06
Aug

Less Jobs Friday

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Market Sentiment Watch: Payrolls stink up the room, setting the tone for a negative tone on the day but the market has had an underlying bid to it and it is possible that reasserts itself on beats of downwardly revised eco-data next week.

Ecodata Watch:

  • Non-farm Payrolls of -131,000 vs -60,000 expected
  • Private sector jobs of +71,000 vs an expected range of +20,00 to +150,000
  • Unemployment of 9.5% vs 9.6% expected

 

BP Spill Watch:

  • Macondo cementing completed yesterday afternoon, BP is monitoring but says the well has been sealed for good.
  • Speculation is increasing that they could sell the relief wells to another party who could then finish them as part of a development program for the reservoir. Just rumors from what I can tell.
  • Meanwhile Thad Allen continues to insist that he's in charge and that the relief wells will be used for the bottom kill.

In Today's Post:

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

Holdings Watch ZCAT (Zman Catalyst portfolio)

  • $9,000
  • 75% Cash
  • Yesterday’s Trades:
    • EOG - Added (1) EOG August $95 call for $7.70 with the stock at $101.70. Bidding a small higher strike position as well. Earnings tomorrow. Expecting potentially catalytic news from the Montana Bakken, the Niobrara, the Eagle Ford (still maybe too early) and China onshore.
    • EOG - High risk but not a lot of $. Added (50) EOG August $115 calls (which is close to this cycle high for the stock).

ZIM (Zman Inefficient Markets portfolio)

  • $5,600
  • 90% Cash
  • Positions for the quick view are updated on the ZCAT, ZIM, ZLT page.
  • Yesterday’s Trades:
    • None

Commodity Watch Crude oil ended off $0.46  at $82.01 yesterday. This morning crude is trading down slightly.

Natural gas fell $0.14 to close at $4.60 yesterday despite the EIA reporting a smaller than expected injection to storage (see below). This morning gas is trading flat.

  • Tropics Watch 1: Colin is reforming but still looks like an east Atlantic fish storm to my eye. Elsewhere the tropics are showing signs of more potential activity.
  • Tropics Watch 2: NOAA has trimmed its Atlantic Hurricane Season forecast. Expectation downgraded from a range 14 to 23 storms to a range of 14 to 20 storms due to the relatively quiet June/July period.

Natural Gas Storage Review

ZComments: The heat is helping and I expect a much smaller injection next week and a smaller one the week after that but at this point, we should be seeing withdrawals making it more than clear to me that production this summer has not begun to decline and may be up a touch.

Stuff We Care About Today

EOG Reported Strong 2Q Results; New Play; Spending Up; Guidance Unchanged

The 2Q10 Numbers:

  • Production of 2.217 Bcfepd:
    • vs guidance of 2.18 to 2.313 Bcfepd.
    • up 7% YoY
    • 73% natural gas
  • Revenue of $1.357 B vs $1.24 B expected
  • EPS of $0.24 vs $0.25 expected
  • CFPS of $2.84 vs $2.76 expected

Highlights Bakken:

  • 12 rig program
  • Couple of nice wells in the core but notably absent was talk of their Montana Bakken effort. They will have to address the Carat well on the call today.

Leonard Shale - Southeastern New Mexico

  • New play for EOG, the Leonard Shale of SE New Mexico.
  • Announced results of  two of their first seven wells, with IPs of 990 and 1,050 BOEpd.
  • Thinking EURs here of 400 MBOE/well.
  • EOG puts reserve potential at 65 mm BOE which is a pretty big opening salvo for these guys on a new play reserve estimate.
  • This makes it their fourth largest oil play in terms of estimated, risked, net potential reserves behind the Eagle Ford at 900 MMBOE, the Bakken / Three Forks at 420 MMBOE, and the Barnett Combo at 370 MMBOE.
  • These reserves are for about 1/4 of their 120,000 net acres in the play.

Eagle Ford Shale:

  • 5 rig program growing to 12 rigs by year end.
  • Announced 3 completed wells that are oily
  • To date they have drilled and completed 31, IPs ranging from 622 to 1,000+ of late
  • Sees major growth contribution kicking in in 2011.

Niobrara Shale:

  • 4 rig program
  • Two more IPs (730 and 1,100 Bopd) which are down from their initial Jake well which IP'd at 1,558 bopd
  • Completed 2 wells in the quarter, restricted rate production of 570 and 600 Bopd, no commentary on IPs.
  • 400,000 net acres but focusing on 100,000 of it for now.
  • EOG continues to say it is "too soon" to attempt to quantify the reserve potential of the Niobrara.

Barnett Combo Play:

    • 14 rig program just in the combo
    • more strong, oily wells to report here, not above previous results but strong nonetheless.

East Texas Haynesville / Bossier:

  • Announced 2 large Hayensville IPs, 32 and 30 MM/d which had outstanding first 30 day average production of 27 and 25 MMcfepd respectively.  These are some of the best wells completed on the Texas side of the play.
  • Also had a Bossier test come in north of 15 mm/d.
  • They commented that the 2010 to 2012 time frame will be "intensive" due to lease expirations. No kidding. I'm looking for a slowdown on the Louisiana side mid 2011 but the comment should give one pause regarding the next two years of gas pricing. Look for Mark Papa to expound upon the gas markets on this call, especially since the EIA revisions of last Spring were insignificant.

Budget:

  • Increased by $500 mm but to be offset by asset sales of producing non core gas assets in the U.S. and non core acreage.  Spending is for liquids infrastructure so that as volumes increase over the next few years, the pipes and treating equipment is in place to handle the growth.

Guidance:

  • 3Q of 2.32 to 2.591 Bcfepd
  • 2010 0f 2.281 to 2.501 Bcfepd, or about 13% growth; in line with last guidance.
  • Cost guidance is essentially unchanged for the year.
  • Growth for 2011 and 2012 are 19% and 21% respectively, estimates unchanged.  Note the real lack of change here despite the newly announced increase in asset sales.
  • Note, the liquids portion of their production profile looks like this:
    • 2008: 29%
    • 2009: 41%
    • 2010: 50%
    • 2011: 63%
    • 2012: 68%
    • By the way, 2Q10 was the first quarter in EOG's history to see more revenue derived from liquids than from natural gas.

Balance Sheet:

  • Net debt to cap of 23% vs 22% last quarter.
  • Target remains < 25%.
  • Still best in class in the large cap E&Ps.

Nutshell: In line quarter, stout operations update with one notable omission already referenced. On the one hand, people like to see new plays unveiled, especially oily ones so Leonard is a welcome addition. On the other hand, investors and analysts have abhorred boosted capital spending of late. Especially without a commensurate boost in production guidance. But on the third hand, it's the right move and will make it possible for them to go from low double digit to high double digit growth, oilier growth at that, over the next two years and to lockup their leasehold in the process.  The stock may come off initially but my sense is that that is short sighted given the radical shift in production profile here (something that began four years ago for them and not with the popular "get oily" crowd of recent months) and the large, repeatable success type drilling inventory they now hold.

