Payrolls Friday

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Market Sentiment Watch:  The morning focus is on payrolls first (wow ugly) and earnings second. AA reported a top line based beat last night to kick of the 3Q reporting season. In energy land, people are taking note that the sector has been the worst performer through the 9 months with one brokerage pointing out that the worst performing group through the 9 months has only had a bad 4Q once in the last 20 years. I 'd just tell them that valuations are not stretched for the group given the current strip and expectations for volume growth on the domestic oil focused E&Ps will keep them that without further stock price appreciation and leave it at that. Yesterday saw some odd activity in MMR and BEXP with options activity jumping on both and deal rumors swirling around the latter. Most rumors are just that but I have for the time being put off a recent thought to sell November calls against my Brigham ZLT position. Look for the IPAA conference next week to provide companies with one last opportunity to provide color before the  earnings season opens, with MMR announcing their quarter on the 18th. 

Ecodata Watch:

  • Nonfarm payrolls came in at -95,000 vs -8,000 expected and -54,000 last month
  • Private sector payrolls came in at +64,000 vs +85,000 expected and +67,000 last month
  • The unemployment rate came in at 9.6% vs 9.7% expected and 9.6% last month

In today's post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Inventory Preview
  4. Stuff  We Care About Today – CXPO Wrap, SSN
  5. Odds & Ends

Holdings Watch: ZCAT (Zman Catalyst portfolio):

  • $5,200
  • 100% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $9,800
  • 50% Cash
  • Yesterday’s Trades:

    • MMR – Took the (15) October $18 calls off the table for just under $0.46, up 31%. I continue to hold the $17′s but with the stock at $16.85 and the big payrolls report due out in the morning and with gas weak on a larger than expected injection these felt a bit too much like playing with fire. Plus 31% in less than 24 hours is always bankable in my view in the options portfolios.
    • BEXP – Sold 33 of the 100 $22.50s taken two days ago for $0.15, up 156%, with the stock up on potential takeover rumors at $20.60. Done on the mid and quite easily. Time to play with house money. I continue to own the $20 strikes, the remaining 67 calls in the 22.50s and the common in the ZLT.

ZLT (Zman Long Term portfolio)

  • WLT – Out of the remaining piece of my only coal name at 81.83, up 18%. I plan to add it back on the next big market swoon.
  • CXPO – Added an opening position at an average cost of $2.89.

Commodity Watch

Crude oil retreated $1.56 to close at $81.67 yesterday. Helloooo profit taking. Not surprised in the least. This morning crude is trading off about a buck.

  • Watching Your Interior Watch: New report out of the Department of Interior states that the new rules following the Macondo disaster will result in higher costs to drill for oil in the Gulf and an increased reliance on foreign oil. Thanks guys, way to go, awesome job on that. These guys would cure cancer by putting the patient in a microwave. Unreal. Ugh and double ugh.

Natural gas fell $0.25 (6.4%) to close at $3.62 after the EIA reported a larger than expected injection. This morning gas is trading flattish.

  • Tropics Watch:  Pretty quiet although there is something trying to get organizes and south and west of Cuba and just east of the Yucatan.

Natural Gas Review

ZComment:   Nothing really to add at this juncture over than I expect to peak at about 3.7 Tcf in four weeks.

Stuff  We Care About Today

CXPO Wrap Thoughts

  • Look for 3 E. Texas well completions in the remainder of this month.
  • Look or their first 2 Eagle Ford tests to be completed by year end
  • Current production levels of 45 mm/d bode well for analysts estimates for 3Q and 4Q volumes
  • I'll have a full update here next week.

SSN Operations Update

  • Lays out strategic plan

    • Acquire seismic on 17,000 + net acres. The + in that comes from the fact that they will have to shoot over leased and unleased acreage in their area. They plan to pick up some of the holes in their acreage area in the future. SSN has told me the cost of this is about $2.3 mm.
    • After interpretation of the data, SSN plans to drill 2 horizontal appraisal wells in 1Q11. Nothing new here although I wasn't sure if they planned vertical tests or horizontal wells... now we know. They plan to employ similar multi-stage fracs as they are using in the Bakken ... not surprising. 
    • The rest of the plan is as you'd expect, if the wells are good they will go to a 1 rig development program and 2 rigs in time.
  • Niobrara - early pre 3D seismic review comments

    • topography is flat, largely agricultural, with paved roads  ... they're telling you its easy to get rigs on location.
    • oil truck terminal nearby, could support a pipeline and a rail line is only two miles away
    • There is a natural gas pipeline crossing the property - good for the casinghead gas
  • Bakken:

    • mentions the potential for drilling on tighter spacing, so we'll probably see more than 6 wells on their current acreage.
    • I'd also expect to see an acquisition of additional acreage by year end
  • 2011 Capex: $11 mm - glad to see them not immediately burn through their new found cash pile. I'd bet this number grows quickly however should they be successful in the Niobrara. 
  • Nutshell: Sounds fair, not much in the way of hard

Other Stuff:

Odds & Ends

Analyst Watch:

  • Nothing noteworthy so far, will add any I see in comments.

168 Responses to “Payrolls Friday”

  1. 1
    milepost_43 Says:


  2. 2
    elijahwc Says:

    BEXP: Pritchard
    "Raising NAV and Price Target. Raising NAV from $24 to $27
    and price target from $21 to $24 on further derisking of Rough
    Rider TF acreage. Taking into account higher oil differentials and
    interest expense, our 2010 EPS/CFPS estimates go from
    $0.55/$1.12 to $0.48/$1.05."

