15
Sep
Wednesday Morning – More Augmented Conference Call Notes
Market Sentiment Watch: Yesterday I said the market needed to take a breather. Check. Today looks much the same prior to the morning's ecodata. In Energy land, it's out with the small and in with the BIG as the Rodman Renshaw conference winds down after hosting 2.5 days of small cap E&P snacks and the Barclays Conference kicks off with the mid and large caps of E&P and Service and runs today and tomorrow. Friday will no doubt be boring.
Ecodata:
- Empire State Index is forecast at 7.5 and last reading of 7.1,
- Industrial Production is forecast of 0.1%.
In Today’s Post:
- Holdings Watch
- Commodity Watch
- Oil Inventory Preview
- Stuff We Care About Today – Rodman Wrap Day 2 (EXXI, KOG, CPE), SSN, Rodman Day 3 Schedule, Barclays Schedule Day 1
- Odds & Ends
Holdings Watch: ZCAT (Zman Catalyst portfolio):
- $5,200
- 100% Cash
- Yesterday’s Trades: None
ZIM (Zman Inefficient Markets portfolio)
- $5,700
- 12% Cash
- Yesterday’s Trades:
- NONE - Will be looking for some exits today.
Commodity Watch: Crude oil eased $0.39 to close at $76.80 yesterday, in highly dollar influenced trading. After the close, the API released a good looking reports for finished product inventories (see below). This morning crude is trading off a buck.
Natural gas inched up another $0.03 to close the day at $3.97 yesterday, after briefly topping $4. This is is Noise. This morning gas is trading up a penny.
- Tropics Watch: Karl formed south of Cuba, course is due west.
Early Read On Natural Gas Storage: Street is at 92 BCF for tomorrow’s report.
- Last Week: 58 Bcf Injection
- Last Year: 67 Bcf Injection
- 5 Year Average: 79 Bcf Injection
- 10 year Hi: 101 Bcf Injection
- 10 year Low: 63 Bcf Injection
Oil Inventory Preview
API Watch:
- Crude: UP 3.333 mm barrels but off slightly at Cushing again. Of late, API and EIA have been in directional agreement on Cushing stocks.
- Gasoline: DOWN 0.076 mm barrels.
- Distillates: DOWN 1.524 mm barrels. That would be a third consecutive interesting number for distillates.
Stuff We Care About Today
Rodman Conference Wrap - Day 2
EXXI - Not Much New To Report
- Production capacity on slide is 26 MBoepd, says its more like 27 to 28 now, with 4,000 boepd coming on in the next few months
- Declines lower than your usual 25 to 35% per year offshore rate, especially including behind pipe reserves, where you just slide a sleeve for cheap $
- On the Shelf, we are getting all of our work done, they have only 1 well that needs a new well permit and they are looking at a sidetrack to get around that. And Lafitte with MMR. Business as normal on their plan.The ultra deep:
- Blackbeard East – at 24,000' drilling ahead, have LWD on, will announce pay as they see it.
KOG - Good update from the company, on track for hockey stick growth
- 2 rigs now, 3rd rig by end of year, + 2 more non operated rigs with large interest.
- Current total company production now between 1,500 and 1,600 BOEpd.
- Completed a frac yesterday on their latest well (no more info on it yet)
- 2 more wells will be completed by end of September
- and they expect 4 more wells to be completed by end of year
- Target of 2,500 boepd for exit 2010, but they think they'll easily beat this.
- 2011 drilling budget taken care of by the recent equity raise.
- Potential locations on their acreage now is 213.
- Good map on slide 10 if you like to know where they are relative to the other players in their FBIR area.
- Still drilling both short and long laterals.
- First Three Forks well drilled but not yet completed.
- Short Vs Long Lateral Comparative Economics:
- Short laterals $6 mm cost at $75 oil = 32% IRR
- Long lats $8 with $75 oil = 49%. at $65 oil these are still 36% IRREarly short laterals were probably 350,000 barrel wellsThe long laterals are probably 650,000 barrels.IPs have stayed the same but the 30 day rate has jumped dramatically. (slide 14)
- Working on spacing issues, trying to figure out how many wells they can pack into one drilling unit, like everyone else.
- KOG is a non-operated partner in a Questar Three Forks well in the area. They can’t say the rate but they are very pleased. Another operator has a good TFS test in the same area.
- Planning to drill 2 Bakkens and 2 Three Forks off the same pad. They think the TFS will be productive over their acreage.
- Koala area – first well spud offsets at 3,460 boepd IP OAS well (the Angel well). XOM is bringing in those 2 non-operated wells mentioned above.
- 2011 budget is probably going to be about $75 mm, not yet official, will be covered by cash and cash flow almost entirely, means they will dip into revolver late next year. My sense is that the next equity deal is at least a year away.
