04
Oct

Monday Morning And All Is Calm

Print Friendly, PDF & Email


Market Sentiment Watch: All eyes are turned to Friday's Payroll report for September so look for some sketchy trading. Notably, Goldman is now telling people that a second round of quantitative easing is already priced into the treasury market and that's no longer safe to buy into those markets. As opinion swings that direction it's a distinct possibility the equity market will benefit. In energy land we should get some last minute mark to market action on the E&Ps from the sellside and also should see a little more news flow out of the Johnson Rice Energy Conference participants beginning tomorrow.

The Week Ahead:

  • Monday 10/4: Pending home sales, factory orders (F = -0.5%), Bernanke speech tonight on more Fed action,
  • Tuesday 10/5: ISM  Non-manufacturing (F = 52%)
  • Wednesday 10/6:  EIA Oil Inventory Report, ADP employment (F = +23,000 for September, August was +10,000)
  • Thursday 10/7: EIA Natural Storage Report, jobless claims (F = 450,000), consumer credit
  • Friday 10/8: Nonfarm payrolls (F = -5,000, last reading -54,000), private sector payrols (F = +75,000), unemployment rate (F = 9.7%, last read 9.6%)

In Today's Post:

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

Holdings Watch: ZCAT (Zman Catalyst portfolio):

  • $5,200
  • 100% Cash

ZIM (Zman Inefficient Markets portfolio)

  • $5,400
  • 2 WLL Positions,
  • 57% Cash

Commodity  Watch:

Crude oil ended last week up 7% to close at $81.58. Blame the time of year and a favorable EIA report showing strong product demand, an almost coup in Ecuador, a new round of bombings in Nigeria, and a weakening dollar. This week do not expect that strong gasoline demand (it was a record for this week of the year despite current high unemployment) to continue but threatening comments by that nutbag of despot Chavez regarding radicalizing his socialist revolution to strike some traders as a prelude to heightened U.S. / Venezuelan tension. The 12 month crude strip is now trading at $84.76.  This morning crude is trading flat.

  • Rig Count Watch: Oil rigs in the U.S. remained near cycle high last Friday as the domestic search of oil and liquids rich plays shows no sign of abating soon. Recent comments from E&Ps indicate a continuing shift away from natural gas drilling however natural gas directed rig counts remain elevated, possibly due to an inability to accurately classify rigs as either gas or gas but with a lot of liquids. Or it could just be that the E&Ps are talking more than acting, as they are still strapped with leasehold obligations and cannot simply shit to oil without losing big chunks of high cost leases.
  • HSC Watch: The Houston Ship Channel may be closed for 3 days due to barge accident.  This could have a minor positive affect on prices.
  • MEND Watch: MEND set off a number of explosives late last week to mark Nigeria's 50th independence day. Over the weekend, Nigeria retaliated by arresting former rebel leader Henri Okah. I've got a feeling this will not go over well with the rebels and could spark a new round of platform and pipeline attacks as government promises to "spread the wealth" and retrain the rebels to be productive citizens have largely not panned out.

Natural gas fell 2% last week to close at $3.80.  We are in the shoulder season (not much heating demand and waning cooling load. Without help from tropical systems look gas to remain in a fairly tight band around $4 until the weather turns more winter like. The 12 month strip is now trading at $4.27. This morning gas is trading off 6 cents.

  • Weather Watch: Cooling

    • Week before last: Cooling Degree Days of 50 which, yielded an injection of 74 Bcf.
    • Last Week: CDDs of 30, warmer than normal; HDD's were 28 (also much warmer than normal as you'd guess)
    • This Week's Forecast: 10 CDD which means it's time to start looking at Heating Degree Days. This week's HDD forecast is a more seasonable 43.


Tropics Watch: Pretty quiet.

Stuff We Care About Today

CHK Monetizes Barnett -Volumetric Production Payment #8

  • 390 Bcf sold to Barclays for $1.15 B
  • This equates $2.94 / Mcf which is a better price than they could have hoped for in an outright sale of the asset.
  • Area is the Barnett and they retained deeper drilling rights on the acreage
  • Debt to cap goes from 41% to 39% as total debt should fall to about $9.35 B
  • Nutshell: I like VPPs when gas prices are fairly low and you are looking to raise cash as opposed to asset sales (unless you can get an outlier price). Much of the Street will simply see the VPP as debt, an obligation of a certain amount of gas they have to fulfill but this is the Barnett shale, where their production should be a certainty and at the end of the period (probably between 4 and 5 years based on the current rate of production of 280 MM/d) they still have the properties. Stock has been performing a little better than usual last week and it could have been a bit of leakiness about something about to get sold. I'd expect it to trade a little better than the group today although again, many sell-siders will view this as debt and give it a shoulder shrug.

