02
Nov

Mid Term Tuesday + A Mess O’ Earnings

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Market Sentiment Watch:   I hate it when I'm right but I thought yesterday would be boring and it delivered. Today is likely to be more of the same with no data but with the Fed set to talk tomorrow. I'll be on conference calls all day as earnings season is now in full swing.

Ecodata Watch:

  • Data has to wait a day on account of the election. The deluge will resume tomorrow.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today – Earnings from BEXP, APC, FST, HK, and REXX.
  5. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio):
    • $5,200
    • 100% Cash
    • Yesterday’s Trades:
      • None.
  • ZIM (Zman Inefficient Markets portfolio)
    • $3,200
    • 0% Cash
    • Yesterday’s Trades:
      • None

Commodity Watch

Crude oil rose $1.52 to close at $82.95 yesterday on the back of strong China news. This morning crude is trading up slightly.

  • Early Read on Oil Inventories:
    • Crude: UP 1.7 mm barrels
    • Gasoline: UP 0.25 mm barrels
    • Distillates: DOWN 1.0 mm barrels

Natural gas fell $0.21 to close at $3.83 yesterday as the market sorted through last Friday's production data and came away with the same feeling of ugliness I expressed in yesterday's post. This morning gas is trading up 2 pennies.

  • Tropics Watch:  Still nothing threatening to the Gulf; season is started to wind down.

Stuff We Care About Today

Earnings Watch:

BEXP Reports Strong Quarter Driven By Top Line Beat; Raises Guidance But Also  Budget

Highlights

  • 3Q was record volume quarter:
    • Note that in a year's time, we've moved from 50% oil to 75% oil as their Williston effort leaps. 
    • 3Q oil volumes of 6,356 bopd were higher than guidance of 5,900 bopd.
  • 4Q Guidance Moves Up: Range of 10,200 to 10,800 BOEpd (77% oil) means oil volumes of at least 7,850 bopd, above the recent guidance of 7,500 bopd. 
  • Budget Rises As Well: Up another 15% to $466--- mm.

    • This may not sit well with investors.
    • For the increase of $62 mm we get another 7 net wells in the Williston and a couple of  wells elsewhere.
  • Balance Sheet: $315 mm cash and an undrawn credit line.
  • Operations Update:

    • 3 new high rate completions, one at Ross at 5,061 BOEpd, and 2 in Rough Rider (west of Nesson) with IPs of 4,169 and 2,417 BOEpd.
    • Density Drilling For Rough Rider ... on the cusp of being able to say how it's doing, said in the pr its looking like a typical well in early flow back, and that they may be able to provide more color on the call.
    • 6 rigs drilling now (2 Ross, 3 Rough Rider, 1 in Montana) and a 7th rig on the way this month which is ahead of schedule.
    • I would note that as usual, people may squawk about their IP reporting methodologies but the numbers are not so flash in the pan if they generate the kind of sequential quarterly production growth we are seeing.
    • BEXP expect to hit a well completion run rate of 6 wells per month soon.

Nutshell: Strong results but few investors want to see E&Ps boosting budgets, even if its an oily name getting oilier. Look for comments on the call regarding the downspacing project at Rough Rider and get set to start thinking in terms of 4 to 6 Bakken wells (plus 2 or more Three Forks wells) per 1,280 acre unit. Also, look for analysts to beg to be spoon fed some 2011 volume guidance. 

Conference Call: Today, 11 am EST.

HK Earnings Brief - Wow-Strong Quarter; Good Guidance; Fayetteville To Be Punted (Officially)

The 3Q Numbers

  • 3Q Production was 685 MMcfepd, 95% gas and well above the 650 to 660 MMcfepd despite restricted rate production out of the Haynesville.
    • up 10% sequentially
    • up 34% YoY
  • Revenues were $409 mm vs $399 mm expected
  • LOE was a tiny $0.25 / Mcfe.
  • CFPS was $0.62 vs $0.60 expected

Guidance:

  • 4Q production raised to a range of 740 to 760 MMcfepd (mid point up 9% seq. excluding asset sales of 15 MM/d)
  • 2010 Capital spending raised to $2.55 B from prior guidance of $2.13 B.
    • Cost creep in the Haynesville and Eagle Ford Shale
    • This may not be popular until you get to the next few bullets
  • 2011 Production targets set at 30 to 40%
  • 2011 Capital budget set at $1.9 B as Haynesville decelerates.

Balance Sheet:

  • 42% debt to cap
  • Borrowing base capacity increased 75% to $1.75 B ($129 mm borrowed)

Operational Highlights:

  • Haynesville Shale was 63% of the quarter's production at 434 MMcfepd
    • Rig count falling off, down from 16 rigs earlier this year to 12 now
    • They completed a well in the quarter with a new design that shaved $1 mm off costs
    • Reiterated they will be largely held by production by mid 2011
    • sees 2011 growth here of 35 to 45% here despite the lower spending.
  • Eagle Ford Shale was 10% of production at 67 MMcfepd.
    • EFS seen growing 3x next year
    • which increase their oiliness slightly
  • Fayetteville Shale
    • They've engaged Bank of America to sell their position
    • 3Q production was 95 MMcfepd and based upon valuation of SWN, the segment could reasonably be expected to garner bids in close to $1 B.

Nutshell: Under Promise, Over Deliver. Great quarter, strong guidance. Punting the Fayetteville is the right move as it removes their least economic play and gives them more budgetary control as it was largely non-operated and had been a source of budget creep over the last couple of years. The guidance should please the Street, especially the lower capital budget and the frequent comments in the press release pointing to mid 2011 as the time when things will really slow for them in the Haynesville (if gas prices are not higher I'd add).

Conference Call: Today, 11 am EST.

Earnings Brief FST

  • Production was 457 MMcfepd, up 16%, exceeding guidance due to better than expected Granite Wash results
  • EBITDA came in at $176.2 mm vs $175.8 mm expected
  • Guidance: Boosted for 2010 from a range of 443 to 453 MMCfepd to a range of 450 to 455 MMcfepd.
  • Granite Wash Update:

    • 7 Granite Wash wells drilled in 3Q, average initial rate was 27 MMcfepd;
    • 20 wells drilled to date have had average IPs of 28 MMcfepd.
    • 2 new Granite Wash Zones and 1 new Atoka (this is stacked pay heaven)
    • Also moving north in the play in Hemphil County, TX

  • Eagle Ford Shale

    • Shooting seismic now in Gonzales and Wilson counties.
    • 1 rig program kicks off this quarter.
  • Conference Call:  Today, 2 pm EST.

Earnings Brief REXX:

  • Production was 20.3 MMcfepd (56% oil), in line with prior guidance
  • EBITDAX of $5.7 mm was slightly higher than Consensus
  • They are reaffirming prior guidance range but expect to come in at the low end of this range of 20 to 23 MMcfepd due to delays in the Marcellus operations. Note that the bump in Marcellus volumes is driving them to a slightly gassier profile in the near term.
  • Was watching this one for Niobrara results near the old Silo field:

    • First well was delayed with mechanical difficulties, now recovering fluids and showing increasing oil cuts but they mentioned they will put it on artificial lift so no gusher here;  expect to give a rate in the next 3 weeks
    • Second well is at TD and has commenced sales (did so during drilling) but no rate has been given.
    • So nothing to write home about just yet but worth watch
  • Conference Call: 10 am EST.

