Market Sentiment Watch: Slow trading day yesterday continued the recent non-hot out of the gate trend of starting weak and ending strong in energy. Bakken player names continue to ramp production at rates in excess of current Street thinking. Last night's OAS release and the prior day's NOG numbers are examples with BEXP and WLL before that. I expect similar strong guidance from KOG in coming weeks. While natural gas is probably nearer the lows than a near term high I don't believe it is ready for a sustained rally and as such remain heavily weighted towards the oily side. I do expect a pullback in oil at least to the low $80s on the next equity market swoon / dollar rally but am more than willing to look through the trough on the oily names, perhaps only taking profits in the trading shares in the ZLT.
Merger Watch: Chevron acquires Atlas (ATLS) for $4.3 B. This is a long life (25+ years) gassy reserves (Marcellus) acquisition. As such we should some follow through on other names in this basin and in the gassy realm as it has gotten cheaper to drill on Wall Street than in the field. More of this to come. Notably, the reserves were valued at over $4 per Mcfe on a proved alone basis, but with infrastructure and a large potential reserves number (13 Tcfe vs 1.02 Tcfe proved) CVX was clearly looking to the future and a large position in a key play. Look for RRC and UPL to see big bumps today and then for all things gassy to get smaller pops all the way from SWN and NFX who have nascent positions in the Marcellus to CHK who is the land king in the play.
Ecodata Watch:
- NFIB small business index (last read 89),
- Job openings (last read 3.2 mm)
In Today’s Post:
- Holdings Watch
- Commodity Watch
- Crack Spread Update
- Stuff We Care About Today – NOG, OAS, Bakken $/Ac snapshot, EGLE, SB, GMXR, CRZO
- Odds & Ends
Holdings Watch:
- ZCAT (Zman Catalyst portfolio):
- $5,100
- 98% Cash
- Yesterday’s Trades:
- None
- ZIM (Zman Inefficient Markets portfolio)
- $4,800
- 0% Cash
- Yesterday’s Trades:
- None
Commodity Watch
Crude oil inched up another $0.21 in quiet trading to close at $87.06 yesterday. I continue to think crude is due for a near term and short lived pullback on the order of 5 to 10%. I will just cut and paste that sentence into next several days of posts. This morning crude is trading up $0.50.
- Early Read on Oil Inventories:
- Crude: UP 1.75 mm barrels
- Gasoline: DOWN 1.0 mm barrels
- Distillates: DOWN 2.1 mm barrels
Natural gas rose $0.15 to close at $4.09 yesterday. This morning gas is trading another 6 cents.
- Early Read On Gas Storage: 28 Bcf Injection. This would take us to a record high.
- Tropics Watch: Nada and the hurricane season is winding down.
Stuff We Care About Today
NOG Wrap
- Good quarter, good guidance
- So why did it trail off the early highs pre call and stay down there post call:
- 1) it's had a good run so a little profit taking isn't out of the realm of normal
- 2) While the growth rate is good, it is not as high as it has been for the last 3 quarters.
- 3) In my view, the 30 to 35% sequential growth that we have seen of late would not be a responsible goal to set for the entirety of next year but this is probably what some onlookers would have liked to have seen.
- 4) There is more upside than down side in the current projection of 170% growth for 2011. This 6,500 BOEpd average for 2011 is largely driven by wells already drilled that have yet to be completed. If 2011 activity is higher than what we have seen in the continually rising rig count of 2010 then there is likely upside to the target.
OAS Reports Better Than Expected Quarter With Volumes Based Beat; Acquisition and Strong Finish To 2010.
Highlights:
- 3Q production came in well above guidance of 4.2 to 5.0 MBOEpd
- Costs were were on the low end of guidance.
- Guidance:
- 4Q Guidance rises from a prior range of 5.5 to 6.5 MBOEpd to a new range of 6.0 to 7.3 MBOEpd. Note that 300 BOEpd of this addition comes from an acquisition detailed below
- Cost guidance for 4Q is in line with prior
- No 2011 yet.
- 4Q Guidance rises from a prior range of 5.5 to 6.5 MBOEpd to a new range of 6.0 to 7.3 MBOEpd. Note that 300 BOEpd of this addition comes from an acquisition detailed below
- 5 rigs running - 4 west of the Nesson, 1 east of it, up from 4 rigs total as of the 2Q call and in line with previously disclosed plans.
- Acquisition:
- 16,700 acres and 300 BOEpd acquired for $48 mm
- Without the production this would still be a pretty good deal at only $2,875 / acre. Take into account the production and picking a reasonable point on a flowing barrels basis and the acquisition comes in just over $1,000 per acre which is where the likes of both KOG and NOG have recently disclosed acreage additions.
- This results in a boost to 2010 capex of $58.5 mm or 22% to a new target of $328.5 mm. Note that the capex raise is solely based on the acquisition price + plus cash needed to drill a well there.
- Where? In their Hebron area which is in Roosevelt County, Montana.
- This brings OAS' total Williston acreage to 308,700.
- On a Market Valuation (TEV/Ac) this puts OAS at $5,800 / acre, which is the low end of the range amongst the Bakken players list (CLR, WLL, BEXP, NOG, KOG, OAS) (see next section).
- Well highlights: none but we did note a number of nice wells in recent NOG results including one that came off the Confidential list on Monday, east of the Nesson, the Berry 5493 well, with an IP of 2,410 BOEpd on Monday.
