Wednesday Morning

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Market Sentiment Watch: Yesterday's FOMC statement, not surprisingly, essentially promised more quantitative easing is on the way unless the economy begins to show signs of a swift recovery.  Today we get another set of eco data that will be less than market moving (import price index this morning and the federal budget this afternoon) but futures are up on INTC and JPM earnings. Bernanke also speaks after the close. In energy land, the Obama Administration ended the deepwater drilling moratorium yesterday to little fanfare and much uncertainty. From what I can tell, Street consensus is that drilling permits will start with a trickle as opertors work through the new procedures, that most drilling is still months down the road. My guess is that like most things, it will move faster than the Street expects. The sellside has a natural inclination towards conservatism in dealing with anything that involves government processes and not without cause. But in this case, the rules will be in hand and the companies will be pushing with all possible haste to get the permits filed. Either way, the end of the moratorium is good news for the offshore crowd which saw an uptick yesterday and for the service names from HAL, RIG, OII on down to names like TDW . 

Nicky Watch: Looks like the low was put in at 1156 earlier and we can now push on up and make higher highs for the cycle. We need to take out 1172.98 on the upside to eliminate the ending diagonal possibility. Once that it is cleared I think we go up to challenge the 1185 -90 area over the next day or two. Just going to add that the risk is now starting to build to the downside with the 45 day cycle moving into extended territory.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today – CHK analyst day, IPAA Day 2
  5. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio):
    • $5,200
    • 100% Cash
    • Yesterday’s Trades:
      • None.
  • ZIM (Zman Inefficient Markets portfolio)
    • $10,300
    • 40% Cash
    • Yesterday’s Trades:
      • OII – Added (20) November $60 calls for $0.65 with the stock at $53.65. This is a play on storm fears from Hurricane Paula and possibly on an early end to the deep water moratorium.

Commodity Watch Crude oil eased $0.54 to close at $81.83 yesterday. OPEC's 157th meeting is tomorrow and since prices have remained near the upper end of the 2010 trading range I don't see the Cartel increasing it's quotas but I do think we will see some saber rattling around the current level of over production. Crude should have minor support just over $80 but I'd feel more comfortable with it back in the mid to upper $70s. This morning crude is trading up almost a dollar. 

  • OPEC Watch: The group upped its forecast for global oil demand by 80,000 bopd for 2010 and 2011 to 85.59 mm bopd and 86.64 mm bopd respectively.
  • Iran Watch: A little internal trouble

Natural gas inched up $0.03 to close at $3.63 yesterday, possibly due to Hurricane Paula acting erratically  near Cancun. This morning gas is trading up slightly. 

  • Early Early Read on Natural Gas Storage: 89 Bcf.
  • Tropics Watch: Paula is now a Cat 2 hurricane off the coast of Cozumel tracking towards Cuba. Models give it a low chance of entering the Gulf.  

Stuff We Care About Today

IPAA Day 2 Schedule:

CHK Analyst Day Pre Game Thoughts... A few small changes to guidance. They have not yet released updated slides for the presentation ... will let you know in comments when they do and I'll be listening to most of the call. Key items will be:

  • Their plans to get oilier (like everyone else although they dragged their feet on it from a model standpoint, they've been acquiring acreage and drilling in over a half dozen "oil plays" since before it was popular),
  • Big Picture Thoughts on natural gas prices, supply, demand (Aubrey's thoughts on gas as a transportation fuel becoming reality), and the possibility of exporting LNG.
  • Eagle Ford Shale JV details ... long term funding gap?  
  • Where do they do the next JV? 
  • Niobrara play - want to hear what they have to say about the Niobrara in particular, Wyoming records show they have now spud 2 wells in the acreage bought from SSN.  

Production Guidance:

  • 2010 - Unchanged at a range of 1,012 to 1,032 Bcfe
  • 2011 - now 1,182 to 1,226 Bcfe, was 1,194 to 1,214 (16 to 20% growth).
    • the change stems from taking oil from 34 mm barrels to a range of 32 to 36 mm barrels, a pretty immaterial alteration
  • 2012 - now 1,314 to 1,394 Bcf (17-19% growth)

Cost Guidance: Unchanged

Operating Cash Flow Guidance: Falls slightly due to a lower gas price assumption.  Their gas price assumption for 2011 went from $5.50 to $4.50.
Operations Update and Other Highlights
  • Ops updated to be added in comments. 
  • CFO Marc Rowland to leave to become president of CHK's 26% owned Frac Tech Services. Domenic Dell'Osso will be promoted from within to become their new CFO. Dell'Osso was CFO of CHK's midstream subsidiary. 

Analyst meeting starts today at 9 am EST, and is scheduled to run for 6 hours. 

Other Stuff

  • The Bakken piece will be out tomorrow, Friday, or Monday, doing a little more mulling. 

ZContest Table

So far we have ... 

Rules are the deal must be announced by end of 1Q11, one company per customer, winner gets a mug and a free quarter to the site. Good luck to you all. My money is on several of these. My pick would be a Bakken name for lack of a good imagination but gassy names should be in the sites of some E&Ps now ... something like a BBG which I do not own. Of course it depends on the buyer and they seem to fall into two camps now. The first is the "Bob Simpson" or "pay a lot for a hot play" camp ... those guys will still buy out a Bakken name and the other is "the LINE" camp which basically says "nobody likes natural gas plays right now so I want to buy natural gas assets." Still several good names out there including SM, CRK, and a big juicy target at PXD that are not on the list. Good hunting.  

Odds & Ends

Analyst Watch:

  • Nothing this early, will update in comments. 

275 Responses to “Wednesday Morning”

  1. 1
    skimo Says:

    re yesterday #50 contest GDP

  2. 2
    zman Says:

    ATPG – launching pre market

    RIG – same

    Front and Center Watch

    CHK – as per post and because I have October 60 contracts that are on the bubble.  Marking up nicely early. 

    BEXP – looking for a near term bounce with oil, following the yesterday's insider sale inspired slump.

    KOG – approaching $4 pre open, nice move off the recent deal! They speak at IPAA tomorrow. I may take some trading shares off the table there soon. 

    Oil service – watching to see what moves following the end of the moratorium. Would snap up HAL but they report next Monday and have put on a good show of late. Still likely to do a short term trade into earnings. 


  3. 3
    zman Says:

    Ski – I will add you. 

  4. 4
    BirdsofpreyRcool Says:

    ATPG put out a coupla PRs/filings last night after close.  First was an S-4, to register their 11.875% Sr 2nd Lien Bonds (as per the 144a prospectus, they have to register these bonds at some point).  The second was more interesting… and made me smile.  Instead of just saying that "ATPG is presenting at IPAA tomorrow"… they went the extra step to say this:  " ATP to Present at IPAA Sanf Francisco with Empasis on Production Growth and Liquidty."  That headline is about the closest thing I have ever seen in print to saying "take THAT, Shorty!!" 
    ATPG continues to offer lots of amusement, for the investment buck.  Am I the only one playing this event-driven situation?  If so, I'll just shut up about it.

  5. 5
    zman Says:

    re 4, no I know there are several others in it. 

  6. 6
    BirdsofpreyRcool Says:

    thanks, z.  I honestly don't mean to be obnoxious about a situation… which can happen, if no one else cares.

