31
Aug
Tuesday Morning – Gas Supply Slide Show For June Plus Some Other Thoughts
Market Sentiment Watch: Another weak open for the broad markets is on tap as all eyes take notice of mid importance level economic data with a real focus on the Payrolls data on Friday. And the approaching three day weekend. By Friday afternoon you should expect three interns and an organ grinder to garner most of the trading on the NYSE. In energy land all is mostly quiet.
Ecodata Watch:
- Case-Shiller home prices come out at 9 am EST,
- We get Chicago PMI (F = 57%) at 9:45 am EST,
- And Consumer confidence (F = 50.0) comes out at 10 am EST
- This afternoon we get FOMC minutes for the August meeting.
In Today’s Post:
- Holdings Watch
- Commodity Watch
- Natural Gas Supply Slide Show - Not so bad as we have become used to.
- Stuff We Care About Today – Gassy players hedge protection, SSN, HAL
- Odds & Ends
Holdings Watch:
- ZCAT (Zman Catalyst portfolio):
- $5,200
- 100% Cash
- Yesterday’s Trades:
- None
- ZIM (Zman Inefficient Markets portfolio)
- $5,600
- 19% Cash
- Yesterday’s Trades:
- None
Commodity Watch Crude oil eased $0.47 to close at $74.70 yesterday, giving back part of Friday's bump up with a weak, weak, weak looking equity market. This morning crude is trading off about a buck with weak equity futures.
- Early Read On Oil Inventories: (from the Bloomberg survey)
- Crude: UP 1.5 mm barrels
- Gasoline: DOWN 0.25 mm barrels
- Distillates: UP 1.0 mm barrels
- Crude: UP 1.5 mm barrels
Natural gas rallied $0.11 to close at $3.81 yesterday. The rally came before the EIA 's release of supply data for the month of June (see below) and was sustained into the close of NYMEX and early overnight. The data can be summed up as "not so bad". This morning gas is trading up slightly.
- Tropics Watch: No current threat. Hurricane Earl is now a CAT 4 storm and may wing the East Coast before heading to the north east Atlantic. Fiona is just getting started but is forecast to take roughly the same track.
The Natural Gas Supply Slide Show
ZComment: Not a bad report. And it's been quite some time since I could say that. First the quick and dirty slides, then the longer format slides with corresponding rig counts and more detailed commentary.
Key Points:
- U.S. gas rig count has stalled after rising for months.
- This has helped to slow supply growth and in the most recent month, curb it slightly.
- I would not expect a sharp reduction in supply but more of a gently sliding plateau.
- Production is still well in excess of where it needs to be to meet demand but price is taking care of that...slowly.
Stuff We Care About Today
Gassy Names (for reference)... musing about who may have a near term problem if gas prices don't recover much this winter.
- I took a look at a number of gassy names as seen here:
- SWN is all gas and as I wrote in comments yesterday they come to mind first when asked who suffers the most if gas prices are weak for an extended period. Note that they have one of the weakest hedge positions (see list below) among their peers and the current sub $4.50 strip would involve them reversing course on prior statements and adding volumes at levels that to date, management has not found palatable. I see them instead waiting for a storm or cold snap related rally before significantly adding to their 2011 hedge sheet. I expect these guys to cut capex in the second half or at least show a deceleration in 2011.
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- Note also that 2011 is not as devoid of hedges as you'd guess and some names like HK, UPL, and RRC are ahead of the game in locking in next year's prices. Given the fall those names have had, I would not be looking at a short side trade there. RRC also stands to benefit from east coast pricing.
Other Stuff
- Cash Is King Watch: SSN - at present, assuming the deal goes through a week from today, net cash (cash less debt) on the balance sheet will account for 57% to 75% of the current price of the stock. They have done' another small Bakken acquisition so it may be somewhere shy of that but not by much.
- SSN - reported that their next Bakken completion, the Gary 1-24H, suffered a minor set back and will now be completed mid September instead of this week. It's non-news but since they are Australian they have to report it.
- Catalyst List out tomorrow.
- HAL Lands Another Iraq Contract. Not that we're counting but that seems like two contracts in as many weeks. This one is for Eni for multiple services in the Zubair field in southern Iraq. No contract terms ($ or length) were provided.
Odds & Ends
Analyst Watch:
- Nada
z — thank you for the natty gas update. One observation, however, either HK didn't do a very good job picking nat gas futures for their 2011 hedges at 55¢… or, there is a number missing there. 😉
August 31st, 2010 at 7:50 amGreat report.
August 31st, 2010 at 7:53 amMany thanks.
BOP- you are so picky.
August 31st, 2010 at 7:53 amelduque — i own some HK… so, don't think i'm picky enuff! ha.
August 31st, 2010 at 8:02 amOoops. Corrected. $5.55 for 2011.
Case Shiller – prices up 1% vs last month, up 4.2% YoY.
