Monday Morning And All Is Wary

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Market Sentiment Watch: Unsettled and unhappy markets. On the heels of a weak market last week, futures were up overnight... until a weaker than expected Japanese GDP report hit the tape turned them around. In energy land, news flow all but dries up this week before (earnings ended and fall conference season yet to begin).

Ecodata Watch:

  • Empire state index came in at 7.1 vs a forecast of 9.5, and a last reading of 5.1

The Week Ahead:

  • Monday 8/16: Home builders index due out at 10:30 (F = 15, last was 14)
  • Tuesday 8/17:  PPI (F= 0.0%), Housing Starts (F = 560K, last read 549K), Industrial Production (F = 0.6%, last read 0.1%)
  • Wednesday 8/18:  EIA Oil Inventory Report
  • Thursday 8/19: EIA Natural Storage Report, jobless claiims (F = 482,000, last week 484,000)
  • Friday 8/20:
  • Saturday 8/21: August options expiry 

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Catalyst Watch
  • Stuff We Care About Today
  • Odds & Ends

Holdings Watch: ZCAT (Zman Catalyst portfolio):

  • $6,100
  • 85% Cash

ZIM (Zman Inefficient Markets portfolio)

  • $3,900
  • 5% Cash

Commodity  Watch:

Crude oil ended last week down 7% at $75.39 on a weak equity market and fears of a slowing China. I had said and continue to say that oil doesn't need to be over $80 and every trip there until the fundamentals improve is only the precursor to a more quick retreat.  The 12 month crude strip is trading at $78.08.  This morning crude is trading ----.

  • Nigeria Watch: Shell says sabotage is on the rise again in the Nigerian delta. No comment on production impact yet but you just new those former MEND members, dissatisfied with the ceasefire and lack of gainful employment, would get back to blowing things up in short order. This could start to play into a supportive roll for oil prices as we approach the next OPEC meeting.

Natural gas fell 3% last week to close at $4.33. High heat is keeping injections from piling too much gas into storage too quickly but look for an increase in the slope of the injections as we get to the second shoulder season in September since apparent supply is still running too strong for non-electricity demand sources.  The 12 month strip is now trading at $4.77. This morning gas is trading ---


  • Weather Watch:

    • Week before last: Cooling Degree Days of 86 which, yielded an injection of 37 Bcf for last week's report.
    • Last Week: CDDs of 92, vs an original forecast of 101.
    • This Week's Forecast: 85 CDDs, still well above normal of 66 for this week of the year and last year's reading of 79.

  • Tropics Watch: Fairly quiet, TD 5 is headed back offshore and may reform but I would not expect disruptions from that. 

Catalyst List - (yellow is new or modified)

Stuff We Care About Today

Weekend EmailBag

  • Q: I saw some of your comments Friday re HK. Do you think BEXP is a possible alternative to HK, if you thought crude has better supply and demand dynamics than NG? I know we are talking apples and oranges. Any reasons why this would make no sense at all? Thanks as always for your thoughts.
  • Response: Yes. In the near and medium term BEXP's increasingly liquids weighted production profile should give it more traction with analysts and investors looking for growthy E&P names. While HK fits the growthy mold, there is not going to be a significant shift to liquids soon. And as far as gas vs oil goes, a global economic recovery need only be tepid to support oil prices at levels that support healthy IRRs in a play like the Bakken where as pieces of HK's production may continue to border on more break even levels.


Other Stuff

  • Updates of the Orange Charts for the small cap E&Ps will be out mid week.
  • Enercom conference is next week
  • SSN said it had trouble with its next Bakken well, setting the liner packer prematurely. It says the well should not be materially compromised and will proceed with a 20 stage frac. 

