10
Aug

Tuesday – Fed Watch

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Market Sentiment Watch:  Fear of the Fed. All eyes are on Ben today, not really sure what yesterday's move higher was about but someone said it was the MCD news so I'll bite and say sure. Market is drifting into the end of summer as earnings season is done for all but the small fry at this point (and it has been a fairly lackluster season in energy land) and the attention span of major players is near an all time low if volumes are any indicator.

BP Spill Watch:

  • Expecting well interception late week if weather in the Gulf doesn't intervene again.
  • Oil found in Blue Crab larvae - read the whole story because there is some good news with the bad. This probably colors the action in the stock early today.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stuff We Care About Today –  SSN, EVEP, WLL, TAT
  4. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio):
    • $8,800
    • 69% Cash
    • Yesterday’s Trades:
      • NONE
  • ZIM (Zman Inefficient Markets portfolio)
    • $5,500
    • 25% Cash
    • Yesterday’s Trades:
      • NOG – Added (2) NOG September $10 calls for $5.60 on the mid and easily
      • NOG – Added (10) NOG September $17.50 calls for $0.40, also on the mid and easily.
      • NOG – Added (5) August $15 Calls for $0.95.
  • ZLT (Zman Long Term portfolio)
  • NOG – Added a starter position during the conference call at $15.71. See site for details.

Commodity Watch

Crude oil rose $0.78 to close at $81.48 yesterday, marking the somewhat meaningless move of the S&P yesterday. This morning crude is trading off $1.50 on news of a ballooning Chinese trade surplus.

  • Early Read on Oil Inventories:
    • Crude: DOWN 2.0 mm barrels
    • Gasoline: FLAT
    • Distillates: UP 0.9 mm barrels

Natural gas fell 3.6% to close at $4.31 yesterday on lack of tropical activity and despite the continued heat. Gas should remain range bound for the near term with risk to the $4 level this Fall. This morning gas is trading flat.

  • Tropics Watch: East Gulf of Mexico disturbance now given 50/50 odds of development in the next 2 days.

Stuff We Care About Today

TAT Reports June Quarter Results; Disappointing.

The 2Q Numbers:

  • Revenue of $18.6 mm vs $22.1 mm expected
  • EPS of ($0.05) vs ($0.01) expected

Highlights:

  • Detailed overview of their recent acquisition in Turkey.
  • Saying the Bakuk 101 gas discovery in Southeastern Turkey is the most important exploratory find for the company to date. More details on the call.
  • Selmo oil field production at 2,000 bopd is behind where I expected it to be. Fewer wells drilled than plan but also something else holding them back here.
  • License 4175 - first well drilling, TD in September on a large anticline. Probably the next catalyst for the name

Nutshell: I am on the bubble here. For it's size, the story is overly complex. While their is considerable upside in the name, the amount leverage taken on to complete this acquisition seems imprudent. Furthermore, they had a plan at Selmo but have not followed that plan. This one seems to always see more potential with something over the horizon. Maybe the call will convince me that that is worth waiting for, maybe not.

Conference Call: Today, 8:30 am EST

EVEP Misses; Buys Property from HK

The 2Q Numbers:

  • Production of 6.83 Bcfe
  • Revenue of $40.9mm vs $49.4 mm expected
  • EPS of $0.50 vs $0.56 expected
  • EBITDA 37.1 mm; up 12% YoY and up 15% sequentially but below consensus as well, which was at $38.85mm

Highlights:

  • Acquiring assets from HK:
    • Acquiring some mid-continent assets from HK for $123 mm.
    • These are very gassy assets and not exactly low operating cost $1.45 to $1.75 / Mcfe.
    • Based on proved reserves, they are paying an OK but not great price of $1.65 / Mcfe; makes some sense given the operating costs and the gassiness of the producing assets.

Nutshell: Firstly, I don't follow this MLP very closely. On the surface the miss appears to be sizable, plan on listening to the call but right now I don't see switching my yield names around from long LINE and WHX to something like this or the two names mentioned above.

Conference Call: Today, 10 am EST

EGY reported, will be on the call at 11 am EST but leaving this one to BOP, Crysball, etc...

SSN Niobrara Deal Update + More Bakken Play Updates

  • SSN on the tape saying the $10 mm Niobrara deposit is in their bank account. Also comments that it’s not in an escrow account but in the bank and is only refundable if they can’t deliver 20% of the properties with marketable title.
  • On the Bakken play, wells number 3 and 4 are set for completion to being in the last week of August.

WLL Redeeming Debt Early

My first blush thoughts ...

  • WLL is redeeming $150 mm of 2012 and $220 mm of 2013 debt early.
  • Using the revolver to fund it. I would bet this means hello equity offering in the near future.
  • The stock is at a triple top which would probably mean a significant snap lower before it recovers.
  • I would suggest that they wait until the stock is closer to $100 to $110 as it is currently trading on the cheap side of its peers

... or the more informed view courtesy of BOP.

WLL — nah. Both those WLL debt issues were trading above the call price. Just makes sense to call ‘em and reterm ‘em out in the Fall.

WLL has debt coming due in 2012, 2013, and 2014. Just makes sense to call the 2 nearer maturities and term it out 10 yrs. There is good demand for BB corporate debt right now and that takes refi risk off the table for 3 yrs or so. Should allow them to extend the maturity of their revolver too (haven’t looked, but banks don’t like to have their maturities extend past the big subordinated stuff… and WLL has $370mm of debt between the two issues they are calling).

Wouldn’t be surprised if WLL annouced a $500mm offering in Sept or so. $500mm would make it a “benchmark bond” included in the HY index… so, anybody who manages $$ against an index has to think of a reason NOT to own a $500mm bond (which is a different exercise than “do i buy this?” it becomes “what if i DON’T buy this, will i underperform?”).

Just my thoughts. But, unless there is some sort of large asset acqtn WLL is contemplating, I would be surprised to see an equity offering to replace the debt being called.

VNR and ECT comments will be in the Wednesday post.

Odds & Ends

Analyst Watch:

  • NOG - Wunderlich ups target $2 to $22, maintains Buy
  • EOG - Goldman adds them to their Conviction Buy List

183 Responses to “Tuesday – Fed Watch”

  1. 1
    zman Says:

    Thanks GS for the EOG nod. All capex increases aren’t equal in the eyes of the market, at least upon some reflection.

    Getting on the TAT call in five minutes.

  2. 2
    zman Says:

    Pre TAT call add to the comments in the post. I have no faith in the original growth projections here. Too many delays due to weather and equipment availability and to changes in their plans. Will be looking to get a sense of the new plan with this call and if I don’t like what I hear I’ll seeking pastures with more visibility to play in.

  3. 3
    zman Says:

    Analyst Watch:

    ROSE – Raymond James cuts to Underperform. I thought the quarter was OK with a somewhat non-revealing press release. The shift to vertical development of the Southern Alberta basin Bakken, Nisku etc could be fueling this downgrade, would like to read if any sees it. Thanks.

    Productivity fell 0.9% in 2Q, economists had guessed it would be up 0.3%.

  4. 4
    zman Says:

    TAT Call Notes

    After a lengthy talk about 3 credit lines and notes owed to the found they said:

    We expect to access capital markets later this year.

    Well, at least you gotta like the honesty there.

  5. 5
    zman Says:

    TAT Call notes

    Their frac equipment is now in Turkey, they believe it will change the way people view opportunities in the country.

    Thinking that some wells that were seen only as “show wells” before will now be completed with immediate offset opportunities.

    Will start slowly with low rate, 1 zone per well fracs, then move to more complex fracs.

    Southeast Turk

    License 4069 – Bikuk well, 50% working interest, non operated, 25,000 surface expressed anticline, thinking substantial reserve potential, thinking high deliverability- showing a good flare on a slide (almost always bugs me when people show pix of flares).

    More area exploration by year end on newly acquired 3D, right along trend with other wells near the Syrian border.

    ,…

  6. 6
    zman Says:

    TAT Call notes

    Kaltepe – just adding it could be a major step change if its good – again, September

    Selmo Oil Field

    Shifted from East to West Flank, can no step up to a 2 rig program. They are behind plan here on production, this shift should allow them to catch up… need to hear what the new rate plan is here.

    License 3118 – Arpatepe wells, 3 wells so far reentered, doing 500 bopd, 1st exploration well came in low and wet, so have deferred further exploration until their 3D is done.