  7. 7
    elijahwc Says:

    KOG started with Outperform @ CSFB

  8. 8
    elijahwc Says:

    Dahlman starts debt rsch buy credit ratings on Concho, Cimarex, McMoRan, and Denbury

    bonds. Say they offer an attractive risk/return profile. Concho and Denbury are oil-focused

    companies with solid liquidity. they appreciate Cimarex’s conservative financial policy, with

    among the lowest debt leverage in our coverage universe. Also, believe McMoRan bonds offer

    good return given the net cash position as a result of the recent capital raise.

  9. 9
    zman Says:

    Thanks Eli

    CHK call started

  10. 10
    john11 Says:

    With you on ATPG  Bop, great job.

  11. 11
    zman Says:

    CHK – starting off with a tribute to Marc Rowland. Fresh blood may be a good thing. Heck, he never returned my calls anyway. 

  12. 12
    andy Says:

    BOP    keep talking ATPG   i was there before u and added when u came in.  sold some 17 calls yesterday, but only 1/2 the posit. 

  13. 13
    zman Says:

    CHK Notes – 

    Of the 100+ deals he's done for CHK, he says 8 of 9 of the firms they were done with are no longer around, says all of the analysts who said they were going to go BK are either no longer around or at different firms, lol. 

    Good history of the firm. 

  14. 14
    BirdsofpreyRcool Says:

    john11 — thanks for the head's up.  Just don't want to think I'm dancin' with myself on ATPG. 
    Not exactly sure where to jump off… think tonight's IPAA presentation will dump more Yule Logs on the ATPG Short Bonfire.  But I don't want to hang out in this name for the next few years… like an EXXI or KOG.  Guess I'm married to those names by now.  Heck, I've been living with them long enuf that — at the very least — it's a Commonlaw Marriage at this point.

  15. 15
    ram Says:

    I jumped in on ATPG before and with you BOP.

  16. 16
    jat Says:

    Re 13, my thought when he said that was: yes, how many of those 100 deals diluted shareholders at much higher prices?

  17. 17
    zman Says:

    CHK Notes:

    Says the new CFO has been his co-CFO for the last couple of years. 

  18. 18
    BirdsofpreyRcool Says:

    andy — good for you!  It's been a heck of a ride, so far.  But then again, so has most stuff in energy over the last month.  It was more important that one have a dog or two in the fight, than exactly which dog to pick.  'Course, some dogs are just plain meaner than others… but, i digress….

  19. 19
    zman Says:

    Jat – yeah, but looking at the monthly chart, it was, for the most part, worth it. 

  20. 20
    zman Says:

    CHK Notes:

    Basics: 2nd largest gas producer in U.S. now, 2.8 Bcfepd

    Most active drill: 140 rigs currently, up from 90 rigs in 2009

    Reserves: 16.1 Tcfe now, targeting 22 to 24 Tcfe by 2012

    99 Tcfe of risked, 241 Tcfe of unrisked reserve potential

  21. 21
    BirdsofpreyRcool Says:

    ram — you are one gutsy dude, dude!  Thanks for 'fessing up.
    OT:  Saw the "Big Lebowski" last night… first time seeing it from start to finish.  Those Coen Brothers are something else!

  22. 22
    zman Says:

    Big Lebowski is MCF's favorite movie. 

  23. 23
    BirdsofpreyRcool Says:

    So…. now we have a "U.S. Climate Prediction Center"???  ha.  and sheesh.  Anyway, "they" say it's gonna be a milder winter than last year. 
    Were these the same guys who thought this year's hurricane season would be "more active than normal"??  Just wondering….

  24. 24
    zman Says:

    Actually, CPC has been around for a long time, it is the data division of NWS and where I get my HDD and CDD data.

  25. 25
    BirdsofpreyRcool Says:

    Have to say, watching the combo of White Russians and long mustache was a little tough… but overall, it’s a pretty darn creative piece of work. One could mine it for years, just for movie quotes. May have to see it again someday.

  26. 26
    tomdavis12 Says:

    BOP: Made a nice coin on your ATPG. Keep up any and all thoughts.

  27. 27
    ram Says:

    Re 23, they’re probably going to read from the Farmer’s Almanac.

  28. 28
    BirdsofpreyRcool Says:

    z — guess I’ve never seen the title of the CPC spelled out like that. Just struck me as “nice… one more govt agency.” Thought NOAA did all that…

  29. 29
    bill Says:

    MCf wells are named Dude , Dudeness, etc

  30. 30
    zman Says:

    CPC is a division of NOAA which is part of the National Weather Service.

    Their stats site is extensive:

  31. 31
    zman Says:

    CHK Notes

    #17 in terms of liquids production in the U.S. at 49,000 bpd (not all oil).

    They think they will be in the top 10 by 2012 as they plan to double their oil production.

    Plan to double it again by 2015, see getting into the top 5 or 6 spot.

  32. 32
    milepost_43 Says:

    ZMAN..ck email..CS on KOG with OUTPERFORM

  33. 33
    zman Says:

    MP – thanks.

  34. 34
    zman Says:

    CHK Notes

    May do some other IPO’s after the success of the midstream deal.

    Stock off, nothing really new said so far. Could be disappointment over the 2012 growth rate, could be some sell the news stuff but volume is low so I’d guess its a bit of fear they won’t say anything to boost it, feeding on itself.

  35. 35
    zman Says:

    MMR bumping higher, earnings on Monday, probably moving on thought that they’ll have an operations update.

  36. 36
    zman Says:

    CHK Notes

    Cost management
    LOE is about $0.85 / Mcfe
    on the shales it is at $0.45 / mcfe

  37. 37
    ram Says:

    It’s seems CHK is not saying the right things to move their stock in the green.

  38. 38
    zman Says:

    KOG – CSFB report has a $4.50 price target. I think that’s a bit conservative for a 12 month target.

  39. 39
    zman Says:

    re 37 – they have said nothing yet that would move the stock really either way, this is all high level stuff, nothing on the plays yet. Selling started and is built on fear. Pretty typical of some to sell because others are selling.

  40. 40
    zman Says:

    TAT continues to slip higher post deal, content with the post deal add there, will likely hold through frac results in the Thrace Basin and the quarter … but they still need to start performing.

  41. 41
    zman Says:


    Added (40) more CHK $24 Oct. calls at $0.17 with the stock at 23.45 while listening to the analyst day. Overall position is still smallish at 100 contracts, sense is the early sell off this morning is not based on much more than piling on action before they get everyone updated. See post for additional comments. Obviously with just under 3 days until expiry this is a high risk trade.

  42. 42
    blackgold39 Says:

    Wow Z, another awesome trade on OII, in at 0.72, out at 1.05 this morning, up 45%.

    Had I had enough coffee, I’d have canceled my limit order.

  43. 43
    zman Says:

    CHK – all still high level stuff.

    Comment on HBP acreage – starting to shift rigs to liquids plays as they are getting the gas assets into HBP this year. More details on that when they get to the Haynesville discussion.

  44. 44
    tomdavis12 Says:

    Z: RIG has approx 25% of their revenue subject to the GOM deepwater. Most effected by moratorium. Like you said next step permits. The bull case is that PBR might take some rigs since they are well funded. CSFB came out with a report today re PBR. Neutral rating. Strong asset base – diluted investment case.

