12
Jul

Monday Morning – Earnings Season Kickoff.

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Market Sentiment Watch: Earnings kick off for the broader markets this week with AA leading the way after the close today. Energy land opens opens 2Q earnings next week with HAL (although NXY reports this Thursday).

BP Spill Watch:

  • Out with the old cap, in with the new: At least in theory but oil flowing freely in the Gulf for at least 48 hours in the interim. Expect to see the BP says it will take as much as a week to determine if the new cap is capturing substantially all of the flow.
  • Asset Sale Rumor Mill: $12 B asset sale to APA mulled, maybe Alaska but probably Latin America. Neither company is talking.
  • Takeover Rumor Mill: A UK paper says high level talks between XOM and BP and the U.S. government has taken place regarding a possible deal. The paper's source said the U.S. would not stand in the way of such a takeover. Again, no one is confirming or denying.
  • Relief well said to be at TD by the end of July.
  • ZComment: I think the clock is ticking for would be acquirers to make a play for chunks of the company or the entire entity. The closer we get to a capped well, the closer we come to a better idea of liability and the less risk there is for the acquirer.

The Week Ahead:

  • Monday 7/12: No ecodata
  • Tuesday 7/13: Trade balance, Budge balance
  • Wednesday 7/14:  EIA Oil Inventory Report, retail sales (F = -0.4%, F= -0.2% ex autos), import price index, inventories
  • Thursday 7/15: EIA Natural Storage Report, jobless claims (F = 445K, PPI (F = -0.1%), Empire State Index (F = 18.1 vs last reading of 19.6), Industrial production (F = -0.1% vs last read of +1.2%), Philly Fed (F = 10.0, vs last read of 8.0), should start to see initiation pieces on OAS.
  • Friday 7/16: CPI (F = 0.0%), Consumer Sentiment (F = 74.8 vs last read of 76)

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today - CLR, SSN, NFX
  • Odds & Ends

Holdings Watch:

ZCAT (Zman Catalyst portfolio):

  • $6,700
  • 78% Cash

ZIM (Zman Inefficient Markets portfolio)

  • $7,100
  • 2% Cash

Commodity  Watch:

Crude oil rallied 6% last week to close at $76.09. The 12 month crude strip is now trading at $78.58.  This morning crude is trading flat on an indecisive equity futures quote.


Natural gas fell 9% last week to close at $4.40 due to a slow weak in the tropics and a larger than "expected" gas storage injection. The 12 month strip is now trading at $4.98. This morning gas is trading flat.

  • Tropics Watch: All quiet on the southern front
  • Weather Watch: Hot
    • Week before last: 66 CDDs which yielded last week's 78 Bcf injection.
    • Last week: 88 CDDs vs a prior forecast of 92. Still, last week was the hottest of the year to date. Taking into account the 4th of July holiday, this should yield an injection in the 70s.
    • This week's  forecast: 97 CDDs.



Stuff We Care About Today

CLR Bumped Spending / Volume Forecasts

  • This came out Friday, just before the open so I missed getting into that post. And again, I have to say, if you want people to notice your press releases, put them at the front of the week and well before the open or after the close for commentary the next day. If you want to get ignored, put them on a Friday in the summer.
  • Budget boosted 53% to $1.3 B, up 140% over 2009 levels
    • 26 total rigs at present with 18 of those in the Bakken (about 14% of total Williston play rig activity).  Rigs will be rising in the play again with the bump in spending.
  • Volume guidance goes from 13% to a range of 15 to 17%.
  • Niobrara shale play about to start, now holding 59,000 acres, will drill first well before year end.
  • Nutshell: Spending up a lot more than volumes left a bad taste in investor's mouths on Friday. Niobrara worth watching but need more details (any) on their 2011 targets before I'd add this more expensive Bakken name back.  

 

SSN Posts New Presentation

  • Post offering share count confirmed, same as my model last week
  • Niobrara portion of presentation shows the acreage sold so they are assuming the deal gets done
  • In fact, they are assuming the deal gets done at the high end of the range of possibilities, $US 76 mm (pre tax).  Note that current market cap is $US 70.2 mm.
  • Planning to drill two 5,000 foot horizontal Niobrara tests on their remaining acreage (they are expecting 500 bopd IPs, one would assume based on results they have heard about from EOG just to the south).
  • They see 26.8 mm BOE recoverable reserves on their remaining Niobrara acreage ... to early for me to gauge the reasonableness of the assumption but the math to get there would not be overly aggressive if this were good Bakken country.
  • My sense is that the stock will move on positive Niobrara news from the EOG 2Q call, should there be any (EOG has been going slow as usual with the data from this play although not with the permitting and drilling).
  • If we transition from thinking in terms of acreage valuation to EUR valuation and they are close to correct on the reserve forecasts the stock will leg higher from here, perhaps adding another $1.25 to my $1.31 to $1.61 price target range (so call the new really case target $2.50). That should take us into next year's drilling to accomplish.   
  • SSN is also planning to sell Rockies gas assets of about 11 Bcfe which could fetch $15+ mm.
  • Lastly, I find it interesting that in the back of their new presentation they compare themselves to KOG and AEZ.