    License 4174 – problem, couldn’t hear, could be lost circulation in first well

    Second well preparing to complete, not a good description of what this one is.

    Get the sense that they are casting about in a lot of parts and play types in Turkey, so far no big strikes, growth substantially inorganic, hmmm.

  7. 7
    zman Says:

    Equity futures taking a header here pre Ben. S&P down nearly 12, DJIA down 94.

  8. 8
    zman Says:

    Nicky – saw your resistance levels yesterday at 1,135 to 1,150. Got support levels?

  9. 9
    zman Says:

    TAT Q&A Starting

    I have to think the stock is going to be constrained by the capital markets comment until we see that deal.

  10. 10
    zman Says:

    Got this from Nicky re support question:

    1115 then 1106. If the top isn’t in then this needs to turn up fast.

  11. 11
    zman Says:

    Analyst Watch

    B of A cuts SD to Underperform.

  12. 12
    zman Says:

    Analyst Watch:

    CRK – Target cut $6 to $33, rating equal weight at Barclays. That stock has taken a beating in the last 7 weeks.

  13. 13
    zman Says:

    PINN shareholders approve of acquisition by Powder Holdings. I never liked that stock from the IPO date forward and it is going off the board at $0.33. Overpriced from the start.

  14. 14
    zman Says:

    West – When you get a chance, do you have any post quarter comments on XEC? I know they missed your volume number but how do you see them now, the stock has not really come off much, especially given the pre quarter rally.

  15. 15
    zman Says:

    TAT Call

    Yeah, still ongoing,

    Expect to double both oil and natural gas production by year end.

    * Selmo – should be 3,000 bopd by year end
    * Arpatepe – may be at 500 bopd. Sounds like future wells are to be 300 to 400 bopd type wells, the first of which won’t hit until 1Q11, as they wait on the new 3D.
    * Not sure where the rest of the volume growth for oil will be from.

    Natural Gas. About 25 MMcfgpd by year end (recall they get $7+ / Mcf here consistently), but much of this comes from their recent acquisition.

    Beyond that level, they will be looking at drill bit growth.

  16. 16
    zman Says:

    SSN flat due to the market, tempted to add some shares back here as the deal continues to move forward as per this morning’s news.

    Update on rights offering refunds. SSN’s transfer agent sent the checks to the wrong address, at least for Schwab, and they were lost. Schwab’s Phoenix office expected those checks to be sent on 8/6 and I’ll get back with more feedback from them as to an ETA later in the day.

  17. 17
    zman Says:

    knock, knock, this thing on?

  18. 18
    ratberto Says:

    Belarus denies delivering any S-300 missiles to Iran. The Iranians had said that two sets came from Belarus.

  19. 19
    BirdsofpreyRcool Says:

    Hey — sorry…. juggling a few things this morning.

    But, EGY report looked great. Glad to see that it sounds like they will get an extension on the Angolan concession. I had written the $10mm deposit there off to zero.

    Also, confirmed that they have a JV partner onshore Gabon. Yay! Who is it??

    Also, remaining 2010 drilling program in offshore Gabon is everything I could have hoped for. Just need to hear what they have to say about upping the capacity (or take-away schedule) on the FPSO.

    Good stuff, EGY. Way to go.

  20. 20
    Nicky Says:

    Morning all.

    Wow what a horrible looking market this morning. Charts look decimated on on indices, metals, energy currencies…..
    Now it could be a ‘C’ wave and that would certainly be the count which catches most off guard believing we are now heading much lower. We would have a rocket ride back to the upside. But this can’t go much lower….

    Just thinking about that trader on CNBC yesterday who said he was so long oil it was keeping him up at night. He must be feeling pretty bad this morning.

  21. 21
    pwdrhound Says:

    it’s on.

    I’ve been looking for an indication of the drop in WLT this morning after yesterday’s nice pop. Do you see anything?

  22. 22
    jiveyjr Says:

    this old guy are here…with nuttin good to repot

  23. 23
    zman Says:

    re 18 Balarus to Iran, “Shhhh”

    Thanks BOP, do what you can man.

  24. 24
    zman Says:

    re 21 = market

  25. 25
    Nicky Says:

    If we take out last weeks’ lows we are looking to move to between 1035 and 1070.

  26. 26
    ram Says:

    What?

  27. 27
    zman Says:

    re 24, which is a function of ballooning Chinese trade surplus. China growth drives steel drives coal in the eyes of the market. If China is over producing they have to slow down and hence you have the big dip in the coals.

    Speaking of dip in the coals, EEE down 22% as it announces 1 for 12 reverse split. Key funeral dirge music now.

  28. 28
    BirdsofpreyRcool Says:

    Frankly, it’s better that the mrkt drop ahead of Uncle Ben’s report. I mean, what’s he gonna say to “make” it go up?

    If he says, “economy headed back to the Uglies, we’re gonna do X”… mrkt will dropon the Ugly statement. (Also, not sure there is much “X” left that he can really do.) If he says “economy’s stablizing at a slower rate, but still on track for a recovery”… mrkt will drop b/c no short-term, sugar-rush of “stimulus X” (again, not sure what that X might be).

    So, either way, we were pretty much setting up for a sell off today. May as well get it over early. Then maybe we can climb back a bit, after the 2:15pm pronouncement.

  29. 29
    zman Says:

    BOP – I agree that I’d rather see it down pre Ben. When does that egghead speak anyway?

  30. 30
    zman Says:

    SD sub $5

    BP pealing back today on this market, the crab story, a possible hurricane delaying things, and the fact that people seem to need daily catalysts to not take profits now.

  31. 31
    BirdsofpreyRcool Says:

    Fed Pronouncement at 2:15 pm ET.

  32. 32
    zman Says:

    Goldman on EOG

    Reason for move to Conviction buy list:

    Sees them regaining their premium to group due to their ability to exploit liquids rich plays more quickly than peers, underperformance over the last month, price is at same level as analyst meeting, sees too much fear in the stock over potential for future guidance misses, and says changes to EPS estimates are due to DD&A rate which they view as immaterial and I would agree.

  33. 33
    zman Says:

    Thanks much BOP.

    EVEP call starting now, wake me up for the EGY one.

    USEG on the tape outing another average looking BEXP well. Suddenly 2,000 bopd IP is a “bad” well. Sheesh.

  34. 34
    zman Says:

    EVEP

    Making an interesting point.

    They bought fields from HK last night, conventional gas fields. They say that because of the shale focus of today, the great conventional fields of the past are being neglected. This is the same, ture argument that E&Ps made for years regarding the neglected U.S. assets of the Majors.

  35. 35
    zman Says:

    ROSE down 8% on that RJ downgrade.

  36. 36
    zman Says:

    EOG trying to go green.

  37. 37
    zman Says:

    Re 25. Yikes, really? Ouch. Timing is next two weeks I assume?

  38. 38
    jiveyjr Says:

    NOG behaving well…

  39. 39
    Nicky Says:

    Z – i mentioned late last night that the minor cycles were topping out here although to be honest this could extend out as far as Thursday which is why I cannot yet discount another high out there and with it being Fed day we know anything can happen. Heck we could start down 130 and finish up 130.

    But the downside is into 16th – 20th.

  40. 40
    bill Says:

    is this new news

    http://finance.yahoo.com/news/US-Energy-Corp-Announces-pz-2988552343.html?x=0&.v=1

  41. 41
    zman Says:

    Jivey – Yeah, that was a really good quarter. When someone says “we can’t guide for the quarters beyond the next one” it usually gives me a lot of pause … until they add “except to stick with past guidance that we will grow 20 to 30% sequentially through at least the end of 2011”. Now, I know they are small so the numbers are not as meaningful but seriously, they are doing a good job of getting the job done without operating a well.

  42. 42
    zman Says:

    Bill – yeah, that one was listed as flowing back at the time of the 2Q BEXP call, not a big deal, central rough rider Bakken well on the north side of their acreage. Some may see the rate as low now but there may be circumstances and I’m not going to kick them over a 2,000 BOEpd well. Still, given the quarter and guidance, I am surprised at the level of apathy BEXP has seen just before and since the Q and am considering an option play there in September, especially if this falls much more.

  43. 43
    zman Says:

    OK, thanks much Nicky. Feels like walking a tight rope without a net when you are absent.