  45. 45
    BirdsofpreyRcool Says:

    Contest — APC

  46. 46
    zman Says:

    Thanks BG, not yet offsetting the hit I’m taking in CHK but time will tell.

    EXXI/MMR running, again, earnings from MMR next week. Jim Bob should have comments on Blueberry Hill (no impact for EXXI) but also on BB East (may have pay totals to depth and if not then shortly thereafter) and then on DJ 2, speed of drilling, not sure they’d be in section yet there.

  47. 47
    zman Says:

    re 45. Nice pick. Gutsy. Almost gotta ask you who you see as the buyer. My thought would be COP. DVN is looking onshore I know but they would not want to go right back offshore so they are out. APA and CHK, definitely not. XOM is full. CVX?

  48. 48
    BirdsofpreyRcool Says:

    z — Schiller’s comments about coring and SEM and hydrocarbon indicators y’day, tells me something is going on. Above and beyond what was exected… think we do get to hear more deets on MMR’s earnings report on Monday. Think there may be some pleasant surprises…

  49. 49
    zman Says:

    CHK – we are calculating the HBP status of the Haynesville is calculated to the day, so we know exactly when we can pull rigs off (and send them to the EFS).

  50. 50
    zman Says:

    Hear ya Tom, I’m sticking with OII for now. All deepwater rigs have 1 or 2 ROVs onboard. It’s a big piece of OII’s pie. RIG is a runner though, no doubt…. what about NE here?

  51. 51
    zman Says:

    BOP – agree, may take a small option position in EXXI, hate how the optins trade though. Glad to have the shares. Thanks.

  52. 52
    bill Says:

    aubrey just acknowledged that the haynesville is not profitable at 4.25

  53. 53
    BirdsofpreyRcool Says:

    Two more thoughts on EXXI and MMR.

    EXXI is going to “do something.” And it will involve debt and equity. In the recent past, Schiller has been good about issuing “non-dilutive equity” (which you can do, if you buy assets are the right price AND issue debt at the same time), so I’m not going to try to get cute and jump ship ahead of anything. Stock may (probably will) go down, but it won’t stay there.

    MMR… my biggest worry there is that FCX buys ’em in-house and limits the upside for the stock there. FCX making all sorts of noises about not seeing any accretive outside investments out there… so, looking at “internal investments.” Don’t think you can pick up a bigger bullhorn than that statement. eh?

  54. 54
    zman Says:

    CHK Notes

    Haynesville – tough environment to make money right now. $4.25 flat in the Haynesville gets you barely to breakeven, sounds like that’s the case in the core, not the whole play. That puts an ugly spin on those outside the core and lets you know why guys like GMXR, GDP can grow production only with good hedges. Goes back to the comment that $4 gas is simply not enough to warrant drilling next year once HBP is out of the way. They will shift to Bossier drilling, which is less costly. I think EOG and ECA and some others like little GST would agree on that. As the rigs come out and the peak of LA gas comes off, this should lead to a firmer environment for gas next year.

  55. 55
    zman Says:

    re 53. Thanks.

    I was thinking out loud yesterday EXXI would do equity sooner rather than later, it’s been almost a year and the stock has done well giving them the currency to do it. Plus, they are looking at interest to capex of something like 40% or an EBTIDA to Interest of about 5 to 1 or debt to cap of 63%. All a bit high angle in my book but I don’t where the same gaudy gold rings that Schiller does and as such don’t probably have his risk tolerance. Don’t get me wrong, that’s not a slam, and I think he should do a deal under their shelf, do both debt and equity and pick up some of the shelf stuff available (XOM, EOG, etc that’s on the block now or take some from MMR). Maybe tender for some of that higher % stuff.

  56. 56
    tomdavis12 Says:

    50 NE needs to get the Pemex situation resolved. The rig report was ugly. Numbers for the quarter are .49/sh down from $1.20 3 months ago. CC on 10/21. Will be there and throw out some comments. Would not expect them to be the fast mover of the group.

  57. 57
    zman Says:

    re 52… yeah, that’s good for natural gas prices. Wait until he shows where the Marcellus is (higher). But still a good thing for NG, helping to blunt that peak on the Louisiana production graph.

  58. 58
    zman Says:

    Yield still running.

    WHX back up to $22.50. No news on their dividend until first week of November. I’m watching it, thinking it will come in a bit light to the analysts and the analysts will reiterate their sell ratings. If it runs through the old peak I am likely to take some or all off the table.

    LINE – over $33 for the first time. Listening today at IPAA for stuff listed in post.

  59. 59
    bill Says:

    robry at + 94 this week


  60. 60
    zman Says:

    CHK Notes:

    Natural gas trends in the Big 5 Shale Plays

    demonstratable EUR between lateral length and EUR but it’s not a linear relationship

    EUR improves over time

  61. 61
    zman Says:

    Bill – yeah, I’m thinking 95, Street is now at 91.

  62. 62
    zman Says:

    … and I’d add that it needs to cool off soon or we are going to bust 3.8 Tcf in a hurry as this could be one of those injection seasons that drags on for an extra 2 or 3 weeks due to mild weather.

  63. 63
    zman Says:

    No pr out of SWN pre IPAA today, guess they are not yet ready to cut spending. As JB said, technically, the stock looks better.

  64. 64
    DrLink Says:

    BOP- Well I remember trading ATPG in the high 40’s so when it was at $8 I could not pass it up. Also have large Jan 2012 LEAP positions with strikes at $12.50 and $20.(Trying to figure out the decay) I’m not looking for a fast trade though….I think if everything goes to plan we have a long ways to go….but on the other hand we all know that pigs get slaughtered LOL

  65. 65
    zman Says:

    CHK – spending a lot of time on drilling and operations stuff but not play specifics, investors looking for more meat on the plays.

  66. 66
    BirdsofpreyRcool Says:

    DrLink — thanks for sharing. Shows one can make really nice $$ by getting to know a situation well enough to understand the risk/return.

    It’s tough, when the mrkt is screaming at you that your baby is ugly… can give one serious doubts. That is where reconfirming what one knows and thinks helps to keep a clear head. Great trading, dude!!

  67. 67
    ram Says:

    Why would CHK spend all this effort/money to do this presentation without throwing out prime ribeyes out to analysts to feast on? Seems counter productive.

  68. 68
    zman Says:

    re 67 – it’s 6 hours long, I assume they will get to it. They are starting with the big picture, there are tidbits here and there so far, slowly getting more specific

  69. 69
    zman Says:

    Going through the new LINE presentation for later today while listening to CHK.

    CHK saying Fayetteville shale was 20 rigs, now down to 8. This kind of thing will help blunt the angle of the “other states” production chart.

  70. 70
    Geno Says:

    Z -EXXI what do you think about the upside now?

  71. 71
    ram Says:

    Oh, sorry, I didn’t realize it’s an all day affair.

  72. 72
    zman Says:

    LINE new presentation notes: I’m comparing this presentation to one from about a month ago.

    LINE expecting to announce higher borrowing base, don’t recall what the old one was but I don’t think it was the $1.5B they now expect to get this month.

    LINE saying capital budget will be 33% of 2010E EBITDA, that number was 36%, could be acquisition added to pro forma EBITDA, it’s not a move to lower capex. Could just be higher EBITDA due to outperformance on the top line due to higher than expected volumes. From what I understand, Granite Wash volumes are quite a bit better than they expected.