Other Stuff

  • NFX  - leak off Malaysia the result of a third party damaging the pipeline from their East Belumut field.

    • NFX has shut in the field and should have repairs completed in 6 to 8 weeks.
    • Malaysia has been a source of growth and this will take NFX's target for the year back to the low end of their previous guidance range but it should be a non event for the stock.


Odds & Ends

Analyst Watch:

  • XEC - Initiated at JP Morgan with Overweight

141 Responses to “Monday Morning – Earnings Season Kickoff.”

  1. 1
    zman Says:

    More interesting than that World Cup final (talk about setting the bar low)

    http://www.bp.com/genericarticle.do?categoryId=9033572&contentId=7062605

  2. 2
    zman Says:

    Analyst Watch:

    Stifel initiated KOG with a Buy, anyone have a copy of it?

  3. 3
    zman Says:

    BP up 4% pre market, warming to the idea of APC now … they may be the more likely, and easy to accomplish takeout.

    APC down 39% from pre spill level
    BP down 43% from same

    APC to defend itself before Congress 7/22. In the meantime they are giving BP the stiff arm on paying cleanup bills.

  4. 4
    zman Says:

    Analyst Watch:

    Johnson Rice terminating coverage of the dry bulk sector.

  5. 5
    crysball Says:

    Z,
    Are you considering APC options for a trade?

  6. 6
    ram Says:

    I hope the BDI’s decline is due to over supply and not a slow down in raw material or finished goods movement. Too many industries rely on that sector to anticipate their future – especially new hires.

  7. 7
    zman Says:

    Crys – yes, mulling that now. It’s been pointed out that they are up more off the bottom than BP but I am thinking they are in a much better position than they were a few weeks back as the negligence angle has solidified. I also think that while most of the M&A talk has centered on BP, the less messy deal is by far APC, which is a mini major in it’s own right.

  8. 8
    choices Says:

    http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=3&mn=0&dy=0&id=p03516743045&a=203954871&listNum=16

    re: bull/bear numbers-had to step out Friday so did not see BOP’s followup-thanks BOP for comments

    above is chart of VIX w/TED-VXO also included, which I understand is not a contrart sentiment indicator-it is put/call ratio on OEX index-supposedly the “smart money” as opposed to the “dumb money”

    Interesting how TED tracks VIX, maybe even leading it somewhat-all FWIW

  9. 9
    zman Says:

    SSN – up 4 cents, that wasn’t much of a post deal announcement sell down last Friday. If you haven’t read a hypey presentation in awhile the SSN one makes for a good view of what an optimist would think of the company. Can’t blame them at all and I do see value here over $1 but know that these are not the “under promise and over deliver” types I normally hang out with.

  10. 10
    choices Says:

    #8-VXO “not” a contrary sentiment indicator

  11. 11
    BirdsofpreyRcool Says:

    Slow start to the week. Credit was weak, pre-stocks… but recovering almost all the downdraft with stocks not falling off a cliff (hope that makes sense).

    Anyway, TED still hanging out in the +37.5 bps area. Too high to take comfort, but well off the recent wides of +48 bps in mid-June.

  12. 12
    zman Says:

    Thanks Choices.

    Editor turned off so Baylor can chat.

    BP approaching $36. Down to a half position in the July’s and that may go away today and half position starting in the $37.50 Augusts taken Friday. That one I think I will hold through month end for the relief well news but if the stock really runs into that news I may cut in half as well.

  13. 13
    zman Says:

    Thanks BOP, is HT awake. That game yesterday could have put anyone into a coma. Notice how short the post was … fell asleep during my normal Sunday afternoon writing time.

  14. 14
    BirdsofpreyRcool Says:

    choices — thanks for the TED comments. Historically, I have found TED to be the most sensitive FEAR Indicator out there. It is well worth watching.

    Given that bonds usually pre-sage stocks, makes a lot of sense that TED is a step ahead of VIX. Although, both are worth watching, as they both draw from different universes.

