08
Nov

Monday Morning And We’re Still Here …

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Market Sentiment Watch: Market looks tired after a big week last week and without more data and with earnings season wrapping up it is likely to waffle about a bit. Two weeks left until November expiry.


The Week Ahead:

  • Monday 11/8: No eco data release scheduled, watch for Presidential related headlines to potentially sway the markets along with Fed actions. 
  • Tuesday 11/9: NFIB small business index (last read 89), job openings (last read 3.2 mm)
  • Wednesday 11/10:  EIA Oil Inventory Report, EIA Natural Storage Report (a day early at 12 pm EST), Jobless claims (F = 448,000), trade balance (F = -$45B) 
  • Thursday 11/11: Veteran's Day
  • Friday 11/12:   Consumer sentiment (F = 68.9)

In Today's Post:

  • Holdings Watch
  • Commodity  Watch
  • Stuff We Care About Today – WHX, NOG, ATPG, earnings calendar
  • Odds & Ends

Holdings Watch: ZCAT (Zman Catalyst portfolio):

  • $5,100
  • 1 small position in KOG December $5 calls
  • 97% Cash

ZIM (Zman Inefficient Markets portfolio)

  • $4,400
  • Positions:  (I'll have a fresh position spreadsheet out a little later today)
  • 1% Cash

Commodity  Watch:

Crude oil ended last week up 7% at $86.85. The 12 month crude strip is trading at $89.12. My sense is that the market wants $90 and that once achieved we're in for a quick bout of "lookout below, take profits now" style trading with a pause at $85 and better support in the $82 to $80 range. But I'm not a technical guy so take that range  as my slightly educated guesstimate. I will add that as E&Ps, gassy or oily, largely trade with oil and not natural gas that a pullback in crude will turn into pullback in the group. And given the run crude and the energy groups (XOI, XNG, OIH up 5,4,and 6% respectively just last week) have had said pullback would be painful for option holders and probably an opportunity for stock additions. This morning crude is trading flat. 

Natural gas fell 2% last week to close at $3.94.  The 12 month strip is now trading at $4.22. This week we are highly likely to set a new record high for gas storage. This is also likely to be the last injection of the season as cold weather has finally invaded the gas heat intensive parts of the country. As such, gas is still range bound but probably closer to the lows than the highs on a short and medium term basis. This morning gas is trading up 5 cents. 

 

  • Weather Watch: Slowly getting colder.

    • Week before last: Heating Degree Days of 65 which yielded an injection of 67 Bcf.
    • Last Week: HDDs of 116. slightly stronger than the estimated 109.
    • This Week's Forecast: 102. Warmer than normal but cooler than last year. 


  • Tropics Watch: Nada

Stuff We Care About Today

WHX Dividend Notes

  • Last Friday after the close, WHX reported a $0.59 dividend.
  • The Street was looking for anywhere from $0.71 to $0.74 
  • I sold my shares about a week ago at $23.10 thinking that the Street numbers set too high a hurdle
  • The analysts here already don't like the name and some of them have it listed as a Sell.
  • The last time WHX "missed" they were quick to downgrade it, sending the shares tumbling from about current levels into the mid to upper teens. 
  • At present, I model a forward yield of 10%, and my thinking is that I will get to rebuy the name again closer to $16 or $17.
  • If history is a guide, the downgrades or reiterations of Sell ratings may take several days to appear as covering royalty trusts is generally not a priority for most E&P analysts. 

Earnings Calendar

NOG Reported Good Quarter; Lays Out Stellar Growth

Highlights:

  • They are busy. They now plan to spud 25 net wells vs a prior target of 24 net wells, which had been upped from 18 in early October. 
  • Growth Remains More Than Robust. Target for the quarterly sequential growth was 30 to 35% (or 2,467 to 2,561 BOEpd) so they beat that handily.
  • Guidance:
    • 4Q guidance is another sequential up 30 to 35% quarter (3,500 to 3,670 BOEpd).
      • Q3 exit rate was 3,406 so the 4Q estimate is pretty much in the bag at this point. 
    • This brings 2010's projection to 2,402 BOEpd on the mid, or up 212% over 2009's average production.
    • 2011: NOG initiated guidance at 6,500 BOEpd, up 171% over estimated 2010 production.
  • Note the graph below. Note that this is almost all oil and it is solely a function of being in the way of an explosion of activity in the Williston Basin. Rig count there is now above 155.  For reference, just looking at the North Dakota part of the play, the rig count is at 138 now, up from 65 at the beginning of the year. 
  • Costs continue to hold stead on a per BOE basis. 
  • Balance Sheet: Pristine
    • Cash was $39 mm vs $70 mm last quarter
    • No debt. 
  • Nutshell: In Line quarter although the headlines will read it as a penny miss on EPS. EBITDA was stronger than expected coming in at $12.8 mm vs 11.9 mm expected. Volumes were ahead of their normal 30 to 35% sequential guidance and the 2011 guidance is stronger than I expected, suggesting a year end 2011 exit rate around 9,000 BOEpd. The name is nearly all oil and has no debt on the balance sheet. 

 

Conference Call: Today, 10 am


Other Stuff

PETD - conference call at 1 pm EST

ATPG reported 3Q results (catalyst highlights):

  • Latest well at Telemark in Mississippi Canyon Block 941, where they reported initial production gross production of 7.0 MBOEpd in October, had a month average rate of 8.2 MBOEpd and a Halloween rate of 12.2 MBOEpd, not too shabby for a well management had a pre-production target range of 7 to 10,000 BOEpd on.
  • Other operations news ... no new permits in the Gulf of Mexico yet
  • Production for the quarter was flat with the prior quarter at 21.1 MBOEpd but that will tick up sharply in 4Q due to that first bullet.
  • CC at 11 am EST. 