Conference Call: Today,9 am EST

KOG Reports Essentially In Line Quarter; Operations Update Still Waiting on Completions

The 2Q10 Numbers:

  • Production of 1.055 MBOEpd:
    • up 112% YoY
  • Revenue of $7.35 mm vs $7.6 mm expected
  • EPS of $0.01 vs $0.02 expected

Highlights:

Bakken- Wells 13,14, and 15 are still awaiting completion as is a re-entry off the reservation so not a lot to talk about.

Budget - Upped their capex from $60 to $75 mm for previously announced acreage adds.

Conference Call: Today, 11 am EST

SWN Reported OK 2Q10 Results

The 2Q10 Numbers:

  • Production of 98.3 Bcfe; in a rare occurrence coming in below quarterly guidance of 102 to 105 Bcfe.

    • up 32% YoY
  • EPS of $0.35 vs $0.36 expected
  • CFPS of $0.99 vs $1.00 expected

Highlights

  • Guidance unchanged.
  • Budget unchanged (it's already been upped)
  • Record number of wells added in the Fayetteville this quarter as the company gets its operations back on track.
  • Average IPs and 30 day IPs recovered from last quarter's reduced levels.

Nutshell:  In line quarter on the bottom line, but missed their volume guidance, nothing I see to get very excited about at the moment and no mention of their new dabblings in Nova Scotia. Kind of leaves me saying meh.

Conference Call: Today, 10 am EST

Other Stuff

  • VNR - Tabled until Monday.

Odds & Ends

Analyst Watch:

  • GMXR - Wunderlich ups target by $2 to $12
  • RIG - JPM cuts to Under-weight

Scary Article Watch

190 Responses to “Less Jobs Friday”

  1. 1
    zman Says:

    EOG going to take a hit on the open on the higher capex guidance, down about 3.5% pre market on light volume.  Call in 20 minutes.

     

  2. 2
    milepost_43 Says:

    TGA CC yesterday and zman’s-“..I do expect prices to close in on $90 to $100 by year end..” really caught my eye…watch out for TGA if zman is right…
    TGA reported yesterday and just finished listening to the CC. These guys don’t “pump” but they did use the following words…CEORoss–“very pleased”…”significant reserve add coming”…..during presentation..”spectacular”…”very robust”….”stellar”….”great performer”….
    I am sure no expert but don’t know how it could be better…and they just closed $100M credit facility….Slide 11–can you say FAIRWAY…Slide 15–per Q&A–no partners needed….see presentation http://www.trans-globe.com/investors/presentations-and-events/index.php
    Very much appreciate the zman’s analysis..thanks…
    ps:do have 1/2 position in Sea Dragon–across the Nile in Al Baraka…

  3. 3
    zman Says:

    EOG call about to start. Will be listening for comments on Montana Bakken and China which were essentially left out of the press release. Also listening for comments on adding acreage in the Niobrara as they could be the buyer of the SSN land although given the price I sort of doubt it.

  4. 4
    AAA Says:

    Z, do you think EOG is overdone to the downside? How much is them and how much market?

  5. 5
    zman Says:

    Thanks MP. We’re going to need to see more jobs friendly data to get to the upper end of that range. Asian / Middle Eastern demand likely to make the bottom doable though.

  6. 6
    zman Says:

    AAA – good question, probably 50/50. On earnings days where the market doesn’t like them initially they can get hit pretty hard. Listening to call now.

  7. 7
    zman Says:

    Saw Tudor’s comments on EOG. They didn’t like the penny miss on EPS or the guidance or the boost in capex.

    In my book, TPH is short sited on the EOG call. The capex boost is to insure infrastructure is in place to manage long term oil volumes and is offset by increased asset sales. Guidance didn’t fall despite asset sales, they are getting oilier quickly, and have added another oil shale play, with initial reserve comments nearly as big as the Bakken a couple of years back.

  8. 8
    AAA Says:

    Generally, it has paid to buy EOG at a discount.

  9. 9
    zman Says:

    EOG Call Notes

    Leonard = Avalon = Upper Bone Spring

    Have a well that’s been on 300 days, doing well, 7 wells to date

    Calling the wells listed in the post typical.

    Haynesville – E. Tx results confirm new core.

    AAA – yep

  10. 10
    milepost_43 Says:

    #5…I’ll take $90 and TGA all day….

  11. 11
    BirdsofpreyRcool Says:

    been busily posting under the EOG heading… oops.

    z, can you move those comments over here?

  12. 12
    BirdsofpreyRcool Says:

    Credit Markets = short term red, longer-term FEAR monitor still coming down.

    IG index is 1 1/2 bps wider this morning, tighter than it was, but still in the red.

    HY index is -11/32 pts (+9 bps wider)

    TED is +26.6 bps… almost almost back to my personal “all clear” level of +25 bps.

  13. 13
    BirdsofpreyRcool Says:

    KOG — if you can’t complete, you can’t produce. If you can’t produce, you can’t sell the oil.

    Raymond James cuts KOG to Market Perform. I think others will follow.

    Currently sucks to be a micro-mini in a tight completion crew environment.

  14. 14
    Jerome Blank Says:

    EOG is currently on a P&F sell signal trading within a P&F consolidation triangle, what I’d like to see is EOG hold in X’s, EOG reverses back into O’s on a print of $98, if EOG reverses back into o’s, the last technical line of defense to more downside is the long term daily channel line which corresponds with the 200 day SMA at $97.50,so $97.50ish-$98 is strong support, a $97 print breaks down the P&F consodlidation triangle and is bearish, but if EOG gets there, if bullish aggressive longs are easy to manage with stops just below $97…

  15. 15
    zman Says:

    EOG Comments on 4 oil shale plays

    Eagle Ford
    moderate activity, constrained by frac equipment, creating their own solution as they did in the Barnett
    25 wells waiting on completion
    245 wells targeted for 2011 vs 111 for 2010.

    Bakken – nothing beyond the press release. Got distracted for a second but didn’t hear Montana.

    Combo – boosted size of core area, changing to more horizontals than verticals from a prior 50/50 program

    Niobrara
    Will wait until year end to put a reserve potential # on it. Not much added to the press release.

    SW Kansas – two nice oil wells, hmmm.

  16. 16
    zman Says:

    Thanks JB, I was thinking I’d like to see it hold the recent low of 97.14, then add if it does.

    EOG China – Second well OK, not as good as first well, waiting to year end to decision the play

  17. 17
    zman Says:

    EOG higher capex

    Big piece of the increase spending will be EFS infrastructure that they had previously planned on taking through a 3rd party. Cost and timing made it a better plan to do it themselves.

  18. 18
    Jerome Blank Says:

    BOP, any fundamental reason not to add to CIGX on weakness?