  15. 15
    zman Says:

    HAL – still working higher. JB, would like an update there and with ECA when you get a chance. Both of my positions are working well and both are July so they are very long in the tooth. And both of those names report Monday next.

  16. 16
    BirdsofpreyRcool Says:

    HeadTrader is short-handed on the desk this week. So not quite as chatty this morning. That said, HT is rarely chatty on Monday mornings. For so many many reasons.

  17. 17
    zman Says:

    re 16 – reasons measured by the glass no doubt. Tell him to be careful or he’ll end up with a nose like Art Cashin’s.

    BP/APC pulling back a bit here, mulling an entry point for APC and an exit for those remaining front month BP calls.

  18. 18
    zman Says:

    SU – gap down filled late last week, free to move with crude now. See interesting resilience there for the first time in 3 weeks, would think being down this far at earnings time here and elsewhere in the group is a good thing.

  19. 19
    zman Says:

    And Goldman is positive this morning on CNQ and SU.

  20. 20
    VTZ Says:

    RE 19 – Simply a valuation call?

  21. 21
    Jerome Blank Says:

    Re: #15, HAL, I updated the 30 min chart…HAL is hitting resistance right at the daily 100 day SMA which correlates exactly with topside trendline resistance on the 30 min ascending triangle…HAL looks like it really wants to break out, the lower trendline on the 30 min could be used as short term support…

  22. 22
    zman Says:

    VTZ- they called it a “scarcity” call but I don’t have the full text. I would assume they are thinking that the others need to get up in price or risk being taken out.

    Thank you much JB.

  23. 23
    BirdsofpreyRcool Says:

    KOG — CapitalOne out with a “New Add” on KOG, $5 pt

  24. 24
    zman Says:

    APC pretty pricey options for August. Sort of thinking $50s or $52.50s. If it’s going to go, it should really go.

  25. 25
    zman Says:

    Thanks BOP, so that’s Capone and Stiffel in the same day?

  26. 26
    zman Says:

    SSN – seems early to say the flipping is done since the new shares are not freely tradeable yet but it does look that way. I guess we will get our new shares and 25% refund checks this week.

  27. 27
    BirdsofpreyRcool Says:

    yep… given that KOG is up a whopping 5 cents, guess those two have a lot of clout, eh?

    That said, buy KOG below $3.30, sell above $3.65 or so. Seems to work every time.

  28. 28
    zman Says:

    Citi out with 2Q mark to market revisions for the gassy stocks.

    Saying EOG is ripe for a miss (hmmmm), will be watching that one closely, could be all about the news and less about the numbers this quarter anyway.

    Favorite picks by them are APC, APA, CNQ and EOG. Yeah, not a type, “we think EOG will miss” in one paragraph, and listed among “top picks” in the next.

  29. 29
    zman Says:

    BOP – hear ya rinse and repeat. Same probably can be said for a $3 to $3.60 range on TAT.

  30. 30
    BirdsofpreyRcool Says:

    Speaking of FEAR Indices… reading an old adage… “VIX low, time to go.”

    Summer forecast = sunny and hot with a certainty of volatility.

  31. 31
    BirdsofpreyRcool Says:

    KOG and TAT… agree with that. The nice thing about those stocks, they are also long-term holds. So, it’s not a tragedy to be “stuck” in the name (if bought too high).

  32. 32
    Jerome Blank Says:

    HAL, added a 5 min chart, the 200 period 5 min SMA falls at the 30 min lower ascending triangle trendline, good support zone to keep an eye on for short term trades…

  33. 33
    zman Says:

    So if the new “what went wrong at Macondo” Presidential commission has 6 months from today to make recommendations on how to prevent another tragedy, it doesn’t sound like the moratorium, which the Admin will reissue soon, will be over from the original 6 month time frame.

  34. 34
    zman Says:

    BP off 40% from its pre spill high now,
    APC off 37% from same. Would think APC would be off a lot less than BP in light of what’s come to light. Still mulling. Market a consideration here as well, looks to be out of wind at the moment.

