03
Dec
T.G.I.F.
Market Sentiment Watch: Payrolls came in light, futures plunged. Weird numbers compared to what other data have been showing of late.
Ecodata Watch:
- November nonfarm payrolls came in at +39,000 vs +155,000 expected
- Unemployment 9.8% vs 9.6% expected
- We get ISM nonmanufacturing at 10 am EST, forecast is 55%
- We get factory orders at 10 am EST, forecast is -1%
In today's post:
- Holdings Watch
- Commodity Watch
- Natural Gas Inventory Preview
- Stuff We Care About Today
- Odds & Ends
Holdings Watch: ZCAT (Zman Catalyst portfolio):
- $5,300
- 99% Cash
- Yesterday’s Trades: None
ZIM (Zman Inefficient Markets portfolio)
- $8,300
- 5% Cash
- Yesterday’s Trades: None
ZLT (Zman Long Term portfolio)
- 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 on Monday. Starting small here. Near terms catalysts probably around New Year's with well results for two Niobrara wells.
Commodity Watch
Crude oil rose $1.25 to close at 88 even. I continue to think crude is glued to a 2010 exit target of $90 but this is now looking conservative. U.S. fundamentals would not seem to support current prices but sentiment, the dollar, and technicals seem to be large and in charge at the moment. This morning crude is trading eseentially flat.
Natural gas closed up 7 cents at $4.34. The last two days of trading, while equity and crude market inspired, have managed to erase losses seen in the wake of Monday afternoon's ugly supply data release out of EIA. I see this as very short lived in nature. Yesterday EIA released a storage number that was short of Consensus only to see gas rise due to a rising tide, the economy is on the mend, type of market. Again, I don't see this as having staying power and will likely lead to sharp moves to the downside in gas when the inevitable warming trend hits mid winter. This morning gas is trading flat.
Natural Gas Review
ZComment: It's all up to weather at this point for the next several months, kind of a no brainer of a statement I know, but with production running at decade plus high levels gas in storage should should hug or exceed the top end of the range in chart A below unless we have sustained cold this winter.
Stuff We Care About Today
WLL Jefco Presentation Wrap
- Drill wells on paper - they think they can drill a 20,000' Bakken well, (that's 10 down and 10 over) in 12 days, so far their best well, spud to TD has been 13.29 days. The get the who horizontal leg done on one bit trip.
- Comment on their enhanced oil recovery projects, SEC only let them book 5% recovery factory. I recall them saying they will probably get 12% recovery in the past. They say their engineers put the recovery at at least 15%. That's about 120 mm barrels that are not going to be included in the reserve statement initially but will be over time.
- Lewis and Clark:
- The discovery well is "holding up well". Knew that from prior but good to hear it is still the case. They see eventually drilling three wells per unit here on their 232,000 net acres or 750 additional Three Forks wells. Compare that to the potential to drill 3 Bakken and 3 Three Forks wells (or maybe slightly more) on the 67,000 net acres in their Sanish play and that is significant.
- Didn't talk much about new plays in the concept phase like Starbuck and didn't talk about pending drilling results at L&C but those should be out any day now.
Other Stuff:
MCF Updates Activities
- Production: 104 MMcfepd, up from 102 MMcfepd in the last quarterly report. This is pretty strong.
- Cash of $43 mm vs $61 mm at last mention. The decline comes from exploratory drilling offshore and the company's onshore effort.
- No comment on operations.
- Created a new officer position, SEARCO - Safety, Environmental and Regulatory Compliance Officer, no doubt in response to the Macondo incident.
WLT & Western Canada Agree On Merger
CXO files $530 mm Shelf.
Next Week:
- A new catalyst list will be out with the Monday post
- I'll have a piece out on REXX on Monday
- The small cap Orange Charts will be updated on Tuesday
Odds & Ends Analyst Watch:
- PXD - FBR maintains Outperform - cites to catalysts
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.
Fugly Payroll Number… going to wait until after 10am ISM is reported to see how market really wants to react. Lots of headwinds… mainly blowing from Washington D.C. A toxic combo of Irresponsible and politically motivated "regulation" / tax increases / and more evidence of corruption (mildly phrased as "crony capitalism," think GE). Also, putting anyone who complains publicly about the TSA on an airline "watch list."
December 3rd, 2010 at 8:52 amI have to just shake my head at this stuff. The Permitatorium in the Gulf is particularly shameful (as is treating Americans like terrorists…. and terrorists like Americans).
File Under — "How You Know When Your Bribery Payment Was Not Large Enough"
December 3rd, 2010 at 8:54 amNigeria – the rebel Movement for the Emancipation of the Niger Delta (Mend) slammed a gov’t plan announced this week to extend an amnesty to an additional 6,000 militants and vowed to carry out further attacks against the oil industry. Mend said in a statement on Thursday that handing out cash payments to more militants would not sustain peace in the long term. “We will go ahead with our planned attacks at the appropriate time,” the group said. (Oil Daily)
Seeing more firms pounding the table on HK here… both as a seasonal nat-gas trade, as well as a technical, chart-based trade. Maybe JB can comment here.
December 3rd, 2010 at 8:58 amHere are the areas of interest I'll be watching today for clues. The overnight low may have to be adjusted before the regular session begins.
S&P Futures Intra-Day Areas Of Interest 12.3.10
1238.50 Major Resistance
1233.75 Major Low Volume Node
1227.50 Minor
1227.50 Overnight High
1223 Close Thursday
1221 Volume Point of Control Thursday
1220.50 Minor
1215 Minor
1213.25 Overnight Low
1204.50 Minor *
1196.75 Major Support
1190 Support
1179 Support
Notes CLVN 1217. *NVPOC 1205.25/CHVN 1204.50 Confluence
http://www.charthub.com/images/2010/12/03/FT71_ES_Composite
December 3rd, 2010 at 9:01 amBedTime Market Strategist's Musings from Last Night —
December 3rd, 2010 at 9:01 amEuropean Vacation.
The markets' vacation from European Sovereign debt fears was extended for a second consecutive session. European Equities were trading modestly higher as investors awaited the ECB press conference. The Euro also exhibited a level of relative calm that has not been present for some time. Spain sold EUR2.5 Billion 3 Year Notes at 3.72%. The bid to cover was 2.16x. That followed Portugal's sales of EUR500 million of 1 Year T-Bills yesterday at 5.28%. Those are obviously high yields but considering these nations are selling anything, it is a positive. The European Government Bonds markets received confirmation of support from ECB President Jean Claude Trichet who asserted that the Securities Market Program (SMP) was ongoing and that the ECB was buying in those markets. Trichet also confirmed that ECB's non-standard measures would remain ongoing as market conditions warrant it. The ECB has repeatedly tried to clarify that the SMP is not quantitative easing, since they follow the purchases with liquidity drains of equivalent value. We find the need to make such a distinction a little peculiar. Some market participants appear to be disappointed that it is not QE. The ECB is trying to communicate that it is acting responsibly from a price stability standpoint. From our perspective, even though the liquidity is drained, this is a far more aggressive policy than QE. The ECB is acting as buyer of last resort, whether it is the right or wrong move, it is a much bolder policy than supplying additional liquidity to the system.
Domestically the recovery story remained on track. Same Store Sales in the retail industry were widely better than expected as were Pending Home Sales. Our favorite indicator, Initial Jobless Claims, upticked to 436,000. They continued the pattern of two steps forward and one step back. Regardless, this reading was still the 3rd lowest reading since August 2008. Next week's number will be an important one. The first week of December generally sees the largest percentage jump in the Non-Seasonally Adjusted number, and the seasonal adjustment usually only adjusts for 60%-70% of the rise. Even considering those headwinds, we expect the seasonally adjusted number to be in line with today's reading or better. AAII Sentiment is at (or above) the 65% bullish level (Bulls/(Bullls + Bears)) for the second consecutive week (as well as 5 of the last 7 weeks). As we always point out, 70% is the sell signal threshold. The caveat is that if the economic data shows material improvements as occurred in 2003, then the signal loses its significance. It appears as though this environment is playing out in a similar manner. U.S. Markets also benefitted from the European stability – let's hope that is not an oxymoron. The big problem with having a two-day rally in the Euro is that it is usually followed by a selloff. Nonetheless, we suspect that come 8:30 am tomorrow, the driving force behind trading will be the BLS Employment Situation report.