    Wolfberry program – much higher IRR range now listed at 50 to 100% vs 40 to 60% in the past … this is largely due to higher strip price.


  73. 73
    zman Says:

    Ram – yeah, pretty sleepy in parts due to the indepthness.

  74. 74
    elijahwc Says:

    BOP says “MMR… my biggest worry there is that FCX buys ‘em in-house and limits the upside for the stock there. FCX making all sorts of noises about not seeing any accretive outside investments out there… so, looking at “internal investments.” Don’t think you can pick up a bigger bullhorn than that statement. eh?”

    Jim Bob (FCX BOD) says “We didn’t go from the 100th to the largest resource company by passing on smart acquisitions.”


  75. 75
    zman Says:

    Geno – I think BOP’s right for the near term target of $30. I think Shiller does a deal up there … I would, especially if you get BB East and DJ 2 data to sell it into, and then talk about how you are getting closer at Lafitte.

  76. 76
    zman Says:

    Eli – yeah, the conflict of interest there as JB sits on the board too says to me you get one heck of a premium or you have an endless string of lawsuits.

  77. 77
    BirdsofpreyRcool Says:

    z — #75… bingo. You are precisely right, on every point!

  78. 78
    blackgold39 Says:

    In weird news: http://www.ktul.com/Global/story.asp?S=13315425

  79. 79
    zman Says:

    CHK – talking about how they drilled a sweet spot area in the Barnett, best five wells ever in the play in the last year, with one IP at 21.8 MMcfepd, that would be a nice well over in the Haynesville and stomps what you normally look for here.

  80. 80
    zman Says:

    re 77. High praise. I think I will take the rest of the day off.

  81. 81
    zman Says:

    re 78, holy cow, want to be the first to say it must be the Woodford drilling, LOL. Sheesh, ugh, double ugh. The planet is 4 billion years old, things are bound to shift and break from time to time. I certainly will at that age.

  82. 82
    zman Says:

    CHK moving onto shale gas Q&A (they’re saving liquids for last which is probably smart)

  83. 83
    zman Says:

    LINE Notes

    Granite wash – no new completions reported in the slides but there are 3 wells drilling and 1 well completing now. The one that is listed as completing is literally next door to their industry highest 60 MMcfepd completion.

  84. 84
    blackgold39 Says:

    Must be the hydro fraccing — cue: Gasland

  85. 85
    AAA Says:

    EOG can’t seem to hold 100.

  86. 86
    zman Says:

    LINE Notes

    Slide 12

    YE 2010 Granite Wash production rate is 320 MMcfepd, used to be 300 MMcfepd (about 3 weeks ago at Barclays)

    Sounds like they have added some more long term natural gas price hedges (don’t see #s yet but they were already well hedged, could be just covering the GW production)

    On the comment on EBITDA climbing above, it is not from the acquisition as they backed out the increase from the planned acquisition (the $100 mm one) that fell through last month. So EBITDA better on organic production, won’t be price either as that’s hedged. Solid.

  87. 87
    ram Says:

    They’re uncomfortable in a 4.3, sissies. Trying being too close to a 7.1 or 6.9 – that’ll fill up their shorts!

  88. 88
    zman Says:

    BG39. When it turns really cold those guys can use the Gasland DVDs as kindling. It is made out petrochemicals after all.

  89. 89
    choices Says:

    (little late category)-BOP, thanks for correction on VIX yesterday-it was my error-saw VXX as 52 week low on TD Amer and “ass-umed” VIX also w/o checking-maybe seeing what I want to see-this ramp up is frustrating to me as I’m hedged to the eyeballs so I’m really not a player and I do not like being in the same camp as Prechter.

  90. 90
    tomdavis12 Says:

    Z: Is CHK doing the choke back thing?

  91. 91
    zman Says:

    Floridians might want to stock up on water, generators, etc.


  92. 92
    blackgold39 Says:

    It got down to 2 degrees F last time I was in SE Oklahoma. Started freezing the brine for the CT unit. Nasty.

  93. 93
    zman Says:

    Tom – yes. Said most IPs over 16 in the Haynesville and they bring them on at 8 to 10.

  94. 94
    bill Says:

    atpg slides for todays mtg


  95. 95
    zman Says:

    KOG at $4.

    BG – especially without windbreaks, that place gets cold.

  96. 96
    zman Says:

    Analyst Watch:

    OAS – Canaccord reiterates Buy.

  97. 97
    zman Says:

    re 96, oops, that’s on NOG.

  98. 98
    zman Says:

    Canaccord says NOG is ahead of plan and should not trade at the discount that it does to its peers. I think it has to trade at some slight do to its lack of control over its operations. They are essentially land owners that process incoming paper and write checks and then cash checks. Fortunately they have the balance sheet to continue to participate with the current rig ramp.

  99. 99
    zman Says:

    CHK – Anadarko Basin discussion starting

    Granite Wash, Cleveland, Tonkawa, Missisippi horizontal play.

  100. 100
    BirdsofpreyRcool Says:

    choices — #89 thanks for pointing out the difference. We are all here to watch each other’s back. But thank you anyway. Just tryin’ to help.

  101. 101
    blackgold39 Says:

    re 99 – They quiet about the Cana activity? I don’t recall, did CHK sell off their piece to one of those other players? CLR, XEC, DVN? I know SD already did…

  102. 102
    zman Says:

    BG – no mention so far, will keep ears on.

  103. 103
    zman Says:

    CHK –

    Note volume spikes on the minute chart as they begin to talk about the non shale stuff.

  104. 104
    wcoaster Says:

    CONTEST = NOG since MHR has already been taken.

  105. 105
    zman Says:

    CHK Notes – Anadarko Basin Liquids

    Colony Granite Wash –

    130,000 net acres

    drilled 104 horizontal, 3x the aggregate
    well count of the players

    now 28,000 boepd from nothing at the
    beginning of 2007.

    7 rig program

    They’re not showing all the slides on the web, no isopachs for the play at home types, that’s weak.

  106. 106
    zman Says:

    re 104, gotcha thanks for playing.

  107. 107
    zman Says:

    CHK chart = more liquids rich meat please.

  108. 108
    BirdsofpreyRcool Says:

    wcoaster — you in MHR?

  109. 109
    zman Says:

    Cleveland / Tonkawa (this is uphole to the Colony GW from before)

    500,000 net acres – more stacked pays

    8,000 boepd (50% oil and NGL)

    6 rigs now, going to 9 in 2011 and planing to drill 85 wells next year.

  110. 110
    jat Says:

    any chk takeaways so far vis a vis line? didn’t see anything more impressive than what line already has

  111. 111
    elduque Says:

    I wonder where CHK’s price would be if Aubrey wasn’t forced to deleverage 2 years ago.

  112. 112
    zman Says:

    CHK Notes:

    Mississippian play (north side of the Anadarko Basin)

    230,000 net acres
    57% oil, 10% NGL, rest gas
    Current production of 3,000 BOEpd , up from just about nothing at beginning of 2009
    3 rigs now going to 4 rigs next year, will do 40 net wells, cost a little higher here due to produced water.

  113. 113
    jat Says:

    or guess I mean line vis a vis chk. the colony/texas panhandle disc didn’t seem that detailed.

