Print Friendly, PDF & Email

Market Sentiment Watch:  Energy land this week has been captivated by moves in the broad market first and oil second. Natural gas, which has been flat through this last little fall doesn't even get honorable mention.  Oil has been falling technically since someone bearing a striking resemblance to myself mentioned that it probably didn't belong up in the $80+ seats just yet. This has weighed heavily on the oilier names despite the fact that they really didn't move up that much as oil did. This is pretty typical action. Second quarter earnings are over and the verdict was a resounding yawn. I'll have the Orange Charts out next week to reflect the quarter and in many cases, the raised level of capital spending. Spending is up on oil and liquids rich projects and flat to slightly lower on those programs purely targeting natural gas. Gas supply will remain robust through at least mid next year as many programs can't be cut for fear of expiring leasehold in the shales and many more liquids rich programs will also produce associated gas. More perspective on the quarter and the "so now what" of it all in the Monday post. 

BP Spill Watch:

  • Seal Test. BP running tests to see if further work on Macondo is necessary. Decision expected sometime today. 
  • From Reuters ~ Thad Allen, the Obama administration's point man on the oil spill, said at a news conference that an earlier effort to temporarily plug the well may have had the unintended effect of creating a permanent seal..
  • I continue to think BP and the U.S. government would like to see the lease sold to another oil company, with the relief wells intact to be used as producers as an incentive for the buyer. 
  • BP also settled 270 citations at its Texas City refinery.

Moratorium Watch: Texas Sues The Feds.

  • Texas AG Greg Abbot ~ "Under federal law, affected states are guaranteed the right to participate in offshore drilling-related policy decisions, but the Obama administration did not bother to communicate, coordinate or cooperate with Texas"
  • The Department of the Interior responded to the suit by saying Secretary Salazar's moratorium is "simply common sense".
  • Oh, the arrogance of power being displayed here (along with the twisting of expert recommendations) is astounding in light of the current economic backdrop and the number of jobs this sabotages. 


Ecodata Watch: In Line. 

  • Retail sales for July came in at 0.4% vs 0.5% expected
  • Retail sale ex autos came in at 0.2% vs 0.2% expected
  • CPI of 0.3% vs 0.3% expected
  • Core CPI of 0.1% vs 0.1% expected
  • Consumer sentiment due out at 10 am EST, forecast of 68.8 vs 67.8 last month ... this one gives me pause

In Today's Post:

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

Holdings Watch ZCAT (Zman Catalyst portfolio)

  • $6,750
  • 86% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $3,800
  • 5% Cash
  • Yesterday’s Trades:
    • OAS – Added (2) OAS August $15 calls for $2.20, with the stock just over $17, on the high side of the mid and after experimenting with a number of strikes this morning. The 2Q was better than expected (see site for details) and the conference call is later this morning. It is probably still early to play options here as they are about as illiquid at the moment as you get, even for a new issue. So I’m only dipping a toe. I continue to own a full position in the common in the ZLT.

Commodity Watch

Crude oil fell $2.28 to close at $75.74 yesterday. Crude has fallen $5.80 in the last 3 sessions. I would expect the selling to end with crude still in the $70s, probably between $72 and $74. The front month contract now looks like this. This morning crude is trading flat.

  • OPEC Watch: The Cartel bumped its estimate for world crude demand by 100,000 bopd to 1.05 mm bopd, up 1.2%, to 85.5 mm bopd. Growth comes from the same sources as has been the case of late: China, India, Middle East, Latin America. The group left it's 2011 growth estimate unaltered at 86.56 mm bopd (also a 1.05 mm bopd addition).

Natural gas eased $0.3 to close at $4.30 yesterday after the EIA reported a slightly bigger than expected storage injection (see below). Gas is likely near the low end of its range for the very near term but the coming shoulder season is likely to sub $4 numbers unless we see hurricane related shut ins. This morning gas is trading flat.

  • Tropics Watch: All quiet on the tropical front.
  • LNG Watch: Forecaster Waterborne LNG now sees August imports to the U.S. of 0.86 Bcfgpd, down 22% YoY.

Natural Gas Storage Review

ZComments: You can see a little divergence forming in Chart A below between current storage and year ago levels. Not going to get too excited about that but it does help keep gas from spiraling lower as the heat wave of 2010 takes its toll on injections. After the heat ends I expect a fattish end to the injection season with peak storage coming in at a range of 3,700 to 3,800 Bcf.


Stuff We Care About Today

KOG priced secondary:

  • 25 mm shares (a whopping 21% of outstanding)
  • @ $2.75
  • raises close to $65 mm net of fees and closes a funding gap that was apparent by year end.
  • No debt
  • Shiny new revolver remains untapped
  • I'm not a fan of dilution of this magnitude. I'm also not a fan of management's deliberately pointing to one source of financing knowing that the other is the route they plan to take. Results here have not been overtly stellar either. The stock performance however has been good. I just would prefer than management hold its shares a little more dearly.  
  • OK, sour grapes over this deal off my chest. No worry about a future equity offering for quite some time and my last KOG sale was at $3.74 so it's probably time for me to add some back.