  19. 19
    zman Says:

    BOPs comments:
    TPH no likee EOG quarter…

    EOG Q2 quick look ($102.44 – A) – Negative Q. Stock likely weak today on $500mm 2010 capex raise, downward tweak to US oil volumes and Q2 eps miss (13c, higher expenses/lower NGL pricing). “What it Takes” is beating on oil production while managing capex…EOG oil volumes ~1.4mbbld below low-end guidance with big cash flow outspend thru 2011 (-$3.5B strip prices). Asset sales must now be ~$1.7B+ instead of $1.5B to keep debt/cap <25% (EOG’s target). Q2 bright spots are operating results from existing oily plays plus unveiling Permian shale (Leonard, ~1,000boepd IPs).

    I responded to that in #7 above

  20. 20
    zman Says:

    More BOP comments:

    KOG — if you can’t complete, you can’t produce. If you can’t produce, you can’t sell the oil.

    Raymond James cuts KOG to Market Perform. I think others will follow.

    Currently sucks to be a micro-mini in a tight completion crew environment.

    West — do you know the API gravity of the Leonard Shale oil? I’m behind the curve… don’t know about this one.

  21. 21
    Dman Says:

    Z – re. scary article. The truth is that carrier groups were only survivable when your enemy didn’t have good satellite surveillance and ICBMs or medium range missiles. There’s no way to hide a carrier, let alone a whole carrier group, from a half-decent satellite system. Once you know where they are, you don’t even need a nuke missile or fancy anti-ship missile. Just a diesel-electric submarine sitting in wait. Even North Korea has those.

    Sure they have lots of anti-submarine gear, but the truth is that the subs still have the edge. It’s one of the few military technology races where there really hasn’t been any decisive shifts for decades: it’s still very hard to find subs.

    So looking at a regional player like China: they don’t have to spread their sub fleet over the whole planet. They can just keep them close to home and wait for a carrier group to pass by.

    Am I saying carriers are obsolete? Yes, they’ve been so for decades. After all, you can’t expect the world to stand still at WWII tactics. In WWII, battleships became expensive targets and carriers worked. Now … it would be better to build more Seawolf subs. They only built 3 of them.

    Why does the USN insist on keeping the carriers? Well, they sure look impressive and they can deter small 3rd world countries with no air force, navy, satellites or missiles. Hmmmm.

  22. 22
    zman Says:

    APC has said the API there is 33 to 36

  23. 23
    zman Says:

    re 21. I’d be concerned they will sell those to the small 3rd world countries. Plus, I’d quibble with the definition of who is scared. There are quite a few nations that aren’t 3rd world in terms of their armies technology who can’t touch a carrier without outside help.

    EOG Q&A starting.

  24. 24
    zman Says:

    EOG called down 4% on 14,700 shares pre market.

  25. 25
    zman Says:

    EOG – I’m pretty sure I will fish a couple of times, small, here today.

  26. 26
    BirdsofpreyRcool Says:

    JB — CIGX stock price reaction is a gift, IMHO. You get to see the actual product and have an actual launch, but the stock goes down on the news.

    Think these are shares that are leaving “fast money” hands and are being picked up by more patient money. But, talking my book (and my actions) here, so take a giant grain of salt, to go along with my thoughts.

  27. 27
    Jerome Blank Says:

    RE: #26, BOP, thank you…

  28. 28
    zman Says:

    EOG down 6, about 6%, on the open, that’s an over-reaction in my book.

  29. 29
    zman Says:

    EOG now targeting late May lows now. Action still not big volume, looks like piling on in a bad market.

  30. 30
    Nicky Says:

    Morning all. Watch support at 1115, then 1105 – 1109.

  31. 31
    zman Says:

    BP one of three green stocks on my screen.

  32. 32
    zman Says:

    ZTRADE – ZCAT – EOG

    EOG – Added 2 more August $95 calls for $3.55 with the stock at 96.30 in a fast market. See site for details on the quarter which at the open, people did not care for.

    missed the trade in the ZIM

  33. 33
    zman Says:

    Thanks much Nicky.

  34. 34
    jat Says:

    coals strong

  35. 35
    AAA Says:

    EOG bouncing hard with market.

  36. 36
    zman Says:

    Jat – yes, just noting my recent WLT add to the ZLT continues to march nicely after a little recent profit taking.

  37. 37
    zman Says:

    AAA – that and guys like TPH simply got it wrong. I don’t think it goes positive on the day but being disappointed about things like a penny miss on EPS in the quarter when they beat on CFPS and their other items just makes me think THEY need a vacation.

  38. 38
    BirdsofpreyRcool Says:

    z #37 — GREAT comment.

  39. 39
    Nicky Says:

    Resistance 1119 – 1125. I am watching the early action before commenting further on cycles etc as much depends on whether we can reverse the early weakness.

  40. 40
    bill Says:

    I was lucky to get some eog calls on the open.

    I like how Papa is shedding assets to pay for his cap ex.

    i wish Sd would do the same or get more agressive.

    Alot of these guys want to hold everything they own even though they dont have resources to capitalize on it.

  41. 41
    jat Says:

    Yah, I’ve been keeping you company on WLT.

  42. 42
    BirdsofpreyRcool Says:

    HeadTrader thinks we saw the lows of the day… thinks we have a slow grind up into close. He thinks we still close red, but higher from here.

    He also points out that after today, NYC will be stricly in the hands of the C Team… as the As head to the Hamptons and the Bs to the Jersey Shore.

  43. 43
    BirdsofpreyRcool Says:

    Various comments off trading desks… we are back to “buy the dips” mentality.

  44. 44
    zman Says:

    EOG Notes:

    Niobrara wells, about $4mm apiece for pretty good economics.

    the Critter Creek wells are in the Hereford (sp?) prospect.

    Big question for them is whether flows are from fractures vs matrix. They think they may be seeing matrix pressure kick in on some but not others. It’s so naturally fractured it’s no wonder they won’t put a reserve number on it. They may to really downspace it to get the reserves out …. or maybe not. Still early in spacing work, completion methods, concept of how long a lateral they can get away with (probably highly variable).

  45. 45
    bill Says:

    eog is going to trade like hk did on earnings..down initially and closing higher on the day

  46. 46
    zman Says:

    EOG more Niobrara

    Jake and Elmer wells, 50,000 barrels first 6 months, appear to be stabilizing now at 150 bopd.

  47. 47
    Dman Says:

    #23 yes the Chinese do have a tendency to sell things and they might think it is in their interest to have everybody equipped with carrier-killers since this would negate a huge amount of USN investment and remove a major card from the US diplomatic pack.

    Far too many times, when things get tense, a carrier group has been sent into an area as if this settles the matter. Too predictable. More variety required.

    My point was that carriers used to be useful against big powers (Russia, China) and that is a bygone era. As for the smaller powers, the US Air Force can hit them with almost zero warning and no need to risk thousands of sailors in a slow-moving steel city.