- Nutshell: Much better presentation. The concept of a late year ramp here is probably relatively undiscovered/untrusted by the Street given the trading action prior and subsequent to the latest equity deal. With that growth and the deal in the rear view mirror and no other deal needed probably through the entirety of 2011 I plan to hold and potential add to my position here. If their Three Forks well is successful it could provide another impetus for higher prices.
CPE Brief
- Reserves: 10 mm BPE proved, so trading at TEV/BOE of $24 / BOE proved which is high
- 3P reserves they put at at 39 mm BOE (with 21 mm BOE of that in the Wolfberry play in W. Texas)
- Balance Sheet:
- $20 mm undrawn line,
- $32 mm cash,
- Debt of $167 mm with first maturity in 2016.
- Growth:
- Onshore Only:
- 2009 about 100 boepd
- 2010E about 850 boepd
- 2011E 2,900 boepd
- 2012E 4,100 boepd
This would be significant versus 2Q10 production levels of 4,350 boepd, very little coming from the onshore.
- Four Asset Arenas:
- The Past:
- Gulf of Mexico Shelf - 10 mm/d (or 1,667 BOEpd), gassy, not looking to grow it, just to produce it out (since they can't sell it at these prices and in this environment).
- Gulf of Mexico Deepwater - 2,500 BOEpd, oily, all from 2 developments, Medusa and Habanero, non-operated, both have behind pipe potential and / or sidetrack to updip reserve potential to stave off declines in the next few years.
- 98% of cash flow here are funneled to other uses ... onshore
- Gulf of Mexico Shelf - 10 mm/d (or 1,667 BOEpd), gassy, not looking to grow it, just to produce it out (since they can't sell it at these prices and in this environment).
- The Future:
-
- Permian Basin - (Wolfberry Play)
- 300 undrilled locations, all verticals
- Current net production of 500 BOEpd
- These are 100,000 boe wells, cost just under $1.5 mm, solid IRR
- 1 rig running, 2nd rig arrives later this month
- Downspacing, seeing some wells come in as high as 150 bopd IPs, better than expected
- Haynesville Shale - small position, drilled first well, bringing it online today at a restricted 10 to 12. Thinking that one is 7 Bcfe, then the rest of their potential reserves is probably close to 30 Bcfe, maybe 6 or 7 more locations total but they are in no hurry here given gas prices at the moment.
- Permian Basin - (Wolfberry Play)
- The Past:
- Nutshell: 98% of their cash flow from offshore can be utilized onshore (very little offshore maintenance or abandonment capex required). Future hinges on whether or not they are successful in the Wolfberry effort. Watching. Thinking it would make a good acquisition or merger candidate for EGY.
Today's Conference Hit List
Other Stuff:
- An archive of today's and yesterday's presentation notes is available on the reports tab.
- Company briefs on a number of small cap E&Ps on the way (REXX, PETD, EGY come to mind). Mulling a few additions to the ZLT.
- I listened to the DBLE and TRGL calls last night, ran out of time to include in the post, will circle back soon.
- SSN Presentation for today's Rodman Renshaw appearance contains a note about the Niobrara deal being done for about $76 mm, that's $2 mm over the high end of the range if everything worked as expected. A definite positive. The last time they updated the presentation before the deal was set in stone they got it right so I like their style. With net cash of $59 mm, their Total Enterprise Value is a scant $50 mm dollars. I put $15 per barrel in the ground on their Bakken acreage. That leaves $35 mm of value to cover 16,000 Niobrara acres, acreage in the Vermillion Basin and other Rockies gas assets that are likely to be sold and prospects along the Gulf Coast. My near term back of the envelope is $1.90+. For those seeking Niobrara acreage now, SSN is acreage at a discount.
Odds & Ends
Analyst Watch:
- GMR, GNK, EGLE - Initiated at Outperform at Wells Fargo
DENVER, Sept. 14 /PRNewswire-FirstCall/ — Whiting Petroleum Corporation (NYSE: WLL) today announced that it will present at the Barclays Capital CEO Energy/Power Conference at the Sheraton New York Hotel & Towers in New York City on Wednesday, September 15, 2010 at 9:45 a.m. (EDT). President and CEO James J. Volker will discuss the Company's strategy, development plans and outlook.
September 15th, 2010 at 7:29 amWhiting's live presentation may be accessed on the Internet by logging onto the following link: http://cc.talkpoint.com/barc002/091510a_rb/?entity=123_NFRDVKO. The presentation materials and link to the webcast will also be available on Whiting's website at http://www.whiting.com beginning September 15, 2010.
Thanks Bill, I plan to listen to the first 15 and then break off for the SSN call. New presentation there is a little more detailed on some Texas stuff they have going. Glad to see them taking out the top end of the range on the deal in the Niobrara. In five more days sounds like they will be getting another $12.3 mm, this is $1.7 mm higher than expected and assumes they get all of the incremental permit acreage sold. Strong.