Other Stuff

Seadrill To Buy Allis Chalmers (ALY)for $890 mm

  • Small oilfield service, drilling and completion firm with ops in the U.S. and Latin America taken out for an 85% premium
  • Not surprised to see this one go given the recent deterioration in the share price.
  • I am surprised that  it didn't go soon and that names like CRR and CLB are still standalone entities.

Enercom is next week - most of our highly trafficked names will be presenting.

I'll have a new Catalyst List out on Monday ...

... and the Orange Charts out later in the week, updated for the 2Q stats

SD looks like a bottom fish candidate at this point.


Odds & Ends

Analyst Watch: Nada

145 Responses to “T.G.I.F.”

  1. 1
    zman Says:

    You cannot be serious watch:


  2. 2
    zman Says:

    Analyst Watch:

    CXO – raised to Outperform at BMO


  3. 3
    BirdsofpreyRcool Says:

    Blackstone buying Dynegy.

    Do not underestimate what this means… as Dynegy is publicly-traded.

    Relatively cheap credit is available to large borrowers who view stocks as undervalued here. If individuals won’t buy stocks, private equity firms will (and flip them back out to us, a couple of yrs later, at 200% gains). Also, expect to see companies themselves announce more stock-buy-backs.

    Credit is available. And it’s cheap. Maybe not “everyone” can borrow… but enough can to make a difference. Thing is, they are not borrowing to invest in capex/expansion plans. They (private equity, companies) are borrowing to buy stock. [Except for KOG, of course… but maybe, this time, they finally got out from being “behind the wheel / a day late, a dollar short.” Anyway, for those who bought stock y’day… congrats.]

  4. 4
    PackMan Says:

    Good morning Z.

    Blackstone buying Dynegy.

    Any implications for the group today ?

  5. 5
    BirdsofpreyRcool Says:

    pondering…. Wonder if the domain name “KenSalazarIsABigFatDummy” is taken yet?

  6. 6
    PackMan Says:

    BOP … IBM also buying someone today.

    DYN had taken a pounding all year, so the BX purchase is not much of a premium over the debt (small equity valuation).

  7. 7
    elduque Says:

    Good morning Z-

    Two more days of plays, then off to Nothern Ontario for some wilderness canoeing. Ah, it is a tough life.

    Re SD- was the insider significant and who?
    How do you rate their management?
    Who do you think has the best management? Top 3.

  8. 8
    BirdsofpreyRcool Says:

    PackMan — i hear you on the premium. Same could be said for ALY. But the point is, they are being bought now. When the individual investor refuses to buy stocks, and stocks fall, the private guys and other companies step in. It is a neon-lighted-sign… and we have only ourselves to blame, if we ignore it.

  9. 9
    zman Says:

    BOP/Pack – saw it, almost mentioned but not really my area, more of a stock market thing.

    Re SD, there were 3 of them that I saw, one was a director, 100K buy full price paid on the 12th, took him to 300K.

    Rate their management: capable but had eyes bigger than their stomach and were unlucky with gas prices. I think ARD was a minor coup for them and step in the right direction but I still think that that is a lot of debt and they are still too gassy. But it may be worth a trade.

    Top 3 managements:
    APC or EOG for 1 and then a number of mid cap names with NFX at the top of the list.

  10. 10
    zman Says:

    re 8. Absolutely get your point on that.

  11. 11
    BirdsofpreyRcool Says:

    CIGX blogger…


  12. 12
    BirdsofpreyRcool Says:

    z — sorry… didn’t mean to get all heavy-handed on ya.

    People say that “credit” is tight. It’s not. Some consumer stuff might be tight (but that is probably a good thing). For companies who really need the money, it’s there…. in the debt market (equity market still tough… but seeing some large IPOs get done… this is also a neon sign firmly attached to a taaaaaall signpost… if we care to see it).

  13. 13
    zman Says:

    BG 39 – I think BP may shine today if they go ahead and say that Macondo is plugged. Nice cost savings over continuing with the relief wells and less risk, no chance of falling on an initial missed intersection, etc.

    Go Texas for suing the Feds over the moratorium!

    KOG lifting pre market as the shares from the deal hit the market.

  14. 14
    BirdsofpreyRcool Says:

    OK, OK… one caveat. You have to be a BIG Company to borrow in the public markets. So, if you are a small company (and 70% of them are), it’s not Easy-Peasy to get a bank loan. But that will follow. These things start at the top, then work their way down. It always does.

  15. 15
    zman Says:

    re 12 – hey, I was just agreeing with you.

  16. 16
    BirdsofpreyRcool Says:

    #5… amazed, it’s available.

  17. 17
    zman Says:

    and yet obamaclinton2012.com is taken.

