Market Sentiment Watch: Markets are troubled by a lack of G20 progress and fears that China will try to rein in growth/inflation with more interest rate hikes. In energy land, 3Q earnings are done except for a few tiny names. Fridays usually include the gas table and graphs and comments but given that it was out yesterday that left a quandary as to how to fill copy and make it look like I was working away while actually my thoughts centered on our 7th Annual Chili Cookoff this weekend (if you are local you are welcome on Saturday, if you out of state or country, we will lift a mug in your honor). With earnings season at an end the market often tunes out until just before the holidays. And I took some profits in my BEXP trading shares position yesterday as 20% in 10 days is too far too fast given my thinking that oil is do for some profit taking any week now. Anyway, with no gas numbers to talk about and no earnings to pre or post mortem I decided to rebuild the Bakken Players piece that was accidentally deleted a couple weeks back. It is updated with 3Q10 data and color. This piece will be archived on the Reports Tab. In Options land we have 1 week until expiry so I will be opportunistically punting some November calls today and Monday.
Ecodata Watch:
- We get consumer sentiment at 10 am EST, forecast is 69.0, last read was 67.7.
In today's post:
- Holdings Watch
- Commodity Watch
- Stuff We Care About Today - Bakken Players Update.
- Odds & Ends
Holdings Watch: ZCAT (Zman Catalyst portfolio):
- $5,100
- 98% Cash
- Yesterday’s Trades: None
ZIM (Zman Inefficient Markets portfolio)
- $10,500
- 28% Cash
- Yesterday’s Trades:
- HAL – Stock moving well post analyst call. Out on 50 of my 90 November HAL $36 calls for $0.59, up 124% to my average cost of $0.26 with the stock at $35.47.
ZLT (Zman Long Term portfolio)
Yesterday's Trades:
- BEXP common – Sold my trading position taken on 11/2/10 at $21.16 for $25.66, up 21%. I continue to hold my core position in BEXP but did not expect the name to run this quickly following earnings and don't need to be "over-overweight" there.
ZLT Portfolio Position Update
Commodity Watch
Crude oil ended yesterday unchanged at $87.81. This morning crude is trading off $1.60.
Natural gas closed off 12 cents at $3.93 yesterday. Record high storage trumped the prior day's slightly smaller than expected injection for a second consecutive day. This morning gas is trading down a couple of pennies.
- Tropics Watch: Nada.
Stuff We Care About Today
Bakken Players Update Part 1 & 2 – This will all be copied to a report on the Reports Tab today for future reference under the wildly original heading "Bakken Macro and Micro" Part 1 is comparity
Bakken Update – Part 1 - This update does not include all the players in the Bakken, only the 6 names on the U.S. side of the border where the Bakken is key (I've excluded VYOG for now which wants to be a pureplay someday and several names where they have a toehold but its not main course like at CRED). I aslo left out some of the big boys who play there (notably EOG and HES) as they have two many other irons in the fire to make comparisons with the pure players useful.This is simply a statistical update with a few comments thrown in for extra color.
- The biggest acreage holder in the play with nearly 900,000 net acres that may be prospective for the Bakken and Three Forks plays.
- Average well EURs have been somewhat, well, average. Not the big kahuna well results like we've seen at WLL and BEXP and like we are starting to see at some of the smaller names below.
- I sold my shares lower than here and am OK with that decision as the other names performance have bested it in the last year.I include these guys because of the acreage position but I don't intend to play here unless they take a significant nose dive or flat line for an extended period relative to the group.
- First there was Parshall - non-operated, run for them by EOG
- And Sanish, big wells in both the Bakken and the Three Forks.
- And combined they had 85,000 net acres, nice and in the core of the play at the time, but fully valued by the market just as they were getting the completion recipe perfected. While they will almost certainly end up drilling more wells in Sanish than previously though as thinking evolves on wellbore communication and appropriate spacing, the market simply ran the stock up too much to be justified by their Williston core acreage.
- Then came Lewis and Clark, a much bigger slice of acreage (233,000 net acres) in southwest North Dakota and bleeding over into Montana as a Three Forks Sanish play
- Now Starbuck, in east Montana threatens to add another 112,000 net acres ... look for an early 2011 test there.
- Management is the "under promise, over deliver type"
BEXP - IP King, Goes For Another Zone
- Traditionally not the cheapest name in the group
- On acreage they now are close to cheapest as they begin to prove up land beyond their original Ross and Rough Rider areas with Montana acreage.
