30
Sep
Thursday – Oil Review, Natural Gas Supply Slide Show, and Gas Preview Plus —
Market Sentiment Watch: Welcome to the last day of the third quarter. Strong day yesterday for the energy groups, especially so relative to the market. With the quarter coming to an end and the markets up but only barely YTD, my sense is that people are looking for areas that have underperformed and are applying cash that's been on the sidelines. With the XOI, XNG, OIH all still negative on the year and with much of the downside taken out of natural gas at this point (not famous last words, just saying it is closer to a bottom than a top in my way of thinking and at this point in the economic vs drilling cycle) the energy crowd would seem to contain less risk. When the crowd comes back to play in the names I get apprehensive. When I hear the Fast Money bobble heads say that "now is the time for energy" (as opposed to a month ago? or six months ago?) I get ready to pull in the horns a bit. I'm not there yet as valuations are fine but if these hot money types drive them up in a disorderly or rushed manner then I will, in a orderly but rushed manner, take profits and wait for the coming disappoint or flow of cash to the next group. Again, it's early but I'm just being mindful of this as we approach the third quarter where news flow should be good but results should be none too outstanding for either the E&P or the Service names. Look for me to revisit some older names that have been core with additional "trading shares" in the near future.
Ecodata Watch:
- Jobless claims came in at 453,000 vs 460,000 expected
- The 2Q GDP revision came in at 1.7% vs 1.6% expected and 1.6% at last read.
- We get Chicago PMI at 9:45 am EST, forecast is 55%
In today's post:
- Holdings Watch
- Commodity Watch
- Natural Gas Inventory Preview
- Oil Inventory Review
- Natural Gas Supply Slide Show
- Stuff We Care About Today – GST, SSN, BP
- Odds & Ends
Holdings Watch: ZCAT (Zman Catalyst portfolio):
- $5,200
- 100% Cash
- Yesterday’s Trades: None
ZIM (Zman Inefficient Markets portfolio)
- $4,400
- 67% Cash
- Yesterday’s Trades:
- MMR - Sold the (15) MMR $17 October Calls taken yesterday for $1.25, up 94%. I'm sure I will revisit the name on a pullback.
- WLL – Added (5) WLL October $100 Calls for $1.70 with the stock just over $97. Plan to add a second set if the EIA numbers cause weakness in the group. See today’s post for details on well results here.
- WLL – Add (2) WLL October $95 Calls for $4.10 with the stock at $97.
Commodity Watch
Crude oil rallied $1.68 to close at $77.86 yesterday after the EIA reported a bullish set of numbers showing strong gasoline and resurgent distillate demand. Cushing stocks of crude declined yet again helping to propel back to near the top end of its recent band. This morning crude is trading up almost a dollar.
- OPEC Watch: Algeria says it is open to talking about production cuts by the Cartel. I find this significant since Algeria could further expand production at this time but would rather see prices bolstered.
Natural gas closed up a penny at $3.96. This morning gas is trading up close to $4.
- Tropics Watch: There are a couple of systems mid Atlantic but it is early to tell where they are headed. Bastardi thinks Otto forms near Puerto Rico by Sunday.
- Tax Watch: The Pennsylvania House voted 104-94 to impose a 10% tax rate on natural gas production in Marcellus Shale,
Natural Gas Preview: I'm at 65 Bcf for today's storage number. Weather was warmer than year ago and normal levels.
- Last Week: 73 Bcf Injection with CDDs of 41
- Last Year: 65 Bcf Injection CDDs were 42
- 5 Year Average: 66 Bcf Injection - Normal CDDs for this week of the year are 29
- 10 year Hi: 101 Bcf Injection
- 10 year Low: 44 Bcf Injection
The Street is at 68 BCF for today's report.
Oil Inventory Review
ZComment: Good numbers all around. Gasoline demand jumped (see 5th chart below) and that's certainly going to be a fleeting number, probably brought about by bad data at EIA in prior periods combined with a bit of a retailer restocking on lower gasoline prices. Distillates also poked their head up in terms of demand and this is more interesting, especially given the time of year as we transition from gasoline helping to determine where oil prices move to diesel and heating oil. Next week look for production of both to pull back significantly, leading to further draws on distillates.
Crude:
Gasoline:
Distillates:
Natural Gas Supply Slide Show
Highlights:
- Month to Month, July supply was up ---%.
- On a year over year basis, production is up 1.8 Bcfgpd, about where it has been.
- Louisiana and the "Other States" (which includes a number of newer shales like the Marcellus from states that have not been tracked seperately) are both showing slowing growth.
