Wrap – Week End 1/14/11

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Strong Start To The Year For Energy Versus The Broader Equity Markets. Energy names have continued to show across the board strength from the Majors, to  E&P (both the gassy and the oily varieties) to the Oil Service names. This comes with no real push from the commodities themselves but perhaps oil price resilience is all that's needed at this point to support the group and not further near term strength which would, based on domestic demand and inventories, seem to be unjustified at this time. We're more comfortable with oil retreating into the mid to low $80s than we are with it making a move back to triple digits (again, near term) because as I often say, the hangover for the energy groups, once oil caroms off $100 that first time, will be worse than the party on the way up was great. In short, it will push me to lighten up a bit whereas a gradual move would leave me more content to ride out any 5 to 15% market based retracements. In the ZLT portfolios, year to date performance has been heavily influenced by stout moves in a number of single digit midgets including SSN (which has been running on increased interest in the Niobrara activities of larger participants in the play) and by strength from our core Bakken player holdings.  We slightly increased our low exposure to gassier E&P's late last year and those are starting to wake up as well.    


Other Stuff: We wrote a couple of short book reports on TPLM this week and added positions in the name twice to the ZLT as a new baby Bakken play. See those posts here under the Jan 11 and Jan 12 news headlines. 


Holdings Watch:

Closed trades this past week:

  • CXPO – Sold a minor amount of CXPO out of the ZLT, up 31% to my average cost, to rebalance the position and raise a little cash. As I've stated before, this is not one I'm in love with and while it has near term catalysts in front of it the stock has had a better than expected run of late. 
  • SSN - sold a small amount from the core position to fund entry in another name in the ZLT A portofolio. Sold for $1.75, up 130%. 

ZLT A (Taxable Account) Performance:

  • YTD 2011 Performance: up 22%.  (S&P +2.8%, XLE 3.3%) 
    • Currently holds 7 positions, essentially fully invested. 
    • This is an equity only account that does not trade on margin. 
  • 2010 Performance: up 75%.  (S&P +13%, XLE +20%) 
  • Since Inception (7/1/08); up 78%. (S&P -1%, XLE  -20%) 

ZLT B (Non-Taxable Account) Performance:

  • YTD 2011 Performance: up 18%. 
    • Currently holds 7 equity positions, essentially fully invested.
    • This is an equity only account that does not trade on margin. 
  • 2010 Performance: up 132%.  
  • Since Inception (9/1/8); up 608%. (S&P +2%, XLE  -5%)

The ZLT C is a four stock, fully invested, small, non-taxable portfolio (two of them actually as they are new ESA's for the interns) and is up 5% since its inception date of 12/29/10.  

A few notes on the Zman Long Term (ZLT) portfolio. The portfolios comprising the ZLT contain a total of 20 different energy, primarily E&P, equity positions. I generally like to hold between 15  and 20 names and will be weeding out a few of these positions over the first six months of 2011.  Average holding times are in excess of 9 months. Returns are inclusive of transactions fees and dividends are reinvestment. Returns are actual, not modeled, and they are mine as I do not manage money for others. 

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The Wrap Table:

10 Responses to “Wrap – Week End 1/14/11”

  1. 1
    crysball Says:

    Re: Weather sinks Colombia coal barge, more problems seen: OT
     While no lumps of coal have yet been found washed up on Columbia's pristine beaches, a team of oceanic researchers from BOEMR, on an expedition funded by the EPA, has discovered a giant underwater plume of coal hundreds of feet thick and covering thousands of square miles near the ocean bottom extending along the Pacific coast of Panama and possibly headed for the United States.  When it was pointed out that the coal barge sank on the Caribbean side of Panama, Lead Researcher, Dr. Gimmie A. Grant, said, "That just points out how widespread this environmental disaster really is.  More research is definitely needed."
    This News Release   provided by  Dr. Gimmie  A Grant who  recently left  BOEMR  to join    BOTNC  [Boot on the Neck Crowd]  on Pennsylvania Ave]. She  further stated ' My ability to OBSTRUCT'     GOM permintting  at  BOEMR   appeared  to be waning,  and  needed a   new  challenge.  Since  it is a scientifically established fact Oceanic  bacteria  do't  seem  to dissolve coal  [well not  nearly as fast as oil]    thought  this  would  make  a good  'HYPE'……..as   have discovered  how  I can  make coal dumped  from a capsized barge     multiply  by millions of times  by merely  suggesting it  is  so……….this sure beats   'global warming'!!!!!