August 31st, 2010 at 8:07 amRobry showed flatish production increase for June but it soared in August growing more than 3.6 bcf suggesting producers can turn on the spigot to meet increase demand .
http://investorvillage.com/smbd.asp?mb=2234&mn=310583&pt=msg&mid=9459069
He shows a leveling off in August last 3 weeks
August 31st, 2010 at 8:07 am08/06/10….63.21….64.10….64.88….64.58….65.12….65.37….64.51….451.76
08/13/10….64.39….64.64….66.10….65.81….66.21….66.17….64.82….458.14
08/20/10….63.73….63.72….64.55….65.21….65.33….65.26….66.30….454.10
08/27/10….63.63….64.01….64.89….65.17….64.52….64.83….64.48….451.55
chk manufactured 2011 hedge position by buying ( in essence) puts at 7.60 and selling tons ( 1 tcf worth of calls for 2014 to 2020 to pay for the put premium
August 31st, 2010 at 8:11 amTakes the issue of the table for them for 2011
bill — your accounting insights are invaluable. thank you for pointing all that stuff out.
August 31st, 2010 at 8:15 amyou thinking about ATPG? It scares the dickens outta me…. but if they can get money in the door for Titan, i figure they just bought a year.
Re 6 – I just don't see that happening. There has never been that kind of real world behind pipe capacity just waiting to be turned on outside of a hurricane and we didn't have one of the those.
August 31st, 2010 at 8:33 amWhy it is tough to turn too bearish here… from a morning summary —
August 31st, 2010 at 8:40 am——————————————————————————————–
Bond Market Update – Today is the last day of August and new bond issuance for the month is about $70bn so far. August is usually the second slowest month for issuance (December is the lightest) yet this year August issuance exceeds that of the prior 5 months. Despite this, there are a couple of reasons to believe issuance in the next couple of months will be heavy.
Funny, i was in ATPG at 18 and not in it at 12
August 31st, 2010 at 8:40 amIt scares the dickens outta me too.
Its a race to see what happens first, running out of cash or getting the oil out of the ground to keep everyone happy.
Wildcards..new govt rules..can an underfunded pipsqueek play in the gom?
Your analogy of a few weeks ago like driving 100 m per hour and not running into a ditch is a good one
Monetization is good and bad. good they have something to monetize.. bad they had to do it.
On the Gomez pipeline they monetized 50 %. The investor GE, gets 13 % guaranteed and atpg keeps 100 % of the operating cost. What kind of partnership is that?
Interest exp is 64 m per qtr and atpg is forecasting 5.0 m to 6.0 boe production for last 6 months of 2010 At 5.0 m int exp is over $ 25 boe.
Gross revenue mix between gas/oil is less than 50. so half the rev is going to cover int expense
These hi debt companies you have to look at free cash flow not EBITDA
i think you told me the debt was trading for 18 %. They got lucky getting the last deal done days before the BP disaster
Oilis getting weaker now low 70's and they are not fully hedged. I think MMR exxi pxp wll are better plays
Now all that being said, they have alot of fans and any news on monetization or drilling rules getting better atpg pops but as you said not marriage material more like a one night stand, lol
#10 is also why the ATPG Titan monetization will get done too. Lots of cash, looking for places to perch in the fixed income market.
August 31st, 2010 at 8:41 am9 appreciate the comments, trying to understand it myself..if he is overstating supply then he is overstating demand as he ties it all out in the storage numbers
August 31st, 2010 at 8:43 ambill — you summed up the situation perfectly with your 2nd point "Its a race to see what happens first, running out of cash or getting the oil out of the ground to keep everyone happy." Says it all.
August 31st, 2010 at 8:45 amGE got 13% for that pipeline cash???!!! Wow. Let the lung rippage begin. Think my 12.5% assumption on Titan may be low. Nice for GE, tho. wowsters. ATPG 144a Sr bonds trading around 17.5%
Odd action in WLT early.
August 31st, 2010 at 8:46 am#15 — it's month end… suspect we see some weird (pricing) moves in stocks today. Given that the Big Boys (HFs) actually added to their E21 positions in 2Q, would not be surprised to see them try to goose pricing into close.
August 31st, 2010 at 8:48 amJust a little game hedgies play, when they can. Helps the marketing pitch in Sept.
… and — on the reverse side of the pricing game coin — would not be surprised to see ATPG go out at the low today. Given the huge short interest involved.
August 31st, 2010 at 8:49 am… 'course, I reserve the right to be completely wrong… about everything. There just aren't many rational humans manning the trading desks at this point (as z pointed out first thing this morning).
August 31st, 2010 at 8:53 amYeah BOP, very mixed bag out there today. I'd rather keep the market lowish into numbers on Friday and then get the slightest beat providing a pre holiday thin volume rally.
WLT up 4%. Almost all the coals up strong, but not that strong. Must be some China comments out there.
August 31st, 2010 at 8:59 amCIGX prediction… will end near the low of the day too. Short more active than longs right now.