Earnings Brief APC:

  • Production at high end of guidance at 629 MBOEpd
  • Revenues of $2.55 B vs $2.55 B expected
  • CFPS of $2.57 vs $2.50 expected
  • Guidance: None provided
  • Highlights:

    • Jubilee offshore Ghana on budget/schedule to see first volumes by YE10.
    • New oil discovery off Indonesia

 

 

More of the Earnings Calendar

 

 

 

 

Odds & Ends

Analyst Watch:

  • To be added in comments.

193 Responses to “Mid Term Tuesday + A Mess O’ Earnings”

  1. 1
    snuhart Says:

    bexp 20.60 -20.69  yahoo finance 8:42 EST

  2. 2
    zman Says:

    It's at 20.98, trimming overnight losses rapidly, ops update was nice.

    Going to vote.

  3. 3
    1520sbroad Says:

    A bit surprised at the bid-ask for HK premarket.  I thought they put out some good numbers, comments etc.    5% oil/ngl production in the quarter was higher than I thought they were producing.  Z – do you have any idea what this percentage is at the end of 2011?  In the 2011 ops preview it looks like half of 175 mcfe/d  – does that bump oil/ngl to 8-9% of production?  Going to 7 rigs in the haynesville by mid 2011 is pretty big I thought too.

  4. 4
    BirdsofpreyRcool Says:

    What to watch for when the FED SPEAKS tomorrow afternoon…
     
    Fed preview –  Wednesday afternoon the Fed will release the statement for the upcoming two-day FOMC meeting. We expect that statement will announce an intention to purchase $500 billion of longer-dated Treasury securities over the next 6 months. In addition, we expect the statement will express a willingness – but not necessarily a bias – to further increase asset purchases if warranted by economic conditions. Enhancing the extended period language by tying it more closely to observable economic variables may be an option, but we don’t think it’s an option they will exercise at this meeting.  We believe that for next week’s meeting only Treasuries will be mentioned as an asset to be purchased and think the language will refer to “up to” $500 billion, consistent with previous Fed asset purchase announcements. 

  5. 5
    BirdsofpreyRcool Says:

    Last Night's Bedtime Market Strategist —
     
    48 Hours.
    Market participants are counting down to what are expected to be two of the most important days of the year: the election and the FOMC meeting. They also happen to be two of the most telegraphed events of the year as well. If there are surprises in the outcome, they should only be ones of degree or magnitude, not of direction. It is interesting that the moves in anticipation of these events have occurred across a broad array of financial markets, commodities, currencies, bonds and equities. It will be interesting to see where the chips fall. Despite these two important events, the economic data due to be released later in the week is fairly important as well. The data deluge started with today's release of the ISM Manufacturing and will end with the October BLS Employment Situation report.
     
    The ISM Manufacturing Report for October registered an impressive reading beating the expectations of 54. Not only did the number beat, but the underlying improvements were important. In the September report, the much watched relationship between New Orders and Inventories (New Orders-Inventories) inverted to a negative reading for the first time since February of last year. At the time, Norbert Ore, who runs the survey for ISM, noted that anecdotal conversations with respondents ran counter to the elevated survey reading for inventories. In the October survey, the relationship righted itself from a -4.5 last month to a positive 5 this month (Chart 1). In addition, Customer Inventories still remain relatively lean (Chart 2). The pick-up in New Orders as a leading indicator should carry some momentum through the report for the balance of Q4 2010. Ore described the situation by noting that he is "pretty optimistic we can finish out the quarter with continued strength." Additionally, 14 of 18 manufacturing industries reported growth for the month. The report is a positive surprise in the right direction. Investors will be watching to see if the balance of the data this week will follow suit.
     
     
    The other story that merits mention today is the SEC's investigation of JPMorgan's role in selling Magnetar's CDOs. When it rains, it pours. The Financial sector has turned into a magnet for negative headlines. The news today pushed the broad market into negative territory. In some selling today, Banks that never even had CDO business sold off as well. The sector managed a modest bounce and remarkably managed to squeak out a flat performance. This type of action is a potential sign that the sector is shifting into stronger hands but it is too early to tell.

  6. 6
    jat Says:

    HK weakness on increased capex/svc costs, it seems, agree with all the comments in the post otherwise.

  7. 7
    tomdavis12 Says:

    Z: Do you think BEXP is being too aggressive? What grade would you give current mgmt? Thanks.

  8. 8
    zman Says:

    1520 – It would still be at least 90% gas in 2011. The numbers were strong as was the guidance. The early reaction is most likely to the capex bump for 4Q … that's a big bump and people are likely to accuse them of pulling 2011 into 2010 to make it 2011 look like a lower $ figure year. I think they can work on that during the call but that it may be a hard sell. They will need to give a target for the FS sale and then we have to think there is a mid 2011 EFS midstream monetization on the way as well.

  9. 9
    zman Says:

    Tom – too aggressive in the Bakken? Probably not, top leasing gets expensive if you let lases expire on you. B+, which is a big upgrade from a couple of years ago when they were C- types.

  10. 10
    BirdsofpreyRcool Says:

    The Fed missed the housing blow-up, until it was too late.  The Fed is going to miss the recovery, until it's fully on us.  And we expect "Govt" to root out "systemic risk?"  Sheesh, man… they don't even listen to conf calls!  (or, if they do, they sure ain't listening)
     
    Sent over from HeadTrader today…
     
    http://jeffmatthewsisnotmakingthisup.blogspot.com/

  11. 11
    zman Says:

    Didn't vote by the way, there were lines, will get to it pre lunch. I've checked the local candidates and anyone with references to liking carbon capture will not get my vote.

    Front and Center Watch

    HK, BEXP, VQ (that might get hurt today and I've wanted to get long for a little while now),

    Thinking today will be slow…. also noting that this is one of those quarters where we ran into earnings and as such, seemingly good numbers are, for the most part, not enough to prompt a further move, unless you are OII and that was a special case.

  12. 12
    tomdavis12 Says:

    BOP: I am going to switch some of my EXXI common to the cv pfrd. You saw the symbol. ( Thanks Eli ). My only fear is lack of liquidity. not a big issue. My woosie nature showing itself. 

  13. 13
    zman Says:

    Re 10, still reading that link, tell HT thanks for sending. Wow, common sense. And in a blog no less. Wonders never cease. It makes so much sense that I'd be happy to collate all of the big picture thoughts from the quarterly CC's in the energy space and send them to Ben, the Administration, and Congress if I thought they'd care.  I leave Interior out of that as I know they don't.

  14. 14
    BirdsofpreyRcool Says:

    TomDavis — getting "paid to wait" is a nice way to hang out.  It's what you do very well (and successfully) it seems.  Equity upside + above-money-mrkt income… what's not to like?

  15. 15
    zman Says:

    BEXP flat to green at open, thinking that one does better today.

  16. 16
    zman Says:

    JB – BEXP looks like a flag with a potential breakout if they say the right things on the CC later this morning. Got thoughts?

  17. 17
    BirdsofpreyRcool Says:

    CAM… why the slam?  It looked good to me…

  18. 18
    zman Says:

    BOP – Have not looked at them yet. Headlines say "margins weakening".

