Wednesday Morning

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Market Sentiment Watch: Another nervous looking day with all eyes on Ireland who continues to claim that they don't need an EU bailout. At the moment futures are green but not by much. API data was largely bullish but crude is sinking again this morning towards the $80 mark as continued fears of a Chinese slow down hit a number of commodities. We tabled a look at a number of single digit midgets due out today until the Thursday post in favor of working out some kinks with the new server overnight.

Ecodata Watch:

  • CPI came in at 0.2 vs 0.3% expected (Core came in flat vs 0.1% expected)
  • Housing starts were 550,000 vs 600,000 forecast

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today – NOG
  5. Odds & Ends

Holdings Watch: ZCAT (Zman Catalyst portfolio):

  • $5,000
  • 99% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $5,800
  • 1% Cash
  • Yesterday’s Trades:
    • HAL – Added (25) December $40 calls for $0.34 with the stock at $35.35, on a little market wide weakness. I'll be exiting the rest of my November calls between now and week's end.
    • WLL – Added (5) WLL December $110 calls for $1.84 with the stock at $103.60. Expecting an operations update any day now.
    • HAL – Added back (40) HAL November $36 calls for average cost of $0.25 with the stock near $35.

Commodity Watch:

Crude oil fell 3% to close at $82.34 yesterday, blame the equity market tumble and a stronger dollar. After the close, the API released another mostly bullish looking report (see below). This morning crude is trading off slightly.

Natural gas waffled lower by 3 cents to close the day at $3.82 yesterday. We continue to be range bound or in an extended bottom. I expect spikiness on cold weather snaps and in the event of better than expected withdrawals (or a smaller than expected injection this week) with little sustainability much above $4. This morning gas is trading up nearly a dime.

  • Marcellus Watch: Pittsburgh bans drilling in the city, commenting that it will not become the Fort Worth of the northeast.

Early Read On Natural Gas Storage: Street is at 12 BCF for tomorrow’s report.

  • Last Week: 19 Bcf Injection
  • Last Year: 21 Bcf Injection
  • 5 Year Average: 2 Bcf Injection
  • 10 year Hi: 33 Bcf Injection
  • 10 year Low: 90 Bcf Withdrawal

Oil Inventory Preview

API Watch: Mostly bullish

  • Crude: Down 7.7 mm barrels - last week API said it would be down 7.4 mm barrels and EIA reported a 3.3 mm barrel decline so I'd look for another larger than expected drop today.
    • Cushing - API is looking for a 1.1 mm barrel build. Normally I'd say their weekly data are not synced between regional storage and the total but the decline Cushing seems to have been far more than would be accounted for by midwest refinery demand and should be coming to a flattening if not a modest rebound. For the past 3 months, EIA and API have agreed directionally here which may mute an oil rebound that would otherwise be prompted by such a large headline drawdown number.
  • Gasoline: DOWN 1.7 mm barrels
  • Distillates: Up 0.2 mm barrels - this would be a disappointment but given last week's giant 5.0 mm barrel decline, not entirely surprising. 

Stuff We Care About Today


NOG Announces Secondary, Lays Out 2011 Plans, Affirms Prior Guidance

  • The Deal: Offering 8 mm shares, probably at $18.50, with another 1.2 mm in the allotment which I'm sure gets done so we are probably talking net proceeds of just over $160mm while adding 17% to the current share count.
  • Guidance Reaffirmed

    • Sees 4Q up 30 to 35% sequentially
    • And 2011 average of 6,500 BOEpd which equates to 25% sequential growth quarter after quarter as next year progresses.
  • Budget:

    • 2010 will be about $132 mm (25 net wells @  $5.3 mm / well and not including acreage adds)
    • 2011 now seen at $227 mm:

      • For this they see drilling 36 net wells ($6.3 mm per well)
      • I would strongly suspect that this rises as the year goes on given their non operated status and the popularity of their acreage in the Bakken.
  • Balance Sheet:

    • Pre Offering:

      • $39 mm cash
      • No long term debt and nothing advanced on their line of credit.
    • Post Offering:

      • $200 mm cash
      • 0% debt to cap
  • Nutshell: Not at all surprised to see them pop off a secondary although my timing on the trading position could have been a little better but that's neither here nor there as far my thinking goes on the stock.  The pullback during the call and subsequent days of trading lower are probably due to the thought that they were overdue for a deal and might do one, along with the general sell off in the market. With this offering that weight on the shares is lifted. Note that management's early guidance on 2011 of 6,500 BOEpd represents growth of 170% and is more of a downside case than one would suspect given the magnitude of the rise. Based on that production growth and my thinking on oil prices I put cash flow north of $115 mm next year, which, combined with the proceeds of this deal, takes care of the company's capital funding requirements for at least the next 12 months barring significant leasehold acquisitions.