    I guess I also think that any country with zero capability against 1950s naval technology isn’t worth worrying about militarily.

    The recent diplomatic aggression and military expansion by the Chinese has been a major strategic mistake because it has tipped off anyone who isn’t blind to their real intentions and attitudes. But it looks doubtful that the West is going to do anything useful about it.

  48. 48
    zman Says:

    Bill – honestly I don’t think it will make it to greensville. I can understand what bones short sighted analysts have to pick with the name. History shows that on days like this, you get the dip, a bounce and then close somewhere in between on the two. My $115s very likely to expire worthless but as I said yesterday, they were not a lot of money and very high risk. Never needed $115 for them to work but without a data point in the math on the premiums, you would need a really significant move now to save those. Looking at Septembers now for the ZIM, still listening to the call.

  49. 49
    zman Says:

    But Bill, I admire the optimism and if it does I’ll send you a mug.

  50. 50
    zman Says:

    re 1950s tech. You mean like Iraq?

    EOG is going to have one of those interesting post call trading periods. Tone is positive by some, neutral to bored to petty by others on the call.

  51. 51
    zman Says:

    EOG Interesting comment on JVs

    Why educate a junior partner for 50% of a new shale play? Would rather do it themselves and keep and sell acreage they can’t get to instead of the JV.

  52. 52
    zman Says:

    ZTRADE – ZIM – EOG

    EOG – Added (1) September $95 call for $7.10

    EOG – Added (5) September $105 calls for $2.16

    Both done with the stock at 98.50.

  53. 53
    zman Says:

    EOG Q&A on last caller, stock floating around low 98s.

  54. 54
    bill Says:

    49 maybe it will take a market move to make it happen but I really dont see what the problem is/was with earnings or where they are going

  55. 55
    zman Says:

    EOG call over, stock at 98

    Switching to the SWN call

  56. 56
    zman Says:

    re 54. Bill, neither do I. Crowd missing forest for trees there.

  57. 57
    zman Says:

    BP holding early gains.

  58. 58
    tomdavis12 Says:

    Z: EOG call. Liked the comments that they have so much acreage, they pick and choose carefully and do not assign big personnel packages to develop any one area. Debt staying below 25% of market cap and being slow and careful. Seems like large dichotomy to CHK and HK approach.

  59. 59
    Dman Says:

    Speaking of military matters, there is a lot of chatter from people with intelligence contacts that Israel will soon strike Iran and thus draw the US into another war. I don’t know what to make of this, because we’ve been there before.

    Last time, Bush sent Mullen to read the riot act to the Israelis. They took him seriously because they took Bush seriously.

    But Obama is very weak and the Israelis don’t take him seriously (nor does anyone else actually, except a few people in Europe who didn’t get the memo).

    Gold has got a bid and crude isn’t dropping much in the face of fairly dismal economic news. The chatter has been going on for a long time, but has reached fever pitch lately. Hard to evaluate but I don’t think it can be ignored. In general terms, it meshes with the views of longer term players like Marc Faber that conflict will increase and this will occur in the Middle East.

  60. 60
    zman Says:

    Tom – that’s net debt to equity cap but agreed. They are and have always been the antithesis of the Aubrey gunslinger approach. Before the advent of the shales, Papa was always seeking out the “one’s and two’s” plays as he called them, places where they could learn from semi-exploratory success in offsetting locations along the Gulf Coast and in the Rockies. Perpetually conservative on the balance sheet so when I see capex go up without a commensurate increase in volume guidance I think a) it’s not the same as HK or CHK or just about anyone else pulling that kind of move and b) they will follow through without question on the asset sales. Their shares are precious to them and they don’t easily distribute them like some companies roll them off like sheets of toilet paper. Their balance sheet is strong and that’s not going to change.

  61. 61
    zman Says:

    SWN talking about difficulty of getting fracs done in the Marcellus. Saying 60 to 90 days to get one done.

    Also, they are worried about water. Been very dry in Penn.

  62. 62
    zman Says:

    KOG – down 6%. Operations updates remind one of crickets chirping.

  63. 63
    Nicky Says:

    Dilemna here is that we have either already topped or there is one higher high out there. If the latter then likely we see it Monday at the 1135 plus area.

  64. 64
    zman Says:

    EOG trading in step with the S&P now. No sense of urgency to pile out post call.

  65. 65
    zman Says:

    Nicky – I forget, when do have that big negative swoon set for? Do you have next week in the plus or minus column?

  66. 66
    Dman Says:

    #50 Not sure what your question meant. I just mean that nuke powered carriers are a 1950s technology concept.

    You could say the same about nuke subs, but it just so happens that new tech really hasn’t made much of a dent in sub survivability. The ocean is opaque to EM waves and this turns out to be a very tough problem to work around. Satellites useless, missiles useless, etc. Needle in an underwater haystack in the dark.

  67. 67
    zman Says:

    Fairly amazed to see crude back to nearly even.

    Someone sent me a Simmons piece on why the recent run in crude prices is not sustainable, have not opened yet but I have my own set of reasons for agreeing with that.

  68. 68
    zman Says:

    EOG said on the call they will be selling 117,000 acres in the EFS, see this coming across the tape now. They also said this will not hurt them on production at all.

    Also seeing headline that they will outspend operating cash flow in 2010 and 2011. This has been the plan but net of divestitures, this does not lead to a big rally in debt on the balance sheet.

  69. 69
    zman Says:

    D – was just saying that carrier groups have been effective against someone like Iraq who spent quite a bit on their military.

  70. 70
    cargocult Says:

    Dman- what are the Chinese’s real intentions? Seems to me we are joined at the hip economically. Without US consumer China closes shop and all those T-bills become worth-less. Without low cost Chinese labor US importers(which is everyone)will need to raise prices and reinvest in capital equipment back home.

    If Israel bombs Iran I don’t want to own equities. Can’t be good for the market. Maybe we can come up with a protective put to cover our you know whats. Oil will certainly increase in value. You make a strong argument for bolstering Obama’s stature for now. Dissing the quarterback is a lousy way to win a game.

  71. 71
    BirdsofpreyRcool Says:

    GST call in 30 mins. Will be on it. But ‘fraid they won’t talk about the most interesting stuff… the EF potential underlying their E TX Bossier acreage. Think they are still in “lease the shit out of the area” mode… and don’t want to show them cards.

    Will be listening to hear how they plan to get value out of their scattered Marcellus acreage too. Maybe a JV or two. Would love to see them just outright sell it. But it does have value… so don’t mean to sound like i’m dismissing it outright.

  72. 72
    Nicky Says:

    Z – re #65 – It all rather depends on whether the top is in. If it is and we are already heading down then the low could actually be in around the 10th. By the way that low needs to hold the 1088 area or the situation turns more bearish. If we have another shot at a high into early next week then likely we turn lower from there.

