05
Jul
Vacation Tuesday
Touring Texas and can report that it is still hot and the roads are fairly crowded despite AAA calling for a 2.5% reduction in traffic due to higher prices at the pump. I'll be monitoring and will check in from time to time as the rest of what should be a quiet week passes. Anticipation of Nonfarm payrolls on Friday should keep a lid on further significant near term upside in the group.
The quick data points
Jerome is calling the market overbought
Oil and natural gas are up slightly early with WTI trading above pre SPR release levels.
Ghaddafi and the rebels have reportedly been in talks for several weeks - not expecting any immediate resolution as the sticking point is Ghaddafi staying or going and he so far will no go. Could lead to some volatility this week if rumors of resolution do get stirred up.
Barron's watch - story about $150 oil http://www.businessinsider.com/the-case-for-150-oil-2011-7?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29
Weather watch - same CDDs as the prior week at 64. This week's forecast jumps to 90 CDDs
Stuff We Care About Today
SSN to participate in those 2 CHK Niobrara Goshen County, WY wells for a 25% WI - provides extra 4Q catalysts and derisking, assuming the wells are good, of SSN's southern exposure in the play.
Credit Markets a little red about the gills this morning. US 2yr swap rate (the current “fave” indicator) is about 1 bps wider at +25.3 bps.
TED moving a little wider too at +23.3 (because US 3mo treasuries are rallying, not because LIBOR is higher).
Investment Grade credit index +1 1/4 bps wider.
High Yield credit index +5 bps wider.
Oil higher… US$ higher… equities not sure how they want to open up. But credit has a slightly sour face on, pre-equities opening.
July 5th, 2011 at 8:07 amTuesday…
S&P Futures Near support and overnight low in the 1329-30 area. Near Resistance in the 1335.25 area.
1337.75 Acceptance, Minor CHVN, O/N High
1335.25 Resistance, CLVN, Friday VPOC
1329-30 Support, CLVN, O/N Low
1319 Support, CLVN
1315 Support,CLVN
1310.25 Support, CLVN
1308 Major Acceptance-Congestion
http://www.charthub.com/images/2011/07/05/ES_Composite
July 5th, 2011 at 8:13 amCrude…Testing Resistance at 96…very low volume area above to 98.50 leaves room for quick move higher. Major acceptance below at 95
July 5th, 2011 at 8:17 amhttp://www.charthub.com/images/2011/07/05/Crude_Composite
TGA..+10%ish..acquires 50% interest/operator of Western Desert concession with a +1,500bpd discovery well and 3D seismic…new slide show up…
http://tinyurl.com/3r6xf5p
long a few Sept calls….waiting on Mar calls to arrive for some leverage….
July 5th, 2011 at 8:33 amJB…any thoughts on CLNE…looks to be bottoming to me…breaking higher now
July 5th, 2011 at 8:35 amEco News = we get Factory Orders for May at 10am. Estimate is for up 1.0%. Don’t know if it will be a Market Mover… but it’s summer trading volume, so you never know what will push stocks one way… or the other.
July 5th, 2011 at 8:35 amCrude thru 96 resistance…moving up easily
July 5th, 2011 at 8:36 amEcon report 6 minutes….Factory Orders
July 5th, 2011 at 8:41 amGood morning Zorg, if the macro mkt cooperates, thinking CLNE might try for $14, this reveres CLNE back into X’s on the current P&F sell signal and retests the bottom side of the 200 day SMA resistance zone, a consolidation off the 200 day could set up the next move higher….
July 5th, 2011 at 8:41 amthanks..JB…long here
July 5th, 2011 at 8:43 amSWN trying to break higher, energy overall looks to have relative strength this morning…
July 5th, 2011 at 8:43 amGDP lagging behind its brethern
July 5th, 2011 at 8:48 amfactory orders in line with expectations
July 5th, 2011 at 8:49 amlaggard ATPG coming back to life
July 5th, 2011 at 8:50 amOT: CIGX
“TheStreetSweeper has just published the second story in a big investigative report on Star Scientific (Nasdaq: CIGX), following up its original article on the generously valued – and heavily promoted – stock with an extensive review of its CEO Jonnie Williams and his past history of regulatory scrutiny and failed medical companies.”