September 15th, 2010 at 7:35 amFront and Center Watch:
HAL – for reaction to SLB comments today at Barclays
SSN – see above
WLL and WLT and EOG – timing my call sales.
September 15th, 2010 at 7:37 amTweet from Bastardi this morning:
Most intense hurricane day ever recorded 2 cat 4s at once Good news both out at sea. Bad news. Pattern favors hits US coast Sept 25-Oct15
September 15th, 2010 at 7:39 amMorning Z – re #4. Are you/Bastardi saying that today is the most intense hurricane day ever recorded?
September 15th, 2010 at 7:47 amupl with an impressive presentation. Do you follow them?
September 15th, 2010 at 7:50 amNicky – he is, just due to the amount of activity around.
Bill – yes I do. Gassy, strong grower.
September 15th, 2010 at 8:02 amNBL not presenting until tomorrow.
Listening to PXD at Barclays now.
September 15th, 2010 at 8:12 amPXD to spud a middle Wolfcamp Horizontal well in 2 weeks, results in 1Q11, followed by a lower WolfCamp horizontal. No horizontals for the Spraberry, too thin.
September 15th, 2010 at 8:17 amAKA its going up despite us dept:
September 15th, 2010 at 8:19 amHoward Weil initiates SDRL with a Market Perform and price target of $32 saying while the Company's fleet make up, contract coverage, and dividend yield all lend to a higher recommendation, the current premium valuation relative to peers suggests much of this is has already been priced into the stock.
Soft opening.
WLL in 15 minutes
SSN in 30 minutes
September 15th, 2010 at 8:32 amPXD – adding more company owned rigs, thinking that will be a trend. They bought EVG, a Raton CBM player I used to follow and that tipped them to liking the idea. You've seen this at CHK and SD for some time but it will be interesting to see if the mid caps start building /buying their own rigs if this leads to more price stability in onshore rig counts.
September 15th, 2010 at 8:37 amZTRADE – ZIM – HAL
Added (50) more HAL $32 September calls (high risk trade) for $0.08 with the stock at 30.90, off about 1.5% on market weakness this morning. Expecting positive comments out of them tomorrow at Barclays but I will take out this risky bet on any good move in the group.
September 15th, 2010 at 8:45 amNew September presentation from SWN on their site. Not a whole lot of new stuff in there. I didn't hear them at the Barclays conference. If anyone did and they said anything new please post. I'll listen to the replay at some point and post notes if no one else has.
September 15th, 2010 at 8:46 am1520 – I plan to listen to them later.
WLL link at Barclays not working on the WLL website.
September 15th, 2010 at 8:47 amInteresting that SLB is trading higher this morning ahead of their speech at lunch. Then you go to their comments this morning and it all looks pretty good, transitioning from reporting internationally to reporting by product segment should be a lot of fun for the analysts to adjust to. They are saying don't expect Gomex to get better until next year, but that US land is strong and improving and seeing improvement in Canada.
September 15th, 2010 at 8:53 amI think for SWN it boils down to 3 words – higher gas prices
September 15th, 2010 at 8:53 amSBL – says Mexico downturn more severe than expected … probably no bueno for WFT.
September 15th, 2010 at 8:54 am1520 – and 4 more words. Expect capex to fall. They've already said they will be flexible on production growth going forward, not going as fast if prices remain lackluster. PXD said they see gas prices in this range for the next 18 to 24 months. Hard to argue with the first 9 to 12 months of that but I think an improving economy later in 2011 (it could happen) along with deceleration in lease driven drilling in the second half could conspire to boost prices.
SSN call in 4 minutes.
September 15th, 2010 at 8:57 am#19 – agreed. I think they will lay rigs down sooner than anyone thinks. To #12 – SWN owns their entire Fayetteville shale fleet which makes it "easier" to stack them.
September 15th, 2010 at 9:02 amI have no idea bout gas prices other than to say I think they will be higher than $4 in the long term.
Jat – Re SLB – distinct lack of commentary on international business except for Canada (good) and Mexico (bad). I think everyone would like to hear them say things in Asia/Mid East are slower than expected and get it out of the way, your thoughts?
September 15th, 2010 at 9:03 amStill waiting on SSN to begin:
http://www.wsw.com/webcast/rrshq18/ssn/
September 15th, 2010 at 9:03 amsd is trying to cross 5
September 15th, 2010 at 9:06 amBill – yeah, watching that happen.
SSN CEO starts off with "if you want a 6 fold return on your stock in the next 2 years you are in the right room"
September 15th, 2010 at 9:07 amwll link is working
September 15th, 2010 at 9:07 amhttp://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=147759&eventID=3369409
SSN Notes:
Due to close second Niobrara closing next week (20th)
$70 mm cash is in the bank, 2nd closing will/should add another $12+ mm
Can buy Bakken acres for about $2,000/ac (I think he means away from their area)
4Q Niobrara – shoot 3D survey
1Q11 Niobrara – 2 wells
Going to sell some Rockies gas assets soon.