Other Stuff

  • Johnson Rice Energy Conference: List of Attendees (Conference is Tuesday - Thursday)
  • SSN - looking to complete sale of Goshen County acres to CHK in the next 10 days.
  • DSX - $83 mm, 10 yr loan from Export-Import Bank of China to finance 2 newbuild drybulks (Newcastlemax class which is a new one on me) announced in April. This is the first loan the've taken with China Eximbank which is wholly owned by China.
  • OSG getting a favorable nod from the manager of Heartland Select Value Fund this morning, say he sees a rebound in VLCC dayrates in 2011/12.

Odds & Ends

Analyst Watch:

  • STR - UBS cuts to Hold.
  • NBL - BMO ups target by $5 to $90, rating Outperform

Housekeeping Watch: Follow us on twitter for announcement of closed positions and a daily heads up that the post is up. Keyword: ZmansEnrgyBrain

118 Responses to “Monday Morning And All Is Calm”

  1. 1
    zman Says:

    Analyst Watch:

    XEC – buy
    FST, SMM – accumulate
    all new adds at Tudor Pickering

  2. 2
    zman Says:

    Front and Center watch

    Watching oil and the S&P for an exit on the WLL calls this week. I will not be in these same sets by next week.

    CHK – just to see how it reacts, it’s been awhile since I traded options there and they are liquid… but so far not much of a bump in pre market.

    WHX – reran the model last night for actual oil and gas prices last night, I get about $0.57 for this quarter’s distribution, this is below the Street and pretty conservative on estimates. Next twelve months yields looks like 11% to me.

    Looks like a slow day setting up.

  3. 3
    zman Says:

    Anyone know Phoenix Capital Research? They are looking for a sharp correction in the S&P down to 875 by year end, with the reversal starting this week after one last hurrah. I happen not to be in that camp but would like to know who they are.

  4. 4
    bill Says:

    does the vpp end when 390 bcfs are delivered or they get all the gas for 5 years regardless of production

  5. 5
    bill Says:

    Chk has analyst day soon. The vpp is news # 1. They should announce a jv partner for 20 % of the EFS soon as well.

    Interesting that chk closed the deal on 9/30 which will help their q3 cash position

  6. 6
    zman Says:

    Morning, when the 390 B’s are done, so is the deal.

  7. 7
    zman Says:

    Bill – yeah, Oct 13 I think as I recall. If that day is slow, its a good 3/4 day listen on the interweb.

  8. 8
    zman Says:

    REXX CEO leaving to pursue other interests. hmmm, maybe an op to get long.

  9. 9
    BirdsofpreyRcool Says:

    yyyyyaaaAAAAAWWWNNNN…. Welcome to Monday, Oct 4th.

    Lack of any real news over the weeked ==> no Merger Monday to wake up to. Seeing some comments about analysts taking down estimates for the SPX companies for 2011… cutting earnings ests by about 10% from August’s high, based on a slowdown… but, that’s about it, for “interesting news” this morning. Been a while since Monday was this boooooooooooooooring.

    Credit Markets (and TED) slightly in the green. But comments off the money center bank trading desks can be summed as as thus, zzzzzzzzzzzzzzzzzzzzzzzzzzz.

  10. 10
    bill Says:

    the iRR for the VPP assuming

    staight line production– actually its more heavier in the front

    and 5 yr strip at 4.25 = 13.6 %
    with 5 year strip at 4.50 = 16 %

    wouldnt debt just be cheaper?

    This is window dressing on the balance sheet, I consider it debt as well and expensive debt at that

    Thats kinda steep isnt?

  11. 11
    BirdsofpreyRcool Says:

    HeadTrader contradicting me… pointing out that there was indeed, a slew of mergers announced. Guess I just didn’t see anyone that was HEADLINE Grabbing. At least, in Energy Space.

  12. 12
    BirdsofpreyRcool Says:

    bill — #10 agreed. It is “debt” dressed up in mcf’s. But it is debt, nonetheless.

  13. 13
    zman Says:

    re 10 – the price is a good one compared what they’d get in a sale, yes they could do debt cheaper but these are 20+ year wells so they’ll be back in their hands and still producing down the road with very little in the way of costs in the interim. I don’t call it window dressing as they get actual cash but many people do because it’s an obligation to produce. Well, they’re already drilled so they will produce and you are bringing that cash forward in the now to reinvest at a higher return presumably there (but in oil) and in the EFS (also oil). Street almost never likes these deals though.

  14. 14
    zman Says:

    Group acting very sleep, opening volumes very light.

  15. 15
    bill Says:

    I don’t have a problem with them..just trying to understand the financial ramifications and z you bring up a good point,
    (bringing that cash forward.. to reinvest at a higher return )

    and the market is what it is

  16. 16
    zman Says:

    Bill – Oh I think they are “the smartest guys in the room” and I appreciate your caution. I no longer have an interest in them but was thinking about the conference, that it could be trade worthy. I guess I should know better as what seemed like good news in years past has fallen on deaf ears when gas prices stink … they look set to stink for quite awhile.

    Group backing and filling after last week’s drift higher.