Upgrades coming???…….see where GS forecasting $100 in 2011 and $110 in 2012…..JPM says $120 in 2012…..SA possibility raising Arab Light 78c…..wonder what prices they are using now?…..if they use these prices will they be raising target prices for stocks they follow? thanks.
December 3rd, 2010 at 9:02 amHK — rumor that XOM may buy HK's Fayetteville holdings… stay tuned…
December 3rd, 2010 at 9:04 amMP – yes, seeing same at a number of firms. High price of crude makes the heart grow bolder. On natural gas, I think the calls for a bounce are premature. Gas is holding up well because it has had a rotten year. Doesn't mean it should or will. So while I'd like HK to rally due to its gassiness I'd point out that 1) it is highly hedged anyway and shouldn't be this low and 2) a much better bounce candidate, if you think gas is going to move higher (which I don't in the near term) would be nearly unhedged SWN (about 15% for 2011).
December 3rd, 2010 at 9:06 amre 7 – that would be a weird deal. Especially now, with AOGC calling for that disposal well drilling moratorium.
December 3rd, 2010 at 9:06 amAgreed BOP, market day will hinge on the 10 am EST ISM #
December 3rd, 2010 at 9:11 am#9 — yep. I don't make these things up… just reporting the topic du jour from the Starbucks Latte Crowd.
December 3rd, 2010 at 9:13 amFrankly given the rally we had the last two days and the magnitude of the numbers whiff I think the only thing hold us from a 2% decline today is the potential for OK 10 am data.
December 3rd, 2010 at 9:15 amLove your posts bop…love your rumors
December 3rd, 2010 at 9:19 amHk, no flash,they just keep performing,the efs assets are amazing,andi it seem they got religion on share issuances
Also, hearing that KOG might not wait until January to do a 2ndary. On the other hand, it hardly makes sense to issue more stock without reporting results from wells waiting to be fracced. So, would expect to see an operational update combined with a 2ndary announcement. Lynn has shown that he knows how to put money to work in an accretive way. So who knows… maybe KOG will pull a BEXP and go UP on the news. Tough call.
December 3rd, 2010 at 9:20 amcrude taking it pretty well so far with lower dxy
December 3rd, 2010 at 9:20 amre 14, wouldn't be surprised, frankly I'm taking the over on Z's 125mln capex est for next year.
December 3rd, 2010 at 9:23 ambill — thanks… and backatcha. Keep those posts coming!
December 3rd, 2010 at 9:23 amFD = I own HK… from last spring… at much higher levels.
BOP – when you say hearing that, do you mean from a sellsider or someone close to the company. I ran the numbers and they can afford to wait longer. Several times in the past Lynn has apparently been scared by the macro environment and his deal timing, not to put to fine a point on it, stinks. Tell him to relax.
December 3rd, 2010 at 9:23 am1217 on the S&P Futs shaping up as an early clue. It was support yesterday and is now resistance in the pre-market,
December 3rd, 2010 at 9:24 amhttp://www.charthub.com/images/2010/12/03/ES_Intraday
I actually think this is the perfect time, just look at the reaction to the NOG deal!
December 3rd, 2010 at 9:24 amRe KOG – I would wait out the well results … otherwise he becomes a predictable guy, lol.
On a completely different topic, thinking to add weight to my offshore exposure via MCF soon. Dry holes are part of the game, not concerned about that. But their onshore volumes are acting to smooth the declines in the offshore program for little $ and I like the way they don't play nice with the Street.
December 3rd, 2010 at 9:25 amjat — yep. Not a matter of "if"… just when.
December 3rd, 2010 at 9:26 amAnd if KOG can drill, let's say, 20 net wells at — what — $7.5mm CWC? That would get you to $150mm and not include any non Bakken and/or acreage acqtn monies. So, you're onto something there….
Re 20. I think higher would be better, since he just did a "priced tragically in the bottom of the hole" deal in August.
December 3rd, 2010 at 9:27 amhmmm…. musing to self… 20 net wells would be a pretty big number…. must cut that back…..
December 3rd, 2010 at 9:27 amBOP – I didn't say don't do it, just don't do it now. Crude is likely to significantly stronger in 1H11 than 1Q10. That alone can take KOG through $6. See my math from the post a couple of days back, they can wait out the wells at year end easily. Do the same deal and dilute me less.
December 3rd, 2010 at 9:28 amZ painful advice on MCF: wait to buy it until you hear yourself say "Boy am I glad I didn't buy MCF at 57 because it's a terrible stock", then buy it.
December 3rd, 2010 at 9:30 amWe'll have the capex plan with well count in the next couple of weeks I think. We have the second tier loan in place and the revolver… no need to rush a deal there.
December 3rd, 2010 at 9:30 amWhat a fab opening. Don't you love the smell of a meltup. And all because the news is bad and therefore the thesis is intact.
December 3rd, 2010 at 9:31 amRe 26. Take the emotion out of the trade. I don't buy all at once anyway. And "soon" to me is a next 30 days or so add.
December 3rd, 2010 at 9:31 am#3 HK…was on my watch list yesterday,
December 3rd, 2010 at 9:32 amHK 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….
this morning HK opened and holding above the 200 day, looks good….
ATPG = bummer if you're still short there…. 😉
December 3rd, 2010 at 9:36 amchoices — nice use of a/h trading!
December 3rd, 2010 at 9:37 amWLL – glad to see no news release for WLL today, would rather be on the normal Monday to Wednesday and market is paying attention time frame. Expecting it next week on Lewis and Clark – 3 or 4 wells. They are now drilling to the NW of the discovery well in a long step out well. Success there would make the end to end diagonal run (NW to SE) in the play almost twice as long. This play adds somewhere between 500 and 750 wells. Meanwhile Sanish and Parshall are going to 6 or more wells per unit next year. Then you will have Starbuck and the other new plays which will get a well in them in the 1st half of 2011 (once the weather warms up). WLL has 9 rigs running in Sanish now, 4 or maybe a 5th running in L&C. L&C is going to 9 soon with 1 of those tasked to move about to Starbuck and others.
December 3rd, 2010 at 9:37 amThinking the HK scuttlebutt is not so misplaced as the bigs are looking for long dated assets.
December 3rd, 2010 at 9:44 amAlso, for you techies, is that a cup and handle on HK's daily chart?
JP Morgan put out a piece that 18% of all mutual funds are behind their benchmarks. Since our XLE has gone from 9 out of 10 in mid july to 4 th place now, you might see additional flows into our space to go after beta and try to catch up.
December 3rd, 2010 at 9:48 amWLL – breaking out to all time highs.
WLT – missed a shot at down $4 on the deal is done news this morning.
BTU and other coals running
December 3rd, 2010 at 9:49 ame: ATPG…saw a lot of volume and price spike late yesterday, but didn't add into it. Been faked out so many times here but have a nice chunk anyhow….
December 3rd, 2010 at 9:50 amISM in 4 minutes, group acting a lot better than the market.
December 3rd, 2010 at 9:53 amjivey — ATPG, me too.
December 3rd, 2010 at 9:56 amScuttlebutt is that Obama announced the "Eastern Gulf Moratorium" b/c BUMMER is about to allow some more permitting. So, a nod to his peeps (that was pretty meaningless to any company's existing position… except — was it — Chevron) while at the same time, allowing some business (well, PRIVATE business) to creep back into the Gulf.
ISM at 55, in line.
re 39 thanks.
December 3rd, 2010 at 9:59 amBOP-think that was Crys on a/h on ATPG-I'm not that quick.
December 3rd, 2010 at 10:01 amCHK breaking up over a downtrend line that has been in place since 11/10.
December 3rd, 2010 at 10:03 amchoices — oops. Too easy to get you Two Smart Cookies confused, first thing in the a.m. Kudos to crys, then!
December 3rd, 2010 at 10:03 amZORG or JB – thoughts on resistance on WLL when you get a chance.