….
September 15th, 2010 at 9:13 amSo I guess if someone was thinking of paying $2 per share, they have been warned otherwise.
September 15th, 2010 at 9:21 amSSN Notes 2
Slide 13 – they always show this but if you've never looked, highlights the similarities between the Bakken and the Niobrara.
Niobrara – 16,000 acres remaining after sale. His assumptions to get to the big NAV target ($10 / share) are probably reasonable but way early to talk about since there is not a well on their acreage spud, td'd, ip'd yet.
Nothing really new on the Bakken stuff. This is only 6 sections, but they plan to add another play here, not sure when.
On the Niobrara sale, they had a cost basis of less than $1mm. Nice trade.
….
September 15th, 2010 at 9:22 amRe 27 – In the event of an acquisition? Yeah, I think you'd need to go $2.50+ now. More later if things work. They aren't going to get full value anytime soon but given time/results I think the stock starts to discount that value. Key will be sometime 1Q or 2Q next year for first Hz Niobrara results on their acreage.
September 15th, 2010 at 9:24 amHe puts the company valuation at $1.80 post 2nd Niobrara closing next week. I see a bit more pop near term but not to that level. I understand how he gets there though, not unreasonable.
September 15th, 2010 at 9:26 amSSN making a very good point about something someone pointed out to me a few weeks back and that I have not accounted for in the model. They have a over riding royalty interest remaining on the Niobrara acreage they just sold. Hard to put a finger on what it is worth without knowing the plan of the new holder in terms of wells drilled and timing. But Enercom has done a report where they calculate the value of the ORRI at $53 mm.
September 15th, 2010 at 9:31 amhttp://www.bloomberg.com/news/2010-09-15/japan-intervenes-for-first-time-since-2004-as-yen-surge-threatens-recovery.html
September 15th, 2010 at 9:31 amJapan intervenes on the yen, "may" have an effect on the DX, which is up a tad this AM-do not think intervention works very well over time.
EIA
Crude down 2.5 mm bbs
Gasoline down 0.7
Distillates down 0.3
…
September 15th, 2010 at 9:32 amWestern Pennsylvania's shale oil deposits have lately attracted interest not only from companies who have been extracting some of that oil, but from locals who object to what they perceive as sharp dealing by the companies involved, favorable treatment by the state government, and environmental degradation as a result of the extraction. Some of the most visible of those protesters, it turns out, have been tracked (including "Web traffic") by Pennsylvania's own Homeland Security department, and that information about them has been shared not only within the department, but with the oil companies themselves. Homeland Security director James Powers defended the information shared with the oil companies as part of a triweekly bulletin, saying "We want to continue providing this support to the Marcellus Shale Formation natural gas stakeholders while not feeding those groups fomenting dissent against those same companies."
September 15th, 2010 at 9:33 amMore EIA
Imports were up slightly week to week
Utilization fell to 87.6% which is low for this time of year and it will get lower and probably stay lower for longer
…
September 15th, 2010 at 9:33 amMore EIA
Gasoline demand falling off as expected but still at a respectable 9.0 mm bpd
Distillate demand held last 2 week's lofty levels at 3.842 mm bpd
Cushing fell 0.5 mm barrels to 35. That's supportive of crude here.
All in all, a pretty good report.
September 15th, 2010 at 9:36 amWLL – heard call – link worked fine – they will report on their 3 lewis & clark wells by the end of month. one has already been completed w/ ip rate known by them, second flow testing now, and 3rd waiting for frac, any day now. if 3 wells are successful plan on going to 9 rigs from 5 at the beginning of year. his tone of voice seemed to me that all was going to be a go, "everything is on schedule in every possible way"
September 15th, 2010 at 9:39 amAndy – thanks very much, will circle back to listen in a few minutes here. I appreciate your feedback there.
September 15th, 2010 at 9:43 amIs the XCO presentation being webcast? I can not find it.
September 15th, 2010 at 9:53 amGot through EIA numbers, modestly good to see gasoline and distillate both inching away from the bloated levels of the last several months.
September 15th, 2010 at 9:55 amRMD – It doesn't seem to be.
September 15th, 2010 at 9:56 amSSN at 105K shares traded today … talk about being in "nobody cares land". If Enercom is not even close to correct on the ORRI on the acreage sold you are getting that for free now.
September 15th, 2010 at 9:58 amMore SSN – Next week with the closing of the second part of the deal, we get a) another $12+ mm and b) perhaps the identity of the buyer. I'm asking them now if we will. I suspect it is NBL or maybe EOG, either of which could ramp the rig count in this part of the play, providing them with a near term stream of royalty revenues to collect.
