Thursday Morning

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Market Sentiment Watch: OK, nervous market one day, not the next. Today we have markets refocusing on Europe where the ECB left rates unchanged but is expected to comment shortly about the domino effect of sovereign debt. In energy land, news is again sparse, but I expect a near term surge in Catalyst List name press releases. In D.C. land, tax cuts are to be brought to a vote today and the White House is apparently open to a compromise where all income brackets would receive no increase in taxes for a limited time frame (1 to 3 years being discussed). One area where the White House is not open to compromise is offshore drilling where the Administration is now reversing course on expanded offshore drilling. Thanks again BP. OPEC should send the President a really nice Christmas gift this year as his policies make him one of their biggest fans. 

Ecodata Watch:

  • Jobless claims came in at 436,000 vs 428,500 expected
  • We get pending home sales for October at 10 am EST, last reading was down 1.8%

In today's post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Inventory Preview
  4. Stuff  We Care About Today - EXXI / MMR
  5. Odds & Ends

Holdings WatchZCAT (Zman Catalyst portfolio):

  • $5,300
  • 99% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $8,500
  • 5% Cash
  • Yesterday’s Trades: None

ZLT (Zman Long Term portfolio)

  • BSIC – Sold half at average cost of $1.81, up 59%.
  • BSIC – Out second half of my position at an average cost of $1.80, up 58%. Stock moved further than I expected, much more quickly than I expected. I may miss out on some further move here but the fundamentals don't, in my view hold name here. I plan to track it and revisit as developments warrant.  

Commodity Watch

Crude oil jumped $2.64 to close at $86.75 yesterday despite an EIA report of a mixed looking set of data. The dollar is currently in charge. This morning crude is trading flat.

Natural gas closed up $0.09 yesterday at $4.27, a move inspired by commodities in general most likely. This morning gas is trading up a dime. 

Natural Gas Preview: 

I'm at 25 Bcf for today's storage withdrawal number

    • Last Week: 6 Bcf Withdrawal
    • Last Year: 2 Bcf Injection
    • 5 Year Average: 41 Bcf Withdrawal
    • 10 year Hi: 13 Bcf Injection
    • 10 year Low: 100 Bcf Withdrawal

The Street is at 29 Bcf.

Oil Inventory Review

ZComment: Not really a great set of numbers but we saw a large, unexpected drop in utilization and one would expect next week's product inventories to fall off more meaningfully again. 

Stuff  We Care About Today

EXXI Presentation Wrap:

  • Yesterday's conference presentation was focused on their recent producing property acquisition from Exxon in the Gulf of Mexico
  • Opportunities to grow oilier than not current production from these properties abound
  • On the ultra deep prospects, MMR/EXXI continue to drill ahead at Davy Jones 2, Blackbeard East, and Lafitte without difficulties.
  • Commented that they would hopefully be in pay zones at DJ 2 by year end
  • MMR has applied for a permit to deepen BBE from the original 29,950' to 31,500' as Jim Bob goes after the Tuscaloosa ... not unexpected and we expect all of these wells to drill deeper than the original planned total depth.
  • BBE log data was not commented upon but the well is drilling ahead again at 29,000' so the data from last week's logging must be in house ... see comments below.
  • Lafitte drilling near 9,000 feet, it'll be months before we hear news there.

MMR Updates Blackbeard East / Davy Jones


  • Blackbeard East:

    • Drilling below 29,000 feet
    • 178 feet of net pay encountered to date

      • 84' from 19,500 to 19,700' in the Miocene
      • 54' at 24,200' in the middle Miocene
      • 22' at 24,600' in the middle Miocene
    • No comment made on the interval from 24,600 to 28,000' 
    • MMR's interest in BBE moves up to 70% WI and 56.2% NRI upon completion of the PXP acquisition
  • Davy Jones 2 
    • drilling below 24,300'
    • Interest here moves up to 60% WI and 48% NRI following PXP approval.
  • Nutshell: Well, they quantified what they had previously reported as hydrocarbon bearing sands of with good porosity and permeability. But they said nothing about the more recently drilled deeper section. My sense is that the market may voice its disappointment with this release. I'm not thrilled with the drop in the stock price as it appears that someone had a good indication the they had no big kahuna log news on the front burner. 

Other News:

  • WLT extends Western Coal bid talks - sounds like the two companies are working to merge but the details are not yet sorted. The reaction to WLT's proposed acquisition has been exceedingly favorable yet WLT remains one of the cheapest names in the Met coal space, despite the improvement in positioning the new deal would provide. Watching for a re-entry.  
  • Arkansas O&G Commission seeks disposal well moratorium. No disposal wells = decreased ability to further expand reach in the Fayetteville Shale or at best, higher costs. So far no reaction in the share price of SWN which I currently hold in the ZLT. If AOG gets its wish though I could see a snap lower in the shares ... checking into this.
  • Working up a new book report on a name we talk about from time to time around here for tomorrow or Monday, one of West's names. 
  • The Small Cap Orange Charts will be updated for Monday. 