Other Stuff:

  • BEXP Presentation at Stephens; today, 2 pm EST.
  • Look for the mid cap Orange Charts on Friday.
  • BP Spill Panel Report Watch: The Panel released an interim report to Reuters last night and the major points seem to shift blame back to BP. Two major criticisms highlight A) BP's choice of well design (though the Panel said there was nothing wrong with the design and that it was standard not 2 weeks ago) and B) BP's decision not to run a bond log on the cement job. That last item is what the SLB crew was on the rig for. BP elected not to run the test, not HAL. As soon as the SLB guys were told no bond log would be run they hit the helicopter for shore.
  • VNR on the tape acquiring ENP from Denbury, says immediately accretive to distributable cash flow.
  • James Bond Watch: Scorpio Tankers prices offering

Odds & Ends

Analyst Watch:

  • Nothing so far, will add in comments.

146 Responses to “Wednesday Morning”

  1. 1
    snuhart Says:

    Seeking Alpha discussing a few of the names followed here.  I think it's Seekingalpha.com

  2. 2
    jat Says:

    Z, it was a build at Cushing, not a draw

  3. 3
    crysball Says:

    Bakken Drilling  rig  update (by  operator)………lists  who has what rigs, and where they are located   [rig by rig]……also  a time series  on  rig growth

  4. 4
    snuhart Says:

    RE # 1  Sorry. Here's the complete addresses:
    seekingalpha.com/article/237163  and

  5. 5
    crysball Says:

    Z,   re NOG Secondary
    In addition  to the Equity  NOG   via RBC  is also offering   90 day  reverse convertibles…………..given the short term do  these  show  up  as  short tem debt on the balance sheet?

  6. 6
    zman Says:

    Thanks Jat, fixed it. Text remains the same as though I typed draw I was thinking build.

    Crysball – that's a bank engineered product, nothing to do with NOG's balance sheet.

  7. 7
    BirdsofpreyRcool Says:

    BedTime Market Strategist weighed in with a few thoughts and comments last night —
    The Quality Bid is Airborne.
    One way to spark a bond market rally is to create a flight to quality bid. It was not only apparent in the Treasury market, which experienced a bounce, but in the Dollar as well. The Dollar rallied 1.2% versus the Canadian Dollar and Swiss Franc. The Dollar rallied 1.1% versus the British Pound, Swedish Krona and Brazilian Real. The Dollar only rallied 94 basis points versus the Aussie Dollar and 74 basis points versus the Euro.
    It is tough to pick a place to start our discussion on such a long day with lots of action and numerous headlines. Once again, China set the tone indicating it would continue to clamp down on inflation. One way to do that is to threaten punishment for anyone speculating in agriculture futures, as was reported by the China Securities Journal. As usual, we believe the Government tapping the brakes is a positive development, but there are still a few bumps left in the road. Shanghai lost another 4%, bringing its 3-day loss to 8%. The China theme continued to fuel the correction in the Commodity Markets.
    Not to be outdone, Europe remains in the headlines as QE2 headlines have given way to SC2 (Sovereign Crisis 2). Just over a week ago, we noted that German Finance Minister Wolfgang Schaeuble started talking up his new plan. We pointed out that "If the spring of this year is any guide, when Schaeuble starts talking, the uncertainty level upticks and the Euro drops." We should have also noted that while the talk benefits Germany, it wreaks havoc on weak EU bond markets. We could not agree more with the comments made by Greek Prime Minister George Papandreou in a <http://www.elabs10.com/c.html?rtr=on&s=x8paoo,660g,352,7c0y,pyb,1l20,e2o> speech yesterday when he stated that,
    "Some have suggested, such as the German government, that bond markets [sic], banks that finance nations with high debt should be prepared to take the course of a possible default or haircut in the future. You know what the response to this proposal was, we saw it last week. Whether understood or misunderstood, it created a spiral of high interest rates for the countries that seemed to be in a difficult position such as Ireland and Portugal. This could create a self-fulfilling prophecy. It is like saying to someone since you have a difficulty, I will put an even higher burden on your back but this could break backs. This could force economies towards bankruptcy."
    If we did not know better, we would say there are now German to Greek dictionaries in the world. Today, Germany's linguistic cousins, Austria, asserted that Greece has not met its commitments, and Austria would not release its December bailout tranche. Later in the day, Austrian Finance Minister Josef Proell announced that Austria will pay if Greece meets its commitments.
    To us, we don't care who's right or wrong, who is meeting commitments and who is not, or who should restructure and who should not. What we do know is that the EU created a mechanism through which to address these Sovereign Debt problems in May. Now, as we have another flare-up, we question why new approaches are under discussion. This is only creating additional uncertainty in the headlines. We can understand the need to replace the temporary facility in 2013, but half-baked ideas should not be floated in the media. Obviously, it is all a great deal of political jawboning and there is a lack of leadership in the EU. These events are prime examples of why the Dollar's demise will be delayed for some time. The Dollar still remains the only house in the neighborhood of reserve currencies. It is starting to appear as though Germany intentionally starts these conversations when the Euro gets too strong. Although it is unlikely, it would be interesting to see the weaker EU nations threaten to walk from the EU because of Germany. Germany and France have the most to lose if that was to happen.
    Domestically, the Federal Reserve appears to have commenced a QE roadshow to explain the policy. The problem is that none of the speakers is Chairman Bernanke and there may have been overkill as some mixed messages were sent. Boston Fed President Eric Rosengren said he expects the Fed to purchase the full $600 Billion. St. Louis Fed President Jim Bullard said if economic data picks up then he expects the Fed will not purchase the full $600 Billion. Our view is that if the data picks up, the Fed will still purchase the $600 Billion but over an extended timeframe as they did in QE1. Isn't it great to have Congress back in session? Senator Durbin, the Democratic Whip, announced that, after a meeting between Senators Reid and McConnell, he is not very optimistic that the tax cuts will be extended. Are these legislators are going to give the electorate a reason to vote the rest of them out, seems unlikely. The Republicans have decided they want to eliminate the Fed's dual mandate. They want to eliminate the "full employment" aspect and solely focus on "inflation." That alone might be a reason to put deflation back on the radar screen. Senator Corker, who is introducing the pertinent legislation in the Senate, had trouble explaining why the Dollar has rallied ever since QE2 commenced. The Fed has brought this reaction upon itself but in an economy with 9.6% unemployment, if the first thing the Republicans tackle as they gain influence is the Fed's full employment mandate, not only will they most likely fail, their rise similarly will likely be short lived. Last but not least, another 1.5%-2% down day in U.S. Equities would prove a nice long setup going into Thursday's Initial Jobless Claims report.