  44. 44
    zman Says:

    Green on the screen watch: not much

    EOG, NOG, SSN, WHX

    WLL and WLT taking it on the chin today. The first on oil down $2 and the second on renewed China fears. Saw an article saying China Industrial productivity would only grow 13% or so in tomorrow’s lease, “down from high 13%s in the prior period”. Sheesh, come on, give me a break, etc.

  45. 45
    VTZ Says:

    People are so dumb with their China growth comments.

  46. 46
    zman Says:

    VTZ – I think they think a recession there would be 9% GDP growth.

    EVEP – very important that distributions grow over time … which is why we are focused on the long term, on a step by step basis.

  47. 47
    zman Says:

    Someone sent me an email without a link to a WSJ story on MLPs. Anyone got that link, they just mentioned it on the EVEP call.

  48. 48
    zman Says:

    EVEP call over.

    They mentioned that some of the assets bought from HK were in east Texas but that they did not obtain the deeper Haynesville rights to those acres. They went on to say that Haynesville was marginal there. I’m sure that’s why HK kept them. EOG has been putting up near record wells there, but it’s not homogenous, would be interested to hear what counties are involved here as it goes to EVEP management credibility. RMD, if you are going to call them you might inquire. Thanks.

  49. 49
    bill Says:

    barclays says

    Gas Hedging Takes On An Odd Twist: With the calendar 2011 gas strip at only $5.17/mmbtu, producers are apparently drilling to go to
    great lengths to preserve the economics of gas drilling and perpetuate current activity levels. Producers are beginning to sell 12-18
    month oil calls and long dated gas calls (2014/2015) and taking the premiums into structure gas trades to generate 2011 gas “hedges” in
    the $5.50+ area. This appears to be one more data point that drilling activity will continue at fairly robust levels despite a weakening in
    next year’s forward curve.

    ————————————–

    no names mnetioned but chk did this

  50. 50
    zman Says:

    Bill – thanks, had not seen, makes sense, and another negative for gas prices.

  51. 51
    zman Says:

    That cloud pile in the East Gulf has been upped to a 60% chance of development.

    EGY call in 20 minutes.

  52. 52
    zman Says:

    Analyst Watch:

    NOG – Canaccord reiterates Buy, calls quarter solid, ahead of schedule, price target $23.

  53. 53
    zman Says:

    Rally in EOG completed back to 0, odd market, it probably does that again, and would likely take out the morning high on the strong gets stronger principal if Ben makes the market smile.

    EGY call in 5 minutes.

  54. 54
    elduque Says:

    TED spread keeps dropping and another big up day for BDI.

  55. 55
    bill Says:

    Sd cfo has a degree in political science

    sd needs someone that understands a business case

    I dont know why they need/have a million acres in undeveloped assets.

    Ward is hoping for a better day and working like hell just to cover debt costs

    ————————————

    Dirk M. Van Doren
    Executive Vice President and Chief Financial Officer

    Mr. Van Doren has served as our Executive Vice President and Chief Financial Officer since June 2006. He served in High Yield Research at Goldman Sachs from 1999 until May 2006. Mr. Van Doren graduated from Colgate University in 1981 with a Bachelor of Arts degree in Political Science and International Relations and earned a Masters degree in Business Administration from Duke University, The Fuqua School of Business in 1985.

  56. 56
    zman Says:

    Bill – fwiw, I know people who like Dirk a lot and think he is an honest, smart guy.

  57. 57
    BirdsofpreyRcool Says:

    EGY starting… taking notes on paper.. so will try to sum up on this site after done.

  58. 58
    zman Says:

    BOP – can’t find a link to the call, you?

  59. 59
    zman Says:

    HAL starting to get interesting to me for a swing trade again below $30. No real near term catalysts other than the fact that NAM business keeps stepping up as partially shown by the weekly rig counts.

  60. 60
    BirdsofpreyRcool Says:

    on website… have to enter a conf id… can call in too

    liking what i’m hearing…

  61. 61
    Jerome Blank Says:

    NOG on new P&F buy signal, also breaking out above the daily ascending triangle, intraday support at $16.25…one of the stocks to watch if the mkt pulls aback at 2:15

    KOG’s gotta hold the 200 day here…

  62. 62
    zman Says:

    Thanks on the call now

  63. 63
    zman Says:

    Thanks JB, liking the move there today.

  64. 64
    bill Says:

    56,

    Id like him better if his stock wasnt down 65 % in less than a year

    They have a problem with debt and they are not addressing it

    140 m sales here and there doesnt cut it, imho

  65. 65
    zman Says:

    Bill – hear ya on that.

  66. 66
    BirdsofpreyRcool Says:

    O/s Gabone (Etame Concession) = nice fat cash cow… key is, what they do with the $80mm of avail cash on b/s here in the U.S. to “add reserves and cash flow.”

    But, lots of little catalysts along the way… like EGY. Slow and steady.

  67. 67
    West Says:

    #14 XEC comments. They had some issues with their Gulf Coast wells with fine sand and choked them back and also had some pipeline repairs during the quarter. The co said during the cc that these wells had held up better than they had modeled them. They are also drilling a deeper formation test from seismic but there probably will not be any reports there until end of the 3rd qtr…………… In the Cana they continue to have excellent results and had positive results from their downspacing test that they conducted with DVN. They tested 80 and 64 acre spacing and although all data is not compiled they are very encouraged with results. They had modeled 70% production performance from downspaced wells and they exceeded that during early 30 day results. This gives them a good shot at least increasing their estimated reserves in this area by 70%. DVN and XEC are in basically every well together and have approximately same # of acreage in this area, DVN is showing possible reserves at 7T. This number would be more than a double from where XEC is now at 3T…….. Probably the most exciting part of the cc was their Q&A where they gave a lot of information about their Permian plays. They have over 380,000 net acres in the play and continue to lease. There are actually several plays being pursued on their acreage..On the northern end of their acreage on the caprock acreage they are chasing the ABO along with CXO. They have 39k net acres and several years of locations with 2 rigs running….Moving to the central portion of their acreage they have 3 rigs running testing the Bone Springs 2nd & 3rd. This program was just started last year we est EURs of 250k for these wells and they have now gone to 550 Kboe.They had 2 really good wells here this qtr with 30 day avg of 900 and 1000 boepd…..On the Lea/Eddy Coline and the border with Texas they have 100,000 net acres in the First Bone Springs, Avalon Shale play and they have drilled 1 horizontal well but did not give any color other than that they were encouraged. If you look at EOG’s Leonard Shale play, this is the same play, XEC has acreage inside EOG’s oval area. Still early on this play but with EOG already giving it he nod gives you and indication of just how large the potentional for this play could be in the PB..The big boys have been actively leasing acreage along this play in New Mexico and Texas withnthe better wells presently in NM. XEC is still guarded in their comments about the Avalon but this is their M O very conservative especially if they are still leasing. In this trend over 50% of the land is HBP by shallower production and most of the tracts available for leasing are less than 160 ac. CXO recent bid for Marbob was to capture acreage along this trend. The water is still a little muddy with APA recent purchase of BP’s PB interest and the ongoing fight over Marbob’s preferential rights in about a 1/3rd of the acreage that was being jointly developed by Marbob/BP…….Lots of Independents in the trend and these people are selling old hbp lease with stripper production for large amounts with many small guys ready to leave NM enviromental issues with producers behind…..XEC is going to up the budget here to 45% of total ex and indicated that they look to increase this amount next year. Indicated that they are seeing increased upward pressure on completion cost by as much as 20% and don’t expect that to abate anytime soon. Also delayed times in scheduling frac crews for jobs…..XEC is looking to exit 2010 with about 25% increase in production from 2009 and think that they may book the largest increase in proved reserves in the Company’s history. If you couldn’t tell I like where this is going. Especially since XEC is very conservative in most of their estimates. Sorry for length post. Out for the rest of the day.

  68. 68
    zman Says:

    Thanks – is the GC a big piece of production, was that sand from the formation or return of prop?

    Good to hear on the Cana, should be good for NFX as well although I think they are slowing down everything in OK at the moment.

    Tiny name entering Bone Springs play = FPP

    EOG came out pretty hot on the Leonard/Avalon, usually they are more cautious even if they’ve been in it for a year like they have there.

    Never apologize for the long post, thanks for the update.

