Stress Test Friday

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Market Sentiment Watch: What a difference a day made. Today we have global markets that are up but in limbo awaiting the results of European bank stress tests.

Busta Cap N Trade Watch: Reid abandons the Climate Bill. You know something is unpopular when you have a super majority and you still can't get your way. Or put another way, Senators may not know how to create jobs but they know how to save their own. Probably good news for coal-fired utilities and coal miners (though not for coal prices).  Definitely good news for people who have jobs in the industry or who pay things like electric bills. 

BP Spill Watch:

  • BP gets "indefinite authorization to keep well capped".
  • Cap to remain on if they have to pull away for the storm.
  • BP is evacuating the Macondo site which lies almost directly in the path of Tropical Storm Bonnie. 
  • Hurry Up and Wait. The Coast Guard's Thad Allen has given BP permission to prepare for the "static kill" procedure but has not given permission to actually start it. Wow. Must still be looking for Form SJ9xy/4305 in which you would cross out "Pizza Over" and insert "Static Kill". Typical.
  • Documents show switch that would have triggered the BOP in the event of an emergency was broken, another vote in favor of the "It wasn't CAM's fault" camp.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review
  4. Stuff We Care About Today
  5. Odds & Ends

Holdings Watch ZCAT (Zman Catalyst portfolio)

  • $7,500
  • 70% Cash
  • Positions for the quick view are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $2,100
  • 7% Cash
  • Yesterday’s Trades:
    • BP – Sold the $37.50 calls for $1.81, up 29%. Will let the ZCAT continue to play in this name.

    • LINE – Added (50) LINE August $31 Calls for $0.24 with the stock at 29.90 (tried to split the spread and failed). LINE announced the highest IP to date in the Texas Panhandle portion of the Granite Wash play at 60 MMcfepd, over 50% of that being liquids. See site for further details on LINE's leverage to the play as it ranks against the other participants. My sense is that this kind of performance not only makes LINE more interesting amongst the E&P style yield plays but may afford the opportunity at some point down the road to increase their distribution. It should certainly help with their distribution coverage ratio.

Commodity Watch

Crude oil jumped $2.74 to close at $79.30 yesterday on the back of a strong equity market and a 1% relapse in the dollar. This morning crude is trading off slightly.

Natural gas rallied $0.13 to close at $4.64 yesterday after the EIA reported an inline storage injection (see below) and the tropical wave north of Cuba intensified. This morning gas is trading off slightly.

  • Tropics Watch: Hello Bonnie. Tropical Storm Bonnie formed north of Cuba last night and is on track for the Gulf and then the Texas / Louisiana Gulf Coast.

Natural Gas Storage Review

ZComments: In line number yielded another week of YoY deficit building and another decline in the surplus to the five year average. We will see this again next week. Nothing to write home about but supportive of natural gas north of $4.


Stuff We Care About Today

Earnings Watch:

NFX Reported Solid Quarter; Bottom Line Miss Should Get Very Little Play... They spilled most of the operational beans with the Wednesday night press release, so just looking for further play detail on the call.

The 2Q Numbers:

  • Production of 73 Bcfe (pre released, top end of old guidance)
  • LOE of 0.68 / Mcfe (recurring) was at the low end of expectations of $0.67 to $0.72 / Mcfe and a sharp improvement from last quarter's $0.91 / Mcfe rate.
  • EPS of $1.06 vs $1.08 expected (not sure the variance here, could be an assumed DD&A unit (per Mcfe) reduction due to the higher volumes that did not occur). 
  • CFPS of $2.85 vs $2.82 expected

Highlights - Just a couple of extras since they spilled the beans with the Wednesday night release.

  • Cost Guidance:
    • Despite the higher than expected LOE of this quarter, NFX has reduced the range for the full year from a range of $0.59 to $0.62 to a range of $0.55 to $0.58 / Mcfe.
    • G&A large offsets the expected decline in LOE
    • All other cash costs (including production taxes) are relatively unchanged.
  • Thinking on this would be not a lot change to the current CFPS estimates.