  8. 8
    zman Says:

    Re NOG – I think this is one of those cases where the stock will trade up following the deal as it came off into it and the deal weight is lifted, no other deal should be needed for the next 12 months, the proceeds will be used for operations and leasehold, and not simply the repayment of debt, the name should be cheap on forward multiples and the growth rate is near best in class.

  9. 9
    BirdsofpreyRcool Says:

    A little color and commentary on yesterday's trading action —
    ·         In terms of desk color, on Fri and Mon, the real problem was a lack of buyers (as the dip buyers, who had been such a force since the rally commenced on Sept, were less aggressive in stepping in on the weakness).  However, during Tues’ session, the desk noted a pickup in selling demand (and some more confidence on the parts of shorts); volumes also rose.  That said, the selling wasn’t panicked and so far the weakness of the last 1.5 wks can still be placed in the camp of “consolidation/digestion” of the Sept advance.  The market has pulled back ~4% from its 11/5 highs and is now in the red for Nov, but remains up >12% since Sept 1.  Correlations surged today, spiking from ~53% on Mon all the way to 63% (signaling that equities were sold across the board w/little discrimination among sectors).
    ·         Equity sectors – Commodity-based sectors got hit very hard as China inflation and rate hike fears sent commodities down sharply. Outside of that, most sectors were pretty much off with the tape, with a few defensives (HC, utes, staples) outperforming. Materials were the worst sector in the market, falling 2.15% on weakness in metals, ferts, and paper/pulp stocks. Energy was off close to 2.1% on weakness in coals, and integrateds/services/drillers. Tech was off 1.8% on weakness in MA and solars. Financials were off around 1.6% on weakness in regional banks, REITs, and DFS. Telecom was 1.6%, moving lower on weakness in PCS, Q, FTR, and VZ. Industrials were slightly ahead of the tape, moving lower on weakness in oily E&Cs, miners (TEX, MTW, JOYG) and some ag equip names (CNH, AGCO). Discretionary was off around 1.35%, outperforming the tape on strength in home improvement names (HD earnings) and URBN (earnings). HC was off around 1.3%, outperformed the tape on strength in a few biotechs and a bit of a defensive bid. Utilities were off 1.2%, outperforming as investors moved into the lower-beta group and on strength in ITC (competitor upgrade) and DYN (Blackstone raised offer to $5/share from $4.50). Staples were off 1.1% and were the best sector in the market, outperforming on strength in WMT, beverages, and protein names (grains prices lower).

  10. 10
    zman Says:

    PETD taking a hit on the open on news of common and convertible offerings and the buy in of partnerships.

  11. 11
    Zorgnak Says:

    overnight low held…

  12. 12
    Zorgnak Says:

    SP Futs

  13. 13
    zman Says:

    Rewriting the law watch: Story out saying that Ken Feinberg is working on a document that will help BP collect money from its contractors. Ken is administering the $20 B fund but says that ultimately, this rewriting is "his call" in his roll as administrator.  Ken's deal would require claimants to quit their right to sue BP and in turn would give BP the right to sue its partners, who are indemnified even to gross negligence under contract. HAL and others must feel like the old GM bondholders.

  14. 14
    zman Says:

    NOG trading to $18, its 50 day sma, I think it prices there to $18 to $18.50, slightly under or slight over $160 mm net capital raise.

  15. 15
    zman Says:

    Was on a call, will be on another in a minute. Holy reversing XLE charts. HAL completely not paying attention to that story in 13. Sense is that Czar proclamations will not hold up in court.