JB – going to go vote now. Here's JB's link:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280
December 3rd, 2010 at 10:06 amNext week is ecodata light (scroll down):
http://www.marketwatch.com/economy-politics/calendars/economic?link=skey
December 3rd, 2010 at 10:08 amre # 39
December 3rd, 2010 at 10:14 amhttp://www.charthub.com/images/2010/12/03/AREX
ATPG is the resistance King in my book. When it turns to short covering it should be a show.
disregard the AREX on the end of the address..it's ATPG's chart
OT…Thx to VTZ..I bought into CEF, didn't really like it at first because it was a closed end fund, trading at a premium etc. BUT it holds a mix of gold and silver and has really made me a lot more money than holding that leveraged paper via GLD…thx buddy!
December 3rd, 2010 at 10:15 amCXO….Would anybody know how long before the availability to use the new shelf registration from CXO ?
December 3rd, 2010 at 10:16 amRe 48, should be nearly immediate, but have not looked at the filing itself.
December 3rd, 2010 at 10:18 amthx
December 3rd, 2010 at 10:20 amre 50. Put a toe in REXX yesterday.
December 3rd, 2010 at 10:21 amZORG and JB – same thing on NOG, going ballistic over the last few weeks, trading in new air.
December 3rd, 2010 at 10:22 amRE 47 – Here to contribute just like everyone else… Oil sands contributions have been limited because the money has been flowing straight to the Bakken and the other hot plays.
December 3rd, 2010 at 10:25 amAre you holding any gold equities through a fund or otherwise? The juniors and equities are trying to break out in a big way and that will be even more explosive than the gold price. Today's close is going to be crazy bullish regardless of where it closes at this point.
Looking for 1500+ by year end and 1600 in the spring.
re 53. Any thoughts on the CNQ budget released last night?
December 3rd, 2010 at 10:26 amRe # 44
December 3rd, 2010 at 10:27 amThe way I look at things there isn't any resistance on WLL……..Clear Blue…Ceilings unlimited
Volume studies show the new highs being confirmed on weekly and daily time frames.
Long WLL
ZORG – no bolly band resistance or some such thinking?
December 3rd, 2010 at 10:28 amOT again to VTZ…I hold GORO, AAU and NEM…no others; I have been buying GROW a mutual fund in San Antonio that specializes in natural resource mutual funds too; heavy concentration in metals related funds.
December 3rd, 2010 at 10:28 amGDP and GMXR starting to move, my guess is the gas rally thesis and short covering.
December 3rd, 2010 at 10:30 amRE 53 – Just that it's not surprising and it goes with what I've been saying about the still overheated market and rising capital costs. I had always assumed that it would either be cancelled completely in favour of insitu expansion or phased much more carefully. It's really the only way development makes sense at these prices.
December 3rd, 2010 at 10:31 amvtz any thoughts on COS.un or coswf
December 3rd, 2010 at 10:37 amWHX
Emailed in question from a former holder asking about when we buy back in. "I" plan to buy back in once it falls to the upper teens. I think it will crack $20 and then really tumble and I am waiting for it to do that and then settle out in the $17 to $18 range which will give it a nice fat yield and probably inspire a slow melt higher over the next few months into the next distribution. They are oily (about 56% of production), they are declining more slowly that expected (less than 5% per quarter sequentially) and they only partially hedged (giving them exposure to higher oil prices down the road).
December 3rd, 2010 at 10:37 amThe payout drop makes it obviously way less attractive although I find it odd that it is being punished so much because the conversion from a trust was not a surprise. The drop is somewhat surprising although they are likely trying to retain some more capital for growth opportunities. Keep in mind that the sustaining capital and fixed op cost requirements for a mine are very high and represent the biggest portion of oil sands costs, (much higher than energy or other variable costs). Like CNQ, they are also probably struggling to set enough capital aside for growth.
December 3rd, 2010 at 10:52 amA while ago I had commented that I preferred SU over COS since the PCA merger/takeover and I think that the remainder of fund money that is left in COS is now shifting as well.
re #56 I don't use BB's that much …especially for calling resistance points in a strong running stock.
I find BB's to be more reliable for finding support.
ATM it's running up the upper BB now. Last time it did that it ran for another 6% or so.
With that said…
If the stock gets extended 5% above the BB I start to get nervous and take some off the table.
December 3rd, 2010 at 10:52 amre 63 – OK, that answers it, thanks much. Timing some option exits, no plans to sell the common.
December 3rd, 2010 at 10:54 amI'm font challenged 🙂
December 3rd, 2010 at 10:55 amVTZ- I met fellow from Alberta who was very bullish on the oil sands cos and Canadian Mid Caps. Main reason was the change in royalty status in Alberta as of Jan. 1. Would you care to add anything to that.
December 3rd, 2010 at 10:55 amre 63 … and I assume that all applies to NOG as we crest $24 now?
December 3rd, 2010 at 10:56 amREXX looks really good to me and if they hit a decent EUR well there in the NIO that should be worth a couple of dollars a share next year. You can take this information and $ 5 and buy yourself a cup of coffee. CXO has 3 deals that are in advanced stages of discussion. The one that seems like it is going to happen and have just been waiting to see how the would structure the deal is probably already a handshake. Personal opinion, look for them to buy the largest publicly traded service company here in Midland. BAS has already had a huge run up so the pieces look right and this would be an excellent fit for CXO and make the company more structured like PXD. Guess we will see what happens.
December 3rd, 2010 at 11:02 amZTRADE – ZLT – TAT
TAT – Sold all at $3.14, up 1%. I will continue to watch the story and may rebuy later.
December 3rd, 2010 at 11:07 amRE 64
December 3rd, 2010 at 11:10 amSome of this is pretty obvious but…
WLL met sellers at 114.01 today and rallied back to 113.56 and is currently below the volume point of control for all sellers and buyers today.
It still is above VWAP for the day however.
I've sold 3/4 of my WLL calls this morning on the pop. I'll hold the dregs unless it appears we'll breakdown through yesterdays highs at 13.04.
That's what I see and my plan so far…
http://www.charthub.com/images/2010/12/03/Arex_
Hear ya West, on normal valuation metrics the name is not exactly cheap but they should also be set to change their production profile to a steeper growth curve soon and the Niobrara and should provide more impetus for new holders seeking a small cap way to play.
December 3rd, 2010 at 11:10 amVTZ – Elduq CSFB put out a piece on SU a few days ago. I can forward to Z if you have an interest and he allows.
December 3rd, 2010 at 11:19 amre 72 – please and thank you.
December 3rd, 2010 at 11:20 amZ: 72 is that OK with you?
December 3rd, 2010 at 11:24 amRE 66 – The conventional oil and gas rates are changing in 2011… not the oil sands ones. The only thing on the horizon for oil sands in terms of royalty related impacts is the Bitumen Royalty in Kind where the government is going to become an energy marketer by sending royalty bitumen to Northwest's Upgrader which will start construction shortly and probably be complete in 2014 if I had to guess. This will help to effectively debottleneck Syncrude, Suncor, Albian and Horizon if they build enough capacity.
December 3rd, 2010 at 11:24 amI'll send him your email but in the future I'd appreciate not playing phone operator.
December 3rd, 2010 at 11:25 amRe NOG
December 3rd, 2010 at 11:25 amSame basic short term picture as WLL
Strong volume buying demand on all time frames (Weekly,Daily, Hourly) with prices encountering little to no selling volume.
I've taking profits along the way and down to a full position now. Long the common . No options
Coug – check your email
December 3rd, 2010 at 11:27 amCrys – check your email, thanks.
December 3rd, 2010 at 11:35 amThanks Zorg. I'm long the common only at the moment.
December 3rd, 2010 at 11:36 am76 Sorry
December 3rd, 2010 at 11:42 amNo apologies, I just get 20 or so "send it to me too" emails every time someone offers me up as a source for Street research …gets old fast as I'm actually kind of busy doing other stuff. It's much better to summarize for the group here. Or send me an email and keep the idea off the site.
December 3rd, 2010 at 11:44 amS&P 1217 remains support today…
December 3rd, 2010 at 11:48 amBulls don't want to see this get much below the open. There's a lot of work to do below.
Tom – didn't mean to bite, keep up the good work.
December 3rd, 2010 at 11:53 amRatberto – Can you see me now?