Odds & Ends

Analyst Watch:

  • ROSE - FBR maintains outperform
  • DO - target trimmed $2 to $76 at RBC, Sector Perform maintained
  • CHK - raised to Outperform at BMO

107 Responses to “Monday Morning And All Is Wary”

  1. 1
    zman Says:

    I left off the BP spill watch this morning because there really has not been a lot of news. TPH said it best this morning with their “too many cooks in the kitchen” comment. No kidding. Govt wanted topkill, then bottom kill, then wait, maybe bottom kill would endanger topkill and/or release oil that was trapped that we all didn’t think about when the top kill was put in place. OK, so now we will do the bottom kill… maybe… but maybe we want the BOP off BEFORE that operation. Ugh. Rest assured if you want a job done for more cost with a longer time to completion and an uncertain outcome make sure you get multiple branches of the U.S. govt. involved.

  2. 2
    milepost_43 Says:

    Keystone XL faces another hurdle…
    EPA questions plan for Canada-Texas pipeline
    …at the EPA under administrator Lisa Jackson, who has intensified its quest for environmental justice, a movement rooted in the idea that minorities and the poor bear an unfair share of society’s toxic ills.

    Jackson outlined a plan last month to place special emphasis on economic and racial factors in an area when making permit decisions and drafting and enforcing rules.

    Compiling national data

    Part of the EPA four-year plan, which is now open for public comment, is developing a national database to identify small tracts of people as unfairly affected over the years by pollution. The tool would use census data, emissions inventories and other numbers to assign a score to an area, and the score will be included in the permitting process.

  3. 3
    milepost_43 Says:

    #2…missed posting that Port Arthur is the EPA “target”

    The U.S. Environmental Protection Agency says the pipeline plan doesn’t evaluate the potential health impacts on Port Arthur, where one fork of the pipeline will end.

  4. 4
    zman Says:

    Health impacts from a pipeline passing by your property? Hmmm. Sounds like a fishing expedition by an Administration that continues to try to get its way without passing an actual law.

    Watch Analysts Sleep In Watch:

    Looks like not a lot of them made it to work today, this is pretty thin:

  5. 5
    BirdsofpreyRcool Says:

    z — nice summary of the TPH comments on the Macondo well kill blurb. It would be funny… if it wasn’t true.


  6. 6
    zman Says:

    Morning BOP, how’s TED?

  7. 7
    BirdsofpreyRcool Says:

    TED !! Clocking in at +20.7bps. Rekindling “FEAR” of a return to Global Financial Meltdown is just SO yesterday.

    The C Team is manning the desks in NewYork. They won’t want to venture too far out on a limb, so expect credit trading to be more “reactionary” (to movements in equities) than predictive.

    IG +2bps… moving a bit wider as we speak.

    HY -3/8 pt (+10 bps)

  8. 8
    zman Says:

    Thanks BOP

    HAL Watch: 15 well contract awarded by Iraq/Petronas/Shell … lot of talk over the last two years about getting contracts out of there.

  9. 9
    BirdsofpreyRcool Says:

    Funny… i was typing my TED comments just as you were asking, it appears.

    So, with TED all warm and fuzzy again, what should we watch? Keep an eye on the shape of the yield curve. Of course, with ZIP, it would be tough for the curve to go inverted, but continued flattening (using the spread bewteen 2s and 10s) is not a healthy indicator at this point in a “recovery.”

  10. 10
    PackMan Says:

    TED is that 20.7 bps or UP 20.7 bps today ?

  11. 11
    zman Says:

    EOG getting hit at the open again. See note in Catalyst List. Goldman upgraded it around $100 and that was worth about 8 hours of relief. Feels pretty overdone here.

  12. 12
    BirdsofpreyRcool Says:

    TED Spread is at +20.7 bps. That is about 5 bps tighter than where we were last monday. Big move toward “Nothing to See Here… It’s all OK.”

  13. 13
    zman Says:

    That HAL contract is for their Majnoon oil field, one of Iraq’s “supergiant” fields. Looking for a big boost in production from the field. Seeing other contracts coming over the tape there now for other service names, not reaction in HAL now but this is an interesting shift. Jat, got thoughts?