- Balance Sheet:
- Still no debt
- $270 mm in cash
Nutshell: Great quarter, based on better than expected/guided volumes at the top line and lower than expected costs. Going into the quarter I was hesitant to add an options position as I'm still getting used to management's guidance style. My concern was that the top end of their guidance would generate a slight short fall in my model relative to Street estimates. Given that they completely bagged the Street on guidance, besting the top end of their range by 10%, I now have a better idea of what kind of guys we're dealing with. Notably they did not provide 2011 guidance now, as is practice with many E&Ps for their 3Q numbers. I expect them to provide guidance between December and the year end call and am looking for triple digit growth at that time. I continue to hold a half sized position in the ZLT after scaling back twice, and may add an options position and/or a trading shares position to this cheapish looking Bakken player name. OAS currently trades at 27.4x, 12.2x, and 7.4x current Street CFPS estimates for 2010, 2011 and 2012 respectively and I expect all three of the denominators here to migrate northward in the next few weeks.
Conference Call: Today, 10:30 am EST
Acreage In The Bakken: A quick, simple look at valuations:
Other Stuff
EGY Reported Strong Quarter
- EPS of $0.22 vs $0.19 expected
- Conference Call: Today, 11 am EST
GMXR Reports 3Q Results ... Swing and A Whiff
Highlights:
- 3Q came in at 4.65 Bcfe vs guidance of 4.6 Bcfe.
- Guidance: None
- The gas price induced deceleration continues. Currently looking to sublease a third rig and continue one of their subleases so they are moving to a 1 rig program. Frac dates continue to be difficult to obtain which along with lower activity is probably the reason for the lack of guidance.
- Reserves:
- up 24% since year end 2009 to 442.3 Bcfe
- move is not based on commodity prices but on drilling and new PUD booking rules.
- TEV / Reserves moves to a paltry (and probably-too-cheap-to-stick-around-if-the-big-caps-start-hunting-in-gasland-on-Wall-Street) $0.56 / Mcfe
- Notably their numbers for Haynesville work to date are higher than those of their reserve engineers. They point to this as proof that they are moving in the right direction. I'd say they probably need to take a more conservative read on their well EURs until they can convince the third party engineers to go along for ride.
- The 442 Bcfe is however signed off on by Degoyer, which is no slouching reserve firm so I view the reserves mark up in a positive (read credible) light.
- Balance Sheet:
-
- Net debt to Cap: 36%
- Cash: $36 mm
- Hedges:
- Second half was about 75% hedged at $6.50
- New hedges for 2011 and 2012. This is up from 0% hedged recently. Puts are now in place for what looks to be almost all of their production at $6.14 and $6.08. While this looks pretty good at first glance not that they've also sold puts that will reduce the floors substantially should prices remain weak (Below $4.22 and $4.13 in '11 and '12 respectively)
- Short Interest: Largest in class at 33% short.
Nutshell: I don't own it, not yet. I will continue to watch it fall. Asset value is clearly there but with the drilling program screeching to a halt for now this becomes even less sexy and I'd say let the momentum guys who used own the stock capitulate. Given the low $/Mcfe for the reserves and the relatively low operating expenses here one could see a name like LINE, who has recently voiced an interest in gassy over oily plays begin to snoop around. If I were LINE I'd let them fall by another third. Chart sort of looks bottomy but I'll leave that to JB.
Conference Call: Today, 11 am EST
EGLE reported a beat
- The 3Q numbers:
- Revenue of $72.8 mm vs $63 mm
- EPS of $0.13 vs $0.08
- Highlights:
- Utilization 99.9%
- Results driven by demand for minor bulks and grain shipping
- CC: Today, 8:30 am EST
SB Reports Shortfall
- The 3Q numbers:
- Revenue of $40.8 mm vs $40.2 mm
- EPS of $0.33 vs $0.39
- CC: Today, 9:00 am EST
Odds & Ends
Analyst Watch:
- ROSE - Wunderlich ups target from $28 to $35.
- RAME - Upped to Outperform at Rodman
CXPO reports Wednesday AH for a Thursday call.
Please make sure you bookmark the backup site:
http://www.zmanbackup.wordpress.com
ng stocks seem poised to soar today. Hh up 5 % pre market
Is this for reals?
soph the ceo of egle sounds like Neidermeyer in Animal House. "is that a PLEDGE PIN"
I mean that as a compliment, slow, very clear, and consise
re 3. Usually the M&A day pop has little to no follow through. However, we have been expecting M&A to pick up going into year end and with the buyer being a Major the move could have a bit more staying power. I do not think we are at an inflection point in the gassy group yet. I think M&A helps but we'll also hit a record for gas storage this week and gas production has resumed climbing on a monthly basis. So we may be at the low but I'd expect a U shaped moved, not a V.
on ng- returns similar to hatian real estate
http://seekingalpha.com/article/235701-where-can-winter-natural-gas-prices-go?source=yahoo
when money managers across the world were looking at the spectrum of YTD returns across global asset classes, right next to Haitian Real Estate they saw NG Futures at -29% in the constant prompt contract, -39% for the DEC 2010 outright.
5 agreed, dead cat bounce all you can say about it ..the product is cheap in an inflationary world.
It won't stay cheap forever as consumers will switch over to the product
hk is indicated to open up 7-8 %
8 sorry thats a 2 day move
TGA re-listened to CC to clarify when news may be coming…have noted a couple of questions I have asked IR
.
Price still well outside upper BB…$15ish vs $14ish….but should only take a couple of more days for upper BB to meet price…..looking for some consolidation @ +-15ish..maybe into midQ update??….looking at the June calls to be sure to catch Nuqra exploration wells IF we get a more substantial consolidation…
.
two presentations coming before midQ update
Event…………………………………… Date
The Advisors MoneyShow, Orlando, Florida November 17-19, 2010
Canaccord Genuity Conference, Miami, Florida Nov. 30 – Dec. 1, 2010
.
historical midQ update
11-15-09
12-16-08
12-18-07
midQ update should come before Dec option expiration on Dec 19. am long Dec and very long Mar calls
.
With an additional deeper target on currently drilling Safwa #2 exploration well, wonder if results will be available by midQ update??
.