- The knock of late here has been how do you top the IP announcements of the past and are they doing something funny to get those strikingly high IPs. Like flowing back frac fluids and calling them oil? Don't know, but the results to date have consistently been superior and that is translating into rising volumes on the quarter
NOG - Welcome to the Non-Operated Production Growth Hockey Stick
- Talk about being in the right place at the right time while holding the right real estate.
- 7 employees who are essentially paper pushers.
- AFE's come in at the rate of 5 to 10 per day, NOG writes a check to cover it's share of the working interest expenses as they are incurred (they generally have just over 10% of the wells they are in), and checks come back in and NOG deposits them, all the while monitor the direction things are taking in the Bakken and trying to stay in the way of the play.
- Given that they are working interest owners and the largest non-operated partner in the play for all of the major players here they are also in the best position to have information flow to repeat the process.
- 3Q Comment: Growth target for 2011 equates to 25% sequential quarterly growth... after the 4Q's 30 to 35% expected growth.
My sense is that this is the low case. If activity in the Basin continues to accelerate they will grow faster.
- Their shotgun blast of acreage is denoted below in yellow.
OAS - Welcome to the Experienced, Well Funded New Kid On The Bakken Block Who Holds A Big Slug of Acreage
- Management mostly comes from Burlington before it was bought by COP, lots of Rockies experience
- See my post here on this one for the most recent thinking.
KOG - An Operated Production Growth Hockey Stick With Important Catalysts on the Near Term Horizon
- 72,000 net acres in the play, once concentrated in the Fort Berthold Indian Reservation (FBIR) which gave them a first mover status there since it took time and effort to put that play together, and now moving off the reservation as well in a number of bear named plays, including areas known for much bigger wells than we've seen out of them.
- KOG's IPs have been less aggressive than some their peers but if you look at the 30 and 60 day average IPs it is apparent they drilling and completing similar type curve wells to the bigger IP wells drilled by the flashier names like BEXP.
- KOG has publicly stated it will complete a whopping 7 more wells by year end and exist with production of at least 2,500 BOEpd. Privately they are talking about higher production numbers. So small gets less small in a hurry.
This report will be archived on the Reports tab.
Other Stuff:
- Tune in next week for updated Orange Charts - probably by Wednesday and a fresh Catalyst List.
Odds & Ends Analyst Watch:
- Energy Sector - JPM lifts the sector to Overweight .... way to be on top of the ball there fellas
- HAL - Barclays lifts price target from $47 to $53, rating Overweight
- NFX - Jefferies raises target from $63 to $76, rating Buy
- OAS - RBC raises target by $2 to $24, rating Market Perform
- XEC - Morgan Stanley lifts target to $95, rating Overweight.
Doug Kass on the tape adding to Gold and Nasdaq shorts. He went net short the market two months ago too but got blasted on that call. The effort to make the next big market turn in the short term call is fierce as it gets you on CNBC more often. He may have a better chance with this one simply given the recent run but all of these talking heads seem to have gotten extremely short term in their thinking. I wonder when CNBC hauls out Garzarelli again.
Front and Center Watch:
MMR – Watching the $18 strikes for a loss reduction sale there, but probably holding those and the $17 strikes which woke up yesterday into Monday, just in case the Merger Monday / well news rumor mill takes effect today.
NFX – looking for an exit on the remaining half position of $65 strike November calls.
HAL – eying the rest of the $36 strikes for an exit …. noting that the couple of days following an analyst meeting is playing out well with a string of price target upgrades here.
Thinking we get TAT and BSIC results next week. TAT may just get punted out of the ZLT as 5 single digit midgets is probably 1 or 2 too many.
Great post todayt..helps clarify my thinking in the Bahken
Great report on the Bakken gang Z, thanks so much for all you do!!
re 3,4 – thanks much. I'll put it on the Reports tab under Bakken and then add Bakken focused links in there.
z — TAT reported y'day… I know you were otherwise occupied (WOW Bakken report — thank YOU). Anyway, I could only listen to the TAT conf call with half an ear, so will go back and read the transcript. Bottom line = hold until we get 1Q11 results, as the 1Q of next year should be the one where we see Promises translated into Results. jmho.
BOP – I saw the operations update but didn't see the financials, thought they were delayed 5 days, need to circle back on that.