August 31st, 2010 at 9:00 amConsumer confidence bettern expected. Well… knock me over with a feather.
August 31st, 2010 at 9:01 amConsumer confidence jumped in August. Hits 53.5 vs a forecast of 50.0. Now that's odd.
August 31st, 2010 at 9:02 amZ: Thanks for your overnight NG chart work. Great as always. Is there any signal that would get you to try and make money from the short side. I know you are not negative. Crude below the 70.76, S&P below 1038, or negative call from Nicky?
August 31st, 2010 at 9:07 amRe 19, what are you seeing? I'm not.
August 31st, 2010 at 9:09 amJat – I see nothing, but stock up $4 (6%). Odd. I own some in the ZLT but no options. Just a little strange it's running that hard.
August 31st, 2010 at 9:14 amTom – I'm pretty wary of the broad market at the moment. On energy I'm pretty oily but I do see a coming trade 1) offshore and 2) in natural gas. I have a distinct feeling NAM service has an up move of moderate size before a bigger downward move next year. Re puts, I have been thinking more about that and I think that comes out of Nicky's work and of paying closer attention to what the Street is liking vs what the Street is abhoring.
For instance, I should have gone puts on EOG (due to the capex bump) instead of calls (due to the increasingly strong long term picture). But I figured the market would sort through the spending hike, see how it was different than others and weight that against projected cash flow and their balance sheet and get over it. This market is not that contemplative.
August 31st, 2010 at 9:22 amVery lackluster trading. Oh, I see the U.S. Open started.
August 31st, 2010 at 9:32 amI'm still waiting to make my 2nd half purchase of EOG. Glad to hear you think they have an "increasingly strong long term picture". Like to hear more about that. Fortunately(or not) I'm better at averaging down than up.
August 31st, 2010 at 9:36 amBill- shouldn't the shippers be showing some improvement given the upticks in the BDI and strength in coal and iron ore? My NM and DSX has really been dead money.
Cargo – there was nothing wrong with that quarter that people who track the company didn’t know about. The oil volumes being on the low side was part of completion timing, and they should have known about that. The long term picture there remains strong, probably 19% production growth for 2011 and 2012, more liquids rich than ever in their history and still a strong balance sheet with <= 25% debt to cap. What more do you want than that?
August 31st, 2010 at 9:41 amDislocations in the market make for opportunity, there is just this quirky thing called timing.
August 31st, 2010 at 9:45 amHear ya on that. Market not giving much credit to those confidence numbers.
NBL gave back most of it’s bounce yesterday, continuing higher today. Thanks JB for your comments there.
August 31st, 2010 at 9:49 amVQ – trickling higher, despite its statehood.
August 31st, 2010 at 9:49 amSTRATFOR’s current views on Iran:
http://www.stratfor.com/weekly/20100830_rethinking_american_options_iran
Rethinking American Options on Iran is republished with permission of STRATFOR.
August 31st, 2010 at 9:50 amThanks ratberto
August 31st, 2010 at 9:51 amCargo
Check out this site daily to get a feel for the dry market
http://www.tonmiletrader.com/
Yes, it has been dead money
Factors impacting the dry bulk stocks are
1. Overall stock market
2. Fundamentals in sector
3. catalyst in stocks
4. To some extent debt levels (leverage)
1.the overall market has been down
2.Rates last few days have been flat to 3.down, good news off their lows.
The best relative rates has been in the smaller sizes. EGLE is a pure play in this segment
The capes need to be above 40 k , currently 33 k
Now companies like NM and DSX get killed due to market moves ie reasons # 1 & 2 even though as NM ceo put it, rates could go to zero and it wouldnt affect thier operating performance in 2010 as they locked in 99 % of the available days.
DSX ( I don’t own) is a bargain in the 12’s, imho.
There is a good supply of ships and more are being delivered
August 31st, 2010 at 9:51 amcurrent commnetary
Drybulk market tracking Chinese domestic steel prices, weekly decline continues. Domestic steel prices in China have declined for a second consecutive week, signaling the market continue to be well supplied..Chinese steel inventories currently are at 81 mt vs 90 mt at all time high earlier this year. This equals an inventory turnover of 1.2 months compared to the 25 days said to be a normal level.
so they seem to be well supplied..
Urs Dur: Dry Bulk: A stall here awaiting new quarterly iron ore pricing. Chartering of Capesize ships stalled August 25th (for loading early/mid September) and pricing for spot Australian 62% Fe content iron ore began to drop from near $150/ton. We would expect the quarterly price for iron ore to be set at ~$120/ton and we feel that loading any higher-priced ore today ahead of 4Q may look less attractive, especially as Capesize ship spot rates have surged of late. We expect a stable-to-softening BDI for the week ending September 3rd. With any nearer-term softness, we like strong balance sheets with extensive contract cover to weather any storm and offer long-term upside exposure to the world’s developing economies. Favorites for next week in the dry bulk space are DSX (no debt) and NMM (high-yield,
August 31st, 2010 at 9:55 amRE: ATPG
How does ATPG mgmt. get away with not reporting material issues like prodcution, or lack therof, etc.