July 5th, 2011 at 8:58 amThanks, mattlee. Even without looking, I can tell you that the “past history of regulatory scrutiny and failed medical companies” is very old news. From (something like) 17 yrs ago. I have heard the explanation behind those events several years ago. I am satified with the explanation.
July 5th, 2011 at 9:01 amCIGX competitor getting bad press.
New research suggests that side effects of Chantix could significantly increase the risk of heart attacks, strokes and other cardiovascular events; …
July 5th, 2011 at 9:07 amHere is a link to NYT’s article on new shale oil finds in Argentina. EOG one of the players there.
http://www.nytimes.com/2011/07/05/business/global/05shale.html?pagewanted=2&src=recg
July 5th, 2011 at 9:11 amOT: CIGX + TheStreetSweeper = absolutely no “new” news. Read every word. Know the history.
What is not mentioned = Paul Perito’s solid gold reputation… along with JohnsHopkins and Roskamp. Also heard about many of the comments coming from the group of Flint, Michigan doctors, testing the RCP-006 compound on patients with thyroditis here. Those doctors don’t care a whit about Jonnie Wms… whether he was a Saint, or a Devil over the years. They just know that they are seeing something that works on inflammation… with no known side affects. Pisa, Italy study also commenced recently…
While RCP-006 and CiGRX may not be the “magic bullet” that Pat Cox speaks so breathlessly about… it is not a scam. And I has been in the works at Star for at least 6 yrs… not exactly an “overnight discovery.”
July 5th, 2011 at 9:18 amJB – Which stocks have given you a new buy signal.
July 5th, 2011 at 9:23 amCIGX stays on its above the P&F trendline buy signal until a print of $4, daily ascending triangle trendline support and the 50 day SMA provide a confluence of technical support at $4.28
July 5th, 2011 at 9:27 amThanks, JB. voted!
July 5th, 2011 at 9:30 ameld…the freshest P&F buy signals are in order, GPOR, MMR and RRC
Check out the SWN P&F chart…
BOP, thank you….
July 5th, 2011 at 9:35 amHAL also looks really good right now…
July 5th, 2011 at 9:36 amSYRG – New CFO, Jennings, mentioned in a Barron’s hit article as coming from GORO. Guilt by association type of piece although he clearly escaped. So just FYI.
http://online.barrons.com/article/SB50001424053111903920704576418052585679600.html?mod=djembwr_h
July 5th, 2011 at 9:45 amAnybody still following TAT? It’s taking a deserved whipping. But I have to think there is substantial value in developing Selmo and getting the Thrace gas wells on the second license in production and hooked up to the pipeline.
July 5th, 2011 at 9:47 amAlso, should note that NOV acquired AMN today for $85 a share.
July 5th, 2011 at 9:47 amThanks JB, Voted
July 5th, 2011 at 9:48 amJustin. I am long at 2.14. I agree with your thoughts.
July 5th, 2011 at 9:49 amRe: ATPG
Over the weekend Egypt reported the Gas Pipeline to Israel & Jordan has been cut [3rd time in 2 months].
Perhaps Israel will become more reasonable in speeding the development of Offshore deposits ….which ATPG is attempting to do…….however Israel is asking for ONEROUS costs to do so.
Whether it is theUS Gov’t in the GOM or Israeli Government in offshore Israel ATPG seems to have hard luck.
July 5th, 2011 at 10:10 am#30….It’s the poster child for the slippery slope of hope……
July 5th, 2011 at 10:14 amPosted this up over the week-end. Interesting article that highlights the regulatory requirements of re-allowing hydraulic fracking. Also, the clean energy group below would welcome any additional names.
Re: FTK ESPH XTMCF GSFVF HEK GRH CLH…..DNR(Co2) RLE-TSXv
It’s a New York state of mind
http://www.ogj.com/index/article-display/8771739518/articles/oil-gas-journal/general-interest-2/government/20100/july-2011/ny-says_frac_ban_would.html?cmpid=EnlDailyJuly12011
July 5th, 2011 at 10:40 amJeffery Gundlach, Doubleline Capital, the great bond manager I thought was going to be on Strategy Session in on now.