  19. 19
    BirdsofpreyRcool Says:

    CAM — ok… i get the "lower subsea revenue in 2011 vs 2010"… gee… ya think DRILLING has SLOWED down in the GoM?  Really?  What a surprise!
     
    CAM talking about lots of M&A oppys in the GoM right now… just comes down to valuation.  Schiller is living that concept every day now.

  20. 20
    tomdavis12 Says:

    BOP: My assessment is that it gives more upside than a covered call approach. The premiums in EXXI are good but illiquid. Just hope the cv is a decent market. Not expecting it to trade today. Also only grumblings I have hear is that current mgmt is greedy. Probably from Weyel severence package. How does mgmt compare to the Aubrey – Tom W greed index in your mind? 

  21. 21
    BirdsofpreyRcool Says:

    CAM coming off the lows now.  That was a bit of Silly Season at open.  sigh….

  22. 22
    zman Says:

    BOP – I couldn't be on the CAM call but am wondering if they expressed any thoughts on the BOP market expanding due to govt regs. Maybe even into the shale plays.

  23. 23
    zman Says:

    E – Anyone see a broker note there, unusual weakness.

  24. 24
    BirdsofpreyRcool Says:

    TomDavis — Schiller is currently less greedy than the poster kids (Aubrey, Tom Ward, and his old boss, Jim Flores).  But he would like to catch up someday, I'm sure.  In a big way, these outsized personalities in E&P take more personal risk than — for example — the CEO of DOW or CAT.  And when they do good, they want to be paid.  It's when they do BAD and still want to be paid (Aubrey, TW, JF) that I shudder.  All you can do is to cross that stock off your list (so you don't have to parse the paypackages and spontaneously erupt smoke signals from your ears).

  25. 25
    BirdsofpreyRcool Says:

    I bought CAM after the Macondo Slam and hold it in a long-term portfolio.  Not on the call right now, watching scrolling headlines… will circle back.  But didn't intend to trade it on the quarterly earnings… so not going to.

  26. 26
    tomdavis12 Says:

    BOP: How valuable was Weyel? Will he be missed?

  27. 27
    snuhart Says:

    MRO good earning, fair guidance: Down $1.40   what did I miss ?

  28. 28
    Nicky Says:

    Good morning all.    I will make a stab at how I think this week may play out based on the the ew count and cycles.
    I am looking for a top between today and early tomorrow.  Resistance is at 1196 and then 1200 – 1203.
    We should then see a pullback into Thursday.  Support is at 1177 and then 1171.  Friday should be stronger.

  29. 29
    zman Says:

    Snu – I don't follow them but it seems to be the season for that kind of action.

    Thanks much Nicky, missed your market level guidance.

  30. 30
    zman Says:

    REXX call in 10 minutes.

  31. 31
    Nicky Says:

    Bigger picture Z I am favoring strength into the middle of November and then weakness into early December.

  32. 32
    zman Says:

    Analyst Watch

    REXX – target cut $3 to $15 at Stifel, rating stays Buy.

  33. 33
    BirdsofpreyRcool Says:

    TomDavis #26 — I understand that Schiller and Weyel had a falling out that had nothing to do with operations.  Given that they handed him a very generous exit package, that makes sense to me.  No idea what it was over… maybe Steve's wife didn't get along with John's wife. 
     
    I'd like to see David Griffin (CFO) be shown the door at EXXI (with no severance package… in my mind, he deserves to be booted "for cause")… but, I'm not on the Board (and don't see being asked to be, anytime in the near future).

  34. 34
    zman Says:

    Thanks Nicky – I would think the S&P would have trouble moving higher without the energy complex and so one of two things must happen… energy has to play catch up or ….

    Anyway, just noting some underperformance.  Couple of trades in a minute. 

  35. 35
    zman Says:

    ZTRADE – ZIM

    NBL – Sold the NBL $80 Nov. Call for $2.70, up 100%.

    BEXP – Added (3) BEXP $21 Calls for $0.80 with the stock off $0.45 following earnings and an operations update that are detailed in the post and before the conference call this morning.

  36. 36
    zman Says:

    REXX call starting

    http://ir.rexenergycorp.com/eventdetail.cfm?eventid=87568

    slides:

    http://files.shareholder.com/downloads/REXX/1003708648x0x414146/2f19c3b6-4888-4f9b-af4e-0e38c1b9aebe/3q10_Conference_Call.pdf

  37. 37
    tomdavis12 Says:

    EXXI cv pfrd 1st trade $273.50. Will not be given away.

  38. 38
    zman Says:

    REXX – DJ Basin Comments

    Southern part of Silo field. Mechanical problems – reading the press release. Ugh.

    Will spud 3rd well by year end.

  39. 39
    ftc88 Says:

    What's wrong with this picture:  Dollar down. Oil up. Oil and service stocks down.  Hmmmm.

  40. 40
    zman Says:

    REXX Q&A

    Analysts beat the Niobrara questions to death to little new info.

    Look for a press release either late year or early 2011. This should contain flow rates for the first two wells. Press release had indicated a rate on this 1st completed well would be available in a few weeks but they want to pr more than 1 well at a time which is a good habit to get into. Otherwise, not a lot new, had some steel problems in both wells, don't think it damaged their chances of commerciality. Also, second well had some wellbore integrity issues which cut the lateral slightly short (did 4,300, were targeting a 5,000' horizontal). Anyway, nothing to see here for now.

  41. 41
    zman Says:

    FTC88- yep, exactly my thoughts. HAL acting pretty terribly post their defense of the Presidential Panel attack last week.

  42. 42
    Dman Says:

    BOP #10  …  but see, what you are missing is that Ben would interpret all that as evidence that the previous QE was *working*. And you can't have too much of a good thing, see? The better the conference calls, the more QE.  And if they went bad all of sudden, well that means *even more* QE is needed.
    If you've only got one idea to choose from, well, ya know what the answer will be.  More of that one idea.

  43. 43
    BirdsofpreyRcool Says:

    Dman — kind of like….
     
    "MORE COWBELL!"  😉

  44. 44
    zman Says:

    BEXP and HK calls about to start, I'll be on BEXP.

  45. 45
    zman Says:

    BEXP's "No Oil Left Behind" 3Q slides:

    http://www.bexp3d.com/IR_pres.pdf

  46. 46
    zman Says:

    BEXP Call not yet started

    Slide 5, shows IP of 2,717 BOEpd on Bard Olson 9-16 2H well, this is the first Rough Rider infill and is incremental data to last night's press release.

  47. 47
    BirdsofpreyRcool Says:

    XACS with a few thoughts for today…
     
    http://www.capmarkets.com/ViewFile.asp?ID1=147602&ID2=448948093&ssid=1&directory=6571&bm=0&filename=11.02.10_Absurdity.pdf

  48. 48
    zman Says:

    The Brad Olson 9-16 2H is a strong results, better than the 1H well, the 3H is listed as completing,

  49. 49
    jat Says:

    "No equity offerings left behind"
    Not that you haven't been paid for it, of course.

  50. 50
    zman Says:

    re 49, roger that.

    More BEXP

    Slide 11 – shows the Clifford Bakke well with 250' between stages, shows first couple of weeks production, well above their other wells on a time plot.