Their debtors are obviously in possession of the material information on production to make loans and continue to hold ATPG’s paper.
The absence of transparency to the retail investor in this climate of market & regulatory uncertainty would seem to justify the short case.
August 31st, 2010 at 9:55 amBill- thanks for the continued insight in shipping. I guess I’m long term in DSX, like it or not. Luckily it is a good company. Prices of these shares will likely move when they increase dividends again since many of us bought for that reason.
August 31st, 2010 at 9:58 amIn some respects the drybulk market is like the nat. gas. market. Both suffering from a current oversupply and a perceived oversupply into the future.
August 31st, 2010 at 9:59 amLikely to take a shot at NBL later. Still going through analyst day materials.
August 31st, 2010 at 10:00 amHow long does KOG remain in the dead money category? Or another way of asking the question, is when do we get some catalyst to move the market.
August 31st, 2010 at 10:03 amIt is astonishing to consider that many of the new buildings in China are empty and they continue building. The Great China Real Estate Bubble. And we are all connected to it one way or another.
August 31st, 2010 at 10:05 amcrys — #37 is why JohnsonRice dropped coverage on the company. (And partly why I didn’t hear any positive comments on mngmt… or their working relationship with The Truth.)
On the other hand, they do have some production tigers by the tail and are trying to hold on, by any means possible. And a couple of directors bought some token amounts of stock at the beginning of june.
Yep, these guys are driving 100 miles an hour… but they have their equity holders in the backseat blindfolded. Makes the ride even tougher. Bankers get to sit in the front seat and stare out the window. But the fact that bankers demanded 11% on their 1st lien money means they holding onto the dashboard with both hands.
Getting Titan money is the difference between staying on the road and lights out, for ATPG… but given the credit environment, I do think they get the funding. It’s only a matter of how many pounds of flesh they have to give up to get it. Methinks it will be a lot.
August 31st, 2010 at 10:06 amGold has broken far enough above 1245 that I’m confident that a new alltime high is imminent.
August 31st, 2010 at 10:06 amZ: Did you see any confirmation of the Israeli newspaper report that their Mediterranean discovery is expected to be 4.2 billion barrels. This is NBL news. Was supposed to be out yesterday.
August 31st, 2010 at 10:10 amre 41: KOG into the russell 2k index tonight on the close- expected to generate 1.9M shares to buy on the close (index funds who track the index must buy)
August 31st, 2010 at 10:19 amBOP,……..re ATPG:
Great Analogies………you missed your calling as a ‘WRITER’ and ‘AUTHOR’.
August 31st, 2010 at 10:22 amRe KOG – thinking it’ll take a little more time and bouncing oil. The rest of the Bakkens are taking a pause as well.
NBL – No confirmation, will get back when I get to the Israel section of the operations review. I had heard something about an oil leg there before but nothing of that scale.
August 31st, 2010 at 10:22 amWLT just keeps rallying, anyone see a broker note there?
Thanks Nifkin
August 31st, 2010 at 10:26 amNBL links – one is Delek (partner int eh well) other is the Isreali press article (both yest) http://ir.delek-group.com/phoenix.zhtml?c=160695&p=irol-newsArticle&ID=1464492&highlight http://www.globes.co.il/serveen/globes/docview.asp?did=1000584716&fid=1725
August 31st, 2010 at 10:29 amEOG-cargo, you prob have seen the latest EOG presentation (8/5/2010) but here it is:
http://www.eogresources.com/media/slides/InvPres_080510.pdf
-couple of things really stand out for me:slide 4-Bakken, Eagle Ford, Barnett Combo prob rank #5,#6,#17 resp of all US giant oil fields-EOG has been early in all three
and as Z has pointed out, shifting to crude production growth, slide 7-looks like they have pretty much given up on NG out thru 2012.
FWIW: EOG price has been tracking the NG flush for the last several weeks-BOP’s idea yesterday:
http://stockcharts.com/h-sc/ui?s=EOG&p=D&yr=0&mn=6&dy=0&id=p89613724486&a=207494080&listNum=14
August 31st, 2010 at 10:33 amRe 50 – Just listening to the portion of NBL analyst conference from June that covers Leviathan. They have not spud a well yet and they were characterizing the deeper target that may be oil as “very low probability”. So first, there is nothing to confirm as we haven’t begun turning the bit to the right yet.
August 31st, 2010 at 10:35 amlooks like bhp settled some met contracts with nippon steel
August 31st, 2010 at 10:36 am209/t
August 31st, 2010 at 10:36 amVTZ 44- What time frame are you thinking? Would appreciate your short-term (couple months) and longer-term views. TIA
August 31st, 2010 at 10:36 am#51-disclosure:I’m up to my eyeballs in EOG at much higher prices but I am not bailing-maybe sell some calls.