Awesome Bakken report – as always.
Corridor – the small canadian company drilling with Apache in New Brunswick Canada – reported last night. No news on that horizontal they drilled near SWN's acreage up there. Still completiting the well – likely will be finished late November and testing done in December. No catalyst type action for SWN — yet.
Will go listen the replay now.
Tech a mixed bag here:
CSCO said govt spending on a worldwide basis slowed more rapidly than they thought
but today we have Intel on the tape raising their dividend and saying they are on track for their best year ever.
Wonder if this helps to offset Micky Mouse in the doghouse over that errant earnings release.
z — nope. You are correct. The financials are not out yet. They might be able to file them today or Monday. Delay due to the Zorlu acqtn.
Thanks 1520 – making a note of that well for the Cat List.
Thanks BOP, will go listen to the call on replay … sure would be nice to see some organic growth on what they've already got. The last thing I need in Europe is a play with millions of lease acres and a dribble of production. Messed around that game with FXEN in Poland 10 years ago and that description, I think, still applies to those guys. Of course, they don't have Malone's resume or deep pockets.
JPMorgan out this morning with a US Strategy piece they call the "Circle of Life." Why do we care? B/c Slow Joe is having to move from "neutral" to "overweight" on the Energy Sector. Wonder if that was his idea? Or did Thomas Lee have to drag him, kicking and screaming, to that call…
Anyway, they are hosting a conf call at 10 am today. We know Joe can move stocks… let's see if he can move an entire Energy Market. ha.
Maybe a live meeting of the ZEB subscriber tribe at the next chili cookoff? I'll bring the beer…
Shanghai Composite down 5.84%. For a little foreign perspective.
BDI down 54
All is right with the world here, however. We have QE2.
Would you be able to cook chili in Maui?
re #3,#4 Ditto Thanks
1. great rundown on Bakken… really helps clarify my thinking
2. CSCO slowdown? FNSR (a csco customer) just took guidance way up…. adding to the confusion. ALSO keep in mind that the CSCO qtr (which ends one month later than all the other tech names)… gives us a unique window into how calender-Q4 is shaping up for rest of the space. ALSO… in tech land, 50% of your sales are booked in the final 30days of the qtr. Bear in mind.. Q4 is supposed to be the strongest qtr in tech land.
Not sure what to think… but CSCO is so big and has such a large footprint it could be a harbinger of a future global slowdown
re 13 LOL
re 14,16 – had thought about a gathering in maybe Vegas back in 2008 but then the back half of 2008 happened.
So, today may be Nicky's down leg to 1189, or so, right?
Actually, happy to see oil drop off a bit here… ran awfully far, awfully fast.
Re 20. Maybe and yes. As I understand it, we are still holding on her bull count above the 1205 SP level.
Re oil. Agreed. Too far, too fast. I probably need to run an inflation adjusted look for the last year because Timmy has so sabotaged the dollar that a move from $60 to $80 isn't as big as it looks.
This QE2 stuff is as astonishing to me as was Uncle Ben's "worry" about INflation in Spring/Summer 2008. He was wrong then. He is wrong now.
But, I'm not a voting member of the FOMC.
Sea of red 20 minutes after the open as expected but not nearly as red as China last night.
NFX – working higher on upgrades to help me sell the rest of my calls.
Other green or flat points appearing in the group.
Zerohedge saying the POMO today is $8B, starts I think at 10 am.
We get Consumer Sentiment for October in 5 minutes, market should move pretty hard initially on this last piece of data for the week.
Consumer sentiment 69.3, a touch higher than the 69.0 expected
REXX director on the tape with a series of open market purchases.
Analyst Watch:
OII – Global Hunter cuts rating to Neutral
UPL – Citi initiates with a Hold rating and $50 target.
Heard the comment "buyers strike" amongst the babble on CNBC … have to agree with that comment. Or am I just being too complacent?
I'm here if anyone needs me but am tuning into the TAT replay now.
TAT Notes From Yesterday's Call:
They have taken all of the Thrace Basin the law allow from acquistions
Sending more CT units to Turkey – cuts time to complete wells
They should begin to balance completions vs drilling going forward
Selmo Oil field drill time is down "significantly" … was 25 days 6 months ago, now less but not quantified. Equals lower costs.