Odds & Ends

Analyst Watch:

  • WLL - cut to Neutral at Susquehanna, price target $123. 
  • MHR - cut to Hold at Global Hunter

Housekeeping Watch #1: Our new billing software will limit access to the site again beginning this weekend. So if you can't get in you probably know why. Contact me at zmanalpha@gmail.com if you have any questions about this. 

Housekeeping Watch#2: Another nifty feature of our new software is multiple IP access blocking. If you share password with others the system will monitor this activity and block you. Sharing your password is a violation of the Terms and Conditions of the site. Moreover, sharing what goes on in Zman's Energy Brain only provides competition for quote fills. 

    177 Responses to “Thursday Morning”

    1. 1
      BirdsofpreyRcool Says:

      MMR bet… and I could be way wrong here… but think it won't trade up much on this news.  Not sure a lot of people will really understand it and/or know how to read it.  And they won't like the phrase "pressure drop."  PR is not "bad" at all… but it's not all "YAY We are all RICH TODAY" type of PR.  More like… "see some good stuff, a few questions to be answered, and will continue to plod ahead with our program." 

    2. 2
      Zorgnak Says:





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      S&P Futures12.2.10
      Areas of Interest- Intraday Roadmap

      1219.50      Far Resistance
      1214.25      Near Resistance
      1211.75      Overnight High 
      1204.75       Wednesday Close
      1204.50       Near Support
      1202.75       Overnight Low
      1196.75       Major Support
      1190          Support
      1179          Composite Volume Point of Control/ Support
      Expectations are for a retest to support levels

    3. 3
      Zorgnak Says:

      S&P Futures12.2.10
      Areas of Interest- Intraday Roadmap

      1219.50      Far Resistance
      1214.25      Near Resistance
      1211.75      Overnight High 
      1204.75       Wednesday Close
      1204.50       Near Support
      1202.75       Overnight Low
      1196.75       Major Support
      1190          Support
      1179          Composite Volume Point of Control/ Support
      Expectations are for a retest to support levels

    4. 4
      zman Says:

      Thanks much Zorg.

      BOP – This is one of those press releases where it looks like the company just wanted to put out something because they knew there was an expectation in the market place. Trading lower as we speak. Nothing from this from the recent logging so this is stale data that's been refined. No comment on the recent logging run and they would have trumpeted that loudly if they had hydrocarbon bearing sands. Stinks for the short term trade, doesn't affect my long term view. 

    5. 5
      BirdsofpreyRcool Says:

      "Stinks for the short term trade, doesn't affect my long term view."

    6. 6
      ram Says:

      Thanks for the clarification.

    7. 7
      bill Says:

      >My sense is that the market may voice its disappointment with this release. I'm not thrilled with the drop in the stock price as it appears that someone had a good indication the they had no big kahuna log news on the front burner.
      Was the big kahuna expected in general or between 24,600 to 28,000' in BBe

    8. 8
      Jerome Blank Says:

      Keep an eye on these today…
      HK and LINE are at interesting spots….HK is flag basing at the 200 day and it's right at the P&F buy pocket, on a P&F buy signal at trendline support, easy to manage…
      LINE looks to break soon, trend is up and probability is for a break higher…. 

    9. 9
      zman Says:

      They had made comments about having a big pile of section to look at in this well. Silence = they saw nothing on the logs worth commenting on. They had comment, less specifically, about the three pays in this press release, on the 3Q call. 

    10. 10
      zman Says:

      I may add more MMR common if it continues to weaken, I had only taken the initial position in the ZLT. 

      Jerome – great work last night, thank. Will go vote again. HK I don't trust to move for any length of time. I think you have some people bottom fishing natural gas right now, my sense is that's early.  I own it but am not ready to add. 

    11. 11
      bill Says:

      someone on yahoo posted the exact production numbers last week so the market reaction was the worse kept secret
      The good news is the hit is behind us (I think)

    12. 12
      ram Says:

      So silence is O.K., but not golden – short term.  I guess I'll keep common.

    13. 13
      zman Says:

      re 11. Exact production numbers? You mean the pay found in feet?   Basically this was a non-press release. They didn't have anything to say about what they have seen from 24,600 to 28,500' … looking for when either of these guys speak at a conference next. 


    14. 14
      crysball Says:

      Any further thoughts  on  Permian   analysis / entires?

    15. 15
      zman Says:

      Susquehanna guy giving me an oppy to add more WLL calls pre Lewis and Clarke well results. I would have thought they'd release results by now, could be weather delay. We know they had a completion issue with one of the three results that was thought not to impact the well performance, just timing, but that was awhile back. 