  3. 3
    blackgold39 Says:

    re BEXP, I'd be tempted to take a bit out of the common if I didn't think it was too overhyped at the moment

  4. 4
    zman Says:

    MP – thanks for that.

    Front and Center Watch

    BEXP – watching the House Money trade… I will probably keep it on through at least late today for a run into the close on Merger Monday thought patterns. I'd put just about 0% on it happening Monday, much like a watched pot, pretty rare these are correct or even if the interest by COP and MRO is there it may be from an offhand comment or from the 12th man on the deal team and as such, the timing could be more like 6 months out.

    MMR – still have those Oct 17 strikes, stock trading up in pre market after a strong rally last hour yesterday. They do have earnings on the 18th and I may just roll into some Novembers early. Maybe something in a cheap size $20.

  5. 5
    BirdsofpreyRcool Says:

    HeadTrader is parked in neutral..gonna see how the mrkt opens before taking a stance.  His bias is for higher… but waiting.
    Credit Indices slightly green, after going to red on employment number.  Lots of govt people lost their jobs last month.  Guess it's their turn, sorry to say.  But the private sector took it on the chin early…
    Oil back to unch'd??  wow….
    Hearing about "lots of cash on the sidelines."  That has to mean something… at some point.

  6. 6
    BirdsofpreyRcool Says:

    MMR/EXXI… getting a case of the Giddies, ahead of initial logging results at Blackbeard East.  Could be out today… but more likely on Monday or so.
    Also, will start to look for ATPG Telemark#3 drilling results on Monday.  So, a little couple of "somethings" to look forward to (i hope).

  7. 7
    zman Says:

    Hear ya BOP re 6.

    Reef – any updates from the MMR guys?

    Big news would be wireline logs over 4,000 feet of potential pay at Blackbeard East.

    At Blueberry Hill preparations continue for the #9STK1 well:


  8. 8
    zman Says:

    BEXP taking out yesterday's highs.

  9. 9
    zman Says:

    OAS – all time new high. Chart is ballistic.

    They speak again next week at IPAA


  10. 10
    1520sbroad Says:

    anybody see any news on HK ? low volume but positive the past few days

  11. 11
    zman Says:

    Re HK – nothing new that I have heard. Speculation seems to have abated over the near term timing of a sale of their Fayetteville asset, probably since the buy of dry gas will be paying low, low $/Mcf there. I think it's technical.

  12. 12
    BirdsofpreyRcool Says:

    1520s — TPH listed HK as one of their top 3 picks for anyone who wanted to be contrarian and play the natty gas kids.  That's all i've seen.

  13. 13
    BirdsofpreyRcool Says:

    EXXI going for the 25 dollar mark…. can it make it?  Wouldn't bet against it.

  14. 14
    1520sbroad Says:

    #11,12 – thanks.  Agreed on contrarian pick – only pick that i know that is more contrarian is SWN.

  15. 15
    zman Says:

    BEXP having another case of the sudden jumps to day.

    Other Bakkens not having a bad day at all

    KOG stout, WLL at 102, NOG

    OAS and NOG now both at all time highs

  16. 16
    zman Says:

    HK doesn't need a recovery in gas prices though, SWN is a gamble. Sure they can grow 20 or 30 or 40% depending on level of spend, but their spending ability is not assured with hedges. Want to grow at that high end? Trade in your healthy balance sheet for a less healthy one.

  17. 17
    zman Says:

    Comcast approaching the pole leading to our office. If I disappear for a bit you know why.

  18. 18
    zman Says:

    Did you know we have a Bios page. See who's who here:


    This just added from Blackgold39

    Grew up in coastal Texas, BS in Electrical engr & Masters in Petroleum engr from Texas A&M.  Working as a reservoir engineer for mid cap E&P. Experience in shales, conventional oil & gas consolidated sandstones, with exposure to operations & drilling, mainly in Texas & Oklahoma.  Moonlighting as an options trader.

  19. 19
    zman Says:

    1520 – Also saw a blurb this morning out of Oil and Gas Journal mentioning the 2 Bee County wells that HK is drilling with CXPO as a 20% WI carried partner. The way they word it, the drilling of the first well looked good enough that they drilled the second well, these are longer lateral wells at 6,200 feet than is typical for EFS wells to date (19,000 TMD wells). So more expensive but maybe more bang for those bucks as well. When the second well is completed HK will frac both… looking for a near year end results on each.

  20. 20
    zman Says:

    Off topic, who beside BO (the dog) is staying around?


  21. 21
    tomdavis12 Says:

    BOP: Stuck my paw out for a no thank you portion of CIGX. Lets celebrate with a smoke?

  22. 22
    zman Says:

    Oil up 70 cents now.

    Dollar going lower:


  23. 23
    BirdsofpreyRcool Says:

    tomdavis — after a long conversation y'day with a large institutional holder of CIGX, we concluded that  we must just "know too much."  The news y'day out of Roskamp was totally Awesome Possum.  Star's follow up PR was lame.  But that's something they are particularly good at… penning lame PRs.  But I digress.  Does anybody think that JohnsHopkins gets involved in stuff just to spend an endless flow research money?  Or, does it make sense that JohnsHopkins thinks the (now patent-pending) compound that Star has perfected is worth testing.  hmmmm….
    by the way "a no thank you portion"….??  Does that mean you hate yourself for having bought?  je suis confus!