Stuff We Care About Today
SSN Updates Bakken Program Activities
- The Gary #1-24H well (their 4th to be completed) produced 2,780 BOEpd (6 hour avg) from a short lateral. I think this was completed last week but am not sure. For the last 24 hours it produced 1,636 BOEpd.
- The next well, Earl, spud Tuesday and should be at TD in about 2 more weeks.
- We should get word on their 3rd and final closing of their Niobrara sale to CHK later today or tomorrow.
GST Announces Middle Bossier Success
- The Streater #1 is producing at 10.3 MMcfgpd from a single completion in the middle Bossier with a high flowing casing pressure. This is an OK result.
- GST expects to complete two more zones when pressure declines here.
- GST has 100% WI and a 76%% net revenue interest which is important since the firm only produced 15.8 MMcfepd, in total, in 2Q10.
- It's also significant in that these wells are probably in the 5 Bcfe apiece range and success here should set up 30 to 40 additional middle Bossier locations on GST's 16,300 east Texas acres.
- GST had proved reserves 49 Bcfe as of YE09, so the ability to add a number of 5 Bcfe-ish wells for less capital and in shorter order than the deep Bossier wells that they are known for is significant. When gas prices improve this should be an important resource for them.
- I continue to hold GST in the ZLT. While it is more than fully valued on a proved reserves in the ground basis at present, I don't believe the market is fully taking into account the value of the recent Marcellus deal, nor the potential of the Eagle Ford Shale where we should get results from their first test around Halloween, nor the value that may come from Glen Rose play oil.
Other Stuff:
- BP, as part of its planned divestitures of $25 to $30 B is in talks to sell some assets in Algeria potentially to state run Sonatrach.
Odds & Ends
Analyst Watch:
- FTI - PT upped $10 to $90 at FBR
- Jefferies raised price targets on most of their solar coverage today.
GLRP – on tape with an acquisition, would not touch it myself.
MCF spinning out their gold exploration sub in Alaska in December to shareholders.
September 30th, 2010 at 7:40 amReposted from BedTime Market Strategist last night — Crude is the key
September 30th, 2010 at 7:58 amThe Missing Link.
These days, the theme on the minds of traders and investors is the return of the reflation trade that was so dominant throughout 2009 as the Fed executed its large scale quantitative easing program. Since August 10th when the FOMC put the brakes on the exit strategy but then subsequently indicated it would reverse course and open the door for a second round of quantitative easing (QE2), signs of the reflation trade materialized. We have been hesitant to look at the market from a reflation perspective because we anticipate that QE2 will look very different from QE1. The key way we have described QE2 is that the Fed would use asset purchases and sales in the same manner as it has historically used the Fed Funds rate. For example, if the economic data were to weaken notably, the Fed would pick up the pace of asset purchases. Likewise, if the economic data were to ramp up (although nobody believes that is about to happen in the near future), the Fed would start making asset sales. Due to the obvious soft patch in the economy over the past several months, the market is widely focused upon the potential for asset purchases. Whether or not purchases are made is conditional upon the severity of developments within the economy. The greater the weakness, the more assets will be purchased. The more mild the weakness, the less the Fed will do. It will be notably different than the process during QE1 where purchases were consistent over a set time period with few adjustments.
The market's expectations for QE2 are currently fairly large due to the weak expectations about prospects for the economy. We are in a data dependent environment. There are only signs of the reflation trade because only certain asset classes are responding. Theoretically, assets like Equities, Gold and Crude should rise. Bonds will have a bid near term, pushing yields lower as players try to get ahead of the Fed. The Dollar should suffer as the monetary base is expanded in hopes of an expanding money supply. Since the August 10th course reversal, Gold has rallied 8.5%, the 10 year yield has dropped 25 basis points and the Dollar index has lost 2.5%. Those are all acting as one might expect in a reflationary environment. Equities have gained 2.1%, they are up but not even enough to offset the losses of the Dollar. Finally, the missing link is Crude. Even after today's rally, Crude is down 3% since August 10th. Additionally, the solid performance from Crude today was the result of a fundamental catalyst in the form of DOE inventory data, not reflation. Even if we expect the reflation today, the process should be different than the approach of consistent asset purchases over the span of just over a year. We will describe what we suspect is going on. We know others will have a different view so please take this as simply one opinion. We are of the view that the comfortable reflation trades are being put on in a speculative manner. In this environment, it is easy to justify buying Gold and Treasuries and selling the Dollar, so that is where the speculative momentum is headed. Those are positions that managers can sleep with and are likely getting a little crowded, at least until we see what QE2 really looks like. Stepping into Equities and Crude does not feel as easy or comfortable, therefore, they are not getting the attention. If reflation is the true catalyst behind the action, than Equities and Crude should participate as well. The divergence illustrates that either the three that are working need to consolidate their recent moves or the other two should join the party.