Weekend Mailbag:

Zman,

I'm interested in your thoughts on the following:
1.  Recent strength in ROSE.
2.  Recent weakness in EOG.
3.  HK seems to be lagging the group.  Too gas heavy?

Zcomment:

1) They reported on Friday and essentially doubled their estimate of reserves per well in their Eagle Ford shale play. My sense is the stock is bit elevated for now and will rest before making a further push in the Spring when ROSE has more data on its other big play in the Southern Alberta Basin.

2) Last week when EOG reported in line results they also cut their 2011 and 2012 growth projections in half. The reasoning was given primarily as an inability to get their wells in the Eagle Ford fracced in a timely manner. I plan to let the dust settle here for the next several weeks before deciding whether or not to add to my start position. 

3) Gassiness doesn't help at present but they are well hedged. I think the real trouble is spendiness when compared to cash flow and a disbelief that they will get within cash flow by 2012 as promised. I think the name is probably drift wood until just before gas prices start to tick up in mid 2011 which should be just before we see a pronounced decline in the gas directed rig count. 

Odds & Ends

Analyst Watch:

  • EOG - JPM ups to Overweight
  • SD - Barclays cuts to Equal Weight
  • ROSE - Stifel raises target $6 to $36. 

165 Responses to “Monday Morning And We’re Still Here …”

  1. 1
    BirdsofpreyRcool Says:

    ATPG — HeadTrader asking… "who releases earnings reports on Sunday??"
     
    That said, currently picking jaw up off the floor… that MC 941 well…. my goodness gracious.  12,200 Boe/d October exit rate (86% oil).  Ummmmm….. let's do more of those, please.
     
    That one well alone, when added to ATPG's 21.1 mboe/d 3Q average production, kicks production thru the "30-40k/d year end 2010 exit rate" goalpost.  Pretty good, for a management team better known for their Gaffes and Whiffs than Promise Fulfillment.. 
     
    Bottom line = phew.  Relief.
     
    Still need to be able to permit those next two deepwater wells, now that the BOEMR (pronounced "bummer") Moratorium was lifted on Oct 12th (not that it seemed to have made any difference).  Bummer still not issuing any permits… can't seem to finalize the criteria, i guess.  (((primal scream)) )

  2. 2
    BirdsofpreyRcool Says:

    File Under:  Bad Kabuki Theatre
     
    Macondo Hearings picking up again today.  Only the "expert" doing the questioning this time is the LAWYER from Chicago who sent the HAL cement letter just before the elections.  HAL, RIG, and BP all scheduled to appear. 
     
    I don't even know what to say… so will just shut up now.  But will probably make for some volatility in the Macondo Three.

  3. 3
    tomdavis12 Says:

    Z: Some comments from Citi that put a positive spin on EOG. See if you agree. They are 1. Letting gas production fall off. 2. Selling lower margin gas assets. 3. Moderate liquids drilling in face of higher pumping service costs. NET/NET No production at any cost. Production lower but cash flow remains high.

  4. 4
    zman Says:

    re 3. In general yes. Bit of near term credibility issue with the Street though on guidance and reasoning for the cuts. 

  5. 5
    zman Says:

    NOG getting marked up early … nice guidance, could care less on the headlines of an EPS miss by a penny when you have that kind of volume projection and you beat on EBITDA which matters 10x vs EPS.

    WHX getting marked lower early. I think that continues for some days. If anyone sees an analyst report on the quarter there, please send along, I could use the chuckle. 

    Re 2. Ugh. Here's to wondering if the oil in the Gulf that disappeared pre elections will reappear now that they are done. 

  6. 6
    bill Says:

    One year strip oil 89.12, ng 4.12 = 21.6 to 1 Amazing.
    If we can find a way to export ng, or additional us demand like autos or coal switching , could lead to one helluva rally in ng. With the weak dollar, 4.12 is even more amazing like 3 dollar ng

  7. 7
    BirdsofpreyRcool Says:

    OT:  CIGX 2ndary annouced as expected.  Raised $14mm at $1.80/share from existing shareholder group.  Also included warrants, callable when stock is over $10.

  8. 8
    bill Says:

    if you think working on a rig in the gom is risky….

    http://finance.yahoo.com/news/Nigeria-5-kidnapped-in-apf-1580289665.html?x=0&sec=topStories&pos=8&asset=&ccode=

  9. 9
    zman Says:

    Thanks for posting 8, did not see that. Recall about 2 years ago this kind of thing dried up. Bringing it back will probably support crude. Nigeria production has been moving higher since a rebel amnesty was declared under Yar A'dua. He then got sick and Jonathon Goodluck took over and from what I can glean from the local press, the rebels feel the jobs and money has not flowed quickly enough in the Delta for them to not take up arms again. 

  10. 10
    BirdsofpreyRcool Says:

    ATPG — it's sad, when the biggest "risk" to an E&P company operating in the US is "USA Political Risk."  Until Bummer can make some sort of internal peace with itself — and starts to issue drilling permits again (((gasp!!))) — ATPG will trade with a lid on it. 

  11. 11
    zman Says:

    NOG pushing well into all time highs at $22.

  12. 12
    tomdavis12 Says:

    Bill: CSFB had comments re SD today.

  13. 13
    jiveyjr Says:

    NOG…good God almighty…roll down my socks and brang me another "cold beer" even on a Monday morning

  14. 14
    zman Says:

    KOG filing a shelf for selling shareholders. I had thought they'd come with guidance of the NOG caliber for next year but they are not ready yet it seems to go there. Instead, we have insiders who will drop, from time to time, a total of 2.75 mm shares on the market. 

  15. 15
    zman Says:

    NOG call in 10 minutes.