September 15th, 2010 at 10:02 amKOG & HK at 500k served, slow day. I checked a couple of times to make sure this thing was still on.
September 15th, 2010 at 10:03 amPopeye – I guess the computers are asleep. I've been reading a number of articles about how the advent of electronic trading has killed the market maker and specialist in today's markets as engineered by the SEC over the last 14 years. That's just depressing. It has also led to flash crash susceptibility. Now the SEC is beginning to think maybe they have taken the human element out of trading a bit too much. Gee, ya think?!
September 15th, 2010 at 10:07 amEOG presents tomorrow @8:25 EDT-that is 0:dark-thirty my time-will try to catch it live or catch it later.
September 15th, 2010 at 10:14 amThere's probably no greater level of confirmation after a bold public statement than an open purchase by insiders.
September 15th, 2010 at 10:22 amYeah, that's a pretty crummy time slot in my book.
FYI, today is 3Q tax day for all you estimated filers.
September 15th, 2010 at 10:22 amSLB address at Barclays will apparently not be webcast.
September 15th, 2010 at 10:29 am… which means I will be on the Rodman BPZ presentation shortly.
September 15th, 2010 at 10:32 amNot that you can see it in the stocks but this is the second day we've breached $4 on NG, now $40.05.
September 15th, 2010 at 10:33 amSSN………..Odds probably favor NBL as puchaser. Whomever bought the acreage has to spud a well on some that acreage by the middle October as I remember and NBL probably has a rig available. Yesterday NBL did deal with Sundance Energy for their Twister prospect….http://beforeitsnews.com/story/175/853/Sundance_Energy_Australia_sells_75_of_Twister_to_Noble_Energy.html
September 15th, 2010 at 10:35 amCommentary on today's $3.9 B Fed bond buying:
http://www.zerohedge.com/article/fed-floods-market-39-billion-fresh-monetization-based-liquidity-qe-lite-record
September 15th, 2010 at 10:37 amWest – right, probably so, hard to see EOG doing that deal for a number of reasons anyway and NBL is all around them.
Came away from KOG more than a little impressed, adding stock in the ZLT.
September 15th, 2010 at 10:40 amwells fargo on shipping, z mentioned earlier
September 15th, 2010 at 10:40 amhttp://www.tradewinds.no/multimedia/archive/00119/Wells_Fargo_shiping_119515a.pdf
ZTRADE – ZLT – KOG
Adding back some of the stock sold higher for $2.94. See comments in today's post for reasoning, now through year end should see a significant ramp in production, perhaps more than they have already stated and up to 7 well announcements.
September 15th, 2010 at 10:42 amJust for reference and so you that I too and talking my book, my cost basis for KOG in the ZLT is now $1.36.
September 15th, 2010 at 10:48 amDoug Kass nowsaying SLB is issuing negative things at Barclays – I don't know as I'm not there but the press release this morning was not bad and did not contain anything new on the downside aside from Mexico comments … known to be soft but softer than expected.
September 15th, 2010 at 10:51 amHere are SLB's slides and prepared remarks
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjMyMDh8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
September 15th, 2010 at 10:53 amJB-voted, thanks for your work.
September 15th, 2010 at 11:00 amMy review of their slides:
Page 1 – positive talking about recovery in oil demand worldwide
also talks about challenging gas environment – that's not news to anyone
Page 2 through 8 – all bullish for service, huge task meeting demand for oil and gas between now and 2030
Page 9 through 14 deal with their new reporting methodology and the Smith deal
Page 15 – shows 3 and 4Q thoughts
A) Gulf of Mexico weak …. no kidding, US and Canada land strong
B) Western Geco (marine seismic) remains strong
C) Outside N. America , activity continues to slowly ramp up with exceptions (Mexico weaker than exp, but Brazil will partly offset that)
D) West and South Africa activity increase delayed, North Africa growth slowing. Europe/CIS/Africa will not recrd seq growth in 3Q despite strong Russia and growth in N. Sea and Caspian
E) Middle East Asia business remains strong, particular ly in Asia
I think much of D was out there already.
September 15th, 2010 at 11:04 amNicky making an interesting point via email that she's worried about the claims number tomorrow because last week 9 states failed to report #s due to the holiday.
September 15th, 2010 at 11:08 amSLB trying to move up during Gould's speech, probably just market but the slides are not nearly as downcast as some shorts would spin it.
September 15th, 2010 at 11:08 amWhat was said during KOG's slot that could have said at SSN's?
September 15th, 2010 at 11:20 amKOGgers are happy today. They like that 7 wells will be completed before the end of this year. They like that company is set to exit 2010 with higher-that-expected production. And they REALLY like that the TFS looks to be prospective under 100 of thier FBIR acreage. With 4 wells per pad planned and equity financing done, the future looks brighter.
September 15th, 2010 at 11:28 ammake that "100% of their FBIR acreage"
September 15th, 2010 at 11:28 amre 64. Don't understand.