  18. 18
    BirdsofpreyRcool Says:

    #17 yeah… because our recent Foreign Policy Moves have been SO BRILLIANT. ha. Don’t get me started… going for more coffee.

  19. 19
    zman Says:

    SSN – Questions regarding Goshen County in with management. Delta on the answer is about $10 mm so will let ya know. Mulling adding back a portion of my shares sold higher.

  20. 20
    zman Says:

    Market open, slight drop at the start as expected, has the feel of a bounce day.

  21. 21
    BirdsofpreyRcool Says:

    Credit markets firmly in the green.

  22. 22
    BirdsofpreyRcool Says:

    TED weighs in at +21.4 bps this morning.

  23. 23
    bill Says:

    sellers is a hedge fund manaager

    2 largest positions

    contango &


  24. 24
    zman Says:

    Yield names getting a bounce, especially LINE. Makes a lot of sense to me. WHX looking at $22, probably builds into the x-div date on Aug 19.

  25. 25
    zman Says:

    OAS chipping higher, given the ugly way the options trade I’ll be more than likely to punt on an significant rally. Anyone see a broker note there yet?

  26. 26
    zman Says:

    Bill – those are your two largest or a fund’s two largest?

    Noting TISDZ heating up, think to add to my offshore holdings again soon (adding back EXXI most likely but I looking at all the names right now. I really think they move up into the Fall. Thinking the market plays it simple and takes the biggest beaten down names up the most, so maybe ATPG and SGY are good candidates.

  27. 27
    zman Says:


    EOG – Added (10) August $100 Calls for $0.52 with the stock at $95.15. Stock has fallen with the market and oil. Catalyst is that I expect a snapback in both in the short term and the name has been highly correlated with oil of late. This one will be pretty quick.

  28. 28
    zman Says:

    JB – can you take a fresh look at BALT? Thanks.

  29. 29
    BirdsofpreyRcool Says:

    HeadTrader says his gut is telling him to short the mrkt right here, right now. With a stop-loss at HOD.

    However, that self-same gut is telling him that the SPX will close +7 today.

    His caveat = “i am a trader and have the right to change opinion in 10 seconds…”

  30. 30
    BirdsofpreyRcool Says:

    U of Mich Consumer Conf out in a few… HT is saying he would be flat, ahead of the number… ‘cuz it’s a “coin flip” here.

  31. 31
    john11 Says:

    XEC, Cimarex upgraded to buy from hold at Lazard Capital (pre-open). Target $85.

  32. 32
    BirdsofpreyRcool Says:

    U of Mich came in as expected… 69.6 (vs 69 exped)

  33. 33
    TEXWS6 Says:


    Current completion costs are TOO expensive for Haynesville wells. Expect a significant rig drop in La. Frac companies are taking their equipment elsewhere where the frac pressures aren’t as high and they can get more money for their jobs.

  34. 34
    zman Says:

    OAS bid on those $15 August strikes is $2.30, intrinsic is $2.95. Lack of volume allowing those cats to price it poorly.

    Sentiment at 69.6, better than expected

  35. 35
    bill Says:

    Analyst just on cnbc recommending nm and balt on the dry side

  36. 36
    bill Says:

    26 his fund

    I havent looked at it in a while– he was heavy into energy and got hit hard on redemptions.

    After selling off most of the portfolio, he was down to just a few of position’s

    He was active in mcf trying to get peak to do something a few years ago. Last few years he got more involved with pxri

  37. 37
    zman Says:

    Thanks Tex – roger that. Haynesville wells a victim of own success. Gas prices hating the success there. What would you saw is the most economic portion of the play in the Texas side, somewhere in San Augustine I would think? EOG has punched some rippers down there.

  38. 38
    bill Says:

    Nm reports next week. They usually have a pre earnings positve news release on operations..probably on tuesday or weds

  39. 39
    TEXWS6 Says:

    San Augustine Tx is too hot and too deep to be economic. Heart of the play is where HK is, no questions asked, these guys have the best acreage. Shallower, larger rates, easier to frac, etc.

  40. 40
    zman Says:

    Thanks Bill. Will look at BALT for the ZLT over the weekend. Still sitting on a bit of cash there from sales of EXXI, part SSN and its almost time to fund the SEP for last year.

    Offtopic: Anyone use ESA accounts for their kids education expenses? You can use them K-12 in addition to college. Always looking for cubbies to put cash in that D.C. can’t get to. Anyway, ESA is self directed vs the 529 track system which has done rather poorly everywhere I have looked. In fact, if anyone has a 529 plan out there they like, let me know about it. Thanks, that is all, back to energy.

  41. 41
    PackMan Says:

    EOG has turned on a dime (north).

    Very strong support at 95

  42. 42
    zman Says:

    Tex – agree re LA, nw parishes, caddo, desoto, but EOG is saying its east Texas corr is highly IRR positive with the recent wells in the 20 MMcfpd range.