I reviewed the oil and gas prod numbers, sans financials the other day here:
http://zmansenergybrain.com/2010/11/10/wednesday-morning-dualing-oil-and-natural-gas-inventory-reports/
….
We got everything but eggs with that Bakken. Thanks, again!
PXD at BofA at 10:30 ET.
TAT Notes 2
Aggressive program in Turkey next year
Expl License 3599 – will drill license by year end, 5 structures with stacked pay on the license, acquiring seismic.
Cargo – thanks!
RMD – Do you have the full schedule?
NBL taking the first decent knock it's had in months. Technically I'd have to say it looks weak but give me another day like this and I may re-enter a small call postion.
Noting that a number of things that have run hard like coals (especially BTU and WLT) are getting hit a bit harder than the market/energy today.
Bakken Summary……man i like hanging out with smart guys like you! Keep up the quality product. Matt
don't have schedule.
hey, reef! You have any comments on GST you can share?
Reef – Way too kind. I know enough to be dangerous, you're the boots on the ground with the real input. Don't be a stranger.
FED delays treasury buying due to technical difficulties. Ben lost his PIN.
BOP – Is POMO enuf to move the treasury market, or is the market bigger than the fed?
PXD just said " will come back when we can tell you how much higher' (than 30%) increases in EUR will be from deepening Spraberry wells into the Wolfcamp (slide 11).
S&P at 1202, group now weak across the board, save REXX.
Thanks RMD – watching AREX.
GST- Latest Transaction Probable Arbitrage.
47.5m on revolver. ~7-10m Cash on Balance Sheet-
If GST has the capital to finalize acquisition of 59,000 net acres then they could not have paid more than $1000/acre.
An initial area of mutual interests ("AMI") will be established for potential additional acreage acquisitions in Ohio and New York along with the counties in West Virginia and Pennsylvania in which the existing interests are located. Within the initial AMI, Gastar will act as operator and will offer any future lease acquisitions to Atinum on a 50/50 basis, while Atinum has agreed to pay Gastar on an annual basis an amount equal to 10% of lease bonuses and third party leasing costs up to $20 million and 5% of the costs on activities above $20 million. Until June 30, 2011, Atinum will have the right to participate in any future leasehold acquisitions made by Gastar, outside of the initial AMI and within West Virginia or Pennsylvania, on terms identical to those governing the existing Marcellus JV.
"Under the terms of the transaction, Atinum will pay Gastar $30 million in cash upon closing and an additional $40 million in the form of a drilling carry. Upon the completion of the funding of the drilling carry, Atinum will own a 50% interest in the 34,200 net acres of Marcellus Shale rights currently owned by Gastar. Gastar will continue to serve as operator of all of the Marcellus Shale interests in the JV. The transaction is expected to close within 30 to 45 days and is contingent upon the receipt of certain required approvals from government agencies in the Republic of Korea and other customary closing conditions.
The terms of the drilling carry call for Atinum to fund its ultimate 50% share of drilling, completion and infrastructure costs along with 75% of Gastar's ultimate 50% share of those same costs until the $40 million carry has been satisfied."
59,000new JV / 34,200 old JV = 1.725
1.725 x $40m carry = $69 m in drilling carries.
1.725 x $30m cash = $51.7m cash
If GST paid $1,000/acre, GST would be paying $7.3m cash and they would gain a $69m drilling carry. Of this drilling carry, Atinum would pay 75% of Gastar's 50% share.
With ~50m shares outstanding this is an over $1/share gain for shareholders!
TAT call – finished listening to the replay – mulling. Patience may pay off here, things starting gel, may give them a little more time.
GST comment, thanks, you think they paid that little.
Simmons notes NUE did drilling program with large N AM producer (they guess ECA) that will deliver gas to their new mill in LA. "at a price…equal to or less than" their low cost Trinidad supply contract.
They also note an Xcel/APC 10 yr. deal beginning 2015 at $5.48.
Long term industrial contracts are happening.
dsx reports monday, its down 4.3 % today– thats overdone–just bot 1000 shares at 13.38
Even though I said avoid bulkers, this one "MIGHT" be worthy of a day trade- buy today sell monday
bdi down over 11 days in a row
http://www.tradewinds.no/drycargo/article570683.ece
#38 — elduque, I honestly don't know. I always figured it was more psychological than anything else. I've seen govts do open mrkt operations in an attempt to "stabilize" currencies, commodities, interest rates. Every time i hear this, i get a mental picture of that little Dutch Boy, sticking his finger in the crumbling dike, hoping to hold back the massive amount of flooding that is building up behind the barrier.