  24. 24
    zman Says:

    All time new high for WLL

  25. 25
    zman Says:

    WLL at $103+, getting read to flip the second set of $100s there this month, what's BOP's phrase, rinse and repeat?

  26. 26
    zman Says:


    WLL – Sold the (5) WLL October $100 calls for $3.80, up 71%, on the mid and easily with the stock at 103.25. I continue to own the common in the ZLT and will have a refresher update out on the Bakken players next week.

  27. 27
    BirdsofpreyRcool Says:

    Little KOG getting a blast of wind through the propeller on it's beanie… mini lift off! 

  28. 28
    BirdsofpreyRcool Says:

    … or is that just what Dwarf Tossing looks like in Single Digit Midget Land…

  29. 29
    BirdsofpreyRcool Says:

    z — nice trading, guy.  Yep, can't start the Repeat Cycle, until you Rinse.  Booking profits is never, ever, ever a bad thing.

  30. 30
    Popeye Says:

    Whatever it is I will take it, up 51%. Should have bought more.

  31. 31
    BirdsofpreyRcool Says:

    EXXI… like pulling into your driveway at the end of a long road trip with 49999 on your odometer.  So close to 25…. you know it will happen… just a matter of when.

  32. 32
    zman Says:

    Getting asked by a sellsider if I follow and know what is up with SGY today, up 8% (another shallow water driller)

    My response: I used to for a living, now only watch that one as management can steal defeat from the maw of victory. Couple of things going on in the shallows right now. 1) the moratorium ends in the deepwater in November. For the shallow water there has been a lot of delayed permitting as well but things are starting to move and for a lot of what they do (workovers and existing bore re-entries) this has not been and issue.  Anyway, as the calendar gets closer to the mark the stocks have been walking higher. 2) there is a lot of rumor mill action around EXXI and MMR and that could easily drag the other names higher from SGY to CPE. 3) I see it crossed it's 200 day today so its got that going for it as well. Will ask on the site if anyone has seen a broker note I don't have access to and circle back.

    So anyone see anything on the broker wires that I don't ? Otherwise looks technical and for the fact that it hasn't yet run.

  33. 33
    1520sbroad Says:

    Z – thanks for #19.
    I also think there is some "last shall be first, first shall be last" at work in the energy space in general.  Money on the sidelines looking for cheap, volatile stuff to buy would be another way to put it.

  34. 34
    zman Says:

    BOP – Re KOG – right play, right time, catalysts on the way, production to hockeystick, and their peers are tagging new highs daily.


  35. 35
    tomdavis12 Says:

    23  BOP just means the worst possible news will not hurt. I still might hate my momo greed dark side, but you can't help me with that.

  36. 36
    zman Says:

    re 33. Oh absolutely agreed.

  37. 37
    BirdsofpreyRcool Says:

    TomD — you own any KOG?  You can star at that chart and feel better….

  38. 38
    BirdsofpreyRcool Says:


  39. 39
    BirdsofpreyRcool Says:

    TomD — I think you also own EXXI.  So, look on the Bright Side of Life, man!  😉

  40. 40
    zman Says:

    ZIM down to 3 positions (BEXP 20, BEXP 22.50, MMR 17) and 62% cash.

  41. 41
    tomdavis12 Says:

    BOP: Although I sound like a very dark and dreary guy, I am not. Just full of a little self deprecation. As a matter of fact I can only thank all site participants for an excellent last 5 weeks. I am very pleased with my performance. The only lousy names have been my own. 🙂  😉  8)

  42. 42
    BirdsofpreyRcool Says:

    TomD — i know you are no Eeyore.  So, suprised you are being so depricating this week.  We all eat grass sometimes… comes with the territory.  I do miss your cheerier side however.  "Gloomy" just doesn't fit you very well.

  43. 43
    andy Says:

    BOP  – those of us who thot we were being clever and sold some 25 calls on EXXI wouldn't mind a stall for abt a week!!!!  luckily only sold a minor part of my posit, so your 30 by XMAS is ok w/ me if it comes sooner!!!!!

  44. 44
    BirdsofpreyRcool Says:

    BOOM.  EXXI thru 25… and my odometer just turned to 50,000.   KOG's beanie propeller working extra hard too.

  45. 45
    BirdsofpreyRcool Says:

    andy — to be honest.  I sold a 2nd round of 25 calls on my "trading shares" at the beginning of this week.  But, combined with the last calls I sold,  if we lose 'em at $25, it will be like selling those trading shares at $26.  A bittersweet good-bye.  But, that's what trading shares do.  They come and they go.  Still have my core position, tho. 

  46. 46
    BirdsofpreyRcool Says:

    by the way, I almost didn't sell this 2nd round of calls… TomD pointed out that you shouldn't sell calls on stocks that are moving up.  That was good advice, TomD.  Guess I learn best by getting a paw singed a bit.  But thanks for your help in the covered-calls world.

  47. 47
    tomdavis12 Says:

    46 With any trepidation like that you could add a couple of naked puts at the same time to offset the fear of a limit to your upside. But that is whole different kettle of fish. You do extremely well with your way. No need to muddy the waters. 

  48. 48
    zman Says:


    Nibbling at $1.10. Very thin name, looking at this for now as a 3 to 6 month trade.