  114. 114
    zman Says:

    re 110 – not really no, I think with LINE, the play just is more noticeable, given the size of the company. All looks good to inline from what I expected.

    for 10% rate of return
    Colony Granite Wash: $31 / barrel
    the rest about the same with Mississippian a little worse.
    Nice plays all.

    re 111 – ouch.

  115. 115
    zman Says:

    re 113 – I think CHK is just demonstrating their ability to grow the heck out of liquids production in a highly economic play.

  116. 116
    wcoaster Says:

    BOP – no, but I’m keeping you company in ATPG.

  117. 117
    elduque Says:

    Eagleford discussion coming up.

  118. 118
    1520sbroad Says:

    HK down in sympathy with CHK?

    I had a long conversation about #111 with my brother recently. We figured that gaffe was worht about $10 a share.

  119. 119
    zman Says:

    CHK Notes:

    Going through EFS,

    Going to 40 rigs, once there will spud a well every 12 hours,
    IRR better than GW due to CNOOC carry through 2012.
    Talking about driving liquids production for the wholeco for decades to come.

  120. 120
    zman Says:

    Re HK – maybe, saw a comment by a sellsider the worry is they will do an equity deal. Makes me shake my head. I don’t see it, they’ve essentially promised not to through year end but where there is some smoke, and the sellsider said this came from a number of buysiders, there is sometimes fire.

  121. 121
    1520sbroad Says:

    #120 – hmmm.

  122. 122
    zman Says:

    re 120 – personally I don’t buy it. I think the sellside helps to create the rumor by continually being disappointed that HK outspends cash flow, only to fill the void with asset monetizations.

  123. 123
    elduque Says:

    Where is HK relative to CHK in the Eagleford?

  124. 124
    zman Says:

    CHK Notes

    12 rigs now – looking to go to spud to spud time of low 20 days. now mid 20s

    31 rigs by YE11
    40 rigs by YE12

    Assuming 595,000 BOE EUR for $5.5 mm CWC

  125. 125
    zman Says:

    CHK notes

    50% IRR at $80 (based on the 600 mboe type curve, that should improve with time)
    10% IRR at $50

  126. 126
    apbd Says:

    Came across Vantage Drilling VTG in my reading. Deep water platforms and jack
    up rigs. Small. Any opinions?

  127. 127
    1520sbroad Says:

    #122 – conveniently spread during expiration week? I would hope that HK has learned something from their past. I have taken at least some comfort that this year they have laid out a plan and more or less stuck to it – asset sales, etc.

  128. 128
    RMD Says:

    Does anyone have any background feeling for mgt at FXEN? Listened to IPAA presentation about Poland, one old hand said APA tried Poland 5 years ago and gave up. FXEN talked a good game.

  129. 129
    zman Says:

    re 127. Target of $1 B in monetizations by year end, $1.5 B done so far and still may punt the Fayetteville Shale division. Also, no further equity issuance so far, so I’d agree, and they are also beating the numbers.

  130. 130
    zman Says:

    RMD – Is the thin tall guy, Tom whose last name I forget still there? Because if so I’d say yes to your question. They are aways “this close” to something big. Not saying it won’t happen and the idea makes since. Are they still poking fun at the National Oil Co of Poland for driving down the highway, going out a 100 yards to the left and right, and drilling post holes?

  131. 131
    zman Says:

    CHK doing their Delaware Basin oil basin talk now. West, probably worth your time to listen. Bone Springs etc.

  132. 132
    jat Says:

    anybody know what PVA is saying at IPAA?

  133. 133
    skimo Says:

    Dan dicker trashes CHK heavy in the beginning of this interview, but then at the end he says “well, I’m not that against ownership of CHK compared to DVN, apache and anadarko. Go figure. Came on line at noon today.

  134. 134
    Jerome Blank Says:

    CHK..updated daily chart, would like to see the 200 day at $23.37 hold as support on a closing basis, right now this level is looking like a nice buy spot…

  135. 135
    zman Says:

    CHK – Niobrara

    Plans to up rigs to 6 targeting the Frontier sand the Niobrara shale. Saying very excited about the stuff up in the Powder River Basin.

    Down in the DJ (around SSN), saying good results from others.

    Niobrara – very consistent over a very large area. Shooting a 300 sqmi 3D, also sees shallower target.

    Calling porosity at 5.5% to 7.5%,
    Says there are 175 permits in the Niobrara, 9 hz wells drilling now by industry, 2 of those are the CHK wells on the SSN acreage (where SSN has that 3.8% ORRI).

  136. 136
    zman Says:

    CHK thinks the Niobrara will be the next big oil play in the U.S. Nice quote.

  137. 137
    zman Says:

    No questions from analysts on the last section. Wow … dolts.

  138. 138
    zman Says:

    Guy speaking now for CHK is the midstream guy, which would normally be a snoozer but he is also the NG special projects guy which looks at new tech and also new avenues of demand for gas.

  139. 139
    Nicky Says:

    Good afternoon. So far so good but I am starting to feel a little uneasy up here. Every chart I look at from metals, to euro to oil to indices is now starting to looking a little too vertical for my liking.
    I don’t think the downside risk is huge but I do think we are on the verge of seeing a 30 – 40 point correction for the spx. The hard part is to nail the top. Due to the extended 45 day cycle which should be topping out here then top should come between now and Friday. My preference is to for us to top between 1184 and 1190 but yes this could extend up to 1205 – 1215. If we top in the lower areas ie around 1085 then a pullback could take us to 1150 or 1131. Remember how important 1131 was on the way up?

  140. 140
    zman Says:

    Thanks much Nicky, hadn’t had time to ask today.

  141. 141
    zman Says:

    MMR going all spikey

  142. 142
    Nicky Says:

    Just want to try and give you the heads up Z when I see a possible turning point in the market. The pullback could be sharp and fast when it comes….

  143. 143
    elijahwc Says:

    EU Decides Against Deepwater Ban


  144. 144
    zman Says:

    Nicky – fantastic, thanks much!

  145. 145
    RMD Says:

    FXEN: Tom Lovejoy (age 74) Chairman. David Pierce (64) CEO. Couldn’t tell from presentation how tall Tom is. Am I reading you correctly thinking they were FOS in the past?

  146. 146
    RMD Says:

    Z did your soccer coaching move to Wed?

  147. 147
    zman Says:

    re 145 – He tried hard to get me to cover him and yes, that’s him, nice guy, could have been a center if you put 80 pounds on him. Don’t know Pierce. Any well results worth talking about. Frankly I could care less about the millions of Polish moose pasture they have if they can’t show some hydro carbons for it.

  148. 148
    jat Says:

    Hope Nicky’s right. I’ve been liquidating and lagging over the past two weeks, have been getting uncomfortable with levels for all sorts of stocks!

  149. 149
    zman Says:

    re 146. I quit and put Intern #1 in the Academy, now M,W 4:30 at Murray if you want to stop by to chat. Much better program than mine as she played out of her socks last weekend.

  150. 150
    blackgold39 Says:

    re 113/114: I question the economics of those old, drawn down plays like the Cleveland/Tonkawa/Mississippian that people have been drilling vertical wells through for years. Several smaller companies have been drilling Cleveland/Tonkawa for 3+ yrs horizontally with little to no success. Crusader Energy and comes to mind as one.