I also think of Bucky and Billy Hunt and the silver market in early 1980.
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
Neither story ends well.
bop- You buying GM today? hehe
RMD – EOG noted on their call their Trinidad volumes are going to be off a bit in 2011 due to lack of activity.
bill — i'm buying as many shares as YOU are. 😉
reef gst- good stuff
China is distorting the demand / supply for distallate [by using governent fiats] which are causing significant shortages and driving up prices….a case study in the unintended consequences of govv't fiiats [are you listening Ben?] ….. According to the Bloomberg article this will have global implications.
http://finance.yahoo.com/news/Fuel-Squeeze-in-China-Drives-bloomberg-2527269871.html?x=0&sec=topStories&pos=6&asset=&ccode=
p.s Najeeb Taleb was on Bloomberg this AM dissing Ben and the Admisnistration…………..a fascinating interview.
Bill
Voted………thanx.
Thanks BOP- that is my sense of it. Although, "the don't fight the fed" theme is very popular. Although I can't remember a time when the fed really has so little to fight with. It really seems to me that mr. market is going to go after them at some pt. in time and it isn't going to be pretty.
TSLA surges to new highs after CEO comments that they won't be hooking up with GM.
J. Russell Porter, Gastar's President and CEO, stated, "This acquisition significantly increases Gastar's exposure to the Marcellus Shale and positions the company for long-term reserve and production growth. This was a unique opportunity structured by Gastar to allow us to essentially de-risk the acreage from a Marcellus Shale perspective prior to committing to the acquisition. The results of the work undertaken by Gastar, and the fact that this acreage is on trend with other successful Marcellus Shale wells, confirm the attractiveness of this opportunity. Gastar's joint venture partner in its existing Marcellus Shale assets has the right to participate in this acquisition on pre-determined terms. Once we know our joint venture partner's intentions, we will determine whether any external financing will be sought. Either way, Gastar has the ability to close the transaction with existing sources of capital."
Confirmed with the CFO yesterday that "existing sources of capital" does not include an asset or equity sale. Unless management is lying in their press releases then the most they could have possible paid was less than $1,000/acre. If Atinum participates, expect this to be this first of several transactions.
Fantastic Reef, thanks a lot.
Reasons for Energy Sector upgrade
1) took oil price to $90, $5 higher than current Strreet
2) centrist mood in DC to reduce regulatory creep … maybe so in terms of carbon capture but there is an OKC story today about E&Ps worried about new stuff coming out of EPA that doesn't have to get through congress to raise E&P costs.
3) and they left out the best reason to raise, because they have missed a big move in the group
Watching NOG for a post earnings entry. We hit $22 before the call and have been backing ever since on profit taking and perhaps some disappointment that guidance "only" calls fro 25% sequential growth for the 1Q to 4Q11 period, after 4Q10 grows 30 to 35%.
Z – thx for the Bakken review, great stuff. Now I can stop creepily looking over your shoulder.
Z- Article in WSJ today discussed Cheniere working on a deal with Chinese for LNG. Aubrey says he is negotiating to supply the nat gas. Cheniere's new facility could export up to two billion cubic feet of gas daily. Says gas bought at $4 per MBTU could be resold for $12 in China. Your thoughts on potential future impact to domestic nat gas E&P players?
Isle – It is definitely a positive for the LNG tanker names. However, there is a large surplus of LNG from stranded gas sources coming on line in the next 5 years. So the International number should not remain at $12.
I can't believe everyone is tripping over themselves to buy the gm secondary. Whats changed?
isle-LNG is liking the news.
increase the price and let everybody in
And suppose they did and it fell 15 % , everybody would be bitching that they got screwed
Sitting on hands waiting on Nicky's level of 1189
Some colorful comments from Cross-Asset Class Strategist… while we wait for the mrkt to do it's sell-off thing…
http://www.capmarkets.com/ViewFile.asp?ID1=148414&ID2=451890969&ssid=1&directory=6571&bm=0&filename=11.12.10_The_Deli_Sized_Red_Flag.pdf
GE CEO travels to India with the Obama Entourage. GE announces they will buy as many as 25,000 electric cars, almost half of them from GM. GM prices IPO this week.