    I plan to be on the ROSE call after that. Anyone on the ATPG call which is at the same time please feel free to drop notes as you can. 

  16. 16
    zman Says:

    PETD – off to the races on earnings, nice call West. 

  17. 17
    zman Says:

    WHX getting sacked for a 10% loss. 

  18. 18
    zman Says:

    My bad, the NOG call, which is apparently not webcast is in 1 hour. 

  19. 19
    bill Says:

    tom could you share it? or email me at bfraser921@aol.com

  20. 20
    bill Says:

    ng up 12 cents
    I think a rally to 5 is possible

  21. 21
    zman Says:

    NFX at $65, onward and upward. Thanks for the read there last week JB. I continue to hold the Nov $65 calls (but not for long) and the common. 

  22. 22
    ftc88 Says:

    BOP – re CIGX.  Now I see why the price was taken from the 2.10 level down to 1.78 in a few days  – so they could set the offer price lower than it's been for 1 1/2 months.  Also explains why no news from the company.  At least it was good of them to set the price 2 cents higher than it closed on Friday.  These things, as you know, are often priced much below the current price.  Warrants are usually priced higher than the offer but were priced at the same as the offering – $1.80,  But they paid 12.5 cents for the warrants.  So warrant price is effectively 1.925 — if I understand this correctly. 

  23. 23
    zman Says:

    ATPG getting a very nice move pre call, congrats there BOP, others. 

  24. 24
    BirdsofpreyRcool Says:

    ftc88 — that is how I understand it, yes.  This 2ndary was completely expected… and we thought they would price it "at market."  But it is good to have that confirmed.  This was not a marketed deal… all the shares were purchased by current shareholders.  What I don't know is if Roskamp also participated. 
     
    The next Q should be financially "ugly" but operationally interesting.  Looking for any info on future marketing efforts by inVentiv.  So far, things seem to be moving along nicely.  Could see some positive moves into the end of this year…. jhmo, of course.

  25. 25
    BirdsofpreyRcool Says:

    ATPG — don't know if they can… don't know if it's possible… but if ATPG can say ANYthing on the call about a positive working relationship with Bummer and when they think they can get the next two permits, then ATPG $17+ here we come.

  26. 26
    BirdsofpreyRcool Says:

    That MC 941 well production rate is just — well — stunning!

  27. 27
    zman Says:

    HAL up 3% on a day they are going to testify. BP off 1.7%. Hmmm. 

  28. 28
    ftc88 Says:

    22 – thanks BOP

  29. 29
    BirdsofpreyRcool Says:

    ftc88 — don't know if you saw it, but I added more shares last week — my confidence level is still high for this one to work out over the next few years.

  30. 30
    zman Says:

    What time does POMO start today?

  31. 31
    BirdsofpreyRcool Says:

    KOG #14 — Lynn held onto all his shares during the Dark Days… only his short-sighted, meathead ex-CFO sold shares.  If insiders want to sell some shares now, to diversify away from volatile oil prices, I'm fine with that.  They lived (and managed) thru some very dark times. 
     
    Or, an i missing something more sinister here?

  32. 32
    elduque Says:

    Re SD and CSFB- was there anything positive to say.
    Thank you and good morning everybody.

  33. 33
    zman Says:

    Re 31. I just don't like the trickle. I say, pick a point and get some sold if you like but the open ended shelf number seems a bit unnecessary to me.  Probably no big deal but if they are going to opportunistically sell into news or rallies it adds a head wind.  

  34. 34
    zman Says:

    Eld – I struck out on finding any GDP reports for ya. 

  35. 35
    zman Says:

    NOG off a buck from it's highs on profit taking, will be on that call in 15 minutes. 

  36. 36
    BirdsofpreyRcool Says:

    KOG — unless i'm missing something, they filed the S-3 to register unregistered shares.  Doesn't mean they turn around and sell them immediately.  But unregistered shares are a b*tch to sell, so they usually get registered at some point. Or, am i totally not getting what is going on here… wouldn't be the first time.

  37. 37
    zman Says:

    No you got it, I was wondering why they were filing it for insiders but this is private placement shares, not the officers or board. 

  38. 38
    zman Says:

    And it's not affecting the stock at least. 

  39. 39
    BirdsofpreyRcool Says:

    OK.  Thanks.  The alphabet soup of SEC filings can be very confusing.

  40. 40
    BirdsofpreyRcool Says:

    ATPG starting in 2 mins
     
    http://phx.corporate-ir.net/phoenix.zhtml?c=123846&p=irol-eventDetails&EventId=3498745

  41. 41
    john11 Says:

    Actually aren't those the KOG  shares included in  the Peak acquisition that they were obligated to register

  42. 42
    zman Says:

    NOG call about to start, as far as I can tell it's dial up only. 

  43. 43
    zman Says:

    Nicky is on the way.

    Market looks to be in profit taking / boredom mode. 

  44. 44
    zman Says:

    re 41 – that makes perfect sense, thanks much. 

  45. 45
    BirdsofpreyRcool Says:

    john11 — some of them are… the Yorktown Energy Partners shares…. yes.

  46. 46
    BirdsofpreyRcool Says:

    ATPG — wow.  Shortest presentation by mgnt in history.  Q&A now….

  47. 47
    andy Says:

    ATPG    short , positive statement  questions already

  48. 48
    BirdsofpreyRcool Says:

    Here it is… the Permit Question…. "problematical… but ahead of the curve."

  49. 49
    BirdsofpreyRcool Says:

    Have complied with every change… and every change that gets changed… but Bummer still changing the rules.  Sheesh.

  50. 50
    BirdsofpreyRcool Says:

    ATPG — other than the current rate of the MC941 well… not any new info.  Just waiting on Bummer to get their act together. 