December 3rd, 2010 at 11:57 amand thanks much!
December 3rd, 2010 at 11:57 amhttp://www.bentekenergy.com/InTheNews.aspx#Article2962
December 3rd, 2010 at 12:02 pmArticle projects decline of Canadian gas to US-do not have full access to article-need membership to following site, which is prob expensive as hell:
http://www.bentekenergy.com/
Bloomberg Businessweek story saying Niobrara field to add 100 wells in 2011 (EOG, NBL, APC ) to reach 120, up from 20 this year. That leaves a lot of smaller folks unaccounted for, going to be a lot more wells than that from what I can tell so far. Also leaves out big name CHK.
December 3rd, 2010 at 12:02 pmre 87, thanks, all the really good sites are.
AREX backing and filling, so tempted.
December 3rd, 2010 at 12:03 pmRelated to #87, I thought this presentation was extremely informative (FWIW-takes a while to load):
December 3rd, 2010 at 12:05 pmhttp://www.transcanada.com/docs/Investor_Centre/MASTER_INVESTOR_DAY_2010_PDF_for_Website_Final.pdf
Off Topic Small Business Technology Question:
I need a new wireless router for the office. Old one is a 6 month old Wireless N from Linksys. Signal suddenly weak, can't stand their software. Was thinking D-Link but am shooting in the dark here. Need to be able to hard wire 2 PCs, and have another 4 connected wirelessly plus 2 wired printers. Any thoughts?
I ask because I have had lots of luck polling you guys for tech that actually works
December 3rd, 2010 at 12:08 pm
December 3rd, 2010 at 12:12 pmA musical treat for this season of giving back . . . Outstanding.
85 – yes, thanks.
December 3rd, 2010 at 12:13 pm91 Try a s/w update first. It helped mine a while back.
December 3rd, 2010 at 12:14 pmA little Lunchtime Reading… remember when Teachers were scaring little kids about Santa Claus melting and Polar Bears dying off in droves? Guess there is no money left in that scam. (Not saying climate doesn't change… just saying we are a teensy part of a larger system.)
December 3rd, 2010 at 12:18 pmhttp://www.washingtontimes.com/news/2010/dec/2/pruden-turn-out-the-lights-the-party-s-over/
(only 'cuz it's Friday… ) 😉
December 3rd, 2010 at 12:19 pmhttp://www.stockwatch.com/News/Item.aspx?bid=U-i0693703-U%3aTRP-20101202&symbol=TRP®ion=U
December 3rd, 2010 at 12:19 pmNews item relates to presentation #90, keystone pipeline to transport crude from Bakken, slide 66
FWIW-Keystone has been mentioned previously on this board-hope this is not redundant
re 92 – very cool.
RMD – tried it, no joy.
re 93. Excellent.
December 3rd, 2010 at 12:20 pmre 97 – hearing a rumor of another big Bakken crude pipe in the works.
December 3rd, 2010 at 12:21 pmZ: I switched some of my EOG to APC earlier this week. I am thinking a 2 – 4 year investor MUST have exposure to W Africa from what I have heard at energy conferences. Any agree or disagreement will be happily listened to.
December 3rd, 2010 at 12:23 pmPati — i like your link better than mine. Thank you for sharing!!
December 3rd, 2010 at 12:25 pmRe 100. Very hard to argue with. Good timing on the switch, APC seemed to ride with the market and it only took three strong announcements to get it off the ground. Noting that our govt spill panel today called the oil industry "complacent" this morning so you will have to contend with headline hand grenades from time to time with APC, RIG, BP, HAL, CAM and a few others but I cannot argue with the need for this exposure. APC would very much be a good target for CVX or COP to take out were it not for potential liability for Macondo and I think that is waning. Big Eagle Ford position, big deepwater, big international.
December 3rd, 2010 at 12:27 pmGST = nice move.
December 3rd, 2010 at 12:28 pmSpeaking of West Africa… EGY.
December 3rd, 2010 at 12:42 pmThank you, Crys, for being our Point-Source Guru on that one!
Crys – thanks for that email, too nice.
December 3rd, 2010 at 12:46 pmBOP: Will look into EGY and report back. Still would like to claim worst idea for the year. NE now down 16% YTD. Anyone want that crown can throw out their worst idea. Not trying to be hard on myself. I just have much more respect for people who own up to their mistakes ( unlike Cramer ). We ALL make them.
December 3rd, 2010 at 12:49 pmdij – check your email
December 3rd, 2010 at 12:51 pmThanks Pati.
December 3rd, 2010 at 12:56 pmdella05 – check your email
WLL = walking up into news next week, much more and I take some calls off the table as it may be approaching a BTRSTN event.
Z, i've had my dlink for several years after switching from linksys. Find it much more stable/doesn't overheat/etc.
Check out this site for router reviews – I always review this site before purchasing anything network related:
December 3rd, 2010 at 12:59 pmhttp://www.smallnetbuilder.com/component/option,com_wireless/Itemid,200
Thanks much, will do. Which Dlink do you have?
December 3rd, 2010 at 12:59 pmLNG tanker rates are near yearly highs in most segments
One LNG shipper than i like and in is GASS– Book is over 10.00 with the stock at 5.70. Specializes in small sizes
Drys is up big today as they found an investor for 20 % wholy owned Ocean Rig and announced they will stop selling shares into the market ATM program. Ocean Rig own deep floaters and drillships to be delivered
I dont like the ceo so drys is in my dog house, but this is good news for them. He dumped the drilling rigs onto drys when oil was 40.. Now with oil pushing 90, the day rates for rigs have improved
On Gas carriers:
CHARTERING
There were no new 2010 records in the VLGC spot market last week, in fact it has been a rather uneventful week. A couple of days were spent waiting for announcement of December posted prices and a couple of days have been spent to digest the prices that came out very similar to the all time high set in July 2008 (at a time when crude oil was in the usd 140's per barrel). There are some forces in the market claiming that the rates are about to come down (more than an adjustment) within short, the largest independent owners are convinced they have put the market in the high usd 40's to stay there much longer. The BIG3 (BW/APM/MOL) dominate the list of available December vessels, they will hang on to continued high rate quotations and will not be charterers' first choice for the remaining December cargoes. The number of FOB cargoes in need for spot December freight is not clear yet, therefore it is hard to estimate the spot rates ahead. The 4th VLGC NB contract of 2010 has just been confirmed when SK Shipping signed a 2013 Q1 delivery of an 82,000 cbm vessel at HHI.
ACTIVITY LEVEL
COASTER
15-23,000 cbm
82,000 cbm
Firm
Firmer
Low
RATES
SPOT MARKET (usd/month***)
This
week
Last
week
Low
High
82.000 cbm / FR
960,000
960,000
195,000
960,000
57.000 cbm / FR
635,000
650,000
360,000
650,000
35.600 cbm / FR
585,000
585,000
460,000
675,000
20.000 cbm / SR*
660,000
640,000
550,000
670,000
10.000 cbm ETH**
580,000
560,000
460,000
600,000
6.500 cbm / SR
525,000
500,000
450,000
650,000
COASTER Europe
330,000
325,000
195,000
450,000
COASTER Asia
240,000
240,000
* 20,000 cbm s/r reflects average spot market, LPG and Petchems (segment 15,000 / 23,000 cbm)
** 10,000 cbm eth reflects average spot market, Petchems and LPG (segment 8,200 / 12,500 cbm)
December 3rd, 2010 at 1:00 pmEld- quick question for ya in an email
December 3rd, 2010 at 1:04 pmRe 61 WHX
December 3rd, 2010 at 1:09 pmVolume composite shows potential areas of support for WHX @ 20 and 18.71. Starts to get a bit thick at 18 and below.
http://www.charthub.com/images/2010/12/03/AREX_2
canadian oil sand (COSWF.PK) off 10% today on heavy volume; I see no news.
December 3rd, 2010 at 1:14 pmQuestion… anyone follow the GDP situtation?
December 3rd, 2010 at 1:28 pmRe 116 – yes, wrote it up earlier this week.