Using Ross' word.."BIG" Yemen basement tests should be available by Feb 1 @ latest.
.
2 Nuqra exploration wells are 30 day wells and Ross said results by mid-March.
If successful, wonder when they will drill the "big" one…Raghama 162MM….if rig is gone to West Gharib…
.
Historical reserve report dates
1-28-10
2-9-09
2-14-08
2-2-07
Egle talking about moving into coa's and leasing in ships. This adds more risk to their business model. They have maxed out credit line and this provides area for growth. It also adds risk to business model. I'd avoid the name for now..too much debt and rates have weakened and I dont like where they are going.
Front and Center Watch
OAS – headlines calling the quarter mixed. My butt it was. Call at 10:30 EST.
EGLE – looks ready to move a bit, let me know if he gives an outlook
Gassy stocks pre market:
GMXR up 5% – chart looks like a bottom has formed. I can't get thrilled about them throwing in the drilling towel but it is ripe for being bought.
HK – also ripe.
RRC, SWN, and UPL all to run hard.
Interesting pre open on KOG
NFX – I'll be punting those $65s today or tomorrow.
GST going back over $4 pre market, talk about gassy.
CXPO should get marked up too into earnings on Wed night.
Product Watch: Toshiba Satellite laptop. Thumbs way down.
White House Spill Panel Watch: BP, HAL, RIG all had cultures of complacency. These guys need some prozac. One day they slam HAL, then they say its basically human error, that money didn't compromise safety and that the well design was not flawed and now this comment. Seems to change depending on whether or not the preceding night's media criticized them. Grow a pair, take a stand and stick to it.
im suprised gmxr is up with lousy qtr
lol agreed on 15
woo hoo ATLS!!!
re 16. It's probably the 24% hike to reserves. These guys look to be playing the new proven undeveloped booking rules to the limit or close to it. Remember a year ago when everyone at the big caps said reserves would become less apples to apples with the new rules as some guys booked all they could and others stuck with a more conservative tack. Well here we have a guy booking reserves that they can technically book but he's basically shutting down his drilling program. He's also in disagreement with his 3rd party engineer on the EUR of his wells but this number would be a combo of the two, the company's and D&M's. D&M should be the biggest piece, almost all of it so that makes it more conservative, but the fact that they are booking these at 3Q end isn't exactly what I'd call a conservative take on thing. These are the guys that 2 years ago in presentations told you why their stock should be at $400 … not $4. I may buy it and tuck it away for the day it gets bought as the reserves are apparently there, even if they don't have the balance sheet and cash flow to go after them now.
Congrats mimster90. Site is the fastest I have ever encountered – like going from a 16 bit to a 64 bit processor.
mimster — Good for you! Now… you have to show us your Happy Dance. 🙂
Decidedly muted pre open indications to oily names.
Gassy names continue to vault higher: UPL up 4%, SWN up 3%, RRC who is probably the go to name as Marcellus pick is up 7%. HK is up 3.6% and while they are not in the Marcellus they are extremely gassy and low cost with a strong, long lived portfolio.
Winner Winner Chicken Dinner Watch: Mimster with a free quarter of ZEB.
pre mkt HK 18.40-45
Ram – you mean this site?
White House Spill Panel Watch: BP, HAL, RIG all made egregious mistakes relating to Gulf Spill. Sounds like someone got a phone call from India.
I did a double happy dance since I also own it. Everyone at work thinks I am crazy. The only ATLS they know is the java Atlas library.
thanks zman for the free quarter. I forgot what the prize was.
Uh, yes. Refresh and moving about the site is lightning fast.
Mim90 – No problem, good job. Will have admin go look up when you roll.
BEXP tearing higher, through $24. Not even gassy but it loves the smell of mergers in the morning.
#26 — exactly. Gotta give the Trial Lawyers something to CHEW on.
Re 28. Thanks. But we have not made the switch yet. Out of the kindness of their hearts, and only after I told them I was leaving, my host decided to leave me up … at least for the time being until our servers are in a cold, dark room in Austin. Please bookmark that back up site.
CRZO – beat, didn't get to do their earnings, up 11%. Part of that is their small cap stature in the safe old Barnett.
Oil not being left out, just not moving as hard. BEXP and OAS at all time highs. WLL at its 52 week high with an eye on the all time at about 112.
LINE – wow
WHX – inching lower
On a tactical note, ignorng taxes, is there any reason not to sell my ATLS holdings at this point? It seems unlikely to me another suitor will offer more for it.
BOP – what was the name of that firm you mentioned that picked up coverage of SSN?
RE: Gold/Silver for anyone who cares. 1420 is the last level of resistance before 1440. At 1440-1445 I expect that there will be a battle and if the bulls succeed I think it will launch us into another wave higher that could take us as high as everyone's end of year/ 6 month targets at 1600-1650 in essentially a straight line (much like the last $250. If the sellers manage to hold the line at 1440 then we are likely to see some consolidation, but at this point I doubt we see any big selloffs, too many people got caught out of the market and have been waiting for a dip since 1224.
Mim – to me the question hinges on two things, 1) as you point out, the likelihood of competition (which I'd bet is low too) and 2) the way the deal is paid for and if stock, how likely the buyer is to appreciate. A few months back I tossed my AEZ after it was acquired by HES since I don't closely follow HES. HES has since moved up and AEZ is probably 15 to 20% higher than where I sold it as the deal is still not closed. So there is that to think about.
The ATLS deal values the acerage at what price in the Marcellus? Is the JV with Reliance adding value to ATLS?
VTZ — great earnings from SLW! One of my favorites also.
ZTRADE – ZIM – NFX
NFX – Sold half of the NFX Nov $65 call position for $1.90, up 392%, with the stock at $66.
Analyst Watch:
BEXP – Credit Suisse ups target from $21 to $24 … way to go out on a limb.