August 31st, 2010 at 10:36 amZTRADE – ZIM – MMR
MMR – Added back the (25) September $15 calls for $0.36 with the stock at $13.80, taking us back up to (50) of the $15s. I continue to hold the $14 Septembers as well.
August 31st, 2010 at 10:39 amThanks Jat.
August 31st, 2010 at 10:42 amNBL comment on one of their plays
(the Aseng Field)
Avg Porosity 26%
Perm = 5 darcies.
Sheesh. After looking at so many cruddy reservoirs that are the “shale plays” you get used to seeing much weaker numbers. Kind of like the difference between dribble and a fire hose.
August 31st, 2010 at 10:47 amcrys — #47… file under: Mutual Admiration Society. Your technical updates are da best!! Keep them coming. You are a great help to the site. Thank you.
August 31st, 2010 at 10:49 am(i’d say “da kine”… but, have to leave that to our Hawaiian colleagues… I don’t have the geographic authority)
August 31st, 2010 at 10:51 amcrys — other than you and I… any other EGY-ers out there? Just curious…
August 31st, 2010 at 10:52 am(KOG will rise from the ashes… it’s just underperforming EGY right now. But, no worries there. FWIW. Just need to get over the irritation of Bankers Exercising Shoes and Then Letting the Stock Crash. THAT will put a burr under ANYone’s saddle!)
August 31st, 2010 at 10:54 am50 Thanks Nifkin
August 31st, 2010 at 10:57 amListening to the NBL exploration presentation at the moment, which will cover the Niobrara.
VTZ – Gotta say way to go on your gold call. Way to stick with it.
August 31st, 2010 at 10:59 amAlhambra – Could be as soon as next week that we make the new high and I think that the entire fall/winter looks really bullish for gold. Would not be surprised to see a move to 1350 by the end of the year or sooner.
In the longer term I believe that by the middle of next year we may have seen 1500-1600. Before the end of next year we will probably also have the first significant pullback in a long time either down to around the ~1225 level or in a more unlikely scenario all the way to ~1040. However, I still don’t see gold ever falling below 1000 again (I was laughed at when I said that when India bought at 1040 and the last time I said it).
I am expecting the equities to continue their August move and they still have a lot of catchup to do relative to gold price. Over the past several years gold equities have traded much higher in terms of HUI:gold price. Right now the equities could increase by 30% and they would not be overvalued in my books. The majority of my gold/silver-related holdings are in equities, in juniors and midcaps.
I also think that silver has a big breakout at some point but then it will probably not appreciate as much as gold will. I still want exposure right now though until I see what the action looks like in the mid-20s.
August 31st, 2010 at 11:00 amratberto-very interesting link to strafor research. You happy with your membership?
August 31st, 2010 at 11:01 amI also agree with those that say that 2000, or 2500, or *insert obscene number* is possible within 3-5 years.
August 31st, 2010 at 11:03 amVTZ- I own CEF which is a Canadian horde of silver and gold. Any thoughts on this as a play on the metals?
August 31st, 2010 at 11:09 amIt’s the best if you just want exposure to the metals appreciation as safety, but I would recommend equities if you want to speculate that gold and silver are going to appreciate.
August 31st, 2010 at 11:13 amThanks VTZ, have you lightened your holdings in bullion for equities?
August 31st, 2010 at 11:16 amCargo,
August 31st, 2010 at 11:20 amI think George Friedman and his STRATFOR gang do a nice job and are very thoughtful. I never got around to subscribing (I would rather subscribe to ZEB!); I just get the free emails. But have followed for about four years.
research question… does anyone have access to the Oppy report on ANM (Canadian) from 8/9? Friend is asking about it…
August 31st, 2010 at 11:22 amKOG at $2.50. That is an antelope just LOOKING to be picked off from the herd, imho.
August 31st, 2010 at 11:24 amRE 71 – I’ve always held more equities than bullion but all new money goes to equities. In reality I only have 15% of my metals position in bullion or bullion equivalents like CEF.
August 31st, 2010 at 11:29 amOil off $2, not sure of the driver for that aside from fear. Dollar is actually off slightly.
Obama Admin imposes new ethics rules for offshore inspectors. Whew! That’s a relief!
August 31st, 2010 at 11:54 ambop – EGY – am w/u.
August 31st, 2010 at 11:55 am#33 a reasonable analysis. However I question the likelihood of such a subtle thought process occurring at the WH.
Like the author, I see no sign of any drop in Iranian influence in Iraq. The government is and will be by the Shia and all Shia factions are heavily Iran influenced and backed. With US forces being reduced, how will the US counter Iranian influence? The only thing that comes to mind is getting heavily behind the Sunnis (i.e. Saddam’s mob) which would both be ironic in the extreme but also be very unlikely to succeed.
Also, Friedman forgot to mention that is is usually assumed:
– Iran would respond to an attack globally and asymmetrically, including in the US.