Nutshell: Good quarter, thunder stolen on Wednesday night? Maybe, but probably not. They should have more to say about the first two Southern Alberta Basin (Montana Bakken, Lodgepole) wells (cores, shows while drilling?) on the call. Also, probably going to mention their 20% interest in LINE's 60 MMcfepd gross well announced yesterday. This well was to the southwest of where they had been drilling and could be a new sweet spot. On the EFS, sounds like we'll know more in a couple of weeks. Lastly, expect them to get questions regarding their recent language of "low end of the range" from early July, juxtaposed with their "maintaining the range" language from the Wednesday operational release. Not that I expect them to wordsmith the releases like Bernanke but then again, maybe I'm onto something after seeing the big (but short lateral) Bakken well results from the ops release. Stock is still cheap at 4.4x 2010 and 2011 current CFPS estimates.

Conference Call: Today 9:30 am EST



SLB Reported In LIne 2Q Results

The 2Q Numbers

  • Revenue of $5.94 B vs $5.941 B expected
    • Service revenue up 7% seq, and 10% YoY
  • EPS of $0.68 vs $0.68 expected and $0.68 in 2Q09


  • “Sequential revenue increases were recorded in all Areas as were sequential margin improvements led by strong performances in North America and Latin America."
  • US onshore strength offset Canadian breakup seasonal effect and the beginning of the Gomex moratorium. 
  • Strength as predicted in international segment
  • "Looking forward to the remainder of the year, we see a continued slow build of activity in the second half in most parts of the world. In particular, US Land, Brazil, North Sea and Russia will be GeoMarkets of continued strength. Meanwhile, we see continued growth across most of the Middle East & Asia GeoMarkets. This will be partially offset by reductions in IPM activity in Mexico in both Chicontepec and Burgos."
  • Buyback continues.

Nutshell: Hmm, early morning market not liking the in line nature of the results. Look for call comments on the International side, including expectations for Iraq which gets closer by the minute, to guide the name today.

Conference Call: Today, 9 am EST.

Other Stuff

  • SSN announces spudding of next Bakken well. Not news but they are Australian so they have to tell you if they take a pit stop, let alone if they spud a well. Still waiting on the acreage transaction.
  • MUR to exit refining business.  Worth watching:
    • Conference call: 9 am EST.
    • What MUR E&P Only Would Look Like:

      • Production approaching 200,000 BOEpd,
      • Production 69% oil,
      • 15% US, 55% SE Asia (Malaysia), 21% Canada, rest off Surinama and Congo
      • Production target by 2015 ~ 260 to 270,000 BOEpd; target of 400,000 BOEpd by 2020 (so plan to double up in 10 years)
      • Reserves: 420-- MMBOE
      • US Stuff: Deepwater Gomex; Eagle Ford Shale, > 200,000 net acres, 3 wells to date (2 squirrelly gas wells and one high rate oil well so far), acreage in both oil (65K acres) and gas (88K acres dry gas) and condensate (48 K acres) windows.
      • Canadian Stuff: Montney shale (126,000 acres), see nearly 10x growth now through 2015, costs falling. Seal Lake EOR project.
      • Exploration and Oil focused: 2010's exploration program targets net unrisked reserves of 1 billion BOE
      • Thought is that punting the refining side will unlock value and possibly make them a target. 
      • Just food for thought at this point.

Odds & Ends

Analyst Watch:

  • CLB - Barclays ups target from $81 to $87, maintains Outperform
  • EXXI - Seymour Price (who?) starts with a Buy rating and $30 target.

131 Responses to “Stress Test Friday”

  1. 1
    scoop006 Says:

    no honorable mention for KWK ?

  2. 2
    zman Says:

    Scoop – What can I say, I'm lazy. Honestly, saw the mention last night and have not had a chance to get to it yet as we were out late with the folks on their 49th anniversary (way to go Mom and Dad!).

  3. 3
    scoop006 Says:

    Contrats, to Mr & Mrs, Z Sr.

  4. 4
    zman Says:

    Wizard, 1520, Greenk, gtue**  – please check your emails

  5. 5
    BirdsofpreyRcool Says:

    Who is Seymore Price???  A British firm, it appears.  Other than that, no idea… like the $30 PT though.

  6. 6
    zman Says:

    Thanks scoop, 49 years and they still tried to pick up the check.