Just connecting the dots….
Re 67. That's hilarious. I heard one National Partisan Radio story on foreclosures a couple of weeks back. It was an interview with a NY Times reporter who kept talking about judges willy nilly pushing through foreclosurse cases without "knowing all the facts of the cases." Nevermind that some of these folks hadn't made a house payment in 2 years. The banks were obviously evil and at fault. I just mentioned the comment in that link about the education status of the people hired to do foreclosures to Petra who has a degree in Russian and an MBA from a better school than mine and who worked for a time in foreclosures and she basically ranted that a 10 year old could do the job. NPR = sheesh, ugh, double ugh.
Billl………..Stealing Candy from a BABY…….NOG $20 90 day Reverse Convertibles with 80% knock
Schwab won't allow retail investors to do Reverse Convertibles, but Etrade & Ameritrade wil……… so placed my orders today. [@par opens Nov. 23rd.]
What a great investment vehicle…………………yield is now 14+% for 90 days, and am hopping I get to own NOG at .16. …..like stealing candy from a baby.
MANY THANX for alerting us to this opportunitly!
Z…………..what a great forum you provide.
I was looking at the HAL DEC options – not alot of premium is coming out.
Thanks Ram – had not looked yet. Was thinking I'd get out of my remaining Novembers and then roll longer next week. I was just considering adding the common to the ZLT, a bit torn on adding anything at the moment as this is one red day and they often come in multiples.
crysball: NOG RC. You will own the stock at $20 if it gets to $16. For a $10K investment (minimum) you will own 500 shares if it is at $20 on 11/23 close.
http://www.bloomberg.com/news/2010-09-23/retirees-duped-by-derivatives-with-wall-street-structured-note-sale-surge.html
Please use caution with these reverse converts as these are highly custom "retail products". Just a caution, not saying they are inapporipate if properly homeworked. But read the whole prospectus and then ask the broker for a copy of his internal use only cheat sheet as well.
Size volume in BEXP December 27 call options.
Crys: 70 also the 14.50% is an annual return. Because you own for only 3mo you receive 3.625% for 3mo. Don't get too crazy. They don't think of these things to loose money.
75: There is also vol in Apr 27. Looks like a calendar trade.
SSN – reading the Annual Circular (proxy). Good work if you can get it.
Want to lift annual non-exec directors fees to $500,000 from $250,000
Want to issue director MacLachlan a mere 7 million options. Director Rudenno a mere 6 million and director Skipper a mere 6 million.
Aubrey needs to hire these people.
Guess which way we are voting the proxies.
Makes sense, thanks for pointing that out Tom.
re Williston- Aubrey said they had over 100,000 acres.
re 80 – true but he was cagey about what it was they were targeting or where about they are leasing.
re 78 – well, they are from Australia.
re 69 NPR= NATIONAL PARTISAN RADO
Thought NPR= National Populist Radio……………..all the NPR stations are in fund raisng mode……….and they are all WHINING about the upcoming hostile FEDERAL FUNDING CLIMATE ………..as much as I love NPR programming, they deserve what they will get what from the newly aligned Congress .
ZTRADES – ZLT
NOG – Added another position in NOG common, for an average cost of $19.22. The stock came off following the 3Q results call after it tapped $22. This feels like enough is enough on the downside for them (off another 5% today), but if it falls further I may add a final piece to round out my position here.
KOG – Added a second trading position at $4.23. My sense is this will be a 3 to 6 month hold in addition to the Core position which is likely to be held longer.
elijah — #78… OMG! That is just WRONG. That is STEALING from the shareholders!! Thank you for pointing that out. I will vote NO. Then think hard about selling my shares at my earliest possible exit point. That is too outrageous.
And one of the many many reasons I typically do NOT invest in companies based in Australia. Aussies are a lot of fun to go drinking with… but business practises are a bit lax, in my experience. UGH.