  51. 51
    zman Says:

    BEXP Notes

    Preparing 2 more 4 well increased density pilots for 1H11, 1 in RRider, 1 in Ross

    Slide 22, Barstad density pilot project in Ross area, not for catalyst list

    Montana – 2nd well spud (near EOG's Carat well), 3rd will spud this month.

  52. 52
    zman Says:

    BEXP Notes:

    Slide 27 – Wolfberry Map … um, that's new.

  53. 53
    BirdsofpreyRcool Says:

    EGY back to feeling the luv… oh yeah, it's OILY. 

  54. 54
    zman Says:

    BEXP Notes

    Ross area comment

    Last 8 wells, near 4,000 bopd IP, paying out in less than a year, EUR of 800,000 to > 1 mm BOE, only drilled 5% of their acreage so far.

  55. 55
    zman Says:

    BEXP Notes

    Ross area – 4 well infill pilot planned for 2Q

    They are decreasing the spacing between stages down to 250' and are draining more of the reserves close to the well bore but with shorter wings. The plan is to lay more wells adjacent to each other to grab more reserves over the acreage.

  56. 56
    BirdsofpreyRcool Says:

    z — what county is Ross area?

  57. 57
    zman Says:

    Mountrail

  58. 58
    zman Says:

    … east of Nesson,

  59. 59
    zman Says:

    Hard to believe the market ignores the Brad Olson 2 well … pilot is working, ups NAV as >100 wells get added to thinking in this part of the play.

  60. 60
    zman Says:

    BEXP Notes

    Wolfberry will be punted, just 2,000 net acres.  Probably worth $10 mm … non event.

  61. 61
    snuhart Says:

    re 53 EGYT acting better subsequent to the Gabon news. Was there any comment from them relative to how they may be impacted?
    . We're flirting with clearing the tree tops  (around 6 1/4)  I m thing of adding here in anticipation but I ve had bad luck buying strength in this name

  62. 62
    zman Says:

    WLL walking higher as the BEXP call goes on. Not getting why BEXP is still down? Budget.

  63. 63
    zman Says:

    BEXP Notes

    Borrowing based upped but they opted not to pay for the extra availability. +1 point for management.

    BEXP starting to wake up now. Q&A should focus on the density pilot and the ones coming up.

  64. 64
    BirdsofpreyRcool Says:

    EGY — no comment that i heard.  crys… you hear anything?
     
    Move today could be on Kosmos' rejection of a $5B bid from CNOC and Ghana Petroleum.  Think West African valuations might be headed up.

  65. 65
    BirdsofpreyRcool Says:

    make that CNOOC

  66. 66
    andy Says:

    snu –  i just  sold my EGY a few minutes ago, so its sure to go up!!!

  67. 67
    RMD Says:

    52 & 60 any idea where BEXP's Wolfberry acreage is, which counties?

  68. 68
    snuhart Says:

    64 Nothing other than their release yesterday with up'd earnings guidance.
     Forecasting  .63 vs loss last yr.

  69. 69
    snuhart Says:

    RE             66 I was ther buyer  !!  Top is in.

  70. 70
    jat Says:

    Does BEXP tend to get to Q&A by the third or fourth hour of the call

  71. 71
    zman Says:

    Re 67 – not on the slide, don't think they said, will relay if they do.

    re 70 patience, patience

  72. 72
    zman Says:

    Wyo, TEXW, Gino – see slides 38 to 43 in the BEXP presentation, your kind of stuff. They are talking about getting the stages up, but same amount of proppant, reducing the wing length. Sounds completely intuitive, wondering at cost involved with so many short wings.

  73. 73
    zman Says:

    Hey Jat, the longer the talk, the better the slide has done, lol, which is generally not the case. Q&A starting now.

  74. 74
    BirdsofpreyRcool Says:

    EGY with a pre-release??  ummmmm….. don't see it on my news pages… uh-oh.

  75. 75
    BirdsofpreyRcool Says:

    JB — is ATPG worth adding to, around 14.01?  Or, am i just nuts.
     
    Anything that would indicate that the GoM will have some sort of viable future (like, permits being issued) should be a rocket booster for the stock…. maybe election results?  Nah… idealogues don't change their stripes… and Kenny S looked like a zebra to me.

  76. 76
    zman Says:

    BEXP Q&A

    CWC for a 30 stage, long lateral well is still $7.5 mm. Each stage over 30 adds about $40,000. This is pretty similar on the incremental costs from a year ago, I think the $7.5 mm is about $500K higher due to inflation if memory serves.

  77. 77
    zman Says:

    BOP – Noted that Boem(er) is about to release more GOMex regs.

  78. 78
    snuhart Says:

     re 74
    BOP
    Nov 1,   am , came from Comptex Smarttrend via Scottrade news

  79. 79
    zman Says:

    BOP – market starting to forgive EXXI, nice move off the pricing low. 

  80. 80
    BirdsofpreyRcool Says:

    thanks, snuhart.  You are at least a few steps ahead of me, then.  oops.
     
    z — yep.  Saw that more rules will be laid out.  However, any clarity at this point should be good for stocks.  methinks, anyway.

  81. 81
    BirdsofpreyRcool Says:

    EXXI — giving it one more day to sell off (if it's going to) on convert hedging.  But, doesn't look like history is going to repeat there.  Still, was willing to buy at 22.50… so anything below that should make me happy, right?

  82. 82
    snuhart Says:

    BOP Thanx- I m not ahead of anyone-especially you !. Chas Schwab says 3rd quarter    will beannounced on Nov 8 consen, 18-19 cents

  83. 83
    zman Says:

    re 81, I think so, yes, I think the deal becomes history in the minds of investors with the next operational update.

    BEXP call ongoing

    Tone from analysts is positive

    Talk is focused on the pilot infills and a potential ramp beyond the 8 rigs they plan to be at by May 2011.

  84. 84
    BirdsofpreyRcool Says:

    snuhart — Schwab info jibs with my info.  Thanks for posting!
     
    and thank you for the compliment (even if it's not exactly true… nice of you to say!)

  85. 85
    zman Says:

    BEXP Q&A

    A number of questions on Montana acreage, how that gets proved up, when they ramp up there (from the current 1 rig program). BEXP is watching the results of Zenergy, CLR, OAS, EOG in the area in addition to its 2 added wells by year end.

    "Costs have kind of leveled off" Commented that their gathering and disposal systems will help costs go the other way (fall).

  86. 86
    zman Says:

    Anyone listening to HK?

  87. 87
    andy Says:

    Z – re HK   Tried for 10 min to get on their web page .  gave up

  88. 88
    zman Says:

    Site was slow, now fast again. Dunno. We'll be on a new server by year end.

    BEXP – lots of interest in seeing them expand their currently small core in Montana (Pale Rider).

  89. 89
    zman Says:

    BEXP estimates are going to be rising. Current CFPS is $1.05 for 2010 (20x) and $2.00 for 2011 (10x). Could see the 2011 number bumped up by $0.25 to $0.40. Given the growth in volumes / cash flow and the continuing and accelerating string of well news, I may look at adding back a little common here. 

  90. 90
    Alhambra Says:

    Z, CLB still on your radar?  Stocks seems to have found some footing after the slide down… Thanks

  91. 91
    zman Says:

    re 87, thanks, I'll listen to the replay. Another good quarter and no one cares.