  69. 69
    BirdsofpreyRcool Says:

    EGY — lots of milestones/catalysts here. The 2 add’l wells approved for o/s Gabon = great to hear. Lots of partners in that concession, so tough to herd all the cats necessary to make the decision. Happy EGY got this pushed through.

    Onshore Gabon = will announce a “large int’l oil company” partner within a week. Agreement to reprocess existing seismic… so, new partner wants to get to the “let’s DRILL that wildcat” sooner, than later. Great news.

    Angola = had written this off for dead. Not so. Will set up a data room in Houston to find new partner that is acceptable for Angola govt. Then will get an extension on shallow-water, offshore Block 5.

    Looking at options to take offshore Gabon up to (or over!) 35kb/d in production. More than I thought. Lovely cash cow, that Etame Concession (EGY has 28% of concession).

    $80mm of cash on B/S. Engaged 3rd party to find something wonderful here in the U.S. They want “reserve and cash flow” (don’t we all, by the way)… will be interesting to hear what they settle on. Happily, this mngmt team shows patience and restraint in not overpaying for asset acqtns (in my short history with the company… maybe others have different opinions). But, anything they do with the money should be accretive to stock price (as no one puts a multiple on cash).

    So, worth putting little pipsqueek EGY on your radar screen for an ongoing stream of news over the next 4 months.

  70. 70
    zman Says:

    Off topic politics watch: Ted Stevens in another Alaska plane crash. Note that the case against him was dropped following federal prosecutorial misconduct. After the case cost him his senate seat.

    http://news.yahoo.com/s/ap/us_alaska_plane_crash

  71. 71
    zman Says:

    Got it back on my near term screen, thanks for the notes BOP.

  72. 72
    zman Says:

    JB – thanks much for the unprompted read on NOG. Can you drop your link more often in with your comments, I think it would help with the vote count?

  73. 73
    Jerome Blank Says:

    RE: #72, Zman, thank you…chart link

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

    CIGX daily updated…holding support at $1.73, if bullish, this is an easy spot to manage

  74. 74
    Jerome Blank Says:

    SSN holding up, looks really good right now …

  75. 75
    zman Says:

    JB – re SSN – I think on a flat day in the market that would be looking at the recent highs again instead of holding up a couple of pennies. Positive news on the title search makes the 1 month out pay day all the more likely (Sept. 6).

  76. 76
    ram Says:

    You’ld think EOG is pinned by it’s recent activity.

  77. 77
    zman Says:

    ZTRADE – ZIM – NOG

    Sold (4 of 5) NOG August $15 calls taken yesterday at $1.91, up 96%, after earnings as the stock reacts favorably today (up nearly 7% at $16.80) in a down market which is in limbo waiting on Fed comments. I continue to hold the September calls as well as the common in the ZLT.

  78. 78
    zman Says:

    Pandemic over:

    http://news.yahoo.com/s/nm/us_flu_who

    Ram – the whole market is pinned by the Fed at the moment. Won’t last long.

  79. 79
    elijahwc Says:

    For you freight fans, BALT just declared its 1st dividend. This is a pure play on Baltic short rates that IPO’d in March at 14 (bad timing)and that has ticked down just about every day since. That’s about to change as the history of freight cos growing a divi attracts a following once this process commences.

    The stock is under pressure today as they have filed a 110 million follow on stock offering. I think it provides the entry window.

    A refresher exerpt from Barron’s earlier this year & a Dahlman Rose & Co comment from today follow:

    Barrons

    THINK OF Baltic Trading (ticker: BALT) as a worldwide water-taxi service. Chairman Peter C. Georgiopoulos says the initial public offering slated for March 8 lets shareholders in on a volatile bet on global bulk trade.

    Baltic Trading shares will mime the Baltic Dry Index, a widely quoted proxy for economic wellbeing derived from an average of spot, or daily, rates for bulk commodities like coal along major global trade routes.

    Baltic Trading, a carve-out from Genco Shipping (GNK), will offer about 16.3 million shares at $15 apiece to start a world bulk-cargo fleet focusing exclusively on the spot market.

    Baltic Trading hopes to raise $245 million to purchase six big bulk carriers to ply the world searching for spot assignments.

    When rates go up, Baltic Trading should mint money, paying dividends out of earnings quarterly. Now, however, rates are low. The BDI is a puny 3,121, down 74% from its 2008 peak of 11,793.

    Baltic Trading plans to do without debt. Genco, which holds majority control via supervoting shares, will manage BALT for 1.25% of gross charter revenue.

    Shipping magnate Georgiopoulos has boasted that the Baltic fleet could grow “as big as your imagination.” New ships that used to cost $180 million now cost only $70 million.

    “The absence of debt will certainly give Baltic more flexibility to pay dividends than its more debt-laden competitors,” says Matt Therian, an analyst at Renaissance Capital, of Greenwich, Conn.

    Dahlman

    “Baltic declared its first quarterly dividend of $0.16, payable August 26 to shareholders of record on August 19. The company is on track — positioning itself as the most attractive vehicle for investors to gain exposure to an improving dry bulk market.
    2Q10 results largely in line; dividend higher than expected
    Baltic reported 2Q10 EPS of $0.12, slightly higher than our $0.11 estimate. The $0.16 dividend is higher than expected, with a non-cash component to G&A contributing to enhanced distributable cash flow. With the company now having taken delivery of 6 of its 9 vessels, two more expected to be delivered this quarter, and the final Capesize in October, we expect the dividend can increase significantly. We forecast a 4Q10 dividend of $0.40, implying an annualized yield at 13.5% for the quarter.
    Pursuing growth early on
    Since acquiring its initial fleet of 6 vessels, Baltic has already added three Handysize bulkers from Metrostar for just under $100MM. Like its other vessels, the Handysizes will be deployed on spot-linked contracts earning 115% of the Baltic Handysize Index. Baltic tapped its 4-year $100MM credit facility to finance the acquisition, although under the terms of the facility, Baltic must pay down the debt through an equity issuance within 12 months or the revolver will convert to a term loan with a 1-yr amortization period. We expect, however, that Baltic will be able to refinance its credit facility to extend the amortization period considering the age of the ships (all built in 2009). We look for more color on the earnings call.
    Maintain positive outlook, reiterate Buy rating
    Chinese steel prices have been increasing during the past several weeks, which sets up the dry bulk market for a strong 4Q10—especially as benchmark iron ore prices from Australia and Brazil are set to be reduced 10-15%. The ensuing higher steel producer margins should allow for much stronger spot rates, of which Baltic is 100% exposed. BALT shares represent an attractive vehicle for exposure to such a firming dry bulk market. We reiterate our Buy rating and $18 target, raising our target CF yield from 10% to 12% to take into account the debt added to the balance sheet. …”

  80. 80
    tomdavis12 Says:

    DIJ: Just wanted to make some comments re NLY from yesterday. I have been in and out over last 5 years. M Farrell has an excellent model and he knows what he is doing. They do use alot of leverage although alot less than ’05 – ’07. They just had a successful secondary recently. For those that are price sensitive you buy during the 6 weeks after ex-div and sell during the 2-3 weeks just before. The problems are: 1. an inverted yield curve (since they borrow short and lend long) 2. prepayments. If they receive principal back prematurely it usually knock down their returns. (currently their spread is 2.2%). If our gov’t starts buying back agency paper, not good for NLY. 3. Stock had a sharp drop the other day when that story came out about the White House encouraging people to walk away from their mortgages.

  81. 81
    zman Says:

    Eli – I’d rather do SEA but that got killed off. Has another Baltic Index ETF been established? If this is such a great deal why did GNK carve them out, to break out value?

  82. 82
    zman Says:

    Tom – Still planning to look at VNR.

  83. 83
    zman Says:

    Can’t tell on my screen exactly but it looks like the S&P is just holding its 200 day SMA.

  84. 84
    zman Says:

    SSN will be at EnerCom week after next. The 2Q update piece makes for a nice looking presentation.

  85. 85
    tomdavis12 Says:

    Z: Thanks. I know now to keep asking if you don’t get to things. You also get a pass on many of my questions due to your vacation. PS. This has been a difficult market to make money in energy-land. My hat is off to you for what you have done this year.

  86. 86
    elijahwc Says:

    #81 nope, to earn the fee and build another castle. But, the observation is simple. These things go up in price into the dividend build.