    BSIC – will be talking to the company this week, someone took a small piece this morning, I mean tiny, and took it up 12%. I think getting the reverse split done and on an exchange is a good step for them and I never say that. But then you have to have a deal or there won’t be enough shares for the lot of us to trade with each other.

  17. 17
    zman Says:

    Crude above $82… probably not a good idea as again, the hangover for the stocks will be worse than the party was good.

    Noting that the Bakkens should continue to outperform regardless of a coming smallish pullback in crude.
    NOG up today with a down group,
    OAS and BEXP barely red,
    KOG off 7 cents but only because it rallied a dime cents in the last 10 minutes on Friday.
    WLL about to take out that high from the day of the L&C announcement.

  18. 18
    zman Says:

    BOP – thanks for the credit market update, even if it’s only a bit green, good to know where they stand. Seems market is marking time pre payrolls.

    Does anyone have the actual Johnson Rice schedule? What I put in the post was just the list of who will be there and it is a good list. Most of the same names will be presenting next week at IPAA OGIS San Fran. I will not be there in person this year but will be back at IPAA either at the Florida meet or in a year at San Fran.

  19. 19
    zman Says:

    WLL – mission accomplished on taking out that high at $98, next stop 98.27, then trip digits.

  20. 20
    Nicky Says:

    Good morning. I personally don’t agree with a market meltdown although I do agree with a correction. The proviso to that first opinion is that the low of 1010 holds on the spx. If it doesn’t then yes the market is in big trouble.

    Short term I am looking for a top in the days ahead. We have serious resistance at 1163. Support remains at 1137.

    An indication that this wave has topped will be a move below 1123.

    I actually think we have another high out there above last weeks 1157 and then we see a correction for several weeks. However as long as 1010 holds I expect the end of the year to be very strong.

  21. 21
    zman Says:

    BOP – congrats again on the EXXI, you’ve been bang on right there, when do they speak at JREC ?

  22. 22
    BirdsofpreyRcool Says:

    Wednesday is “My Day” at JR… both KOG and EXXI will be presenting.

    I think EXXI is a $30 stock by Christmas. But, that is just MHO.

  23. 23
    zman Says:

    Good morning and thanks very much for tackling that one Nicky. Good stuff, will keep the numbers in mind.

  24. 24
    zman Says:

    BOP – could be time (this week or next) for a DJ 2 new pay report. MMR does not speak at either conference but EXXI speaks at both. Could be that MMR drops that news as Shiller will be giving a depth drilled report and at last check they were drilling through porous rock like butter.

  25. 25
    BirdsofpreyRcool Says:

    EXXI = underspending cash flow for 2011 + upside from the MMR Ultra-Deep + almost 70% production from OIL + leveraged balance sheet (providing leveraged returns to equity) + upside from end to Moratorium + announcements from DJ#2, BBE coming over next few weeks (i think) + upside from “what do you do with the excess cash, boys?”…

    So… what’s not to like? 😉

  26. 26
    BirdsofpreyRcool Says:

    SSN = making me eat a little grass here… aren’t we supposed to get an asset sale update about now? Thx!

  27. 27
    zman Says:

    They should be spudding that next one soon, need to go grab blocks on those as they may be in Texas waters and therefore trackable on a weekly basis, unlike Fed waters.

  28. 28
    zman Says:

    re 26 – “early October”

  29. 29
    crysball Says:

    LEI is flying (again).

    Moving too much based on the news ( permitting of first Hill JV well in the EFS.

  30. 30
    BirdsofpreyRcool Says:

    Can’t post link to XACS#2 anymore… but reading his post this morning can be summed up like this…

    $3Trillion+ money market managers looking for yield… pension funds looking for yield… bond funds looking for yield… expect corporate issuance in October to be an upside surprise. All this money will cause equities to rally, whether they “believe” it, or not. It’s not tied to a robust economy… but to 1) the credit cycle (and we are still in the early innings here) + 2) the need for pension funds to meet obligations. So, even in the face of slow-to-no growth, equities WILL move up and to the right. Expect floor at 1115 in SPX… Credit Bears are just letting the mrkt run, for now (will probably attack at a higher level, as volumes in equities leave the mrkt vulnerable to attacks). So, volatililty continues… no reason to chase… but be ready to pounce if/when your fave antelope wanders a tad too close to where you are waiting in the weeds.

    Credit backdrop and place in cycle also very friendly to leveraged-balance sheet companies… like EXXI, MMR, and even ATPG, to name a few.

  31. 31
    zman Says:

    Pending home sales were up 4.3% in August.

  32. 32
    zman Says:

    GST giving ground here, they speak as well at JR on Wednesday after the close. Market apparently unimpressed by Streater well (mid-Bossier) announced rate. Glen Rose news coming probably on 3Q call, not sure they have much to add this week. Not sure if they have EFS well drilled by time of 3Q call.