September 15th, 2010 at 11:29 amubs has pxp as a takeover target
September 15th, 2010 at 11:30 amThe sum of the pieces has to more than current stock price
Strong again today
is it too big for a hedge fund?
OXy would like calif assets
shell some of the gom propoerties
exxi and MMR for bbe and davy jones
Chk buy back haynesville and resell to another jv partner
They have an attractive list of assets
Going for a run. Back well before the 1:45est OII presentation.
September 15th, 2010 at 11:31 amWhat was said during KOG's slot that could have said at SSN's?
September 15th, 2010 at 11:32 amsorry, couldn't resist. I will articulate in a bit.
September 15th, 2010 at 11:32 am#60 skimo, thank you much for the vote…
September 15th, 2010 at 11:36 amKOG intraday looks strong, taking a rest trading right at daily 50/200 day SMA resistance now….
ram — what you are asking is basically what was said at the KOG presentation to get the stock moving… and why didn't SSN say the same thing (or, at least something to get people to buy their stock). Is that it?
September 15th, 2010 at 11:37 amwell, for one, it took KOGgers a day to digest the presentation. So, let's give SSNers at least a day to think about what was said (or not said).
I'll send myself an email now.
September 15th, 2010 at 11:37 amram — U R (still) funny! 😉
September 15th, 2010 at 11:39 amWes t- I own Sundance Energy – I look at it as my "baby SSN" Sundance They sold a portion of their property for cash to one of the biggest operators in the Niobrara (NBL). They retain 25% WI and get 8.1million cash. They also retain 3.9% royalty interest on the leases and get carried for $600,000 in drilling costs. This fits their business model of reducing risk and selling land that has increased in value to finance drilling and more land purchases.
September 15th, 2010 at 11:42 amZ..Please put on catalyst list– PXP
PXP has studied its Gulf of Mexico (GOM) operations over the past few months and now plans to reduce its GOM exposure and related capital spending while delivering to its shareholders the unrecognized value created by our recent drilling success. PXP's goals are to secure $1 to $2 billion of value from its GOM assets through third party joint ventures and/or asset sales and to align capital spending with operating cash flow. PXP has engaged Barclays Capital and Jefferies & Company to assist in executing this value recognition strategy over the next few months.
September 15th, 2010 at 11:44 amKOG daily chart updated…first hurdle is resistance at $3, then a base here, then next taget at $3.25, which reverses KOG back into X's on the P&F chart….
September 15th, 2010 at 11:51 amhttp://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
Bill – will do.
Assuming BOP's interpretation of the query in 64 and 70 is accurate I would say circumstances in trading leading up to the presentation for the two were radically different. SSN has been killing it. KOG has been trading off. In the presentations both presented catalytic news but KOG's was better defined in terms of growth while SSNs was more a statement of unrealized value. Growth almost always reacts more quickly than value. SSN should have 2 data points over the next week, one in a Bakken complete and the other in the remaining interest being sold. That's probably not as exciting coming from a tiny Aussie who is up 6 fold in the last year as is the story of KOG's doubling of production between now and the end of the year.
September 15th, 2010 at 12:00 pmThanks JB, will go for the daily vote now.
September 15th, 2010 at 12:00 pmRE: #80, Zman, thank you always for the vote….
September 15th, 2010 at 12:04 pmZ: Just got back from Barclays Conference. Left just before SLB lunch presentation. 20th year of this conference. Someone from Barclay's said more buzz re that presentation than he could ever remember. Standing room only and a hugh room.
September 15th, 2010 at 12:19 pmZ: Was there for the presentations for SD, CLB & NE. Was at the breakout sessions for WLL, RIG & NE.
September 15th, 2010 at 12:24 pmThanks , pass along any tidbits you feel relevant when you get a chance.
RE SLB – the shorts were out spreading their line of spin pre conference.
September 15th, 2010 at 12:25 pmBOP: You would be happy to know I asked Tom Ward about the money he is spending on his new OKC campus. He defended by saying it was one of the best real estate purchases he has ever made. He said he spent 25M for the property and his staff is there. He does not have to spend as much money as has been reported. He would be a good politican.
September 15th, 2010 at 12:29 pmZ: Overall tone as best as I could tell was very positive or at least very interested. They call conference CEO Energy-Power Conference. All first string players (CEO). No backups.
September 15th, 2010 at 12:32 pmtomdavis — did you ask him which stadium he is going to name as his next act?
September 15th, 2010 at 12:32 pmThat answer reminds me of Labor Day Sales ads… "the more you spend, the more you save!!" sheesh.
Twitter is overcapacity, I guess my comment for everyone to follow Doug Kass and do the opposite worked, lol.