  35. 35
    zman Says:

    Ram – looks like no worries for you this week:

    http://www.ssd.noaa.gov/goes/east/catl/loop-vis.html

  36. 36
    BirdsofpreyRcool Says:

    Here’s one less thing we have to worry about this week too…
    ————————

    Earth Hit By Mass Extinctions ‘Every 27m Years’
    2010-07-12 14:32:00.939 GMT

    July 12 (Telegraph) — Life on Earth suffers catastrophic extinctions every 27 million years, according to researchers.
    For at least the last 500 million years, say Adrian Melott, an astrophysicist at the University of Kansas, and Richard Bambach, a palaeontologist at the Smithsonian Institute, there has been a burst of extinctions every 27 million years.
    Periodic mass extinctions have been posited before, and it has been suggested that it means the Sun has a huge, dark neighbour which orbits it every 27 million years, each time knocking a shower of comets out of the Oort Cloud at the fringes of the solar system and sending them crashing into Earth. This hypothetical dark satellite was called “Nemesis”.
    But the regularity of the extinctions and the timescale they occur over – the 500 million years examined by Dr Melott and Dr Bambach is almost double that earlier studies have looked at – seem to rule that out.
    This is because in the last 500 years the Sun has had close encounters with many other, known stars. The gravitational pull of these stars would have affected the orbit of Nemesis, causing it to lose the regular 27 million year cycle. The peak should either have been slowly changed by up to 20 per cent, causing it to smear out over the aeons, or to suddenly change, giving two or more peaks on a single cycle. Instead, it is based around a regular 27 million year cycle, with a 99 per cent chance that it’s not random chance. The researchers say: “Fossil data, which motivated the idea of Nemesis, now militate against it.”
    This implies that it is not a hidden celestial body, but something closer to home, since it is unlikely that anything in space would maintain such a regular heartbeat over so long a time.
    The extinctions range from utter catastrophe, devastating the majority of species on Earth, to smaller ones like the most recent, which destroyed 10 per cent of known species. And while they happen once every 27 million years, they do not arrive on cue, but up to 10 million years either side of the due date.
    However, there is no immediate panic. The last such event took place 10 million years ago, so there should be plenty of time to work out what is going on before the next one comes.
    The paper is publihshed in the journal Solar and Stellar Astrophysics.

  37. 37
    crysball Says:

    Z,
    Re APC August options:
    APC will be pilloried at the upcoming congressionl inqusition (excuse me …..HEARRING] on July 22nd…..and will likely take a dip going into or coming out of this ‘CIRCUS’.

    Suspect APC will not be the ‘SOFT TOUCH COOKIE JAR’ like BP…..and will stand up to boys in ‘BULLY PULPIT’.

    From a timing standpoint is it better to wait on August Options until this event?

  38. 38
    BirdsofpreyRcool Says:

    XACS#2 weighing in on SummerTime Volatility
    ———————–

    http://wjb.na.bdvision.ipreo.com/NSightWeb_v2.00/Handlers/Document.ashx?i=9a51b43ad6e24ee5974a9e9914be250f

  39. 39
    zman Says:

    re 36. With standard deviations like that, those guys should have been economists.

  40. 40
    zman Says:

    Crys – I don’t know that they get pilloried. 1) Because they weren’t the operator, just a financial partner and 2) Because they have extensive deepwater experience and can say that we would not have completed the well the same way, it wouldn’t be safe. They are the best expert witness the government could have if they are wise enough to use them as they look to build a criminal negligence case.

  41. 41
    zman Says:

    But they may indeed get pilloried since the “wise enough” comment is not exactly a given. Still mulling. If I go in it will be leveraged (high strike) and small $.

  42. 42
    VTZ Says:

    RE 34: Keep in mind how much the other majors have dropped during the same timeframe along with the broad market.

  43. 43
    choices Says:

    Z (or anyone)-do you have a max pain number for EOG?

    Thanks.

  44. 44
    jiveyjr Says:

    thx re: 38 BOP…I like that guy’s work

  45. 45
    zman Says:

    re 43, max pain is $100.

    http://www.optionpain.com/MaxPain/Max-Pain.php

  46. 46
    elduque Says:

    BOP – any comments re GST

  47. 47
    zman Says:

    Same period:
    XOM -16%
    CVX -14%
    COP -13%

    S&P testing the 1070 level now. Nicky still on vacation.

  48. 48
    zman Says:

    V – sent you something.

  49. 49
    BirdsofpreyRcool Says:

    GST — operations update went out of it’s way NOT to say anything about GST’s most important well, the Wildman #6H. Can’t imagine they would “tight hole” the well if it was bad… just man up and move on, I would think. But if the well is prospective for oil in the Glen Rose in E. Tx… that could set off a whole new resource play. For oil. That would be H-U-G-E.

    Bull Case = So, if I was GST and I liked what I saw in the Wildman, I would keep my mouth shut and send a herd of landmen into Leon County (and the surrounds) to lease up every single acre I could.

    Also, GST pulled their GlenRose acreage map from their annual meeting presentation on their website. Why do that?? hmmmmmmmmmmmmmmm….