December 3rd, 2010 at 1:34 pmZ, re Wirless Routers
December 3rd, 2010 at 1:35 pmDon;t know what speed you are looking for, but Netgear has always been reliable in the home office environmentt and the range [distance from router] is quite good for the rf signal(so you can work outside when the weather is nice) , and seems immune from RFI [radio frequency interfernce] .
Thanks Zorg on the WHX, I continue to wait it out with about that level in mind for a re entry
December 3rd, 2010 at 1:36 pm#117 — going to toddle off to the medicine cabinet now… and rummage around for some of those ANTI-STOOPID pills.
December 3rd, 2010 at 1:42 pmGotta be around here somewhere….
Paul – re coswf- they announced their plans on how they are going to switch from a trust to co. Mkt was expecting the dividend to be cut to .40 quarter and they are cutting it to .20 quarter.
December 3rd, 2010 at 1:42 pmRe 120 – didn't mean to imply that at all, was on the phone with a guy about a thing. You want the link to it, really wasn't much of a piece of work.
December 3rd, 2010 at 1:44 pmRe 115 Paul, COSWF announced a dividend cut for next year when they loose their trust status
December 3rd, 2010 at 1:44 pmhttp://www.cos-trust.com/newsreleases/PressReleases/PressReleaseDetails/2010/Canadian-Oil-Sands-Provides-2011-Budget1123433/default.aspx
Re 118 – thanks very much.
December 3rd, 2010 at 1:50 pm#120 — didn't take it poorly… just had missed your GDP write-up, for some reason (Wed)… and i DO read your morning blurb… i really really DO.
December 3rd, 2010 at 1:52 pmCould you add the two EFS wells to the Cat List? Sounds like could be results any day…
Yep, they are on there for next Monday's update
December 3rd, 2010 at 1:53 pmI have them down as by year end
December 3rd, 2010 at 1:53 pmNot sure if this was on the site but Gov Patterson has 10 days to sign the frac moratorium in NY through May
December 3rd, 2010 at 1:55 pmSD has been up last couple of days-this is a noteworthy event-have seen no news.
December 3rd, 2010 at 2:14 pmWill have that REXX piece out on Monday.
December 3rd, 2010 at 2:19 pmBOP………….PAW TALK……….ATPG
December 3rd, 2010 at 2:19 pmBased on your 'heads up' about about a possible ATPG GOM Permit late yesterday………..did 'stick out my paw for ATPG in the after hours and got filled (multiple accounts) and sold today (nervous about past ATPG roller coaster experiences).
Muchas Gracias for the 'Heads~up'.
"PAW TALK"… smiling… 🙂
December 3rd, 2010 at 2:22 pmClients only love ya, when you make 'em money. Can't book it, 'til you sell it. Nicely done!
WHX – the crunkage continues, down 5.7%
December 3rd, 2010 at 2:23 pmWild Hare (or is it Hair?) PAW = snatched a few GDP earlier… ya never know what might come out over the weekend… and it's fun to burn shorts for warmth in the winter. heh heh heh.
December 3rd, 2010 at 2:24 pmFingers crossed. This is not my usual M.O.
OAS — z, your EXXI –> OAS swap continues to outperform. Aren't you up something like 100 PER CENT on that trade by now??
December 3rd, 2010 at 2:26 pmNOG and OAS – vaulting higher now. People seem to want to be long the Bakken 5 (BEXP, KOG, NOG, OAS, WLL).
Took a hard look at CRED , not going to play but it may if the main names keep picking up. Other Bakken participants like CLR (too rich for my blood), AEZ (part of HES), CXO, EOG (own it but not for the Bakken so much as the EFS), SM, NFX (owned for this and lots of reasons), SSN (owned for this and Niobrara, they have a small piece but they are very small themselves), VYOG (the next NOG wannabe), BSIC (way too pricey for me now), and AXAS.
Or I guess one could just play ICPAX. Naaahhh.
December 3rd, 2010 at 2:33 pmZ, re:111, I have the dlink dgl 4500 (http://www.dlink.com/products/?pid=643) it was a bit pricey when I bought it as it just came out but that was a few years ago. It used to be at the top of the chart for the speeds but now not on list (outdated).
December 3rd, 2010 at 2:47 pmThanks BOP, but no, not that good. I sold half of the EXXI in July in the mid teens so with EXXI now at $26 it was just an OK swap.
December 3rd, 2010 at 2:48 pmRE GDP- I think (which is a whole other subject) that they are in a very nice place in the EFS, at least that is what their slides show. So they are transitioning themselves from a pure play nat gas. co. Not sure that the market a couple of days ago was aware of that.
As an aside it seems to me that the Jeffries conference was when "others" became aware of it, at least the price action would suggest that. It was certainly outlined during their quarterly, but it was like no one was paying attention.
December 3rd, 2010 at 2:48 pmI wonder if this is just an anomaly, or are there other stories out there that the "others" just miss. In answering my own question, that is why this site is so valuable.
Boss – Thanks, am looking at the 3700 which is near the top of that list now. I am a neophyte in that space, can't tell if I can plug in 4 and 4 more wireless or if 4 is the total number of connections. Thanks for the help here.
December 3rd, 2010 at 2:49 pm“SD has been up last couple of days-this is a noteworthy event-have seen no news.” choices #129
Maybe its this:
Earlier today West offered up the following: “CXO has 3 deals that are in advanced stages of discussion. The one that seems like it is going to happen and have just been waiting to see how the would structure the deal is probably already a handshake. “
Since He has previously spoken to CXO’s potential interest in certain SD assets I went back and checked the notes. Here you go:
“Although CXO is probably not the highest offer for SD's non-essential Permian Basin properties, on total value of the two different areas, I still think that they are front runners to do this deal……..The Wolfberry has established production plus some very promising acreage in clusters that are very desirable. This should be valued at or above $200 million if recent prices for other properties in the area are applied. Since there is established production and most of the northern acreage will probably be in PUD designation in the next year, this is also attractive to cos like LINE and LGCY. Private company Henry Resources also has large position in northern Upton and southern Midland Counties. The hottest part of the Wolfberry play continues to be Martin Co. where many wells are IPing around 300 bopd and some associated gas. That is a extremely profitable vertical well at less than 10k'……………….SD's acreage in the Delaware Basin of Texas has huge potentional , the area is still in its early stages of development for Bone Springs and deeper formations. Once again we have an area of interbedded sandstones, carbonates and shales . New technologies, horizontal drilling, high rate fraccing and seismic imaging while fraccing is making the economics work on very tight formations. SD's large concentrated acreage position greatly increases inherent value of this block…” West 10/07
“.CXO cc address, for those with an interest in why the Permian Basin remains one of the hottest plays in the US…..Looking for SD to get top money for their PB assets that they will probably announce tomorrow.” West 11/04
December 3rd, 2010 at 2:59 pmnewbomb182 – please check your gmail
December 3rd, 2010 at 3:03 pmthx, Eli..re: SD
December 3rd, 2010 at 3:06 pmnow that Bill has dumped this wunnerful stock, I think I'm the only remaining long-term sufferer…
.I keep it on my sheets so that when my wife's outta town, I still get constant reminders of how incredibly stupid I can be at times. only good move I made was I quit buying it around $7…started much higher tho
elduque — #139 thank you for your thoughts here. Was just going thru GDP's latest presentation. Story is a lot cleaner than I recalled. And that EFS acreage looks very promising. Would love to hear about a well (or two) that IP'd close to 1mboe/d. Any sense of timing of that?
December 3rd, 2010 at 3:06 pm#141-Eli, thanks!
December 3rd, 2010 at 3:08 pmThat is an extremely important summary-it certainly seems to be the reason.
re 144. They do have a good slug of debt. Recall they were a Gulf Coast explorationist turned Haynesville player turned EFS. I like Gil but sheesh. Still, very gassy, big debt but with catalysts. You do want the leverage on the balance sheet if gas prices rise. I think if the stock moves up much they have to do a secondary as they are deep in now, just to fund the program. Timing on the 2 EFS was said by them to by the end of the year.
December 3rd, 2010 at 3:09 pm#143-I'm in there as well, jiveyjr-not in size but enough to be pin prick every time I pull up the screen on IB.
