15
Sep

Wednesday Morning – More Augmented Conference Call Notes

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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:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today – Rodman Wrap Day 2 (EXXI, KOG, CPE), SSN, Rodman Day 3 Schedule, Barclays Schedule Day 1
  5. 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
    • 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.
  • 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

128 Responses to “Wednesday Morning – More Augmented Conference Call Notes”

  1. 1
    bill Says:

    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.
    Whiting'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.

  2. 2
    zman Says:

    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.

  3. 3
    zman Says:

    Front and Center Watch:

    HAL – for reaction to SLB comments today at Barclays

    SSN – see above

    WLL and WLT and EOG – timing my call sales.

     

  4. 4
    zman Says:

    Tweet 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

  5. 5
    Nicky Says:

    Morning Z – re #4.  Are you/Bastardi saying that today is the most intense hurricane day ever recorded?

  6. 6
    bill Says:

    upl with an impressive presentation. Do you follow them?

  7. 7
    zman Says:

    Nicky – he is, just due to the amount of activity around.

    Bill – yes I do. Gassy, strong grower.

  8. 8
    zman Says:

    NBL not presenting until tomorrow.

     

    Listening to PXD at Barclays now.

  9. 9
    zman Says:

    PXD 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.

  10. 10
    elijahwc Says:

    AKA its going up despite us dept:
    Howard 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.

  11. 11
    zman Says:

    Soft opening.

    WLL in 15 minutes

    SSN in 30 minutes

  12. 12
    zman Says:

    PXD – 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.

  13. 13
    zman Says:

    ZTRADE – 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.

  14. 14
    1520sbroad Says:

    New 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.

  15. 15
    zman Says:

    1520 – I plan to listen to them later.

    WLL link at Barclays not working on the WLL website.

  16. 16
    zman Says:

    Interesting 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.

  17. 17
    1520sbroad Says:

    I think for SWN it boils down to 3 words – higher gas prices

  18. 18
    zman Says:

    SBL – says Mexico downturn more severe than expected … probably no bueno for WFT.

  19. 19
    zman Says:

    1520 – 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.

  20. 20
    1520sbroad Says:

    #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.
    I have no idea bout gas prices other than to say I think they will be higher than $4 in the long term.

  21. 21
    zman Says:

    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?

  22. 22
    zman Says:

    Still waiting on SSN to begin:

    http://www.wsw.com/webcast/rrshq18/ssn/

  23. 23
    bill Says:

    sd is trying to cross 5

  24. 24
    zman Says:

    Bill – 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"

     

  25. 25
    bill Says:

    wll link is working
     
    http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=147759&eventID=3369409

  26. 26
    zman Says:

    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.

    ….

     

  27. 27
    ram Says:

    So I guess if someone was thinking of paying $2 per share, they have been warned otherwise.

  28. 28
    zman Says:

    SSN 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.

    ….

  29. 29
    zman Says:

    Re 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.

  30. 30
    zman Says:

    He 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.

  31. 31
    zman Says:

    SSN 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.

  32. 32
    choices Says:

    http://www.bloomberg.com/news/2010-09-15/japan-intervenes-for-first-time-since-2004-as-yen-surge-threatens-recovery.html
    Japan 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.

  33. 33
    zman Says:

    EIA

    Crude down 2.5 mm bbs

    Gasoline down 0.7

    Distillates down 0.3

  34. 34
    Popeye Says:

    Western 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."

  35. 35
    zman Says:

    More 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

  36. 36
    zman Says:

    More 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.

  37. 37
    andy Says:

    WLL  – 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" 

  38. 38
    zman Says:

    Andy  – thanks very much, will circle back to listen in a few minutes here. I appreciate your feedback there.

  39. 39
    RMD Says:

    Is the XCO presentation being webcast?  I can not find it.

  40. 40
    zman Says:

    Got through EIA numbers, modestly good to see gasoline and distillate both inching away from the bloated levels of the last several months.