  73. 73
    tomdavis12 Says:

    Z: On the CC’s I have been on I have heard nothing but difficulties re the pricing of NGL’s. Is that because distillate inventories are so high?

  74. 74
    zman Says:

    BOP – Great, relay notes when you can. I will be on KOG.

  75. 75
    BirdsofpreyRcool Says:

    Oh good. Can’t be on both calls at the same time… figured GST would have more to say, at this point, than KOG. Even if GST won’t say anything.

    If you’re Lynn… what can you say? “We’re standing in line… with all the other midgits… waiting for the Completion Guys to call our number.” Is what it is.

  76. 76
    Dman Says:

    Z – #69 yes, but they fell into the category of countries without an airforce, navy, satellites, submarines or any serious anti-ship missiles! You might as well say carriers are effective against a kindergarten.

    cargo – I think Z will agree that oil equities, especially those with operations confined to the US, will do very well if Iran is hit.

    Not sure anyone can bolster Obama apart from himself and I don’t think he sees the problem.

  77. 77
    choices Says:

    carriers: traditions die very hard in the Navy, carrier proponents (brown shoe Navy) has dominated Navy thinking and strategy since WWII-continue to spend billions to build new carriers and name them after former Presidents-not likely Clinton or Obama will get one-heh.
    many old reasons now why we need 11 carriers, one under construction-projection of power, patrol sea lanes, etc, etc.
    The US has to start getting realistic about its military spending-if ANY progress is to be made on debt reduction, spending to include military spending must be brought under control-it is not going to happen with tax increases or waiting for growth to arrive.

    Dman, you nailed it but do not expect the Navy and its Congressional allies to give up the carrier anytime soon-e.g.watch the Congressional food fight whenever the Navy contemplates changing a home port of a carrier group-

  78. 78
    zman Says:

    Thanks Nicky, market looking pretty iffy at the moment.

  79. 79
    zman Says:

    SWN call over …. yawn.

  80. 80
    zman Says:

    Tom – hearing that too, NGL inventories not over-stored at the moment, at least not propane, I think it comes from processing capacity and a flood of demand from liquids rich plays to get processed. But I’m still partly on vacation mind time so need to actually think about that answer some more.

  81. 81
    zman Says:

    S&P just zipped through Nicky’s first support.

  82. 82
    zman Says:

    ATPG – big reversal of yesterday’s rally.

  83. 83
    Dman Says:

    Cargo – sure there is economic interdependence. But that is just the next few years. The Chinese are thinking much further out than that. They intend to surpass the West. The fact that the West was willing to donate it’s entire manufacturing industry and almost all of its technology to China must have surprised them … they see it as a sign of Western foolishness, weakness and irresolution and I tend to agree with them on that point.

    The recent diplomatic aggression revealed that all their “we just want to trade and play nice” behavior for the last 30 years was just a strategy until they are strong enough to not need to play nice. When they feel strong, things will get very nasty.

  84. 84
    Nicky Says:

    50% retrace is 1109, 62% is 1105

  85. 85
    BirdsofpreyRcool Says:

    Dman — #83, it’s dismal, but completely agree with your statements. It is on track to get ugly. Don’t know what is going to derail that, in the long run. Will just have to stick around and see….

  86. 86
    Dman Says:

    Surely all these service shortage/delay problems must be good for someone. Usual suspects (HAL,SLB)?

  87. 87
    zman Says:

    Dman – yeah, probably, frac pricing drifting higher. In the Marcellus, the water issue could also be good for gas prices down the road.

  88. 88
    BirdsofpreyRcool Says:

    GST — yeah yeah yeah… a 2nd “tough quarter” in a row…

    currently at 22mmf/d net production level. this is good (vs 15.8mmf/d during 2Q)

  89. 89
    Dman Says:

    … although HAL is up almost 50% in 2 months… a pullback would be reasonable.

  90. 90
    cargocult Says:

    That the Chinese will surpass the West is foregone. They have over 1 billion hard working people and have embraced capitalist economic expansion with gusto. GM now sells more cars in China than the US. So is GM an American manufacturer or a Chinese one? Maybe GM is a bad example because it is currently owned by government. Not for long.

  91. 91
    BirdsofpreyRcool Says:

    sorry… make that 20mmcf/d (not 22)

  92. 92
    crysball Says:

    RE Service Shortage & Delays……Makr mentioned various types of propoants, coated sands and ceramic would appear most likely candidates.

  93. 93
    zman Says:

    KOG Notes:

    Completions have been delayed for a variety of reasons but we have made tremendous progress over the last quarter.

    Experiencing unprecedented delays in North Dakota.

    Completed 3 wells recently with short laterals (4,500′).

    Thinking EURs are 450 to 500,000 BOE, this is up from 350 to 400,000 BOE thinking a year ago.

    Most recent well could not get liner to toe of the lateral of their 9,600 foot lateral well, only stimulated 6,200 feet.

    They think they will get the long lateral EURs into the range of the 750 to 800,000 BOE.

    Disjointed commentary here, a bit hard to follow, sounds like he said two more wells completed by year end??

  94. 94
    BirdsofpreyRcool Says:

    GST — decent hedges on 20mmf/d for rest of year

  95. 95
    BirdsofpreyRcool Says:

    GST costs per mcfe were high due to a lot of workover costs in the last quarter… should be flat to down in 3Q

  96. 96
    crysball Says:

    Mark’s explanation during the EOG call of the negative effects in Frac’d wells of propants washing back into the well and cutting up the frac pack and equipment…essentially damaging the well…. in ‘free flowing’ wells makes eminent sense. It also hepls explain about the merits of choking these wells to create a ‘back pressure’ and how this helps EUR. Would like Wyoming’s perspective.

  97. 97
    BirdsofpreyRcool Says:

    GST legal expenses up … they have some weird legal issues… can’t decide if they are material (or not)… but, since having to spend $$ defending here, that is not good.

  98. 98
    DrLink Says:

    Today NYC Times…
    “Officials in the United Arab Emirates have concluded that a terrorist attack caused the mysterious damage a Japanese oil tanker suffered last week as it passed through the Strait of Hormuz, the narrow channel that serves as a passageway for shipping crude oil from the Middle East to the rest of the world.”

    Perhaps this is giving oil a little support

  99. 99
    BirdsofpreyRcool Says:

    GST — NOT raising capex guidance from yr… will fund from cash flow and revolver.

  100. 100
    zman Says:

    re 99. can you tell how much roughly of each?

    DRL – thanks, saw those pictures, surprised it has taken the bad guys this long to try it.

  101. 101
    BirdsofpreyRcool Says:

    4Q = EF horiz oil well test in E Tx. Was hoping this could be a 3Q event, but delays… THIS could be a “company-maker” for GST.