December 3rd, 2010 at 3:11 pmNBL
December 3rd, 2010 at 3:12 pmKeep an eye on NBL. Above 85.95 on good volume would be a breakout. It may not be today's business as it's up on less than average volume but then so was NOG until 10:45.
Room to run to $98
thx Zorg re: 148…I put a bunch on my sheets because it was mentioned on here and I liked its weekly chart some time back….
December 3rd, 2010 at 3:14 pmLivermore said he made his most money sitting…I'm sitting with a hand I really like and I really want to sell some stuff but I just can't…anyone else feel that way?
Another plus, is they have been quaranteed verbally to have 2 frac crews for next year. When asked did they have a firm contract, Gil said no, but they had been dealing with the driller for years and had no reason to expect that something different would happen. I assume there are still places in this world where a person's work means something.
December 3rd, 2010 at 3:18 pmGoodrich Petroleum 3-Day Rally on Eagle Ford Strength: Stifel 14:19 [CRZO US 31.60, +0.82][GDP US 15.60, +0.56]
December 3rd, 2010 at 3:19 pmGoodrich Petroleum rises for third day after Carrizo Oil reported strong 24-hour well rates in Eagle Ford shale near Goodrich properties, Stifel Nicolaus says.
GDP has risen 19% in past 3 days; yesterday took out 50- 150- and 200-DMAs
NOTE: CRZO said Nov. 30 Mumme Ranch 10H well at initial prod’n rate 1,011 b/d; 12H had rate 1,220 b/d GDP Burns Ranch, Pan Am wells located north of CRZO’s Mumme Ranch in La Salle County, Texas, Stifel says Stifel has a buy rating on the shrs (upgraded Nov. 5) with $17 PT
BOP – Is there a schedule for continued distribution for CIGX? Have you heard of any feedback from the first distribution?
December 3rd, 2010 at 3:19 pmelduque — that seems to me to be pretty big news. thanks! Hearing about the same thing with Lynn (KOG) and his HAL frac crews. When you are a straight shooter, people remember. Still nice to see "what goes around, comes around" in real life.
December 3rd, 2010 at 3:22 pmram — NO! CIGX management being freakishly quiet about what is going on. That said, inVentiv has complete control on the marketing and distribution of CigRx. What I am waiting to hear/see, are one or two of the university-based, independent studies on the compound. They are out there… just not floating around in the public domain yet.
December 3rd, 2010 at 3:24 pmZ- when they say that the cvt. have a put/call due 12/1/11 what does that mean. Are the bondholders allowed to put the bonds back to the co. at par?
December 3rd, 2010 at 3:25 pmWhy is it that everything these days seems to take so much longer? Except for information/obscure news blurbs…. THAT seems to travel the globe at light-speed, thanks to the internet.
December 3rd, 2010 at 3:26 pmCowboys on camels… just have to keep that in mind.
hanrow – please check your email
December 3rd, 2010 at 3:28 pm#155 — yes. That is one of the reasons I bought the GDP convert a long time ago… bondholders can put the bond back to the company at par, on Oct 1, 2014, or 2019, or 2024.
December 3rd, 2010 at 3:28 pmRe 155 – better question for BOP, Eli
December 3rd, 2010 at 3:31 pmto add to#158 — it's no worse than having a bond come due on Oct, 1, 2014. Still a few years away… and if stock is trading over $34.658, bondholders will not want to convert.
December 3rd, 2010 at 3:33 pmGiven that they have $175MM with a put due 12/11 then the banks must have been comfortable enough with their ability to finance or they wouldn't have raised their credit facility from $200M to $250M.
December 3rd, 2010 at 3:33 pmThey did say they were going to sell off $70M in assets.
sorry… meant to say, "bondholders will not want to exercise their put."
December 3rd, 2010 at 3:35 pmWe'll see some short covering if we take out 1223.25…next target is 1225.50
December 3rd, 2010 at 3:38 pmThey have two bond issues.
December 3rd, 2010 at 3:39 pmTEXW – please check your email
December 3rd, 2010 at 3:39 pmShould have said if we see some short covering…It's Friday
December 3rd, 2010 at 3:40 pmHK putting in a big move on volume late in the day today…I'm loaded so not buying
December 3rd, 2010 at 3:42 pmeld; mucho thanks!! i appreciate your post
December 3rd, 2010 at 3:42 pmBOP is it going to make any difference to the futures nat gas players that when they go into work on Monday the temp is going to be in the 20's. It used to, but I haven't paid any attention for years.
December 3rd, 2010 at 3:42 pmNFX >70 = happy camper here. Picked some fruit from that tree today. Thanks Z
December 3rd, 2010 at 3:43 pmGDP — your're right. Other one is $175mm and puttable on Dec 1, 2011. Company is expected to generate $144mm of EBITDA in 2011, so it shouldn't be an issue to roll that debt over either.
December 3rd, 2010 at 3:43 pmSorry, have one eye on something else… seem to be working with only half a brain today.
DrLink; thank you as well!
December 3rd, 2010 at 3:44 pm#169 — that is a better question for z and 1520s and jat… 😉
December 3rd, 2010 at 3:44 pmHK — making like a condor and soaring into the close…
December 3rd, 2010 at 3:45 pmRe 170 . Sweet.
Re 173/169. Very short term probably.
December 3rd, 2010 at 3:45 pmfor those interested mcdep.com had a research piece posted on sunday from end of october on the canadian oil sands; clearly the market did not expect 20 cent dividend
December 3rd, 2010 at 3:46 pmREXX on the tape with news on their cryo plant being operational in Butler, PA, wouldn't mention but I just started buying yesterday. News is in line with prior comments by them it seems.
December 3rd, 2010 at 3:50 pmS&P 1225.50 to the penny LOL
December 3rd, 2010 at 3:51 pmzman or VTZ. How would you rank the different canadian oil sand stocks? I am not looking to buy at the moment, but I would like to have a short list of which ones to investigate and add to me watch list.
December 3rd, 2010 at 3:51 pmHK – 3 HK Petrohawk Energy is considering selling assets valued at $1.5B — Dow Jones ($19.74 +$0.76)
December 3rd, 2010 at 3:52 pmThe potential sales includes natural-gas distribution systems as well as land in the Fayetteville shale, according to COO Richard Stoneburner. The article notes that HK had said in early Nov that was hiring BofA Merrill Lynch to assist it in seeking potential buyers for its Fayetteville property, though didn't disclose any potential value being sought.
GREAT CALL BOP
Decided to hold the WLL through the weekend
Mim- I think SU is my favorite here but I'm stale and need to do some work there. So I table that one to V
December 3rd, 2010 at 3:53 pmRe 180 – its on the catalyst list by the way, has been for months, rumor today must mean things are getting closer to done. Thanks for bringing it up BOP.
December 3rd, 2010 at 3:56 pmFor you new guys, the Catalyst List is always located in the upper left links on the page.
December 3rd, 2010 at 3:56 pmgreat week guys…muchas gracias…now taking my gambling a** to the race track
December 3rd, 2010 at 3:59 pmilikericky – please check your email
December 3rd, 2010 at 4:00 pmZMAN – Does it seem like MMR is dead money until some major catalyst come along. It doesn't appear it wants to move with the group.
December 3rd, 2010 at 4:00 pmbeerthirty
December 3rd, 2010 at 4:00 pmThanks Z and all the others for pointing out which horses to ride this week. I appreciate it.
December 3rd, 2010 at 4:03 pmre 186. It is a catalyst driven stock. It could have catalytic news at any time.
December 3rd, 2010 at 4:03 pmmim – You should own both SU and CNQ for sure because they are slightly different. If COS falls more I would look at it too. But CNQ and SU are where you want to be exposed for their suite of both intermediate and longer term growth.
December 3rd, 2010 at 4:04 pmDon't fall for the OPC or BQI traps, UTS is a nice long term play. CLL is ok although I'd rather that you owned something else. PBG is somewhat interesting longer term. BTE has gone bonkers. There's a whole suite
ATH is actually coming along more quickly than I expected in terms of development although I still don't believe their production timelines. I would be ok with you owning ATH although it has rallied a fair bit recently since their development news but they are well financed.