  51. 51
    BirdsofpreyRcool Says:

    Reminder… nat gas produced in the North Sea doesn't go for the same sucky prices as nat gas here in the US.  ATPG call going well, so far.

  52. 52
    zman Says:

    NOG Q&A 

    Actual well costs have been coming in under AFE

    Continuing to see opportunities to acquire land

  53. 53
    RMD Says:

    ROSE: paying land rush prices for acreage is destructive to capital discipline.

  54. 54
    zman Says:

    ROSE tacking on another 4% during their call, planned to listen but NOG conflicts so will listen to replay. 

  55. 55
    zman Says:

    NOG Q&A

    2011 production now largely a function of the wells that have just been put on line and the ones that have been drilled already and are waiting on completion. Additional drilling in 2011 will potentially be additive to the 6,500 BOEpd. 

  56. 56
    irongate Says:

    re 30, POMO is done for the day http://www.newyorkfed.org/markets/pomo/display/index.cfm  looks like 6 billion.   so now the primary dealers will have to do something with 6 billion.  This was not a large POMO operation… the Biggies will be revealed on Wednesday.   http://www.newyorkfed.org/markets/tot_operation_schedule.html  

  57. 57
    zman Says:

    re 53. Probably so, depends on what you can sell it for or drill it into later. 

  58. 58
    zman Says:

    Thanks much IG

  59. 59
    irongate Says:

    This POMO is really something that should be considered for you active traders.  Here is an excerpt from a goldman report  on frontrunning the Fed  http://www.zerohedge.com/article/goldman-advises-clients-front-run-fed-pomo    l

    On the interplay between the FED and STOCKS: Since Sept 1 – when QE was becoming a mainstream focus – if you only owned S&P on days when the Fed conducted Open Market Operations (in US Treasuries), your cumulative return is over 11%.  in addition, 6 of the 7 times when S&P rallied 1% or more, OMO was conducted that day. this compares to a YTD return of 5.8%.  the point: you would have outperformed the market 2x by being long on just the 16 days when – this is the important part – you knew in advance that OMO was to be conducted. The market's performance on the 19 non-OMO days: +70bps.

  60. 60
    zman Says:

    NFX rally continues, at this rate I will be out of the $65 calls today. 

    Thanks again Irongate, I get the zerohedge updates on POMO on Twitter but didn't have a schedule link of late. 

    NOG hedges:

    32% next year, going to 50% by the end of this year, will be 25% hedged going out 2 years. 

    Acreage acquisitions – they've been buying land at the rate of about 200 acres per day all year long, small lots, paying a small fraction of what you see in the headlines $6 to 10,000 / acre. They continue to see that opportunity continue to exist. 

  61. 61
    zman Says:

    NOG Notes

    Not leaving the Bakken, not interested in looking at Niobrara or anywhere else. 

  62. 62
    zman Says:

    re 61. Exactly what I want to hear from my pure play Bakken, pure play oil, pure play non-operated play. 

  63. 63
    zman Says:

    NOG Notes

    Production guidance at 6,500 BOEpd but no well count yet given, analyst picking at the two. NOG saying there is potentially some upside to that number. Saying again that the 2011 production forecast is largely a function of 2010 drilling. Should be very little to any downside to the 6,500 BOEpd target. If rig count rises from here in ND and MT then you are looking at a rise in the net well count and that will drive you above the 6,500 BOEpd. 

  64. 64
    irongate Says:

    HAL – I think this is the news that is helping HAL today…..  "Oil Spill Panel Says Money Didn't Trump Safety"   http://online.wsj.com/article/SB10001424052748703514904575602350069015436.html?mod=googlenews_wsj  
    I believe that this means that it was an "Accident" meaning that HAL is indemnified.

  65. 65
    zman Says:

    NOG Notes:

    Slawson just applied for and received 6 well per 640 acre unit spacing (double what it was) so they will see good downspacing in part of their acreage .. don't know how much but it is their biggest operator. 

  66. 66
    zman Says:

    IG – they are indemnified even in the event of gross negligence. Which all prior testimony and statement indicate there was not. Te stock was wrongfully slammed by the Pres Panel a couple of weeks back, don't recall if you were a subscriber then but I addressed/debunked the Panel's comments point by point. 

  67. 67
    zman Says:

    Pullback in ATPG a function of market or did they say something. 

    NOG – pulled back off highs pre call and has been flat during the call. Call ended, very strong stuff. 

  68. 68
    BirdsofpreyRcool Says:

    ATPG just bouncing around… didn't hear anything that would cause a sell-off. 

  69. 69
    irongate Says:

    Thx zman… I will go back and check your comments on HAL.   i bought the day the wheels fell off the cart on this pres commission report.  appreciate all u do here. 

  70. 70
    jiveyjr Says:

    OT….can't help ask IGate how he picked that name…it coincides with one of my favorite old CW bars/dance halls in Ft. Worth, TX…long ago closed…wondered if he was a local

  71. 71
    tomdavis12 Says:

    Z: Review of offshore comments made by sell siders last week. Will keep very short. PDE mostly lowered earnings numbers for 4th quarter. Raised capital like everyone else. $2.55 for '11. DW CD is 5x revenue of their JU fleet. Stock overvalued to the group because of take over talk last week. RIG Citi was most optimistic. Thought Q was better than appeared. Stock 5.5x CFPS vs the group at 6.7. Three catalyst's to move stock: 1. reinstitute dividend (1st q is consensus) 2. More PBR tenders in 1st Q '11. PBR's earnings are out this Thurs 11/11. 3 GOM rigs back to fullrate (2nd Q '11). Gov't timeline Marine Board of Investigation findings 3/11. Presidential Spill Commission report on Macondo 1/11. DOJ report unsure of timing.    