September 15th, 2010 at 12:39 pmBOP: I cannot do as well as Z with all the data crunching that he does. Z is unbelievable at that. I tend to go right to the nutshell type of comments. Ward was most proud of two things. 1. '08 revenue was 76% NG. Now '11 78% oil. Had a chart that showed relative value. Oil $75.79/bbl, NGL's $39.92/bbl & NG $22.86/bbl. 2. His deal with Forest for 800M. He hopes to sell the Wolfberry & Delaware basin assets for $400M and will be left with $6M/boepd.
September 15th, 2010 at 12:44 pmI'd rather see him keep the Wolf and punt the Delaware to someone like CHK but good. Had heard $200 mm for Wolf alone. Obviously he needs to get the debt down.
September 15th, 2010 at 12:47 pmMarket looking like all hinges on claims this week. ZZZzzzzz.
September 15th, 2010 at 12:48 pmZ; Ward talked about his divestiture history. CO/Pieceance 5/08, E Tx/Haynesville 6/09, W Tx/Midstream 6/09 & NW Ok/Cana 7/10. He trys to sell when things are popular. That is why Wolfberry. Maybe HK the buyer?
September 15th, 2010 at 1:05 pmThen he should have added Pinon when gas was $14/MMBtu, lol.
September 15th, 2010 at 1:21 pmZ; SD spending for '11: 70% Permian, 25% MidCon & 5% Pinon.
September 15th, 2010 at 1:31 pmThanks Tom
September 15th, 2010 at 1:37 pmZ: Do you have an opinion re CLB? Very impressive company.
September 15th, 2010 at 1:58 pmI like them quite a bit. Hard to trade options there or at least my 2 attempts in the last 2 years have been ill timed and the spreads are way too wide for being slightly off on that. They are in use everywhere, have 3 product divisions that are all growing and they rarely miss on the numbers.
September 15th, 2010 at 2:01 pmPisani on CNBC saying September to date volume on the S&P is down 30% YoY
September 15th, 2010 at 2:05 pmZ: CLB are peak oil guys. Expecting Iraq to NOT get above 3.6M bbl/d EVER. They have a Super Hero Plus fracing charge they are very proud of. Showing the same type of remarkable drain well reservoirs with good porosity as Brazil off the coast of W Africa (Angola). If you don't want PBR you might keep an eye on the biggest players in W Africa. Other than north of Siberia they were very pumped about what they were seeing in W Africa.
September 15th, 2010 at 2:14 pmTom – yeah, listened to the 2Q call and note they beat and the stock pulled back, expectations always high there. I have wondered about their transition once the shales slow and things that people buy into the core consortiums are well known but it looks like they will be able to transitions to a better frac and reservoir management company as that occurs. This is one of a couple of companies out there in the Service realm that I am surprised that it is still on its on and not painted all blue.
September 15th, 2010 at 2:18 pmKOG at 3, at least volume there looks to be picking up.
September 15th, 2010 at 2:20 pm… right at the 200 day SMA.
September 15th, 2010 at 2:24 pmRE 98 – That's what happens post-flash crash, post-no real changes to regulations, when there is no retail left to fleece I suppose… or the volume all moved to the COMEX for safety…
September 15th, 2010 at 2:26 pmCall my cynical… I know I am.
Z: Their clients are all the big boys. More revenue worldwide. Our shale plays will not be a sweet spot for them. If they can take the giant fields and add 5% recovery, they will have much work. The Macondo spill was like a test lab for them, They help companies analyse fluids more than rocks. What happened in 100 days at Macondo is what usually takes many years in a well life. Crude to water and NG. The colors changed as it went through the full cycle. Very helpful to their sales pitch.
September 15th, 2010 at 2:27 pmVTZ- I may shift to trading Vancouver stocks. Naaaahhhh.
September 15th, 2010 at 2:27 pmTom – Their core consortium clients run from tiny to big, but I hear ya on reservoir monitoring, the 4D realm. I think Aramco is even a client. Had not heard the Macondo aspect, will listen to the replay.
Tried to listen to the WLL replay but last I checked it had not yet been archived. Will have anything new there in the post tomorrow but the weakness today looks to be residual and lack of anyone paying attention based.
HAL trying to recover now that the S&P is acting more greenish.
September 15th, 2010 at 2:31 pmTAT also tapping $3. Probably more near term catalysts there than at GST Elduke
September 15th, 2010 at 2:34 pmLINE executive chairman sells 39K shares at 30.15, leaves him 538 K. Not a worry in my book.
September 15th, 2010 at 2:36 pmRE 105 – Wasn't trying to imply anything like that, but I think it's a very real explanation for the low volume. How does the average investor have any confidence investing here?