    HK has been consistently making better wells in NWLA for some time now. Has to be the rocks, can’t just be superior completion methodology. Really glad to see them choke back the IPs now and flow them for the long term improved EUR. Stock however would simply like them to get oilier.

  43. 43
    zman Says:

    Pack, yeah but its having trouble shaking off the opening weakness. Ya know, a Goldman Sachs strong buy, Conviction List (and I really do think they should change the name of that as it makes them sound like criminals) just isn’t worth what it once was.

    Market can’t get out of its own way either.

  44. 44
    zman Says:

    OAS showing quite a bit of resilience here, toying around $18 now. Still have not seen post CC commentary from the Street. Street looks to have gone on the last vacations of summer.

    Reading that FHA is now insuring mortgages on multi-million dollar condos in Manhattan. Is that really something FHA should be involved in? These guys don’t get the fact that when you artificially prop up a market or system you only extend the duration of the pain and create the potential for a further decline down the road.

  45. 45
    PackMan Says:

    EOG – spoke too soon !

  46. 46
    PackMan Says:

    that’s what’s called a headfake !

  47. 47
    BirdsofpreyRcool Says:

    XACS#1 weighs in (L-OIS = another way to measure the TED Spread… just sounds more sophisticated [and is the TED Spread measure that Greenspan “favored”… not surprisingly])


  48. 48
    zman Says:

    Yeah, that’s a new post CC low for EOG. Negative days have come on weaker than normal volume, expecting something to click with people there pretty soon.

    NGO rallying back now.

  49. 49
    Nicky Says:

    Morning all. What a weak market when we can’t even bounce a point or two after such a massive sell off.
    I am still thinking we have another low out there. Support and gap fill at 1070 – 72. Likely to come in the next couple of trading days. Then we should stage at least a bounce, maybe more, but to be honest I am getting more bearish. The up cycles run out at the end of August and it looks to me as if any bounce may end up being just a correction. We have to take out 1056 to be sure the top is in.

  50. 50
    choices Says:

    moratorium: common sense my A$$

    Z-#24- WHX ex-div is 8/17

    Whiting USA Trust I (NYSE: WHX) announced the third Trust distribution in 2010, which relates to net profits generated during the second quarterly payment period of 2010.

    Unitholders of record on August 19, 2010 will receive a distribution amounting to $10,263,879 or $0.740332 per unit payable August 30, 2010.

  51. 51
    PackMan Says:

    just bought some EOG … looks like too big a flush to me relative to the group.

  52. 52
    zman Says:

    49, 50 – Thanks.

  53. 53
    choices Says:

    EOG-I take Z’s point on the importance of cash flow vs earnings agree 100%) but the “consensus”still keeps knocking earnings, sets a very negative tone-just got another note yesterday that consensus reduced another 0.02 to 0.377 for Q3-still, it is a very wide range of estimates, 0.15-0.64-little over a week ago, prior to earnings announce, consensus was 0.55 for Q3

  54. 54
    zman Says:

    BP says pressure test complete. Says BP and govt. squints looking at the data now. Says recommendation will got to the U.S. govt., no time line given but would think it would be pretty quick.

  55. 55
    Jerome Blank Says:

    #28 BALT, trying to hold the bottom at the $10.25 zone, which is P&F trendline support…hard to get a feel if this holds but if bullish longs are easy to manage with stops below the recent lows….

  56. 56
    zman Says:

    Thanks JB

  57. 57
    zman Says:

    Iran Watch:


  58. 58
    blackgold39 Says:

    re 13 – Z, I am in for a dollar on BP, so to speak.

    BP currently ripping out of the gate, I will likely drop the Aug 45s whenever it is convenient, and hold the Oct 42s and 45s I picked up over the last couple days while they were getting beaten down….I see them stagnating around 45-48 dollars in the intermediate term, but there is no excuse for them to be sub-40 without a significant drop in crude….decided to play the intermediate term instead of paying into this ridiculous market.

  59. 59
    zman Says:

    BG – pretty similar thinking to mine of near term pricing there. I think it goes to $40+ today if they say the bottom kill is not needed.

  60. 60
    zman Says:

    But I’d guess they don’t get that out until the evening (post close) press conference.

  61. 61
    zman Says:

    Market about as boring as it gets.

  62. 62
    zman Says:

    WASHINGTON (MarketWatch) — In perhaps one of the sharpest critiques of Federal Reserve policy ever from a sitting policy member, Thomas Hoenig, the president of the Kansas City Federal Reserve Bank, said zero interest rates were “a dangerous gamble” in a period of moderate growth. In a speech in Lincoln, Nebraska, Hoenig warned that Fed Chairman Ben Bernanke and his allies were trying to use monetary policy as a “cure-all” for “every problem faced by the United States today.” Keeping rates too low for too long will only lead to a repeat of the cycle of severe recession and unemployment in a few short years, he warned. Hoenig has dissented at every Fed policy meeting this year. He wants the Fed to commit to a slow and gradual increase in the target Federal funds rate. Hoenig argued that the economic news was not as bad as reported in the media and described by Wall Street experts. The markets want zero rates to continue because they are earning guaranteed returns on free money, he said. Hoenig dismissed fears of deflation.