  72. 72
    Alhambra Says:

    wow silver… broke through first three levels of weekly resistance already… levels of resistance were 26.78, 26.97 and 27.38

  73. 73
    RMD Says:

    WHX  RBC guesses only $11-12.00 in distributionsover remaining life of trust, reduced target to $10.

  74. 74
    zman Says:

    IG – that was some smart buying, I held my calls through it but did not add. I know Jat backup up the truck that day. My comments were from the day after, after HAL issued their late night rebuttal pr. 

    re 68 – thanks much

    re 71 – thanks for keeping me up to date in the space, eye off ball of late there. 

  75. 75
    zman Says:

    re 73 – Oh please go to $10, oh please go to $10 ….

  76. 76
    andy Says:

    re 72      let me add another please!!!!

  77. 77
    zman Says:

    Call in with CXPO to get earnings date – gotta be this week sometime but I don't see it. 

  78. 78
    zman Says:

    OAS after the close, should be a good quarter, with very strong exit guidance – best guesstimate is 5+ MBOEpd for this quarter (range is 4.2 to 5.0) and an exit rate for the year in excess of 7,500 BOEpd.   Several analysts have cut ratings on valuation of late. Wonder if they jump back on board with a small beat or if it takes a large beat to get them to get excited. Another no debt name in the Bakken, 95% oil, but operated and one people are still getting to know.  I own a half position after having scaled back twice. Doing some modeling, will be back on this a little later. 

  79. 79
    ram Says:

    There is more than $10 worth of dividends left in WHX?

  80. 80
    zman Says:

    OAS – going to add to what I've got, possibly on the options side, possibly on the stock side … mulling. Looks like an "in line" quarter about to be reported but I think they will guide strongly.

     

    Re WHX – I don't calculate out anywhere near that far. He's doing a terminal valuation. I however live in the real world and know that these animals price off of expected near term yield (out 12 months). However, as oil prices continue to rise over the next couple of years he'll have to re-examine that dividend stream. 

  81. 81
    zman Says:

    Going to hold off until tomorrow on the OAS addition. Unless they take out the top end of the range I see them slightly missing Revenue and EBITDA numbers. Can they take out the top end of the range? Yes, but I don't know them well enough yet to gauge whether or not they are Class A Street baggers yet or not.  

  82. 82
    zman Says:

    CXPO reigniting, still don't have an earnings date there. 

  83. 83
    elduque Says:

    re TAT- anything new?

  84. 84
    zman Says:

    Nothing that I have seen. They are really getting down to perform or punt time for me though. This quarter I decide to stay or leave. 

  85. 85
    Jerome Blank Says:

    KOG…30 min chart updated…$4.25 is the resistance area to watch today, if KOG pulls back off the intraday trendline test, consider longs at $4.18ish, if KOG breaks out, $4.25 should hold as support….

  86. 86
    zman Says:

    Bill – still staying away from EGLE in front of the quarter? Also, do you have thoughts on SB?  Irongate, feel free to jump in on those as well. I'm partial to DSX which reports next Monday but currently down own anything in the bulker space. 

  87. 87
    Jerome Blank Says:

    EOG intraday..broke counter pattern probability…vol dropping off on the rally, but support now at about $89…intraday 30 min chart updated

  88. 88
    zman Says:

    Thanks JB – I'm waiting for EOG as I think they could catch more downgrades and see more $ shift to other names. 

    HAL looking alive again

    BEXP/WLL going for another new high.

    NOG holding $21, mulling an add. Could be some disappointment that the 6500 guidance (up 171%) isn't higher. Please, come on, give me a break, that is guidance they are set to beat as it is.  

  89. 89
    zman Says:

    WLT and BTU – still out of the names, names still running. 

  90. 90
    BirdsofpreyRcool Says:

    z — tell me again… what is a reasonable PT for CXPO?  thx

  91. 91
    Jerome Blank Says:

    EXXI…nice bull flag breakout on the 30 min, near term intraday support at $23.25, significant resistance at $24, EXXI reverses back into X's on the current P&F buy signal at $24, you can also see on the daiy chart that  this gets EXXI out and above  the consolidation once it pierces $24… charts updated

  92. 92
    zman Says:

    re 90 … Did I tell you before? The Chinese seem to think $5 is a fair price to pay. 

  93. 93
    BirdsofpreyRcool Says:

    #92 — I couldn't recall that you did… hence the  question.  The only thing i've ever heard about them is that their properties give cats and dogs a run for their money.  But, yes.  Seems to me that $5 is someone's vision of the future.  The Chinese are not known for being stupid.  However, they have 1,000 yr time lines on some things.  Hopefully, not CXPO.

  94. 94
    zman Says:

    CXPO – I don't have a back of the envelop there. They could get $3,000 / acre for 12,000 Niobrara acres and then drill up south Texas to double their reserves in 3 or so years with the proceeds. Hard to say. Management are not rubes. But they have quite a bit of debt and they have not wowed the crowd with results so far. Could be some nice wells in E. Texas on their 3Q call. 

  95. 95
    zman Says:

    I'd settle for a 10 year plan in this country as a start. Far be it from me to propose another agency but you would think there could be some report that says "Point A to Point Z – A Guide In Pictures" that everyone could read about. Who knows, maybe there is. 

  96. 96
    zman Says:

    BOP – On CXPO I think you said $5 before China bought there which is a little scary, lol. I think I said $4. I'm not falling in love at all, with any of these little midgets. That goes for TAT and even little SSN who really is a fledgling with promise. 

  97. 97
    BirdsofpreyRcool Says:

    ha!  Remember Ross Perot with his charts and arrows? 