  14. 14
    zman Says:

    SSN question feedback – nothing yet, will keep ya posted.

  15. 15
    BirdsofpreyRcool Says:

    HT pointing out that Fan/Fred discussions this week could be the volatility inducer in the mrkt…

    Govt Summary of Week

    Away from earnings/analyst meetings, the Treasury/White House is going to be hosting a large conference Tues (Aug 17) to explore the future of Fannie/Freddie and the US mortgage market. Congress remains on recess, but Obama will be campaigning throughout a bunch of states ahead of the Nov mid-term elections. Congress won’t come back into session until Sept and there is really only one major issue left for the year – the Bush tax cuts (the Senate has said it will consider the issue prior to the Nov mid-terms but a final solution for this overhang may come down to the last weeks of ’10 if the two sides remain far apart). The Fed will start buying Treasuries on Tues (will be the first purchase under the FOMC’s recently announced MBS reinvestment program). The eco calendar will be pretty quiet in the US although we are going to get the first of the Aug eco releases (the Empire Manufacturing Survey is on Mon Aug 16 and Philadelphia is on Thurs Aug 19) and a bunch of housing #s (NAHB survey on Mon and starts/permits on Tues; also the LOW/HD earnings reports on Mon/Tues will be important for housing sentiment). In Europe, the ZEW surveys for the Eurozone and Germany will be released in addition to the minutes from the most recent BoE meeting. In the rest of the world, the RBA will release its meeting minutes and Japan GDP will be reported.

  16. 16
    zman Says:

    Energy yield continuing to outperform the broader energy space.

    Anyone know what the components are of AMZ, the Alerian MLP index?

  17. 17
    zman Says:

    re 15 – If only all it would go into recess…

  18. 18
    zman Says:

    Also read over the weekend that S&P 500 collective balance sheet has a record cash level. CEO’s not willing to spend in an uncertain environment, hoarding cash, same as individuals at present.

  19. 19
    zman Says:

    BP chart still looks constructive to me. JB, any thoughts?

  20. 20
    BirdsofpreyRcool Says:

    EGY — we should be hearing from them any day, now, as to WHO is the “large, international partner” for EGY’s onshore Gabon concession. Since that concession is currently producing zero, anything that comes of developing it will be accretive.

  21. 21
    VTZ Says:

    Gold back up to the 1224-1227 level that has been revisited multiple times as key resistance and support. Initially it broke past 1224 and then ran into the higher end of the resistance. If it churns slightly lower and then bests 1227 by the end of the week then I’ll consider it a victory although I’d rather see it break above and then retest it as support.

    Most of the shorter term momentum has been regained the bulls so I think it’s likely that they push their advantage to take out resistance.

  22. 22
    Jerome Blank Says:

    RE: #19 updated the BP daily…from multi day perspective BP looks like its setting up to form a larger a bullish ascending triangle, shorter term the 5 and 30 min are trading in choppy waters…

    Zman, thank you for the kind comments regarding the charts last Friday…

  23. 23
    redjack Says:

    BOP…re CIGX: as I mentioned last week, I ordered the product Aug 5. 10 days later (Saturday),I received an order confirmation indicating that they would send me an email when it ships. It seems to me that either business is real good, or they were not prepared for the product introduction.

  24. 24
    zman Says:

    JB – thanks much. When it moves up I would think it would need to get quickly through the recent high for a sustainable rally into the mid to upper $40s to take hold. BP/Govt saying a decision on proceeding with the bottom kill could be made today, then take 96 hours to intersect the wellbore.

    Weighing on the minds of investors there is the fact that out of 8 vacations the first family is taking this summer only one night spent in the region with a single snapshot of the POTUS swimming in the Gulf vs days in Spain, Chicago, LA, Maine, 10 days at Martha’s etc. You have to wonder if CDC was standing by with a mobile decon unit for the toweling off.