MCF reported and I didn't even notice it. Stock banging on all time highs.
Revenue was $55mm vs $41 mm exp
EPS of $1.21 vs $0.84 exp
Zoiks
Production for the quarter was 102 MMcfepd, which is in line with recent comments by them, and still strong. No call, no ops update.
Good morning.
Nat gas on Nov 19, 2009 was at 4.157 — ran up to 6.11 on 1/8/10.
Seasonal????
lol 42 i didnt see it either. Peak ignores the street
EGY just touched $7.00. Conf call at 11 est today… will be on that.
mcf is the only ep company i know thats paying taxes. They should buy sd and turn it around
You'll have some seasonal action for sure but the stocks largely discount those moves as they are short lived.
re 44. Right, good idea for him so far. Seeing if can kick self in head over the oppy at low $40s I missed there.
EGY – nice call, will be on OAS, may be able to catch the Q&A.
mcf
loe .52
ga .27
avg sales price 5.85 without hedges
re 36: I know the banks (JPM and C among others) had large shorts on silver… unwinding? …yeah, tastes like iron, don't it boys
HK one of the few names lower on LOE.
re 49, hahaha.
Goldman now officially a contra indicator on EOG – Conviction buy at 100, off conviction buy list at 88. Nice job there.
OAS zooming higher now, 6% … you'd think they were gassy looking around today.
Can anyone post notes from the BPZ call at 11 am EST.
GMXR has officially turned into a scoop chart. Not that the two are anything alike but the plan to go to 0 rigs and then rebound activity when prices do reminds me of what PXD did in the Permian.
ATPG — flopping around like a landed fish… until they get their two drilling permits. Might see those within a week or so… hope to, anyway. Bummer has actually approved several deepwater wells in last few days… slowly, slowly… but approving, nonetheless.
Gassy names slicing up through their 200 day average, HK case in point. Will need to see that hold for a bit for me to think this isn't simply bottoming action and a short term, short lived pop on M&A.
BOP – did they say on the call it could be that soon?
I had to look up LOE and found it means lesbians on ecstacy or lease and operating expense.
WHX settling into the typical trade off for several days on the "miss" pattern. Here's to rebuying at $17 or so.
ATPG answer from the call transcript —
<Q – Stephen Carpell>: Great. A couple other ones – if you look at what your – what you're on oil – where you are on permits, I was a bit confused on the press release. What have you exactly done on Telemark, on the third well, for filing permits, and where are you? What's the status, and what have you received back in terms of response given the safety procedures you've already put in place?
<A – Leland Tate>: It's Leland again. I'll be a little more broad here on answering the question because it's probably going to coming up several
times. The permits are problematical for us – for everybody in the industry,
though I think we're ahead of the curve on the ones that we have. We have
actually filed the APM, or the permit to drill, if you will, permit to
modify, with the BOEM. It's been in for a couple of weeks now. It has all of
the qualifications in it from to NTL5, NTL6, and the new existing rules that
– existing interim rules that were put out. So we have complied with every
change, every rule and every change of rules that we know of. And we've been
– we're working on 10 to 14 days now of that actually being in.
We're continuing to monitor it and asking, when is it going to get approved?
What do we need to file in addition? And what we get back from the BOEM is,
in some cases, silence; in some, we're still working on it. I believe
personally that the rules are still changing a bit. And so, as a result, it's
a bit difficult to justify exactly how long it'll take. However, I think
there's reason to be optimistic because we have a subsea intervention device.
It's a known reservoir. It is an oil field, and these are surface wellheads
with fully pressured maintaining risers. So this should be the best of the
best for them to be able to approve.
Are people able to short WHX? My broker told me he is unable to so
Looking around, the gassy name rally is largely a mid cap affair. Micros and single digit midgets are barely budging so far.
Popeye – LOL
Getting on OAS Call
nog down on the day
61 – i shorted it at scottrade and merrill-boa fidelity told me no
New OAS Presentation:
http://b2icontent.irpass.cc/2011%2F116527.pdf?AWSAccessKeyId=1Y51NDPSZK99KT3F8VG2&Expires=1289324150&Signature=4Gutxt0pkAaQR7RAMrXaKRoZBxM%3D
>And what we get back from the BOEM is,
in some cases, silence; in some, we're still working on it.
that gives you a warm and fuzzy
HK with 7M volume already this am.
OAS Notes
Thinking Montana (Hebron area) will be 400 to 700,000 barrels oil per well EUR (no gas included)
Contracted a 6th rig to be dedicated to Hebron.
Well costs are $6.8 to $7.2 mm CWC for a 28 stage well – service costs are moderating despite the fact that the Williston rig count is now 160.
Confident they will be able to get frac slots to complete their wells in a timely manner.
Still working on the completion mix (#frac stages, amount of sand etc)
Thanks andy… wachovia nixed me
OAS Notes 2
Burke county well – 5 mm pounds sand, 28 stages, completed for $6.2 mm. That's cheap.
Georgestadt well (west side), near the Angel well, fist 7 day average 1,600 bopd.
East Nesson wells coming in within in the expected EUR range, better in the mid to southern part of the play.
36 stage well (Ernst) also done for $6.2 mm (shallower).
LOE – down due to increased oil production in the Bakken, more efficient than their older Madison well production. So look for this LOE reduction to continue.
Also some one time charges in G&A for coming public and staffing up to be public.
…
OAS – presenting 2011 review to board in mid December, then will make public. Sounds like a pre Christmas press release for 2011 guidance. Should be in excess of 100% volume growth.
OAS Q&A about to start
NOG – I may add some more common close to $20.
RE 49: HSBC and JPM are both going to get sued for manipulation of the markets. A Goldman guy outed them. It's been argued by GATA for a long time.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8116143/Whistleblower-accuses-HSBC-and-JP-Morgan-of-silver-futures-scam.html
Many people have been crying foul but it's even better to see them feeling the pain of their huge shorts.