    SLB in 5 minutes, not expecting earthshaking stuff and will only be on the call until the NFX one starts.

    Futures stuck in slightly up mode. People wanted the stress test results out early last night … didn't happen. Could be pretty volatile when those hit.

  7. 7
    zman Says:

    BOP – yeah, no kidding, normal I don't include recommendations from every bucket shop out there but it was EXXI and I was thinking of you. 😉 Oh yeah, and I still have a half position. Wondering if in October / November we see the offshores all turn higher as news trickles out regarding changes resulting from Moratorium 2.0 and the liability front? Thoughts?

  8. 8
    BirdsofpreyRcool Says:

    TAT — will do a stock 2ndary sometime before the end of this year.  Only question I have is do they have anything to do/announce to get the stock up a tad before doing another raise?  Don't know.  Will try to find out.

  9. 9
    zman Says:

    BOP – should have spud a large exploratory test (or soon) near the border with Iraq.

  10. 10
    BirdsofpreyRcool Says:

    At some point, people will remember that EXXI is 60% oily production.  But struggling to come up with any near-term catalyst.  Other than oily production and mounds of free cash flow.  An accretive asset purchase would be nice.

  11. 11
    zman Says:

    SLB Notes

    – slowdown in Mexico going to cause a charge (didn't say size) in Q3

    – Jat – when you get a chance, do you think there is any chance they punt Western Geco? I know they bought it a couple of years back but it's a drag every quarter.

  12. 12
    BirdsofpreyRcool Says:

    TAT — yeah.  Well 4175 in the southeast of Turkey.  They think it could be a huge OIL find.  Apparently, we are about 60 days from TD (is that on the catalyst list yet?).  Also, they think the Thrace Basin will be HUGE.  But it's taken a bit of time to get the pressure pumping equipment in country.  Those camel trains just refuse to walk any faster!

  13. 13
    bill Says:

    can someone tell me why sd is opening down 18 c roughly 3 %
    Sandisk earnings?
    Cap & trade?
    Market?  chk and hk holding in there

  14. 14
    zman Says:

    TAT – is on there for a late July operations update, but not the well on block 4175, I have that as 3Q in my notes.

  15. 15
    zman Says:

    Bill – I think you hit with the sandisk results.

    BOP – if you look at my old Addax stuff on the reports tab, I understand this TAT well is testing that kind of potential (some of those were 30,000 bopd wells).

  16. 16
    elduque Says:

    TED keeps dropping a little now at 34 and Baltic keeps climbing a little up about a 100 in the last 4 days to 1826. Not really doing anything, just stabalizing.

  17. 17
    elijahwc Says:

    #13 on SD: Reorg shares (4.777 SD for ARD) hit custodian accounts last night.  Also, they are not covered by See..More..Price. 

  18. 18
    1520sbroad Says:

    #4 – saw email – replied – thx

  19. 19
    BirdsofpreyRcool Says:

    z — no doubt there is a lot of energy potential in Turkey.  They have the rocks for it.  Infrastructure a bit of a problem… but that will get built out over time, of course.  Just have to be patient with this one.  Like YEARS-type of patient.  But could (should?) be worth it.

  20. 20
    bill Says:

    17 >Also, they are not covered by See
    whats that mean?

  21. 21
    zman Says:

    seymour price = see more price

  22. 22
    RMD Says:

    SLB : working on a technology alternative to using "brute strength" -lots of horse power- in fracing shale.  Sounded like new process might be ready for 2H11 (my guess from t;heir language).  This seems imp't to the shale co.s.

  23. 23
    zman Says:

    SLB pretty cagey in the Q&A, Andrew in low energy mode today.

  24. 24
    skimo Says:

    BOP, at what point should we worry that CIGX isn't executing their plan? I was always taught that you bring products on line in accordance with a time plan so that revenues ramp up accordingly.

  25. 25
    BirdsofpreyRcool Says:

    The worst part of having CNBC on in the background, all day long, is the commercials.  I just cringe, when i hear the "MagicJack!!" one.  Over and over again.
    TED still floating a bit lower (tighter, good)… not in any apparent hurry to get back to 25 or so, tho.
    Credit up with stocks.  People just LUV corporate bonds (and MLPs, it seems).
    IG -1 1/8 bps to +107.75 spread to treasuries
    HY +5/32 pt to 97

  26. 26
    zman Says:

    RMD – yeah, heard that, sounds good, not sure what they mean as in how it would work … you could say the other names are doing the same thing in various ways as well.