JB: Thanks for your comments and work last night. When you like something, I pay attention.
September 30th, 2010 at 8:07 amRE: #3, tom, thanks much for the kind comments…
September 30th, 2010 at 8:10 amEditor off
I will be out of the office from now until probably 15 minutes after the gas number due to an appointment.
JB also highlighted SU as a potential breakout on yesterday's post this morning. Thanks for all your hard work JB!
I may add trading shares to HK, another JB highlight from last night. It is well hedged, it has done what the Street wanted and it is growing rapidly still. 3Q results may be run of the mill there but the stock certainly isn't discounting anything better from the name. If they sell the Fayetteville the crowd should go wild.
Market in general looking to take out the 3Q at its highs
WLL – looking for a little payback there today as the news flippers should be (but may not yet be) done.
OAS taking out $19 and all time new highs in pre market action.
HAL – now too rich for my blood going into the quarter but on a big bad red day I will return soon
September 30th, 2010 at 8:11 amOK, one last thing before I hop
OAS – Initiated at Southcoast with an Add rating and $24 PT
September 30th, 2010 at 8:14 amChicago Purchasing Managers feeling a little perkier… at 60.4 vs 55.5 expected and 56.7 last month. Market deciding to like that.
September 30th, 2010 at 8:46 amGST has a lot going on, underneath the surface. Two horizontal wells still drilling, one targeting the EF and the other the GlenRose. Both are hoped to be liquids-rich.
September 30th, 2010 at 9:11 amJB — if one wanted to pick up more ATPG trading shares, what level should one be looking for?
September 30th, 2010 at 9:13 amcpe has had a 25 % in 2 days
September 30th, 2010 at 9:24 amSD remains relatively strong. Wondering out loud how much of this move is short covering
reading that Salazar is expected to speak at 10:30… expected to announce new rules for o/s drilling….
September 30th, 2010 at 9:26 ambop – PAYD is this the imp thing at least 1 of the rodman bros exercising? (i couldn’t find greg exercising, just selling some, but i’m guessing i missed it.) am tempted to sell 1/2 my position now that i’m back to even. u said don’t spend more than a vegas week-end, but i added a 2nd week-end.
September 30th, 2010 at 9:28 amandy — suggestion would be to hold for a bit longer… then you can sell 1/2 for more than breakeven and hold onto the weekend-money position. The options exercise is good news. Think we might see the other bro exercising here soon.
September 30th, 2010 at 9:31 amAnyone have the #’s?
September 30th, 2010 at 9:34 amNat Gas stockpiles up 74 Bs
September 30th, 2010 at 9:36 am+74 for nat gas
September 30th, 2010 at 9:36 amhttp://www.thestreet.com/story/10875299/1/petrohawk-shares-stand-to-quadruple.html?puc=tscft&cm_ven=tscft
My HK is back in black this am and here comes the fast money crowd.
September 30th, 2010 at 9:58 amNG off a little more after the number. Obviously not a great number. Best thought is that supply has remained in the +2 Bcfgpd YoY area through current time.
September 30th, 2010 at 10:01 amWLL = still puking up shares bought for the news. Will add more to the $95 calls soon I think.
SSN – lightish volume, up but should not really run on the ops update. Next big things are the closing of the CHK deal, timing of CHK wells, getting the 3D in house on the remaining Goshen acres and setting the spud date for the first two wells (checking to see if those will be post holes or horizontals).
BSIC – awaiting feedback from the company.
September 30th, 2010 at 10:03 amGrains collapsing-did not see any news.
September 30th, 2010 at 10:05 amchk is just weeks away from announcing a partner for efs.. Perhaps they want to keep it out of q3.
CHK has 600,000 acres and likes to sell 20 to 25 % to jv partners. At 1,500 acre, the parcel is worth 9 b, 25 % 2.25 b
They like half of sell price as carries
They are also having an analyst day mid october and I think this gets announced prior to “analyst day”
September 30th, 2010 at 10:07 am20 putin might end wheat export ban
September 30th, 2010 at 10:07 amJeremy Siegel apparently listening to BOP re bond funds:
In a Withering Market, Where Will Your Investments Grow?