  33. 33
    zman Says:

    Quick reversal in the Bakkens, NOG suddenly off 4%. Weird, not volume move, but aligned with the S&P move lower. So far WLL holding near flat.

  34. 34
    BirdsofpreyRcool Says:

    Fwiw… i plan to add a little more GST down here. Watching… waiting…

  35. 35
    BirdsofpreyRcool Says:

    Think GST weakness partially due to continued uncertaintly about what the Dopes In Harrisburg plan for “severance taxes.”

  36. 36
    zman Says:

    re 35, yeah, makes sense, hurts the little names more than big as the sophisticated holders (institutions) of names like RRC, UPl, are not going to be punting over a a severance tax issue.

  37. 37
    Jerome Blank Says:

    WLL one of the first stocks to flutter green near the $98 ascending triangle breakout zone, WLL wants to go higher, thinking it could break if the mkt coorperates…

  38. 38
    zman Says:

    JB – thanks much, was just thinking same. Too bad they do not speak at Johnson Rice, but they do talk at IPAA next Tuesday, which will be their first oppy to speak about why the Lewis and Clark wells being successful are so important to next couple of years at the company in a public forum. I have $95 and $100 strike October calls and mulling adding again.

  39. 39
    zman Says:

    JB – Also thinking same on NBL, adding another rig in Niobrara this month (then a total of 3), lots of activity in the play now with little in the way of released results. NBL must like what it has drilled so far if going to 3 rigs.

  40. 40
    zman Says:

    And JB – put EOG in that camp too. They speak tomorrow at Johnson Rice, not Papa but Lauren Lyker who is also a capable speaker. Estimates have been falling sharply for 3 and 4Q, really doubt they miss at this point.

    WHX inching higher while almost nothing else is. Won’t get numbers for a month there but again, on some pretty conservative estimates I get an 11% yield going out 12 months.

  41. 41
    skimo Says:

    Isn’t NBL’s big gig in the Mediterranean? Something called Leviathan?

  42. 42
    Jerome Blank Says:

    Re: #39, NBL, updated the charts, trading right at 30 min intraday support here, strong support at $75

  43. 43
    zman Says:

    Ski – yes, off Israel, 16 Tcf (gross unrisked) target spudding end of this month, they have half. But they are hitting on all cylinders at the moment in the States too.

  44. 44
    Jerome Blank Says:

    TAT also looks a lot better having broken out above that long daily decending triangle, like to see pullbacks hold @ $2.95…

  45. 45
    zman Says:

    Ski – quick on them is they present very well, have 1 big project in Israel (tamar) now being sanctioned as a 2012 gas prod event, upside would be Leviathon, you’ve also got a lot of wells drilled in the Niobrara, and several in the Granite Wash. I added them to the Orange Charts in the big caps in the last update and continue to get to know the name as I never followed them before other than as a curiosity. They’re relative low cost and cheapish on forward multiples.

  46. 46
    zman Says:

    JB – good to see TAT get ignored on a day like this, good to see them holding 10% above the private offering price just after the deal. It’s put up or shut up time for them on their next conference call though.

  47. 47
    zman Says:

    NFX giving back some of the heady gains from last week, expecting an ops update from them in about 2 weeks.

  48. 48
    elduque Says:

    I think the market forgot to wake up.

  49. 49
    zman Says:

    Eld – actually it did but then fell out of bed. Volumes are low but accelertating.

  50. 50
    Jerome Blank Says:

    SSN trading at the 50 day SMA daily support zone right here, would really like to see this hold, a good spot to try a long, easy to manage if you want to set stops below the 50 day according to sizing and risk tolorance…

  51. 51
    zman Says:

    S&P falling, MMR pulling back into range again.

  52. 52
    zman Says:

    Nicky – S&P below that 1137 level you mentioned.

  53. 53
    BirdsofpreyRcool Says:

    XACS#1 weighs in with a Monday morning comment —

    http://www.capmarkets.com/ViewFile.asp?ID1=145600&ID2=442277353&ssid=1&directory=6571&bm=0&filename=10.04.10_Credit_Trends_to_Continue.pdf

  54. 54
    zman Says:

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

    Voted. The only advice I ever give: You should too.

  55. 55
    BirdsofpreyRcool Says:

    If you don’t have Down Days, you don’t get to buy stuff that you don’t have enough of on Up Days.

    Just a thought….

  56. 56
    BirdsofpreyRcool Says:

    October is — historically — a scary month for stocks. Think we might have a few opportunities present themselves. So, could be a good month to practise your swing-trading skills.

    Just a few more thoughts.

  57. 57
    zman Says:

    ZTRADES – ZIM

    WLL – Added (5) More of the October $100 calls for $1.25 with the stock at 97, takes my average costs to $1.50. I continue to hold the $95 strikes here as well. See today’s comment section for additional color.

    MMR – Back in again. Added (10) October $17 calls for $0.93 with the stock at 17. Partner EXXI speaks at an investment conference on Wednesday and again at IPAA next week.