  16. 16
    AAA Says:

    Z,  re SLB guys leaving the rig via choppers, I had heard this before and it was pointed to as evidence that they thought the rig was in imminent danger.  Is that your take?
    As for Feinberg, are you suggesting that he is somehow trying to strip BP's contractors of their contractual protection?  I don't see how that would work.  He can't just amend their contracts.

  17. 17
    cargocult Says:

    BOP-thanks for the "color" this am. Your contributions are greatly appreciated.

  18. 18
    jat Says:

    I'm gonna swing by the NOG lunch but haven't followed in detail, let me know if you guys are interested in anything specific

  19. 19
    zman Says:

    AAA – yes, first I thought it was just a rumor but have read three different accounts from sellside firms that seem to confirm it. Basically they looked at the positive and negative pressure test data and were going to run the bond log, BP said no, we are swapping the mud for seawater, SLB guys said seeya!

  20. 20
    BirdsofpreyRcool Says:

    #13 — I can not stress ENOUGH how seriously bad/wrong/damaging that is.  The ability of an unelected, point-source "official" to unilaterally re-write law to bend to his own reality is beyond the pale (whatever that means… beyond the pale). 
    However, Chrysler and GM Hugo Chavez-style asset grabs were done in the heat of the moment, at the peak of a crisis (which they did not let "go to waste").  That is the only reason (I hope) that "our government" was allowed to get away with that kleptocratic move (and crony-capitalistic gift to the UAW).  The BP Spill Fund is not being operated under a time-sensitive crisis.  Therefore, any move by the autocratic (and unelected) Mr. Feinberg (at the behest of his comander, BHO, of course) can and will be challenged in a court of law and over time.  This is one heist, I do not think BHO will be able to pull off.

  21. 21
    zman Says:

    AA – re Feinberg, the story I read said that what he is doing will intentionally open the door for BP to sue its contractors for a share of the $20 B fund above the $75 mm liability cap. Don't know how that would be but am not a lawyer.

    re 17 – ditto


    1) what is their appetite for further leasehold acquisitions in 2011?

    2) Where do they see prices going for non-operated acreage in the Willston?

    3) Does a lot of opportunity to acquire leasehold still exist at their current $1,600 or so per non-operated acreage?

    4) How about on the same questions on the Montana side of the border

    5) What are they basing the $6.3 mm completed well cost for 2011 on?

    6) How much, roughly, of the 6,500 BOEpd figure is "in the bag" due to wells already drilled? Would they put a number on it for their growth if Williston rig count climbs some percentage next year … like if Willston climbs 10% or 20% next year, what does that do to your thinking about 6500 BOEpd.

    7) How are you set for oil and gas takeaway capacity.

    If you hear anything on those lines would like to hear about it, thanks.

  22. 22
    zman Says:

    20 = well said.

    HAL Wildztrade from yesterday is on borrowed time.

  23. 23
    zman Says:

    NOG stock not exactly getting plugged and abandoned on their offering announcement. I may buy a second trading slug in a bit here.

  24. 24
    zman Says:

    Oil numbers in 5 minutes

  25. 25
    bill Says:

    23 I already jumped on it
    Reminds me of BEXP which  offered shares at 10, i got pissed and sold> big mistake

  26. 26
    zman Says:

    EIA Oil Inventory Report

    Crude down 50 cents at $81.83 pre release


    Crude: DOWN 7.3 mm barrel

    Gasoline: down 2.7 mm bbs

    Distillates: down 1.1 mm barrels

  27. 27
    bill Says:

    from fearnleys today>
     vlgc is very large gas carriers>
    The VLGC market rallied to a 26 months' high last week – we haven’t seen spot freight rates (Ras Tanura/Chiba basis) in the very high USD 40's per ton since September 2008! "Everybody" saw that rates would start firming a few weeks ago, however, not that many were able to foresee the large number of fixtures that has no doubt helped building a stronger fundamental underneath the rise. Moreover, the surging rates of late have been caused by a solid increase in FOB volume available in the MEG concurrent to very strong LPG demand in all the eastern markets despite the comparatively high LPG prices. November VLGCs in the MEG were practically sold out by mid month (some early December vessels were booked, too), and this tonnage balance has not been seen since the summer of 2008. Very high USD 40' per ton equals USD 30,000/day on a modern 82,000 cbm vessel – similar to a glimpse back in June this year when nominal ton rate was lower but bunkers cost USD 50 less per ton than now.

  28. 28
    zman Says:

    More EIA


    Gasoline : Down slightly week to week, off 100,000 bpd

    Distillates: Off sharply, probably backing out some overage in the last couple of weeks

    Not as bullish as the headline numbers on inventories look

  29. 29
    zman Says:

    CNBC skipped the oil inventory numbers, talking about the GM IPO instead. Wow.

  30. 30
    zman Says:

    More EIA

    Cushing was up large as API forecast. Up 1.3 mm barrels week to week, not at the highs but shooting back up to them. So far crude doesn't really care, now back up to $82.32.