  87. 87
    zman Says:

    Tom – Thanks. Agreed tough, tougher on the option side due to the all-or-none, take-no-prisoners, you-never-know-what-you’ll-wake-up-to-in-the-futures-market. On the stock side I’m close to my high, thanks to the yield names and some of the little guys like SSN and KOG. The growthy names have been anything but growthy in terms of share price.

  88. 88
    tomdavis12 Says:

    Z: I don’t play the little guys like you but your WHX, VNR and LINE have really helped to offset some of my clunkers.

  89. 89
    zman Says:

    http://www.marketwatch.com/story/aid-to-states-on-the-line-in-house-vote-2010-08-10

    Have you ever noticed that all bills employ math commonly used by 3rd graders? We pass a bill on one thing but in tough times, we have to bail out states that are impacted by that same bill, in this case, with the feds funding part of the state’s obligation on Medicaid. Were they to employ, oh I don’t know, something more like Algebra, so that demands were ratable given the situation, and not simply a +/-/x maybe things wouldn’t require more bills.

  90. 90
    zman Says:

    Tom – Had my fair share of clunkers as well. And VNR wasn’t mine, I just looked, never did buy it.

  91. 91
    zman Says:

    EIA STEO out

    Biggest change to the short term energy outlook is a boost to world oil demand by 100,000 bopd to show an increase of 1.6 mm bopd this year over last.

  92. 92
    zman Says:

    EIA says Gulf of Mexico output will fall by 120,000 bopd by 2011 due to the moratorium. So much for getting off foreign oil, eh.

  93. 93
    VTZ Says:

    I can’t wait for the day the US is asking for more dirty oil.

  94. 94
    zman Says:

    Storm possibility delays drilling

    http://news.yahoo.com/s/ap/20100810/ap_on_bi_ge/us_gulf_oil_spill

    But note in the story how Thad Allen is now hedging on the relief well going for the bottom kill. I bet he is starting to view it as unnecessary. Topkill is holding. Why not sell those wellbores. You could produce those with funds going into the a Gulf Recovery fund.

  95. 95
    elijahwc Says:

    MHR update via Rodman & renshaw:

    “Q2 production a tad light of our forecast. MHR reported Q2 production of 1,755 Boe/d, just under our forecast of ~1,800 Boe/d. Oil and NGLs made up a slightly better-than-expected 69% of total volumes (versus our forecast of ~67%). The company’s first full quarter to reflect production from the acquisition of Triad Energy helped drive sequential growth of 28% and y/y growth of 138%. June production was 1,835 Boe/d (65% liquids), or ~5% above the Q2 average.

    Frac date for the Gonzo Hunter #1 pushed back. The company has finished drilling its 1st operated horizontal well in the Eagle Ford Shale, the Gonzo Hunter #1 (50% w.i.). The well was drilled to a measured depth of 13,750’ including a lateral of >4,300’. The frac date is now scheduled for mid-September—about a month delay from prior expectations—with results expected by the end of that month. Its next well, the Lagunillas Camp #1H (100% w.i.), is set to spud mid-month in Atascosa County. MHR also plans to drill a 3rd gross well this year (although the completion might be pushed out to next year).

    Marcellus Shale program on target for Q4 sales. MHR recently spud the first of a pair of horizontal wells in the Marcellus Shale planned for this year. The vertical sections of both the Weese Hunter #1001 and #1002 (100% w.i.) are being drilled by one of the company’s air drilling rigs (the Alpha Hunter) with a 3rd party rig scheduled to drill the lateral section once these are completed. Phase 1 of MHR’s Eureka Hunter Pipeline remains on schedule to be placed in service by early November, at which time the company plans to have its initial 2 wells ready to hook up to sales.

    Nudging-down our production forecast. Each well that MHR drills in the Eagle Ford or Marcellus can have a material impact on total production. While that’s good, the downside is that individual well completion delays can materially impact production. Given the slight pushback in completion dates in the Eagle Ford, our 2010 production forecast to slips to ~1,820 Boe/d (from ~1,920). As a result, our 2010 CFPS estimate slides to $0.12 (from $0.15). For 2011, we are trimming our production forecast to ~3,700 Boe/d (from ~3,900); this takes our CFPS estimate to $0.38 (from $0.42).

    Target price slides to $5.75 (from $6.00); maintain Market Outperform. Our target prices slides a bit on the slightly lower production outlook, but we’re still buyers of the stock at current levels. We arrive at our target price by applying a 1x multiple to our NAV of the company’s proved and risked upside reserves, valued at long-term commodity prices of $75/Bbl and $6.00/Mcf.

  96. 96
    bill Says:

    balt announced a secondary and the stock got slammed

    i dont think they will rush to market, but needed to make the filing as they will need funding to pay for new deliveries in q4

    here is drybulk latest outlook

    http://files.irwebpage.com/reports/shipping/1BmqLTvo0l/bmti_investors-market-spotlight_2010wk32.pdf

  97. 97
    zman Says:

    VTZ – so when the economy recovers the U.S. will be producing more higher cost oil from onshore than the cheap from the deep.

  98. 98
    VTZ Says:

    Plus if you keep the topkill then they don’t need to hand over the BOP. Perfect!

  99. 99
    VTZ Says:

    I was just being sarcastic about the “dirty oil” thing.

  100. 100
    BirdsofpreyRcool Says:

    (The BOP would really prefer not to be handed over to the govt. The BOP can think of nothing worse….)

    😉

  101. 101
    zman Says:

    re 98. Gee I hadn’t thought of that, lol.

  102. 102
    zman Says:

    V- yeah, I know, and I was just thinking how ironic all of this is playing out to be.

    BOP – how about being turned into one of the data drones at EIA?

  103. 103
    BirdsofpreyRcool Says:

    in response to #102 — Tuesday’s Movie Quote
    ————————————–

    Sam Lowry: Excuse me, Dawson, can you put me through to Mr. Helpmann’s office?
    Dawson: I’m afraid I can’t sir. You have to go through the proper channels.
    Sam Lowry: And you can’t tell me what the proper channels are, because that’s classified information?
    Dawson: I’m glad to see the Ministry’s continuing its tradition of recruiting the brightest and best, sir.
    Sam Lowry: Thank you, Dawson.

  104. 104
    RMD Says:

    Z I can maybe help on VNR, but building a dock ladder today so not very in-touch–which makes my All Red screen not hurt so much.

  105. 105
    bill Says:

    just read 79.

    Balt actually owns 9 ships.

    2 capes
    4 supramax ans
    3 handys

    It said it was set up to mimic the Baltic index but it will be driven by the rates of each of these clases. cape rates have been soft in q3

    They had 5 ships operating at the end of q2, 6 now, 8 by the end of q3 and 9 at year end

    My model for the dividend for q 3 depends on the spot rate

    for q2 they avg around 25 k a day and paid out .16

    avg tce rate q 3 dividend
    23 0.22
    25 0.27
    27 0.32

    .40 cents kind of bullish for q4 and then there will be dilution on the share offering

    Even though the rates are daily spot, the ships are tied up for a year or more and they will have no debt after the next offering similar to nats model on the tanker side

    If they can pay 1.60 a year , 16 should be achievable for a 10 % yield

  106. 106
    elijahwc Says:

    ROSE : the RJF note from this am

    Rising Well Costs Wilt Valuation; Downgrading to Underperform

    ♦ Valuation stretched. As a result of service tightness in the Eagle Ford (especially with pressure pumping), costs have started to significantly increase. Rosetta’s wells are now
    averaging $6.5-7.5 million (we were modeling $5 million), and costs are likely to keep increasing as activity in the play ramps up. In addition to the narrower margins,infrastructure setbacks in the Eagle Ford have also lowered the company’s short-term growth outlook (see below). Elsewhere, company news flow from the Alberta Basin Bakken remains virtually non-existent. After a year of being involved in the play, Rosetta has yet to provide any well results and has decided for the time being to continue with its vertical delineation program. We believe the market has been pricing in some favorable results from the Bakken as well as some overly favorable economics in the Eagle Ford. Given the
    continued waiting game in the Bakken and near-term headwinds in the Eagle Ford, we
    believe this will be priced back out over the next few months. Our total company NAV is now ~$20.50 (at $100/bbl and $6/Mcf long term) and ~$16 at current strip pricing ($83/bbl
    and $5/Mcf). As such, we are downgrading ROSE from Market Perform to Underperform.