    The Bear Argument = would be that the Wildman #6H encountered problems and they are still completing the well, so don’t know what they have yet, and so don’t want to comment.

  50. 50
    zman Says:

    BP saying they are pleased with the new cap installation, should be done in the next 24 hours, then will run tests to decide if they can “fully shut off the leak”.

  51. 51
    choices Says:

    APC-I bailed in early June, prob near bottom, when the ___ was hitting the fan about the extent of the liability and BP’s and APC’s CDS spreads, according to Markit, were going off the scale-the credit issue was the panic indicator which got my attention me-huge loss (ouch)but had some covered calls.

    I guess I would like to know what APC credit pricing is now before taking the jump altho I really like the company.

  52. 52
    elduque Says:

    re 49 – thank you. What is it worth if the bear argument is correct?

  53. 53
    zman Says:

    Re 51. Good question, have not seen a quote lately, more BOP or Eli’s area than mine. I recall me arguing against APC on the liability think much lower than here so I have missed the bottom but the market seems to have turned that corner now. May be a good idea for it to wait, have a big bad ugly day and then get long. Still mulling, doing some other stuff at the moment though.

  54. 54
    zman Says:

    But Choices, I have a mind to dip my little toe in now using some profits from BP which I think has more risk in the story.

  55. 55
    BirdsofpreyRcool Says:

    GST probably worth around $6, even if Wildman is a Glen Rose duster. But there is some noise around that number. This last quarter will show a production decline (as one of their largest producing wells was shut in) and people are nervous about the fraccing controversy and Marcellus holdings. Also, there is a lawsuit involving an old affiliate (GeoStar) that doesn’t seem to be material, but hasn’t been cleared from the dockets yet, either.

  56. 56
    zman Says:

    LINE – I know it’s boring but up around $28 now, near it’s highs this year. I like getting paid to wait and having the underlying outperforming the group.

  57. 57
    zman Says:

    ZTRADE – ZLT – EXXI

    Sold part of my position in EXXI, for 16.95, up 60%.

    Swapping for increased exposure to onshore oil in the form of OAS at $15.58. Expecting favorable coverage this week (it’s the underwriters so that should be no surprise) but also expecting positive operational update on their 2Q call. See reports tab on the site for my initial look at the name.

    Average cost in OAS now $15.26.

  58. 58
    john11 Says:

    Are LINE’s second Granite Wash well results due soon?

  59. 59
    zman Says:

    John – I have the second well, the Black 50-1H, listed as early July – I have nothing to suggest that has changed. Could be out pre 2Q, could be out with the 2Q which is probably more likely.

  60. 60
    choices Says:

    z-excellent call on BP’s calls-

  61. 61
    ram Says:

    Did EXXI trade as high as 16.95 today?

  62. 62
    zman Says:

    Thanks BOP, I’m trying to get Wyo to post the APC CDS chart.

    In short, the APC situation is improving.

  63. 63
    BirdsofpreyRcool Says:

    choices #51 — I have APC CDS pricing levels as of friday’s close. Looking at the 1-yr spreads… before the spill, APC traded at a spread of around +35 bps. About a month ago, that spread blew out (literally) to almost +1,200 bps. Currently (as of Friday’s close) at +575 bps.

  64. 64
    BirdsofpreyRcool Says:

    APC CDS… looking at today’s pricing, seems like there might be a short squeeze going on… spreads are about 50 bps tighter to Friday’s close.

  65. 65
    zman Says:

    Re EXXI, no, $15.95 and the gain was 50%, not 60%.

  66. 66
    zman Says:

    Choices – thanks, the remaining July calls are up 808%, no typo. The Augusts taken last week are up 91%. Milking it.

  67. 67
    zman Says:

    Heckuva bounce in the S&P off the 1070 level. Almost feels like what was resistance has become support but I’m no chartist and this is too short a time frame to really make that claim.

  68. 68
    zman Says:

    Obama Admin on the tape saying it is likely to issue new moratorium later today. United States Constitution, Article I Section I crumpled up and thrown in trash.

  69. 69
    ram Says:

    Thank you for the clarification. ZMAN, you mentioned that EXXI without DAVY JONES could be around a $10 level. Is that still valid? Do you feel that OAS is similar to CLR when you first bought CLR?

  70. 70
    zman Says:

    Ram – re EXXI – in this market environment, yes, I think the comment is valid. However, I don’t think they will be without that play or the other baker’s dozen ultra deep shelf plays. If anything, no drilling in the deepwater for now only bolsters the case for the ultra deep shelf (although it is gas so that mutes the argument a bit). But I’m just hinking I can make a little onshore coin while these names flop about at the whim of your Administration.