  31. 31
    zman Says:

    More EIA

    Imports fell to a new recent low, below 8 mm bopd, with OPEC cheating as much as they the oil is being diverted to China, India and staying at home, either for demand or for tankering.

  32. 32
    zman Says:

    NOG went green while I was typing.

  33. 33
    elduque Says:

    Z thanks for the color on the EIA and Cushing. I got lazy and did not look at it. You saved me the price of a subscription, by your work.

  34. 34
    zman Says:

    Dude … Sweeet.

  35. 35
    zman Says:

    CNBC's fascination with the GM IPO to the neglect of all other items is akin to last nights nightly news coverage of the royal engagement. Lots of useless noise.

  36. 36
    bill Says:

    robry has a + 4 for tomorrow

  37. 37
    zman Says:

    Thanks Bill – I have not yet worked up my number.

  38. 38
    AAA Says:

    I looked up the Reuters article on the Feinberg issue.  I don't really see that it is that big a deal.  Claimants are required to release claims against BP and sign over any rights against others, which I would consider pretty standard.  I don't see how it would give BP any greater rights or put contractors in an inferior position.  There were quotes from law school professors saying the opposite but they never explained why it would be so.  Probably it is all spin from BP trying to make it look like they didn't get hosed as badly as they did.

  39. 39
    bill Says:

    see message 39
    robry has ng production up 15 % from the summer
    enercast at + 7

  40. 40
    zman Says:

    re 38. True they did not go into how it works and I don't claim to get the connection but they did make the connection. As far as BP getting hose, recall that they actually come out ahead on their tax bill to the US as they got to book the $20 B without paying all of it up front. I think BOP put up a schematic of how that actually worked in their favor a couple of months back.

  41. 41
    tomdavis12 Says:

    crysball: 5 the NOG RC has nothing to do with the company. They do not receive any of the proceeds. The issuer is RBC and they stand behind the terms. pricing will be after the close 11/23. I will throw out the final numbers 11/24. The weakness makes for less risk as I see it.

  42. 42
    AAA Says:

    OT but can anyone explain to me why the GM ipo is so attractive.  Is it just that privatizations are generally priced where everybody is happy?  I see GM having pretty much the same problems it had before.

  43. 43
    zman Says:

    Re 42. Good question.

  44. 44
    AAA Says:

    re 40, you're right, they seemed to think the contractors were screwed but I just don't see it.  Time will tell. 
    I wasn't aware of the BP tax angle.  Still, I think in that position, they have to be prepared to do the unpopular thing and play hardball like XOM did with the Valdez.  I can't see how it could have been much worse for them.  Even if they wanted to settle, who is going to drive a harder deal, Feinberg or lawyers representing the company?  Their partners didn't roll over and they haven't suffered some sort of PR disaster.

  45. 45
    VTZ Says:

    RE 42 – It's not attractive, but it needs to be oversubscribed so that the government can get some pocket change back.

  46. 46
    zman Says:

    Right, it's politically attractive. Wonder how many firms they have set to fill out the partial fill orders to goose it on the open tomorrow.

    NOG up 1.7% now

  47. 47
    tomdavis12 Says:

    Z: RIG fleet report out yesterday. Nothing exceptional. Street is still concerned that standby rates in GOM will keep 4th Q numbers down. The high-spec JU they just bought is accretive to '12 numbers. Citi with $80 PT. same catalysts 1: Div resumption. 2. Better permits in GOM  3. PBR with some rig announcements.  

  48. 48
    tomdavis12 Says:

    42. Heard the road show was very well received. Much cleaner balance sheet. Should be very profitable over next two years with weaker $.  

  49. 49
    zman Says:

    re 48, right, weaker $, that wasn't intentional at all, lol.

    re 47.  I'm a bit concerned about all the JU's I'm seeing come to the space but have not been keeping up with deeper water drillships? How does the capacity growth in that space look.

  50. 50
    zman Says:

    Irongate. Is today another Pomo day. Yeah, can't find the schedule and I'm lazy and its easier to ask you than look it up as I sit on hold for a guy about a stock.

  51. 51
    zman Says:

    PETD down 7.7%, would like to be long there, keep falling PETD.

  52. 52
    RMD Says:

    GHS thought for the day is that looking at public co. gas production data, Sept production has a chance to be the first mo.- mo. decline of the year.

  53. 53
    zman Says:

    Thanks RMD, not sure how they get to that level of granularity since most companies don't report September only data in press releases and the data reported to the stats is lagged more than this.

  54. 54
    tomdavis12 Says:

    49 The next 8 – 9 months will be the rat through the snake. Their are much unspoken for newbuilds coming out. After that there is much less. I have some research I can forward that has all the numbers and what everyone's fleet looks like now.

  55. 55
    elduque Says:

    re POMO purchased 8.15 bln. Dealers offered 29.9 Bln.

    It just occured to me this would be a great way for China to unload its position.

  56. 56
    zman Says:

    OK thanks, was wondering if there is concern of further deterioration in the shallow water pricing. 