  25. 25
    BirdsofpreyRcool Says:

    redjack — thanks for the update. I ordered (3-pack) on Tuesday, Aug 10th, and have not even gotten to the level of the “order confirmation” email.

    I’ll try to get any info i can on order rates, but the company is holding that very tight to the vest (and being professional about it).

    Since inVentiv is handling 100% of the product launch, whatever delay is due to how they chose to roll this out. Informercials are currently hitting the airwaves (so i am told… don’t stay up that late). If people are ordering from the informercials and not getting product for a couple of weeks, that isn’t good. On the other hand, if it works (and it does), then all this start up delay will be forgiven and forgotten at some point.

    Let me know when you get yours… i ordered 5 days after you.

  26. 26
    blackgold39 Says:

    re 24 – Z, I was thinking the same thing for the longer term with BP. I could see them encountering resistance from a fundamental standpoint around 46-48, mainly due to the unknown future liabilities.

    No reason aside from broader market malaise for them to be trading at this level, should be headed north in the coming couple months barring total meltdown of the economy.

  27. 27
    zman Says:

    re 26 – I saw Fadel Gheit comment a couple of weeks ago that once the static kill worked, the stock, based upon current CF and thoughts of liabilities that would play out of a long time frame, should move into the $45 to $48 in short order, so you are in good company with your number.

  28. 28
    zman Says:

    EOG continuing to be the poor cousin during this early Monday mini move in the group and market. Wondering if GS will step up and reiterate their call 8% lower than it was when they put it on the Conviction List last week.

  29. 29
    zman Says:

    Market waking up, HAL starting to. 15 wells is no great shakes but it’s the trickle that will likely become a flow.

    WLL moving better than most of the Bakkens today, good to see that move back towards the recent highs. Still expecting quite the reversal in EOG this week.

  30. 30
    ram Says:

    Re29 – I so hope as well.

  31. 31
    zman Says:

    Morning Ram

    85 to 90% of holdings in ZLT due to weeks just like the last one. All positions in the ZIM were in the green on Tuesday and then the market decided to vomit up some recent gains.

  32. 32
    ram Says:

    Vomit, you are holding back. Good morning to you to.

  33. 33
    tomdavis12 Says:

    Z: C Icahn goes from 2.1M shares of CHK to 12.7M. Aubrey look out for more meetings.

  34. 34
    Nicky Says:

    Morning all. Saw the blip down to 1070 to comlete five waves down. Now we are likely to see a slow drift to the upside over the next week or two to correct the move down. I am looking for the 1106 area on the upside and it could take until 27th but we could also go fill that gap left on the 11th. May play out something like this – up into Wednesday/ Thursday of this week, down into next Monday and then up into the following Thursday.

  35. 35
    zman Says:

    Tom – I came out last for the first time in 2 years so maybe it gets to move now.

    Nicky – thanks much, sounds like pretty boring trading ahead.

  36. 36
    zman Says:

    FPP announced buyback, pumpy, pumpy, hypey, hypey. But watching for Bones Springs comments here sometime soonish.

  37. 37
    zman Says:

    Max pain on EOG is $100. We’ll just see how well that system works this week.

  38. 38
    tomdavis12 Says:

    Z: 35. I know the feeling

  39. 39
    andy Says:

    bop – re 23 dont u think mgt of CIGX shud be alerted to slowness of delivery. my limited infomercial buying was on impulse, and i would think it very important to get delivery quickly before impulse disappears.

  40. 40
    elduque Says:

    Greetings from North. Mn.

    Going wilderness canoeing for 8 days.

    Please have natural gas up at least .50 cents before I get back.

    BDI up again. Note that the Chinese Composite Index keeps rising. I find it somewhat surprising how little our market pays attention to it.

  41. 41
    BirdsofpreyRcool Says:

    andy — our comments about the slow fulfillment have been passed along to mngt this morning. Apparently, inVentiv has outsourced the “fulfillment” function, so I can’t blame either them or CIGX mngmt. But, believe me, they are getting an earful this morning.