Published: September 29, 2010 in Knowledge@Wharton
Wharton finance professor Jeremy Siegel believes investors into U.S. Treasury bonds could be in for a fall. “Those who are now crowding into bonds and bond funds are courting disaster,” Siegel wrote in an op-ed published in The Wall Street Journal in August titled, “The Great American Bond Bubble.” Written in conjunction with Jeremy Schwartz, director of research at WisdomTree Investments where Siegel is a senior advisor, the article warned of what would happen to bond funds when interest rates rise: “The possibility of substantial capital losses on bonds looms large. If over the next year, 10-year interest rates, which are now 2.8%, rise to 3.15%, bondholders will suffer a capital loss equal to the current yield. If rates rise to 4% as they did last spring, the capital loss will be more than three times the current yield. Is there any doubt that interest rates will rise over the next two decades as the baby boomers retire and the enormous government entitlement programs kick into gear?”
Siegel says critics objected to the piece, arguing that investors who hold bonds to maturity will always receive a specific dollar amount, making bonds inherently less risky than stocks. But most Americans are not actually buying bonds, he points out. Rather, they are investing in bond funds. Rather than holding bonds until they mature, bond funds sell bonds as they get close to maturity and replace them with similar bonds that will mature at a later date. “These people who are going into bond funds are not holding them until maturity,” Siegel notes. “If interest rates rise, they will take a permanent loss in their portfolio.”
September 30th, 2010 at 10:07 amZTRADE – ZIM – WLL
WLL – Weak again today post the Lewis & Clark news, added (2) more of the October $95 calls for $2.60 with the stock at $94.60.
September 30th, 2010 at 10:08 amAlert to JB’s CIGX comment yesterday re triangle break.
September 30th, 2010 at 10:09 amAs always appreciate it and voted.
Mr. Salazar speaking….
September 30th, 2010 at 10:09 amMMR seeing quite a bout of profit taking off today’s peak. I’ll be dabbling there again too.
September 30th, 2010 at 10:10 am#9 ATPG BOP, posted a 30 min perspective, thinking $13.40 is the spot to try…
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
September 30th, 2010 at 10:10 amonce again, proving to the world what an Id-jit he is
September 30th, 2010 at 10:10 amz- in you opinion , how would the market react to a new chk jv for efs.
Who else would benefit hk?
September 30th, 2010 at 10:11 amRE: #25, john… thank you
September 30th, 2010 at 10:11 amSalazar saying that companies “must identify potential drilling hazards.”
Oh, yeah… FORGOT to think about those, Ken, when we recommended this $120mm expenditure. Thanks, bud.
September 30th, 2010 at 10:11 amThanks BOP, can’t find it, Bernanke speaking to the House now.
September 30th, 2010 at 10:11 amKen still withholding the complete set of new rules. And they wonder why this Administration is considered “anti-business”??? sheesh.
September 30th, 2010 at 10:13 amYosemite Sam to Bugs Bunny Bugs Lighting up a match in the gun powder room on the ship; Why You Crazy Doggone Idjit, whatcha trying to do blow us to smithereens?! I Hates Rabbits!
September 30th, 2010 at 10:14 amBill – I think it’ll be a pretty muted response, depends on the terms, good for CHK but often their JV partners have not gotten good deals. If it is India it may give a short lived boost to the list of EFS players there so HK, EOG, PXD, … all the way down to an MHR. Other mids that may get a bounce would be ROSE, SFY, SM.
September 30th, 2010 at 10:14 am>Salazar saying that companies “must identify potential drilling hazards.”
lol
these dopes have to go
You cant legislate common sense
September 30th, 2010 at 10:15 amKen Salazar is the Poster Child for what happens when you give absolute power to BAFOONS.
September 30th, 2010 at 10:15 amre 34. Unreal. Withholding because they aren’t done writing them yet?
September 30th, 2010 at 10:16 amWLL…strong support at $93.50
September 30th, 2010 at 10:17 amhttp://www.nytimes.com/2010/10/01/us/01drill.html?_r=1&hp
“lift moratorium in our own time”
September 30th, 2010 at 10:17 am“Ban will end when risks are ‘significantly reduced’….” HUH??
September 30th, 2010 at 10:17 amMaybe Ken can oversee the Airline Industry next…
September 30th, 2010 at 10:18 amBOP – where are you watching this, bloomtv?
September 30th, 2010 at 10:21 amscrolling headlines on BB, yes.
September 30th, 2010 at 10:21 am#38… I think I insulted Bafoons. Sorry. I’d say “mentally retarded,” but that phrased is outlawed now.
September 30th, 2010 at 10:23 amre 41. Wow. I can hear China laughing from the other side of the planet.
NG8990 – please check your email.
September 30th, 2010 at 10:23 amGiven the recent run, there is probably a good put trade out there in RIG.