  92. 92
    BirdsofpreyRcool Says:

    GS telling clients to buy VIX puts today, ahead of election results and Fed moves.  hmmmm…….

  93. 93
    zman Says:

    re 90 – very much so. In listening to the BHI call the other day I thought I should add them to the list of possible buyers of CLB. If I go in it will either be common or a deep in the money call.

  94. 94
    zman Says:

    re 92. So sell the news?

  95. 95
    BirdsofpreyRcool Says:

    Unless my thinking is all catty-whampuss on that, buying VIX puts would mean GS thinks the mrkt heads up, tomorrow morning.  Interesting thing is, HT says the puts aren't particularly cheap, even though the VIX is only at 21.30-ish

  96. 96
    BirdsofpreyRcool Says:

    But through the Rally Years (4Q04 – 1Q07), the VIX hung out around 12… so, it seems GS is getting bulled up… at least for overnight.

  97. 97
    VTZ Says:

    I don't think there's really any way that the Fed can meet the expecations that people have for the size or scale of their QE. I have powder in case theres an opportunity on Wednesday.
     
    Any sell off of commodity related plays is extremely shortsighted.

  98. 98
    VTZ Says:

    Of course the Fed could come out bazookas blazing. The most bullish scenario in my mind for the markets would be something bigger than 500B, with the promise to increase as required to continue the fight against deflation (rest assured that the actual amount will be much larger than 500B regardless of what is announced, not nobody likes thinking that far ahead).

  99. 99
    bill Says:

    cwei reports tomorrow–only 12 m shares o/s down today pre earnings with oil charging higher
    I expect a beat as they shift production to more oiler properties, more rev than q2 and lower costs
    analyst only expect 1.12, i think its closer to 1.50
    Im estimating production at an avg of 14 850 per day

  100. 100
    zman Says:

    BOP – OK, thanks.

    VTZ – agreed on all points

    Bill – thanks.

  101. 101
    bill Says:

    99,100,
    the ceo is not shy expressing his political views, last call he was calling for a regime change and less communism in wash. dc
    If nothing else, he should be in a good mood tomorrow , if pre election expectations pan out

  102. 102
    BirdsofpreyRcool Says:

    bill — you mean Clayton Williams??  LOLOLOL.  No, he is NOT SHY, for sure. 
     
    Thanks for pointing out the call… just might have to swing around and listen.

  103. 103
    irongate Says:

    ATPG – reports earnings this week… and they are a serial disappointer… I would wait till after that b4 making a decision on an ATPG buy

  104. 104
    zman Says:

    Bill – their last presentation was pretty good.

  105. 105
    tomdavis12 Says:

    Z: Any yield names that you are watching? VNR out with numbers. I am also hoping for weakness in WHX. SDRL too strong.  

  106. 106
    zman Says:

    Tom – just LINE which I own and WHX which I just sold last week and plan to rebuy in the teens when the analysts brick the quarter.

  107. 107
    BirdsofpreyRcool Says:

    irongate — ATPG and GST are about neck-and-neck, in my book, for worst mngmt of anything i hold.   Agreed.

  108. 108
    BirdsofpreyRcool Says:

    ATPG — I don't see where they have even scheduled the call yet.  I see an estimate of 11/5… but nothing in stone.  ???

  109. 109
    BirdsofpreyRcool Says:

    irongate — thank you for any thoughts you have on ATPG (or anything else)… a little birdie mentioned you are a Very Smart Cookie.

  110. 110
    zman Says:

    BOP – I have them down for Thursday.

  111. 111
    BirdsofpreyRcool Says:

    thanks.  I have 11/5 too.  But it's not a confirmed date.  Anyway, it's getting close to the end of the required reporting period… so, it's got to be some time soon. 

  112. 112
    bill Says:

    104, they updated their guidance and my number use the mid-points. I had to assume realized prices. the analysts never adjusted their numbers for the new guidance and they have q3 at about the same levels as q2. they sold some assets for a 3 m gain this qtr. they might even do close to 1.75, my 1.50 is conservative (like the ceo) williams.
    I sold a little exxi to add to my position in cwei today, fwiw
    Reminds me of mcf

  113. 113
    elijahwc Says:

    HES TRGL tag team catching the fancy of every mo mo out there. 

  114. 114
    irongate Says:

    yes.. I see that same "estimate" date for ATPG… and of course even that gives me concern … as they may pre-announce something with their announcement of the actual eps date.  I own some, but i hesitate to add until we get beyond eps (or pre-anncmt).   One thing I have noticed… is this thing has more leaks than the titanic… must be alot of folks working on those rigs that kinda know how things are progressing.  oftentimes the stock movement precedes the news.  i dont mind owning more… but if i am going to get up to my eyeballs in it… i wld rather do it after this next (potentially down) catalyst.

  115. 115
    crysball Says:

    EGY
    No  news  I'm aware of………..They  had  a paltry [382,000 barrel] lifting  from the FPSO  yesterday……..but  this may be related  to headspace  on the  Tanker……..rather  than monthly production.
    Shell  Gabon  is actively peddling  thier  properties in Gabon,     [upstream and downstream].   and they    have   both on-shore   production and offshore  production.
    Here  is a list  of  their  Gabon  facilities:
      

     
    has a share in:
    Douka Marin – Gabon – Offshore Concession in Gabon
     

     
    has a share in:
    Gamba/Ivinga Field – Gabon – Oil Field in Gabon
     

     
    has a share in:
    Iguega Field – Gabon – Oil Field in Kenguerie Marin Block, Gabon
     

     
    has a share in:
    Kenguerie Marin Permit – Gabon – Offshore Concession in Gabon
     

     
    has a share in:
    Panga Marin – Gabon – Offshore Concession in Gabon
     

     
    has a share in:
    Rabi – Kounga Field – Gabon – Oil Field in Gabon
     

     
    operates:
    Iguega Field – Gabon – Oil Field in Kenguerie Marin Block, Gabon
     

     Howevver,Total  would  seem  the likely candidate  to take   all of  the Shell  operations in Gabon

  116. 116
    bill Says:

    I need to see more evidence of progress at atpg. The level of debt is concerning and who the heck knows what production will be. They sold off a piece of production and it isnt clear to me who gets what and when. That being said, if they can execute, 14 might be viewed as a steal. I have a small position in the name with a covered call on it

  117. 117
    Jerome Blank Says:

    #16 BEXP…looking good right now…today's developing support and reistance can be seen on the updated 30 min, resistance for the breakout at about $21.25, support for conservative adds at the lower 30 min consolidation triangle trendline, stops should be below $20.50…charts updated…
    Thanks all for the votes, it's much appreciated…
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
     
     
     

  118. 118
    BirdsofpreyRcool Says:

    irongate — thank you for the comments and sharing your thoughts.  appreciated. 

  119. 119
    bill Says:

    wow cwei poped to 60.50, an hour ago it was 59.00
    One last thing, 70 % of ng production is hedged at 6.80

  120. 120
    irongate Says:

    thanks BOP.. that little birdie must be the same one who showed me this excellent board.  Right now I am kind of like a deer in headlights.  I tend to think that the current oil quote has more to do with the Fed's debasement of the USD that it does with any oil fundamentals.  So I am holding off doing much till I see what the Fed announces tomorrow.   My concern is if they announce something like  "UP TO $500bln in QE"   not sure how mkt would react to that.