  98. 98
    zman Says:

    and BSIC and END and GST. 

  99. 99
    BirdsofpreyRcool Says:

    TAT — I think the wheels there are finally turning.  Slowly…. but in the right direction.  They brought in some new investors with this last round… I know a couple of them.  Patient types…. who don't get in for just a 40 to 50% return.

  100. 100
    BirdsofpreyRcool Says:

    GST — kind of makes me wonder what their Head Drilling Engineer does all day.  'Cuz it sure hasn't been drilling, lately….

  101. 101
    zman Says:

    White House sees 1 mm plug in electrics on the road in the US by 2015. What great news … for coal. Generation pie watch: Coal 50%, Nuclear 20%, NG 20%, and the last 10% (water, sun, wind, biomass and oil). 

  102. 102
    zman Says:

    re 100. Yes, a long time between wells and then they go to complete … and there's a problem. I'm hold another quarter there to see the 2 Glen Rose wells and the first EFS well. If no joy then I punt. 

  103. 103
    ram Says:

    The options in TAT is pretty thinly traded.  I'll stick with the common.

  104. 104
    BirdsofpreyRcool Says:

    #102 — those are the only two reasons to be holding this stock, imho, yes.

  105. 105
    zman Says:

    One of the things that bugs me about TAT (aside from the delays) is that the story starts out so heavily weighted on the founders' resume. Like at SD. Wait a minute, that was SD. Anyway, I'd like them to punt that section from the presentation. Given the missed guidance it sounds like deep pockets that can afford to make a string of mistakes. Too many good stories clicking now to look back at success and then use that to forgive current problems. Hopefully they are getting rolling with the incountry frac crew but if I even smell the weather excuse I'm history there. 

  106. 106
    zman Says:

    Way easier than giving blood.

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

    Thanks for all the BEXP charts – looks like a short term base breakout that began last week and is now pushing to new highs.

    Once all the reports for the quarter are out I'll have updated Orange Charts – some time next week.  

  107. 107
    BirdsofpreyRcool Says:

    TAT — you think the presentation is heavy on the Founder's background??  You should hear him in person.  You almost expect him to stand up and go walk on a pond somewhere. 
     
    But, maybe NMM the 2nd really can pull something off… he's got a new round of investors, so he bought some more time i guess.

  108. 108
    BirdsofpreyRcool Says:

    oops… make that the 3rd NMM, not the 2nd. 

  109. 109
    jiveyjr Says:

    HK is behaving really good today on nice volume….

  110. 110
    RobBanks Says:

    Z – which do you think is a better value here going forward, KOG or NOG? Or is it a tie?
    I own KOG but have dragged my feet on NOG.

  111. 111
    zman Says:

    Jivey – yeah, gassy names getting a lift, SWN, UPL, RRC too along with the rest of the group. Group started strong but looking around the names and at the volumes I would say there is still a lot of appetite. 

  112. 112
    choices Says:

    thanks, JB-voted-some  of these validation phrases are becoming a challenge-last week, had a German umlaut over a vowel, today had dashes over several letters-just keep trying until I get something I can read-heh.

  113. 113
    zman Says:

    re 110. Great question. I think NOG is less risky. Given that they don't operate and just get in the way of the play as it expands, and the operators that drill wells on their acreage are mostly the big boys who have done well to date in the play from Slawson (private) to BEXP to EOG I think there is less execution risk. There is also less control. So far they have been in a financial position to not get AFE'd to death. In other words, they can keep up with all of the requests for funds as they come in and they are opening working interest checks as fast as they can at the same time. 

    KOG is a more focused story.  They control their own destiny but they are a smaller name in the operating crowd here. So far they say that has not been a problem as far as completions go (frac crew availability) but it could become more of an issue as the play continues to attract new players and more rigs from existing players. We shall see. 

    On growth, NOG is probably going to beat the 2011 target set out today but let's just go with 170%. KOG may do a bit better than that as they are running lower going into year end but will ramp right around the exit leaving them with a much higher starting point relative to 2010's average. 

    On acreage basis NOG is slightly cheaper but not markedly so. NOG currently has more running room (more acreage) and more cash but again, they are pretty different stories and I so own them both. 

     

  114. 114
    tomdavis12 Says:

    Z: The latest number I read was that HK is expecting $700M – $1B for their FS assets. With everyone selling NG assets how do you feel about everyone getting their price. Their updated cap-ex – cash flow really needs that sale.

  115. 115
    zman Says:

    BOP – jump in there with some more positives on KOG. I should have added well performance for KOG. It's been good. Not the IPs bur the 30 and 60 days averages are pointing to bigger than expected reserves. 

  116. 116
    zman Says:

    Tom – I think that Fayetteville in particular is not going to get top dollar in this market. Kind of thinking the ranking from lowest to highest goes something like FS, Woodford, Haynesville Non Core, Barnett, Hayensville Core, Marcellus.  

  117. 117
    bill Says:

    NG names have been beaten down too hard, imho and oil stocks are moving too much
    Took a starter position in CHK and might nibble at HK
    Beware, everytime I try to time a NG rebound, i get my head handed to me.
    # 86 Not playing EGLE as rates have weakened in q4. i think there is a chance of a beat but the bulker names have already rallied. I'm in DSX (valuation) for the earnings on Monday and GASS longer term on valuation (LPG sector). I got out of NM but still like the name. Ill check into SB, havent look at them in awhile

  118. 118
    zman Says:

    Can't believe the EOG upgrade was from Joe Alman. I guess I should give him credit for being early to downgrade it. But I think he is early to upgrade it as well. EOG back down through $90, just feels too early to get traction to me. 