September 30th, 2010 at 10:24 amre 46… if the dunce cap fits …
September 30th, 2010 at 10:25 amhmmmm… on the other hand, maybe Kenny is a Secret Plant by the Republicans to make sure that no GoM state ever votes for Democrats again. pondering….
September 30th, 2010 at 10:26 amS&P nose dive, a little end of quarter profit protection anyone?
BOP – or he’s long natural gas futures…
September 30th, 2010 at 10:27 am… about the only good thing i can say about Ken Salazar is that he is much better looking than his Good Buddy, Henry Waxman.
September 30th, 2010 at 10:30 am(but the bar doesn’t get set much lower than that)
September 30th, 2010 at 10:31 amZTRADE – ZIM – MMR
MMR – Added back (10) of the October $17 calls for $0.88 (sold yesterday for $1.25) with the stock at 16.88, backing off with the group.
September 30th, 2010 at 10:35 amRE: SU breaking out, it’s only US dollar effects. In CAD it’s still stuck in the mud.
September 30th, 2010 at 10:38 amjust bought some more ATPG trading shares… thanks, JB. i will go vote now.
September 30th, 2010 at 10:42 amJB- any thoughts on SD chart?
September 30th, 2010 at 10:55 amREXX coming across the tape with an ops update now … comments on the closing of their Marcellus JV, also gives rate of 4.3 mm/d on one well, another 2 wells at a combined 6.9, next one to frac next week, then 6 more wells drilled that will be completed second half of October.
September 30th, 2010 at 11:02 amRE: #56, BOP, thank you…
RE: #57, cargo…SD has had quite the run and is now trading up against daily 100 day SMA resistance, would not be surprised to see a well deserved pullback here, the day’s not over but I also see a slight RSI divergence developing on the daily, thinking I would not chase if not currently long from lower…
September 30th, 2010 at 11:02 amREXX also saying it is fracing its first Niobrara well now so probably news there before earnings.
September 30th, 2010 at 11:03 amIn case you were wondering about the market today, from Marketwatch:
September 30th, 2010 at 11:10 am“Some economic figures came out this morning that were… more positive than what was expected, and that gave the market a shot in the arm,” says Loren Danielson, Senior Vice President, RBC Wealth Management. Those figures include a bigger than expected drop in new jobless claims and a stronger than predicted increase in Chicago-area manufacturing activity. As for why the effects of that shot wore off so quickly, Danielson tells Andrew O’Day “we have had a really, really good September – so it’s not surprising that the market is not shooting up from here.”
Thanks JB- fear is overtaking my greed impulse on dec 5 calls. Since I am better at buying than selling your caution is timely and helpful.
September 30th, 2010 at 11:13 amHogzilla – please check your email
VTZ – please check your email
September 30th, 2010 at 11:40 amBaylor – check your email
September 30th, 2010 at 11:47 amOil was up roughly 5 dollars a bbl this qtr. This means mark to market (non cash losses) for people with oil hedges
SD gets a double whammy, low ng prices and a huge mark to market loss on its oil hedges 100 m +. Bottom line they lose money in q3
September 30th, 2010 at 12:33 pmWow – we have someone called Hogzilla
VTZ – what’s the story with COS? Been in a downtrend for a while and up 2.5% today.
September 30th, 2010 at 12:35 pmBOP nice pick-up on ATPG. would like to have joined u but have too much already. plus its been a great overnite trader.
September 30th, 2010 at 12:37 pmDman – oh you’d be surprised by the names of some of the lurkers.
September 30th, 2010 at 12:40 pmandy — thank you for your kind words. Just love it when we can all share ideas and make $$ together. That’s what z’s site is all about.
September 30th, 2010 at 12:45 pmRE 66: Since the Petro-Can purchase I think that people like myself have been moving out of COS because with oil stuck in a range the dividend growth potential is less attractive, the growth potential compared to SU is much smaller and with SU shaking out the Petro-can piggy bank of assets their cash position is improving and they are more likely to grow at a faster rate than COS.
I have seen numerous reports citing that COS is relatively expensive given the current dividend and growth potential.
I also think that CNQ, CVE, and SU are more favourable growth alternatives in the sense that they have smaller bitsize chunks of capital projects in the form of things like Firebag, Kirby, Primrose, etc. and the cost profiles and project returns look much more favourable with oil in this range than it does for COS.