    16. 16
      BirdsofpreyRcool Says:

      I think there was a fair bit of shorting MMR on the delay of news… we could be seeing a short-covering bounce here.  That said, really nothing has changed the long term thesis here.  I just got another education on the dangers of "well-watching."  Comes with the territory.  No tears.

    17. 17
      Zorgnak Says:

      AREX popped out of it's recent channel at the open

    18. 18
      zman Says:

      Crys – oh we're days away on those names, maybe a week. I am likely to publish one of my snapshots on one of them tomorrow though. 

    19. 19
      bill Says:

      posted 11/23 on yahoo
      Re: BBH Sonris     23-Nov-10 03:38 pm    
      The test I saw was 16,000 mcf/d and 833 bo/d, certainly not a monster.

    20. 20
      zman Says:

      Market doing a shoulder shrug so far on EXXI and MMR. 

    21. 21
      reefguy Says:

      GST gonna test $5

    22. 22
      bill Says:

      The poster is a drilling engineer from PXP– He posted some stuff on a pxp well last year that was on the money

    23. 23
      BirdsofpreyRcool Says:

      reef — watching your GST right now… and smiling.  Thank you.

    24. 24
      BirdsofpreyRcool Says:

      fwiw, EXXI is not a partner in the Blueberry Hill well…

    25. 25
      BirdsofpreyRcool Says:

      We have the November Non-Farm Payroll announcement tomorrow morning.  If mrkt runs UP today, more chance it will be down tomorrow… and vice versa.  So, just sitting on my hands today… anybody else doing anything?

    26. 26
      ram Says:

      zman – If I have this site open on a desk workstation, then go for coffee and bring laptop, I will not be able to open site on laptp if still open on workstation?

    27. 27
      zman Says:

      re 19 – ohhhh, that's Blueberry Hill, yeah, that's a good rate, not the ultra deep , just the deep on the Shelf, sorry, not what I was thinking of.  I didn't see it on the Sonris site but you can track that well on the Louisiana website weekly here:


      For them to say it wasn't a monster when the company has 90% of the well and it tested about 20 MM/d and the whole company produced 146 MM/d in 3Q and has been declining is well, I guess, a judgement call. It's not a bad rate

    28. 28
      zman Says:

      re 24. Again, it's not a bad rate at all, very meaningful to them in the pre ultra deep era. 

      re 26. That's possible but unlikely. 

    29. 29
      zman Says:

      Susquehanna who? That didn't last long. 

    30. 30
      jiveyjr Says:

      I listened to the EXXI presentation and the ATPG presentation last nite…added a few shares to each….like them both a lot.  tried to connect to the BEXP call and didn't get anything there….
      the ATPG presentation was by a financial buy, but he did a decent job as did the EXXI guy….I lose focus all the time about what my holdings are even doing so it was good to listen in

    31. 31
      andy Says:

      bop – is the susquehanna downgrade on WLL our friend duane?

    32. 32
      zman Says:

      re 31, bet you it is a valuation call. 

      Jivey – as far as I can tell, the BEXP call never happened, just the slides were posted, live call and replay didn't work. 

    33. 33
      zman Says:

      On a call next 20 minutes or so

    34. 34
      BirdsofpreyRcool Says:

      jivey — thanks for the comments.  I continue to like the EXXI story/outlook/situation a lot.  The XOM properties acqtn was just Top Drawer, in my book.  Well done and rah-rah.  That lays the banquet table with a feast that will keep on feeding for years to come.  And it's OILY.  I bought some more EXXI at $24.50 y'day…. then watched it go lower.  But, it hit a price I was willing to pay, so stuck the paw out and swatted.  Other than the Bakken, i think shallow GoM oil is a pretty fantasic place to be, under almost any economic scenario over the next 3 yrs.

    35. 35
      BirdsofpreyRcool Says:

      andy — i think WLL is covered by Duane's serf, Charles Minervino.  I don't know that guy… but his coverage list is 100% oil services…. plus WLL.  Weird.  Will have to go ask… give me a bit.

    36. 36
      BirdsofpreyRcool Says:

      MADISON WILLIAMS: MMR/EXXI– BBE 178 net ft of pay vs previous est of 150ft. Which is made up of 84ft bt 19.5-19,700 ft., 54 net ft at 24,200ft and 40net ft at 24,600. There is an updip potential that could increase the pay to 69ft and 62ft. Permiting to 31.5k ft as it sounds like they are trying to find the deeper sands that they had in BBW. BBHill: expected a disappointment w lack of news, IPd at 29.5mmcfe/d and lost pressure now prod  at 21mmcfe/d, spent $100mm and evaluating. No real suprises…

    37. 37
      Zorgnak Says:

      S&P at first resistance…expectations that it will slow here


    38. 38
      Zorgnak Says:


    39. 39
      jiveyjr Says:

      # 32…thx re: BEXP…slides look impressive..understand the stock is expensive but everything that's good is most of the time…hard to imagine someone not taking them out

    40. 40
      bill Says:

      36– What were investors skittish about more  BBE or BBW
      BBE as madison says has 178 ft of pay with potentially more and we have mmr silent on last 4,000 assume nothing there..to me this is a positive
      BBW– Is this productive? Z in # 27 says 21 mmcfe not bad, but I think severe drop off in pressure raises questions on reservoir size or some other problem, no?