  57. 57
    zman Says:

    Thanks ElD

  58. 58
    zman Says:

    Wow slow. Feels like summer. Most stocks doing a whole lot of nothing at the moment, waiting on jobless claims, Ireland.

  59. 59
    tomdavis12 Says:

    56 Have not noticed weaker JU pricing. There has been surprising more tender activity but if crude can hold $80 and pricing can just stay stabile for the next 6 mos, money will start to flow back into this sector. Not like the Bakken growth stories however. CSFB just upgraded NE based upon Pemex doing some fast track and regular tenders. There are 24 working rigs today. CSFB is expecting over 30 to be working 1st q '11. I will believe when I see. Don't trust Pemex.

  60. 60
    tomdavis12 Says:

    SDRL is talking about additional activity in SE Asia working for them. They have only 1 rig in GOM. Aggressive with more newbuilds for '12 & '13 

  61. 61
    PackMan Says:

    I am spam ?  lol

  62. 62
    tomdavis12 Says:

    Z: Moody cuts rating on EOG. Guess they didn't notice the asset sales.

  63. 63
    zman Says:

    re 61. Apparently but not sure why.

    Re 62. They don't like the increase in the company's targeted debt to cap range. And on less assets to boot.

  64. 64
    zman Says:

    The SDRL has been added to my rig list of names to watch.

  65. 65
    zman Says:

    Please bookmark the backupsite at:


  66. 66
    zman Says:

    WHX finally starting to come off, $4 more and I'll be looking to buy it back

  67. 67
    tomdavis12 Says:

    CSFB out with an MLP report today. Overweight names BWP, ETE, ETP, PAA, NKA, KMR.

  68. 68
    zman Says:

    Those look like midstream guys, not my area, but thanks.

  69. 69
    tomdavis12 Says:

    Z: Did you ever look at the CHK midstream, or that is just not your area of interest? 

  70. 70
    Nicky Says:

    Afternoon all.  Something not quite right….indices holding up and commodities down.  Oil should lead the way imo so indices should roll over again.
    This sell off is pretty brutal in crude last few days.  It looks like this may be the final five down to me…
    I am also expecting a lower low in the indices tomorrow or Friday and then a bounce next week.  1165 really has to hold on a closing basis.

  71. 71
    zman Says:

    Tom – you got it, not my area, its not just that my eyes glaze over but I think you need to know about the comps when looking at those things (all things really) and I don't have the comps or the experience in hand to make a call there. 

    Nicky! Welcome Back!  On crude we really didn't need to be up where we were. Today got a lift on the headlines but the build in Cushing and the lack of product demand follow through from last week's big number on distillates made it a short lived lift. I think we are close to done on the downside but may see a test of whole number support at $80. 

  72. 72
    Jerome Blank Says:

    HAL…interesting intraday chart…extended 30 min chart updated, support /resistance perspective for NOV calls…. 

  73. 73
    Nicky Says:

    Hi Z.  Expiry on Friday.  I wonder where they may want to pin it for that.

  74. 74
    zman Says:

    Odd divergence in EXXI and MMR last few days. No doubt a function of Eli's explanation yesterday, should resolve itself when they give an operations update. 

  75. 75
    zman Says:

    Nicky – tough to say, there are a lot more longs than shorts as per CFTC data. But it also may depend on how oversubscribed the GM deal is and how GM does tomorrow. Sounds silly to say but that could be a market booster. Oh, that sounds really silly to say reading it back. 

  76. 76
    Jerome Blank Says:

    KOG daily updated….$4.20 is nearterm support/$4.40 key resistance 

  77. 77
    cargocult Says:

    ot-Anybody know what happens when they stop trading on a stock. I own options on a stock that has trading halted. RINO

  78. 78
    Jerome Blank Says:

    KOG 30 min updated

  79. 79
    zman Says:

    Thanks JB, will go vote in a bit here. 

    Cargo – generally halts are short term in nature pending news. Often the options spreads will blow out during the halt, and it may or may not be tradable. 

  80. 80
    tomdavis12 Says:

    Z: WLL calls acting well. Good call.

  81. 81
    BirdsofpreyRcool Says:

    EXXI — maybe we get to hear about the asset purchase soon?
    Operational update = DJ#2 at 25k ft, BBE at 28k ft and looking to drill below 30k.  Currently working with Bummer to permit an extension on contiguous leases at BBE/W.  Could hear something on LaFrog (spelled differently, like the scotch, but not gonna look it up right now) at "any time."  And Lafitte has some operational issues (don't know exactly what it is… but something like a drilling floor guy dropped a monkey wrench down the hole… brings things to a halt and has to be worked out… but, these things happen).
    Could hear some good stuff next week.  I'm hoping it's a Filene's Basement Buy on those XOM acres… think that would kick the stock price up a notch or two.

  82. 82
    zman Says:

    Thanks, its early, bought with enough time to capture the press release of the Lewis and Clark fairway wells and the one well that essentially twins the discovery well but with more stages. Positive results would/should serve to further derisk this new and larger core area. 