EGY — some companies take their disclaimer comments WAY too seriously. Bobby G reading the SEC code now….
OAS Q&A
2Q11 – couple of catalyst list items
1) downspacing test, probably in an adjacent unit but closely spaced to an existing well. This way they get to test infill potential while still working to hold their land.
2) first Three Forks test. Probably drill 3 to 5 TFS tests next year.
OAS Q&A
Spud to first production is 90 days … same as before. This is what NOG said yesterday. Sounds like BEXP's timeline plus a few days.
The hardest part about following EGY is figuring out what their Gabon income tax will be. Basically, when company is investing in capex for field development, income taxes go down. When they are just pumping and selling, taxes go up. It's like depreciation in the U.S., only more complicated. Just a comment….
EGY — commencing a shallow water Gabon seismic program… interesting. Looking for more bumps. Must be feeling pretty good about geology and govt outlook. "Leave no barrel behind!" — EGY's rallying cry, as crys pointed out.
Adding some more HAL exposure in the ZIM with the stock just under $34. I don't need the name to recover back to $36 for that to work. Stock is continuing to shrug of WH Spill Panel comments, staring another strong several quarters in the face.
OAS call over, positive tone in line with today's post. Look for a press release with strong guidance in the second half of December.
Getting on the EGY call.
EGY getting together with its offshore Gabon Partners (about 10 parties) to figure out how to proceed. Keep production capacity at 25k/d, take it to 30k…. 50k…. will get back to us in 1Q11. So, moving up, just don't know how much yet. Sounds good.
$100mm cash to spend at EGY. Just a matter of what, when, and how much. Looking at domestic shale gas plays…
ZTRADE – ZIM – HAL – high risk trade
HAL – Added 30 more HAL $36 November calls for $0.1 with the stock at $33.83. I continue to look for reason regarding the fundamentals to overcome some of the fear of the BP Spill Panel in this name. I don't have to get to $36 for this trade to work.
EGY — something to keep in mind… of the $7/share stock price, almost $1.80 of that is cash. If/when they DO something with that cash, you can put a 3-4 multiple on it…
re 82 … just tuned in. Same as last quarter, looking for an acquisition but the wording was almost the same so I get the sense that they are'nt imminent on it. But I missed the first part of the call .. does it sound any sooner than it did last quarter?
EOG Resources, Inc. (NYSE: EOG) (EOG) is scheduled to present on Thursday, November 11, 2010 at 3:35 p.m. Eastern Time at the Bank of America Merrill Lynch Energy Conference. Loren M. Leiker, Senior Executive Vice President, Exploration, will present on behalf of EOG.
Thanks Choices, had not yet seen that conference listed. Papa sending Loren as he doesn't want to get hit with a pie I suspect. Lots more conferences at the beginning of December.
#85 nope. No hurry. Nothing imminent. Looked at another African play… decided not to. Cash not burning a hole in their pocket. Like that.
HAL = Investor Day tomorrow, just fyi.
re 88… agreed.
re 89 … yep, 1/2 day, thanks. I think they get to reiterate a lot of stuff from the 3Q call. NAM to slide next year but not as much as people think and Int'l to continue to turn the corner.
Just logged on and made quick scan of comments…anybody else watching AXAS today?
At what price was the HAL options purchased?
Typo – should have been $0.18
Kaman – not by me, probably by Eli or RMD
ZMAN; ANY WORD FROM NICKEY?
re 95. She is busy
Hope she is doing well
GMXR up 15% now, their call should be over. Chart looking very scoopy. Will listen to replay, not tempted to chase at the moment.
Z,do you have a good map of the Bakken to include the Southern Alberta Basin with acreage holdings/drilling activity-ROSE and NFX mentioned in Q3 update.
Thanks!
re 97. Agreed, always.
Other than MCF, gassy rally not translating to offshore gains. Difference is reserve life.
S&P looks tired. Putting brakes on the group into lunch.
Choices – I have something somewhere on that, shows old fields, not sure it has acreage of them displayed, will see what I can dig up. Drilling activity is quite limited in the new play and those are verticals. Lots of well control here though and old oil shows on the way to deeper formations.
PETD down 5% today after a strong rise on a good quarter. Canaccord Buy reiteration apparently no help.
Big volume in HAL of a sudden, big seller, don't see the news yet, probably the spill panel folks.
Silly silly prediction. In the spirt of buying low in order to sell higher one ought be positioning Natty stuff right now. Particularly the doggie names. Its a simple case of follow the leader XOM for XTO, CHV for ATLS, China for CHK, Reliance for everybody. And, as many have given upon maybe a policy change in D.C. Two things are for certain in my opinion: These names aren't going out of business no matter how mismanaged as the asset has long dated value if not so currently. And, if the current commodity' all thing real rally continues then the lagging asset class will come back and outperfom the leaders with a vengeance. Your names: CHK GDP SWN HK MHR SD and the concept guys that will attract the mo mos, CLNE WPRT and CIM. But you have to take the first bite of the apple before the turn.
#99 MUR is sneaking in there big.
re 103. JC- how did you get in here again? 😉
CSPAN2 – conducting a course in hypotheticals on Macondo. Pretty interesting, kind of like science fiction.
One of the big reasons I like HAL in the medium and long term:
Slide 21
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzk2ODUxfENoaWxkSUQ9NDAzMDAyfFR5cGU9MQ==&t=1
NAM has 25% of the world's unconventional reserves and 75% of the pressure pumping capacity.
HAL Watch: Ah, the sell off just after I bought was in response to an EPA subpoena. Story says EPA reached out to 8 service companies who all expect HAL to cooperate with subpoena which is an odd statement. Story says that HAL failed to provide the necessary information related to the Macondo well explosion. Weird.