  41. 41
    zman Says:

    RMD – It doesn't seem to be.

  42. 42
    zman Says:

    SSN 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.

  43. 43
    zman Says:

    More 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. 

  44. 44
    Popeye Says:

    KOG & HK at 500k served, slow day. I checked a couple of times to make sure this thing was still on.

  45. 45
    zman Says:

    Popeye – 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?!

  46. 46
    choices Says:

    EOG presents tomorrow @8:25 EDT-that is 0:dark-thirty my time-will try to catch it live or catch it later.

  47. 47
    ram Says:

    There's probably no greater level of confirmation after a bold public statement than an open purchase by insiders.

  48. 48
    zman Says:

    Yeah, that's a pretty crummy time slot in my book.

    FYI, today is 3Q tax day for all you estimated filers.

  49. 49
    zman Says:

    SLB address at Barclays will apparently not be webcast.

  50. 50
    zman Says:

    … which means I will be on the Rodman BPZ presentation shortly.

  51. 51
    zman Says:

    Not that you can see it in the stocks but this is the second day we've breached $4 on NG, now $40.05.

  52. 52
    West Says:

    SSN………..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

  53. 53
    zman Says:

    Commentary 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

  54. 54
    zman Says:

    West – 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.

  55. 55
    bill Says:

    wells fargo on shipping, z mentioned earlier
     
    http://www.tradewinds.no/multimedia/archive/00119/Wells_Fargo_shiping_119515a.pdf

  56. 56
    zman Says:

    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.

  57. 57
    zman Says:

    Just for reference and so you that I too and talking my book, my cost basis for KOG in the ZLT is now $1.36.

  58. 58
    zman Says:

    Doug 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.  

  59. 59
    zman Says:

    Here are SLB's slides and prepared remarks

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjMyMDh8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

  60. 60
    skimo Says:

    JB-voted, thanks for your work.

  61. 61
    zman Says:

    My 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.

     

     

     

  62. 62
    zman Says:

    Nicky 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.

  63. 63
    zman Says:

    SLB 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.

  64. 64
    ram Says:

    What was said during KOG's slot that could have said at SSN's?

  65. 65
    BirdsofpreyRcool Says:

    KOGgers 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.

  66. 66
    BirdsofpreyRcool Says:

    make that "100% of their FBIR acreage"

  67. 67
    zman Says:

    re 64. Don't understand.

  68. 68
    bill Says:

    ubs has pxp as a takeover target
    The 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

  69. 69
    zman Says:

    Going for a run. Back well before the 1:45est OII presentation.

  70. 70
    ram Says:

    What was said during KOG's slot that could have said at SSN's?

  71. 71
    ram Says:

    sorry, couldn't resist.  I will articulate in a bit.

  72. 72
    Jerome Blank Says:

    #60 skimo, thank you much for the vote…
     
    KOG intraday looks strong, taking a rest trading right at daily 50/200 day SMA resistance now….

  73. 73
    BirdsofpreyRcool Says:

    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?
     
    well, 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). 

  74. 74
    ram Says:

    I'll send myself an email now.

  75. 75
    BirdsofpreyRcool Says:

    ram — U R (still) funny!  πŸ˜‰

  76. 76
    DrLink Says:

    Wes 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.

  77. 77
    bill Says:

    Z..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.

  78. 78
    Jerome Blank Says:

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

  79. 79
    zman Says:

    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.

  80. 80
    zman Says:

    Thanks JB, will go for the daily vote now.

  81. 81
    Jerome Blank Says:

    RE: #80, Zman, thank you always for the vote….

  82. 82
    tomdavis12 Says:

    Z: 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.

  83. 83
    tomdavis12 Says:

    Z: Was there for the presentations for SD, CLB & NE. Was at the breakout sessions for WLL, RIG & NE.

  84. 84
    zman Says:

    Thanks , 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.

  85. 85
    tomdavis12 Says:

    BOP: 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.