  121. 121
    BirdsofpreyRcool Says:

    bill — agreed.  ATPG's YE production "guidance" is broader than the side of a really large barn.  The debt doesn't scare me as much here (as it would have a yr ago)… they have some add'l liquidity and bought additional time.  But execution (and getting those next permits, so they can start drilling in 1Q11) is key.  Not a lot of room for error, when you are careening down the road, going 110 miles an hour, with a back seat full of debt.

  122. 122
    BirdsofpreyRcool Says:

    "up to 500 b" == mrkt sells off, dollar rallies, crude down (short-term).  jmho.

  123. 123
    zman Says:

    re 120 – bingo re oil. For the record I'm much more active and content with oil below $80 than above, unless we see distinct and sustained improvement in finished product demand.

  124. 124
    Jerome Blank Says:

    #75  ATPG…BOP,agree, $14 is the near term support level to watch…dialing down to the 30 min, there is important technical resistance on the intraday descending triangle at about $14.60, I'm thinking that the intrday rally if it happens might take a rest near that price a pull back, if bullish, it would be this pullback, holding above $14 support to buy for the breakout try…a breakout above $14.60 would also confirm that ATPG can get above the daily 200 day SMA at $14.45 which has been causing resistance problems over the last few days…given where ATPG is trading here and bearish intraday tone, I'd prefer to see how ATPG reacts to the resistance level befpore trying the long…charts updated
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
      

  125. 125
    zman Says:

    re 124. I'd rather vote for you than those beltway types any day. Just did.

    EOG, PQ, WRES on tap for tomorrow, VQ guidance didn't please today, don't know why SM didn't report, must have a bad date there.

    BEXP just nosing green.

  126. 126
    BirdsofpreyRcool Says:

    124 — if i didn't think your advice wasn't Top Drawer, i wouldn't bother you.  Thank you for your detailed response.  Just voted.

  127. 127
    milepost_43 Says:

    TGA…new all time high so far today…..$11.27…..Z ck email for spreadsheet…..Dan of Sw16 target $18ish 2012….

  128. 128
    zman Says:

    MP – thanks, missed this one didn't I?

  129. 129
    irongate Says:

    I know this is an energy board… But allow me to flesh out my perspective here, wrong or right.
    For years it has always been the REAL Economy that drives the capital markets… But we now have a Fed that is using the Capital markets to drive the REAL economy.  Since zero interest rate policy (ZRIP) is no longer working…. the Fed is trying to trick everyone into thinking they are rich by driving capital markets higher… and thus promote consumer spending.  Will it work?  who knows..  but this is a MUCH different economic environment that most of us have seen in our lifetimes.  We have both deflation and inflation happening at the same time. 
    Dow10,000 from my perspective is a matter of national (financial) security.. for below that level folks start feeling like they are poor (and spend like it). Thus it is in our governments national interest to defend the dow10,000 level with guns a-blazing.. But at what inflationary/stagflationary cost?  http://av.r.ftdata.co.uk/files/2010/10/fut_image.ashx3mo.png
    I saw some shoddy research out of a wirehouse this am,  that said that the stock market and the CRB index rise simultaneously, (but their data only went back to 1992).  I would agree that a DEMAND led CRB would also lift stocks…. but this is not a demand led CRB lift… it is a FED led lift.  No telling when all these rising resource inputs begin to harm stocks…. so if you have a gun to my head to be invested… I would want to own commodities… and OIL being among them. 

  130. 130
    zman Says:

    re 129 – thanks for the perspective. We have a bios tab at upper left and if you are interested you can send something along those lines to petra at zmanadmin@gmail.com.

  131. 131
    blackgold39 Says:

    ZMAN,  What is up with NFX today?  Firing higher…

  132. 132
    zman Says:

    Could be Bakken comments out of BEXP, While it's not helping that name they seem to be lifting NFX, WLL, CLR  … BEXP noted that CLR was having some success copying BEXP's completion cocktail, but I didn't see anything spec to NFX. Also, FST had some more nice Granite Wash wells, call starts in 1 minute there and that could be a push for NFX as well.

  133. 133
    elijahwc Says:

    #129 I see the same velvet hand.  In fact I believe the Presidents Working Group  (a.k.a. PPT) has goosed the futures from time to time. Since 3/6/09 it been give me a zero at the front end of the curve and I can print profits…..for now.  Accordingly the two most important items on my screen are the 10yr (yield) and dollar index.. 

  134. 134
    bill Says:

    jerome 124 voted
    can you look at cwei, thanks

  135. 135
    1520sbroad Says:

    #129 –  las two lines there are my stance to a T.  Oil isn't the only commodity but it sure gets the most headlines.  Ags and the greater food chain story have a little more demand led story I think. 

  136. 136
    zman Says:

    EOG reports before the open, holding the common, may add on weakness, the last few quarterly reports have been tough on them. Crucial they don't miss on numbers as 1 quarter is explicable, and 2 is a problem. I don't believe that but the Street does and that's what matters here. Anyway, not taking options into earnings but I do suspect they will not have an oil volumes issue (coming in on the light side) as many analysts suspect they will.

  137. 137
    irongate Says:

    anybody see Uranium lately?   the whole structure trading higher (admittedly it trades by appointment)   
    http://www.cmegroup.com/trading/metals/other/uranium.html.  
    Shades of 2007?  some names levered to Uranium CCJ URZ URRE DNN USEG URG.

  138. 138
    zman Says:

    re 137, I keep about a tenth of an eye on so feel free to speak up. I don't play in the momo names there any longer but find that when Cramer likes CCJ it's time to move on. Actually, that can be said of many names. Back in 2000, the big concern for utilities was long term pricing ending in 2010 for them, which would subject them to a lot higher costs than they had been enjoying, don't know if they were able to layer in more contracts at good prices to cover in the interim. I've become much more coal than nuclear focused in the last couple of years and that all takes a way backseat to E&P and Service.

  139. 139
    zman Says:

    ZTRADE – ZLT – BEXP

    BEXP – Added a trading position in BEXP for $21.16 following strong earnings and operations updates. See site for details on the outlook there. This adds about 30% to the core position I already have in the name and takes me to a short term overweight in the name.

  140. 140
    choices Says:

    #136-EOG is reasonably strong today, Z, do you think this is related to BEXP discussion.

  141. 141
    choices Says:

    #137-saw news blip that Vietnam is building two nuclear plants, contracted to Japanese firms.

  142. 142
    choices Says:

    #141-I was wrong-Russian firm building the first one:
    http://www.monstersandcritics.com/news/business/news/article_1595530.php/Vietnam-picks-Japan-to-supply-second-nuclear-power-plant

  143. 143
    irongate Says:

    zman… I don;t know how you would have the time to cover UxC with the same detail that you cover E&P names.  so keep doing what you do best and we all benefit 🙂

  144. 144
    zman Says:

    Choices – maybe but probably not. The comments on Parshal (EOG's bread and butter or Bakken Core) from WLL the other day were not bullish. And BEXP's comments really don't pertain to the same areas … I guess some of BEXP's area is what EOG has called Bakken Lite in the past so that could help. But it just may be that some people want to be long their pre earnings, defying the Street's thoughts that either US oil production will come in light or their Eagle Ford Shale well results will look to be higher decline than people want to see. They have explained the bobble on crude production last quarter as a function of lumpy production practices (drill a batch of wells 1 quarter and frac it the next) so we shall see. I think they will do fine on that front. As to the EFS, they have drilled a handful of very large IP wells and I suspect they have more of those and some Barnett combo wells to brag on.