  27. 27
    jat Says:

    Re 23, well, it’s not a high energy quarter. GoM/Canada pretty big penalty this Q, more than I thought after HAL/WFT, that’s why they broke out US land in the PR…

  28. 28
    bill Says:

    oh yeah > seymour price = see more price
    still dont get it, lol–time for coffee

  29. 29
    zman Says:

    About to switch to the NFX call.

    BOP – you can gauge the health of the economy by the commercial quality on CNBC. When the WSJ is the high frequency rotation commercial, things are good. When pajama grams rule the day, things stink.

  30. 30
    BirdsofpreyRcool Says:

    skimo — not worried one teensy percent of one iota.  CIGX is not in charge of rolling out the product, inVentive is.  Could honestly be "any day"… but every one involved is doing everything they can to "get it right."  They expect some dirty tricks to come out of BigTobacco, so they want to be sure to have all the Ts crossed and i's dotted. 
    Hope it's soon (as they were originally planning on a June 1st launch).  But not worried one teensy bit.

  31. 31
    skimo Says:

    BOP, thanks

  32. 32
    zman Says:

    Jat – hear ya, and Andrew is often a conservative, dry, speaker. Tone is pressuring my HAL and WFT  positions early.

    NFX call starting.

  33. 33
    zman Says:

    Futures gave up gains, far as I can tell, stress test results not yet out, could be just a bit of profit taking (or what the heck were we rallying on anyway?!) here.

  34. 34
    zman Says:

    LINE now at pre big GW well levels.

  35. 35
    BirdsofpreyRcool Says:

    skimo — to be perfectly frank, i would love it if CIGX dropped like a rock today.  I got a bunch of shares in the 1.50s, but not as many as we wanted.  So, still a buyer here.  Just fyi.

  36. 36
    BirdsofpreyRcool Says:

    HeadTrader out with some comments of his own, on the SEC announcement yesterday…
    It seemed a little odd last week when the Securities and Exchange Commission settled its lawsuit against Goldman Sachs within two hours of Senate passage of the Democrats' Dodd-Frank financial reform bill. After all, who could ask for a more perfect backdrop than a successful prosecution of the investment colossus of Wall Street and a prime mover in the economic crisis of 2008? But this one looks stranger still considering that the SEC action was announced on April 15 of this year, only a week before the legislation was brought before the Senate, thus neatly bookending debate on the proposal. And it gets even stranger. On the same April 15, President Obama's campaign organization, Organizing for America, purchased a Google ad directing people who Googled "Goldman Sachs SEC" to donate money at my.barackobama.com .
    Rep. Darrell Issa, R-Calif., the ranking Republican on the House Oversight and Government Reform Committee, wonders about all this and more, and so has asked the SEC for documentation of commission officials' communication with the executive branch. The announcement of the Goldman settlement, Issa wrote, "less than two hours after the U.S. Senate passed controversial financial reform legislation raises questions about whether politics influenced the announcement." The SEC is prohibited from using its resources to influence the passage of legislation, but its chairman, Mary Schapiro, was already on record in support of the bill, having released a statement in late June praising its expansion of the commission's authority and for "improving the SEC's funding process."
    Consider, too, that the SEC's settlement with Goldman is carefully phrased to avoid forcing the firm to admit the most damning fraud charges: "Goldman acknowledges that the marketing materials … contained incomplete information. In particular, it was a mistake" to sell particular products "without disclosing" the role of parties whose interests were adverse to the investors. "Goldman regrets that the marketing materials did not contain that disclosure." Such language obscures the firm's ethically challenged actions behind a fog of rationalization. That might explain why the fine was only $550 million, an amount equal to just two weeks of Goldman's profit, not the $1 billion or more expected by veteran journalists covering the market.
    To hear SEC officials tell it, however, you might think Goldman CEO Lloyd Blankfein was placed in stocks on the White House lawn after a perp walk from Congress down Pennsylvania Avenue. To put this in perspective, recall that the SEC has been most often seen in recent years as a failure, most notably because it failed to detect or stop Bernie Madoff's Ponzi scheme. More recently, there was an inspector general's report detailing widespread porn-surfing among SEC employees. All of which suggests that SEC officials should stop bragging about the Goldman settlement and start answering Issa's questions.