  83. 83
    Nicky Says:

    z re # 75 – no it doesnt sound silly.  the hype around this ipo is ridiculous.  they have barely talked about anything else all day on cnbc.  only thing that worries me is everyone they talk to seems to want to flip their shares so how long will the pop last.

  84. 84
    zman Says:

    re 81. Thank you very much. Sounds like a TBP round table update. 

  85. 85
    zman Says:

    re 83. Right, depends on what kind of book they have built to provide support. 

  86. 86
    Jerome Blank Says:

    CIGX falling below the 200 day on very slight vol, seems like it's just quietly falling with gravity, with no thrust to push it back up thru the 200 day …yet

  87. 87
    zman Says:



  88. 88
    Jerome Blank Says:

    HAL very near term resistance at $35.65, intraday breakout about $35.75

  89. 89
    Jerome Blank Says:

    Thanks to all for the votes, it's very much appreciated….

  90. 90
    bondbuddha Says:

    Voted Jerome, thanks for all that you do and share

  91. 91
    zman Says:

    WLL – a little surprised by the strength given the move in oil today … must be other people who are looking for the mid November ops update as well. 

  92. 92
    Nicky Says:

    need to get back above the 80.90 area now for a low to be in in crude.

  93. 93
    PackMan Says:

    Warning of the risk of an "implosion" in the bond market, former Treasury Secretary Robert Rubin says the soaring federal budget deficit and the Fed's quantitative easing are putting the U.S. in "terribly dangerous territory."

  94. 94
    Nicky Says:

    perhaps they want 75 by Friday???

  95. 95
    zman Says:

    Nicky – I'd rather see it plunge there than dribble to there. Get it over with I say. Of course, I'm in the camp that we'll be close to $90 by year end. Signs of improving demand are cropping up, even in the US. 

  96. 96
    zman Says:

    HAL at your resistance JB

  97. 97
    ram Says:

    No 75 by Friday – Nov calls!

  98. 98
    Nicky Says:

    It could be done Z.  We need a fast move up now to retrace this last spike down.

  99. 99
    zman Says:

    re 97. It would be hard on those yes. 

  100. 100
    Zorgnak Says:

    Another look at HAL using Volume Profile.
    Shows the heavy selling vol in this area of resistance. Doesn't mean it can't power through. Gap above.

  101. 101
    PackMan Says:

    GM – #42. 
    The whole thing is a joke; all politics and hype.   Trying to create demand where none exists.  Who in their right mind would buy GM ?
    I heard that most of the demand was from asian sovereign funds. 
    Obama or Timmy will probably hold a press conference post IPO to crow about it.
    I would not waste my time reading the prospectus to find out more.   It will be HFT robot trading heaven, like C is, or AIG.
    Buffet didn't bother to read it.
    Steinhardt said he would sell it at the open.

  102. 102
    PackMan Says:

    Steinhardt – "why would anyone want to own a government equity ?"

  103. 103
    zman Says:

    re 100, thanks much, was about to comment that I didn't get it and then I scrolled to the right. Thanks. 

  104. 104
    Zorgnak Says:

    re 100 3rd time at 35.70 might do it…then 35.90 and on to 36.27

  105. 105
    zman Says:

    re 104. Thanks, out of prudence though, I'll probably punt the Novembers into that kind of strength, holding the Decembers. Tomorrow in the market is a big ? mark at this point. Jobless claims and GM. 

  106. 106
    Zorgnak Says:

    re 105
    Thanks for the Novembers BTW πŸ™‚ and the WLL Calls….lovely

  107. 107
    jat Says:

    anybody here knowledgable about gte?

  108. 108
    choices Says:

    GM-Nicky is correct on CNBC-tuned in for a couple of minutes, all GM discussion, did say that some sovereign funds pulling out of commitments because the rumored price is too high, ~$33
    Also, Donald Trump came on, said he for the first time is seriously considering running for Pres-heh.

  109. 109
    Nicky Says:

    I heard Trump too Choices.  Do you think he was serious?

  110. 110
    zman Says:

    LINE reversing out recent market weakness, up 3% on the day. Has anyone seen commentary from sellside MLP analysts covering the potential for a bond selloff, taking yields higher and reducing the attractiveness of the MLP sector? 

  111. 111
    choices Says:

    Nicky, sounded like he was but it could just be a trial balloon, or whatever he does in his marketing activities.

  112. 112
    BirdsofpreyRcool Says:

    HT saying NTAP results leaked and are crushing tech mrkt…. and tech was the only thing holding the mrkt up (in his opinion).

  113. 113
    zman Says:

    Tell HT to look at the XLE and say that tech is the only game in town, lol. 

  114. 114
    BirdsofpreyRcool Says:

    HT is quick to point out that the energy sector is not his strong point.

  115. 115
    zman Says:

    re 114. If it were everyone's there'd be nothing but janitorial arts for guys like me πŸ˜‰

  116. 116
    Nicky Says:

    this would be five down days in a row  if we get it – extremely rare and doubtful I would say.