  49. 49
    Nicky Says:

    Morning all.  The markets response is pretty amazing considering the terrible jobs number.  I guess baked in. 
    So it looks to me as though we are now working on wave v.  Could complete late today or for preference Monday.  Resistance is still at 1172.  We should not now see the 1151 – 1155 area until this wave is done.  So a break of that area is the warning.
    Once complete I am looking for a short and sharp correction down to the 1120's ior lower.

  50. 50
    zman Says:

    Morning Nicky, thanks much.

  51. 51
    VTZ Says:

    Re 49 – Market is up because a bad payrolls number derisks the probability of QE2.
    Market is looking about as far forward as its nose again.

  52. 52
    blackgold39 Says:

    Z, are those MMR 17s for Oct?

  53. 53
    apbd Says:

    Green, Green.  It's finally fun again.

  54. 54
    zman Says:

    Yes, all are OCT at the moment. Toying with taking half off this afternoon.

  55. 55
    BirdsofpreyRcool Says:

    Nice.  EXXI had 5.4mm of it's 45.3mm float sold short, as of last report.  That's got to be a barrel of monkeys today.  Talk about fun!

  56. 56
    BirdsofpreyRcool Says:

    Midday OVERVIEW
    ·         Stocks start the day flattish rallied into the afternoon; 1166 seen as a level (about the high as of 12pmET).  There was one last obstacle to a potential QE2 announcement in the minds of investors and that was today’s BLS number.  However, the report was tepid, as expected, and is being viewed as providing the green light for any Fed official still on the fence about more asset purchases (other than Fisher and Hoenig, both of whom reiterated their hawkish view on policy yesterday to no effect on the markets).  There was some confusion w/the Bullard remarks on CNBC today (his conviction levels initially at 6amET as to whether he backed more QE seemed a bit less than his prior public remarks, although over the course of the morning the St came to view his sentiments as pretty much unchanged and in favor of more BS expansion).  With the macro/Fed landscape settled for most (although keep in mind we will have FOMC minutes get published next week which could throw a wrench into the Nov 3 QE call), attention is turning towards Q3 earnings.  The season started out on a somewhat disappointing note w/MAR and PEP, but AA Thurs night (it is the first Dow component to report and is seen as unofficially kicking off the reporting period) came in better-than-expected and the stock is trading up ~6% (note that JPMorgan upgraded AA shrs this morning to OW).  Loose policy + strong earnings is a toxic combination for any equity bear for the near-term and after a few failed sell-off attempts this week (on Wed and Thurs), shorts are covering today and any long seller has moved to a neutral stance (the JCP/FO news is just adding more fuel to the fire).  There continues to be skepticism towards the broader equity market (and the EQIX “cloud” momentum blow-off top is still making people nervous), but as the tape remains very resilient and with the weekend papers heralding “Dow 11,000” and “IBM all time highs”, no one is really in a mood to fight the upward action.  Technically, the 1166 level is the next area to watch, and then 1174-1175. 
    ·         Equity sectors – Materials are the best sector in the market, rallying close to 2% on strength in metals (commodities surging and AA earnings) and ferts (WASDE report showed much lower yield ests for grains). Discretionary is up close to 1.2% on strength in FO, JCP, and other higher-beta names as investors try to chase the rally. Industrials are up close to 1%, outperforming on strength in ag equip stocks (WASDE report) and then pretty much even strength across the board. Energy is up 0.75% as a rise in crude sends services/drillers sharply higher and a small jump in natural gas gives a nice leg up for E&Ps/coals. Tech is slightly ahead of the tape on strength in MU, SNDK, and AMD, although a few other semis are kind of weak. Financials are up 0.3%, but lagging the tape a bit on weakness in a few insurance names. Healthcare is also lagging the tape on weakness in devices and health benefits companies. Staples are up slightly, lagging the tape on weakness in TSN and grocers as investors move into higher beta names to chase the rally. Utilities are flattish, underperforming as investors rotate out of the space to add risk on the books. Telecom is off around 0.6% and is the worst sector in the market on weakness in Q, CTL, and WIN.
    ·         Commodities: Commodities have rebounded from yesterday, as the group is near its highs across the board with the dollar getting hit off the weak eco data.
    ·         FX: USD (DXY) came off its highs following the jobs number, and is flattish heading into the IMF/World Bank’s meeting over the weekend (people nervous about headline risk around IMF meeting and not pressing dollar shorts as a result). The Euro is dn. slightly while the pound has rallied and is near its highs, up ~0.4% The yen has continued its momentum with Japanese officials downplaying more large-scale QE.
    ·         Corp. Credit: Corp Credit has continued to melt higher with HY 15 up 1/8 of a pt and IG 15 tightening 1 1/4bps.
    ·         Treasuries: Treasuries are near their highs of the day, with the group rallying off the change in Nonfarm & Private payrolls came in weaker than expected (strength across the board).  The group was hit this morning after some hawkish comments from the Fed’s Bullard who said that the Nov. 2-3 meeting will be a “tough call” because “QE2” is an extraordinary measure and the economy doesn’t seem to be weakening so much. (CNBC) The 30 yr TIPS are flattish today after widening over the past few sessions.
    ·         Europe: Europe strengthened into the close, with the Euro Stoxx 50 finishing flat after some choppy trading.  Newsflow out of Europe was on the lighter side, with the German DAX outperforming other indices despite German exports falling for the 2nd month in a row. (Bloomberg)  The Spanish IBEX was one of the weakest indices, with Financials leading the way lower.