    Re OAS – yeah, that’s not a bad comp. Definitely going to be growthier than CLR but cheaper than a BEXP. We should know quite a bit more in the next few weeks as they talk on their 2Q and 3rd party numbers hit the Street.

  71. 71
    john11 Says:

    Speaking of new plays any valuation thoughts on QEP?

  72. 72
    ram Says:

    MY ADMINISTRATION!!?? Your knuckleheads that make into office every so often and screw up my 401K need to pack up and move to CHAVEZVILLE.

  73. 73
    zman Says:

    John – apologies, but I haven’t looked at it very much yet, I did like the idea though.

    Ram – Ha, ha. You always refer to it as mine and since we both live in the U.S. and he is our President, I just thought I’d return the favor.

  74. 74
    BirdsofpreyRcool Says:

    According to Schiller, there is no reason to think the ultra deep shelf play will not go forward. The depths and pressures and temperatures are no greater than land-based deep drilling (and actually temps are a bit cooler). Also, the BOPs are all above the water line. So nothing about the ultra deep shelf should raise eyebrows at the BOEMRE. That said, the Obama War on Carbon-Based Energy continues. The composition of the Spill Commission is Orwellian. And some of the appointees have economic ties to “green energy investing”… so, the conflict of interest here is absolutely mind-blowing. Anything could happen, it seems.

  75. 75
    zman Says:

    Blackberried in from Nicky:

    I think we see a pullback to 1050 – its what happens there that is key. However if we close above 1081 then downside is going to be limited.

  76. 76
    elduque Says:

    would you clarify re OAS – your favorable comments, its the underwriters comment.

    Thank you

  77. 77
    zman Says:

    Re 74. Absolutely agree with all of that. The question was put to me, what’s it go to without it and my thought was $10. But I don’t see them without it.

    BOP – would love to see the names on that list again, do you have it?

  78. 78
    ram Says:

    Some of the worst performing stocks have been the “green energy” types. These guys can’t get that right either.

  79. 79
    zman Says:

    re 78. It is to laugh, at least on that part. I was going through old excel files over the weekend and came across a bene’s and punished list of name if Obama or McCain won. Boy did I get an F on that list. Had the solars up, with FSLR at top of the list at $190. Sheesh.

  80. 80
    Wyoming Says:

    http://screencast.com/t/OGZhOTI2YT
    Beer thirty here.

  81. 81
    zman Says:

    re 76.

    Eld – simply meant that the underwriters should come with positive, glowy things to say since they did the deal and it is still near the deal price. That may not carry a lot of weight unless they do a good job of highlighting the growth path. I think you get a muted but green response to coverage from 2 to 5 of the deal bankers there later this week or early next. (Expect JPM, UBS, Simmons, TPH all with buys and higher targets).

  82. 82
    zman Says:

    Thanks for 80, that’s the APC CDS chart

  83. 83
    elduque Says:

    Is their a time period where they were not allowed to make any comments?

  84. 84
    zman Says:

    BP chasing $37, up 8.5%.

    APC still holding it’s early gains levels.

  85. 85
    zman Says:

    re 83

    30 days

  86. 86
    elduque Says:

    mahalo

  87. 87
    BirdsofpreyRcool Says:

    #77 — here ya go…

    http://online.wsj.com/article/SB10001424052748704895204575320892241446242.html

  88. 88
    choices Says:

    Thanks, BOP, Wyoming. CDS spreads still may be a tad high

  89. 89
    zman Says:

    BOP – thanks for that, did some digging, sounds like if you aren’t a card carrying Sierra Club member you need not have applied.

    BP Spill Watch

    The cap should be on tonight, couple of days to test whether or not it can take the pressure, watching the cap descend from the camera on Enterprise ROV 1, looks to be about 250 feet shy of target at the moment. Looks like this “cap” has BOP like rams on it, also multiple off take valves. It’s definitely a higher tech mouse trap than the last cap.

  90. 90
    zman Says:

    And my sense is that the market will take BP higher into capping here, could be an all week thing but also a buy the rumor, sell the news event once the relief wells are done at month end. APA news sounds more and more like they are going to involved in an asset purchase from BP.

  91. 91
    zman Says:

    Watching APC run away from me, was a bit cheap earlier and missed some calls.

  92. 92
    choices Says:

    CDS spreads-another story “out there”-heh

    http://www.bespokeinvest.com/thinkbig/2010/7/1/state-default-risk-and-a-comparison-to-sovereign-debt.html

  93. 93
    zman Says:

    Market determined to go green here.