  42. 42
    andy Says:

    bop – maybe u can’t blame them , but i sure can. millions spent to launch a product that they can’t deliver timely!!! maybe someone should have looked into that111

  43. 43
    redjack Says:


  44. 44
    ram Says:

    ditto again

  45. 45
    zman Says:

    I’ve seen a number of companies misfire on delivery but later win on the actual product. If there is no competition this is even more the case. Is there competition here?

  46. 46
    BirdsofpreyRcool Says:

    I am just insanely curious as to why the delay? …Snafus? Technical? Procedural? Lack of enuf inventory? Will be interesting to hear what’s going on. Should hear more this afternoon. Will get back to y’all.

  47. 47
    zman Says:

    Crude +/- 20 cents at the whim of the equity markets.

    NG down 13 cents as heat abates in the States.

  48. 48
    BirdsofpreyRcool Says:

    “Competition” = the nicotine patch and “Cha”-something (the perscription stop-smoking drug that has nasty side effects and doesn’t work all that well).

  49. 49
    zman Says:

    Thanks BOP, I was thinking of new school competition being more important than that which has been in place for some time.

    Case in point of some snafus early on in delivery that eventually trounced the bricks and mortar competition. Netflix.

  50. 50
    BirdsofpreyRcool Says:



  51. 51
    DrLink Says:

    RE CIGX In fact if you go to the web site and press “order now” the order page appears but is now not functional. (anyone else try today?) Hopefully demand was off the charts and forced this…….I don’t smoke but was going to buy some for a cousin and use him as a test mouse.

  52. 52
    BirdsofpreyRcool Says:

    DrLink — just emailed that info to someone who knows what to do with it. Thank you.

  53. 53
    redjack Says:

    re 51…Unbelievable!

  54. 54
    zman Says:

    My last off topic for the day: Chantix is probably a better comp but has still been around for years and many hate that stuff. What’s the price point delta on those two?

  55. 55
    BirdsofpreyRcool Says:

    hmmm… don’t know what the price point diff is. Presumably, one could get one’s insurance company to pay for the perscription Chantix. On the other hand, inVentiv is marketing directly to doctors… so, i’m guessing that a script can be written on that too. Don’t know how often one takes Chantix (once a day?). I have a friend who takes about 6 CigRx a day. So, don’t think the useage pattern is the same.

  56. 56
    BirdsofpreyRcool Says:

    Frankly, it’s rather interesting, to be following (literally) the first few weeks of what could be a fairly large product launch. As there was nothing for inVentiv to go on (in designing the rollout), they chose to start in the test area of Richmond, VA. Using that data, which would take several weeks in order to determine “re-order rates,” inVentiv and Star plan design a full-on production schedule for the rest of 2010. I have no idea what the delays and snafus are due to… but, you have to admit, it sure is interesting!

  57. 57
    redjack Says:

    re CIGX…I notice that the promotional pricing has changed since I ordered. If they are anticipating a lot of repeat orders, I don’t think they should be changing the price or promotion within two weeks of introduction. Buy 2 get 1 free reminds me of infomercials.

  58. 58
    tomdavis12 Says:

    Z: Heard that the Port of Los Angeles and the Port of Long Branch had their best volume in two years in July. They do 40% of US volume.

  59. 59
    redjack Says:

    more CIGX…if the product is as good as it seems, they shouldn’t be marketing like car wax. Any yes I own a couple thousand shares.

  60. 60
    BirdsofpreyRcool Says:

    personal opinion… i hate “informercials.” They are the definition of “cheesy poofs” in my opinion. So, it’s an interesting, multi-pronged approach to product placement. Market directly to doctors (high class), through a website (well… it IS the 2000’s now, and that is how people buy stuff), and via informercials (low class, but effective, i’m told).