– the idea of limiting the action to a land war is unrealistic. The only way of shutting down all the anti-ship missiles would be for a land invasion of Iranian territory near the Gulf.
So the risks are very high. Obama is risk averse. Palin not so much I guess.
The recent crescendo of war talk looked like it was building up to something. As it turned out, what it was building up to was … even more war talk in the form of a big article by Jeffrey Goldberg in The Atlantic.
The blatant propaganda aspect of the article, in which Goldberg was simply a vehicle for Israeli psychological warfare, seems to have been so obvious that it took the wind out of the issue. Indeed the recent peak in crude more or less coincided with the Goldberg piece.
August 31st, 2010 at 11:58 amBOP…EGY here
August 31st, 2010 at 11:59 amandy — thank you for playing! (And reminding me.) You going for the whole cow, or just the filet, on this one? (Whole cow = hold into mid-6s, steak dinner = sell at 5.80.)
August 31st, 2010 at 11:59 amVTZ – do you have any thoughts on Newmont Mining? I’m thinking of adding to a position there.
August 31st, 2010 at 12:07 pmredjack — thanks for putting your hand up. Looks like we are getting close to Steak Dinner level… after $5.80, all bets are off.
But, I am holding here… too much cash on the BS and liking their JV with Total (and all that implies). And Crys does a superb job of keeping us up on the science and engineering. So, planning on hanging out for a while.
August 31st, 2010 at 12:10 pmFinished listening to NBL. Mulling. Don’t feel like rushing about at the moment.
Interesting, insightful comments D on the Iran/Iraq situation.
August 31st, 2010 at 12:18 pmBarclays out with the four most vulnerable large cap producers to a continued slide in gas price expectations (I know right, what are the odds that he publishes it today?) …. ECA, RRC, SWN, UPL … Their worst case scenario has these stocks falling 20 to 60%. No mention of hedges in the blurb I have access to.
August 31st, 2010 at 12:21 pmZ – I’d like to think of a Star trek analogy for the Middle East but you’d need all the alien races to appear in a single episode, plotting and scheming against each other 🙂
August 31st, 2010 at 12:25 pm#85 Oh yeah and they would all be different, but somehow all look the same. Difficult for the scriptwriters.
August 31st, 2010 at 12:30 pm85, 86. Afghanistan doesn’t sound much better. Will send a note to Italyinvestor to see how things are going.
August 31st, 2010 at 12:36 pmEGY — pass the A-1, baby’s gonna eat well tonight!
August 31st, 2010 at 12:38 pmNext up, KOG.
Hey! batter batter batter.
August 31st, 2010 at 12:41 pmREX energy… REXX, up over 7% on above avg vol, interesting daily chart, breaking out above long term channel resistance…
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
August 31st, 2010 at 12:46 pmJV with Sumitomo for Butler county acreage
August 31st, 2010 at 12:47 pmJB – Thanks, that’s not one I have a great deal of affection for but it has been known to run hard and fast.
Question for you when you get a chance. Part A) Can we get your top 5 charts in the energy space now? Part B) Of SWN, RRC, UPL, and ECA who do you like best from a TA standpoint?
August 31st, 2010 at 12:49 pmMMR – looking at the minute chart that one wants to run again.
August 31st, 2010 at 12:50 pmBOP I’m with you again on KOG, just hit a $2.50 ball to second base…..looking for another swing if it drops lower…..
August 31st, 2010 at 12:51 pmRe 92, Best or Worst?
August 31st, 2010 at 12:52 pmRam – good of you to ask for a clarification. I meant “Best”. If Driscoll of Barclays, the biggest gas perma bear of them all, is going uber bearish than I figure it’s time for a bounce, probably in the commodity first and then the names.
August 31st, 2010 at 12:57 pmMM will not let go at 2.50…still waiting.
August 31st, 2010 at 1:00 pmfwiw, just met with a utility that does ~9mln tons of coal a year. Uncontracted on the met side, and they said met negotiations which typically happen in Oct/Nov for domestic steelmakers are happening earlier than usual this year, as the domestics want to lock it up, fearing a loss to export markets…
August 31st, 2010 at 1:01 pmRE 96, thanks, I feel more relaxed now.
August 31st, 2010 at 1:02 pmI must be waiting in line with others that want 2.50.
August 31st, 2010 at 1:04 pmJat – Do I understand you to be saying that domestic mills are looking to lock in prices now before big additional slugs of demand hit from China this fall? Thanks for the color.
Re 99. Glad to be of assistance.
August 31st, 2010 at 1:05 pmFOMC minutes:
Several members saw need for further stimulus.
No member saw a big risk of deflation.
August 31st, 2010 at 1:06 pmram, I got tired of waiting and cleared at 2.51 in nanoseconds
August 31st, 2010 at 1:13 pmof course then it goes down to 2.49 memo to board- follow Z don’t follow me.