September 30th, 2010 at 12:48 pmone thought i’ve been struggling with, as far as a day-trade in ATPG today… there are a lot of agressive shorts in the name. And a lot of funds use “trade date” as their reporting date. Well, HFs, anyway. So, don’t know if they will try to press their position to get a good “end of quarter” mark there. It’s a bit of a Push-Me-Pull-You situation between the longs and shorts in ATPG. I think (hope, bet) the fundamental news will drive ATPG into the Winner’s Circle for the longs… but it’s a tough call on a very near-term basis. Just a few thoughts…
September 30th, 2010 at 12:49 pmBOP – just looked up Salazar on Wikipedia. The most interesting thing about him is that the guy who retired from his Senate seat before Ken ran for it had the middle name “Nighthorse”. I’m not making it up! It’s in the Wiki so it must be true.
September 30th, 2010 at 12:50 pmThanks V.
Query: what about if crude got to $100? Would COS be more levered to that move?
September 30th, 2010 at 12:52 pmBP moving on up on the Algeria sale news (potential sale) and despite the US and Mexico saying they may sue the company. Back over $40.
September 30th, 2010 at 12:52 pmDman — actually, if you look up “Big Hat, No Cattle” on wikipedia, they have a picture of Kenny Boy there too. Poster Child, if you will.
September 30th, 2010 at 12:53 pmI thought that COS also guided down syncrude prodn in the last week
September 30th, 2010 at 12:56 pmRE 73: Definitely. I think that the move today might be anticipation of oil breaking out of the range that we’ve seen for so long now.
If oil does break out and move closer towards 100 COS would get a better pop in the short term for sure.
Think of it as a better play when oil is rising in the short term because of the dividend increases whereas, all things equal, the other are better plays for growth.
September 30th, 2010 at 12:57 pmYeah COS guided down, but nothing too crazy < 5%. Anyone who assumes that the guidance from the oil sands companies is accurate should show me 1 year that they ever meet guidance/business plan. It's the nature of the biz…
September 30th, 2010 at 1:02 pmIt is not an easy thing … just don’t call it tar sands. If you have never read VTZ’s primer on the oil sands biz you can find it here:
http://zmansenergybrain.com/2008/12/12/expert-guest-post-alberta-oil-sands-101-don%E2%80%99t-call-it-tar-sands-please-it%E2%80%99s-annoying/
September 30th, 2010 at 1:06 pmV – Enerplus has broken out over the last few days & I’ve been wondering if that is also anticipating a move in crude or just that NG can’t get too much worse. Maybe both. It’s kind of a U-shaped chart with the bottom of the U extending 2 years (with a bit of a wobble during the giant panic of 2008-9).
September 30th, 2010 at 1:08 pmDman – for the record I don’t want crude higher now, not yet. I would agree with the maybe both situation. LINE would actually fall into the “you idiots hedged!” crowd and start to underperform when the two commodities rally…so far they are holding near their highs.
September 30th, 2010 at 1:11 pmdman – i also wiki’d salazar pic. wanted to see who BOP called good-looking.
BOP – if your theory about ATPG is correct, it might make a good overnite trade!!!!!
September 30th, 2010 at 1:17 pmER 79 – Things I really need to update from that post:
September 30th, 2010 at 1:18 pm-2008 costs, both capital and operating
-Capital spending environment
-Expected projects that will be completed
-Northwest Upgrader and the Bitumen-in-Kind Royalty Structure
-New Suncor
-CVE as a separate entity
-More insitu talk
andy — he is only “good looking” compared to Henry. wiki Mr. Waxman… but not right after you’ve had lunch.
September 30th, 2010 at 1:22 pmandy — and you are precisely correct. ATPG has made for a much better “swing trade,” than it has as a day-trading-vehicle.
September 30th, 2010 at 1:23 pmRE GST – Just and FYI, my near term (by year end) target is probably $4.50 to $5 unless both Glen Rose and EFS are good. Over $4.50 I have to think about pulling so off the table and then looking to have a long term core (assuming I still like them that much after the next couple of quarters are in the bag) and a set of trading position shares.
September 30th, 2010 at 1:29 pmZ – #81 I hear ya but we don’t always get what we want 🙂
Oil sheiks, on the other hand, usually do and they are watching the price of bling go thru the roof. Basically crude has not really priced in the big drop in the USD versus metals, grains and other paper currencies, so it has some ketchup to do. It is currently nibbling at the down-sloping line in a wedge going back to May.
I would think the oil sands folk are in a good place because the price of the NG they burn will not keep pace with crude. Of course, if crude gets to $100 the economy will collapse all over again, but lets not get ahead of ourselves.
September 30th, 2010 at 1:30 pmZ: I thought Hogzilla was the ex CEO of Wash Mutual. Always had a good tan. He should take a cell next to Bernie Ebbers. JPM wants their money back from the govt for that purchase. Fat chance.