I put my father in both SU and CNQ a while ago because he's not the tradey type and just wants exposure. If that's what you want then those are what you want. Throw in a bit of ATH if you wan some long term quality development assets that are well financed.
I meant to say "There's a whole suite … of companies with insitu assets that need to convert their projects into cashflows.".
December 3rd, 2010 at 4:06 pmZorg – thanks for all the chart reads, good to have you around
December 3rd, 2010 at 4:06 pmForgot to add CVE.
December 3rd, 2010 at 4:10 pmI would rank the top ones as:
CNQ = SU > CVE~ ATH > COS
Where ~ means similar but both have merit.
Italy, don't know if you've seen this :
http://www.imdb.com/title/tt1559549/
regarding the Korangal (sp?) valley but holy crap. Thanks for all you do for us.
December 3rd, 2010 at 4:10 pmAfter hours gold reaching higher. New record highs coming next week.
December 3rd, 2010 at 4:17 pmDoes anyone know if you can buy Canadian listed stocks (only listed in Canada and not the U.S.) via Schwab?
December 3rd, 2010 at 4:21 pmWe'll be doing another series of test posts this weekend, please to ignore.
December 3rd, 2010 at 4:24 pmGrapevine stuff; FTK may be in a position to announce two int'l supply JV's they hinted at on the CC soon. Maybe as early as next week.
December 3rd, 2010 at 4:24 pmStock continues to amaze, up another 10% and #8 on NYSE %gainers again.
#196 Yes, but US OTC symbols are available for almost all of them.
December 3rd, 2010 at 4:25 pmre 189. O.K., I guess any stock can have catalytic news at any time – very good point.
December 3rd, 2010 at 4:33 pmRe: 140, basically you can plug 4 lan (wired) + 1 wan (internet) and then basically multiple wireless (basically as many as you want just limited by address range/hardware…so 100's).
December 3rd, 2010 at 4:34 pmFor my home, I have the 4 lan plugged in + switch for another 5 wired, plus about 10 wireless devices (bb's, printers, etc.) and it all works well.
zman… that's a nice feature.. the catalyst lists. thanks
December 3rd, 2010 at 4:48 pmre 200 – ok, didn't mean to sound sarcastic, was being serious. Some stocks are value stocks. Some are momo growth stocks. Some are momo news stocks. MMR falls into this last category. I think they could have news out at any time. Probably not next week but before year end is a definite possibility as they are making hole very fast at Black Beard East. I'm very rarely sarcastic as the internet is so flat that people might get confused. Where is my beer. Oh, there it is.
Boss – thanks too much. Awesome perfect. If you want a cup or hat or tshirt let me know.
IG – we try, keep asking questions and keep point out all the stuff you do, you are a good add.
December 3rd, 2010 at 4:53 pmBondbuddha – please check your email
December 3rd, 2010 at 5:09 pmJy – please check your email
December 3rd, 2010 at 5:15 pmThanks JY – don't be a stranger on here! Big experience in that bio!
December 3rd, 2010 at 5:19 pmI wasn't implying that you were sarcastic – just grouchy! 🙂 Have a nice weekend
December 3rd, 2010 at 5:19 pmRe 207 – Ohhhh. Who me? I'm an image of sunshine. You too on the weekend.
December 3rd, 2010 at 5:20 pmViking International, part Malone Mitchell's empire in Turkey. Anybody know 'em?
December 3rd, 2010 at 5:43 pmViking's website say they are wholly owned sub of TAT, available for hire outside as a service co. Homework finished.
December 3rd, 2010 at 6:42 pmNah …..homework incomplete. Who's going to sell them food quality fracing fluid?
December 3rd, 2010 at 7:56 pmEli – you still around?
December 3rd, 2010 at 8:07 pmthanks VTZ on the oil sands stocks
December 3rd, 2010 at 8:11 pmShale giant Chesapeake Energy Corp. "has one of the industry's best collections of natural gas assets," but "continuing concerns about the company's profligate spending" and accounting methods led veteran analyst Philip H. Weiss of Argus Research to trim his recommendation to "sell" last week.
December 3rd, 2010 at 9:45 pmIn a lengthy report, Weiss took on Chesapeake's "spending/earnings quality issues," noting the Oklahoma City-based driller has spent $3.7 billion to acquire gas and oil assets through the first nine months of this year. Since June 30 Chesapeake has agreed to spend "in excess of $1 billion more."
In November Chesapeake made two shale transactions that alone total more than $1 billion. CEO Aubrey McClendon confirmed that his company would pay $850 million to acquire 500,000 net acres in the Appalachian Basin from Anschutz Corp. (see Shale Daily, Nov. 5; Oct. 8). The company also agreed to pay $200 million cash for more acreage in the Eagle Ford Shale (see Shale Daily Nov. 30a).
"Although we believe that Chesapeake Energy has one of the industry's best collections of natural gas assets, we are lowering our rating to 'sell' due to our continuing concerns about the company's profligate spending and its impact on the balance sheet, as well as our worries about its earnings quality," said Weiss. "We might think differently if we saw signs that spending would slow and that management was truly interested in deleveraging the balance sheet. However, spending continues unabated…"
Other energy analysts discounted the Argus report and said they continue to believe Chesapeake remains well positioned to benefit from its extensive deal-making. One pointed to the $2 billion joint venture with China's CNOOC Ltd. (China National Offshore Oil Corp.), in which Chesapeake parted with one-third of its stake in the Eagle Ford Shale (see Shale Daily, Oct. 12).
Zacks Investment Research analysts are maintaining a "neutral" recommendation based on the company's "strong" 3Q2010 results and "several potential" shale transactions to raise funds for development activities.
"We believe these initiatives position the company to deliver industry-leading finding and development costs and returns on capital," said Zacks. However, Chesapeake's "further acreage accumulation is a cause of our concern and it remains to be seen how the company aligns its newly acquired assets with the existing holdings. Moreover, we believe improvement in its underlying valuation via liquid initiatives is a time-taking matter."
Toby Shute, who covers the energy industry for Motley Fool, had another viewpoint. "What I find, is that the company tends to acquire vast swaths of undeveloped land on the cheap, and farm it out to international partners with deep pockets…at multiples of that acquisition price."
The latest transaction in the Eagle Ford Shale, said Shute, should not "shock" the company's shareholders, even though it paid "considerably more" than Marathon Oil Co. did for a similar purchase in the play (see Shale Daily, Nov. 30b).
"If this were a major purchase, I would be more concerned about Chesapeake overpaying," wrote Shute. "As long as the company saves its higher-priced acquisitions for small 'tuck-ins'…and keeps debt levels at around 40% of total capital or lower, the business model doesn't bother me."
On Thursday Jim Cramer of CNBC's Mad Money said Chesapeake was "just too cheap," after the stock closed the day at $21.63/share. He invited McClendon to come on his television show to explain why the company wasn't trading higher with the set of assets it has in its portfolio.
Weiss might have some answers for Cramer. The Argus analyst's "pessimistic near-term view" is a reflection of "growing concerns" about the producer's earnings quality based on a review of financial statement footnotes over a period of time "and its frequent use of complex financial products, as well as our desire to see management cut back on spending.
"Our rating also reflects our belief that the company's accounting policies and heavy use of off balance-sheet leverage add unnecessary complexity and obscure true financial performance."
Two years ago Chesapeake announced that it would issue stock to raise nearly $1.8 billion to finance its U.S. activities, and shortly thereafter management said the company would remain cash neutral through 2010 to weather the economic storm (see Daily GPI, Dec. 9, 2008; Dec. 2, 2008). Two months before that McClendon had been forced to involuntarily sell "substantially all" of his shares in Chesapeake to meet margin loan calls (see Daily GPI, Oct. 13, 2008).
Concerns also have been raised about Chesapeake's "tendency to change its focus more frequently than other companies in our coverage group," said Weiss. And, Chesapeake's accounting "is less than transparent, as the company regularly enters into joint ventures that engage in off balance sheet financing, including sale-leaseback transactions and volumetric production payments to generate cash without increasing balance sheet debt."
The company, now one of the largest domestic gas producers, quickly has shifted to liquids-rich production, and McClendon has stated a desire for Chesapeake to become one of the largest domestic oil producers (see Daily GPI, Aug. 4; June 11).