September 15th, 2010 at 2:36 pmGLRP up as much as 70% at it high, 25% now. at R&R, claiming a lifting system without a drive, for resoivoirs without any pressure. Dan Butler, ex HAL, devised it. Taking shallow Permian wells with tiny production (10boe/d from 23 wells to 80/d–I think these numbers are aggregate for the 23 wells, so tiny production). Building acreage, claiming big PV-10 and stock worth $5 from just A zone, with zones below to 1,500 ft, then into the Clearfork, Canyon, etc. First time I have heard of co. Sounds like a natural for Jay.
September 15th, 2010 at 2:37 pmBOP's not around so I'll say it, EXXI up 4%, without MMR moving, just playing catch up off of MMR's bounce the other day I would guess.
September 15th, 2010 at 2:38 pmHear ya V, even CNBC is running ads for "Man vs Machines" trading special they are airing.
RMD – thanks, it does sound like Jay's deal for stripper wells, cheap, hard to break. Hmmm.
September 15th, 2010 at 2:40 pmBill – I'll have an updated catalyst list out either Friday or Monday.
September 15th, 2010 at 2:41 pmZ: In the WLL breakout session you will not see these comments online. First of all I have listened to 2 WLL CC's and I thought James Volker was a little boring. In person you can fall asleep listening to this guy. Maybe that means you don't have to check your back pocket after you have a meeting with him. The Enbridge difficulties will be resolved. He knows of some highly capitalized NA companies that have been in discussions about purchase of the pipeline. If any company including WLL disappoints on revenue for the 3rd Q and the stocks falls, he alluded to that as an opportunity. He was talking about the industry and NOT his company
September 15th, 2010 at 2:41 pmZ: WLL is very happy with the money EOG has put into their rail system. Helps others in the Bakken. LOE for '11 he expects to be approx $11/bl. Fighting to get his cost per well in L&C to $5.5M and Sanish $5.0M. Has 1/2 a frac crew from HAL. Will have them completely by year end and are expecting to frac 8 – 9 wells /mo. Will keep an inventory of about 10 not fracced wells until they catch up. Bone Springs new area he likes. Called bonds and Cv prfd. Board will have to meet before they raise more money. If they do it will be a sign they see something they want.
September 15th, 2010 at 2:51 pmZ; With the trading of WLL this afternoon maybe he did put everyone to sleep. 🙂
September 15th, 2010 at 2:59 pmZ: Knock Knock. looks like I'm having the same effect. lol
September 15th, 2010 at 3:07 pmTom I had to step out , back for a second but have to whip an intern into shape on the pitch. Back later, thanks for the comments on WLL, will listen to it tonight.
September 15th, 2010 at 3:22 pmHey! Not too shabby today… E21, KOG, even silly little GST. EGY down… but that stock trades in a parallel universe all its own, so not worried. ATPG down… but could be a huge mover at some point over the next 2-3 weeks. Planning to hold on for the ride there.
September 15th, 2010 at 4:41 pmHI Z —
You are being read in the Singapore airport. What a global site.
Will be back on Maui in a week.
September 15th, 2010 at 5:33 pmMike Linn Excutive Director sold 761,000 shares [~$24 million] over the last 2 days, he still owns 557,000 shares.
September 15th, 2010 at 6:32 pmhttp://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7151147
Whoa, didn't see the first two lots of shares he sold. That maybe something to look into. He's the executive chairman and the namesake founder but not the president or CEO.
September 15th, 2010 at 6:55 pmYes, but when you do the math, it seems SSN still should be moving up to a higher plateau.
September 15th, 2010 at 8:53 pmI would expect it to take out the recent high next week upon successful completion of closing #2. Given the rally it has had, I would also expect sporadic profit taking in the name.
September 15th, 2010 at 8:57 pmthinking over LINE insider sales and looking for negatives:
September 15th, 2010 at 9:09 pmmy guess on various things imp't to MLP valuations which could go wrong in '11 would be:
1. ability to hedge forward affects CF multiple;
2. ability to grow by acq. decreases in '11;
3. commodity prices go up/down: may be prices go up and you are hedged;
4. interest rates go up so there are more alternatives;
5. spreads to corp. bonds or the 10 tr widen ala 3/09.
I am sure there are others but these are at the top of my list FWIW.
Listening to the WLL replay
Re 125 – sounds mostly fair.
On #1 I don't think it is would be a big worry for the 2011-2014 as they are almost entirely hedged unless something has changed there. They may outstrip it via new organic or bolt on volumes but generally management has displayed a penchant for acquiring and hedging out the volumes in both good and poor hedging environments.
2) Why? Not if you are looking at natural gas.
3, 4, and 5 are fair points
September 15th, 2010 at 9:25 pmThe only non energy thing on my screen at the moment: MCD. Big rally after short pounding earlier this week. He's hoping to see a McBondfire of shorts on that one.
September 15th, 2010 at 9:39 pmpxp updates divesture process
September 16th, 2010 at 7:03 amhttp://investor.plainsxp.com/phoenix.zhtml?c=132091&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTAtMjEwODI3L3htbA%3d%3d