July 5th, 2011 at 10:53 amMHR = back to a 7-handle… warms the cockels of my heart.
July 5th, 2011 at 10:54 amInteresting article w/a tribute to CRR toward the end:
Scientists offer new material to aid in natural gas ‘fracking’
http://www.standard.net/topics/business/2011/06/30/scientists-offer-new-material-aid-natural-gas-fracking
July 5th, 2011 at 11:02 amWhat is a cockel?
July 5th, 2011 at 11:05 amEli: Been adding to the MHR.D right here $48.10. Thanks again.
July 5th, 2011 at 11:05 amHere is the Leon Cooperman we wanted to see last week. Leon Cooperman on stock picking and his stock picks:
http://video.cnbc.com/gallery/?video=3000031004
July 5th, 2011 at 11:12 am#36 — a bivalve… very good with butter and garlic. 🙂
July 5th, 2011 at 11:18 amKOG — think a few shorts got caught in the room… while the rest headed out the door last week. Feeling heated bivalves again…
July 5th, 2011 at 11:19 amthanks eli for #38
July 5th, 2011 at 11:22 amOT: CIGX. Streetsweeper may have closed their puts:
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=te&bn=100813&tid=55460&mid=55460&tof=3&frt=1#55460
July 5th, 2011 at 11:23 amOT: bathtime — thanks for pointing that out. Problem with writing a “Kill Bill” piece on CIGX is that they can either point to NO REVENUES or Jonnie’s past. There just isn’t much else to hang your short hat on. So pretty much as I expected the attack to be. Glad to see they didn’t try to post any lies. Everything they said was (basically) true. Just told the story from the short-side, watching it unfold in the rear-view mirror.
July 5th, 2011 at 11:27 am42 OT the proof will be whether we see goat pasture Herb on cnbc bashing the stock.
July 5th, 2011 at 11:30 amBOP: Just sold CIGX Aug 4.5 puts @ .98. Hope I get put the stock.
July 5th, 2011 at 11:36 amTomdavis — thanks for sharing!
July 5th, 2011 at 11:38 amSome interesting comments from XACS#1 from earlier this morning —
http://www.capmarkets.com/ViewFile.asp?ID1=161397&ID2=489130293&ssid=1&directory=6571&bm=0&filename=07.05.11_Conspiracy.pdf
July 5th, 2011 at 11:49 am#32 – Marcellus – I was on the road this weekend retrieving kids from camp in western NY state. Drove thru northeastern PA and the southern tier of NY and saw 20+ trucks with loads of drill pipe. Stopped for gas in Wind Gap PA and asked the guy behind the counter if he had seen any gas industry activity. He then reeled off a list of 3 relatives who all either signed leases or who now work in the gas business.
July 5th, 2011 at 11:58 amWindRiver – I have no doubt they will be able to raise that $2mm to fill the near-term operations gap. Not done yet… but suspect we will be able to tell (by the stock price action) when it is done. Like that there are near-term operational catalysts on this micro-mini-teensy midget. Another reason to stick around during the Lazy Days of Summer.
July 5th, 2011 at 12:06 pmEOG is another stock not feeling any love.
July 5th, 2011 at 12:23 pmNat Gas having a nice bounce after they tried to sell it off.
July 5th, 2011 at 12:25 pmTropical Storm Risk forecast from University College, London.
July 5th, 2011 at 12:28 pmhttp://www.tropicalstormrisk.com/
re 49. I have a buy order just sitting on Windriver a bit above .30 for the last several days. Doesn’t someone need some summer pizza and beer money?
July 5th, 2011 at 12:34 pmBOP
Re : GEVO & TKOI
IMHO, Both are fascinating and not Off Topic Energy companies, which Z’s audience here would find of interest….and also show some diversity as far as the gamut of energy companies being adressed.
Would recommend GEVO first as they are further along and in the scaling up process.
If Z is amenable suggest we submit a list of questions to you & Z we would like addressed in the CEO chat.