    In addition, we think the “catalyst risk” for this sell idea is very limited. Rosetta has shifted into development mode in the Eagle Ford and has stopped press releasing individual well results, and with only vertical wells planned in the near term in the Bakken, we don’t foresee any upward needle moving releases.

    ♦ Infrastructure setbacks temper production growth outlook. 2Q volumes of 135 MMcfe/d were up 9% sequentially but ~4% lower than we modeled. While the Eagle Ford continues to drive nearly all of the growth, Rosetta foresees curtailments in the field in 3Q and 4Q as
    a result of takeaway capacity issues. As a result, the company lowered full-year guidance to 135-145 MMcfe/d, down from 145-155 MMcfe/d. On a somewhat more positive note,Rosetta has worked through its completion backlog at Gates Ranch.

    ♦ Earnings beat. Rosetta posted 2Q EPS of $0.08, above our estimate of $0.05 and consensus of $0.07. The upside to our estimate came from lower operating costs and lower DD&A. EBITDA of $41.5 million was 16% higher than our estimate. After adjusting some of our
    cost assumptions and back-end loading deferred production into 2011, our 2010 estimates are coming down while 2011 estimates are going up.

    ♦ Cost creep driving increased spending. Rosetta also announced that it has raised its 2010 cap ex budget $30 million to $310 million. While a majority of the capital will be spent on
    the company’s higher return liquids projects (Eagle Ford getting 75%), the increase was a result of infrastructure expenses and rising drilling and service costs. Higher cap ex and lower production guidance; optically not good. This is also nearly double our 2010 cash
    flow forecast of ~$160 million. Nevertheless, the company currently has the liquidity and as of July 31 had $225 million available on its $345 million facility. In addition, Rosetta is
    also looking to divest some non-core assets to fund the deficit.

    Non-GAAP Q1 Q2 Q3 Q4 Full GAAP EPS Revenues
    EPS Mar Jun Sep Dec Year Full Year (mil.)
    2009A $0.00 $0.08 $0.11 $0.19 $0.37 $(4.27) $294
    Old2010E 0.14A 0.05 0.15 0.23 0.56 0.56 324
    New2010E 0.14A 0.08A 0.11 0.18 0.52 0.52 309
    Old2011E 0.25 0.23 0.18 0.26 0.93 0.93 420
    New2011E 0.23 0.26 0.25 0.36 1.10 1.10 443
    Rows may not add due to rounding. Non-GAAP EPS excludes unrealized hedging losses, property impairments, and
    other extraordinary items.

  107. 107
    RMD Says:

    bill #49; somehow selling long calls is just a bit too cute; my guess is that it backfires somehow and ends up costing the shareholders $. The “good news” will be that it would then be a 1 time charge: ha ha.

  108. 108
    zman Says:

    Thanks much Bill. Still mulling the sector.

  109. 109
    Nicky Says:

    Slightly unusual action for a Fed day. We normally drift higher into the Fed. I can’t remember when we were last down this amount ahead of the Fed. Its setting up to buy the news but somehow I just don’t believe it.

  110. 110
    zman Says:

    RMD – given that it is CHK, you’ll probably encounter a new form of reverse hybrid knockout swaps that make those charges non-cash 😉

  111. 111
    elijahwc Says:

    Bill re #105: nice. I’m setting a ticker alert on BALT at 16. Believe it will get there well before the $1.60 modeled divi.

  112. 112
    bill Says:

    One other thing on dry bulk business..

    there is a ton of supply coming into the market for the next few years

    Financing is hard to come by

    this has caused rates to fall and ship values to fall as well

    The upside is higher rates will drive vessel values higher.

    The model that balt has works because income support’s the stock price and they use the stock as currency to add assets to increase the dividend

    NAt (on the tanker side) sells above book or asset value due to the dividends. They pay out all cashflow adding back depreciation, balt holds onto depreciation to refresh the vessels

  113. 113
    VTZ Says:

    My money says it’s a buy the news of more QE coming if not included already in this meeting. Most likely more mortgage purchases. They went out of their way to tell us last time that if we start seeing bad data, they won’t be afraid to do something. They already gave us the clue that last time the positives were slowing and I’m pretty sure we can all agree the jobs numbers were bad, etc.

  114. 114
    VTZ Says:

    If they don’t do something, Obama is going to have some kind words for the Fed.

  115. 115
    zman Says:

    re 113 … that’s where I am at too.

  116. 116
    zman Says:

    re 114, speaking of that, I wonder when Summers resigns.

  117. 117
    Nicky Says:

    We might seem some short term euphoria on the announcement of QE if it happens but likely to be short lived as everyone will then say it confirms their expectations about how bad things are.

  118. 118
    VTZ Says:

    RE 113/115 – Nobody neesd the Fed telling them how good or bad the economy is, that’s what data is for.

    All they want to know is what the Fed is going to do about it. That’s why I can’t see any selloff coming. If the Fed says it’s bad then that means QE which means rally. If they say the economy is showing strength (which I doubt), and that they are willing to wait but QE is still on the table then it might stay down. That’s the only way we don’t rally.

  119. 119
    cargocult Says:

    Movie quote=from one of my favorite movies, Brazil by Terry Gillium.

  120. 120
    VTZ Says:

    RE 117 – The whole rally to the high on the S&P was based on QE. Eventually you’re right, there isn’t going to be enough places to hide all the money they are creating out of nowhere which is why gold will be used as the only asset whose value is big enough to sink lots of USDs into, but it will however need to appreciate for that to happen.

  121. 121
    VTZ Says:

    RE 121 one last one – US Treasuries that are paying 3% are only an asset if you think you are going to get paid back and paid back in USDs that are worth the same.

  122. 122
    zman Says:

    Cargo – thanks, the economy can’t be that bad, I can’t even give shirts away.

  123. 123
    bill Says:

    here are todays indices

    Here is the latest 1 day change.You can see the capes up 9.6 % had a nice move with the bdi up 4.6 %. Using balt mix they had a 3.4 % rise so it doesnt mimic the bdi perfectly

    Baltic Dry 2,212 (+4.64%)
    Baltic Capesize 2,724 (+9.62%)
    Baltic Panamax 2,666 (+2.26%)
    Baltic Supramax 1,729 (+0.41%)
    Baltic Handysize 976 (+0.31%

  124. 124
    Nicky Says:

    re 118 – they may do and say nothing. In which case we go lower. People want something out of them.

  125. 125
    BirdsofpreyRcool Says:

    cargo — #119 You are CORRECT, sir!
    one of my faves too… but in a very dark way.

  126. 126
    zman Says:

    Some of Ben’s European colleagues have been suggesting negative interest rates. Don’t see them doing that ever, not sure it’s even legal at present. I think he’s all talk today but nothing firm but you never know, once in awhile he takes a big swing. Agree that if they do nothing we are looking a Nicky’s support levels soon.

  127. 127
    bill Says:

    The bdi was over 4,000 in May now 2200

    here is another good brokers report

    the July rates sucked

    Balt avg 25 k in q2, well july they did no better than 16 k/ day

    But recently rates have rebounded

    if you scroll thru the report they have a graph of the daily spot

    http://files.irwebpage.com/reports/shipping/0n0RXxi2rP/MONTHLY%20REPORT%20JULY%202010%20with%20commentary.pdf

  128. 128
    VTZ Says:

    RE 126 – That would be the ultimate QE money creation scheme.

  129. 129
    BirdsofpreyRcool Says:

    #124 — agree that people “want” something out of the Fed. But, honestly, what can they really do, at this point? The sluggish economy has nothing to do with the Fed having their “boot on the neck” of the money supply. It’s something else. And it’s pretty obvious what it is. Unless you’re Krugman, or Blinder (perfect name, by the way), or Summers, or any of the Keynesian “geniuses.”

  130. 130
    VTZ Says:

    RE 129 – I disagree because I think that if FASB did not allow the banks to mark their assets at whatever they want, many more would be clearly insolvent. I don’t think that the only reason banks aren’t lending is there are no borrowers. Why does the government need to give 30 bill to small business?

  131. 131
    BirdsofpreyRcool Says:

    VTZ — we can agree to disagree, it appears. But, that is what makes for lively discussion.

    But as a small biz owner, I do — completely — disagree with you.

  132. 132
    dij Says:

    Tom,

    Thanks for the NLY observations and experience. I will watch and give it a try.