  117. 117
    Jerome Blank Says:

    #116, thinking near term oversold, $NYMO closed at -86.89 yesterday, looking to slip a slightly lower if it closes down here…

  118. 118
    zman Says:

    BOP – thank him for the headsup on NTAP, it did a number on the S&P as well.

  119. 119
    elijahwc Says:

    #112  Boy, anything to give the machines an excuse.  I'm double danging it as a long time NTAP holder.

  120. 120
    BirdsofpreyRcool Says:

    HT pointing out that the same thing happened with DIS two weeks ago (early leakage of earnings whiff).

  121. 121
    elijahwc Says:

    NTAP:  Same thing happened last quarter.  In line guide gets you a 5% haircut.  The Steve Jobs school of guidance.

  122. 122
    Jerome Blank Says:

    HAL 30 min extended updated… 

  123. 123
    zman Says:

    Wondering now if they price NOG at $19. Road show must be going well. 

  124. 124
    elijahwc Says:

    Some smart bidder picked up a few shares of MHRpC @ 24.95 today.  Nice job.  If you wait, they will come.

  125. 125
    john11 Says:

    Do you think NOG prices tonite?

  126. 126
    zman Says:

    I have not yet heard, don't know if they are doing a full show or just a day of meetings. Most deals of late have been quick so I suspect tonight. Anyone know for sure?

  127. 127
    elijahwc Says:

    CQP at RBC Capital Markets MLP Conference tomorrow.  The little red engine will be able to talk about the two recent capacity MOUs and Aubreys visit on LNG exportation.

  128. 128
    zman Says:

    Giving the HAL Nov. Calls another day. 


  129. 129
    zman Says:

    Jerome – that KOG chart is looking pretty interesting on the daily. 

  130. 130
    elijahwc Says:

    NTAP resumption 15 minutes after close.  I think its a lot of noise signaling nothing.

  131. 131
    zman Says:

    NOG going to close up nearly 3.5%, not too bad for announcing a secondary. 

  132. 132
    elijahwc Says:

    MHR appears to be following the yellow brick road on the way to an all time high nearterm.  What say you JB?

  133. 133
    elijahwc Says:

    I'm not quite 100% on this and it does require a little more investigation but I believe the following press release was mistakenly attributed to HAL instead of FTK:
    "Long recognized as the industry leader in advancing the science and engineering of the production enhancement technology known as hydraulic fracturing, Halliburton today announced the introduction of a first-of-its-kind fracture fluid system comprised of materials sourced entirely from the food industry.
    The solution, which will be marketed under the trade name CleanStim Formulation, is an integral part of the company’s new CleanSuite line of products."

  134. 134
    Jerome Blank Says:

    #129, KOG really does look good, thinking, $4.40 is the first resistance area to get above then major resistance at $4.55, a pullback off the $4.55 area would create a daily ascending tirangle, thinkning this pullback if it happens would be a good buyable third test of resistance…
    #132  looks really good, staging ascending triangle, formation suggests a near term break to al least $5.50   

  135. 135
    elijahwc Says:

    #134:  And that JB gets you a vote.  We luv confirmed conformational bias.

  136. 136
    elijahwc Says:

    I promise to learn how to use a spell checker next year.

  137. 137
    BirdsofpreyRcool Says:

    now, elijah… don't go changin', just to please us, we love you just the way you are! 
    (as paraphrased from Billy Joel's song to his first — of many — wives).  πŸ˜‰

  138. 138
    RMD Says:

    Jeremy Grantham of GMO cheerily talking about the S&P at 900, though with very uncertan timing. Fed unequipped to reflate economy, should be using fiscal policy.

  139. 139
    Pati Says:

    Eli, no news releases at FTK about Clean Suite.

  140. 140
    elijahwc Says:

    Correct Pati.  We are trying to connect a few dots as their  critus based micro-emlusions are "well represented" in HALs "food grade" product line.  Humm……….

  141. 141
    elijahwc Says:


  142. 142
    elijahwc Says:

    Thanks BOP…I'm hopelessly flawed.

    Pati, I brought this name up last year just in time to saddle a few unfortunates on this site with a 1.50 to 1.75 cost basis only to see it trade down to 1.05.  Ugh…..

    Well this year I get the call that "Elijah guess what, we are almost back to cost basis."  This came by the way from the contributor here that is world renown for his mastery of all things obscure.

    Well suffice it to say that sometimes it takes longer than anticipated for "Green Fluid" to become relevant and a fundamental turnaround to commence.  But it is happening.

    Now the stock has run hard so I can't suggest an entry point but I would own a little.  Maybe a first trance with a commitment to adding lower.

    But do own a small research position.

    I also hear that they have a relationship with a larger player that may enable them to grow some international stuff  substantially.

  143. 143
    crysball Says:

    North Dakota………………..Tyler  Formation…………..it  just gets  better.

  144. 144
    zman Says:

    Thanks Crys

  145. 145


  146. 146
    zman Says:


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