  37. 37
    BirdsofpreyRcool Says:

    Seeing headlines that US stocks are down on concerns about the European Bank Stress Test.  This is where our little friend, TED, comes in.  If the worry was real, TED would be telling us that.  But he's not. 
    So either stocks have it wrong, or financial writers are just flopping around in search of a Reason for the Red.  No reason why stocks couldn't go green.

  38. 38
    zman Says:

    NFX Notes

    Well hedged for gas in 2010 and 2011 (nothing new),

    cutting back on NG projects vs liquids (also not new),

    Monument Butte – turning a new oil well to sales every day
    – almost all expected production hedged … this was covered in yesterday's post.
    drilling faster, bigger wells (had a 350 bopd avg 30 day rate well the other day)

    Bakken –

    4000 boepd, going to 6,500 boepd by year end (also Thursday post)

    3,800+ BOEpd (east of Nesson) from a 3,900 foot lateral … going to be some ?s on the Q&A

  39. 39
    BirdsofpreyRcool Says:

    Noooooooooooooooooooooooo… not the "MagicJack!!" commercial again!!!  I'm going to go get more coffee.

  40. 40
    zman Says:

    NFX Notes:

    Eagle Ford

    – 5 rigs running, 2 wells drilled to date, about to TD a third. Frac next week.

    Southern Alberta Basin

    – will not discuss … oh come on guys. ROSE did it with only verticals and some cores.

  41. 41
    zman Says:

    NFX Notes:

    Granite Wash

    Expect to test at least 10 horizons by year end (stack pays)

    This is their highest return gas play at the moment

    80 MMcfepd from GW

    Woodford Shale

    still growing 20% with the lower activity levels (only 4 rigs now due to low gas prices)

    continue to get more efficient, lateral penetration rate improved by 20% ytd

  42. 42
    Dman Says:

    CIGX chart looks kinda positive to me.

  43. 43
    zman Says:

    NFX heading in Q&A


    SSN up 5% on lighter than recent opening volumes. Reminder that Monday is July 26th. See language from their Goshen County press release:

    "The closing of the transaction, which is tentatively scheduled for July 26th, is conditional on the satisfactory conclusion of the buyer’s due diligence."


    So they are going down to the wire.

  44. 44
    zman Says:

    NFX – not hearing a huge amount of new incremental, impactful data on the call.

    Market waffling through the release of the Euro stress test results

    Ram – please check your email.

  45. 45
    blackgold39 Says:

    NFX call was fairly boring

  46. 46
    zman Says:

    BG39 – yeah, usually pretty good, sounds like a bit too early on some stuff so we are in one of those quarters between the peaks. Liked all the cost guidance last night though, solid.

  47. 47
    blackgold39 Says:

    BP firing off this morning, a bit odd with the storm headed their way

  48. 48
    zman Says:

    … a bit odd that it will hit the Gulf but is not forecast to grow beyond TS status. That could be helping as they will be able to get back to work quicker with a weaker storm.

  49. 49
    zman Says:

    LINE rebounded during the NFX call but I really didn't hear anything on the Q&A that would account for it. BG, you were on that right, did you hear anything new and exciting on the Granite Wash?

  50. 50
    zman Says:

    Bill – please check your email.

  51. 51
    blackgold39 Says:

    Only that NFX will have tested 10 horizons by year end, I dont think that is new info though.  I got on about 15 minutes late, so if they mentioned the LINE news, I did not hear it.

  52. 52
    zman Says:

    Yeah, the 10 horizons was mentioned awhile back and was in the Wednesday night release. Didn't hear them mention or an analyst mention it, will grab the transcript when available but I think it was not commented on.

  53. 53
    zman Says:


    LINE – Added (10) August $30 Calls with the stock at $29.78 for $0.50. I continue to hold the (50) $31 strikes taken yesterday as well. Earnings next week.