    ECA fought off a sell off earlier in many of the gassy names.

  94. 94
    zman Says:

    Analyst Watch:

    NOG and KOG started at Add at CapOne.

  95. 95
    zman Says:

    $21 and $5 targets respectively.

  96. 96
    zman Says:

    And the market could care less.

  97. 97
    zman Says:

    ZTRADE – ZLT – BP

    BP – Sold the remaining half position in the July $31 Calls for $5.65, up 817%, with the stock at 36.60.

    BP – Uprisked a piece of the profits, adding (20) BP July $38 calls for $0.60.

  98. 98
    BirdsofpreyRcool Says:

    Wow, z. It’s not often that one can type in the words “up 817%”…. nice!

  99. 99
    zman Says:

    BOP – thanks. Been awhile since I cashed a tickets in that weight class.

  100. 100
    zman Says:

    Open flow:

    Shot from Q4000 Rov 1 right now.

    If you want to know what 50,000 bopd, 5,000 feet below the surface of the ocean looks like, here ya go:

    http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/incident_response/STAGING/local_assets/html/Q4000_ROV1.html

  101. 101
    ram Says:

    Can you have a stock like ATLIF in a 401K?

  102. 102
    zman Says:

    Ram I do not know them. The fact that it is a pink should not be a problem, but if it is an MLP it will give you headaches. But again, I don’t these guys and my information on them is limited.

  103. 103
    ram Says:

    It might have been ELI who mentioned it as a good 8% yield generator. It sounded like a Canadian Company that owned generation and transmission here in the U.S. I am fishing for growth and yield for a 401K.

  104. 104
    zman Says:

    White House on the tape saying new drill moratorium will be announced at the close.

  105. 105
    elduque Says:

    HK can’t get any love.

  106. 106
    john11 Says:

    re 101, yes, shouldn’t be a problem Ram.

  107. 107
    john11 Says:

    Sorry, missed 102.

  108. 108
    ram Says:

    Thank you John11.

  109. 109
    pwdrhound Says:

    Any new thoughts on HAL going into earnings?

  110. 110
    zman Says:

    re 109. Nothing really, thinking today’s weakness is market noise combined with a little quick profit taking. Reading more analysts saying they see stronger than expected U.S. land activity (which makes sense if you’ve been watching the horizontal rig count spiral higher). Also talk of them being more forthcoming about Iraq ops getting off the ground and another quarter of better international margins.

  111. 111
    BirdsofpreyRcool Says:

    thoughts from TPH on HAL….

    HAL – 38c v 35c, best chance of beating Q of the large caps, NAM strength, utilization and pricing up

  112. 112
    zman Says:

    BOP – thanks for the back up, was combining my own thoughts with Pritchard and a couple of others from last week, didn’t note the TPH comments this morning. Thanks.

  113. 113
    zman Says:

    That BP cap is not moving by the way, just holding at 4,680 feet down for the last few hours. Stock however back close to HOD. I’m working on some Niobrara stuff and thinking about earnings and may go for a run in this oh-so-boring-market.

  114. 114
    pwdrhound Says:

    Hope you’re right. I’ve got some July options that I’m hoping will rebound into Friday pre-earnings.

  115. 115
    BirdsofpreyRcool Says:

    Diamond Offshore on the tape, saying they plan on moving 3 rigs from the Gulf of Mexico…

    (along with all the jobs that go with it… so sad. so needless. so wrong!)

  116. 116
    zman Says:

    BOP – that’s a total of 4 from them now. A clear shout out to Obama.

  117. 117
    zman Says:

    Pwdr – Of course, HAL max pain is $26.

  118. 118
    BirdsofpreyRcool Says:

    [comments by the judge worth re-reading… sums it up nicely]
    —————————————

    The Obama administration will issue a new revised moratorium on offshore drilling Monday, two administration officials told The Associated Press.

    Both officials requested anonymity because they were not authorized to speak publicly ahead of the official announcement.

    Last week, a federal appeals court rejected the government’s effort to restore its initial offshore deep-water drilling moratorium, which halted the approval of any new permits for deep-water projects and suspended drilling on 33 exploratory wells. That moratorium, issued following the catastrophic Gulf oil spill in April, was first rejected last month by U.S. District Judge Martin Feldman.

    “If some drilling equipment parts are flawed, is it rational to say all are?” Feldman asked. “Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing.”

    He said the moratorium “seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.”