    This isn’t to say the econ doesn’t fly, but I wouldn’t be shocked if the lack of detail is simply because it doesn’t fly and they are just trying to boost liquids volume for the sake of boosting it.

  151. 151
    zman Says:

    CHK midstream guy talking technologies now.

    Talking gas to liquids. Looking for a breakthrough on margins. Says current tech needs $84 oil to make that work ($4 gas + $10 x 6). Says they are making significant progress being along those lines. Wow. Saying they will see GTL work in the U.S. Double wow.

  152. 152
    bill Says:

    chk talking lng exports and z favorite chenaire

  153. 153
    zman Says:

    Aubrey session probably starts in 20 minutes.

    Been watching PXD climb since the CHK deal and just before it. That’s gotta be getting overdone.

  154. 154
    zman Says:

    re 150. Hmmm.

  155. 155
    elijahwc Says:

    #152 if of interest CPQ is the horse. FCX also commissioned their LNG for export this year I believe.

  156. 156
    zman Says:

    Jat and Nicky – I hear ya overheated. Look at WLT, soaring again, that has mo-mo energy China stock written all over it. Out a bit lower, looking to get back in on a big bad set of red days (and not on the first one as I do think it will be a set of them … this is still October).

  157. 157
    zman Says:

    LINE added NG swaps in 2011 and 2012, average price of those years is now $5.97; was $6.25 which makes sense as the new volumes were probably done close to $5.50. But it keeps them close to 100% of expected volumes in the out years as the Granite Wash volumes pile up.

  158. 158
    ram Says:

    I just wish CHK just had the ‘m’ in mo-mo so it could move along.

  159. 159
    zman Says:

    Aubrey Strategic Overview starting

  160. 160
    AAA Says:

    EOG just getting pounded.

  161. 161
    zman Says:

    CHK Notes

    CHK – good slide showing $2.25 cash costs/ Mcfe vs $6.14 / Mcfe (hedge weighted price)

    Debt nowhere due.

    See a larger revolver in 2013 that could consume their first trache of $500mm that comes due then.

    Continuing to pay down debt

    JV’s – $12.8 B in 5 transactions to date

  162. 162
    zman Says:

    AAA – huh?

  163. 163
    zman Says:

    CHK Strat Overview

    Talking about the fact that of the JV’s they’ve done, they have only conveyed 25% of the underlying assets. If you look at the remaining assets, the implied valuation would be well above CHK’s total enterprise value of $26 B.

  164. 164
    zman Says:

    Ram – I take it you are long the CHK options. Did you do all the MMR’s from the last few weeks as well? Or the BEXP’s?

  165. 165
    ram Says:

    Yes, no and yes.

  166. 166
    zman Says:

    CHK goes from:

    2010: 12% liquids
    2011: 17% liq
    2012: 19% liq

    Note that they are going mid teens rate through 2015 for flat capex.

  167. 167
    AAA Says:

    re EOG. It’s been getting selling from the open and is at the LOD on a day when everything except for CHK and CLR is up.

  168. 168
    zman Says:

    Just wondering. Do you play in the ZLT common shares as well?

  169. 169
    zman Says:

    re 167. Ah, I see, normally I don’t view down 2 dimes as pounded so I was wondering if my quote screen was messed up.

    Aubrey starting now.

  170. 170
    RMD Says:

    CHK “We are perfectly positioned for today’s markets” does not sync with the previous slide showing how the stock is worth $42 at $4.00 gas.

  171. 171
    zman Says:

    Aubrey saying the earthquake this morning was not his fault.

  172. 172
    zman Says:

    skipping the LINE call for now, will circle back.

  173. 173
    zman Says:

    re 170. He means from what they own and their plans but I know you know that.

  174. 174
    ram Says:

    ZLT is where it’s at for me and my 401K.

  175. 175
    zman Says:

    Gotcha, just snooping. None of my business honestly, just curious, just sounded like you were pinning a lot of hope on CHK.

  176. 176
    jiveyjr Says:

    GST moving nicely…think they presented a bit ago

  177. 177
    jat Says:

    XTO would probably be at $30.00 today were it not for Bob Simpson.

  178. 178
    zman Says:

    Jivey – they spoke yesterday, pretty much “wait until the quarter for Glen Rose and year end for the Eagle Ford”. Glad to see it moving though.

  179. 179
    VTZ Says:

    Dollar looks to test round number support at 77 again.

  180. 180
    zman Says:

    Look at the big hat on JB, nice call yesterday re SWN! I own the common but did not take the thought I had re a gas bounce and the lagging name in options.

  181. 181
    ram Says:

    If I had pinned my hope on CHK, well it probably be the soup line for me -jmho.

  182. 182
    jiveyjr Says:

    thx Z……may as well be ah drinking beer the way i pay attn. eh? I’m purty good at that ‘ya know

  183. 183
    jat Says:

    Does anyone else remember the shale haves and have nots of the 2009 annual meeting? Of course, that was when gas was going to be $7+ this year…

  184. 184
    zman Says:

    re 183, sure and yes it was. I also remember when everyone was a natural gas company and before that, when they were all oil companies, and before that….

  185. 185
    zman Says:

    CHK – will identify another oil play in 2011 which they could have 1 mm acres in. This is the second allusion to it.

  186. 186
    zman Says:

    EFS acreage example

    Invested $1.4 B for 600,000 acres, then do CNOOC deal leaving them 1/3 of it leaving them with a negative cost of $800mm. They do this over and over… market doesn’t really care.

  187. 187
    jat Says:

    You cannot argue with the way Aubrey flips shale. But no one ever seems to care.

  188. 188
    zman Says:

    CHK – mentioned earlier their potential reserves are for an 8% recovery factor. They think they can get that recovery factor up. Moving to a 9% recovery adds a billion barrels.

  189. 189
    zman Says:

    Jat – true. I think next year, they get oilier and they can really whack the gas rig count. Could be interesting. I no long own it (except for those calls) so it’s interesting to step away from the story and then revisit from time to time from the outside. Takes the crust off my view. The play may be in some other vehicle that will benefit from this switch. My sense is that it is HK and others.

  190. 190
    zman Says:

    He’s talking about that new play as a hypothetical. He’s saying it’s the next EFS and that he could acquire 1 mm acres for $1.25 B and then he’s saying you could sell it to the partner you just had in the EFS for $2.5 B. Would you do that. He’s a rascal, not admitting this is the case but definitely implying he’s doing it right now.

  191. 191
    zman Says:

    Keeps talking about “that’s how we do it, how we will do it, why we do it”

    Reminds me of the “That’s how dad did it, that’s how America does it, and so far it’s worked out pretty well” speech from Iron Man.

  192. 192
    zman Says:

    Talking about doing a JV in the Niobrara.

  193. 193
    zman Says:

    Said it probably won’t close this year but it might.

  194. 194
    jat Says:

    Yeah, I think CHK has best been played from a lateral target search perspective for some time, as those other will get the pure play value that Aubrey tries to argue for with all of these JVs.

  195. 195
    jat Says:

    I mean, can you imagine where SSN will be if he gets his Nio JV done.