#104-thanks, Eli
which one is slide 21?
Mahalo
#108-I caught portions of CSpan yesterday-commission is asking BP, HAL, RIG to agree to subpoena-all indicated (obviously) that they needed to go back to superiors to obtain consent-evidently, subpoena power was initially blocked by some Senator(s)-not sure if related.
Lack of subpoena power was repeatedly mentioned in hearings.
Big reversal in Corn today
Before anyone answers 110, I got the answer it is the one between 20 and 22.
Re 110 – slide 21 in the link provided above is a regional breakdown of where unconventional reserves are on the planet. They are largely in Asia, Europe, Australia and South America. And in those plays they are essentially untapped. You need more than rigs to get at them. You need pressure pumping horsepower to complete these types of wells. In that same presentation, on slide 19, there is a good look at all of the Basins/Plays we talk about and the phenomenal growth we have seen in some of the new ones like 400% growth in Marcellus pressure pumping capacity in just the last 2 years. As the "shale" has become so common place now that some guys in my neighborhood are actually seen sporting "Got Shale?" and "Got Bakken?" t-shirts, so too will you see the same in China, probably in Mandarin.
May be of interest:
http://www.infocastinc.com/index.php/conference/bakkeni
Experiencing some site slowness, backup site is up just in case:
http://zmanbackup.wordpress.com/2010/11/09/merger-tuesday/
Spill panel adjourned for lunch. Me too, back in 30 min.
During the last year we have seen two majors buy nat. gas reserves. I think the major reason is not that they think that nat gas is going to go up. But by using the BOE of 6 units of gas makes up one BOE, it allows them to claim that their reserves are still climbing. It is a cheap way to fudge the books.
It should mean that a company like CHK is worth a fortune to some major. Also given that SD has lots of reserves, it should make them attractive as well.
BOP – can you give me your best near and medium term thoughts on EGY when you get a chance? Cast of catalysts? Thanks.
MP – Same questions to you on TGA.
I am close to punting a couple of single digit midgets should they not bear fruit in the next 3 months. One of them is probably going to get tossed this week, making room for a new name.
z — in all honesty, crysball runs circles around me on EGY… perhaps we can coax him to help out there… crys…. you game??
RE 118 – Shell also bought East Resources and is heavily gas weighted. Their CEO has been vocal about NG being the future.
re 118 – I think they have long term horizons on gas. With an economic recovery somewhere down the road, I have no doubt we will see $6 and then $8 and $10 natural gas again. Since the reserves in the ground are perhaps not economic at current levels but are at future levels, the buys make since to me. XOM also got a nice addition in the Bakken with that XTO purchase.
9 year old red healer, free to indestructible home.
BOP – way to humble. But Crys, same ? question goes to you.
LINE has repeatedly voiced comments that gas buys are more attractive than oil right now. Makes sense, especially when your shareholders want you to be an oil company and gas can be had on the cheap.
Thanks V. You should market some "Got Gold?" T's, lol.
These really do make a great Christmas gift for that brother-in-law that's too cheap to subscribe to this site:
http://www.cafepress.com/ZmansEnergy
I should just walk around with a "cash-4-gold" sign or a light up "cash-for-gold" t-shirt.
Interesting–lng exports
http://investorvillage.com/smbd.asp?mb=4288&mn=61368&pt=msg&mid=9737919
Z…let the dog chase some cows…that was what he/she was breed for.
Too right, cows, cars, pizza delivery guys, small children … a variety of capabilities.
Bill – right, they have reexported a test cargo or two.
and this
http://investorvillage.com/smbd.asp?mb=4288&mn=61397&pt=msg&mid=9739922
I used to have several blue healers…they were great. I had to return one because he wouldn't get out of the bed of the pickup.
RJ – I have 2 blues … awesome dogs. This red is a different deal. Good alone but the color is appropriate as he's the devil if in the pack.
EGY…………More Agressive Going Forward……increased production, increased reserves, and more development wells…..with some large exploration upside potential drilling toward the end of 2011.
It just takes them longer due to their small size.
On a near-term [2011] basis, Bobby seems fixed on the middle case option of the Etame study to expand Gabon Shallow Offshore production on the FPSO to the 25,000~35,000 B/D……….even this will take a protracted perod of time [based on previous negotiations with the FPSO owner/operator].
Presently, the FPSO in nearly maxed out at 29,200 b/d offulids [capacity is currently 30,000 b/d fluids and 25,000 b/d of oil] The good news is all the increased production will be very low watercut,
~Etame 7-H is estimated at 4,000 b/d net increase by late Dec.
~S. Tchibala [via Avouma platform] net increase of 2,000 b/d by late Dec.
~Ebouri 3-H [currently shut -in becasue they lack swichgear will add 3,000 b/d by end of Q1 2011.
~They will throtle backthe high watercut wells in Etame to enable them to max out the FPSO at its current limit of 25,000 b/d of oil or 30,000 b/d of fluids. Russ stated he expects a 22,000 to 23,000 b/d exit rate for year end 2010 {currently producing 19,000 to 20,000 b/d }.
~The Etame study group results [due end of Q1 2011] need to be in hand before they can finalize 2011 Capex and drilling schedule….which will be back endloaded to 2nd half of 2011.
~In the past they sold their oil at about a 50 cent /barrel discount to Brent Crude [Rabi light]……..in 2011 they will receive approx. a 50 cent premium to Brent Crude[Rabi light] …….That $1 swiing goes straight to the bottom line.
The stars seem to alinging for Vaalco [finally] ……..comments on 2011 drilling plans need t o await the outcome of the the December Omangou exploration well and the Etame Study Group Report.