  119. 119
    zman Says:

    Thanks much Bill – I'm still in trepidation mode on oil… too nose bleed for me here, don't mind holding ZLT stocks through a short but sharp oil swoon but its killer on the option. 

  120. 120
    RobBanks Says:

    re 113, thanks for the detailed response, Z.
    I'll take a starter in NOG. As you say, different stories but I like them both and there's no reason (for me) not to own both.
    And to BOP, may I suggest we call ourselves KOGNOSENTI instead of Koggers? Just a thought.

  121. 121
    zman Says:

    NOG is the Bakken version of MCF on costs but is even more of a paper pusher as they have nothing to do with not just the drilling but the picking of what is to be drilled. 

  122. 122
    RobBanks Says:

    #121 Is it small private companies that NOG supplies cash to? Doesn't seem like those big operators would need their cash.

  123. 123
    BirdsofpreyRcool Says:

    RobBanks — you are one CLASSY dude!  ๐Ÿ˜‰

  124. 124
    bill Says:

    I just looked at Supramax rates in q3 vs q2 – Egle is 100%  Supramax segment
    q4 rates are running below q3
    q3 Supra max spot rate's was =    19,800
    q2 Supramax spot rate    was=      27,600
    So rates in q3 were 28 % lower, this has to hurt EGLE's numbers. Q2 they did 18 cents, analyst have factored this as estimates are calling for 8 cents in q3. 60 % of their fleet is fixed and 40 % spot. They will have more billable days as they been taking deliveries. So they could have a beat relative to .08 but will be down from .18. The stock has been running up into earnings, so it might be one of those buy on the anticipation and sell on the news
    Their GA is too high and EGLE's ceo comp package makes Shiller look like a cheapskate in comparison, so I have an issue with that.

  125. 125
    RobBanks Says:

    BOP,  ๐Ÿ™‚

  126. 126
    BirdsofpreyRcool Says:

    HeadTrader hearing rumors that FIG is withdrawing its lawsuit against BAC.  That would be pleasant news.

  127. 127
    BirdsofpreyRcool Says:

    #115 — you summed it up nicely.  Two different stories.  As far as acreage valuation, tho…  "Operated acreage" is always more valuable in an M&A scenario than "non-operated." 

  128. 128
    zman Says:

    Rob- No, it's the larger companies for the most part. Operators like having them as a non-operated interest owner because they pay their bills on time and always participate.  If it were little operators or some of the smaller privates that were operating most of their wells,  I would not be interested. 

  129. 129
    elijahwc Says:

    CQP just booked up 20% of thru-put (in or out going) to Morgan Stanley.  Stock up 4% to $19.40 on its way to a new annual high as soon as it goes through 21ish.

  130. 130
    zman Says:

    re 127 – yes it is. And since they are pretty close to where everyone else, they are getting a bit of a carry on market pricing. Noted that they are picking up acreage at $1,200/ac and the market is valuing them like other Bakkens at about $8,000 / ac. KOG is $9,100. Can't compare those to recent lease sale values though since much of that land is raw and theirs is proved up.  OAS, by the way is at $6,200 /acre and BEXP is at $7,000.

  131. 131
    zman Says:

    RIG up 5%, HAL up 4%, BP down 1%. I guess I don't need to watch today's testimony. 

  132. 132
    irongate Says:

    re 101… what i don't understand zman is how this administration can brag about 1mln vehicles plugging into the grid.  Our nation's grid is so overwealmed as it is.  There has been little infrastructure improvement since the 1980's.. and since then we now have PC's sitting on everyone's desk with 2 monitors that are ON all night.  we have prolly 50mln more people in the country and now they want to plug in millions of cars??.  
    There has got to be a major overhaul of the "transmission" capability of our powergrid.  which leads me to my off topic name… MYRG.  they are 100yr old small cap play focused on the "transmission" side of the powergrid infrastructure.  a long term hold… not a matter of "IF" but instead "WHEN".

  133. 133
    zman Says:

    re 129 – Hmmm. That's a sub of LNG, the company, right? Wonder why it is structured that way. To hide the debt of the parent, lol?

  134. 134
    zman Says:

    IG – No argument at all from me. I often harp on the generation side which is antiquated to say the least on probably half (some coal, getting there on nukes and some of the damns will come down). Nukes have seen about all the uprates they are going to in terms of capacity increases and good luck building a new one. Coal is, well, old. Gassy is mostly newish. But solar and wind are tiny and unreliable. By the way, the inaugural pledge to drive huge growth in wind is falling flat. This is why I laugh when I here electric cars and don't here natural gas at the same time. It's a sad laugh really.  

  135. 135
    RMD Says:

    133 = yes, at least in part.

  136. 136
    zman Says:

    Good to know I'm not the only cynic. 

    OAS post close reporter, sitting on hands on half sized position in the common. Sort of tempted to take puts for the numbers but worry this would be a case of "missing" an overzealous Street and then facing strong guidance.  

  137. 137
    elijahwc Says:

    #133 Oh no oh my not the way I understand it.  CQP was put there to receive the guaranteed distribution from the bag holders at LNG.  lol

  138. 138
    zman Says:

    Analyst Watch:

    SD – UBS cuts to Equalweight, takes estimates lower. 

  139. 139
    zman Says:

    re 137 … In the words of Intern #1 "well if you say so then you say so". 

  140. 140
    RMD Says:

    ig:  I have listened to PIKE which seems like a 1st cousin to MYRG?  Does not seem like their time has come as yet.  Have you compared MYRG to PIKE?

  141. 141
    zman Says:

    Stories out there now that the 30 yr mortgage is on the way to 3%. 

  142. 142
    elijahwc Says:

    Intern #1 will go far and have many admirers.