  196. 196
    zman Says:

    Aubrey comment – By 2011, the finding of big oil fields in the U.S. will be over. All U.S. sedimentary basins will have been examined for shales. Don’t know what’s after 2012 … that’s why we are spending on land now, because we won’t be later (I’ll believe it when I see it) but the implication is excess cashflow in 2012, paying down more debt.

  197. 197
    zman Says:

    re 195 – well, um, yeah, higher, lol, I mean the math will get pretty simple won’t it, lol.

  198. 198
    zman Says:

    NFX tapped $60.

  199. 199
    zman Says:

    BEXP trying for me, sure could have done without Bud making that filing yesterday. Will likely punt the $20s today for a nice gain. The $22.50s will likely die but are more than paid for by the sale of the first third of that lot for a triple.

  200. 200
    zman Says:

    CHK debunking fears that they could lose their operatorship in JVs with foreign companies. Um, hadn’t heard that one, don’t know which part of left field generates those kind of questions but its a whacky part of the field.

  201. 201
    zman Says:

    The safe play on the BEXP $22.50s is to declare a wash and punt on them for $0.05. That bid is a real one, looks like over 100 contracts there. I sold a third of mine for $0.15 and my cost is $0.06 so I’m going to let those ride. If I hadn’t done that, I’d probably take the penny and half loss with commisions on those. Just thinking out loud while Aubrey rambles on.

    RMD – He just said frac spreads are at highs for the year and at multi year highs. NGL prices just not falling like the sellside feared.

  202. 202
    blackgold39 Says:

    NFX going to break 60??

  203. 203
    zman Says:

    CHK Notes

    Was there a US review of the CNOOC deal? There is a body out there that will review it. They are confident it will pass muster. CNOOC will not operate, will not other facilities.

    CHK – “we’re going over to China to get our money and our jobs back”

    US passed a law in 2009 – The US-China Shale Gas Act – that encourages exactly this kind of deal.

  204. 204
    bill Says:

    CHK was founded by 2 land men aubrey and..Tom Ward

    Given that major reservoirs are now spoken for maybe its time for aubrey to reunite and takeover SD.

    He then can spinoff or find a jv partner for all of sd’s idle assets

  205. 205
    zman Says:

    Re 202: Probably a deal rumor, lol. They’re always a bridesmaid in peoples thinking but never get to the alter. I’d hate to see them go honestly. Unless they get a very large premium that is.

  206. 206
    zman Says:

    CHK in the last throes of the Q&A. Aubrey and Marc doing a good job, just said they will make their 2011 numbers in light of the VPP, they had taken that into account, just pointed that out to an analyst who wrote that last week when the VPP was fired off. The analyst then said “it wasn’t me”.

  207. 207
    zman Says:

    CHK – can’t imagine doing a corporate acquisition. Said people are doing them for $150 to $200,000 per flowing barrel. Not if they can drill for it much cheaper than that.

  208. 208
    zman Says:

    Aubrey – 1/3 of US coal plants are unscrubbed, all will get shut down next 10 years. That sounds high to my recollection.

    They don’t see a moratorium coming on fraccing.

  209. 209
    zman Says:

    If there were a moratorium imposed on fraccing, NG would go to $20 in about 3 months and we’d hedge out 10 years of production and life would be good.

  210. 210
    jat Says:

    Aubrey: “It’s been an honor to interact with our JV partners”

    I’m sure. 🙂

  211. 211
    zman Says:

    Aubrey says in a year you will start to see these foreign JV partners start to buy U.S. companies.

  212. 212
    RMD Says:

    201 yes, heard that.
    203 CHK – “we’re going over to China to get our money and our jobs back”. Wonder since land dealsin USA are almost over, it is on to China for CHK.

  213. 213
    blackgold39 Says:

    re 205: I wonder what sort of a premium they’d go for? 80-85+? I know the Booth wouldn’t let her go before then…

  214. 214
    1520sbroad Says:

    #209 – I was in a long, ugly discussion with one of my in-laws (a land owner in PA) about fraccing, water etc. I closed the argument with – “The day that fraccing stops in the US due to a gov’t imposed moratorium I will load up on nat gas stocks and you should too because nat gas will go vertical.”

    Fortunately I don’t have to those folks but once a year…

  215. 215
    blackgold39 Says:

    re 211: jajaja maybe NFX

  216. 216
    zman Says:

    RMD – no, he said they looked at 180 basins outside the U.S. Sounds like it would be the Netherlands (very nice looking shales) or bust and he’s not going there either.

    CHK call over, stock at 23.35, down $0.52

  217. 217
    zman Says:

    re 215 – possibly, he was saying they’d be going after the shales that way. That the JV’s are just part of educating themselves before they drill on Wall Street.

  218. 218
    choices Says:


    Z, this data is somewhat dated but still may be useful-not sure where Aubrey gets 1/3 of the plants, that ~=200 plants.

  219. 219
    elduque Says:

    CHK – why does the stock trade so cheaply. Is it mainly because the street doesn’t give any value to his buying and selling land, albeit it has been amazingly profitable.

  220. 220
    tomdavis12 Says:

    Z: What about the promise to be investment grade that he has trotted out on the last few CC’s. He has promised since end of 2003. Why does he have to be the biggest? Now I see why all those adds on TV to get the gov’t to help.

  221. 221
    jat Says:

    what happened to atpg?

  222. 222
    zman Says:

    re 221 – I see a form 4 filing for the COO, tiny sale but he doesnt own much. Could just be some pt.

  223. 223
    zman Says:

    re 220. He nodded ascension to a mention of that happening in 2012. Believe it when I see it. There will always be something to spend it on instead of debt. He’s good at buying stuff. If they really were after the debt paydown, they wouldn’t start off the financial discussion by talking about expanding the revolver.

  224. 224
    zman Says:

    Thanks Choices, I used to use EIA and EPA data to track plants, now I no longer worry on it. I just think the 1/3 of US plants are unscrubbed comment is a bit high. Many were seeing bag houses, ESPs and scrubbers added back when I monitored it and that was the late 1990s. So it’s a hard statement for me to swallow but I have not looked at it in a decade … just would have thought the aging coal fired population would have had to have made more progress than that.

  225. 225
    elduque Says:

    In listening to the call, I got somewhat confused about the next big deal. The mythological 1,000,000 acres. Was he talking about the Niobrara or was this another area?

  226. 226
    BirdsofpreyRcool Says:

    ATPG — no idea. Bear Raid perhaps?? They present tonight after close. What better time to stage a raid and then cover your short. We shall see.

  227. 227
    zman Says:

    Eld – that would be another, unnamed deal.

  228. 228
    zman Says:

    I think it is profit taking. ATPG, EXXI, MMR, SGY, MCF all red in a green day. By the rumor, sell the end of the moratorium. Probably short lived.

  229. 229
    BirdsofpreyRcool Says:

    ATPG — hearing that weakness is due to their slides being put out, ahead of presentation. Haven’t gone to look… so don’t know what’s in them to scare anyone.

  230. 230
    john11 Says:

    Agree Bop, I didn’t see anything provocative in the ATPG slides that would cause weakness, will look again. I think it is just ill-tempered shorts messing around.

  231. 231
    Pati Says:

    ATPG, interesting that it fell to the upper 200day BollingerBand and bounced right off.