  54. 54
    zman Says:

    Crysball – are you getting the ZBLASTs?

  55. 55
    zman Says:

    This must be the reason for the LINE buoyancy

    Analyst Watch:

    LINE – Raymond James raises target from $30 to $34

  56. 56
    zman Says:

    Thanks Bill

  57. 57
    elduque Says:

    GDP continues to behave abnormally strong???

  58. 58
    zman Says:

    Eld – got your message but no report last night, did you try to send?  Could be the "storm surge" effect on highly shorted gassy names.

  59. 59
    bill Says:


  60. 60
    zman Says:

    re 59 . Thanks, always good to have boots on the ground as per the 3rd comment.

  61. 61
    zman Says:

    HAL and WFT now mostly shrugging off the dour sounding call from SLB. Will go back and read the transcript there for substance but it didn't sound that bad, they just failed to beat.

  62. 62
    elduque Says:

    z- it was an old report 6/15/10

  63. 63
    zman Says:

    ElD – ah, ok, thanks.


    Market snoozing.

  64. 64
    zman Says:

    CNBC reporting Eurostress test was based on U.S. version but was stricter. Market trying to tick up on that.

  65. 65
    zman Says:

    All German but 1 banks passed as do all Portuguese banks, top 4 French banks …

  66. 66
    zman Says:

    Hmmm… supposedly stricter but all the Porto banks pass. That's odd.

  67. 67
    zman Says:

    Oh, a Greek bank failed. Well that's a bit better. Sheesh bored market. Have a boring call and get punished – see SLB.

    Grabbing an early bite.

  68. 68
    BirdsofpreyRcool Says:

    Reading headlines that "two killed in gas well explosion in western Pennsylvania"…

  69. 69
    zman Says:

    Analyst Watch:

    LINE – upped from $27 to $30 at RBC … way to step out on the risky edge guys.

  70. 70
    BirdsofpreyRcool Says:

    Headlines showing up under EOG ticker… but don't know if the "two wells" were EOG's or not.
    How do "two wells" explode?

  71. 71
    BirdsofpreyRcool Says:

    Sorry… mixing up the headlines.  Two people were killed in a "gas well explosion."  Ugh.  Sad stuff.

  72. 72
    andy Says:

    explo well owned by huntley and huntley (private)

  73. 73
    zman Says:

    Hearing that TD Ameritrade customers have the refund in their account. I do not yet reflect that with Schwab. They're still riding my float I guess.

  74. 74
    zman Says:

    Feels like there has been a step up in onshore drilling accidents this year. Companies need to get safe and not just tout a safe past record. All of these plays are getting drilled faster and faster which makes one wonder if the pressure to move from spud to rig release is wearing on the crews. Stupid to kill people in the process.

  75. 75
    BirdsofpreyRcool Says:

    GE boosting divd from 10c to 12c

  76. 76
    VTZ Says:

    Anybody else in AGU? I bought some with POT and It's exploded up about 20-25% and I'm thinking of cashing out. In general the commodities have had a pretty good run on a relatively small bounce in the S&P.
    Z – With oil approaching the topside of its trading range and the economic indicators not comign in as well as before is it time to trim exposure to oil and maybe leave NG positions on for weather related reasons?

  77. 77
    bill Says:

    gas well exploded

  78. 78
    bill Says:

    sd tom ward to be on cnbc next weds 1230 pm…

  79. 79
    zman Says:

    V – I would if I had non-catalyst related holdings in options, yes. In the ZLT I don't get worked up about that trading range. Am contemplating punting on ECA calls as that's just not working the way I thought it would this time around. Will wait out storm this weekend though. HAL and WFT I'm fine with for a bit longer, glad not in SLB. LINE has earnings and distribution announcement next week. Distribution almost assuredly flat with last one (so about a 8.5% yield).  BP of course has a few catalysts ahead.

  80. 80
    zman Says:

    re 75… you'd think that would buoy the market but it's a summer Friday and non one seems to care much about much.

  81. 81
    1520sbroad Says:

    #76 – I used to follow AGU – haven't in a while.  Good trade with POT… POT does earnings next thurs. I am in a holding pattern with my shares waiting to cover.