  57. 57
    BirdsofpreyRcool Says:

    So… time to turn off the editor??

  58. 58
    zman Says:


  59. 59
    zman Says:

    Editor off

  60. 60
    BirdsofpreyRcool Says:


  61. 61
    Jerome Blank Says:

    CIGX feels heavy but, stabilizing near the 20 day SMA, would like to see CIGX hold the lower end of this support zone and break back into the pattern sooner than later…technical only traders are  for sure covering on the break below the ascending triangle, this was a technical disappointment given what looked like an imminent breakout yesterday…given the fundamental potential with this stock, I'm not at all uncomfortable with the dip… a closing "doji" and and move higher next week would be what I would look for…resistance near term at $2, sitting on support here….not a bad spot to consder longs… 

  62. 62
    zman Says:

    Just got buzzed by a B25 Mitchel … very cool.

  63. 63
    AAA Says:

    EOG buzzing towards par.

  64. 64
    zman Says:

    AAA – yeah, been watching, I’m in a small common position but nothing else. Those fears about their economics in the EFS were much ado about nothing. Silly analysts.

  65. 65
    Jerome Blank Says:

    KOG prints a new P&F buy signal at $4

  66. 66
    BirdsofpreyRcool Says:

    JB — have i told you lately how Good Looking you are? Love ya, man. Voted.

  67. 67
    RMD Says:

    Bumper sticker comment on Washington:
    If voting could really change things, it would be illegal.

  68. 68
    zman Says:

    JB – and you said $3 is the PF buy for CXPO? Should have enough catalysts to get it there this month, then potential catalysts at year end for a run higher. Chart looking pretty scoopy to me.

  69. 69
    jat Says:

    I agree with 64, but it’s not like rising service costs aren’t happening there. Viva la HAL.

  70. 70
    Jerome Blank Says:

    #RE:#66 BOP…thank you…I blush……..

  71. 71
    zman Says:

    re 67 = LOL

  72. 72
    zman Says:

    Grabbing lunch, back in 20 minutes.

  73. 73
    bill Says:

    how would you like to buy MMR at a 20 % discount?

    Cet is a closed end mutual fund and it has 10 % of the fund in energy with mmr being 2 % of it.

    Closed in funds are different than open end as they issue a fixed amount of shares and they subsequently trade on the exchange

    CET is trading roughly a 20 % discount to nav.

    Value fund investor who rarely sells after purchase, They bought intel in 1986 and never sold it.

    33 % of their holdings is in auto insurer Plymouth rock and its recorded at deep discount since its not publicly traded

    I put it in my son’s roth ira, Buy it and forget it

  74. 74
    bill Says:

    forgot the link to its holdings


    They distribute cap gains once a year so if you dont like paying taxes thats a consideration

    good for iras or if you have a cap loss carryforward

  75. 75
    Jerome Blank Says:

    RE: #68 CXPO…not a P&F buy signal, a three box reversal… means different things depending on the technical structure, but in this case, technical picture improves supported by the asceding triangle base breakoout on the daily…thinking, longs on a pullback to say, $2.90 on the three box reversal at $3

  76. 76
    bill Says:

    exxi, turn away for a second and its soaring 25.61

    gj bop

  77. 77
    BirdsofpreyRcool Says:

    bill #73 — thank you for sharing your off-the-beaten-path ideas. Verrrrrry interesting…. And useful!

  78. 78
    BirdsofpreyRcool Says:

    EXXI outperforming MMR on BBE rumors… that doesn’t make sense… So it’s got to be shorts scrambling for the door. Might drop back after we empty the room a bit… sticking to my $30 by Christmas call tho. Nice stocking-stuffer.

  79. 79
    BirdsofpreyRcool Says:

    On the other hand… there are EXXI-specific rumors out there. “Something BIG.” This would involve EXXI raising debt, equity, and doing some balance sheet rearrangement (hence the private buy of the converts, the other day). Anyway, it ain’t boring, fore shore.

  80. 80
    BirdsofpreyRcool Says:

    jat — any rumblings about ATPG? Maybe Monday? Or, is that still too soon…

  81. 81
    jat Says:

    Sorry. I was just in right before the asset monetization, just for that, which was based on thoughts from a few people here in nyc. I don’t follow closely enough to feel safe about anything more, not as smart as you on it!

  82. 82
    BirdsofpreyRcool Says:

    jat — nice call on your part, nonetheless. You had the filet, instead of trying to eat the whole cow. Hope I’m not going the way of the Bum Steer… but holding until Telemark results. Well-watching = always risky pastime. Thx for your response. You did great!

  83. 83
    choices Says:

    Z, you mentioned the other day that you were having problems with Firefox-I just did an anti-virus program update on TrendMicro and since have been having multiple problems-even got a message from TrendMicro Program that update may be the problem of multiple startups???! if so, fix it!

    What antivirus do you use? Anyone have experience with Norton-used to be very clunky but recent version much better according to some sites. Any other suggestions from anyone?

  84. 84
    skimo Says:

    Z, BOP, In your considered opinion do the recent adds to EXXI board suggest more M&A activity, or just an opportune time to add?

  85. 85
    skimo Says:

    83, I have used Explorer and Firefox, but at the urging of my in-house teenage experts migrated to Google Chrome. It seems much faster and I don’t seem to have any more issues than I had with the other 2.