  143. 143
    bill Says:

    lol 133  Z hates LNG

  144. 144
    zman Says:

    Spill Panel Watch:

    Dollars did not trump safety

    well design was not inherently faulty

    seems to be the result of several human errors.

    Wow, that's much less witch hunty than the old boot on the neck comment.

  145. 145
    zman Says:

    Hate is such a strong word, but yeah, I think LNG (the company) was built like a Corvair.

  146. 146
    zman Says:

    re 142. Unfortunately she already does. I have yet to use the line "I have a gun and shovel…you won't be missed" but I'm looking forward to it. 

  147. 147
    elijahwc Says:

    Intern #2 luvs Corvairs, smartly putting investment value over structuring engineering!

  148. 148
    milepost_43 Says:

    85 voted thanks.

  149. 149
    bill Says:

    Hey , is it too early to call for a rebound in the gassy names?
    Hk up 5 %
    Chk up 2 %
    Even unloved NG up 4 %

  150. 150
    zman Says:

    Bill – I think you will get fits and starts but for my book, I don't buy that its anything more than bottoming action. The name implies that we've seen the lows and I think that's mostly true for this cycle except for the debt laden and unhedged of world. I don't think gas is doing much more taking a first cold snap induced bit of short covering. It may rally a bit but I don't see $5 soon. 

  151. 151
    zman Says:

    Beerthirty. 

  152. 152
    RMD Says:

    AREX files 5.0mm shares (plus .75mm shoe), ups capx budget from $52mm in '10 to 100mm in '11.  Only guides to 25% production growth which is a total sandbag.  Why on earth are they using JPM…a question which will go unanswered.

  153. 153
    zman Says:

    CLNE looks a little light, had to miss call, reading for some highlights

    Bigger news, Cowboys fire Wade Phillips

  154. 154
    zman Says:

    EGLE numbers look pretty stout. 

    SB looks like a miss despite the headlines calling it a beat. 

  155. 155
    zman Says:

    OAS on the tape, blew out the top end of production guidance.   Ahead on Revenue and EBITDA lines as well. 

  156. 156
    bill Says:

    elduque 32- sd
    CS reduced target to 5.50 from 6.00, "valuation is not yet compelling"
    TPH says stock likely in penalty box once again as ppl tired of dilution and lack of capital discipline
    My comment>Assets saleS would be viewed as a positive and a regime change

  157. 157
    irongate Says:

    re 140 and question about PIKE.  Actually you are on the right track with PIKE, but I like MYRG much better

    Normal
    0

    Essentially, regardless of the “Build America” plans from the current Administration this space "should" start to gain traction. Specifically MYRG began over a century ago to supply electricity to rural towns and now can be called on for a much needed upgrade to the electrical system. After going public in September 2008, the stock faltered and has now risen as pent up infrastructure buildouts begin to be anticipated. Spending on transmission projects was forecast to double from 2008 to 2012 and MANY of these contracts are being negotiated in 2010.

    46% revenues derived from Transmission (the hi margin stuff), 27% Distribution, The co operates with high barriers to entry and Transmission is severely capacity constrained due to a decade long UNDERspend by the majors. The industry has deferred spending as long as they possibly could and have even shrunk workforces (outsourcing)… But now we are fast approaching an inflection point where widespread project starts will be met with little excess capacity and thus fewer project bids and resulting higher project prices. All that is left in my opinion is rate relief to put this widespread spend into action.

    MYR is a conservatively run organic nuts and bolts play on the repair and upgrade of transmission & distribution systems all over the world. MYR walks among industry giants Siemens and ABB who might want more manpower as they aggressively pursue T&D upgrades throughout the world. Additionally, MYR is one of the purer plays in Transmission and much smaller, (digestible in terms of M&A potential), than its main rival PWR who also does telecom and oil/gas infrastructure. PIKE is another one to look at but MYR is older, with a larger footprint and much more levered to “transmission” vs “distribution".  Earnings came out tonight but I am just too beat to really go through it… tomorrow is another day, and I don't plan on selling it for a long while anyway.  The main impediment lately is that projects keep getting delayed and pushed out…. But that can't go on forever.

  158. 158
    zman Says:

    OAS pre call post is up. 

  159. 159
    RMD Says:

    ig thanks, I'll listen to conf calls more closely with this background info.

  160. 160
    elijahwc Says:

    Smart money continues to buy long dated regulatory impaired cheap gassey assets:  ATLS & CHV
     
    Atlas Energy: Chevron Agrees to Acquire Atlas Energy, Inc. in a Transaction Valued at $4.3 Billion or $43.35 per share
     

     
    Co announces that it has entered into a definitive agreement to be acquired by Chevron Corporation in a transaction valuing Atlas Energy at $4.3 billion, including Atlas Energy's currently outstanding debt. In the transaction, Atlas Energy shareholders will receive consideration valued at $43.34 per share in total, a 37% premium to Atlas Energy's closing share price on November 8. Atlas Energy shareholders will receive $38.25 in cash for each outstanding share, and will also receive a pro-rata share of a distribution of over 41 million units of Atlas Pipeline Holdings (AHD). Based on AHD's most recent closing price on November 8, these units have a value of $5.09 per Atlas Energy share.

  161. 161
    irongate Says:

    arghhhhhhhh!!!!!  I kicked it last week!  concerned about the never ending oversupply of NG

  162. 162
    bill Says:

    We hit the bottom. Its time for ng stocks to rally. Look for positive moves from cgh and hk, others,imho

  163. 163
    zman Says:

    Post up in a couple. You guys did see there was another one overnight, right?

  164. 164
    zman Says:

    Tuesday Merger post is up.

  165. 165
    proxy solicitation rules Says:

    corporate proxy solicitation rules Would apply to which of the following

    Monday Morning And We

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