  145. 145
    zman Says:

    Thanks much IG, you are a welcome addition. Feel free to speak up on things like nukes; you'll find many folks here with specific expertise niches like Bill with tankers, drybulks etc., Nicky the e-waver, JB the point and figure guy, and then a bunch of smart types from investing/trading to boots on the ground in a number of hemispheres in the E&P industry. 

  146. 146
    zman Says:

    GST being forgiven for taking the sack on their litigation.

  147. 147
    zman Says:

    S&P went golden cross back on October 22, tells you how much of a chartist I am, lol.

  148. 148
    zman Says:

    Wondering if this is the right thinking and not wanting to open up the political basket on today of all days. But my thought is Reps really thrash the Dems, that as they take over they are going to beat the fiscal responsibility drum a little more loudly than the market would like.

  149. 149
    BirdsofpreyRcool Says:

    GST announced they closed on the Marcellus deal.  Combined with lifting the dark cloud of litigation ("don't worry about that, it's a meritless-case")… all we need now is to find a frac crew to finish out that EF well.  Then we'll see how fast this Cat can Dance.

  150. 150
    bill Says:

    cwei crossed above its 52-week high of $62.70 on 2:52 PM ET on November 02, 2010.

  151. 151
    choices Says:

    thanks, Z-last two EOG presentations, they have been very strong on Eagle Ford.

  152. 152
    zman Says:

    GST … and some color on those Glen Rose wells …

  153. 153
    BirdsofpreyRcool Says:

    yeah… not looking too good for the Glen Rose… but, that would be gravy.

  154. 154
    BirdsofpreyRcool Says:

    OILY gravy

  155. 155
    zman Says:

    BOP – you have a anything to share beyond the first well completed and no report? Any views from the moose pasture cam?

  156. 156
    irongate Says:

    if bill likes the bulkers then he has got to love BALT..   been waiting too long on that secondary to complete my positon but it appears to be geting away from me.   It has a clean balance sheet (puts it at a signif. advantage vs peers) and that dividend is just starting to ramp.   i think it can get back to 15 but next summer….  But the 800lb gorilla in the room of course is that large secondary that still hasn't been done.  Perhaps that is why it is finally starting to ramp from a 3 month consolidation  (underwriters walking it up to get the deal out the door)

  157. 157
    BirdsofpreyRcool Says:

    The Glen Rose may not be succeptible to the same sort of horizontal drilling and forced pressure fracturing that can stimulate other formations.  So, it may not be a completion problem… it might be a formation problem.  We shall see… that Fat Lady hasn't sung yet.

  158. 158
    zman Says:

    Thanks BOP,

    Will let Bill address 156,

    Will have EOG, CWEI, PQ and more in the morning post for earnings,

    Votethirty

  159. 159
    bill Says:

    Im not in balt due to secondary and current rates but its on my watch list. i want to see as you put it (800lb gorilla in the room of course is that large secondary that still hasn't been done) and better rates.
    They probably hold divy at .16 qtr
    Added to dsx which imho is just too cheap and will rise to 14 on earnings in a few weeks

  160. 160
    snuhart Says:

     
    129 and 133 : I agree but it s important to highlight that  (I think ) you're addressing the wealth effect here and that s not the end of the story . There s a much more important systemic metric that has only surfaced within the last 18 months or so .
    I m referencing the debasement of  paper currencies and accordingly the abandonment of faith in governments ability to responsibily handle debt and manage it responsibiy. That is the horse gold and silver are riding and it s the root of  emotion that fuels the underlying (bullish factors)
    propelling copper , cotton and grains. It adds fear and fuel to the fire.  Thirty cent sugar–  unheard of , only happened once before- 1.35 cotton , never – maybe in the Civil War , when there were no substitutes, $25.00 silver , only once with the Hunts.  

    The stock market has baked in a huge upset in the balance of power. If we don t get it I wonder if the market will ever stop going down.
     
    Sorry , too many words and please forgive typo s

  161. 161
    BirdsofpreyRcool Says:

    snuhart — "to many words"?  Nope.  Just the right amount of words, I think.  Thank you for your thoughts.

  162. 162
    BirdsofpreyRcool Says:

    API
     
    crude -4.137mm
    gasoline -3.202mm
    distillates – 4.727mm
    Cushing -0.908
     
    looks pretty darn bullish….

  163. 163
    jat Says:

    on imports up 600kpd to 9.35 and refinery runs flat, riddle me that

  164. 164
    zman Says:

    re 162. Very much so, a bit surprised by the continued drop in gasoline, utilization should have been flat to up so that implies strongish demand. The Cushing decline is huge and that has directionally been in agreement with EIA for the last 10 weeks or so. Crude is not altogether surprising as it is probably largely a function of a reversal of last week's import number (smoothing), but I have not yet seen the details page, Jat please forward when you see that, thanks. The numbers are all 1) negative and 2) bigger than the Street is looking for by far.

  165. 165
    BirdsofpreyRcool Says:

    jat — ummmm…. Govt Accounting Prowess??

  166. 166
    zman Says:

    I was typing while you were typing. Ok, yeah that make no sense other their internal numbers are also smoothed week to week and often don't work with each other in the same week. Lies, damn lies, and statistics.

  167. 167
    BirdsofpreyRcool Says:

    API… oops… American Petroleum Institute… not a govt agency.  Sorry.  My bad, Mr. Obama.

  168. 168
    bill Says:

    Republican Gov for mass?
    Current guy deval Patrick 5 to 8 point lead according to press.
    Im calling for an upset, Charlie Baker
    The state has been gerrymandered for a barney frank win 🙁

  169. 169
    zman Says:

    re 167 True, but I understand the organization has been reordered towards lobbying congress and away from science and stats over the last 2 years.

  170. 170
    snuhart Says:

    161 you are most kind  and polite Thank you

  171. 171
    Geno Says:

    Problem with Glen Rose is no porosity in limes like you have in shale so no storage space for hydrocarbon unless it is fractured.

  172. 172
    BirdsofpreyRcool Says:

    Geno — the GR in Leon Co. does have oil… but whether it's natural fractures (like the Austin Chalk) or vuggy, the formation doesn't respond correctly to staged fraccing.  Don't know if it allows too much energy to seep out via factures or absorbed by vugs… need a little more info here.  But the vertical wells drilled thru the GR do have oil shows.  Maybe not enuf to be economic.  Reef may have looked at the cores… maybe he can chime in here. 

  173. 173
    zman Says:

    EOG on the tape with #s earlier than normal, guiding production lower due to weak gas prices … reading.

  174. 174
    RMD Says:

    CRK at end of conf call, bought 6,000 acres @ $7,500/ac. in Bossier.  Co. not talking about '11 capx plans much until largest shareholder questioned outspending CF, then said will outspend CF but not ruin balance sheet w/o JVs etc (that other co. doing).  Wonder if CRK would follow in XCO's footsteps with an LBO?