    Personally, i liked the “free shipping” on the 3-fer deal. But, that’s just cheapskate me. 😉

  61. 61
    zman Says:

    Thanks Tom, still watching the drybulks. Until today they had been pretty rudderless post 2Q, drifting in the harbor, gaining no headway. Today we are seeing a definite move in the names mentioned around here of late:
    ELGE up 7%
    BALT up 5%
    others up a little less

  62. 62
    bill Says:

    balt has been oversold

    egle has 100 % supramax, some tied to spot and this segment doing better than the others

    this week drybulk commentary


  63. 63
    bill Says:

    rates are coming off lows..then there is the russian wheat issue

    Natasha Boyden: …. The Panamax market was also stronger, supported by more grain cargoes in the Atlantic. The Russian wheat export ban is expected to start impacting the market shortly, and should last for 1-2 months. With most exports going to the Mediterranean, we believe consumer countries will source wheat instead from the U.S. and Australia primarily, which should positively impact ton-mile demand. Along with the more positive sentiment in the dry bulk market, period charter activity picked up significantly.”

    More from her at Tonmiletrader.com

  64. 64
    milepost_43 Says:

    #62..thanks…hope your right on BALT..nibbled at the open today….

  65. 65
    zman Says:

    Thanks Bill.

    Added a little equity diversification via WLT to the ZLT a couple of weeks back. Probably going to sell back some older Bakken position and add an oil Service name and a drybulk soon.

  66. 66
    zman Says:

    Group starting to green a little.

    My thoughts on selling during expiry week but also pretty much any time you want or feel the need to sell something. I don’t care what price I bought something for. The market certainly doesn’t. Getting back to even is a losing game. If I can take a 40% hit on an option early in the week (and I see little upside in that week) instead of a 100% hit on Saturday then I’ll do it. In the last week, if a loss is >= 75% I’ll likely let it run to 0 but may add more if I still think it is pop worthy, it has a catalyst or the market does and if the delta still makes it viable for averaging down.

  67. 67
    zman Says:

    Thad Allen – “We need to drive a stake in the well”. Dude, it’s not a vampire.

    U.S. says to decide on bottom kill procedure in next day or two. Ah, the efficiency of committees.

  68. 68
    bill Says:

    Balt got whacked recently when they made a filing to raise 100 m. Q3 rates are weaker than q2 but they have more ships in the water.

    My expectation is that they hold the divy at 16 c for next qtr with a potential for a higher rate in q4

    They have 3 types of ships.

    Supramax and

    Cape rates were lousy in q3 but they are now improving.

    to get to a 40 cent qtrly divy rates for the qtr need to avg

    capes 40,000
    supram max 22,000
    handys 18,500

    we are lower than that now but rates are slowly improving

  69. 69
    bill Says:

    tanker report


    and a report on bulkers

    good reading of pros and cons


  70. 70
    Nicky Says:

    Support at 1077 and then 1075. Resistance is at 1082 and then 1087.

  71. 71
    DrLink Says:

    CIGX order page now works, order went through.

  72. 72
    zman Says:

    RIG flat after being told it can’t pay $1 B in dividends by the Swiss. Sort of interesting chart, and interesting that it recovered from the opening swoon so quickly.

    EOG creeping

  73. 73
    BirdsofpreyRcool Says:

    DrLink — thanks for the update. I see they added a “pick your own quantity” order box that spells out the number of tablets per container and containers per box. That little nugget of info was missing at first. They assumed that EVERYONE knows there are 20 cigarettes to the “pack” and 10 packs to the carton. So, by calling it a “carton” they ass-umed people would know it was 200 tablets per box.


    So, happy to see they fixed that.

  74. 74
    BirdsofpreyRcool Says:

    EXXI feeling the luv, flowing from the Gulf today. Wonder when we start to get updates on DavyJones #2? As a reminder, Netherland Sewell gave the DJ structure almost a billion barrels (104mm BOE net to EXXI). That number is (probably) conservative.

  75. 75
    blackgold39 Says:

    BP looks like a flatlining patient

  76. 76
    zman Says:

    re 74 – pretty sure that’s a November event.