  133. 133
    VTZ Says:

    Look at the weekly FDIC bank closures, they never even get close to what the total assets are marked at.

    Well all the organizations that represent your small business disagree with you, but then again I don’t have first hand experience so you may be right.

  134. 134
    bill Says:

    FWIW, I came up with 40 in q4 for balt if rates avg 25,500 the q3 rate.

    But rates are lower in q3 are lower as i said before

    23 0.22
    25 0.27
    27 0.32

    at 18,500 you get 16 cents again and that what they are running today

    So on 2nd thought, i think next qtr will be 16 as well and the jury is out for q4
    and depends on shares outstanding and what the bdi does.

    I like balt in the 11 as on an asset value play

    I like NM and DSx as they have charters locked in

    So, it comes down to how you feel about debt leverage and bdi outlook

    egle is pure supramax and the smaller ships are earning more than the larger ones ( at the moment)

  135. 135
    elijahwc Says:

    Another BDI resource:

    http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

  136. 136
    BirdsofpreyRcool Says:

    Yes… and the AARP (which purports to represent Americans over 50) also supported ObamaCare. Think that decision was because it was a “great bill”? Or because it was “self-serving.”

    Hint: the AARP is the largest beneficiary of making MedicareAdvantage disappear.

    To think that “organizations” or “labor unions” really represent the constituents they purport to help. Well, you’re just not following the money.

    15 secs to go….

  137. 137
    ram Says:

    So, good or bad?

  138. 138
    zman Says:

    Fed’s balance sheet staying the same size via reinvestment, market initially liking that.

  139. 139
    BirdsofpreyRcool Says:

    Fed goes from supporting the mortgage market… to supporting the Federal Govt. Guess you shore up the structure where the greatest weakness exists.

    Kinda scary, actually.

  140. 140
    ram Says:

    So are they rationally accommodative still?

  141. 141
    BirdsofpreyRcool Says:

    ram — yes. The Fed is going to continue to be very very accomodative. Not a whisper or a hint that they will ever tighten monetary policy (but we weren’t expecting that they would).

  142. 142
    BirdsofpreyRcool Says:

    Fed to Reinvest Mortgage Proceeds Into Long-Term Treasuries 2010-08-10 18:14:58.989 GMT

    By Scott Lanman
    Aug. 10 (Bloomberg) — Federal Reserve officials decided to reinvest principal payments on mortgage holdings into long-term Treasury securities, making their first attempt to bolster growth since March 2009 to keep the slowing U.S. economy from relapsing into recession.
    “The pace of economic recovery is likely to be more modest in the near term than had been anticipated,” the Federal Open Market Committee said in a statement in Washington. “To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level.” The Fed retained a commitment to keep its benchmark interest rate close to zero for an “extended period.”
    With growth weakening in the second quarter and company job gains in July falling short of estimates, today’s step signals that risks of a downturn have increased enough for the Fed to delay its exit from unprecedented stimulus. Chairman Ben S.
    Bernanke told Congress last month that the Fed was “prepared to take further policy actions as needed.”
    The Fed said it will “continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.” The reinvestment policy applies to agency debt and agency mortgage- backed securities held by the central bank.
    The central bank left the overnight interbank lending rate target unchanged in a range of zero to 0.25 percent, where it’s been since December 2008. High unemployment, low inflation and stable price expectations “are likely to warrant exceptionally low levels of the federal funds rate for an extended period,”
    the Fed said, repeating language from every policy meeting since March 2009.
    “The pace of recovery in output and employment has slowed in recent months,” the FOMC said. The Fed will “continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.”
    U.S. central bankers repeated that inflation is “likely to be subdued for some time.” Prices in June rose 1.4 percent from a year earlier, the third straight month of slowing gains under the Fed’s preferred index, which excludes food and energy costs.
    Kansas City Fed President Thomas Hoenig dissented from the decision for the fifth straight meeting.
    Fed policy makers, at their last meeting in June, judged that the central bank “would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably,” according to minutes of the session.
    Records of today’s meeting will be released Aug. 31.
    Bernanke said in an Aug. 2 speech that “we have a considerable way to go to achieve a full recovery in our economy.” Still, he avoided signaling that the central bank would reverse months of reductions in record stimulus and liquidity programs, including the end to $1.7 trillion in purchases of housing debt and Treasuries.
    St. Louis Fed President James Bullard said July 29 that while he expects a continued recovery, policy makers should be ready to buy Treasuries if the economy slows further.
    The Fed’s last move in favor of easier policy came in March 2009, when policy makers agreed to buy $300 billion of Treasuries and more than double planned mortgage-debt purchases to $1.45 trillion while starting a pledge to keep the benchmark rate close to zero for an “extended period.”
    This year the central bank stopped buying assets, raised the rate on direct loans to banks and shut emergency-lending programs for corporations, bond dealers and money-market mutual funds. It’s also developed tools for raising rates with a near- record $2.3 trillion balance sheet.
    Today’s decision defied easy prediction after a report Aug.
    6 showed U.S. private employers added 71,000 jobs in July, below the 90,000 median estimate of economists surveyed by Bloomberg News. The unemployment rate was unchanged at 9.5 percent.
    Including government workers, the U.S. lost 131,000 jobs in July, compared with the median estimate of 65,000.
    The weak job market has inhibited growth in consumer spending, which accounts for about 70 percent of the economy.
    Such expenditures rose at a 1.6 percent pace last quarter, down from a 1.9 percent rate in the previous three months that was smaller than previously estimated.
    “They’re supposed to keep inflation under control, but they’re also supposed to promote full employment,” Christopher Low, chief economist at FTN Financial in New York, said in a Bloomberg Television interview before the announcement. “The Fed is starting to worry about hitting that full-employment goal any time in the next three or four years.”
    Aeropostale Inc., a retailer to teenagers whose sales rose in July at one-seventh the pace analysts predicted, said changing consumer preferences and a “challenging” retail environment hampered spending. Sales at J.C. Penney Co., a department-store chain, fell 0.6 percent last month.
    Still, Bernanke and other officials in recent weeks had maintained their outlook for a pickup in the economy over the next year. Corporate spending on equipment and software jumped at a 22 percent annual rate last quarter.
    While weakness in housing and commercial real estate will restrain the recovery, and the job market’s “slow recovery”
    weighs on consumers, “rising demand from households and businesses should help sustain growth,” Bernanke said in a speech last week in Charleston, South Carolina.
    United Parcel Service Inc., the world’s largest package- delivery company, raised its annual profit forecast last month and posted second-quarter earnings that climbed more than analysts estimated on increased demand overseas.
    The S&P 500 Index has rebounded 12 percent as of yesterday from its low this year on July 1.
    Investors don’t expect the Fed to raise the federal funds rate until late 2011, based on futures contracts on the Chicago Board of Trade.
    The housing market has faltered since a federal tax incentive for first-time homebuyers expired in April. Sales of previously owned homes fell 5.1 percent in June from May, housing starts slid to the lowest level in eight months and the 330,000 annual pace of new-home sales was the second-lowest in data going back to 1963 after May’s 267,000 rate.
    The National Bureau of Economic Research, an academic group with a committee that marks the start and end of recessions, has yet to announce a date for the end of the downturn that started in December 2007, even after four straight quarters of growth.
    Some panel members including Stanford University’s Robert Hall and Jeffrey Frankel of Harvard University have said it’s clear the contraction has probably ended.

  143. 143
    zman Says:

    Oil rallying with the S&P. Wouldn’t care to bet this rally has legs, there just wasn’t much new there.

  144. 144
    bill Says:

    139 wow right on

    You should be on tv

  145. 145
    Nicky Says:

    Normally 3 moves on the Fed announcement. First move is correct, second is fake, third goes in the same direction as the first….

    If that is the case this move lower is a fake out and should be bought.

  146. 146
    zman Says:

    Thanks Nicky

  147. 147
    BirdsofpreyRcool Says:

    Nicky — great observation. Thx for the timely posting.

    Back to trying to make $$ in an uncertain world.

  148. 148
    zman Says:

    EOG recovering from pre Fed speak dip. NOG stayed up pretty well through the day and ESV joining in now. Other wise all still a lighter shade of red. WLL continues to be one of the most volatile names in the Bakken on an intraday basis.