    41. 41
      jiveyjr Says:

      Bloomberg quote of the day is prescient " Against stupidity the gods themselves contend in vain"…that's prophetic…attributed to Friedrich von Schiller….
      I"ll reveal my stupidity and admit I don't know who von Shiller is!!!

    42. 42
      BirdsofpreyRcool Says:

      HeadTrader says there is no human blood behind the rally… just computers, blinking madly at each other. 
      HT is bored….

    43. 43
      tomdavis12 Says:

      BOP; The option premiums in EXXI for 50 days out are a little less than 1 month ago. Slight loss of mojo from those wild and crazy option people. Still higher than most.

    44. 44
      Zorgnak Says:

      AREX HOD….

    45. 45
      BirdsofpreyRcool Says:

      tomdavis — thank you for the update.  You sell calls against your position?  You are good at managing your portfolio in that way, it appears.  Nice to get income, while waiting for a Big Kahuna Announcement.

    46. 46
      Fiveanddimer Says:

      jiveyjr — Schiller was the most famous German dramatist ever.  Was a buddy of Goethe in Weimar.  Among many others things, he wrote the "Ode to Joy" that Beethovan used in the choral movement to his nineth symphony. 

    47. 47
      BirdsofpreyRcool Says:

      MMR — i sense shorts getting their panties in a bit of a bunch here.  Or, as HT says, "sell the rumor, buy the fact."  (or is that the other way around… can never remember…)

    48. 48
      tomdavis12 Says:

      BOP: @ $30 I will be walking thru the exit door for a big chunk. You called $30 by the end of the year way back. The XOM piece just makes that much more probable. Thanks for the idea.

    49. 49
      zman Says:

      Bill – Blueberry Hill and Blackbeard are not related. The 21 MM/d has nothing to do with Blackbeard West or East. 

      On the 178 feet pay, they have previously stated that it would producable via conventional infrastructure. Would the entire well be economic if they found nothing else down to 31,500? Probably not. It depends on how much closure you have on these sands but unlikely to, at current gas prices, pay for the trip all the way to the low TD. Would they complete it? Sure, these three zones are bailout zones and would help to recover costs. But they aren't the target. 

    50. 50
      zman Says:

      Down 23 Bcf

    51. 51
      BirdsofpreyRcool Says:

      tomdavis — yep.  EXXI to $30 and KOG to $5 by the end of this year.   I kinda messed up on the KOG call, tho….  šŸ˜‰

    52. 52
      zman Says:

      KOG at $5.25. Options kicking into play now as well as the common. Yippee Skippee. Around $5.50 or $6 I think we enter the "secondary zone". 

    53. 53
      BirdsofpreyRcool Says:

      GST = another Gold Star for reef.

    54. 54
      zman Says:

      WLL approaching yesterday's high which was the all time high for the name. They speak at the close at Jefferies. 

    55. 55
      zman Says:

      BEXP hit $27, also all time high. 

    56. 56
      milepost_43 Says:

      TGA prints 18.04……..in Canaccord presentation on Tues, CEO said the East Arta 8 well results will be known in about 2 weeks…..IF it hits it will confirm that "GREEN BLOB" on slide 13
      is ALL ONE BIG FIELD.…..

    57. 57
      zman Says:

      KOG chart has that "she's going ballistic Maverick" look to it.   Getting ready to take some profits in the trading position taken post August secondary at $2.94 and added to at $4.23. If you pull the weekly the big recent points are 2.75 in August and $5.25 now. Yikes. Not saying it won't going higher but valuations in the play are getting up there on a per acre basis.

      This often happens when you have a limited number of names in a small subset group and high demand. Wondering last night at soccer with RMD where the IPO's are. OAS was awhile back and did pretty well I'd say out of the gate. Surely Enercap or someone else has cobbled together some acreage and could roll it to the public soon. Talk about good timing for a hot IPO in energy. 

    58. 58
      Zorgnak Says:

      AREX contiues to run.. HOD ….coming up on recent highs at 20.38

    59. 59
      zman Says:

      AREX ratcheting higher. Thinking PETD and REXX to run soon as well. 

    60. 60
      irongate Says:

      FYI… JPM had an interesting piece out this am… some institutional interst in MAN and RHI…. someone gmaing job numbers?   Then look at MSFT  seems like the plain vanilla's getting the call to get long.   also hearing some plan van interest in the financials.   
      i think we have a green light for a few weeks… and then Eurozone problems resurface with portugal and then Spain by Feb… perhaps even Jan.  so make hay while the sun is shining

    61. 61
      zman Says:

      MP – Working on it, back burned due to the rally there, congrats muchos.