Housekeeping Watch: Please do not forget to bookmark this site.
http://www.zmanbackup.wordpress.com
re 78. As a point of clarification …
There are nearly 1.7 B shares in Australia which is what you are talking about for comparative purposes on those options, not the 83 mm U.S. shares you see in my NAV calculations. That makes 7 mm options, if exercised, at about 0.4% of outstanding. These numbers are bigger than in past years to be sure, probably has to do with getting the stock from point nowhere to where it is now. Doesn't move the needle on what I think about the stock. CHK is telling people they have 1,000+ BOEpd wells in the Niobrara … that bodes well for SSN in two ways. 1) It proves it works in SSN's part of the play and 2) SSN has a 3.8% ORRI which means cash flow from that and from their Bakken wells while we wait for them to spud their own Goshen County test. Eli – you ought to send Terry Barr a note regarding your thoughts, he generally responds to emails with a few days, especially if you let him know you either own a lot of stock or that you write an online newsletter.
BOP Yupp …….I guess the SSN directors need that much to rent the Netjet to get the family to Aspen this winter.
#83 – thanks, Z. Been watching and waiting on NOG (I'm the one who asked why it was weak at $17+ a few weeks ago).
Anyway, I like the story and the metrics, so I took a little 1% starter at 19.22.
Z – Forgot to mention Terry Barr's option package is 10 million shares at an 8 cent exercise
elijah — on the other hand… I don't see you volunteering to exit SSN. So, guess i should untwist the ol' panties and pop a few CigRx. inner peace… inner peace…
#86 & 90: Guilty as charged….I'm not exiting….yet. And for the reason Z enumerates in 86. But surely Aubrey lent him his "compensation insultants".
best to do that BOP, I decided years ago I was going to carefully pick out one local business and buy a boatload of its shares…that was my get rich plan. I narrowed it down to two candidates. I trusted one of the guys and thought he had a great business….I didn't trust the other one much but he was connected politically…..I put my money with the guy I trusted and he went broke…the other guy who I didn't trust got through a Fed fraud matter I didn't think he'd get by and sold his company out…if I'd just split the money between the two I'd be worth four times what I am today even with one of them going down the tubes.
I had a client get a rough shake with Aubrey some 20+ years ago, and I don't like him much…but I can tell you if Z adds CHK to the ZLT I'm buying…previous grudge be damned.
Less than half a percent of the nearly 1.7 billion (with a B) shares outstanding.
Terry gets $250,000 base + $50,000 bonus if he meets his goals. Last trade of the stock in Australia was 7 cents.
jivey — thank you for sharing that story. Constant reminder to try to keep some of the emotion out of the investment decision.
Goal is to make some personal coinnage… not to lead a one person Rage Against the Machine. Best to leave that to the Ralph Naders of the world. Thank you.
I've watched commentary on the board about biases/predjudices against people etc. I'm older than most here and I can tell you my biases/grudges have cost me more than they've made me….
thx for what you do here BOP and that goes for many, many people….I keep my mouth shut most of the time now and benefit immensely
jivey — wow. I feel like I just reached the top of the mountain and caught what the guru had to say. Clear-headed advice. Thank you again.
#92,#95-good advice, jiveyjr-thanks for sharing-a lot of lessons I'm learning on this board. I also try to keep my mouth shut most of the time but invariably I do not always succeed.
Jivey – Agree with the bias comment unless we are talking about airlines and then I can't do it unless its LUV and they are a different animal. But please do not be quiet as I have found your musings to be beneficial.
I've never met Aubrey but he's friend with my uncle in OKC and I like that guy so he must not be all bad, lol.
Fair enough on Terry's base comp. He deserves more in that regard.
It was the nonexec directors 500,000 up from 250 that blew my mind. And, it still does.
Last hour rally, rally, rally.
well, I've been watching Nicky's level, which coincides with another EW guy I follow but maybe it won't get that bad.
it looks as though they are going to stick save it off the 20 ema around 1096….
re: 98…well as it relates to Aubrey, it was a long time ago and he was just starting out and made a mess in the Austin chalk…he was hard to get information from and his books were a mess….
but all that said, I'm not who I was 20+ years ago….and he's not either….hopefully we are both better people and I am not going to let my biases beat me out of money and opportunity….I get paid on price not personality
As I recall Nicky had a support range of 1187-1196, so far so good.
thanks reef for all the GST work and info.
Lynn – got 750K total comp back in 2006 when the Bakken was only a glimmer in his eye.
I guess I need to hold back just to minimize the ZMAILS. Sorry ZMAN.
Z-do you still own OAS?
Re 106. I do not understand, please to explain.
Re 107. I still own my Half sized position. Cost basis is $17.34
Beerthirty. Have a great weekend.
thx Z…wish I wuz where you are…I'd go to Sammies for a pizza!