  58. 58
    choices Says:

    Very strange news item: “joy”???

    http://www.thedailybell.com/1420/China-Joyfully-Bails-Out-EU.html

    What does Greece have that China wants, maybe just a foot in the door, it is good to have all of that money-the Chinese are handing the West its head and will continue to do so.

  59. 59
    zman Says:

    Re 55,56, see 57, lol.

  60. 60
    zman Says:

    Tech check – need a new 21 to 23″ monitor, anyone have a favorite out there? Otherwise it looks like HP wins as it’s in stock at the ODP down the street.

  61. 61
    BirdsofpreyRcool Says:

    Rats. Really hoping for a “smash-and-grab” oppy with GST. Not hitting my PT yet… waiting….

    #59 — ha!!

  62. 62
    Jerome Blank Says:

    Re: #54, Zman, thanks much for the comment, much appreciated…

  63. 63
    milepost_43 Says:

    Voted…thanks for TGA…

  64. 64
    zman Says:

    TAT flat
    BSIC and WHX in their own little worlds
    Everything else a boring shade of red, working on some stuff, here but quiet. May go kick a ball at this broken monitor.

  65. 65
    BirdsofpreyRcool Says:

    MIDDAY OVERVIEW

    · Very quiet trading session this morning w/weakness pretty much across the board. The higher beta/eco sensitive groups are all lagging (tech, industrials, materials, energy all off >1%). The financials tried to bounce this morning but are coming for sale along w/the market as we head into the afternoon. Not a lot of major moves in today’s session as investors await the kick-off to Q3 earnings (YUM is Tues night, MAR is Wed, and PEP/AA are on Thurs) and the Sept jobs report (which comes this Fri). The bigger issue for the weakness is more a lack of buy demand than it is a big uptick in selling pressure. The weakness today is being blamed in part on the higher Swiss capital standards (although CS and UBS both traded OK in Europe following the initial announcement) and heightened terrorist fears (on the Euro-zone warning). The big uptick in ECB eurozone government purchases last week (see below for details) is weighing on the euro a bit while the DOJ credit card suits is hurting sentiment. Bottom Line – some light profit taking is weighing on stocks during a very light session. The bigger catalysts won’t hit until later this week.

    · Technicals – 1137 is a level but we have broken through that point as we head into the afternoon. There is a cluster of support in the high-1120s/low-1130s and below that the 200day MA @ 1118 if being eyed.

    · Equity sectors –Tech is off close to 1.6% on weakness in semis (SOX off >2.3%), LXK, SYMC, and WFR. Materials are also weak, falling 1.6% on weakness in steels (China demand worries and X said it would idle one of its smelters), metals (lower commodity prices), ferts, and paper/pulp stocks. Industrials are off over 1.6% on weakness in higher-beta machinery names, TYC, truckers, and building products. Energy is off around 1.5% on weakness across the board after outperforming all of last week. HC is down with the tape on weakness in managed care and devices. Discretionary is off around 1%, outperforming on casino stocks (strong Macau data) and autos (competitor upgrade on F). Financials are off 0.9%, outperforming on strength in REITs and a few regional banks (FITB, KEY in particular). Utilities are off around 0.6%, outperforming on strength in EIX, SO, and PPL. Staples are off around 0.55%, outperforming on strength in SLE (takeover talk w/ KKR) and other grocers. Telecom is the best sector in the market, trading slightly lower on strength in T and FTR, and also on a bit of a defensive bid.

    · Commodities: With the exception of Crude Oil, commodities have weakened against the strong dollar. Gold has is down slightly, while copper has given back ~0.6% Natural Gas has extended its losses from late last week, and is dn. another ~2% today.

    · FX: USD (DXY) has pared its losses from last week and is up ~0.4% after some weak eco data from Europe (the Euro is trading near its lows, dn. ~0.7%). The pound has fared better than the euro and is near its highs of the session, up ~0.2%. The Yen is dn. ~0.2% though off the lows of the overnight session ahead of tonight’s BOJ decision announcement.

    · Corp. Credit: Corp Credit is flattish/mixed, with HY 15 up flat while IG 15 has widened ¼ of a pt.

    · Treasuries: Treasuries are bid across the board, helped by the soft equity session as well more dovish Fed remarks (see Sack from the NY Fed below). The 2s are yielding 0.411%, the 10s are yielding 2.488% and the 30s are yielding 3.72% (2yr yields set another all time low today).