  63. 63
    blackgold39 Says:

    Re 59 – Agreed.

    I think attempting to finish the relief well in the near term actually makes the stock less attractive, because not only does it do nothing to make the hole any safer, it puts a rig at risk, it destroys a perfectly decent development well, & it keeps rigs on location longer, costing them more money by the day.

  64. 64
    PackMan Says:

    BOP – Do you still have my email address ?

    I have an interest in looking at your CIGX play and was wondering if you could send me a brief synopsis of the story as you see it.

    Let me know; thanks.

  65. 65
    PackMan Says:

    ZIRP in my opinion is extraordinarily harmful to mainstream Americans.

    Think of all the folks – retirees etc – who are getting hosed by not being able to earn any money on their savings as Ben trys to force them into risk assets.

    All this to help the banks.

    It is outrageous.

  66. 66
    BirdsofpreyRcool Says:

    Pack — i do. But I’ll have to search around for something to send you. I’ve followed Star for many years… thru the lawsuit and all the appeal nonsense. But we always knew that it would be the CigRx product that would be the real possibility for an explosive growth story. There isn’t really any “analyst” who follows the stock. But a couple of people have written it up, over the years. I’ll try to find one of those and send it to you.

    CigRx is real… and it appears to work on a fairly large population of smokers… without the side affects of the pharma-stop-smoking-drug (who’s name i can’t recall right now).

  67. 67
    PackMan Says:

    BOP; that would be great; if you can’t find that, perhaps you can just summarize the story, the backing and the key issues. that would probably be fine.

    Much appreciated.

  68. 68
    BirdsofpreyRcool Says:


    Key issues =

    1) it works (and Star’s medical team, the Roskamp institute, inVentiv, and several very smart funds [including an in-house, private fund at GoldmanSachs] are right)

    2) it doesn’t work (and Star will burn through about $5mm of cash/quarter until it dies and the shorts are right )

  69. 69
    zman Says:

    Alabama AG suing BP and RIG for “Catastrophic Harm” … no details I see yet.

  70. 70
    zman Says:

    EOG in weak gets weaker mode. Market snoozing. Volumes weak.

  71. 71
    PackMan Says:

    EOG, I am usually pretty good at timing the trade and reading the technicals.

    The action since yesterday morning (straight down – $4 – in the last 24 hours) is perplexing.

    There must be a pretty strong downgrade out there; just not seeing it.

    I realize the market is weak but this is very unusual, particularly when looking at others in the sector.

  72. 72
    zman Says:

    re 71. Yep, yep, yep.

  73. 73
    TEXWS6 Says:

    Random man here, SLB came out with a free oilfield glossary app for all you iPhone users. I’m not cool enough to carry one around, yet.

  74. 74
    blackgold39 Says:

    BB really climbing now, making back losses from the last couple days

  75. 75
    zman Says:

    Friday Moving Quote Watch:

    “I am a brave president”


    I love how the second post on the right of the Spill Response is Obama welcoming the Saints to the White House

  76. 76
    BirdsofpreyRcool Says:

    Couldn’t help myself… had to look. Funny answer!

  77. 77
    VTZ Says:

    As a general market comment to people who own companies that produce Canadian heavies, expect an impact as a result of the Enbridge pipeline shutdown.

    The light/heavy spread is widening from 10-12 $/bbl to >15 $/bbl in Aug and the contracts for Sept are trading at >20 $/bbl differential because of maintenance at refineries that produce heavies.

    Could be a pretty big hit to Q3 earnings for companies like Baytex whose Q2 earnings were good yesterday.

  78. 78
    zman Says:

    BP Watch: Alabama said it is suing BP, RIG, and HAL citing the cement job as the cause of the accident, saying that the state of Alabama is suing to be “made whole” but did not specify a $ amount.

  79. 79
    VTZ Says:

    RE 73 – TEX, I just got cool the other day with a new phone but don’t bother with the iPhone, it’s old and busted.
    New hotness -> Android.

  80. 80
    kaman Says:

    AXAS earnings next week 8/17…anyone have expectations?

  81. 81
    Popeye Says:

    VTZ was that an EVO? I can’t find one.

  82. 82
    VTZ Says:

    HTC Desire, I can’t get the EVO in the Great White North. But it’s also quite slick.

  83. 83
    TEXWS6 Says:

    Android is Sprint? Just moved to OKC and was wondering what the best service provider is.

  84. 84
    andy Says:

    android – verizon

  85. 85
    ram Says:

    Has anybody shelled out money for the EVO? I am debating.