      Irongate – Roger that, making hay. 

    62. 62
      cargocult Says:

      Did MHR say something to offend?

    63. 63
      zman Says:

      re 62 – Global Hunter downgrade

    64. 64
      skimo Says:

      Z, thanks for BSIC. Looks like we might get the BOP wash cycle on this as a lucky strike extra.

    65. 65
      zman Says:

      Analyst Watch:

      WWL – regarding that downgrade at Susquehanna, the guy cut the rating from Positive to Neutral, while RAISING his price target from $112 to $123. Here's to him raising his rating at a higher level, lol. 

    66. 66
      zman Says:

      Skimo – You're very welcome, was beginning to think I was nearly alone in that trade. I am not going back to the trough there until it a) falls and b) I get some sense of timing and magnitude of their Bakken non op near term effort. Should get (b) shortly. 

    67. 67
      zman Says:

      Analyst Watch:

      HAL – Raymond James raises target $10 to $55. Prospects are good for this one to trend higher into year end on positive macro. Fears of a slouching NAM are, in my opinion, overdone. 

    68. 68
      RMD Says:

      Musing about MMR:  could it be they waiting until PXP deal closes to announce good news.  (I doubt this, but have a fondness for conspiracy theories.)

    69. 69
      elijahwc Says:

      MHR: Global Hunter downgraded this a.m. suggesting that "drilling results and hence production need to catch up to stock performance". 

    70. 70
      zman Says:

      Jumping on a CC. 

    71. 71
      elduque Says:

      Re GDP- when a company completes a well, that is significant in relationship to their production are they obligated to release the results. Trying to figure out why it is up 5% today.

    72. 72
      jat Says:

      71, GDP highly shorted, maybe that's why?  Some eford out ahead of conferences?  Don't know.
      As for 57, I slammed the air brakes and it flew right by me!

    73. 73
      zman Says:

      72 Nice

    74. 74
      jiveyjr Says:

      Fiveanddimer..thx re: Shiller

    75. 75
      andy Says:

      z –  any downgrades in WHX?  pretty weak today    covered my short at 21.60

    76. 76
      Zorgnak Says:

      @ Far resistance  1219.50 on the S&P Futs

    77. 77
      zman Says:

      Andy – not that I see … delayed reaction weakness? It has been slipping last few days. Still out from my $23.10 sale, looking to add back in $18 – $19 range. 

    78. 78
      elijahwc Says:

      Oh oh…FTK blasting back into the $4's.  Could be one of those things.

    79. 79
      snuhart Says:

      XCO been quiet on the newsfront lately. Anyone seen anything recently ?

    80. 80
      zman Says:

      Snu – they had a guidance update for 2011 the other day but you know they are LBO'ing?

    81. 81
      zman Says:

      Relief/short covering rally I guess in MMR. Speaking next week at a conference, should be interesting.   

    82. 82
      snuhart Says:

      80  Yes I  saw 20.50,  was it  finalized ?  Thanx in advance.

    83. 83
      zman Says:

      Don't think so yet, I think they need a vote. 

      REXX working higher. I'm not in yet. 

    84. 84
      zman Says:

      On a replay call, doing some homework, market drifting. 

    85. 85
      choices Says:

      Video "splains" strateg w/frequent trading desk expletives

    86. 86
      zman Says:

      Anyone see the reason for the drop in CRED – small Bakken position there, been snooping

      ROSE speaking at Jefco, the presentation yesterday at Canaccord was good

    87. 87
      choices Says:

      Z, do you have a schedule for Jefco-think EOG is also speaking but not Papa.

    88. 88
      zman Says:

      I have it but not in a conveniently postable form (paper). I don't seem them speaking today. I do see GMXR, MHR, WLL, FST, ROSE, CWEI

    89. 89
      elijahwc Says:


    90. 90
      choices Says:

      ROSE drillers will earn their money this winter in Alberta Basin, north of Cut Bank and Browning-it gets colder than hell up their with 20-30 knot winds-prob not much worse than NE Montana/ND, however.
      went to high school up there when the dinosaurs were still roaming around…

    91. 91
      choices Says:

      #89-thanks, Eli

    92. 92
      zman Says:

      Yeah, cold, and still well south of VTZ country. 

    93. 93
      zman Says:

      Thanks Eli 

    94. 94
      choices Says:

      EOG-I'm wrong-it is next week on 8 Dec at Wells Fargo Energy Conference

    95. 95
      zman Says:

      Glad to hear it choices, best they not speak at the moment, lol, seems to be bad for them every time. Ugh. 

    96. 96
      choices Says:

      #92-Calgary/Edmonton prob makes northern Montana appear to be a Sun Belt but they "may" not get as much wind up there-VTZ may jump on me for that comment.