  86. 86
    BirdsofpreyRcool Says:

    skimo — #84 good question. With both the CEO and CFO of EXXI on the board, perhaps they just needed more Independents. Maybe they are thinking about moving to the NYSE at some point. I am sure Schiller is getting good M&A advice, without having to reward advisors with boar positions. But (if bloomber is correct) EXXI only had 5 board members (with 2 from the company)… so need a little more “independence,” if you will.

  87. 87
    BirdsofpreyRcool Says:

    having a little problem finishing words today… must be Frida

  88. 88
    elduque Says:

    CHK prepping for investment day.

  89. 89
    zman Says:

    Mcafee and spyware doctor.

    Re 86 Sounds right

    Re 88 Expecting a lot of Niobrara talk out of them.

  90. 90
    zman Says:

    Bill – if you like MCF offshore, that NOG onshore is the same basic model. Low head count, low cost but don’t operate. Acreage in the way of all the big players, working interests increasing. No reason for it not to be in the $25 range based on acceptable forward multiples.

  91. 91
    zman Says:

    JB – thanks for that clarification on CXPO.

  92. 92
    zman Says:

    Jat – my thought on HAL is the same as my thoughts on EOG and this quarter as far as analyst commentary goes. Initially, they botched it. Now analysts are playing catch up except for GS who actually put EOG to conviction Buy at $100 before it fell apart. Analysts are driven by so many things, not the least of which is commission generation for the sales force. Makes them short/blind sighted sometimes.

  93. 93
    RMD Says:

    choices, I’ve used AVG ever since it was recommended by Bob Schwabach’s column. It’s free. Norton hogs a lot of the PC.

  94. 94
    zman Says:

    CXPO cresting $3

  95. 95
    zman Says:

    Anyone see any broker comments on SGY?

  96. 96
    BirdsofpreyRcool Says:

    #95 — nope. Gotta think it’s b/c of the MMR Ultra-Deep program and SGY just being a blind squirrel sitting on a hill o’ nuts…

  97. 97
    andy Says:

    choices -agree w/ 93 AVG free

  98. 98
    zman Says:

    Just about all of our names are speaking again at IPAA next week, notable exception in MMR who doesn’t got to that one. Will listen to all of them, LINE for sure as I expect them to be more firm about when they bring the increased distribution. I’ll have a fresh catalyst list to have at hand for the presentations as well.

  99. 99
    zman Says:

    Bakkens up 4%+ on average, acting like people believe a deal is nearing. If no deal, expect some profit taking in those next week with the one caveat being that we do have OPEC meeting mid week. They’ve been lax on quotas but there has been more rumbling of tightening up so will be listening to their presentation early, early on the 14th.

  100. 100
    BirdsofpreyRcool Says:

    musing…. would not be surprised to see ATPG close above $14 today. Think we could have news as soon as Monday. Probably not (thinking later in the week)… but who knows.

  101. 101
    jat Says:

    Re 92.. I don’t think most of the analysts botched it; I just think they’ve been extremely lazy!

    First, Macondo. HAL held a conference call in early June, releasing an 8-k, and basically told you what their GoM exposure was. So once you figured that, you knew the sell off was overdone. At the very least you needed to hold on and at the best buy it up.

    Second, Q2. That blowout relative to estimates alone told you that you were missing something on the revision front, mainly due to share gains and tight pressure pumping and international not falling apart.

    Third, Q3. Today, all you need to do to get to JPM’s Q3 estimates is (1) plug in the right rig count numbers (shown weekly by BHI) and (2) assume some marginal share gains (easy when BHI goes around crying how much share they’ve lost); (3) know that the pressure pumping market has been tight and overcapacity is not an issue for the next few quarters.

    In the short-term, it’s all a matter of oil, dxy, and whispers, but when you look at outright 2011 estimates and HAL P/Es versus the other service companies, it’s a no brainer. Glad it’s finally being recognized. People could have bought at any of the three times above and been in the black, but they need JPM to come out and tell them it’s safe to play…

  102. 102
    BirdsofpreyRcool Says:

    jat — thanks for all your HAL comments. I don’t usually do the services space, but bent down and picked up CAM and HAL, once it became somewhat clear who was responsible for the Macondo blowout. Happy Holder of both.

  103. 103
    BirdsofpreyRcool Says:

    ATPG going for the noggin bump against $14 again… only a matter of time, methinks.

  104. 104
    bill Says:

    90, nog, Im in it thanks

    How do you feel about valuations 1 b market cap, 30 times sales

    Wow the Bahken really is hot!!

  105. 105
    skimo Says:

    ATPG 14.07 🙂

  106. 106
    john11 Says:

    ATPG speaks on wednesday, Could be good timing.

  107. 107
    zman Says:

    Bill – honestly they don’t bother me as it’s set to grow so rapidly. P/S is rarely used in looking at E&P but P/CF levels are not out of line.

    NOG P/CF
    2010: 20x (this is no longer looked as the transition is made to looking at the next two years forward at this time of year.
    2011: 10.2x
    2012: 7.2x – this would be the upper end of most healthily growing E&Ps. With a strong balance sheet and increasingly good looking results however, I think the out numbers are currently low. 1) I expect higher than strip oil prices out here but 2) and more importantly, volume growth isn’t fully factored into the 2012 numbers for any of the Bakkens.

    If you are wondering on 2012 who is the cheapest on P/CF, it’s KOG at 4.5x followed by WLL at 4.6x.