  86. 86
    elduque Says:

    VTZ – What about SU

  87. 87
    BirdsofpreyRcool Says:

    Speaking of presidents… friend just emailed me this link. Think it’s a real movie?? Wow. Would be pretty interesting…


  88. 88
    zman Says:

    EOG now $3 below pre analyst meeting levels. Relative underperformance seems unlikely to persist. Story has not worsened since then. Before that date we had little idea of how big they were in the Eagle Ford though it was rumored they were large nor that they were nearly so big in the Niobrara.

  89. 89
    choices Says:

    KOG bouncing-about the only good news in this mkt-for me also as I added back a small chunk yesterday at 2.81-wished it was more.

    As far as I’m concerned, I am in for the long hall on EOG because if 2011 comes thru on projections, s/b a gamer.

  90. 90
    VTZ Says:

    RE 86 – SU should remain relatively unaffected because the majority of their volumes are sold as light synthetics. The upgrader volumes should not be overly affected. Their Firebag volumes will be impacted however.

    Similarly, CNQ’s Primrose and other insitu volumes would be impacted.

    I think they’ll be given a pass for it because it’s out of their control but I just wanted to comment so people don’t get surprised by bad Q3 numbers. It should be isolated to Q3 as well.

  91. 91
    VTZ Says:

    It was more of a caution for people holding companies that are weighted towards insitu production.

  92. 92
    zman Says:

    Rig Count Watch:

    Gas rig count up 9 to 992, 18 month high. They are their own worst enemy.

    Oil rig count up 25 to 636 vs 272 a year ago.

    All good for HAL, SLB, BHI etc, also CRR for proppant, CLB for cores, reservoir optimization, etc

  93. 93
    VTZ Says:

    Suncor’s MacKay volumes will also be impacted.

  94. 94
    1520sbroad Says:

    VTZ – any thoughts on POT and the ferts – I remember you had a trade on with POT in the not so distant past?

  95. 95
    milepost_43 Says:

    TGA had mid Q updates around Sept 8/9 in 08 and 09 and

    they have these conferences on their schedule.
    Peters & Co. Limited North American Oil & Gas Conference
    September 16, 2010
    FirstEnergy Capital Corp. Global Energy Conference
    September 20, 2010

    should be at least 6 wells including
    a deep Nubia test and An Nagyah #4 horizontal to report..
    maybe take out of DANA GAS oil field/concession across the river????….

    An Nagyah #4 horizon “completed shortly” as of 8-5 CC
    Hana #23-2127′-Kareem Aug comp

    East Arta #4 Nukhul cased–32′ SIGNIFICANT deeper Nubia TD wk of 8-9

    Hosia #8 Aug frac
    South Rahmi #3 Aug frac
    East Arta Aug fracs

  96. 96
    1520sbroad Says:

    Found this article re: New Brunswick Canada.


    Also noted that Corridor released earnings yesterday and indicated that Apache Canada has finished the horizontal section of the most recent well they have drilled together up there. That is in the most recent Corridor press release on their site. They are getting ready to case and then frac. I am sure SWN is watching carefully as that well is closer to their acreage than anything else drilled.

  97. 97
    zman Says:


    CHK – Sold for $20.89, long term loss of 65%. Doing a little house cleaing and don’t see an immediate reason to hang on to this one. I continue to have greater oil than gas exposure in the ZLT.

    EOG – Adding a first tranche of EOG common for $94.55.

    SSN – Adding back some of my recently sold shares for $1.14.

  98. 98
    ram Says:

    You’re still giving HK some latitude?

  99. 99
    zman Says:

    Yes, and SWN.

  100. 100
    zman Says:

    SSN – I get a value of between $1.40 and $1.76 at the moment assuming the deal goes through.

  101. 101
    ram Says:


  102. 102
    zman Says:

    Sort of an open ended question. Mind getting polysyllabic for me so that I can respond better?

  103. 103
    PackMan Says:

    Z … you gotta work on your timing of your buys (not that I should talk)… use charts …


  104. 104
    zman Says:

    Pack – The ZLT could care less about today, tomorrow, next week. I do use charts a bit and not sure which stock you are referring to but assuming it is EOG, we are near support from March, prior to the analyst meeting and all the things that made people happy back then are more than true now.

  105. 105
    PackMan Says:

    I hear ya; did not mean to offend you w/ that comment; said in jest.

  106. 106
    zman Says:

    Pack – I guess I need those CIRGx things. Plus oh so bored
    Plus working a refi and everyone is trying to explain why my excellent credit doesn’t matter re rates that aren’t matching what the market says they should be
    Plus back to school crap
    Plus doing some tax stuff …
    Please therefore excuse my edginess.

    But happy to see the mike is still on around here given the post trade volume spike in SSN.

    Absolutely no offense taken on my side and I’ll repeat that I would make a lousy day trader.