July 5th, 2011 at 12:35 pmcrys — thanks for doing all that legwork! Not saying GEVO and TKOI are buy-able “right-here/right-now” (and not saying they are not)… but AM saying that they are worth discussing. And we can get them to talk to us (the way Wind River so graciously did). And ya always learn “sumptin” from listening to a CEO chat. Thanks again. With z’s permission, I’ll go to work on it.
July 5th, 2011 at 12:38 pmAlso, GEVO had a little blurb in the L.A. Times this weekend. Co-founder is geeky… but pretty cute.
http://www.latimes.com/business/la-fi-himi-arnold-20110703,0,6168321.story
July 5th, 2011 at 12:41 pmGEVO — I will be out of town next week… but can tentatively get GEVO to talk to us (call in number + power point presentation… like WVR) a week from today. Tuesday, July 12th. Need to run this by z and nail down the details… so stay tuned.
July 5th, 2011 at 12:52 pmmrkt takes a step down on Moody’s downgrade of Portugal.
HeadTrader says “zzzzzzzzzzzzzzzzzzzzzzzz”
July 5th, 2011 at 12:57 pmThis is the first rating of Portugal to hit non investment grade.
July 5th, 2011 at 1:15 pm#58 — not saying it isn’t negative… just saying it wasn’t unexpected.
July 5th, 2011 at 1:25 pmUPCOMING VAALCO ENERGY CATALYSTS
Select Semisub drilling contractor for 2 wells in Block 5 [Shallow Offshore] Angola July 2011 may defer announcement until Q2/2011 CC.
Frac completion of Granite Wash* Buffalo Wallow] Initial well, log well, & production flow test of drilling results of 1st well[ late July 2011 may defer announcement to Q2/2011 CC.
Granite Wash* Initial well goes on Production (connected to pipeline) Sept. 2011
Granite Wash* Additional Leasehold Announcements (if 1st well is successful)
And drilling plan for additional well)s).late July 2011 may defer announcement to Q2 CC.
Announce Results of June meeting with Etame partners regarding Etame Concession Development plan (see below) Q2 CC
• Completion of bolt-on well slot [Ebouri platform] previously announced.
but not yet completed]
• SE Etame /N. Tschibala build & Install new production platform [[12-15 month lead-time]
• Firm well drilling schedule for Etame [beginning Q4/11]
o 4th Dev. Well for Ebouri Platform [1st of 3 to begin inQ4]
o 3rd Dev. Well S. Tchibala [2nd of 3 to begin inQ1/12]
o Exploration well N. Tchibala [Dentale Sands] [ 3rd of 3 to begin inQ1/12]
• Completion of bolt-on well slot Avouma/S.Tchibala platform and addition of switchgear and generating capacity and water removal [prior to drilling development well in Q1 /12. January 2012
• Capex commitment to design & build a new Production Platform to tap both SE Etame & N. Tchibala fields ………lead time to install is approx 15 months.
Semisub Drilling 1st (of 2) Block 5 shallow water Exploration well commences Offshore Angola late Nov./ early Dec. 2011
Drilling of 2nd (of 2) Block 5 shallow water Exploration well commences Offshore Angola Q1/12 2012
Drilling of 1st Bakken light (Montana) Well commences [middle Bakken target] Dec. 2011
Drilling of Mutamba [onshore Gabon] well with Total a 25 day well from spud]…….Vaalco has 100% drilling carry & 50% WI late Q1 / 2012
Announce Angola Block 5 JV partner [note Sonoongal has agreed to pick up the 40 % cash call if a partner is not selected by time 1st well drilling commences] Q3 /2011 CC
Announce Results of Exploration Drilling of the first 2 Angola prospects and plans for further development Q1 CC 2012
OTHER EVENTS WITH UNKNOWN OR UNDEFINED TIME FRAME:
• Gabon Etame Seismic work for new prospects near shore [previously delayed]
• Exploration well Elili prospect~requires Semisub, and would logically be drilled as a tag-on to the Angola wells………but partners may not approve.