  149. 149
    bill Says:

    replay of useg call

    http://investor.usnrg.com/events.cfm

  150. 150
    Nicky Says:

    need to take out yesterdays highs. So far could still be a wave c retrace currently at about 75%.

  151. 151
    zman Says:

    JB – so far so good on the KOG hold the line comment.

  152. 152
    BirdsofpreyRcool Says:

    HT = “might get a big squeeze here… whole spx pit is short….”

  153. 153
    zman Says:

    ESV breaking out on the daily, still holding my unofficial hunch trade there from two weeks back.

  154. 154
    Nicky Says:

    Wow BOP is that is true this could explode to the upside. Maybe that 1135 plus level stands a chance after all.

  155. 155
    choices Says:

    #116-think the boyz on Wall Street want to keep him and Tim where they are-do not know any other reason why Summers has lasted as long as he has or why he was hired in the first place.

  156. 156
    jiveyjr Says:

    here’s my contribution to levity this afternoon….

    http://rapidshare.com/files/…./Billy_Currington_-_Pretty_Good_At_Drinkin__Beer.MP3.html

  157. 157
    Jerome Blank Says:

    Adding some CIGX at $1.75….

  158. 158
    BirdsofpreyRcool Says:

    JB — just had 2 CigRx tablets (love the minty freshness!)… and I’m actually feeling OK about having bought CIGX at much higher prices.

    HA!

    Nice buy, tho.

    By the way, if anyone else tries them, let me know what you think.

  159. 159
    zman Says:

    BOP – maybe they should send some of those to the POTUS, great PR.

  160. 160
    mattlee Says:

    re: CIGX

    This is getting floated around on Yahoo message boards. Not sure if it’s the same Jonnie Williams and I hate gossip-mongering, but any thoughts of this possibly affecting the price lately?

    http://www.sec.gov/news/digest/1994/dig012794.pdf

  161. 161
    Nicky Says:

    although we are well off the lows I am not exactly ecstatic about the market action.

  162. 162
    Pati Says:

    BOP, am ordering CIGX tabs today. My father died of Alzheimer’s so feel as you do. Also a little of the Zen would be nice.

  163. 163
    zman Says:

    Tropics continuing to heat back up, 3rd system looks to be targeting the Gulf now.

    tepidbeerthirty

  164. 164
    BirdsofpreyRcool Says:

    mattlee — that could be affecting it today. That’s old news… but gets pulled up by the short side periodically.

    Jonnie Wms is an entrepreneur. He has invested in some interesting companies, over the course of his career. I had the background of that one explained to me, at one point, several yrs ago. It was so silly, that I forgot the details.

    Look up Paul Perito’s background. That guy is as “white shoe” as they come. He would never get in bed with the Pond Scum that the short’s argument implies Jonnie is. Also, my buddy (and very large shareholder) has one of the best Noses for Bullsh*t in the biz. He has spent hours and hours (including private plane time) with Jonnie and is one of CIGX’s biggest supporters.

    This is real. It is the ONLY non-pharma that inVentiv has EVER taken on… much less created an entire division to support. The Roskamp Institute has a solid-gold reputation in the study of old-age diseases. The recent high-level hires (over the last 4 yrs) at CIGX have all been people with stellar reputations and career histories. That said, Jonnie is a colorful guy. But he has surrounded himself with a Top Tier Management Group that has just launched what could be a blockbuster of a nature-derived product.

    Aspirin is derived from the bark of a tree in Central and South America… so this sort of thing can happen.

  165. 165
    Geno Says:

    BOP – is there anything you don’t know!

  166. 166
    BirdsofpreyRcool Says:

    Pati — I am very sorry to hear about your father. I had an Uncle who suffered for almost 20 yrs, before passing away. I know what that disease does… and it is oh so sad.

    Had my 2 for the day… just in case. Let me know what you think of them!

    By the way, there is information on the CigRx website that only doctors can access. It shows comparisons to other “stop smoking” products, as well as toxicity levels (the highest level of “toxicity” is the caffeine in a CigRx tablet… if you take a whole pack (20), you ingest as much caffeine as drinking half a diet Coke…).

    I don’t know why the “Public” can’t see that stuff… the SEC doesn’t consider it “insider” or “classified” info. Guess it’s just the AMA, protecting their turf. But, if anyone is a medical doctor, I heard the charts are compelling…. and I would expect that info to make its way into the Public Domain at some point.

  167. 167
    BirdsofpreyRcool Says:

    Tree bark is our Friend. Tree bark has yielded many useful “drugs” over the course of human history…

    http://www.yourhealthbase.com/bark.htm

  168. 168
    BirdsofpreyRcool Says:

    Geno — U R funny, guy! 😉

  169. 169
    RMD Says:

    110 Z, I think we all need some reverse hybrid knockout swaps = clearly something no one will understand.

  170. 170
    RMD Says:

    TAT: I am relatively impressed that it didn’t sell off more. Of course St. reaction arrives tomorrow…

  171. 171
    RMD Says:

    OPCO: Major oils are steadily shifting their long-term strategy to emphasize

    natural gas growth, while E&P companies, predominantly gas producers,

    are diverting increasing portions of their drilling budgets to oil and

    liquids-rich resource plays, mainly onshore North America. Rising

    nationalism made it increasingly more difficult for international oil

    companies to access large oil resource plays and resulted in a major

    strategy shift to gas, mainly LNG and more recently shale gas plays,

    especially in North America. E&P companies, on the other hand, are

    racing against time trying to reinvent themselves into oil producers

    after giving up hope for a meaningful and sustainable rebound in

    natural gas prices in the next two years. Time will tell who was

    right.

  172. 172
    elijahwc Says:

    Don Coxe call transcript: always wonderful

    http://www.scribd.com/doc/35631169/Don-Coxe-A-Blank-Canvas-080310

  173. 173
    BirdsofpreyRcool Says:

    elijahwc — do you get Don Coxe’s monthly write up too? I always love to read what he has to say. Thank you!

  174. 174
    Nicky Says:

    It looks to me as if we still need one more pop to the upside. If the really bullish count is underway then we should exceed 1134 and move towards 1150 into the end of the week. The less bullish count says we move to about 1131 – 1135 tomorrow before a decent pullback. The cycles would argue that the less bullish count is correct.

    Are there any API numbers tonight?

  175. 175
    zman Says:

    Nicky – Thanks. API's were modestly bullish:

    • Crude: DOWN 2.187 mm barrels
    • Gasoline: DOWN 1.536 mm barrels
    • Distillates: UP 2.286 MM barrels.
  176. 176
    Nicky Says:

    Thanks Z.
    Data out of China tonight.  Could set the tone for tomorrow and wouldn't be surprised to see it support commodities.

  177. 177
    elijahwc Says:

    BOP – No but it can usually be found on Prieur du Plessis excellent site Postcards from Capetown.

    http://www.investmentpostcards.com/

  178. 178
    BirdsofpreyRcool Says:

    thank you, elijah.  I have to beg, borrow, and scrounge to try to get it every month.  So appreciate the assist.

  179. 179
    blackgold39 Says:

    A CRAB STORY sinks BP for the day? ugh give me a break.  I almost doubled down on the Aug 40's and 45 calls but I am already in too deep there.

  180. 180
    zman Says:

    BG39. To be fair, it was probably more the weather.

  181. 181
    Nicky Says:

    Yikes Nikkei down for 4th straight day and down big.  Taking the US futures with it.  Someone doesn't buy today's action by the Fed.

  182. 182
    PackMan Says:

    54 – BDI … 2200 …. looks very very sick; dead cat bounce.

  183. 183
    West Says:

    From earlier today I had DVN net acreage in the Cana-Woodford at about 90k acres and their most recent cc is now showing 180k. CLR has a strong position in Cana at 200k. I would expect an annoucement in here somewhere on who was the purchaser of SD acreage in this area, with front runners probably being CLR and DVN and consideration to XEC with plenty of cash to make a deal. …..Z on XEC Yegua area they seem confident that they can hold production at or near current production rate with current exploration program that is about 10 to 15 % of total company budget. They currently running only 1 rig in this play with additions based on results. This area is current producing somewhere in the neighborhood of 30% of their revenues  for 10% of their budget. Probably the reason for ramp up in drilling in the PB and Cana to even out production over more wells. Their revenues should exceed expenses by about 100 mil $ this year so they are probably looking to expand or buy in here somewhere.

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