  86. 86
    tomdavis12 Says:

    Z: 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.  

  87. 87
    BirdsofpreyRcool Says:

    tomdavis — did you ask him which stadium he is going to name as his next act? 
     
    That answer reminds me of Labor Day Sales ads… "the more you spend, the more you save!!"  sheesh.

  88. 88
    zman Says:

    Twitter is overcapacity, I guess my comment for everyone to follow Doug Kass and do the opposite worked, lol.

  89. 89
    tomdavis12 Says:

    BOP: 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. 

  90. 90
    zman Says:

    I'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.

  91. 91
    zman Says:

    Market looking like all hinges on claims this week. ZZZzzzzz.

  92. 92
    tomdavis12 Says:

    Z; 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?

  93. 93
    zman Says:

    Then he should have added Pinon when gas was $14/MMBtu, lol.

  94. 94
    tomdavis12 Says:

    Z; SD spending for '11: 70% Permian, 25% MidCon & 5% Pinon.

  95. 95
    zman Says:

    Thanks Tom

  96. 96
    tomdavis12 Says:

    Z: Do you have an opinion re CLB? Very impressive company.

  97. 97
    zman Says:

    I 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.

  98. 98
    zman Says:

    Pisani on CNBC saying September to date volume on the S&P is down 30% YoY

  99. 99
    tomdavis12 Says:

    Z: 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. 

  100. 100
    zman Says:

    Tom – 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.

  101. 101
    zman Says:

    KOG at 3, at least volume there looks to be picking up.

  102. 102
    zman Says:

    … right at the 200 day SMA.

  103. 103
    VTZ Says:

    RE 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…
     
    Call my cynical… I know I am.

  104. 104
    tomdavis12 Says:

    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.  

  105. 105
    zman Says:

    VTZ- I may shift to trading Vancouver stocks. Naaaahhhh.

  106. 106
    zman Says:

    Tom – 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.

  107. 107
    zman Says:

    TAT also tapping $3. Probably more near term catalysts there than at GST Elduke

  108. 108
    zman Says:

    LINE executive chairman sells 39K shares at 30.15, leaves him 538 K.  Not a worry in my book.

  109. 109
    VTZ Says:

    RE 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?

  110. 110
    RMD Says:

    GLRP 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.

  111. 111
    zman Says:

    BOP'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.

  112. 112
    zman Says:

    Hear 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.

  113. 113
    zman Says:

    Bill – I'll have an updated catalyst list out either Friday or Monday.

  114. 114
    tomdavis12 Says:

    Z: 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 

  115. 115
    tomdavis12 Says:

    Z: 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.  

  116. 116
    tomdavis12 Says:

    Z; With the trading of WLL this afternoon maybe he did put everyone to sleep.  πŸ™‚

  117. 117
    tomdavis12 Says:

    Z: Knock Knock. looks like I'm having the same effect.  lol

  118. 118
    zman Says:

    Tom 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.

  119. 119
    BirdsofpreyRcool Says:

    Hey!  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.

  120. 120
    elduque Says:

    HI Z —
     
    You are being read in the Singapore airport. What a global site.

    Will be back on Maui in a week.
     

  121. 121
    mimster90 Says:

    Mike Linn Excutive Director sold 761,000 shares [~$24 million] over the last 2 days, he still owns 557,000 shares.
    http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7151147

  122. 122
    zman Says:

    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.

  123. 123
    ram Says:

    Yes, but when you do the math, it seems SSN still should be moving up to a higher plateau.

  124. 124
    zman Says:

    I 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.

  125. 125
    RMD Says:

    thinking over LINE insider sales and looking for negatives:
    my 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.

  126. 126
    zman Says:

    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

  127. 127
    zman Says:

    The 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.

  128. 128
    bill Says:

    pxp updates divesture process
     
    http://investor.plainsxp.com/phoenix.zhtml?c=132091&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTAtMjEwODI3L3htbA%3d%3d

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