  82. 82
    elduque Says:

    You may want to listen to this mornings MOS conference call to get some color on the fertilizer's

  83. 83
    crysball Says:

    Re 54: am not receiving Z Blasts.

  84. 84
    zman Says:

    Crys – do you want to be, we had a bad email, but can use the one on the account if you like now.

  85. 85
    elduque Says:

    OK, why does the NG rig count keep climbing. I am missing something???? besides my money.

  86. 86
    zman Says:

    SSN – I sold half of my position earlier this week at $1.30 and am sitting tight for the moment on the rest. That may not be the right call for everyone however and in my normal abundance of caution and helpfulness I present the following non-advisory type thoughts.

    So pick your poison:

    Deal on Monday: Should mean stock goes higher, as long as it is not option C for the acreage (the low end of the range which is now probably nearly priced in (maybe still runs to $1.50 on that deal)).

    No deal on Monday and no word on the deal: Stock off and trickling lower (but not too much) until there is word about the deal. Actually, I don't think this can happen because they play by Aussie stock exchange rules and have to press release significant events. Of course, since this is in essence the lack of a significant event transpiring perhaps they have an out.

    No deal on Monday but they announce new terms and an extension. Obviously direction the stock takes would be dependent on the new terms but that's probably more of a negative.

    Deal canceled. Stock gets halved. Maybe not all at once but it would take a sharp drop on the open.


  87. 87
    zman Says:

    Rig Count Watch:

    Oil up 11 rigs to 591 vs 257 a year ago

    Natural gas up 3 to 982 vs 675

    Horizontal: Off 1 to 858 vs 408 a year ago. Hard to fathom how this last number jives with the first two.

  88. 88
    zman Says:

    Nicky – can we get your final thoughts on the week, market looks like a computer pump job taking place.

  89. 89
    zman Says:

    S&P touched 1,100

  90. 90
    zman Says:

    Emailed in from Nicky:

    Well resistance is at 1105, 1108 – I remain bullish…..

  91. 91
    BirdsofpreyRcool Says:

    Headlines = "Dow Jones erases loss for the year"

  92. 92
    Jerome Blank Says:

    Re: #73, SSN refund…no refund posted yet at TOS which is now owed by Ameritrade…. 

  93. 93
    BirdsofpreyRcool Says:

    HeadTrader said "so what"… no one is trading.
    Guess it's just machines, throwing shares back and forth at each other.

  94. 94
    zman Says:

    Sounds about right, I'm busy learning how to graph the performance of my stock accounts. And contemplating a cold Hoptober.

  95. 95
    jiveyjr Says:

    R # 73…Fido posted my SSN refund…wotta trade…

  96. 96
    BirdsofpreyRcool Says:

    Literally, the BEST Trader/Portfolio Manager i know is spending the summer, running around, doing all the errands he put off over the last 6 years.  Keeps him from screen-watching, he says.
    And a sell-side friend just got back from a client call in NYC.  One word summary of activity = "crickets"
    Sums it up nicely, I would say.

  97. 97
    jiveyjr Says:

    not that anyone wud consider me a portfolio mgr. but I told one of my trading buddies I was thinking of going across the street, buyiing a new car, a bottle of gin and heading to Del Mar for the rest of the summer

  98. 98
    zman Says:

    Jivey – good to know both 95 and 97.

  99. 99
    skimo Says:

    97 No olives?

  100. 100
    BirdsofpreyRcool Says:

    jiveyjr — you should do it.  You only go around once in life!

  101. 101
    cargocult Says:

    Can anyone explain what the SSN refund is about. I'm not sure what it refers to.

  102. 102
    zman Says:

    Cargo – it is for those who took shares in the rights offering (the secondary). They put in a set amount of $ and got 75% of there order. Now some of us are still waiting on the refund for the 25% we did not get allocated. It takes a bit of time for those to flow through so I'm not surprised or concerned but I do keep an eye on my money.

  103. 103
    cargocult Says:

    Thanks for the clarification. I got the shares and didn't quite follow the money. I hope Schwab will send me an email notice of the refund. Otherwise I'll look for it next week.