Thre should be at least 3 more Vaalco catalysts ]in December] prior to year end:
~Etame 7-H goes on production and what the reserve addition will be…est. 4,000 b/d net prouction [after deducting E-1V which will be shut down].
~South Tschibala well #2 goes on production….et. 2,000 b/d net addition
~Results of drilling Omangou exploration well.
We lost the female to a rattlesnake. The family was so upset, I bought another in Kansas and had it flown in the next day. Ah, memories…
China’s Dagong Global Credit Rating Co. cut its credit rating for the U.S. to A+ from AA because of a Federal Reserve plan to purchase bonds to spur growth and inflation, according to Xinhua News Agency.
The credit outlook for the U.S. is negative amid deteriorating debt repayment capability and a “drastic” drop in the government’s intention to repay debt, Dagong said, as cited by the state-controlled news agency. The Fed’s quantitative easing policy will erode the value of the dollar and is against the interests of creditors, the company said.
“Serious defects in the U.S. economy will lead to long- term recession and fundamentally lower national solvency,” Dagong said, as cited by Xinhua.
Dagong, seeking to become an alternative to Standard & Poor’s Corp., Moody’s Investors Service and Fitch Ratings, ranks China’s debt higher than that of the U.S. and Japan, citing widening deficits in the developed world. Global ratings methodology is “irrational,” Dagong ChairmanGuan Jianzhong said in July, and “cannot truly reflect repayment ability.”
The credit rating company’s remarks follow those of Chinese government officials, who have expressed concern that quantitative easing will hurt the country’s economy.
Story ran two hours ago on Bloomberg wire. Mkt seems to be ignoring………
BSIC – reports in the next week, want talk to me today as they are in their quiet period (which is pretty much the case all the time by the trickle of news they do let out). So I'll be talking with them post numbers release which I'm assured will have no operational color nor will there be a conference call. This is my most highly speculative play and I honestly have no opinion regarding the quarterly results other than they should make a penny or two of EPS. Whether or not BEXP has spud a well or two on their acreage we will have to wait to talk about after their numbers. If you missed the basic piece on this one you can read it here:
http://zmansenergybrain.com/2010/09/28/tuesday-morning-30/
re 134. Thanks Much!
Market taking a header of a sudden.
HAL on the tape saying it welcomes any court to look into its good faith effort to comply with EPA requests on frac fluids.
Attempting to averaging down in HAL
#134
"It's the first actual case of a direct Atlantic arbitrage that I've seen," one UK gas analyst said.
Thanks Bill
The financial angle will eventually make these LNG export markets a feasibility
ZTRADE – ZIM – HAL – High Risk Trade
HAL – Added another (40) HAL $36 calls for $0.08 with the stock at $33.40. Those ones bought earlier should have read bought at $0.18. Same thinking as earlier.
Z: Surprising strength for EOG today. See anything?
Tom – I see Barclays reiterating outperform. Other than that it is still gassy enough to be considered a takeout name on a day like today and I'd say that it would make a good add to COP or XOM in a pinch. The best fit I can think of would be APC taking them out. APC is not in the Bakken and could use some more US oil exposure, plus it would give them the largest (once combined) position in the Eagle Ford.
I find 136 amusing..shows how much the usa has fallen
crys — thank YOU for #134. You are all over this one!! 🙂
HAL…pulling back into what should now act as intraday support, 30 min chart updated, this would be a good spot to try…
JB — very timely! voted.
EGY resistance zone= $7.25 to $8
JB – Voted
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
Director of BOP's BUMMER on CSpan2-says he needs 100 mil for fiscal 2011 to implement reform, new regs, new hires-Graham says to try to get it in increased permitting or leasing fees-Browich says congress not favorable to idea-therefore needs from Fed budget-they are still trying to hire up for permitting, hence delays in permits.
GMXR – up 15%. Wow. They should have ground things to a halt sooner.
Re 150 – "I'm from the government and I'm here to help"
#150 s/b Bromwich
Bromwich-a lawyer
http://en.wikipedia.org/wiki/Michael_R._Bromwich
choices — yeah…. I want $100mm too! And people think only the Private Sector (and bondholders, of course) are "greedy"?? It's about the money. Always. Public, private, U.N., Global Warming, Green Initiatives… always follow the money. That is the direction of the underlying truth.
At least PUBLIC companies have to publish financial reports every 3 months. Who gets to peruse the $100 MILLION that Bummer wants to spend? Anyone? Anyone? Bueller? Bueller??
Latter part of article relates here-govt has not issued single permit since lifting of moratorium
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/09/AR2010110903764_2.html?hpid=topnews
re 157 … which is why its good to be someone like EXXI where they are largely re-entering well bores for recompletes and sidetracks and don't need fresh permits to maintain their current production.
ATLS
Other Buyers?
“I wouldn’t be surprised to see another buyer emerge,” said Scott Hanold, a Houston-based analyst for RBC Capital Markets. “This values the company at about $9,000 an acre for a Marcellus position. Reliance paid about $14,000 an acre for the joint venture in Atlas’s core holdings. Investors are going to want some more.”
Hanold rates Atlas Energy a buy and doesn’t own the shares.
http://www.businessweek.com/news/2010-11-09/chevron-to-buy-shale-gas-owner-atlas-for-3-2-billion.html
I guess i will hold for now.
massive dump in SLW… (loving it, went short this morn) Hedge funds moved into this sector in big way for past 2 months and would not be surprised for fall, at least the 20 EMA.
It seems all metals took a dive at the same time.
Welcome to 2 more new members today, please feel free to ask questions and thanks again for subscribing.
Ideas on shorting silver Sr Vtz would be much appreciated
We get oil and gas inventories tomorrow along with jobless claims due to Veteran's day being a govt release holiday on Thursday.
Quite the reversal today – trend or pause?