  77. 77
    zman Says:

    re 75 – much like the market. Doing some research trying to stay awake.

  78. 78
    ftc88 Says:

    BOP – re: CIGX. Keep giv’em hell!

    Not auditing systems and not understanding the customer (i.e. # in a carton) are rookie mistakes. Or, they are made by a company (inVentiv) that has reached a big enough size where they are bureaucratic and overlook marketing 101 issues that are not that important for a large pharma client but are critical to a small company like CIGX.

  79. 79
    zman Says:

    TD 5 moved back offshore and is now given a high probability of forming into something with a name. Probably no impact to production but lots of rain in NOLA.

  80. 80
    BirdsofpreyRcool Says:

    ftc88 — not sure who’s to blame here. Probably inVentiv, as they have 100% control on marketing. The website designer is supposed to be one of the Best in the Biz. He/she/it did the website for Lance Armstrong and for the Academy Awards. (or was it the Emmy’s… can’t recall right now). But the point is, THESE GUYS SHOULD KNOW BETTER!

  81. 81
    BirdsofpreyRcool Says:

    ftc88 — inVentive made the unusual move of creating a whole division, just to manage the CigRx account. So don’t think it’s because they think it’s not important. More like, this is the first time (ever) that inVentiv has been in charge of the entire marketing effort for any product. Seems they have some kinks to work out.

  82. 82
    redjack Says:

    re 78….ditto again

  83. 83
    zman Says:

    Thanks for those levels earlier Nicky.

  84. 84
    nifkin Says:

    Vaalco Energy announces farm-out agreement for Mutamba Iroru Permit Onshore Gabon ($5.59 +$0.14)

    VAALCO announced that it has executed a farm-out agreement with Total Gabon for the Mutamba Iroru Permit, onshore Gabon, which is 100% owned by VAALCO. Under the terms of the agreement, VAALCO and Total have committed to reprocess 400 kilometers of 2-D seismic data and drill one exploration well, superseding VAALCO’s prior obligation to acquire 200 kilometers of 2-D data on the Permit. In return for Total funding an agreed portion of the new work program, Total will receive a 50% interest in the Permit. The agreement is subject to obtaining the approval of the Republic of Gabon for the amended work program, including a one year extension to allow sufficient time to conclude the seismic study and drilling operations. Government approval is expected within 30 days. Under the terms of the agreement, VAALCO will remain as operator of the Mutamba Iroru Permit through the drilling of the exploration well. In the event that exploration results lead to a development plan, Total has the option to assume the operatorship of the Mutamba Iroru Permit. Total currently has production infrastructure in place as operator of the Atora field to the north of the Mutamba Iroru Permit.

  85. 85
    zman Says:

    Nifkin – That’s not a bad thing to have happen to you; the kind of thing that will make that stock sit up and get more notice.

  86. 86
    BirdsofpreyRcool Says:

    nifkin — thanks! Total is a GREAT partner to have in Africa. They understand how to do business and get it done. I would have guessed “Total” if pressed to come up with who I thought the Perfect Partner was… but since it’s after-the-fact, now, doesn’t make much difference.

    Good partner. Way to go, little EGY!

  87. 87
    zman Says:

    WHX getting a little pre ex dividend dip, fighting it off OK for now but obviously going to see 74 cents come out for the div this week. I’d be interested to see what the analysts here had to say after this quarter but I’ve only seen one headline so far, from one of the guys who downgraded it after last quarter and that only said he reiterated his underperform rating and $11 target.

  88. 88
    zman Says:

    That EGY is probably an easy run back into the low $6s, mounting list of catalysts.

  89. 89
    BirdsofpreyRcool Says:

    The World is just a Happier, Brighter Place, whenever EXXI is above $17.

  90. 90
    zman Says:

    BOP – it certainly doesn’t hurt. EXXI should benefit along with the other offshore guys when the moratorium is lifted even though they aren’t deepwater guys, may add some more of that and of a non Bakken name soon.