  102. 102
    BirdsofpreyRcool Says:

    21 – 22 mmf/d = 3Q production guidance with 4Q production jumping up “dramatically” if current drilling comes in as hoped.

  103. 103
    zman Says:

    KOG

    Experiencing some service cost creep. Gross CWC of $6.5 to $8.5 mm, that’s not bad with the high end of the range being a longer lateral and more stages.

    next 2 wells have liners in place without any trouble.

  104. 104
    BirdsofpreyRcool Says:

    ha!! 1st question goes right to the heart of the GST story… “what’s going on with the Glen Rose?”

  105. 105
    BirdsofpreyRcool Says:

    GST = still leasing acreage in the Glen Rose play… screwed up the acid job on Wildman #6… think know more now, will re-acidize.

  106. 106
    zman Says:

    EOG didn’t come off as much as the rest of the group with the S&P’s last swoon (it was already off). I take it as a minor positive sign that it seems to want to pop whenever the S&P gets a little run. I am typing to stay awake as Lynn monotones along here.

  107. 107
    BirdsofpreyRcool Says:

    GST — oops… back to 22 mm/d net production in July… 20mm was just E Tx

  108. 108
    BirdsofpreyRcool Says:

    GST saying again that they expect 4Q production to be a pretty dramatic jump from current 22mm/d level.

  109. 109
    zman Says:

    KOG Q&A

    Service providers adding new equipment to the Basin, having trouble housing all the employees. Seeing more proppant availability.

    Doesn’t sound like service price inflation is a big issue yet and may not be as Service increases equipment and people availability.

    Using 100% ceramics now, trying to manage the costs as best they can, using 350 foot stage intervals at present. Sounds like CRR still going to see prop volumes up quarter after quarter.

    4 well pad. Are you going to do more 4 well pads going forward. Yes, cost savings on move times but also on pipeline and other infrastructure. Also see doing 3 Forks from the pad.

    Anxious to see results of a non operated TFS test and then from their own well which has spud.

  110. 110
    BirdsofpreyRcool Says:

    z — when things get really dull in August, could be a good time to take a look at GST. Nothing in particular is gonna move the stock in the next month or so… but could (should) be some large catalysts going into the end of the year. Would make a nice addition to the Event List.

  111. 111
    BirdsofpreyRcool Says:

    Some notes from SWN call
    ——————————–

    Southwestern is taking a cautious approach to the Marcellus

    · Southwestern indicated it would not operate somewhere it is not wanted; right now management believes Pennsylvania wants the industry but it indicated it would exit if it felt that attitude had changed

    · The company is wary of legislation, and is therefore ramping up slowly in case it decides to exit

    · SWN will run 1 rig and drill 20 wells in 2010; ultimately it sees running 5-6 rigs in the play

    Fracking in Pennsylvania remains difficult

    · Fracking services supply is tight, and in some cases it can take 60-90 days before a well can be fracked

    · Management indicated that in order to keep a committed frac crew, a company needs to have 4-5 rigs running, which it will not have for 18-24 months

    · Southwestern’s other concern is the limited water availability in the Marcellus; it has been a dry summer and the company believes that the entire industry may be slowed if the Fall is also dry

    Southwestern indicated that approximately 30-40 of the wells drilled in the Fayetteville each quarter are to HBP acreage

    · The company continues to experiment with tighter well-spacing in the play

    · SWN averaged a drilling time of 10 days in July; faster drilling times have allowed the company to drop a rig, reducing horizontal rigs to 15 in the play

    The Fayetteville Express pipeline continues to progress on time

    · SWN expects some interim service as early as October and expects full service by January 2011

    Management indicated the Midstream Services segment continues to be a core asset

    · The segment is core for the company because it helps it get wells on faster and allows it to set up the system the way the company wants it

    · Management indicated there is still a lot of pipe to lay, and there will be at least another year of laying basic infrastructure

    · Once the basic infrastructure is in place, the company would reconsider whether or not the asset is core

    The company plans to make additional acreage acquisitions

    · The acquisitions will be focused on shoring up blocks in the Fayetteville and Marcellus and adding to positions in the new ventures

    · SWN said it will not participate in Petrohawk’s Fayetteville data room

    What to watch for

    · Completion of the Fayetteville Express pipeline

    · Additional acreage acquisitions

  112. 112
    zman Says:

    Re Coal stocks – JRCC saying they see strong met coal demand (running flat out) and returning thermal coal demand

  113. 113
    zman Says:

    BP sending Suttles, who has been in charge of the Gulf spill response for the last 3 months, back to Houston effective immediately. Noting that BP still hasn’t said it will bottom kill this well if the top static kill works which it looks like it will.

  114. 114
    zman Says:

    KOG – Exit rate for year end in 10Q, 2,500 Bopd.

  115. 115
    zman Says:

    … so more than double the 2Q average of 1,055 bopd.

  116. 116
    zman Says:

    Nicky – way to call support.

  117. 117
    ram Says:

    Is CIGX coming into some sort of support? It seems to bounce up from 1.85/1.90 range.

  118. 118
    zman Says:

    Heard the RJ note on KOG was scathing. Calls the quarter a miss across the board. They cut the rating based on lower NAV due to higher per well completion costs. Hmmm. That’s not really what I’m hearing. Sounds like they didn’t like the EPS miss and went after the rating based on something else which may not really have that much of an impact.

  119. 119
    zman Says:

    Noting APC saying Tronox issued false and misleading statement. Tronox was the TI02 division (whitening agent) of KMG that was spun off and promptly went BK. I used to model this thing when it was part of Kerr and it was a squirelly deal then to get info on. Should not be impacting APC much at all, it was small then and again, next to nothing in terms of transparency, no pun intended.

  120. 120
    Jerome Blank Says:

    Re: #117,ram CIGX pulling back to daily support, it’s also sitting on the 30 min lower trendline…I think everyone is trying to decide if the wash out is finished for the moment….the $NYMO is probably close to 0 right now, but it’s the end of day reading that matters…

  121. 121
    ratberto Says:

    Re Israel – Iran
    The Iranians this week claimed that they now have four S-300 surface to air missile systems, obtained from countries other than Russia (who agreed not to deliver S-300’s under an existing contract with the Iranians). The S-300’s are comparable to the U.S. Patriot system, and represent a quantum improvement in air defense capability for Iran. The existence of S-300’s in Iran has been generally acknowledged as a potential tripwire for an Israeli attack.

  122. 122
    zman Says:

    By the way, while I was out last week, good call to whoever said that was an explosive, think they said it was anfo, that hit that tanker. Bet you top dollar that is some state funded work. History has been, try barebones first, then come back with with a real attack later, maybe a couple of years later.

    KOG call over. OK call, not much of a mover on the stock.

  123. 123
    zman Says:

    BOP – re GST, thanks, will do.