Argus analysts would "like to see management rein in its seemingly insatiable desire for assets," Weiss wrote. "We believe it would be better for the company to simply manage its current asset base and slow down growth activity, especially while natural gas prices are relatively low.
Chesapeake, Weiss said, "has by far the weakest balance sheet of any energy company in our coverage group, which increases risk, particularly if the economic recovery falters."
The company uses the full-cost accounting method, which Weiss said makes it difficult to compare to peer company metrics. Chesapeake also uses "long-dated call options on oil and natural gas in order to generate greater premiums for its near-term hedges. In short, while the company maintains that it has ample liquidity, its actions suggest that it needs more cash than its operations generate." Argus analysts also take issue with the company's method of calculating finding costs, calling the results "somewhat superficial."
Chesapeake's Jeff Mobley, senior vice president of investor relations, responded to the Argus report late Thursday.
"We have read Mr. Weiss' report, which is basically a repeat of a report he wrote in October," Mobley told NGI's Shale Daily. "As a matter of corporate policy, we do not comment on analysts' reports and so all we will say here is that we do not agree with the comments and implications of the report.
"We would direct you to the investor slide deck on our website, our conference call transcripts on our website and public filings with the [Securities and Exchange Commission], which we believe address any issues raised by Mr. Weiss."
Chesapeake's board has continued to back its CEO. In late 2008 McClendon, who founded the company, was awarded a five-year employment contract that included a one-time $75 million bonus for the leadership role played in negotiating joint ventures in the Haynesville, Woodford, Fayetteville and Marcellus shales
was away this afternoon–just read comments on sd. My worst investment in 2010 and maybe 2009
December 3rd, 2010 at 9:55 pmThey locked in most of oil production in the 80's, with oil pushing 90, ward screwed up again by locking it in and he gave up on ng hedges putting those on recently
maybe people are thinking that Higher oil will bring up ng. 22 to 1 ratio is absurd
HK,chk had nice moves today
On pxp oil hedges are puts, so outside of the put premium (about 5 bucks) they have 100 % upside to oil move. Half their production is oil 40,000 boe a day.
bill life is simpler if you read mgt actions and decide who the smart ones are and who the dumb ones are (CHK,SD, GDP, GMXR, PXP). You will get the drift for the site, though in fairness GST has done a few things right and operationally stinks , yet I own it.
December 3rd, 2010 at 10:52 pmNext: ignore the dumbys, own the smarties. Longer term this will pay off. Plan B : wait patiently while trying to figure out why one of the dumbys may be changing or tarred with the wrong brush while you do your homework. You are not in a rush as it will take the St. 6 mo. to a year to figure out if you were correct or not.
Anyway, that's how I see it, but there are lots of other ways.
z – I haven't seen it but was in the 173d ABN while the film was made. We're having some of our own Restrepo moments down here but not the sustained intensity that they faced in the Korengal Outpost/Restrepo/Viamoto/OP Dallas areas. Had the pleasure of serving Thanksgiving dinner to one of my platoons two or three houses down from the house that Mullah Mohammed Omar was born and raised in. The TB are a little upset with this recent development. We've got six months down and six to go. We have a lot of development projects (roads, water, education) that we're starting now that we've pushed the TB back a bit. When we first got here in June, no one would talk to us. Now we have about one local turn in and ied every other day. Progress, steady and deliberate.
December 4th, 2010 at 3:36 amitalyinvestor — God Bless You and THANK YOU for your update. Your daily life and duties are unimaginable to me…. but you have my complete gratitude and respect. What you do is REAL, man. And I feel honored you care to share even a little bit with us. Thank you again.
December 4th, 2010 at 9:39 amcrys — ATPG…. was smart to clip a "mrkt coupon" on that move. Careful reading of their JPMo presentation on Friday shows that management currently believes they will NOT get their next two deepwater development permits until 1st, or even 2nd, quarter next year. BUMMER is slogging thru almost dry cement, trying to cross the finish line of exactly what it is they want to do. As this decision (exactly what it is they want to do) is being constructed by the Committee of 9, the BUMMER, Bromwich (a lawyer from Chicago with no E&P experience), and a few Senators, it is taking way longer than our race to put a man on the moon. Sheesh. 'Nuff said.
December 4th, 2010 at 10:39 amATPG thinks that the first deepwater development well permit will go to a major, like XOM or Chevron, for all the obvious reasons (big, safe, politically-connected). But meanwhile, ATPG has enough cash and liquidity and cash flow to aford to sit on their hands for a while. This is a position of luxury that they have not been in for several years. The short thesis is that ATPG would run out of cash flow and be taken over by the bondholders. That thesis has been pushed out at least a year. Once the risk of bankruptcy has been pushed out, that lengthens the time to expiration of the "call option" that is enbedded in the common stock of ATPG. Extended time value, all else equal, means value of stock goes up.
Caveat = current production for ATPG is around 28k bo/d. They have guided to 30-40k/day as a 2010 exit rate. With the Permit-atorium still in place, not sure they can get production up over the 28k by year end. Will this be a disapointment? It shouldn't be… waiting on the BUMMER… it is not something that ATPG can control. Still, for a mngmt team known for Overpromise/Underdeliver, it's just another way to stay "Best in Class" in that dubious category.
Bop didnt see you comment on this
December 4th, 2010 at 11:57 amhttp://finance.yahoo.com/news/Energy-XXI-Gulf-Coast-Inc-prnews-2528237921.html?x=0&.v=1
is 9.25 % about right or rich? i thought they might get something in the 8's
EXXI upped the size of the offering from $700 to $750mm. In addition to tendering for the 16%s and funding part of the XOM acqtn, they are going to "redeem" $47.6mm of their 10% Senior Notes due 2013 (currently callable at 105) . Sad to see any of those 10s go, before their maturity, but I guess that's why EXXI upped the deal size.
December 4th, 2010 at 1:00 pm9.25% is higher than I would have expected. But, just over a year ago, EXXI did some bond swaps (from the 10s, into the 16s) that saved their balance sheet bacon. In the end, it turned out ultra-fabulously for the 16% holders, as well as the remaining 10s. However, Bondholders have can have long memories and hate any sort of mid-stream change in direction… so EXXI looks to have paid up for
1) the Bumbling Fool they call their "CFO,"***
2) the fact that 100% of EXXI's operations are offshore, and
3) upsizing the deal
(in that order, imho).
If those bonds ever trade anywhere near par (after they are registered), I will stick out the old Fuzzy Paw and swipe at 'em! Tasty stuff.
***EXXI's investment banker should be due a gianormous BONUS this year, due to his/her abiilty to land a very Large, very Stupid, very Lucrative fish. And yet, Mr. David West Griffin, CFO, gets well paid for doing his job… go figure. (He must have some interesting pictures of Schiller in a vault somewhere…. that's the only thing that makes any sense to me.)
the Bumbling Fool, lol 🙂
December 4th, 2010 at 4:24 pmthanks BOp
What the process that they use to determine which of the 10's get called? Also why would they go for unsecured vs secured notes, they would be able to get lower interest rate with secured, but…? Thanks
December 4th, 2010 at 4:48 pmAlhambra — they will probably call the notes in a pro rata format. There are $276.5mm of the 10s still outstanding that are callable at 105. EXXI said they will redeem $47.5mm of those notes (i'm assuming they mean face value, not dollar-value at 105). So, $47.5 / $276.5 = 17.2%… that means you can expect to have 17.2% of your holdings of the EXXI 10% Notes redeemed from your account at 105.
December 5th, 2010 at 11:12 amThey did unsecured because it does not tie up assets. Those assets can then be pledged against bank debt… which will be lent at a much lower yield than Secured Notes would require. Also Bank Debt is typically much easier to repay than Notes. So, as EXXI generates excess cash flow, they can pay down bank debt much easier than the messy, expensive process of redeeming, calling, or tendering for Notes.
This is about the only intelligent move that the EXXI CFO has made… but the i-banker probably told him to do that… as the banks will then get to generate MORE fees when they structure and issue any bank debt EXXI might take down in the future.
Happy, happy EXXI i-bankers!!
Thanks, guys, the wrap table is posted.
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