  119. 119
    zman Says:

    SSN – 700K volume today, not too shabby in this market, and especially given the continued buoyancy of the stock. If they get the deal done at the high end of the range their stock price will be nearly 100% supported by cash.

  120. 120
    scoop006 Says:

    Z any reason wht RIG is + while DO is -.
    shouldn’t DO’s rig moving be a positive, while not reflected in stock price?

  121. 121
    RMD Says:

    GST: thanks for your updates BOP; I hope you are right as I’m long, but mgt does have a way of getting it wrong.

  122. 122
    BirdsofpreyRcool Says:

    Thanks, RMD. Not a huge fan o’ management at GST. But, sometimes blind squirrels find nuts… and GST has a lot of acreage that is prospective for the Glen Rose, if it works. If it doesn’t, don’t see the stock cratering from here.

  123. 123
    zman Says:

    Scoop – I think maybe just that the BP spill guys are making a little up move today and the rest of energy and service is largely off. I would think their news is good for them but I haven’t seen the rates they are taking to get these rigs employed so maybe that’s the trouble.

  124. 124
    pwdrhound Says:

    So if I hold Jul $28’s for HAL and Max pain in $26, the theory says that the stock price will tend to go toward Max Pain as it nears expiry, correct? So then the question is whether or not the speculation on HAL earnings news outweighs the desire to hit max pain?

  125. 125
    zman Says:

    BP going out near HOD, with the 50 day SMA at 38.20ish just a day’s trade away.

  126. 126
    zman Says:

    Beerthirty

  127. 127
    zman Says:

    Re 124. That’s correct on both counts and I hold the $28s as well.

  128. 128
    Geno Says:

    Z – listening to the Congressional committee – man who selected these congressmen. What kind of background experience do they have – whose on second?

  129. 129
    zman Says:

    Geno – from what I can tell very little, but they are said to have a budget to hire consultants with. Ugh.

  130. 130
    Wyoming Says:

    At least they won that thingy last night:

    http://www.businessweek.com/news/2010-04-30/spain-pricks-solar-power-bubble-as-greek-fate-looms-update1-.html

  131. 131
    zman Says:

    Re 130. Yeah, no subsidy, no worky. Unless you can cap and trade it into parity.

    AA on the tape, looks like a penny beat on higher than expected revenues. Outlook lifted for aluminum demand. Stock halted

  132. 132
    zman Says:

    Administration says new moratorium not based on water depth but instead based on configurations and technologies. Well, that ought to be clear as drilling mud.

  133. 133
    BirdsofpreyRcool Says:

    U.S. Secretary of the Interior Ken Salazar directed the Bureau of Ocean Energy Management, Regulation and Enforcement to issue new suspensions of deepwater drilling on the outer continental shelf, according to an e- mailed statement.
    ————————–

    Otherwise known as “BOEMRE”… pronounced “bummer.”

    Too bad they weren’t called the “Interior Department for Investigating Offshore Trading and Shipping.” Then we could call them by their true name, IDIOTS.

  134. 134
    elduque Says:

    Not that was a good one.

  135. 135
    elduque Says:

    not should have been now

  136. 136
    zman Says:

    Heard the bummer before but the IDIOTS is is new, funny if it weren’t so apt.

    Seeing stories on the new moratorium but none are clear what they cover, just that it ends Nov 30.

  137. 137
    zman Says:

    BUMMER does not have the new moratorium on its website. But news stories indicate the new ban applies to shallow water as well as deep. It says you can drill if you can meet the new safety guidelines.

  138. 138
    zman Says:

    CNBC reporting Cap in place, stock trading 37.75, up 11% on the day.

  139. 139
    zman Says:

    Love the label on the side of the new cap. “think twice, act once”

    Fox news reported leak contained, I don’t trust them and I can’t find a camera angle that shows the top of the bop and this new cap which is actually quite a tall stack itself.

  140. 140
    zman Says:

    BP feeds, lots of them at once.

    http://www.bp.com/sectionbodycopy.do?categoryId=9034366&contentId=7063636

    Cap is clearly on, no oil billowing. Inlet pressure reading I saw was 2,600 psi, outlet pressure 0 so maybe the rise isn’t hooked up yet. But the juncture at the top of the BOP and this new stack is solid.

  141. 141
    zman Says:

    Re 140, you can clearly see pressure bleed holes in the riser above the new cap in the Skandi ROV 2 video stream. You can also see that the new cap is tightly seated on the BOP with little or no seepage. They will be closing those holes over the next day or so and will be conducting pressure tests in the morning to see if they can seal the well (Thad Allen’s word, not mine).

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