there today than for the peers. Don’t see a reason.

    You know VYOG. Interesting set of assets now. 24K net in Niobrara, 24K net in Bakken, plus some other odds and ends. Stock came from a buck in April to $4 ish now. Slawson has made some big wells in the Bakken for the likes of NOG. If they do that here it could be interesting, especially if it will pull back. Still scratching head over that acreage valuation.

98. http://www.qepres.com/

99. West – Thanks, have had the QEP on my current market watch for days waiting for it to come out. QEP doing lots of good work in a lot of places.

100. Although, looking at VOYG’s website, alarm bells are going off, looks hypy without a lot of depth.

101. VOYG – balance sheet solid, income statement non-existent, CEO has been in the family biz, can’t really tell how much experience they have on their team.

     They have some cash, no debt, not a lot of shares out so it’s a micro cap, if you put some low prices on their acreage you’ve got the market cap justified but it’s obvious with Slawson’s drill plans for the Niobrara alone this name is going to need funding before it sees almost any oil out of the ground. RMD, you know this one?

102. never heard of them.

103. RMD – then color me shocked. It’s a single digit midget that came out of nowhere, ticker change and new CEO and a big leg up since April and it has some Street coverage. Acreage play now, reading SEC docs as their website is what I’d call poor. Stock is BB and trades like it … by appointment and with a massive spread. Worth watching for a big bad red market swoon day though as they stole that acreage. Maybe it’s in a bad area, or past the pinchout or maybe it’s highly fragmented but then there is the Slawson involvement and that is not a dumb outfit. So I’m intgrigued.

104. VYOG — ha! company used to be “World Poker Tour”…

105. If that price is the reason for EOG being down this much … well that’s just silly. That’s a small deal and the price is fishy.

106. VYOG — yep. Sold all their assets last August… was just a shell company with some cash at that point. Guess they found the next hot play (after online poker didn’t work out so well for them)….

107. QEP has a double layered Middle Bakken and 3frks horizontals that are drilled under the lake just north of KOG . They have offset dual parallel wells to be drilled. No chatter at all about this 3frks , personally I think that the 3frks is going to be about 50% of the EURs of the Middle Bakken in this area. If they can reduce cost by drilling mutliple wells from same pad it should be economical.

108. BOP – The chairman’s resume is priceless. Total vegas.

     The CEO sounds like he was a land man manager:

     James Russell (J.R.) Reger was the Chief Executive Officer of the Company since December 31, 2009 and has been our Chief Executive Officer and a director since April 16, 2010. Mr. Reger was born and raised in Billings, Montana and is the fourth generation in a family of oil and gas explorers and developers dating back more than 60 years. Mr. Reger’s great grandfather was Vice President of Land for Mobil Oil’s Rocky Mountain operations. His grandfather, Jim Reger, co-founded the exploration firm of Norsworthy & Reger. Prior to accepting the position as CEO of the Company, Mr. Reger was the President of South Fork Exploration, a mineral leasing company in Billings, MT with experience and interests in Montana and North Dakota. Mr. Reger holds a B.A. in Finance from Baylor University in Waco, Texas. We believe Mr. Reger’s qualifications to sit on our Board include his extensive experience in our core business of oil and gas exploration and production.

109. West – agree on both counts. I’ve heard several comments re the 50% of the Bakken EUR. Does QEP have acreage to the east and south of the FBIR too?

110. no quarter end pump up????

111. re 110 – maybe payrolls is killing that idea?

112. 109 …horseshoe around KOG under the lake but not the part that is the actual old river. 80k acres in this area. They also have some acreage next to EOG’s Niobrarra play in Wyoming. Maybe they bid for SSN’s property?

113. West – I would think too tiny. But I could see them filling in the doughnut hole that is KOG.

114. Ugly

115. Beerthirty.

116. Got the Wunderlich initiation on VYOG. Thanks. Little there that my soon to be 7 year old daughter could not have penned.

117. JB-if you get a chance, would appreciate your thoughts on the EOG chart-as Z mentioned, the rout from the 110-114 level is a mystery, the buttugly nature of this mkt notwithstanding.

     Z-would certainly be interested in your conclusions if the VYOG land transaction is in any way related to this weakness in EOG-does not make sense from your previous comments.

118. I take it back; looked at them and think the Reger is the brother of Reger in NOG. The “parentage” BOP notes in 104 and 106…somehow just did not appeal to me. (Remember I missed LEI also. Can it be my standards are going up as I age?)

119. TBP interview from CNBC this am

     http://www.cnbc.com/id/15840232?play=1&video=1533935567

120. Choices – that was a brokerage’s suspicion, that EOG was falling due to the VYOG. Seems very, very, very far fetched to me at this point.

     My how we suddenly hate coal stocks. See WLT.

     RMD – I knew you would know something there.

121. WLT from $100 to $60 since tax day. Yikes. That just doesn’t seem right. In May, WLT’s estimates for 2010 and 2011 were $7.54 and $9.25 respectively. Shortly after 1Q numbers came out, the Street saw the light and the numbers had jumped to $9.12 and $11.82 and have remained about there ever since. So, numbers go up, and stay there because coal prices have hung in there and yet the stock, which I guess you could say had had a good run, is now off 40%, contracting it’s multiples to 6.7x this year’s number and 5.1x next’s. That just seems overdone.

122. RE: #117, Choices…updated the EOG chart, EOG is sitting right on support at the lower daily channel trendline, and although EOG went on a P&F sell signal today with the $99 print, it’s still trading above long term P&F trendline support, and even given current mkt conditions, this is a prime zone for a long try, I think stops need to be below the 200 SMA because all of these support points basically come together in the same area…in addition, $NYMO is starting to get into oversold territory… EOG could be setting up to be a bear trap, seems like an easy place to manage the risk for a trip back toward $110…if the mkt continues to fall apart, the 200 day is a reasonable risk…

     http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280

123. JB Voted. I find the TED chart juxtaposed with the S&P chart pretty interesting.

124. RE: #123, Zman, thank you…

125. JB – we don’t exactly look oversold for the broad market, do we?

126. Re: #125, my indicators say, not yet… the McClellan Oscillator, $NYMO closed at -50.77, it’s starting to get oversold, but it’s not yet near the extreme levels observed back in May, so based on this indicator, there’s still a bit of potential downside possible, extreme oversold these days is anything under -80, in addition, the NYSE bullish percent went back into bear confirmed status and the $SPX P&F is currently on a sell signal…additionally, the 10 year note yield, $TNX (chart posted) has a price objective of 2.5%, suggesting still higher note prices, all adding up to it does not look like we are quite done yet….

127. Thanks JB, that’s what I was basing my comments off of. It’s slow around the site this time of year but know that I find your charts more than a little helpful.

128. Thanks, JB, for the charts-EOG-noted bear obj-would not like to see that attained-see if support holds-also noted that $BPENER is on bear mkt confirmation today-ugly markets.
     -also voted.

     Thanks, Z-it must be something else other than VYOG-have seen no news or comments.

129. AEZ on the tape with a new well, earlier than as expected per the Catalyst List, details will be in Thursday post.

130. re 129 – disregard, AEZ on tape with 30 day rates on old wells, pushing back completion timelines, like KOG.

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