August 31st, 2010 at 1:17 pmDrLink — just heard from a buddy who gave some CigRx to a smoking friend… “It works.” Is all he said. 🙂
August 31st, 2010 at 1:17 pmZ – notwithstanding your earlier comment about puts, do you think EOG is too beaten up here?
Do you have their gassy percentage at hand?
August 31st, 2010 at 1:17 pmskimo — it’s not nice to pick bottoms in public. You did just fine! Thank you for sharing!!
August 31st, 2010 at 1:18 pmFILLLLED!!!!!!!!
August 31st, 2010 at 1:20 pmRe 101, that’s what this utility said. They’re a coal producer of course, talking their book.
August 31st, 2010 at 1:20 pmOK, Thanks Jat. That price mentioned earlier sounded low by the way.
Ram – congrats.
D – Re EOG, it was 73% gas in the most recent quarter, on the way towards balanced in the next 2 years.
August 31st, 2010 at 1:25 pmram — you GO, guy! Thanks for sharing.
August 31st, 2010 at 1:29 pmnah the price is right bob:
Quarterly contract prices for hard coking coal were concluded between the
BHP Billiton-Mitsubishi Alliance and Japanese steelmakers late Monday at
$209/mt FOB Australia for October to December, down 7.1% from $225/mt FOB over
July to September, several market sources claimed late Monday.
The price of $209/mt FOB would apply to BMA’s top brands, Peak Downs and
Saraji, which are typically used as a reference in contract talks. This price
is higher than most participants in the coking coal market had anticipated,
but it is still about $5-10/mt below recent spot deals into China for such
material.
BMA’s slightly lower grade premium hard coking coals Goonyella and
Riverside were reportedly priced at $205/mt FOB, hard coking coal Norwich Park
at $195/mt, and semi-hard coking coal Gregory at $190/mt, sources said.
Similar prices for the fourth quarter are now expected to be offered to
other steelmakers in Asia, Europe and elsewhere.
No official confirmation could immediately be obtained from BHP Billiton
or Nippon Steel. A spokesman from JFE Steel declined to comment.
Coking coal contracts with Japanese steelmakers typically have tonnage
fixed annually, and prices negotiated bilaterally every quarter. This is
different from iron ore, which is mostly sold in contracts which are linked to
spot price indices. Iron ore is the other key raw material used in
steelmaking.
After falling almost continually since mid-April, spot prices have risen
August 31st, 2010 at 1:36 pmby around $12/mt, or 7%, over the past three weeks to reach $188/mt FOB
Australia on Thursday, Platts data showed. This price relates to mid-vol
coals.
This market reminds me of this guy.
http://www.youtube.com/watch?v=tM4eIBs8WBw
The 12 pack he’s trying to buy represents more Stimulus.
August 31st, 2010 at 1:38 pmThanks BOP, we are on same wavelenghth, I mailed my cousin some yesterday, he is bad smoker…i should hear by Thursday
August 31st, 2010 at 1:39 pmThanks Jat, prices are little hard to come by. Is there a spot quote on bloom?
August 31st, 2010 at 1:39 pmRe EOG – yes, I think it is overdone, as I did $10 higher than hear. As Goldman did (or said they did) at $100.
August 31st, 2010 at 1:40 pmNothing’s perfect on bloom for that. You can find a bunch of chinese prices per metric ton which appear slightly higher than the BHP ones, once you convert into USD, but I don’t really know what the differences in terms of grades etc are.
August 31st, 2010 at 1:48 pm#113 — Wow. Wonder if he rode his bike to the store….
August 31st, 2010 at 1:49 pmI guess I was a little early on the KOG.
August 31st, 2010 at 1:52 pmThanks again Jat.
BOP – I think it is safe to say he didn’t get there by walking, lol.
August 31st, 2010 at 1:53 pmAugust NYMEX closed
NG down 23%
August 31st, 2010 at 1:55 pmOil down 9%
MMR: an enthusiastic friend’s musing: days/ weeks to BB Hill and hen BB East. BBH “best sands” Jimbob ever saw; BBE 10,000 ft miocene sands with 25% porosity; BP’s well was Miocene with 80 ft. of pay, very sweet crude.
August 31st, 2010 at 1:55 pmPopeye — #119 right there with ya, bud. Still gots my $2.65 shares. But, you picks your price, you plays the game. EGY went down, before it went up too.
Keep repeating, “this is a crazy market.” And this is also the lightest volume week of the year… on top of being a crazy market.
August 31st, 2010 at 2:02 pmJPMo announcing they are shutting down their commodities prop desk, to comply with the Volker Rule.
Might have something to do with vol in the crude mrkts….
August 31st, 2010 at 2:03 pmThanks RMD, glad you made it in.
August 31st, 2010 at 2:23 pmBOP – Interesting, they cut their target on crude for 3Q yesterday.
August 31st, 2010 at 2:30 pm#126 — ha! Guess the desk was net short….
August 31st, 2010 at 2:33 pmBOP – thanks for pointing out 124, I had not seen it, I was just chaulking that one up to thin market volume weirdness and weak technicals.