  175. 175
    BirdsofpreyRcool Says:

    RMD — well… debt is cheap and plentiful and equities remain undervalued.  CRK has always been run as a bit of a private company… i can see mngmt raising bank and high-yield debt and then making a bid for the equity.  You're right.  The "story" is more compelling to a bank/bondholder group if it's got an oily leg to it. 
     
    This is what we mean by debt markets being open to accomodate "shareholder friendly" moves.  Whether it's MSFT rasing $1B in 30-yr paper at 4.75% and paying a dividend or NTY being taken private by Carlyle or CRK accessing the debt mrkt to tender for their stock… those are all ways that debt is used to enhance equity values.  If investors won't buy cheap stocks, private equity, other companies (M&A), or mngmt LBOs will.

  176. 176
    choices Says:

    EOG getting slammed a/h-made very reduced EPS but quarter shows loss from one-time after-tax charge-as Z said, guidance lower for 2010,2011-I guess it is prudent to get the bad news out early-did sell some calls today but not enough.

  177. 177
    choices Says:

    Z, if you get a chance, do you have previous production guidance for 2011, 2012 for EOG.  They now say growth will be 10, 12% respectively for those two years.

  178. 178
    choices Says:

    #177-looks to me from Aug presentation that prod guidance for 11, 12 was 19, 21% respectively-huge reduction.

  179. 179
    zman Says:

    Choices – was prepping the post when you rang. Try 19 and 21% respectively for 2011 and 2012. Even the hit to 2010 is hard to swallow as it goes from 13% to 9% in a very short period. I own a starter position in the common and no calls and it will probably be down $8 to $10 on the open on this. The operations update is decidedly unsexy except for in the Barnett Combo where they reported their best wells to date. Avalon Shale working for them and they are encourage by the EFS results to date. Not much new in the Bakken to speak of.

  180. 180
    mimster90 Says:

    #13 – LOL zman "from a blog no less" <mimster looks around>

  181. 181
    zman Says:

    … and I'm glad I don't own any calls here going into this one as they are going for another report and get slammed quarter.

  182. 182
    BirdsofpreyRcool Says:

    BedTime Market Strategist
    =====================
     
    QE2 Setting Sail.
    Tomorrow is D-Day for the next wave of monetary policy. Many in the global investment community might refer to it as "Debasement Day" and that still appears to be the prevalent attitude in the marketplace. We are not in the debasement camp. We believe that, at a minimum, the theme has been overplayed in the short term. The interest rate hikes by the Reserve Bank of Australia and the Reserve Bank of India only fueled the drubbing of the Dollar. The Dollar index is down approximately 5% since the August 10th FOMC meeting when the Fed began to reverse the Quantitative Easing exit strategy. To put that move in perspective, from November 25, 2008 until March 31st of this year, which was the duration of QE1, the Dollar index lost 4.6% (Chart 1). Many will recall that during the start of QE1, the Dollar was the recipient of a notable flight to quality bid. One could argue that some Dollar weakness during QE1 was the result of the flight to quality bid dissipating from the currency.
     
    The purpose of Quantitative Easing is to expand the monetary base and thus create a supportive environment for money supply creation. Had the Fed allowed a contraction of money supply, it would have been a replay of one of the key mistakes of the Great Depression. Many will remember that the initial expansion of the Fed's Balance sheet was not the result of QE1, but the many emergency facilities the Fed created to provide various forms of liquidity to different markets that froze up. Market participants will also recall that the Dollar rallied during this balance sheet expansion as the result of a flight to quality bid. The Fed's emergency facilities were constructed to self-sunset as markets normalized. Fearing that the automatic liquidation would create a drain on the Monetary Base, the Fed unveiled QE1 to handle the transition from the short term liquidity of emergency programs to longer term liquidity that could be drained as recovery unfolded. During the weakness of Q1 2009, the Fed upped the ante by $1.1 Trillion in March to bring the eventual size of the program to just over $1.7 Trillion. Although fears about debasement existed, they seemed remote in the near term as most hoped to avoid a depression. Today, with the economy on sounder footing, debasement and inflation have become the fear.
     
    We certainly agree that the expansion of the Monetary Base creates a significantly greater risk of inflation in the future, but to us, the market's adjustment process has gotten ahead of itself. During QE1, the overwhelming majority of the liquidity injected has found itself parked back at the Fed in the form of $1 Trillion in excess reserves that banks are still uncomfortable lending (Chart 2). To achieve the sustained inflation/debasement/devaluation the market appears so intent upon receiving, the economy needs to recover so that the banks lend the money and that $1 Trillion in excess reserves begins to make the conversion into money supply. To use QE1 as an example, M2 Money Supply had its strongest year over year growth as result of the Fed's emergency programs. As QE1 took the handoff from the emergency programs, year over year M2 growth declined (Chart 3). Currently, M2 growth has improved to 3.3%, which is the low end of the decade long pre-crisis range of 3.3% to 10%. The irony of this entire situation is that for the feared inflation to materialize in the period the market seems to have priced in, the worst acting sector of the S&P 500 during the past year (Financials) needs to start lending voraciously.
     
    The safe bet for tomorrow is announcement of a $100 Billion per month, with a 3-month commitment, then revisiting, and of course promising more if necessary. That still seems a touch aggressive from our perspective considering economic data has been improving, but once again the Fed has put itself in a position of not wanting to disappoint.

  183. 183
    Jerome Blank Says:

    Re: #134, CWEI…on a P&F buy signal in X's, looking at the daily, I'm thinking that a break to new relative highs at about $64, at the topside channel line, might be the probable next resistance point, if CWEI gets above this level, aggessive buys on pullbacks to $62 or conservative buys at the lower channel line support area…from here, CWEI holds the current P&F buy signal until a print of $57, if using stops, I think you need to position size for stops under $56, this makes the most sense looking at the traditonal daily, the setup could pose a bear trap risk, if the stops are too tight, and the stock seems to trade thin….  bill, I posted new charts… 
    Regarding the comment the other day about P&F charting, if you have the time, I would recommend the book by Dorsey Wright…excellent  
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280

  184. 184
    irongate Says:

    thanks BOP… $100bln/mo for 3 mos?  hmm, not sure if mkt will like that.  i think we need a number north of $500bln to keep the bubble going.  But in light of the economic data recently that has clearly stabilized…. one has to wonder why the fed is doing QE2 in the first place.  It seems pretty hard to justify a big QE number with yesterdays ISM.
    The other scenario i have thought about is it sure would  be convenient (if the GOP sweeps both chambers), for the fed to "suddenly" back way down on the size of QE2.  this of course will cause a sell off… and the Dems can then blame the sell off on the GOP landslide the day before.  And most American's won't even know the real reason stocks dropped.   I know this is crazy thinking… but lets face it… these are crazy days.  If you think I have a screw loose for saying this… don't forget that the current administration was borne out of that ethical Chicago political machine.  Just trying to think outside the box

  185. 185
    BirdsofpreyRcool Says:

    irongate — you sures enuf do thinks outta da box.  Keeps it up, man. 
     
    It's All Politics, All the Time in this country now.  With the Government controlling such a large swath of the economy, I put nothing past anyone, when it comes to keeping power "by any means necessary." 
     
    On the other hand Cross-Asset Class Strategist says to keep buying the media companies… lots of money to be thrown at trying to "convince" the American People and shape Washington politics.
     
    Tomorrow should be an interesting day.

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