  104. 104
    choices Says:

    A BTW on gold-the premiums on CEF and PHYS are both below 10%-CEF 7.4% and PHYS 9%-gold was knocked down this AM but seems to refuse to go below 1180-the premiums on CEF and PHYS alone are not usually something to trade from but they are one more indicator that gold refuses to fold and sentiment is not screaming off the charts-FWIW

  105. 105
    RMD Says:

    TAT;  GHS had on road this or last week, raise $100mm later this yr as acq. note to Malone was a 1 yr. note.  Nat'l oil co came to TAT to work a deal on the frac equipment which is in transit now.  4175 well was Malone's old phone # indicating optimism about it:  lots of oil.

  106. 106
    zman Says:

    Re 105, thanks for the always interesting Malone color.

  107. 107
    ram Says:

    Why did you guys give up money?  Wasn't there a bill me when the shares deposit option?

  108. 108
    zman Says:

    re 107. Not on my account. Subscribed to the deal and paid my selection price.

  109. 109
    elduque Says:

    z – how far are you by car from Springfield, Mo. Going to my son's wedding next weekend.

  110. 110
    zman Says:

    2.5 hours at 70. I'll buy you a beer if you can make it. Congrats to your son. 

  111. 111
    elduque Says:

    If HK doesn't start to go up. You will have to buy.

    More seriously. They say they are cutting NG prod. by 10% because of Bonny. How much of that 10% represents total production.

  112. 112
    reefguy Says:

    Tom Ward on CNBC and the stock falls 5%….Therefore, exited EXXI above $17..all into SD below $6

  113. 113
    zman Says:

    Total production in the U.S. is around 60 Bcfgpd. Gulf is about 7 Bcfgpd, so that just over 1 percent.

  114. 114
    zman Says:

    Reef – nice.

  115. 115
    elduque Says:

    OK, now when you do your calculations for next if you figuring that the amount added was going to be 40, then tahtat would mean basically no change

  116. 116
    elduque Says:

    by that I mean you still be at 40.

  117. 117
    zman Says:

    No change because that would be in the numbers a week from next Thursday. If they are curtailed for 2 to 3 days you can generally see it in the numbers. 10% though is pretty small. 

  118. 118
    BirdsofpreyRcool Says:

    KOG — what a dependable little workhorse that one is.  Buy below $3.30, sell higher.  What a pleasant little stock.

  119. 119
    Jerome Blank Says:

    KOG daily looks really good here, trading now at 100 day SMA resistance, KOG breaks out of the consoldiation triange from here at about $3.50…

  120. 120
    zman Says:

    BOP and JB – no kidding and thanks.  I think TAT offers the same from $3 to about $3.60.
    And AEZ from $6 to $7ish.

  121. 121
    zman Says:

    Storm looks likely to come ashore as a TS right around NOLA.   Glad it's hot out as NG will generally get whacked hard on near misses like this one looks to be.

  122. 122
    Jerome Blank Says:

    EXXI chart really improving also…updated the daily, break out above the consoldidation triangle, support at the restest…

  123. 123
    Jerome Blank Says:

    AEZ also testing the 100 day SMA, topside triangle trendline resistance at $7…

  124. 124
    West Says:

    Still touting XEC here before the close with ops update as early as Monday.

  125. 125
    zman Says:


  126. 126
    Jerome Blank Says:

    Re: #124, West XEC looks great, updated the chart…bullish consolidation ascending triangle, really looks like XEC wants to break higher, to at least test the recent highs which would form an even bigger wedge…

  127. 127
    West Says:

    Thx, JB, voted.

  128. 128
    Jerome Blank Says:

    West, thank you….

  129. 129
    zman Says:

    Wizard, check your email, it's that time again.

  130. 130
    zman Says:

    The wrap will be out on Sunday.

  131. 131
    crysball Says:

    Z,   BOP, et al,
    Will the current  Obama plan to allow  Bush era tax cuts  to lapse [sharply increasing  Dividend  and  Capaital Gains rates]  trigger a Q4  selloff   to realize  gains   in the 2010  tax  year?……Does   Obama's current plan  have  a chance of being overturned before  year end?
    Rrealizing  this  economomic /tax   policy  is  not  normal  fare, but could certainly outweigh  other  catalysts  as  we  apporach  year  end.

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