    97. 97
      choices Says:

      That is prob why Papa sends out his minions.

    98. 98
      elijahwc Says:

      “too many obstacles” such as the recharge time for batteries.

      Natty gas auto's are coming to the US via Fiat.
      All it's gonna take is a few price sensible options to take this decision out of the hands of policy makers.

      I may get one as a daily driver around town as they are refuel-able at the house and we are getting a station nearby.


    99. 99
      zman Says:

      re 98. You can lease a NG Civic now for $600 /month 

    100. 100
      zman Says:

      JB and ZORG – could I get a read on REXX and NBL? Thanks. 

    101. 101
      Zorgnak Says:


    102. 102
      elijahwc Says:

      Yippes, FTK now #7 on the NYSE % parade. 

    103. 103
      Zorgnak Says:

      AREX Broke the recent channel this morning and is finding buyers this afternoon above it's recent highs at 20.38 clearing most of the overhead supply until  $22.73.
      Support is now $18.65

    104. 104
      Zorgnak Says:

      Long AREX

    105. 105
      Zorgnak Says:

      REXX @ 12.50 atm
      Major overhead resistance at $12.72
      Still stuck in congestion. Needs to clear $13.75 to break clear.

    106. 106
      zman Says:

      Thanks much Zorg. Around year end they could have well news on 2 Niobrara wells that may just break that log jam. 


      Listened to a number of old and new REXX calls today, paying more attention this time so I don't have to listen to some of those a third time. Interesting, sort of pricey on the assets, reserves but almost no debt, lots of cash and catalysts on the near term horizon (see them on the Catalyst page), may nibble. 

    107. 107
      zman Says:

      Yeah, going to play and then go to lunch. Nibbling REXX.

    108. 108
      Zorgnak Says:

      REXX  Volume Profile Composite

    109. 109
      zman Says:


      REXX – Opened a small REXX common position at $12.50. REXX is a small cap E&P with interests in the Marcellus, Niobrara, and a polymer oil flood play. I'll have one of my snap shot reports out on them either tomorrow or Monday. Starting small here. Near terms catalysts probably around New Year's with well results for two Niobrara wells.  Starting small while I come up the curve. 

    110. 110
      zman Says:

      Thanks Zorg

      Grabbing lunch, back in a hour.

    111. 111
      Zorgnak Says:

      re 98
      WPRT running today

    112. 112
      BirdsofpreyRcool Says:

      Must say (just because I must say it)… EXXI sub-25, post Exxon property acqnt, was an Early Christmas Present.
      Might be offered that again, before the month is out… but it honestly shouldn't trade down there.  The more I gets to know those properties, the more I likes 'em.

    113. 113
      BirdsofpreyRcool Says:

      Thing about Schiller is, he knows his strengths and sticks to his bailiwick.  No "offshore one day" and "Haynesville the next."  Nope… he sticks to his knitting.  Gots to admire a guy who is a good knitter!

    114. 114
      jy Says:

      MMR Blueberry Hill well- If costs are ~$110  million(drill & complete) for the well and it produces ARO 15Mmcf/d + 700 Bbls cond/day, w/no decline, subtracting 25% royalty and 5% operating expenses it will take 3.7 years for the well to pay out the D&C costs at $80 oil & $4 gas.  The well WILL decline at some rate, lets's optimistically assume  20%/yr (average GOM new well decline ~30%), it will take ~9 years to net $82 million.  This would be $28 million short of breaking even w/out factoring in a discount rate.
      These are rough estimates done by a geoscientist, but he is trying to see how these types of wells make money from their production.

    115. 115
      jy Says:

      Spelling review suggests that Suggestions is the proper spelling os "Sugegestions"

    116. 116
      elduque Says:

      BOP- Any chance you can find out whether the pop in GDP is short covering or whether they hit a beg well in the Eagle Ford.

    117. 117
      jy Says:

      "os" = of

    118. 118
      Zorgnak Says:

      A big thanks to whoever brought
      FTK to my attention.

    119. 119
      john11 Says:

      Looks like people finally reacting to mondays EGY news release.

    120. 120
      elijahwc Says:

      #118 – Food grade / restuarant quality frac fluid.  From our table to yours.

    121. 121
      Zorgnak Says:

      Lovely šŸ™‚

    122. 122
      skimo Says:

      Reef and Z,  a big thank you for GST. Took very nice profits today. šŸ™‚

    123. 123
      zman Says:

      Kudos to Jat and Ram for the HAL trade. 

    124. 124
      dij Says:

      WLL following, so far, a nice trendline the last three days, 106.65 to the current 111.80.
      Thanks for the completeness of your work!

    125. 125
      BirdsofpreyRcool Says:

      elduque — just called a super-duper-all-energy-trading desk for the poop on GDP (just for you!).  Anyway, the analyst said that there were some throw-away comments from some other shop about expecting results from 2 EFS wells outta GDP some time soon.  The comment was in the context of "look what happened to CRZO… so you might wanna cover your shorts."
      So, nothing concrete… other than shorts leaving the party.