    · Europe: Europe has sold off (and has taken another leg lower since the SP500 opened) and ended the day dn. >1%. Some of the the initial weakness came from Italy’s budget deficient widening (DJ) which caused the Italian FTSE MIB to be one of the weakest indices. Additionally, Spain’s jobless claims came in weaker than expected (DJ), and a senior UK minister said that Britain might be headed for a “double dip” (Reuters). However, despite the news & comments, the British FTSE and Spanish IBEX posted two of the more modest declines of any European Index. In the FTSE, best performing stocks included: BT Group, Wolseley, Standard Charter and National Grid. In the IBEX, best performing stocks included: Sacyr Valleherm, Gamesa, Abengoa and Ferrovial

    · European sov debt markets – they behaved remarkably well last week despite all the neg. headlines (Anglo Irish, Spain, etc). However, this morning it looks like the ECB may have played a big part in that stability – the ECB bought EU1.384B in Eurozone gov’t bonds last week it announced today….this is up 10x vs. the prior week and is the highest wkly purchase amount since late June. These purchased helped settle markets in wake of Anglo + Spain. Also getting attention today in Europe – the spike in the EONIA rate (Euro Overnight Index Average) following a greater-than-expected withdrawal of liquidity from the eurozone money markets last week (keep in mind we get the ECB meeting this Thurs).

    · Fed Speak – the Dudley remarks from Fri are still top of mind today but the head of the NY Fed’s Markets Group, Brian Sack, just released text endorsing further balance sheet expansion and dispelled recent worries that such increases are ineffective. Bernanke will speak tonight (7:30pmEt) in an address on fiscal sustainability (it’s not clear how much he will touch on monetary policy). W/Dudley and now Sack, the market is increasingly of the view that more QE will be announced on Nov 3.

  66. 66
    zman Says:

    See WHX – what goes up on a day like today gets attention.

  67. 67
    crysball Says:

    Voted ATPG, SSN.

  68. 68
    BirdsofpreyRcool Says:

    hmmmm… USEG got handed back their old molybdemun mine… wonder if there is some long-term value there. It’s a high-cost, deep-underground mine, but… hmmmmm….

  69. 69
    BirdsofpreyRcool Says:

    make that “molybdenum”… not easy to spell on a monday.

  70. 70
    BirdsofpreyRcool Says:

    (or, as my dad — a Chem-E — likes to say, “Molly Be Denim”)

  71. 71
    zman Says:

    re 70 – figured you had the smart gene.

    JB – how right you are re “wanting to go up” for WLL

  72. 72
    choices Says:

    waaay off topic: another sign that the end of the world as we know it is near: Elliot Spitzer sharing a new CNN “news” show-heh.

  73. 73
    BirdsofpreyRcool Says:

    choices — i plan (with great aforethought and aplomb) to completely AVOID even accidently channel-surfing onto that “show.”

    On the other hand, I just may tune into the first American Idol of the season. Some “train wrecks” are just too compelling to miss… and with Steven Tyler and Jennifer Lopez…. should be interesting, to say the least.

  74. 74
    zman Says:

    LINE on the tape terminating a $95 mm asset purchase announced in July. I would not expect a big impact on results from this as it was an E. Texas acquisition of 900 BOEpd.

  75. 75
    RMD Says:

    GHS talking about a mobile evaporator GE developed to treat frac water. It is 50 gal./ min, forced circulation, vapor compression system on a single trailer.
    (My calculation: 1mm gal of water/50 gal/min = 20,000 min = 333 hours = 13.8 days to treat the 1mm gal. Probably the technology will improve.)

  76. 76
    zman Says:

    re 75, guessing it runs on natural gas or diesel?

  77. 77
    zman Says:

    Tomorrow at Johnson Rice (what I’ve found so far) :

    APC
    BEXP
    NBL
    EOG
    VQ
    PXD
    GDP
    KEG

  78. 78
    zman Says:

    BOP or Eli – any thoughts on the MHR series C preferred? 10.25% seems nice, don’t have a ticker for it?

  79. 79
    zman Says:

    LNG on the tape with extended and unexpected maintenance at Sabine Pass. Story confirms they have not taken an LNG cargo since July. There should be a picture of them under “boondoggle” in the dictionary.

  80. 80
    zman Says:

    2 hours to go, market still just marking time, last 30 minutes probably going to be interesting test of S&P support, going for a run, back in 30 minutes.

  81. 81
    BirdsofpreyRcool Says:

    MHR 10.245% convertible preferred CUSIP 55973B201

    First question… is MHR cash flow neutral in 2011? Or, is there a cash-raise on the horizon?

    Personally, I bought the DBLE 9.25% preferred at par ($25.00) recently. It’s not a convert, but it pays a nice coupon. I think either Eli or RMD pointed it out.

  82. 82
    zman Says:

    Thanks for the MHR comment BOP, looking at that question.

  83. 83
    BirdsofpreyRcool Says:

    ATPG — you could make a career out of just swing-trading this stock. Holy-poop… it’s one VOLATILE PUPPY!

  84. 84
    zman Says:

    KOG – nothing says caretaker board member like a exercise and sale of all your stock like the 50,000 shares board member Lidstone just recorded.

    Looking at the recent buys (none) and sells (over 350,000) I have to say that I’m not impressed with the whole put your money where your mouth is thing here. Last buy by Lynn was 100K for $0/share back in March. No buys other than options (with sales attached) that I can see for quite some time.