  232. 232
    elijahwc Says:

    On briefing:

    ATPG ATP Oil & Gas gives preliminary Q3 results in slides, sees production of 21 MBoe/d, 57% oil; estimates 4Q10 production of 30-40 Mboe/d (16.09 -0.69) -Update-

    Sees Q3 Cash of $234 million.

  233. 233
    BirdsofpreyRcool Says:

    ATPG saying that 3Q production at 21k boe/d and 4Q at 30-40… why is stock down on that??

  234. 234
    zman Says:

    I think too many people are watching the ATPG chart and it rolled and then others say “oh crap, something must be wrong”. Profit taking happens, it’s probably an opportunity.

  235. 235
    BirdsofpreyRcool Says:

    ATPG — just bot some more trading shares

  236. 236
    elijahwc Says:

    Does feel like a bear raid: Emini’s being sold, Energy names jam down, 10yr auction w/<3 times cover, everybody talking overbought.

  237. 237
    BirdsofpreyRcool Says:

    Trigger-Happy Mr. Market. On the other hand, pretty far, pretty fast… so, profit taking is in the cards.

  238. 238
    john11 Says:

    Added some ATPG

  239. 239
    BirdsofpreyRcool Says:

    lol…. ALL my ATPG shares are “trading shares.” Some just “shorter-termed” than others!

  240. 240
    zman Says:

    re 2356 – make that offshore energy names, my screens are almost entirely still green and near HOD. Feels like much ado about nothing guys.

  241. 241
    zman Says:

    Throught out a mid bid on the $17s, no joy, walked right up and away from me.

  242. 242
    elijahwc Says:

    The machines needed an excuse. I think they started too early

  243. 243
    zman Says:

    Listening to the LINE replay.

  244. 244
    blackgold39 Says:

    re 228, MMR straight up fell out of bed

  245. 245
    zman Says:

    Dow Chemical on the tape says it sees a “long transition time” from now until a day without fossil fuels. Saying it is interested in investing in an oil and gas field. They said they are interested in doing a deal like the CNOOC/CHK deal.

  246. 246
    blackgold39 Says:

    MMR still way down, maybe that is the rebound play?

  247. 247
    zman Says:

    Yeah, EXXI same. Someone just dumped a bunch of offshore plays probably bought for the run into the end of the moratorium. My sense is this tiny little offshore swoon won’t carry over into something you can differentiate from the move the E&PS will have tomorrow and the next day and so on.

  248. 248
    blackgold39 Says:

    Picked up the Oct MMR 19s @ $0.50 for a short term turnaround

  249. 249
    zman Says:

    WHX creeping up to $23.

  250. 250
    zman Says:


    22 granite wash wells this year
    35 wells or so next year, also some non-operated wells.
    They have >100 locations on their position remaining. This is only 1 lateral per unit. Recall that the wash plays are stacked plays, there could be 10+ zones underneath each unit to go after, early to say.
    Commented that they are offsetting that 60 MM/d well as I mentioned above, bet they have that one by the time of the 3Q call to talk about.

    Wolfberry 2 rigs, about to be 3, 5 to 6 rigs next year.

  251. 251
    zman Says:


    OII – Sold the (20) OII Nov calls for $1.05, up 59% since taking them yesterday, stock moved faster than I thought but I didn’t like how the greeks were moving in the trade. Just not getting the move I’d like to see for the spread, premium, etc. Will revisit soon.

  252. 252
    zman Says:

    BG – I’m looking out a little longer now there but you get the “gutsy move maverick” award of the day.

  253. 253
    zman Says:

    Latest Paula tracks have one more model pointing north into the Gulf than this morning.

  254. 254
    cargocult Says:

    What is the overall effect market wise of big storms. Gas prices climb, but gom operations affected negatively? 6 of one, half a dozen of the other?

  255. 255
    jiveyjr Says:

    thx for the comments on ATPG…I had sold my shares now I got ’em back and a few more…a smidge or two below what I sold for

  256. 256
    zman Says:

    Re 254. Good question. Largely depends on how strong a storm and where it goes in the Gulf. East is generally worth little to prices or production infrastructure. Big moves in NG can be seen around storms coming slowly in at Cat 3 or higher on an approach of Mississippi Canyon or west of there. The slower the more the damage the more sustained impact. Hitting the TX/LA border as it comes ashore will bring oil prices into question as products can get ramped on onshore infrastructural flooding.

  257. 257
    zman Says:

    Contemplating an offshore wildz

  258. 258
    zman Says:

    Noting BALT moving.

  259. 259
    milepost_43 Says:

    TGA $10.50ish on about 4x vol..upper BollBand @ about 10.65….next PR Nov 4 with mid Q update 1st half Dec…confirmed 2 Yemen basement tests will spud Nov…ckd my TGA “truck” and looks like some room for Mar 10 calls when/if things settle down..

  260. 260
    zman Says:

    MP – thanks, missed it so far. On list of things to do.

  261. 261
    zman Says:

    Nah, no more trades for me today.

  262. 262
    BirdsofpreyRcool Says:

    Market selling off from the highs… energy kids selling off a little harder than the mrkt… Moratorium energy kids selling off really hard. What goes up, must come back a little, it seems. Nothing goes up in a straight line.

    Pick your stocks, name your price, watch and wait. Picked up a little more ATPG trading shares. But watching overall market too… might take a breather here. Healthy.

  263. 263
    zman Says:


  264. 264
    bill Says:

    balt had a ship delivered. They used 100 % debt to pay for it.

    so we have q3 results

    then a divy

    then an offering

    id favor dsx if you want to get in, rates right now are weaker than q2 avg rates but today the capes picked up a little

  265. 265
    zman Says:

    Thanks Bill, just keeping an eye on 3 names daily there.

  266. 266
    zman Says:

    KOG at $4. Makes you wonder if they should have talked up the exit rate … and then done the secondary. And not v.v. Sheesh. 

  267. 267
    Nicky Says:

    Z – regarding Paula – our local weather say it is very unlikely to impact Florida.  They say the tracks showing it going that way are the least likely…..
    Anyone got the API data.?  I presume it was slightly bullish as oil has moved up a touch.

  268. 268
    BirdsofpreyRcool Says:

    crude -4007k
    cushing crude -328k
    distillate -254k
    gasoline -1883k

  269. 269
    mimster90 Says:

    Was fun to read along as the day went, usually I only read at night after work.

    z great option play on wll and mmr.

  270. 270
    Jerome Blank Says:

    ATPG…a few technical observations…from where ATPG is currently trading, it reverses back into a column of O's with a $15.50 print and holds to the three box reversal until a $15 print…this zone of $15- $15.50 will probably be defended and there is support on the 30 min as well in the same price range…interestingly, ATPG had trouble at the topside channel line back in August, but in this case ATPG is now trading above the major moving averages…consider long opportunities on weakness tomorrow in the above price zone, if using stops I think they need to be below the 200 day at $14.73…daily chart updated

  271. 271
    zman Says:

    Mimster – thanks

    JB – thanks

  272. 272
    jiveyjr Says:

    thx for those observations on ATPG Jerome….thx to everyone.  it wasn't much fun in this biz any more until I found this affiliation….

  273. 273
    jiveyjr Says:

    BTW…I voted

  274. 274
    VTZ Says:

    76 handle on the USD.

  275. 275
    milepost_43 Says:

    270 thanks voted

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