August 31st, 2010 at 2:38 pmVTZ………Sliver Miner
You might find FRMSF or FR.TO interesting. Currently own & operate 3 Mines all in Mexico, and more mines coming on stream. will produce 6 million Oz. of Ag this year.
They execute well on their mining plans.
IMHO have lots of upside, as they are increasing production steadily, and even mint their own bullion and coins (accounts for 10% of production).
Well financed and growth financed out of generated cashflow.
A ‘CLASSY’ Junior.
August 31st, 2010 at 2:39 pmI hold some First Majestic and have also bought silver off their site.
August 31st, 2010 at 2:46 pmMMR – late day institutional buying.
August 31st, 2010 at 2:51 pmummmmm — z…. nice timing on those MMRs. Quite an end of day run.
August 31st, 2010 at 2:52 pmRe 130, VTZ, is that the closest you can get to spot prices?
August 31st, 2010 at 2:54 pmMMR (and to a lesser extent, E21) should keep us in a constant state of amusement, from now through the end of the year. With 3 deeop wells drilling and one permit to announce soon, JimBob could be back to “one PR a week” mode. Never a dull moment, with those guys.
August 31st, 2010 at 2:55 pmFMRSF had quite a run, you expect this to continue?
August 31st, 2010 at 2:56 pmRE 133 – Sometimes they have “specials” if you register on the site and you can buy for a $0.50 premium to spot. That’s pretty much as good as you’re goign to get.
August 31st, 2010 at 2:58 pmSeeing some headlines about crude being down on end of month liquidations. If that is the case, should see a rebound tomorrow.
August 31st, 2010 at 3:07 pmRE 135 – I expect all the equities to break out shortly… the HUI ended today bang on some long term resistance. Given a decent increase in metals prices the equities could break out in a serious way.
August 31st, 2010 at 3:27 pmZ – not looking good:
http://www.telegraph.co.uk/news/worldnews/asia/afghanistan/7972863/Afghanistan-bomb-attacks-kill-twenty-one-US-soldiers-in-48-hours.html
August 31st, 2010 at 3:57 pmNo, it looks very bad.
You might know the Lt. Colonel in this article better as Italyinvestor:
http://www.postbulletin.com/newsmanager/templates/localnews_story.asp?z=50&a=466353
August 31st, 2010 at 4:12 pmWhat happened to TAT today? up>13%.
August 31st, 2010 at 4:43 pmAPI was a mixed bag with oil up big but Cushing levels down along with gasoline and distillates. Oil up off the low close.
August 31st, 2010 at 4:57 pmInterview with CEO of FR:
August 31st, 2010 at 4:59 pmhttp://thedailygold.com/podcasts/the-daily-gold-podcast-5/?p=4293/
TAT – They closed their buy the other day and I saw a new credit line the day after that. Must have convinced some new blood on the story.
August 31st, 2010 at 5:11 pmDifferent spin on natgas storage
August 31st, 2010 at 6:51 pmhttp://seekingalpha.com/article/223167-why-natural-gas-storage-numbers-are-misleading?source=yahoo
#92, Hard to find 5 charts I'm really all that crazy about at the moment, but EXXI and MMR are two standout bullish favorites both with similar technical structures, both charts appear to be flagging for a breakout, also SSN continues to look good and appears poised for a breakout, NBL also looks strong, continuing to press the topside ascending triangle resistance line and 200 day SMA, good restest bounce away from the 100 day at today's low., LINE and CLB are also technically holding up well… with all the downward pressure recently the McClellan at -32.52 still is not severely oversold…
August 31st, 2010 at 7:34 pmAdded UPL to the charts…
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
Of the 4 choices SWN, RRC, UPL and ECA, I don't see enough of a technical distinction between them yet…the P&F and traditional charts structures are all very similar, I will continue to watch them to see if one within the group starts to outperform….
Uncle Phil with an interesting commentary
August 31st, 2010 at 7:44 pmhttp://www.firstenercastfinancial.com/e_commentary.php?cont=100000
Post will be up at 9 am EST
September 1st, 2010 at 7:36 amThanks JB, saw that last night,
Skimo / Bill – havent' looked at those yet, will after open
September 1st, 2010 at 7:38 amHarold Hamm CLR ceo on cnbc squawk box right now
September 1st, 2010 at 7:44 amHarold Hamm on CNBC now
September 1st, 2010 at 7:44 amIs he saying good stuff about the Bakken?
September 1st, 2010 at 7:54 amyes
He said oil should / would be between 75-90 for the next year
September 1st, 2010 at 7:58 amMentioned that oil industry helping North Dakato..only state with a surplus
Thanks Bill.
September 1st, 2010 at 8:01 amZ- what do think of CLR?
September 1st, 2010 at 8:01 amwill answer on today's post which just came up.
September 1st, 2010 at 8:06 amtks much
September 1st, 2010 at 8:07 am