September 30th, 2010 at 1:30 pmWLL – a bit of technical & psychology drag versus crude up 2.8%.
September 30th, 2010 at 1:35 pmBSIC – someone took a little off the table and the thin little thing drops 6%.
Crude up $2 at $80 at the close.
NG off 11 cents.
September 30th, 2010 at 1:36 pmRE 87: James Cameron doesn’t think that we’re in a good place but he’s probably still a little lost in Pandora.
It’s probably some sort of a publicity stunt so clever reporters can draw parralels between Fort McMurray and Pandora and oilsands and “Unobtainium”.
September 30th, 2010 at 1:43 pmDman – yes, a lingering bit of BTRSTN action. Should wake up and smell the coffee soonish. I don’t yet know if they speak next week at Johnson Rice.
September 30th, 2010 at 1:48 pmZ did you notice that SSN put out a yr/end financials release at market open. They mentioned that ” A third and final closing is expected in early October and is estimated to result in Samson receiving a further $4 million in proceeds.”.. I know you were out for a little while around that time.
Here’s the entire release link.
September 30th, 2010 at 1:49 pmhttp://finance.yahoo.com/news/Samson-Oil-Gas-Lodges-June-30-bw-2715233434.html?x=0
Thanks John, no I did not. Early Oct as in Oct 1 I wonder, sounds like maybe a small delay. Anyway, will have a look and put anything relevant in the morning post. Their quarterly pieces are a good read, as there is more there than balance sheet, Bakken, and Niobrara.
September 30th, 2010 at 1:51 pmAnybody know what woke up ECA today?
September 30th, 2010 at 2:06 pm#95 — eighty-dollar oil, maybe??
September 30th, 2010 at 2:07 pmJohn11 – it’s lagged the sector hard since earnings but its wow up today. Don’t see a thing, could just be technically it was time.
September 30th, 2010 at 2:08 pmEcuador screetching about some sort of coup attempt. Seems to have jolted the oil mrkt a bit.
September 30th, 2010 at 2:08 pmthx for that pullback area on WLL Jerome….made me some walking around money for the weekend….
September 30th, 2010 at 2:10 pmWLL starting to wake up.
CLB was off $3 earlier, Cramer spoke lovingly, now off $2. Wish he’d shut up and let it fall $10 so I would feel better about getting long there for a trade.
September 30th, 2010 at 2:10 pmThanks BOP – had not seen, dealing with some stuff on the phone, probably part of the rally, not a lot of sense to that as they are a bit player in the big scheme of things.
September 30th, 2010 at 2:12 pmOAS tapping fresh all time highs, hold oil here for a bit and wheel see $20+. My thought is that as they speak at more conferences this fall and they release 3Q numbers we will see them get a little freer with their comments and investors coming to the stock. It’s kind of the quiet but large-ish position holder in the Bakken.
September 30th, 2010 at 2:14 pmBSIC volume 4x normal, after two days of 2x normal activity.
A couple of more things I find interesting here:
When BEXP bought out their partner Panther’s acreage, they were buying to the east of Rough Rider, where Zenergy has been putting up some good numbers. Panther was dragging their feet, BEXP won’t be, plans two wells prior to year end. BSIC working interest here should be between 2 and 8%.
BSIC also has acreage in Indian Hill which is the donut hole in the center of Rough Rider. SM is putting a well down now that is 4 sections from one of BEXP’s 3,000 boepd wells. NFX and COP are in encroaching on this from the east side as well.
May not sound like much to have sub 10% working interests in the area but when you only made 299 boepd in your last quarter it’ll be an apparent ramp.
September 30th, 2010 at 2:18 pmV – well, I never did see the blue-people film, but I can’t pretend that I think oil sands are doing the planet any good.
Still, lets assume oil sands are destroying the planet as we speak. So the moralist tells me “you must not make money from the oil sands, because then *you* are destroying the planet”. I then ask “oh, so should I make money by shorting oil sands?” Would I then be *saving* the planet?
I’ve yet to see an “ethical short-only hedge fund” based on that premise. I guess there’s an opening there. OK everyone, I’ve got that idea copyrighted!
So I could ascend to heaven by shorting Altria. Actually, based on the chart, it might just work here. Long CIGX, short Altria. There’s a hedge fund right there.
But I can’t trade Altria simply because I would have to think about them all the time. It’s not a moral thing, just that I can’t stand them. Ugh.
Speaking of CIGX, it seems to have a cup & handle thingy going on.
September 30th, 2010 at 2:19 pmOAS really pushing higher now.