  2. 2
    crysball Says:

    FUTURE  BP NEWS RELEASE…….or the Tony & Vlad  show
    Tony  Hayward, architect  of  the  Rosneft/BP    Arctic Exploration Deal  announced    Anna  Chapman, recently    'persona non grata' of the USA, would  be  joining  the BP  Board  of Directors since  Rosneft  was  now  a significant  BP  shareholder.
    Vlad [you know who]  ,  a prominent politician,  added,  while   Anna  is young,  her  experiece  in the  Oil & Gas  business  is extensive, as  she  'pumped'  her  own BP  gas  while  residing  in the USA  ………..at least  I was  told  she was 'pumping' gas.   …as  he  smiled & winked.  We  are  glad  BP  has  chosen  to recognize   Anna  and   look forward to her  contribution  to  our  new  Rosmeft/BP  Arctic venture.
    When    Tony   was  questioned    if  this  appointment  was  like 'poking a stick  in the eye' of   BOEMR  and  Barack,  he  replied  with a smile, and  said  he  hopes  to  expand  Anna's  knowlege  of  'pumpung'  so she can be appointed  to the  Alyeska  Pipeline ,   as  BP  and  Rosneft  have plans  to  build a pipeline  accross the the    Bering Stait   and  tap  into  the Alyeska Pipeline  since  the USA  seems   not  to want  BP's Alaskan Oil, and China  sure  does.  
    Tony & Vlad  jointly  statedEnergy  dependence  upon  foreign  Oil  seems  to be a  new  mission  of  BOEMR  and  the  Obama Administration……….we  just  'WANT TO HELP THEM   OUT'.

  3. 3
    crysball Says:

    1С-Битрикс: Управление сайтом   or Future  Rosneft  Press Release
    Tony Hawyward  is   on an extended visit  with  Mikhail  Khaordovosky [formerly of Yukos]  in Siberia .   Tony says he loves  the  Russian  Arctic Winters, and  plans  to  prospect   new discoveriesi n Siberia  with  Mikhail  Khaordovosky , Tony added,,  this new BP/Rosneft  Arctic   venture  is so  much    more  fun  than  the  TNK/BP   venture  on the Sakhalien  Peninsula., but   he   was unable  to explain  why BP'S   Rosneft  shares had  mysteriously fallen  to 1 Ruble  and  been  purchased  by Russian Entrpreneur  Anna Chapman.

  4. 4
    crysball Says:

    Yes  it  is true……. used  to write   comedy  skits  for  'Second City'  in Chicago  to help pay my way through  Graduate  'B' School   in the  1960's,  but   you cannot  beat  reality…….and  the  BOTNC   is already beginning to 'WHINE'  about BP  /Rosneft  deal.  Please  excuse  this  cut & paste    from an actual  Yahoo News Release today
    ‘Bolshoi Petroleum’
    The deal  [Rosneft/BP   share  exchange] may hurt BP’s efforts in the U.S. to restore its reputation. Representative Edward Markey called for a review of the transaction by the state department and the Committee on Foreign Investment.
    “This acquisition will almost certainly complicate the politics of levying and collecting damages from BP following their Gulf of Mexico oil spill,” Markey, a Massachusetts Democrat, said in a statement on his website. “BP once stood for British Petroleum. With this deal, it now stands for Bolshoi Petroleum.”
    IMHO, Am beginning  to wonder  if  it;s  something in the water   the  BOTNC  and their congressional lackies drink.

  5. 5
    crysball Says:

    STUXNET…………….fascintating  Background   in Weekend NYT 
    If you don't  believe  in conspiracy theory,  the  long and very detailed article in the  NYT   Weekend edition   may  change  your  mind………..it builds a meticulously detailed case  for  the the  involvement  of the  National Lab in Idaho, Siemens,   US Dep't  of  Homeland  Security, The  Israeli  Dimon   Nuclear weapons/Reactor  facility and traces  it back  to a 62 page  paper  published  at  an open  meeting  in Chicago  several years ago. 
    Fascinating reading
    The  Israeli  Dimon facility  is where  the US & Israel  tested  out  the software  on  Uranium  Hexafluoride  Cenrifuge  networks  they  modeled  to duplicate  the  Iranian  facility.
    They  article also  dissects  the  STUXNET WORM  whch  has  many levels  of  complexity  and  time delays  and   even  false  health  messages  to signal  to  the  safety  routines  in the  Siemens  PL7 controllers  that  everyything is fine………….while it   actually sends  overspeed  and unerspeed  signals  to  the centrifuge motor  controllers  so  the centrifuges will self destruct,……..and  block diagrams  of  how  they  spread  the STUXNET WORM…………and tailored  it  to  the Iranian    reactor  site  computer  archtecture.

  6. 6
    zman Says:

    Truth is stranger than fiction by a long shot, thanks Crys.

    Playing with the interns today and I hope you all are enjoying the holiday. I've received a few emailed in questions over th e weekend and will address them in the weekend mailbag watch in tomorrow's post. 

  7. 7
    jiveyjr Says:

    saw quote on SSN cross this morning at $2.04….yippee

  8. 8
    zman Says:

    Post will be out around 8:40 am EST. 

  9. 9
    Zorgnak Says:

    MMR at support @ 16 in pre-mkt…thanks BOP for pointing out the likelihood of a dip today

  10. 10
    jiveyjr Says:

    read the MMR press release…looks as though BOP's warning very accurate…not enough information on the deep stuff yet available, it appears, to keep people from selling….will be interesting call this morning at 10:00 eastern

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