  108. 108
    elijahwc Says:

    Choices #83 and #’s 93 & 97 on anti-virus protection.

    All of them are free to include firewall, backup, maint programs and suites.

    Log on to your broadband providers site and download whoever they have contracted with.

    Comcast, Att et al are in an arms race each contract with a major vendor which they pass along free to you.

    Even better the downloads are usually built to uninstall the old, then self install & scrub your system

  109. 109
    zman Says:

    Names like WLL and BEXP, who are just opening up new cores or plays in old cores definitely due not have the full effect (nor should they yet) in their out year numbers. As long as results continue to prove up the newer parts of the plays (like the TFS in the Lewis & Clark area for WLL) then analysts will be able to walk their numbers up even if oil prices stay flat.

  110. 110
    Nicky Says:

    If we can hold up here into the close, and barring any bad news over the weekend, then it looks good for a gap up Monday. How much of a gap up will be telling. I am still looking for 1168 – 1177.

  111. 111
    zman Says:

    Thank you that helps with the afternoon trading decisions on a sleepy but green Friday. Excellent week. Thanks much all.

  112. 112
    zman Says:

    JB – can you give me your very short term (1 week out) read on BEXP? Thanks much.

  113. 113
    BirdsofpreyRcool Says:

    From what I am told, ATPG needs to bust through 14.15 or so, in order to keep the 14-handle. Kinda fun to watch the battleground. Bullets are flying!

  114. 114
    bill Says:

    107 good stuff

  115. 115
    zman Says:

    MMR = another late day telephone pole of minute chart.

  116. 116
    BirdsofpreyRcool Says:

    z — #107 thanks for the preview.

  117. 117
    bill Says:

    dont look now but mmr is moving again

  118. 118
    BirdsofpreyRcool Says:

    mmr = more like steamrolling than just moving…

  119. 119
    zman Says:

    MMR within about 3 cents of taking out the March, Davy Jones inspired and pre Macondo level of $18.80.

  120. 120
    zman Says:

    re 118 – yes, sorry about, I really need to stop tweeting. 😎

  121. 121
    andy Says:

    Z – thks to all on site. this has been awesome rally.
    SNUHART u enjoying this??? (maybe he’ll speak??)

  122. 122
    zman Says:

    MMR – also at a new 2010 high. Generally getting a bit more cautious until after we see the first “it can’t be this easy, oh crap it is all falling in unison” day that typically happens after the hot money has been back in the group for 2 to 3 weeks. So going to stick with the faster than not option trading for now. As to the stocks, I like them long term so I can ride out some coming rockiness.

  123. 123
    BirdsofpreyRcool Says:

    the sector is trading as if Ken Salazar is the next guy to resign… heh heh heh

  124. 124
    crysball Says:

    As so aptly expressed by BOP’s analogy to a SDM dwarf tossing contest…..may it continue on Monday…hey it’s Friday.

    Could we be getting some assistance with money coming off the sidelines?

  125. 125
    BirdsofpreyRcool Says:

    was it Dman or BSJ who pointed out that once all the cheerleaders hit the field, it’s time to take a breather…

  126. 126
    jat Says:

    Actually, someone was talking to me about the possibility of 123 the other day… apparently the president wasn’t exactly full throated in Salazar support in an interview he gave the other week or so.

  127. 127
    bill Says:

    123 rofl

  128. 128
    zman Says:

    Andy – new guys are often shy.

    Just remember:



    B) It’s a GROUP EFFORT. Think a post was boring? That’s because I lack the creativity to do this without being prodded with questions which kind of circles back to A.

  129. 129
    BirdsofpreyRcool Says:

    On the other hand, money IS going to come off the bench. It has too. You won’t be able to meet pension liabilities, fully invested in just bonds.

  130. 130
    bill Says:

    19.08 do you believe it??

  131. 131
    ram Says:

    #122 – Like post HS excitement on the gassy guys in July of 08 after the April to late June 08 run.

  132. 132
    bill Says:

    Some were speculating that MMR might have oil.

    Someone ought to sue Flores for giving this away for nothing

  133. 133
    jat Says:

    for all my bullish commentary on select names, I’m actually a lot more hedged up as of this week, and that’s proven wrong so far…

  134. 134
    bill Says:

    mmr oct 20 calls are 1.25. They expire in 1 week! with the stock at 19.18

  135. 135
    BirdsofpreyRcool Says:

    jat — funny thing… i was talking to a state level energy regulator last week, asking some production questions about a field he was responsible for… he was nice, knowledgable, very very helpful, and fun to talk to. So, we got to chatting… he said that one should never ASSUME that Ken Salazar speaks for the entire department of energy… even THEY think he is dumber than sea salt.

    It made my day.

  136. 136
    zman Says:

    SGY up 10%, MMR up 6.7%. Hmmmm.

  137. 137
    ram Says:

    Holy crap – the call volume on MMR lit up.

  138. 138
    zman Says:

    re 131- good point. Not to be forgotten although I think we are sort of in the 4th or 5th inning, not the 9th but agreed, something to keep in mind. Maybe some puts into peaks next week for me.

  139. 139
    skimo Says:

    What lit up PWE today? Rising tide?

  140. 140
    elijahwc Says:

    TRGL hit champaign

  141. 141
    bill Says:

    135 lol love it

  142. 142
    zman Says:


    MMR – Sold all (10) the October MMR $17 Calls for $2.60, up 175%.