  85. 85
    zman Says:

    OK, Lidstone is the lawyer. I guess this is his paycheck for coming to the meetings. Still would like to see Lynn and others buy the stock, it would be a greater show of enthusiasm than just taking $0 shares.

  86. 86
    zman Says:

    BOP – are you still in the ATPG trade?

  87. 87
    crysball Says:

    BOP re # 68(USEG Mt. emmons Moly mine), can’t find any news release can you advise sources.

    re GE frac fluid treatment…..reminds me of boiling the ocean to solve pollution isses.

  88. 88
    DrLink Says:

    I just read this in an article, “The reason the debate (over production oil from shale) is so divisive is simple. Of the five unconventional-oil plays identified today––the Bakken, Tuscaloosa, Waskada, Barnett and Niobrara––only the Bakken is currently producing meaningful volumes of oil economically. More importantly, while operators have garnered economic flow rates from the Bakken, the play is essentially not shale, it is a carbonate sandwiched between two shales. As such, it shares few geologic characteristics with the other plays.” So is this correct that when SSN and others have lofty projections with the Niobrara we REALLY are in uncharted waters so to speak? Thanks

  89. 89
    BirdsofpreyRcool Says:

    still in the ATPG trade… waiting…

  90. 90
    Jerome Blank Says:

    SSN…something hit the tape, knee jerk reaction…mkt seems unsure what to make of it

  91. 91
    Jerome Blank Says:

    RE: #90 sorry I meant to say CIGX, been watching SSN all day I have it on the brain

  92. 92
    BirdsofpreyRcool Says:

    CIGX news out… not really NEWS news. Just lawyerly-stuff with the patent office over the on-going RJReynolds lawsuit. FWIW, it’s actually GOOD news for Star. But, funny to see Mr. Market try to figure it out.

    Also, it has ZERO to do with their product, CigRx. It’s the patent that covers their method to cure tobacco that greatly reduces carcinogens.

  93. 93
    BirdsofpreyRcool Says:

    crys — I met with USEG mngmt about a month ago. They said the moly-asset (the mine) had been put back to them, as per the terms of the age-old acqnt agreement.

  94. 94
    zman Says:

    Can’t argue with the Bakken comment and having a dolomite sandwiched in there.

    I’d tell the author he’s wrong on the Barnett as substantial volumes are flowing there, EOG now, others coming.

    As far as the Niobrara goes it is still early. We’ve seen results from EOG, SM, NBL that all look positive over a fairly wide area, but again, still early. It is highly fractured which can be good if you understand which way to orient in your area. In some areas it also has some good reservoir rock a shale seal. As far as projections go, I’m just putting acreage value on it now for SSN, not a barrels in the ground computation which gets you to a much higher number than my $2-ish one (something close to double digits). I think its at least 6 months to a year early to call this one the next Bakken.

  95. 95
    zman Says:

    Surprised by how little crude did today with the run it has had and the bump in the $ and the drop in the S&P. Must be all those mitigating things in the post bullets.

  96. 96
    zman Says:

    HSC to open to crude tankers on Tuesday.

  97. 97
    Geno Says:

    RE 88 the concern in the oil shale play is the amount of gas that comes with the oil need to be in the wet gas window. The pure oil eagleford does not work well and that is also the problem with the tusc.

  98. 98
    bill Says:

    Oil prices are rising and so are product prices

    Heating Oil in the Northeast was up over 10 cents last week.

    Looks like the POTUS answer is clean energy..opening gom back up not mentioned

    what is taking republicans so long. let the bashing begin!!

    http://www.businessweek.com/news/2010-10-02/obama-says-republicans-would-cut-u-s-clean-energy-incentives.html

  99. 99
    choices Says:

    EPA is considering raising limit on ethonal from 10% to 15%-still not looking at NG altermatives.

  100. 100
    bill Says:

    93

    BOP

    thats news to me…i dont think useg ever published that

    Whats your feeling on useg after meeting these guys? The ga seems out of control, excessive salaries to exec’s

  101. 101
    BirdsofpreyRcool Says:

    #100 — hmmmm. Maybe I got it wrong. But could have sworn they said the asset was put back and they were going to have to figure out what to do with it. But that it wasn’t on the books for much. Lemme go back to my notes from the mtg… i might have gotten it a bit mixed up.

  102. 102
    zman Says:

    Geno – right, I was thinking mostly of the Bakken where there is just not that much gas involved, much more like cashinghead gas from an oil window than an either or situation. EFS is a bit more of a pickle. And a lot of condensate and NGLs and not really oil. That NGL market just can’t take a lot more volume without getting stomped.

    Bill – I saw him pumping up community colleges today. Not to down them but it goes to the whole “do what I say and not what I did/do” thing. On the incentives, it’s obvious he skipped the Bschool classes.