  124. 124
    zman Says:

    Interesting theories on Romer’s departure:

    http://news.yahoo.com/s/atlantic/whyisobamastopeconomicadviserleaving4618

  125. 125
    zman Says:

    Swag Watch:

    KOG at exit of 2,500 bopd, can’t find what they previously had as an exit target, anyone?

  126. 126
    Dman Says:

    Z – anfo=? The dent in the hull didn’t look like anything a wave could do, that’s fer sure.

    #121 – true but they only got 4 missiles and that ain’t much. They may try to use them to develop their own system.

  127. 127
    ram Says:

    Thanks JB.

  128. 128
    Dman Says:

    Z – I google it. Yeah, anfo makes sense. concentrated enough blast to cause a dent but not to punch a hole.

  129. 129
    BirdsofpreyRcool Says:

    In this crazy market, there are days when you look like a Genius… and days when you feel like a Goat.

    I am going to go outside and wander around, eating grass for a while today.

    (I have a bet with HeadTrader that CIGX closes at 2.10 or higher. But you have to keep in mind, that level is coming from someone who is about to go chomp green.)

  130. 130
    choices Says:

    #124-do not if Romer is/was competent in her job but I’m fairly well convinced that Summers needs to be gone-what an arrogant piece…..maybe something will change if and when he is gone.

  131. 131
    bill Says:

    129 lol

    im not going to bet against that silly goat

  132. 132
    zman Says:

    Dman – Other than mud forts when I was a kid I have little experience blowing things up, well, maybe the occasional rubber raft these days, but that is what someone mused on the site last week.

    BOP – you are not a goat but if you like, I can send you a hat to eat.

  133. 133
    Dman Says:

    There is talk about an al-qaeda related group being involved:

    http://www.nytimes.com/2010/08/07/world/middleeast/07tanker.html

    They may have realized it’s easier to hit ships than to get to the Saudi infrastructure.

  134. 134
    Jerome Blank Says:

    CIGX appears to be firming, added a bit at $1.94…

  135. 135
    choices Says:

    134-I also added some-need to bring BOP back from the goat pasture.

    Thanks as always for your charts, JB-voted.

  136. 136
    tomdavis12 Says:

    BOP: If I chomp on some CIGRX pills, will it help to not make as many stupid trading mistakes. I am thinking of lessening my HK exposure and add to EOG.

  137. 137
    Jerome Blank Says:

    #135 choices, thank you…

  138. 138
    crysball Says:

    Iran:
    Getting S-300’s and making them operational are two completely separate matters…..as these are very complex systems.

    St. of Hormuz Attack:
    Am hearing they used an inflatable and had some kind of soft {foam} rubber sheet over the entire boat which acted like a ‘stealth coating’ to abosrb {cut} radar signature…….so they were in effect invisible to partolling Naval craft……..also hearing the boat actaully impacted the tanker and bounded back before perp’s were able to detonate…..which reduced the blast effect somewhat.

    Finally, it is not inconsequential those claiming credit dedicated the effort to the blind Sheik/Imam who attempted to bring down the world trade center before 9/11……it implies to me they will make additional efforts to block the Strait of Hormuz…..and consider blocking the St. of Hormuz as important an Iconic Symbol as the World Trade Center

    Think about it…….2 zealots in an inflatable raft covered with a rubber sheet can sneak up and hit a supertanker in the most heavily patrolled shipping lane in the world…it is only a matter of time before they try again…..the next time the world may not be as lucky………and thanks to the media the perp’s can learn from their mistakes.

  139. 139
    Jerome Blank Says:

    WRES is pulling back into support, thinking of long at $3.25…the breakout from the daily channel was on good vol, the pullback vol is weak….support higher prices….

  140. 140
    zman Says:

    Rig Count Watch:

    Oil up 8
    Gas up 11

    Horizontal up 25 to a new high.

  141. 141
    zman Says:

    Fadel Gheit on CNBC saying BP should move up to $45 to $48.

  142. 142
    zman Says:

    BP and Govt on tape saying relief well will intercept discovery well bore Aug 13 to 15.

  143. 143
    Pati Says:

    Suttles saying BP might drill again into spill reservoir. Not going to be well-received.

  144. 144
    zman Says:

    Pati – Maybe not by the Administration. But he’s a businessman and they have found oil there and they are in the business of finding oil. There shareholders should welcome the shift from crisis mode back to making money mode.

  145. 145
    Dman Says:

    An inflatable craft would be virtually invisible on radar at the best of times. But this mode of attack is fairly easily countered (eg crew could keep visual watch… revolutionary idea). So they can only get away with this sporadically. Enough to cause jitters but not close the gulf I would think.

  146. 146
    crysball Says:

    Re Strait of Hormuz:
    ~Inflatable rubber raft=Zodiac with twin Outboard motors.
    ~In headway mode the outboard motors do not produce a phosphorescent wake.

  147. 147
    zman Says:

    Red paint not exactly drying flat into the close here, seeing some volumes late in the day on the buyside, names like ROSE, EOG trying to make a little bounce.

    SSN – lack of news causing a doubters dip, should be a release on Monday detailing the $10 mm deposit. I’m holding through the weekend. I don’t think they would have had the PR yesterday if they were not reasonably certain. My return correspondence with the company has given me increased confidence in the deal going through.

  148. 148
    Dman Says:

    #146 Give the crews some night-vision gear to spot the engines. Or put some UAVs up for same purpose.

  149. 149
    baylor3217 Says:

    saying hi

  150. 150
    zman Says:

    Hey Baylor, what’s up?

  151. 151
    baylor3217 Says:

    not much just haven’t been around much lately and was going through ZEB withdrawals

  152. 152
    zman Says:

    EOG tapping on $99 as the S&P tries a little late week run. I’m now breakeven on the $95 Aug position thanks to the triple down. Conviction abhors a coward or some such.

    Movie Quote Friday Watch:

    “Life is so fucking good I can taste it in my spit.”

    (and forgive the language and no its not a reason to get saucy outside of the movie quotes)

  153. 153
    crysball Says:

    Re: St. of Hormuz:
    Zodiacs come in many sizes/shapes….
    think of a black Zodiac Pro 20 man with a black rubber [foam] blanket on a moonless night dropped in the St. of Hormuz traffic lanes by a frighter.

    http://www.marinesafe.com.au/inflatables/zodiac/pro/pro.html

    It can drift (without IR signature or radar signature) until target selection……and this is a target rich environment with 40% of the worlds crude oil passing through the St. of Hormuz…then dash into the target in a matter of just a few munites.

  154. 154
    zman Says:

    re 152 … wow, summer is slow, here’s another, same movie.

    “the art of good business is being a good middle man”

  155. 155
    BirdsofpreyRcool Says:

    back from the green pastures…

    must say, i’m shocked…. SHOCKED at Such Language, z!

    😉

  156. 156
    zman Says:

    BOP – sorry, but just trying to give your merchandise away.