    MMR – Bought (10) of the January MMR $22.50 Calls for $2.07.

  143. 143
    bill Says:

    on the outside, we have exxi pushing thru 26

  144. 144
    BirdsofpreyRcool Says:

    elijah — did TRLG find something? Or, is it still in Anticipation Phase?? thx

  145. 145
    zman Says:

    Octoberfesthirty. Have a great weekend.

  146. 146
    BirdsofpreyRcool Says:

    ummmm… amazing. ummmmm…. speechless.

  147. 147
    Paul in Kansas City Says:

    I was tempted to take profits on my Jan WLL call position (DITM $85s); but held off; i did take some from OAS; Thank you Z Man! I see soem of the returns and vividly remember to selling enough of big wins long since past; always a tough dilemma; market up a lot; but all my stocks seem too cheap!

  148. 148
    elijahwc Says:

    BOP TRGL still in Anticipation Phase but have multiple resource zones to discover. Those below the ground and those above.

  149. 149
    andy Says:

    BOP – know lots of words to describe u -witty, fun, smart, clever, but speechless NO WAY

  150. 150
    BirdsofpreyRcool Says:

    aaaaaaaaaawwwwww, andy…. blushing. t.y.

    elijah, thanks. If one was going to pick a place on Earth to base their business, can’t think of a better place than the Champagne Region. Oh, da Bubbly!

  151. 151
    BirdsofpreyRcool Says:

    (why do I always think of Dr. Suess when I read that ticker, TRGL?…. …. Oh, YEAH — “Yertle the Turgle”… or something like that)

    Thanks everyone for all the help. apbd said it best — “It’s finally fun again.”

    Have a Super Weekend!!

  152. 152
    choices Says:

    thanks, andy, RMD-looks highly recommended.

  153. 153
    choices Says:

    #108-thanks, Eli

    #135, BOP-watched most of energy forum yesterday, included one guy bashing fracing-then PA regulator made amazing comment :”very important to identify problem, fix it-in the past, steel industry caused problems, coking industry caused problem, most probs were fixed or addressed-need to work constructively and move on-coming from PA guy, it was refreshingly constructive approach, rather than bashing fracing indiscriminately-fracing may not be the problem-strongly implied that bashing was political.

  154. 154
    john11 Says:

    SAC Capital Advisors (Stevie Cohen)just filed a 13g showing 4.4% position in EXXI.

  155. 155
    elijahwc Says:

    John11 – believe it or don’t I just read this as I’m out the door to have a soda pop with a group that includes his old boss from the Gruntal days. Dudie always chims that when you got the call you needed the second line open because the he just might reverse the trade that fast.

    Still this is excellent news because he’s gonna amp it as long as it works, has size and a following.

  156. 156
    BirdsofpreyRcool Says:

    choices #153 — it just makes my heart glad, to know there are government employees who care, and think, and work hard, and understand. We hear too much about the other kind. Thanks for passing that along.

    SD — T. Ward sold 6mm shares on 10/6. Wonder what the back-story is there?

  157. 157
    bill Says:

    SD — T. Ward sold 6mm shares on 10/6. Wonder what the back-story is there?



  158. 158
    BirdsofpreyRcool Says:

    bill — gotta love it… you says it likes it iz!

  159. 159
    RMD Says:

    suggestion box for Z:
    is there a source for the price of liquids? How about adding a price to your weekend price list?
    I u/s from a holder of NFG–big in the MS –that liquids pricing has dropped to 25% of oil; last time I checked it was 35%, but that was a month or so. A lot of liquids drilling (and stock market valuation) seems to have downside if liquids pricing continues south.

  160. 160
    Jerome Blank Says:

    RE: #112 BEXP…posted a new 30 min chart, BEXP was pressing against its new highs all day, other than things feel to me across the board to be a bit over heated, technically speaking BEXP is suggesting still higher prices and the $NYMO closed today at 21.47, this is not overbought, still plently of upside macro room to run…I’ll try to take a closer look at some of the names this weekend…


  161. 161
    zman Says:

    RMD – I will look into it.

    Baylor – please check your email.

  162. 162
    Jerome Blank Says:

    HDY made AMEX top percent gainers today, along with SSN and KOG…HDY has quite the chart on good vol…I lost track of this stock…


  163. 163
    zman Says:

    lwperl – please check your email.

  164. 164
    zman Says:

    Thanks much JB … I’ll have the wrap out Sunday morning.

  165. 165
    zman Says:

    RMD – did you see the latest SM presentation? Their comments on everything heavier than ethane holding its historic relationship to crude seems to be optimistic to overly simplistic to me. Working on that.

  166. 166
    RMD Says:

    Didn't listen to SM, but I will.  Will be checking liquids pricing in different markets to see if they are varied one from another.  Few seem to be paying att'n to this but my gut feel if every co. is fat-dumb-happy and taking liquids for granted….and that usually gets you in trouble. I had my best consultants working on it this evening: Jim Beam, Jack D., the Beefeater, Old Granddad…a very learned crew.

  167. 167
    zman Says:

    Hadn't look at the site on Google Chrome in quite some time. Blazing fast.

  168. 168
    BirdsofpreyRcool Says:

    Sounds like GE Energy Financial Services is looking to get more involved in producing assets.  They have a lot of money… if they were really that smart, however, they would have bought PXP's GoM Shelf Assets (instead of letting MMR snap them up).  Wonder if anyone at GE is kicking themselves right now…

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