    126. 126
      Zorgnak Says:

      re 124
      šŸ™‚ my pleasure

    127. 127
      redjack Says:

      more government intervention :

    128. 128
      zman Says:

      WHX – another $1.50 lower is the 200 day. Crack that and it should get crunked. The analysts are all in deep hatred here so again, look for them to reiterate their strong sell ratings. Looking to rebuy in the upper teens. 

    129. 129
      ram Says:

      Sticking with HAL.  I would imagine they will be raising prices as desperation sets in for fraccing.  "Got frac crew?"

    130. 130
      zman Says:

      BEXP topped $27. 

      WLL – long for the long haul in the common. Looking to release the $110 and $115 strikes upon news. 

    131. 131
      Jerome Blank Says:

      RE: #100 NBL, Noble is actually on my mention list….looks good, nice intraday flag on the 30 min framing short term support and resistance, strong P&F structure and NBL looks to be breaking out of the consolidation triangle pattern on the daily, updated charts
      Thank you for the votes, much appreciated.

    132. 132
      jat Says:

      re 123, thanks!  It's going to $1,000 tomorrow.

    133. 133
      zman Says:


      re 129. Ya know, on the last two calls they addressed that and price increases, at least in NAM are not the keys to the kingdom this time. They think they will get costs down and keep volumes up to boost margins.  They said they are working with clients … not to kill the clients off essentially. 

      re 132. I would be short up there. 

    134. 134
      jat Says:

      On a serious note, the news from Jefco from HAL was pretty positive, in terms of waiting times for new frac if you ordered it today.  Also international shale and sticking to goals from the recent analyst day.
      also, re GDP, just confirming with a few people… definitely an eagleford move. they said at jefco that the well was done and to be released with budget.  so people are looking for CRZO redux.

    135. 135
      zman Says:

      GST, WLL, BEXP, all on the list of any day now catalysts. Whole bunch more in the any week now to year end. Will update the Catalyst List for tomorrow. 

    136. 136
      elduque Says:

      re 125

      Thank you

    137. 137
      Geno Says:

      Re 114 The scariest part of the flow rate quoted on the Blueberry Hill #9 well was the decline in flow pressure and rate at the end of the flow test reserviors might not be as continuous as they think. 

    138. 138
      zman Says:

      re 134. Did you see a story re HAL bidding on something like $15 B of international shale work at the moment?

    139. 139
      jat Says:

      oh, sry, didn't see 125

    140. 140
      jat Says:

      it's not really at the moment, more like the opportunity over the next few yrs

    141. 141
      zman Says:

      re 137, thought that sidetrack was going into an isolated fault block….need to check notes. 

    142. 142
      jat Says:

      see page 49 of their analyst day presentation on unconventional shale, released November 10th

    143. 143
      Geno Says:

      Re 141 If it is isolated then it could be very small unless they have some kind of down hole mechanical failure.

    144. 144
      zman Says:

      Stepping back out for a minute again, the wife's B-day, gotta get a pie. 

    145. 145
      jiveyjr Says:

      I just voted and looked at JB's chart book…I thought my book was too full so I never looked at AREX until now…and to make matters worse they are a Fort Worth based Co. …what a whiff on my part….happy for those that bought it though!

    146. 146
      milepost_43 Says:

      #129.."got frac crew"
      Energy online labor demand up 49%…………. —
      The mining, quarrying, oil and gas extraction industry was up 49 percent, Monster Worldwide Inc said.

    147. 147
      Zorgnak Says:

      re #31 Forgot to look at this one….busy day
      Seeing the same situation as Jerome…NBL finding acceptance at the current price.
      A break above 86 may encounter  minor resistance around 90 with major resistance at 95-98
      Near term support at 80 and Major support at 76.50

    148. 148
      Jerome Blank Says:

      CIGX really winding….what's interesting is that it seems to be basing on the 200 day into a staging flag…

    149. 149
      BirdsofpreyRcool Says:

      jat — #139 good to have it confirmed.  thanks!

    150. 150
      BirdsofpreyRcool Says:

      JB — you say the sweetest things… will go vote now.

    151. 151
      zman Says:

      AREX speaking at Wells next week, guessing that will be well attended. 

    152. 152
      mimster90 Says:

      I bought some REXX (thanks zman) and a few cigx (thanks BOP) 2013 2.50 leaps, for some fun.
      I am wondering if in Jan the market willl have it's usual swoon.

    153. 153
      zman Says:

      Market moving to HOD, reminds me of BOP's statement from earlier in the day about payrolls tomorrow … they better not be on the shy side. 