    Also sort of tempted to just add back some of the KOG I sold months ago. At least we know we don’t have a funding gap there now.

    Market having essentially a throwaway day.

  91. 91
    elduque Says:

    z- thoughts about SWN. It has really swooned recently.

  92. 92
    zman Says:

    Banks easing credit on small firms story, says first time since 2006:


  93. 93
    BirdsofpreyRcool Says:

    Non-Bakken, combo of resource and traditional plays, gassy-but-nice-EFS-liquids-acreage… GST.

    Negative = Marcellus acreage too scattered to operate efficiently. And mediocre (to be nice) management.

  94. 94
    zman Says:

    Eld – I own the common for the long term.

    The name is one you can count on to make numbers unless they have infrastructural problems as they did with boardwalk. My sense is that it will languish with natural gas for the short and medium term and I have no interest in playing it with options except on days when it gets hit hard with gas and then only for very short term moves. Their balance sheet is solid but becoming slowly more levered. They did a bad job of hedging this year’s production thinking that prices would rally which has not given them an opportunity to hedge more. I think they are naked in 2011 but will be checking as I go through the Orange Chart data. They are trying to take lessons learned in the Fayetteville to other basins and it looks like Nova Scotia is the next big target with their Haynesville/Bossier stuff likely getting completely monetized, think they have some gray sand acreage that could go as well.

    In the past the stock was driven by production growth gains, a strong balance sheet, falling operating costs, and wells that on a quarterly basis looked improved time and time again in the Fayetteville.

    Now they are slightly outspending CF and while production is going to grow 30+% at least this year and next, the rate of increase in obvious well improvements appears to have slowed and they are all gas, which at present, as you know, is out of favor with the Street. Nearly unhedged and all gas being doubly so.

  95. 95
    BirdsofpreyRcool Says:

    ha! REALLY “non-Bakken” but oily = EGY….

  96. 96
    zman Says:

    BOP – yeah, I know. Got enough single digit midgets at the moment though. I may bite but one of the others will need to exit the building.

  97. 97
    BirdsofpreyRcool Says:

    Any sense of when the TAT Camel Cowboys make kick up something other than dust? Guess the real catalyst is that 4-digit well in the SE (“named” after MM3rd’s original phone number or extension or something like that).

  98. 98
    BirdsofpreyRcool Says:

    make = Turkish for “might”

  99. 99
    zman Says:

    BOP – next 3 months, unless it rains then 4 or 5.

  100. 100
    BirdsofpreyRcool Says:

    Gulf Kids really taking to their Flexible Fliers and pointing downhill. They are running… fast.

    Any particular reason for the afternoon perkiness? Other than, even the Govt can’t screw up the well at this point…

  101. 101
    zman Says:

    MMR and EXXI running together about the same %, could be something to that, everything else looks red or flat offshore (ATPG, SGY, MCF CPE)

  102. 102
    BirdsofpreyRcool Says:

    Ooops. You’re right. Maybe someone finally read EXXI’s reserve report. That was awfully nice of NS to assign them all those jiucy “contingent reserves.” Don’t think people were expecting that many BOEs.

  103. 103
    BirdsofpreyRcool Says:

    EGY trying to jump into the wagon with EXXI and MMR. Go, kids, go!

  104. 104
    zman Says:

    Talk about a much ado about nothing kind of day. Even EOG came back to basically flat.

    BOP – either that or Shiller has loose lips. I didn’t think they had anything even close to TD at this point in the ultra deeps though, must be something shallower or just a rumor.

  105. 105
    zman Says:


  106. 106
    BirdsofpreyRcool Says:

    EXXI closed above $17.

    And the Mice form a circle and sing Kum-by-Ya … while passing around the packet of CigRx tablets. All is Right with the World.


  107. 107
    zman Says:

    More hedge fund names coming across that added to energy in 2Q, Singh, Mindich, Soros.

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