    Ram – you still there? I guess you meant why punt CHK and hang onto HK and SWN.

    A couple of reasons. I really do think HK is doing everything it can to meet expectations, in terms of asset sales, in terms of falling lifting costs, in terms of discipline. SWN same and both still growth 30+%. I like having some gas exposure and they seem like a good way to play any kind of bounce in the commodity. And finally, the CHK position was small, they are complex and I don’t follow the name as well as I used to and I could use the tax loss … so I punted.

  107. 107
    milepost_43 Says:

    love it when things are “free” ………SF EV chargers —

    Bay Area soon to be home to 5,050 more EV charging stations
    August 10, 2010 | Camille Ricketts

    Infrastructure for electric transportation is heating up. Companies like Coulomb Technologies and Ecotality are already deploying electric vehicle charging stations region by region. And just today, general Motors said it was gearing up to announce a charging partner for its forthcoming Chevrolet Volt.

    Now in the San Francisco Bay Area, one of the most progressive regions when it comes to advanced transportation, the Air Quality Management District is funneling $5 million into an initiative to roll out 3,000 home chargers, 2,000 public chargers in commercial areas, and as many as 50 rapid charging stations along nearby highways (capable of juicing car batteries in 30 minutes or less).

    The goal is to spur wider adoption of plug-in vehicles, which are only expected to capture a sliver of market share in their first few years. The key will be to make charging stations accessible wherever people need to go, allowing them to quickly and efficiently extend the range of their green cars without high prices or the hassle of long waits.

    The new initiative is an extension of the Bay Area EV Corridor program launched in 2008 to install billions of dollars worth of charging stations around the region. In addition to providing vouchers for charging equipment, it will provide an undecided dollar amount in incentives for homeowners looking to install chargers in their garages before the end of the year. A federal tax credit equivalent to 50 percent of the cost of a home charger is already available. Pairing the two incentives

    could make this equipment essentially free.

    The Air Quality Management District, which is picking up the bulk of the costs, wants to get the ball rolling on EV infrastructure before the release of the Chevrolet Volt and Nissan Leaf later this year. Right now, pretty much the only electric cars on the road in the Bay Area are Tesla Roadsters, but this is soon to change.

  108. 108
    zman Says:

    MP – any word on what it will cost to juice your EV up? Also, how much power are we talking about? Are people juicing their EV’s at home going to be shocked by their electric bill?

  109. 109
    zman Says:

    Friday Wine Watch:

    Root: 1 , Colchagua Valley, Chile

    Big crunchy cab, great with a steak or a burger.

  110. 110
    ram Says:

    O.K……, It seems to be an unloved gassy that is trying to get oilier but has management that gets little respect from analysts. What do you see in HK that would get to a 35 to 50% equity appreciation?

  111. 111
    ram Says:

    Saw the expanation in 106. Thanks. It seems that HK is in a perpetual dog house.

  112. 112
    zman Says:

    Ram – yeah, they are really only trying to get a little bit oilier. Depends on who gives the presentations. If Floyd does it he will say they are a gas company, plain and simple. Stoneburner seems to take the approach that they are going to get more liquids rich but pretty slowly. My thought is they have to do their asset sales (so far so good and we had another one this week) and then they have to get to CF to Spend at par by 2012. What gets them up is continued strong growth until then. And, I probably point to this too often, a rally in gas prices in second half 2011 due to people FINALLY curtailing their drillbits as acreage is held. The company on production basis is much much bigger than it was two years ago. In another year it will be bigger yet again and the stock has not kept up with this growth, neither on production per share nor more importantly on a $/ Mcfe of reserves. As they drill these will and bring more proven undeveloped locations on and hammer their per unit operating costs down, they should get some recognition from the Street. Especially if they stick with their “no equity deal through 2011” near-promise. Either way, the downside from here (famous last words) seems less than the upside.

  113. 113
    PackMan Says:

    no worries Z ….

  114. 114
    zman Says:

    re 111. Oh, can’t agree enough. It is definitely in the doghouse. I just think that they have done everything the Street wanted and yet have not been rewarded for that yet and that when gas moves up (despite the fact that they are well hedged now) that the Street will like them.

  115. 115
    zman Says:

    Pack – you ought to share your twitter feed here … I find it both enlightening and amusing.

  116. 116
    zman Says:

    Govt says Macondo not yet permanently plugged:


  117. 117
    apbd Says:

    Any more thoughts on the NM warrants?

  118. 118
    BirdsofpreyRcool Says:

    File under “And You Thought It Couldn’t Get Any Worse?”

    Last friday, i got a round of emails from various traders wishing me much happiness, over my remaining summer. Then they promply disappeared into the wilds of the Hamptons. Bye-bye, A Team. See ya in September!

    Well… today the BEE TEAM is making its rounds and saying its good-byes.

    By the end of next week, what is left of this “market” will be in the hands of the unpaid Summer Interns.