    154. 154
      BirdsofpreyRcool Says:

      mimster — thank you for sharing your CIGX trade.  I know people think I'm nuts here… but I like the fact that I could lose 100% of my money…. or make several, several hundred percent.  (And I don't think I'm nuts…. but that's what crazy people ALWAYS say, isn't it?)  šŸ˜‰

    155. 155
      zman Says:

      Of course, another strong day in equities and we'll have $90 crude a month early too. 

    156. 156
      tomdavis12 Says:

      JB Voted. Didn't want the beginning of the month to show little.

    157. 157
      BirdsofpreyRcool Says:

      Gots to say, the Obama Administration is trying their BESTEST to make crude prices go UP.  Guess Soros is long the stuff.  lol

    158. 158
      zman Says:

      More eccentric than nuts really.

      Listened to NPR story about a farmer using electric tractors powered from panels on the farm. Now that's a good application of solar and electric transportation. Wonder who makes those. 

    159. 159
      elijahwc Says:

      OT – AMRN

      I’ve been waiting with baited breath for the pull back on this one.  I’m not sure that I’m going to get it so I just took a “research position (itsy bitty)”.  Technical types here, could you throw out a bone?  Help

    160. 160
      Pati Says:

      Maybe the Steel Workers' union isn't contributing enough???

    161. 161
      zman Says:

      Reef – again, thanks for the poke and prod on GST.

      My most recent primer on GST was in this post:


    162. 162
      jiveyjr Says:

      ATPG flying into the close on heavy trading….maybe, just maybe we get some permits eh?

    163. 163
      zman Says:

      Whitingthirty – presentation at Jefco in 1 hour

    164. 164
      zman Says:

      SUN on the tape punting an OH refinery, don't see that everyday, 

    165. 165
      BirdsofpreyRcool Says:

      jivey — it is amazing to me, how many of my investments are waiting on some govt entity to DO something… the patent office, the courts, the BUMMER, the FDA.  I sure didn't plan it that way… but Govt has stuck it's big, fat thumb into the Economic Plum Pudding over the last coupla years.  (And they wonder why business thinks the govt is not "friendly" towards them.  ha!  Boots on necks never feel very good, nor do they make for grateful subjects.)

    166. 166
      Zorgnak Says:

      re #159
      Took a look but I'm not very good at low volume stocks or ones that have broken into the clear blue. Sorry.
      Technical term for AMRN's chart pattern is  "Bottle Rocket"   

    167. 167
      elijahwc Says:

      Thanks Zorgnak
      I don't know what to do as entry points are 90% of the battle and I can see AMRN doing a whoosh down (but only if I make it more than a research psn).
      On the other side this one will be a monster fundie wise.  Much higher this time next year if I’m right.
      So we have the old enigma wrapped in a riddle as to “do we or don't we”.

    168. 168
      bondbuddha Says:

      voted JB

    169. 169
      crysball Says:

      ATPG ………drilling permint  approval..???
      BOP   the price and volume surge going into closing  would  seem  to indicate  you   'HIT THE NAIL ON THE HEAD'    am  adding  to  exsiting  postion s  in the after hours.!
      EGY  closes at  52 week high  on above normal volume (2 days in a row). Am  expecting multiple catalysts prior to end of Dec.  to  keep moving  it  along.

    170. 170
      ram Says:

      BOP – Have any info. on PAYD?

    171. 171
      zman Says:

      WLL – starting now:


    172. 172
      zman Says:

      Slides show those 4 wells as still completing and several wells in L&C drilling, including some stretching to the north west, far in that direction from the discovery well … so proving up more of the new part of the play. 

    173. 173
      zman Says:

      WLL Notes will be in the morning post

    174. 174
      crysball Says:

      WLL  presentation: ………….. As  Sergent  Friday  would  say:  'NOTHING  BUT THE FACTS   M'aam'"  …………..and very  impressive facts…..just  wish   they would have provided   cash  flow…………..but  in a way it is irrelevant  as they are projiecting  $1.1  capex  in 20111  and  within cahsflow.

    175. 175
      BirdsofpreyRcool Says:

      ram — PAYD is another hostage of the US Govt.  (I was serious about most of my major investments are waiting for some sort of Govt action).  We have our patent approvals (all of them!)… just waiting on the US Patent Office to put together the final binder (to include the original "master patent" and all the little "baby patents").  That is the last piece of the puzzle… the USPTO… and what kept us waiting all summer, the last time I thought we were close.  Company is doing what they can, to push things through before the end of this year.  But as bad as BUMMER is, the USPTO is worse.  Hence, The Waiting Game.
      Think we are seeing tax loss selling right now.  Nothing more than that.

    176. 176
      BirdsofpreyRcool Says:

      choices — #85… finally watched.  Wow.  That is FUNNY! 
      (not to mention true).
      Hedge Fund friend just sent me the same link… so, if you want to know where the Hedgies get their ideas (and how they talk to each other), you can see for yourself!

    177. 177
      zman Says:

      MCF on the tape with a short ops update, just cash and production levels. 

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