  157. 157
    BirdsofpreyRcool Says:

    Bought some CIGX trading shares at 1.94. Thank you, JB. Will go vote now.

    CIGX is gonna be a volatile ride. I think it’s one you will be able to trade, as well as hold for the longer term. So, any technical help is greatly appreciated!

  158. 158
    BirdsofpreyRcool Says:

    z — i think you could have a strong market for edible hats… i would be one of your better customers, i fear.

  159. 159
    zman Says:

    EOG – closing on $100.

    BOP – I’ve eaten my share, most famously for a 2008 low in natural gas prices.

  160. 160
    BirdsofpreyRcool Says:

    i have no idea what movie your quotes are from… but guessing they feature gangster-like characters…??

  161. 161
    zman Says:

    Consumer credit down $1.34 B in June, less than the $5 B forecast.

  162. 162
    zman Says:

    BOP – re 160. As almost always.

    “So while prohibition lasts, make hay while the sun shines. I’m not a gangster. I’m a businessman whose commodity happens to be cocaine.”

  163. 163
    bondbuddha Says:

    Daniel Craig in Layer Cake, crazy movie

  164. 164
    BirdsofpreyRcool Says:

    wow. DK that one. Like Daniel Craig, tho… and well before he was tapped for the latest version of James Bond (which he does very very well, i might add)

  165. 165
    zman Says:

    Winner, winner, chicken dinner.

    Want a mug or a shirt (we have Got Bakken? and Got Shale? in the shirts)

  166. 166
    zman Says:

    Re Craig, tapped to star as the reporter in Girl With The Dragon Tatoo series …. great book, one of my favorite but unfortunately deceased authors.

  167. 167
    bondbuddha Says:

    Interesting factoid: The word “fuck” and its derivatives are said 201 times throughout the film.

  168. 168
    BirdsofpreyRcool Says:

    #167 — clearly makes the movie a Trading Desk fave, eh?

  169. 169
    zman Says:

    Unless the trading desk is Goldman, they’ve been told to soap out there mouths.

    http://www.nydailynews.com/news/national/2010/07/29/2010-07-29_goldman_sachs_bans_employees_from_using_swear_words_in_emails_texts_and_instant_.html

  170. 170
    bondbuddha Says:

    It clearly fits on our trading floor, no doubt

  171. 171
    BirdsofpreyRcool Says:

    Goldman banning bad language is just a hoot. It’s like the Bloomberg bad language filter… The founder of Bloomberg (Michael) is known for communicating almost exclusively in Blue Words. lol.

  172. 172
    zman Says:

    Broker types sending me sellside stuff this afternoon recommending DNR on anti-frac thoughts. Right name for it in my book but I don’t think fraccing is in near term danger at the moment. Still, that kind of sentiment could move the name higher.

  173. 173
    zman Says:

    I try to keep that word off the site as much as I do the word “very”. The word “very” is a substitute for actual numbers or a chart or a better imagination.

  174. 174
    jat Says:

    That’s very true.

  175. 175
    BirdsofpreyRcool Says:

    z — you obviously spent a lot of quality time under a strict copy editor.

    I’ve never had that distinct pleasure (which ‘splains a lot of my very very annoying writing style, methinks. That said, it’s still LESS ANNOYING than that incredible “majicjack!” commercial… The BEST part of it being the weekend, is no CNBC on in the background. Yaaaaaaaaaay!)

  176. 176
    BirdsofpreyRcool Says:

    Commenting to HeadTrader that his mrkt call this morning was right (higher close, but still in the red). His reply….

    “just seemed like the right call at the time….”

    then

    “the 11am sell off seemed like “f*ck it…need to go to the Hamptons at 11, sell my trading shares”

    And so, we are officially launched into the End of Summer Doldrums…

  177. 177
    zman Says:

    EOG going to close near the HOD. Trying to take the Aug $95s taken this morning off now.

    KOG going to close LOD … more a function of no one cares than something bad in the Q.

  178. 178
    zman Says:

    BP starting to work as well, safe move would be to punt into the close. Not doing that.

  179. 179
    zman Says:

    Also interesting to see the tiny touch of weakness in the SSN shares on lower volume than the rallies, but a recovery into the close to close green.

  180. 180
    zman Says:

    Bond – should you decide on a mug or shirt, send it along with size to zmanadmin@gmail.com

  181. 181
    zman Says:

    Beerthirty, have a great weekend.

  182. 182
    jiveyjr Says:

    have a great weekend everyone…

  183. 183
    Dman Says:

    #153 If freighters are used as weapons platforms, wouldn’t this quickly bring about a tight control over all traffic (if it isn’t already in place)?

    So then we would be back to Z’s point about needing a State actor involved. Iran? It isn’t in Iran’s interest to close the Gulf at random: it’s one of the major cards they hold and they’d be giving it away for nothing. In fact, if Al Q closed the gulf, this would be a major blow to Iran. They’d lose oil income and their big bargaining chip.

  184. 184
    tomdavis12 Says:

    Z: WHX quarterly div .74 vs .70 last. Good call Z.

  185. 185
    BirdsofpreyRcool Says:

    Some interesting headlines coming out of HPQ… guiding full year up… but tossing the CEO over the side of the ship.

  186. 186
    zman Says:

    RE WHX

    Thanks Tom, taking a look at the numbers now.

    Production well ahead of normal decline, in fact, up from 1Q levels.

    I wonder if those two punter-analysts who downgraded it to sell last quarter will upgrade it now.

    Out with a fresh model over the weekend.

  187. 187
    zman Says:

    Just went through WHX model. Going to have to assume that they played catch up with volumes produced but not sold last quarter on oil, maybe due to trucking, putting those volumes in this quarter. Gas continued to decline as expected so my bet is its a volume smoothing issue between quarters. I will adjust the oil volumes going forward to reflect this so I don’t overestimate production going forward. Still, assuming the bid price of 21.25 at present is the Monday price, you are still looking at a next twelve months yield of 13%. Woohoo.

  188. 188
    jiveyjr Says:

    those downgrades sure helped…love those guys…I’d starve without ’em

  189. 189
    ratberto Says:

    Aspiring martyrs in boats: that’s one reason god made Little Birds (MH-6/AH-6 helicopters).

    In 1987 the Iranians made trouble with shipping. Little Bird missions were flown from barges supplied by HAL. Which just has to make one smile.

  190. 190
    crysball Says:

    Am hearing Iran not involved in attack on Japanese Tanker, that it was as suggested by Dman a ‘low Budget……..first effort….that came very close to succeeding.

    Also hearing the rubber (foam) blanket was coated with a material like you can buy at military surplus stores to absorb IR.

    A Zodiac Pro 20 man loaded with explosives and aspiring martyrs with the control console cut down would lie very low in the water.

    A Jihaadist friendly [Yemeni] coastal freighter moving slowly could lower the Zodiac Pro 20 man from a deck crane or davit………and be gone long befor the attack took place.

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