  119. 119
    zman Says:

    BOP – I would do the same next week but the interns are headed back to the class room. 😎

    Impressed with the move in KOG today following the deal. Wonder if they really needed to price it that far in the hole.

  120. 120
    ram Says:

    If you feed the Summer Interns those special minty tablets, maybe they will react like those happy mice.

  121. 121
    zman Says:

    WHX taking out $22. I still have not seen commentary out of the guys who cut it to sell about 4 days after the last distribution, cause a massive sell off in the shares.

  122. 122
    PackMan Says:

    115 – Thanks Z … CapCube for anyone interested in following ..

  123. 123
    zman Says:

    You can not be serious watch#2:


  124. 124
    BirdsofpreyRcool Says:

    #123 — no lie!

    I worked in the crude shipping division for an energy company for a year. We had our own, separate building, down by the port. It was a 15 storey building, but the top floor was “16.” You guessed it… no “13th floor” on the elevator buttons. It got even worse… there were no Room #13s on any floor either. Here’s the funny part… I was the new kid in the group… in a position that revolved every so often. Our group was on the 14th floor and i had room #14… my room number was officially 1414. But, with no “13s” allowed… i was really in…. i think you can see where I’m going here…

    Nautical folks that that stuff VERY seriously!

  125. 125
    BirdsofpreyRcool Says:

    “Nautical folks TAKE that stuff VERY seriously” [i meant to say]

  126. 126
    jiveyjr Says:

    re: 62 looks like Hoenig wants to do something else with his life besides be associated with the Fed Reserve….

    re: 65 completely agree…

  127. 127
    zman Says:

    re 124. And so the oft requested bio emerges, bit by bit.

  128. 128
    BirdsofpreyRcool Says:

    Ha! Yep. Got to know the Jones Act and OPA 90 on a close and personal level… 😉

  129. 129
    apbd Says:

    The people at General Mills takes things very CEREALLY!

  130. 130
    zman Says:

    APBD – I put #1 in just for ya. Don’t tell the missus though.

  131. 131
    BirdsofpreyRcool Says:

    apbd — you hitting the G&Ts a little early today??



  132. 132
    zman Says:

    One of my favorite chart guys:



    At least we aren’t overbought now.

  133. 133
    BirdsofpreyRcool Says:

    What a stupid stupid market.

    Oh yeah… it’s mid-August. You expect RATIONALITY? Forgeddaboutit.

  134. 134
    zman Says:

    ohsobeerthirty. have a great one.

    WHX – interesting close, volume spike on the minute chart.

  135. 135
    BirdsofpreyRcool Says:

    I hope those recently-ordered CigRx tablets show up by Monday. Could use a little zeeeeeeeeeeeeeeennnnnnnnnnnnnn.

    “inner peace…. inner peace….” (that’s a movie quote, by the way)

  136. 136
    Pati Says:

    135, with you on that, BOP. Heading to the gym to work off a little frustration.

  137. 137
    PackMan Says:

    outta here … enjoy the weekend folks

  138. 138
    blackgold39 Says:

    re 116: Z, that should have been under ‘They don’t know what they’re talking about’ watch.

    Finishing the relief well just ruins a wellbore worth tens of millions of dollars, so pile that on to the tab.

  139. 139
    blackgold39 Says:

    Oh, and I’m about to refi also, 5% to 4%

  140. 140
    zman Says:

    BG –

    re 138 – well said

    re 139. If you mean 4 even let me know where you found that low a rate.

  141. 141
    zman Says:

    NBC Nightly News reporting the top kill sent cement all the way down the well and partially up the annulus This they think trapped 1,000 barrels of crude that could be released if the bottom kill proceeds. So now they are trying to decide what to do.

  142. 142
    zman Says:

    As a side note, they reported that Ted Stephens’ plane had some defective equipment on it. The “state of the art” beacons” malfunctioned. The plane crash killed 5 people. My thought is that we should put a 6 month moratorium on at least small plane flights, perhaps on all plane flights, until we find out why these beacons didn’t work.

    Or we could just say that “the world is an imperfect place, screws fall out all the time” and deal with it.

  143. 143
    blackgold39 Says:

    re 141 – I don’t know how on earth they could possibly determine that, given that the cap covers all of the tubular equipment. They’d have to be pinging it with acoustic tools, and I still don’t think they’d have any certainty whatsoever….it’s becoming a spin game since nobody can refute anything they say.

  144. 144
    zman Says:

    BG39 – yep. Funny how just before the close it’s “drill on” and after the close it’s “we’re not sure”.

  145. 145
    VTZ Says:

    Sorry 1520s, Stepped out for the day… I sold some calls against my POT lower but bought them mostly back when they crossed my breakeven but I still have a reduced position but I’m still holding all my AGU. I might lighten up just to take some profits on the grains pop. I still however think fertilizer demand will stay up for this year and probably the next.

Leave a Reply

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette