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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:

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

Holdings WatchZCAT (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. 

227 Responses to “T.G.I.F.”

  1. 1
    BirdsofpreyRcool Says:

    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."
    I 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).

  2. 2
    BirdsofpreyRcool Says:

    File Under — "How You  Know When Your Bribery Payment Was Not Large Enough"
    Nigeria – 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)

  3. 3
    BirdsofpreyRcool Says:

    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.

  4. 4
    Zorgnak Says:

    Here 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           


  5. 5
    BirdsofpreyRcool Says:

    BedTime Market Strategist's Musings from Last Night —
    European 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.

  6. 6
    milepost_43 Says:

    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.


  7. 7
    BirdsofpreyRcool Says:

    HK — rumor that XOM may buy HK's Fayetteville holdings… stay tuned…

  8. 8
    zman Says:

    MP – 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). 

  9. 9
    zman Says:

    re 7 – that would be a weird deal. Especially now, with AOGC calling for that disposal well drilling moratorium. 

  10. 10
    zman Says:

    Agreed BOP, market day will hinge on the 10 am EST ISM #

  11. 11
    BirdsofpreyRcool Says:

    #9 — yep.  I don't make these things up… just reporting the topic du jour from the Starbucks Latte Crowd.

  12. 12
    zman Says:

    Frankly 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. 

  13. 13
    bill Says:

    Love your posts bop…love your rumors
    Hk, no flash,they  just keep performing,the efs assets are amazing,andi it seem they got religion on share issuances

  14. 14
    BirdsofpreyRcool Says:

    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. 

  15. 15
    jat Says:

    crude taking it pretty well so far with lower dxy

  16. 16
    jat Says:

    re 14, wouldn't be surprised, frankly I'm taking the over on Z's 125mln capex est for next year.

  17. 17
    BirdsofpreyRcool Says:

    bill — thanks… and backatcha.  Keep those posts coming!
    FD = I own HK… from last spring… at much higher levels. 

  18. 18
    zman Says:

    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. 

  19. 19
    Zorgnak Says:

    1217 on the S&P Futs shaping up as an early clue. It was support yesterday and is now resistance in the pre-market,

  20. 20
    jat Says:

    I actually think this is the perfect time, just look at the reaction to the NOG deal!

  21. 21
    zman Says:

    Re 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. 

  22. 22
    BirdsofpreyRcool Says:

    jat — yep.  Not a matter of "if"… just when.
    And 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….

  23. 23
    zman Says:

    Re 20. I think higher would be better, since he just did a "priced tragically in the bottom of the hole" deal in August. 

  24. 24
    BirdsofpreyRcool Says:

    hmmm…. musing to self… 20 net wells would be a pretty big number…. must cut that back…..

  25. 25
    zman Says:

    BOP – 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. 

  26. 26
    RMD Says:

    Z 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. 

  27. 27
    zman Says:

    We'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. 

  28. 28
    elijahwc Says:

    What 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.

  29. 29
    zman Says:

    Re 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. 

  30. 30
    Jerome Blank Says:

    #3 HK…was on my watch list yesterday,
    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…. 
    this morning HK opened and holding above the 200 day, looks good…. 

  31. 31
    BirdsofpreyRcool Says:

    ATPG = bummer if you're still short there…. πŸ˜‰

  32. 32
    BirdsofpreyRcool Says:

    choices — nice use of a/h trading!

  33. 33
    zman Says:

    WLL – 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. 

  34. 34
    elijahwc Says:

    Thinking the HK scuttlebutt is not so misplaced as the bigs are looking for long dated assets. 
    Also, for you techies, is that a cup and handle on HK's daily chart?

  35. 35
    tomdavis12 Says:

    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. 

  36. 36
    zman Says:

    WLL – 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

  37. 37
    jiveyjr Says:

    e: 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….

  38. 38
    zman Says:

    ISM in 4 minutes, group acting a lot better than the market. 

  39. 39
    BirdsofpreyRcool Says:

    jivey — ATPG, me too.
    Scuttlebutt 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.

  40. 40
    zman Says:

    ISM at 55, in line.

    re 39 thanks. 

  41. 41
    choices Says:

    BOP-think that was Crys on a/h on ATPG-I'm not that quick.

  42. 42
    elduque Says:

    CHK breaking up over a downtrend line that has been in place since 11/10.

  43. 43
    BirdsofpreyRcool Says:

    choices — oops.  Too easy to get you Two Smart Cookies confused, first thing in the a.m.  Kudos to crys, then!

  44. 44
    zman Says:

    ZORG or JB – thoughts on resistance on WLL when you get a chance. 

    JB – going to go vote now. Here's JB's link:


  45. 45
    zman Says:

    Next week is ecodata light (scroll down):


  46. 46
    Zorgnak Says:

    re # 39
    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

  47. 47
    jiveyjr Says:

    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!

  48. 48
    West Says:

    CXO….Would anybody know how long before the availability to use the  new shelf registration from CXO ? 

  49. 49
    zman Says:

    Re 48, should be nearly immediate, but have not looked at the filing itself. 

  50. 50
    West Says:


  51. 51
    zman Says:

    re 50. Put a toe in REXX yesterday.

  52. 52
    zman Says:

    ZORG and JB – same thing on NOG, going ballistic over the last few weeks, trading in new air. 

  53. 53
    VTZ Says:

    RE 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.
    Are 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.

  54. 54
    zman Says:

    re 53. Any thoughts on the CNQ budget released last night? 

  55. 55
    Zorgnak Says:

    Re # 44
    The 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

  56. 56
    zman Says:

    ZORG – no bolly band resistance or some such thinking?

  57. 57
    jiveyjr Says:

    OT 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.

  58. 58
    zman Says:

    GDP and GMXR starting to move, my guess is the gas rally thesis and short covering. 

  59. 59
    VTZ Says:

    RE 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.

  60. 60
    elduque Says:

    vtz any thoughts on COS.un or coswf

  61. 61
    zman Says:


    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). 

  62. 62
    VTZ Says:

    The 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.
    A 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.

  63. 63
    Zorgnak Says:

    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.

  64. 64
    zman Says:

    re 63 – OK, that answers it, thanks much. Timing some option exits, no plans to sell the common. 

  65. 65
    Zorgnak Says:

    I'm font challenged   πŸ™‚

  66. 66
    elduque Says:

    VTZ- 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.

  67. 67
    zman Says:

    re 63 … and I assume that all applies to NOG as we crest $24 now?

  68. 68
    West Says:

    REXX 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.

  69. 69
    zman Says:


    TAT – Sold all at $3.14, up 1%. I will continue to watch the story and may rebuy later. 

  70. 70
    Zorgnak Says:

    RE 64
    Some 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…

  71. 71
    zman Says:

    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. 

  72. 72
    tomdavis12 Says:

    VTZ – 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.

  73. 73
    elduque Says:

    re 72 – please and thank you.


  74. 74
    tomdavis12 Says:

    Z: 72 is that OK with you?

  75. 75
    VTZ Says:

    RE 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.

  76. 76
    zman Says:

    I'll send him your email but in the future I'd appreciate not playing phone operator. 

  77. 77
    Zorgnak Says:

    Re NOG
    Same 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

  78. 78
    zman Says:

    Coug – check your email

  79. 79
    zman Says:

    Crys – check your email, thanks. 

  80. 80
    zman Says:

    Thanks Zorg.  I'm long the common only at the moment. 

  81. 81
    tomdavis12 Says:

    76 Sorry

  82. 82
    zman Says:

    No 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. 

  83. 83
    Zorgnak Says:

    S&P 1217 remains  support today…
    Bulls don't want to see this get much below the open. There's a lot of work to do below.

  84. 84
    zman Says:

    Tom – didn't mean to bite, keep up the good work. 

  85. 85
    zman Says:

    Ratberto – Can you see me now?

  86. 86
    zman Says:

    and thanks much!

  87. 87
    choices Says:

    Article 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:

  88. 88
    zman Says:

    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.  

  89. 89
    zman Says:

    re 87, thanks, all the really good sites are. 

    AREX backing and filling, so tempted. 

  90. 90
    choices Says:

    Related to #87, I thought this presentation was extremely informative (FWIW-takes a while to load):

  91. 91
    zman Says:

    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

  92. 92
    Pati Says:


    A musical treat for this season of giving back . . .  Outstanding.


  93. 93
    ratberto Says:

    85 – yes, thanks.

  94. 94
    RMD Says:

    91 Try a s/w update first.  It helped mine a while back.

  95. 95
    BirdsofpreyRcool Says:

    A 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.)

  96. 96
    BirdsofpreyRcool Says:

    (only 'cuz it's Friday… )  πŸ˜‰

  97. 97
    choices Says:

    News 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

  98. 98
    zman Says:

    re 92 – very cool. 

    RMD – tried it, no joy. 

    re 93. Excellent. 

  99. 99
    zman Says:

    re 97 – hearing a rumor of another big Bakken crude pipe in the works. 

  100. 100
    tomdavis12 Says:

    Z: 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. 

  101. 101
    BirdsofpreyRcool Says:

    Pati — i like your link better than mine.  Thank you for sharing!!

  102. 102
    zman Says:

    Re 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. 

  103. 103
    zman Says:

    GST = nice move. 

  104. 104
    BirdsofpreyRcool Says:

    Speaking of West Africa… EGY. 
    Thank you, Crys, for being our Point-Source Guru on that one!

  105. 105
    zman Says:

    Crys – thanks for that email, too nice. 

  106. 106
    tomdavis12 Says:

    BOP: 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.  

  107. 107
    zman Says:

    dij – check your email 

  108. 108
    elduque Says:

    Thanks Pati.

  109. 109
    zman Says:


    della05 – 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. 

  110. 110
    BossmanG Says:

    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:

  111. 111
    zman Says:

    Thanks much, will do. Which Dlink do you have?

  112. 112
    bill Says:

    LNG 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:


    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.


    15-23,000 cbm
    82,000 cbm



    SPOT MARKET (usd/month***)

    82.000 cbm / FR

    57.000 cbm / FR

    35.600 cbm / FR

    20.000 cbm / SR*

    10.000 cbm ETH**

    6.500 cbm / SR

    COASTER Europe

    COASTER Asia

    * 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)


  113. 113
    zman Says:

    Eld- quick question for ya in an email

  114. 114
    Zorgnak Says:

    Re 61 WHX
    Volume composite shows potential areas of support for WHX @ 20 and 18.71. Starts to get a bit thick at 18 and below.

  115. 115
    Paul in Kansas City Says:

    canadian oil sand (COSWF.PK) off 10% today on heavy volume; I see no news. 

  116. 116
    BirdsofpreyRcool Says:

    Question… anyone follow the GDP situtation? 

  117. 117
    zman Says:

    Re 116 – yes, wrote it up earlier this week. 

  118. 118
    crysball Says:

    Z,  re  Wirless Routers
    Don;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] .

  119. 119
    zman Says:

    Thanks Zorg on the WHX, I continue to wait it out with about that level in mind for a re entry

  120. 120
    BirdsofpreyRcool Says:

    #117 — going to toddle off to the medicine cabinet now… and rummage around for some of those ANTI-STOOPID pills.
    Gotta be around here somewhere….

  121. 121
    elduque Says:

     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.

  122. 122
    zman Says:

    Re 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. 

  123. 123
    DrLink Says:

    Re 115 Paul,  COSWF announced a dividend cut for next year when they loose their trust status

  124. 124
    zman Says:

    Re 118 – thanks very much.

  125. 125
    BirdsofpreyRcool Says:

    #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.
    Could you add the two EFS wells to the Cat List?  Sounds like could be results any day…

  126. 126
    zman Says:

    Yep, they are on there for next Monday's update

  127. 127
    zman Says:

    I have them down as by year end

  128. 128
    zman Says:

    Not sure if this was on the site but Gov Patterson has 10 days to sign the frac moratorium in NY through May

  129. 129
    choices Says:

    SD has been up last couple of days-this is a noteworthy event-have seen no news.

  130. 130
    zman Says:

    Will have that REXX piece out on Monday. 

  131. 131
    crysball Says:

    BOP………….PAW   TALK……….ATPG
    Based  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'.

  132. 132
    BirdsofpreyRcool Says:

    "PAW TALK"… smiling…     πŸ™‚
    Clients only love ya, when you make 'em money.  Can't book it, 'til you sell it.  Nicely done!

  133. 133
    zman Says:

    WHX – the crunkage continues, down 5.7%

  134. 134
    BirdsofpreyRcool Says:

    Wild 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.
    Fingers crossed.  This is not my usual M.O.

  135. 135
    BirdsofpreyRcool Says:

    OAS — z, your EXXI –> OAS swap continues to outperform.  Aren't you up something like 100 PER CENT on that trade by now??

  136. 136
    zman Says:

    NOG 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.  

  137. 137
    BossmanG Says:

    Z, 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). 

  138. 138
    zman Says:

    Thanks 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. 

  139. 139
    elduque Says:

    RE 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.
    I 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.

  140. 140
    zman Says:

    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. 

  141. 141
    elijahwc Says:

    “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

  142. 142
    zman Says:

    newbomb182 – please check your gmail

  143. 143
    jiveyjr Says:

    thx, Eli..re: SD
    now 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

  144. 144
    BirdsofpreyRcool Says:

    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?

  145. 145
    choices Says:

    #141-Eli, thanks!
    That is an extremely important summary-it certainly seems to be the reason.

  146. 146
    zman Says:

    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. 

  147. 147
    choices Says:

    #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.

  148. 148
    Zorgnak Says:

    Keep 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

  149. 149
    jiveyjr Says:

    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….
    Livermore 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?

  150. 150
    elduque Says:

    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.

  151. 151
    BirdsofpreyRcool Says:

    Goodrich Petroleum 3-Day Rally on Eagle Ford Strength: Stifel 14:19 [CRZO US 31.60, +0.82][GDP US 15.60, +0.56]
    Goodrich 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

  152. 152
    ram Says:

    BOP – Is there a schedule for continued distribution for CIGX?  Have you heard of any feedback from the first distribution?

  153. 153
    BirdsofpreyRcool Says:

    elduque — 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.

  154. 154
    BirdsofpreyRcool Says:

    ram — 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.

  155. 155
    elduque Says:

    Z- 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?

  156. 156
    BirdsofpreyRcool Says:

    Why 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. 
    Cowboys on camels… just have to keep that in mind.

  157. 157
    zman Says:

    hanrow – please check your email

  158. 158
    BirdsofpreyRcool Says:

    #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.

  159. 159
    zman Says:

    Re 155 – better question for BOP, Eli

  160. 160
    BirdsofpreyRcool Says:

    to 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.

  161. 161
    elduque Says:

    Given 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.
    They did say they were going to sell off $70M in assets.

  162. 162
    BirdsofpreyRcool Says:

    sorry… meant to say, "bondholders will not want to exercise their put."

  163. 163
    Zorgnak Says:

    We'll see some short covering if we take out 1223.25…next target is 1225.50

  164. 164
    elduque Says:

    They have two bond issues.

  165. 165
    zman Says:

    TEXW – please check your email

  166. 166
    Zorgnak Says:

    Should have said if we see some short covering…It's Friday

  167. 167
    jiveyjr Says:

    HK putting in a big move on volume late in the day today…I'm loaded so not buying

  168. 168
    Paul in Kansas City Says:

    eld; mucho thanks!!   i appreciate your post

  169. 169
    elduque Says:

    BOP 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.

  170. 170
    Alhambra Says:

    NFX >70 = happy camper here. Picked some fruit from that tree today. Thanks Z

  171. 171
    BirdsofpreyRcool Says:

    GDP — 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. 
    Sorry, have one eye on something else… seem to be working with only half a brain today.

  172. 172
    Paul in Kansas City Says:

    DrLink; thank you as well!

  173. 173
    BirdsofpreyRcool Says:

    #169 — that is a better question for z and 1520s and jat…   πŸ˜‰

  174. 174
    BirdsofpreyRcool Says:

    HK — making like a condor and soaring into the close…

  175. 175
    zman Says:

    Re 170 . Sweet.

    Re 173/169. Very short term probably. 

  176. 176
    Paul in Kansas City Says:

    for 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

  177. 177
    zman Says:

    REXX 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.  

  178. 178
    Zorgnak Says:

    S&P 1225.50 to the penny  LOL

  179. 179
    mimster90 Says:

    zman 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.

  180. 180
    irongate Says:

    HK –  3 HK Petrohawk Energy is considering selling assets valued at $1.5B — Dow Jones ($19.74 +$0.76)
    The 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.

  181. 181
    zman Says:

    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

  182. 182
    zman Says:

    Re 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. 

  183. 183
    zman Says:

    For you new guys, the Catalyst List is always located in the upper left links on the page. 

  184. 184
    jiveyjr Says:

    great week guys…muchas gracias…now taking my gambling a** to the race track

  185. 185
    zman Says:

    ilikericky – please check your email

  186. 186
    ram Says:

    ZMAN – 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.

  187. 187
    zman Says:


  188. 188
    Zorgnak Says:

    Thanks Z and all the others for pointing out which horses to ride this week. I appreciate it.

  189. 189
    zman Says:

    re 186. It is a catalyst driven stock. It could have catalytic news at any time. 

  190. 190
    VTZ Says:

    mim – 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.
    Don'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.

  191. 191
    VTZ Says:

    I meant to say "There's a whole suite … of companies with insitu assets that need to convert their projects into cashflows.". 

  192. 192
    zman Says:

    Zorg – thanks for all the chart reads, good to have you around

  193. 193
    VTZ Says:

    Forgot to add CVE.
    I would rank the top ones as:
    CNQ = SU > CVE~ ATH > COS
    Where ~ means similar but both have merit.

  194. 194
    zman Says:

    Italy, don't know if you've seen this :


    regarding the Korangal (sp?) valley but holy crap. Thanks for all you do for us. 

  195. 195
    VTZ Says:

    After hours gold reaching higher. New record highs coming next week.

  196. 196
    zman Says:

    Does anyone know if you can buy Canadian listed stocks (only listed in Canada and not the U.S.) via Schwab?

  197. 197
    zman Says:

    We'll be doing another series of test posts this weekend, please to ignore. 

  198. 198
    elijahwc Says:

    Grapevine 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. 
    Stock continues to amaze, up another  10% and #8 on NYSE %gainers again. 

  199. 199
    elijahwc Says:

    #196 Yes, but US OTC symbols are available for almost all of them.

  200. 200
    ram Says:

    re 189.  O.K., I guess any stock can have catalytic news at any time – very good point.

  201. 201
    BossmanG Says:

    Re: 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).
    For 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.

  202. 202
    irongate Says:

    zman… that's a nice feature..   the catalyst lists.   thanks

  203. 203
    zman Says:

    re 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. 

  204. 204
    zman Says:

    Bondbuddha – please check your email

  205. 205
    zman Says:

    Jy – please check your email

  206. 206
    zman Says:

    Thanks JY – don't be a stranger on here! Big experience in that bio!

  207. 207
    ram Says:

    I wasn't implying that you were sarcastic – just grouchy! πŸ™‚ Have a nice weekend

  208. 208
    zman Says:

    Re 207 – Ohhhh. Who me? I'm an image of sunshine. You too on the weekend. 

  209. 209
    elijahwc Says:

    Viking International, part Malone Mitchell's empire in Turkey.  Anybody know 'em?

  210. 210
    RMD Says:

    Viking's website say they are wholly owned sub of TAT, available for hire outside as a service co.  Homework finished.

  211. 211
    elijahwc Says:

    Nah …..homework incomplete.    Who's going to sell them food quality fracing fluid?

  212. 212
    zman Says:

    Eli – you still around?

  213. 213
    mimster90 Says:

    thanks VTZ on the oil sands stocks

  214. 214
    bill Says:

    Shale 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.
    In 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

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    bill Says:

    was away this afternoon–just read comments on sd. My worst investment in 2010 and maybe 2009
    They 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.

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    RMD Says:

    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.
    Next: 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.

  217. 217
    italyinvestor Says:

    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.

  218. 218
    BirdsofpreyRcool Says:

    italyinvestor — 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. 

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    BirdsofpreyRcool Says:

    crys — 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.
    ATPG 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.

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    bill Says:

    Bop didnt see you comment on this
    is 9.25 % about right or rich? i thought they might get something in the 8's

  221. 221
    BirdsofpreyRcool Says:

    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. 
    9.25% 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.)

  222. 222
    bill Says:

    the Bumbling Fool, lol πŸ™‚
    thanks BOp

  223. 223
    Alhambra Says:

    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

  224. 224
    BirdsofpreyRcool Says:

    Alhambra — 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. 
    They 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!!

  225. 225
    zman Says:

    Thanks, guys, the wrap table is posted. 

  226. 226
    what is the best anti aging cream Says:

    what is the best anti aging cream

  227. 227
    Erik T Goluboff, MD Says:

    Erik T Goluboff, MD

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