Feels like PT to me Ram. Big Fed POMO tomorrow, and key data on economy and our group. Maybe we test the 1200 and then 1189 levels. I'll send Nicky a note to see if she can chime in.
Still, it seems coordinated as if GS or someone said boo.
Beerthirty
API's out bullish
eep, EEP! A secondary!!
API reports crude inventories (7.398M) vs. Reuters +1.4M
distillate inventories (3.995M) vs. Reuters (1.9M)
gasoline inventories (3.448M) vs. Reuters (800K)
U.S. Crude Oil Supplies Plunged Last Week, API Report Shows
2010-11-09 21:34:37.730 GMT
　
By Margot Habiby
Nov. 9 (Bloomberg) — Crude oil inventories plunged 7.4 million barrels to 360.2 million, the American Petroleum Institute said today.
Gasoline inventories dropped 3.45 million barrels to 216.3 million, the report showed.
The Energy Department is scheduled to release its inventory report tomorrow at 10:30 a.m. in Washington.
Analysts forecast that the government report will show stockpiles of crude oil increased 1.5 million barrels, according to the median of 15 responses in a Bloomberg News survey.
Gasoline inventories probably fell 1 million barrels from the previous week.
Oil-supply totals from the API and DOE have moved in the same direction 75 percent of the time over the past four years, according to data compiled by Bloomberg.
API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Oil for December delivery fell 60 cents, or 0.7 percent, to
$86.46 a barrel at 4:31 p.m. in electronic trading on the New York Mercantile Exchange. The contract traded at $85.87 before release of the report at 4:30 p.m.
Silver stocks had been going up 10% per day for about a week. A lotta hot money only just discovered that silver exists… perfect conditions for a correction.
BOP # 155: The basic principles of global warming were discovered about a century ago before research grants even existed. Predictions made 30 years ago (that recently proved correct) about the Antarctic ice shelves were made before the issue had any political or financial footprint whatsoever.
During the cold war, the Defense Dept spent billions on all sorts of research. Some of it let to the creation of the internet. So according to "follow the money", the military were conspiring 40 years ago to create Google.
Thanks JBIMJ
If you are new to the site (or just don't listen to me when I post this) please make sure to bookmark the back up site:
http://www.zmanbackup.wordpress.com
Should this site become unavailable we will be over there.
Dman — never said "good research" could not be turned into Politial Control and Capital Capture. Most govt agencies start out with "good intentions." But money and power and money corrupt. Just look at the U.N. Panel on global warming… or ANY U.N. Panel, for that matter. What started out as a noble endeavor… well… 'nuff said.
TAT delays filing 10-Q, citing Amity Deal. ugh.
If you wanted to short silver you could use SLV, SLW just had good numbers so they might not have any good news in a while…
My advice is of course not to short it but then again I'm talking my book and I'm also aware that silver just broke out of a 30 year consolidation cup. You are probably going to be short for the weak hand profit taking but make sure you get out after you make your pennies per oz because I'm going to be making dollars for a long time yet.
HAL, intraday follow-up…slipped under the first channel support area, but held at the 200 period, the intraday chart still looks good going into tomorrow…
Thanks again JB. Strong work on top of your day job 😎
Good evening! Apologies for not updating for several days – I hate to be so unreliable but its just circumstances at the moment. I should be back a little more often starting next week….
Meantime this is what I am looking at. I think we are working an an abc wave correction for wave iv. Today we completed or are close to completing wave a, (maximum downside should be about 1205), then we bounce tomorrow for wave b to around 1219 – 1222, then down to between 1187 – 1196 for c. Then its back to the upside for new highs in wave v.
There is a more bullish count which in fact says the low is in or almost in and we go straight up to new highs over the next couple of days. What argues in favor of this count is the fact that we did not appear to complete five waves up today to the new high. It looked like three. If the bullish count is to play out then we are going to know about it pretty quickly tomorrow.
Yes there is a more bearish count but it does not fit with the cycles so I won't comment on it yet.
Nicky – never apologize, thanks so much, best to you.
VTZ- I agree with you and my little money going short is temporary. Thanks Nicky and all
Items of interest from APA conf call:
Leo Mariani – RBC Capital Markets Corporation
I just wanted to get a sense on the Permian. Kind of where you guys thought you were in terms of evaluating some of these new horizontal plays out There. Is Kind of early days for you? Have you done some test wells? Can you give us a sense of kind of where you are there?
John Crum
Well, I gave you a few examples of some things we've done and I think, we have tested eight different horizons out there with horizontal wells already this year. And we're finding some interesting results. I got to tell you, I'm not ready to share all of that information because was obviously some of that's critical as we gather up acreage around our successes. But we have had good results we've shared with you, a somewhat surprising benefit horizontal in these old water plugs. We'll just continue to be amazed. We're drilling wells that come in at 400 barrels a day on fields that have been 60, 70 years old and had been water flooded and on 10-acre spacing. So we think the potential for horizontal drilling in the Permian is just unbelievable, really.
I have been wondering why RBC got on the cover of AREX's deal. My salesman has never heard the name. Maybe the above has something to do with it?
On LNG:LNG, for us, means the monetization of large North American gas resources at oil length prices.
RMD – I used to work with Leo. Smart, aggressive analyst who can move a stock. Ex banker too.
His written work has not impressed me, nor has his color commentary. Maybe he is a great Investment Banker's analyst?
His modeling is solid and he generally asks good questions. Does he officially cover AREX yet?
Not yet. Still I best I see on AREX is Key. Tudor put a sell on it today, but have not seen reasoning. I remember West (I think) syaing that if PXD succeeded with water floods in the Permian the results would be "staggering". I think the stars are aligned for AREX, but talking my book. Expecting some facts tomorrow.
I will agree that today could have been a blow off top in silver the more I look at the close, but consolidation is all thats coming, then watch out.
Nickey; Thank you for your commentary #181