  103. 103
    BirdsofpreyRcool Says:

    USEG = a family office that keeps the kids out of trouble and gives them a job. But, some good assets… and the Dad sure knew how to “buy right.” They are working through 2nd and 3rd generation Larsens now… This is one where you hope the apples didn’t fall far from the Old Tree.

  104. 104
    zman Says:

    Re 99. Wow. Ethanol might be a 1.1 to 1.00 ratio fuel. As in 1.1 gallon of ethanol produced for each equivalent unit of energy put in to its manufacture. And by the way you get lower miles per gallon as the amount of ethanol goes up. Did these guys skip chemistry 101 as well?

  105. 105
    zman Says:

    LNG (the company) reporting that the compressor outage won’t affect operations. No kidding, since they had no business to affect!

  106. 106
    BirdsofpreyRcool Says:

    USEG… before I get the company accused of “selective disclosure,” let me state that i was referring to the “put option” that AMAX had… NOT Thompson Creek. That deal (TC) is still in force, from what I can tell.

    Sorry about any confusion.

  107. 107
    zman Says:

    Market just content to go into the close a bit about the lows in lethargic trading. We get non-manufacturing ISM tomorrow but all eyes still on the Friday report. Wonder how big they can get the font size in the weekend papers if unemployment ticks up to 9.7% as the last # before the elections.

  108. 108
    bill Says:

    drybulk report

    marking time

    http://files.irwebpage.com/reports/shipping/gEXYgFoEuw/dbnl-704-4.pdf

  109. 109
    BirdsofpreyRcool Says:

    My Canary in the Coal Mine — RSO — is actually chirping away today. So, mrkt down, but that (very) high-beta stock not showing signs of worry, FWIW.

  110. 110
    bill Says:

    I own USEG for the oil bexp participation. The moly mine isnt even a consideration

    Thanks bop for the clarification

    ty for 103 too

  111. 111
    zman Says:

    nodozethirty

  112. 112
    bill Says:

    105 best funny of the day

  113. 113
    elijahwc Says:

    #78 & #81 MHRprA or MHR.A for thomson users. Non-convertible but traditional cummulative perpetual which I own in size.

    On the questions, I’m eyeing the proxy as I type and it says that:

    Gary Evans “the banker” will not dilute his common shareholders as he is requesting an increase in MHRprA to 50million shrs from the current 10mil as this is how MHR finances ongoing opts (hee hee).

    Opps I spoke too soon. Gary “the serial acquirer” is also asking for common authorization to go 150 million shares from 100 mil of which 68 million are out now.

    Remember that we were less than a 10 million market cap a short 2 years ago, so I believe the common will be in the hands of our new partners shortly and as he said earlier this year “We will be issuing equity north of five by year end and everyone will be smiling about it.”

    One area of concern: West’s inquiry of a couple of weeks ago, “Anybody hearing anything about completion issues at the Gonzo, their first EFS well”?

    Well anybody?

  114. 114
    bill Says:

    speaking of lng

    what do you think of this

    http://www.reuters.com/article/idAFN2221699920100922?rpc=44

  115. 115
    elijahwc Says:

    #114 nice find “LNG’s Sabine Pass and Freeport — currently the only U.S. terminals that can re-export LNG.

    The yield hogs play on this is CQP.

  116. 116
    elijahwc Says:

    BEXP sighting:

    Brigham Exploration announces State 36-1 #2H Rough Rider Three Forks well early production rate of 2,356 BOEPD, three high rate Bakken completions (18.92 -0.32)

    Co announced the completion of the State 36-1 #2H Rough Rider Three Forks well, its first Three Forks well west of the Nesson Anticline, at an early 24-hour peak flow back rate of ~2,356 barrels of oil equivalent. BEXP also announced three Bakken completions, including the Domaskin 30-31 #1H Ross project area well at an early 24-hour peak flow back rate of approximately 4,675 barrels of oil equivalent. As a result, BEXP has now completed 36 consecutive high frac stage long lateral Bakken and Three Forks wells in North Dakota with an average early 24-hour peak flow back rate of ~2,684 barrels of oil equivalent. In addition, BEXP announced the acquisition of additional leasehold covering ~10,200 net acres in the Williston Basin, ~7,600 of which is located in its core Rough Rider project area. Finally, BEXP provided an update on its drilling and completion activities in its core 205,600 net acres in the Williston Basin.

  117. 117
    zman Says:

    BEXP on the tape with an ops updated

    Their first Three Forks well at Rough Rider looks very good, 2356 BOEpd IP.

    That’s sooner than I thought by 4 weeks and opens up their RR acreage to the second play of the TFS. Nice. As I missed it with the ZCAT since I thought it would be later on, I will be playing, probably in the $20s tomorrow in the ZIM. I continue to own the shares in the ZLT.

    They also announced a land buy and another big rate well in Ross area, think that is the second biggest.

  118. 118
    zman Says:

    I’ll have details in the morning post.

Leave a Reply

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®