Intern #2 on the scene so I’m going to shut up a few minutes early but will keep the mobile on me. Pretty good end to the quarter in sight and I like the general drift up I’m seeing for the whopping 2 options positions I have on at present.
September 30th, 2010 at 2:31 pmi think part of OAS move today relates to Russell index add
September 30th, 2010 at 2:31 pmBy the way, getting more interested in PETD as it just trends sideways.
September 30th, 2010 at 2:31 pmJohn – thanks, didn’t think of that, was thinking the rating by Southcoast and oil prices.
September 30th, 2010 at 2:32 pmDman — thinking CIGX will be my “cup of tea” at some point between now and year end. They have waited years, to be in the position they are currently in… and have plotted out all the counter-moves against them (like Glaxo, the other day). Since Star has been wandering in the Desert for the last couple of years, they have had nothing better to do, then lay it all out like a John Grisham novel. It should be a lot of fun.
September 30th, 2010 at 2:34 pm#109 I like it when BOP gets all poetic 🙂
September 30th, 2010 at 2:35 pmhttp://s.wsj.net/public/resources/documents/info-Failed_Banks-sort.html
Very interesting picture I had not seen before. Can sort the dots by different categories to see different size dots as well.
September 30th, 2010 at 2:35 pmaw, shucks, Dman. thx!
September 30th, 2010 at 2:42 pm#111 Interesting – I wouldn’t have guessed the big pile of dots in Georgia, but I assume it correlates with vastly over-inflated property. Florida makes sense of course.
September 30th, 2010 at 2:42 pmbeerthirty
September 30th, 2010 at 3:05 pmEnd of Day / End of Month Overview —
· Market Update – stocks wrap up their best month since the start of the rally (the SP500 ends Sept up ~8.9%, its best monthly gain since the +9.39% of Apr ’09; this was the best Sept since ’39 according to CNBC). Investors were given several excuses to rally today but failed to break north of the technically important 1157-1158 level. Overseas in Europe two much anticipated events took place w/the Moody’s Spain downgrade and the Anglo Irish bailout assessment (both events were inline-to-better than worst case fears and CDS on some of the peripheral countries actually tightened on the news). China wrapped up its last day of trading until Oct 8 (the country started its “Golden Week” holidays today) w/its best gain since mid-Aug after authorities rolled out new real estate regulations that wound up being less onerous than expected (the key was that no real estate tax was unveiled). The economic numbers in the US surprised on the upside (both jobless claims and the Chicago PMI). US stocks did stage an impressive rally (the futures jumped from a low of ~1134 at the 2amET lows right after Spain to a high of 1153 right in the wake of the Chicago PMI) but the move didn’t have a lot of legs to it (technical resistance at 1157-1158 on sp500 cash played a part). The subsequent sell-off though wasn’t panicked and the desk didn’t see a lot of people rush to take profits or lay out fresh shorts. Indeed, equities quickly found their footing and spent much of the afternoon session hugging the unchanged line. The day provided fodder for both the bears (the failed rally) and bulls (stocks demonstrated some of their usual resiliency this afternoon) w/neither really having the upper hand at 4pmET. Some of the strongest groups in Sept were def. for sale today (i.e. tech hardware/HWI, which was up ~15.5% in Sept, fell more than 1% on the day; retailers were also sluggish following big Sept gains). From the futures desk: flows are strong into the bell, but considering month end/quarter end and the index rebalances we’ve had today, our expectations were higher. There is a sell side bias, but it is not as overwhelming as some had predicted.
· Equity sectors – Energy was the best sector in the market, moving higher on strength in integrateds (big jump in crude), refiners (rise in crack spreads), and solars (Jefferies raised PTs and upgraded CSIQ). Financials and tech saw an interesting reversal, possibly tied to a month-end rebalance as financials were a notable outperformer while tech was the worst sector in the market today (financials were one of weakest sectors this month, while tech was one of the best sectors). Discretionary was slightly ahead of the tape, reversing their underperformance on strength in education stocks, although retails continued to underperform. HC was mostly in line with the tape, with strength in a few biotechs and weakness in pharma names (PFE, MRK). Materials were down with the tape on weakness in ferts, gold stocks, and a few steels. Telecom was off 0.35% on weakness in WIN and AMT. Utilities were off around 0.4% on weakness in NU and DUK. Industrials lagged the tape, falling around 0.45% on weakness in ag equip names (bearish crop report for corn), miners (IMF said it would like a broader Aussie mining tax), and truckers. Staples were also off around 0.45% on weakness in ADM, CL, and SYS, although poultry names outperformed on corn weakness.
September 30th, 2010 at 3:33 pm