OTHER EVENTS CONTINGENT UPON WELL DRILLING RESULTS NOTED ABOVE:
• JV with a cash strapped small player in the Montana Bakken and / or Granite Wash to obtain a much larger acreage position………..Vaalco will be the operator.
OTHER EVENTS POSSIBLE [but unlikely]
• Increasing topside fluid processing capability of FPSO [to 35,000barrels of fluid and 30,000 BOPD]………NOT likely because of implications for Gas Flare. Also by putting water knockout on the production platforms it reduces the water removal load on the FPSO.
General Notes & Caveats:
• Expect Vaalco will become much more aggressive in domestic US Capex spending, especially if initial wells in the Granite Wash and Montana Bakken are successful. This is driven in part by the frustrations of moving the partners in Gabon to spend capex on Etame, and the delays in getting Angola Block 5 Shallow Offshore drilling started.
• If Angola l Block 5 is successful a subsea completion is anticipated, however, an FPSO would be required to produce the field(s)** and this would take approximately 24 months from date of successful exploratory drilling of 2 wells(note 1 well would likely not produce enough flow to justify an FPSO).
*Permian Basin Hemphill County, TX
July 5th, 2011 at 1:28 pm** While technically possible, it may not be economically feasible to produce a single Angola well using a floating barge(s).
KOG will revert back into X’s on the current buy signal at $6.50..
July 5th, 2011 at 1:48 pmKOG — CFO on the tape… reporting purchase of 10,000 shares last Thursday at $5.75.
July 5th, 2011 at 1:53 pmKOG CFO vs The Shorts.
My money is on the insider.
July 5th, 2011 at 1:53 pmBOP – where do you get your up to date info? I’m not seeing the 10000 share buy on yahoo or scottrade. (I know they aren’t the best sources)
July 5th, 2011 at 2:19 pmDillon — bloomberg “WSA” news feed usually picks it up as soon as the form 4 is filed.
July 5th, 2011 at 2:24 pmThanks BOP – I’m guessing that one comes with a nice price tag as well
July 5th, 2011 at 2:32 pm“Monopoly pricing.” Yes.
July 5th, 2011 at 2:33 pmBut I share the info for free. 🙂
July 5th, 2011 at 2:37 pmZ behaving quite well today. Petra and the interns must being sitting in on his continuing ed class at the Schlitterbahn and making sure that he takes copious notes
http://www.schlitterbahn.com/nb/attractions/
July 5th, 2011 at 2:46 pmYes and for that you are greatly appreciated BOP. A little backdoor ticket if you will.
An interesting OT story – SPIN.PK There is a CC on their website that explains what this little company does in detail…They basically fund spinal and vertebrate work up front before a settlement is reached with lawyers and the insurance co’s from any kind of spinal injury. CEO (and highly respected spinal surgeon) has large holdings and is continously adding to fund the co. He has done this plan successfully (sold last co for $11/share) before and is on track to do it again.
July 5th, 2011 at 3:03 pmre 71 – CEO is funding the co in early stages currently until they have the desirable amount of clinics in place. They are already turning profits and topline and bottomline is growing. Revenues are starting to really show up now since these insurance settlements typically take 6-8 months to settle.
July 5th, 2011 at 3:08 pmbop – just wanted u to know i was thinking about u. Am in ireland on a golf trip and near my hotel they had a birds of prey show. naturally thought of u and went to show. highly entertaining and very informative. had perrin, falcon, hawk, owl, vulture, eagle and more.
July 5th, 2011 at 4:31 pmthen after golf today come back and discover love affair for KOG and others. life is good!!
andy — wow! Thanks for sharing.
Have to ask tho… didn’t you think the birds were just too COOL????
Oh… and the KOG rebound was pretty nice too (CFO bought on the backs of the short manipulation… love that… and real, honest-to-goodness evidence that — yes, Virgina, the end-of-month-mark really CAN be manipulated).
Enjoy the rest of your trip… and Mind The Bunny Holes!!
July 5th, 2011 at 5:01 pmThanks for the updates gang. I’m limited to thumb typing at the moment but will comment on some today’s comments in a post tomorrow.
July 5th, 2011 at 5:09 pm