13
Jul
T.G.I.F.
Market Sentiment Watch: China's 2Q12 GDP came out at 7.6% overnight, in line with expectations prompting a modest rally as futures breath a sigh of relief. Moody's downgraded Italy after the bell yesterday but that's hardly surprising. In the Statesn, JPM is back in the headlines adding to the renewed sense of distrust investors have in the financials. And in energyland, the ongoing mark to market season prior to 2Q12 reporting season is predictably seeing those cut price targets and maintained ratings. We continue to slowly add to select positions on weakness mixed with bouts of hand sittingas we seek out value and study up while the market goes thrrought the process of sorting itself out. In today's post please find comments on natural gas storage (continued progress) and on another financially levered beat down and unloved natural gas weighted name.
Ecodata Watch:
- PPI came in at +0.1% headline and 0.2% core vs expectations of -0.2% and +0.2% respectively,
- We get consumer sentiment at 9:55 am EST (F = 73, last read was 73.2)
In Today’s Post:
- Holdings Watch
- Commodity Watch
- Natural Gas Inventory Review
- Stuff We Care About Today – XCO, SSN
- Odds & Ends
Please click the link right below this to
Holdings Watch:
ZMT (Zman Medium Term portfolio):
- Yesterday’s Trades: None
ZLT (Zman Long Term portfolio)
- Yesterday’s Trades: None
Commodity Watch:
Crude oil oscialled with the equity markets and inversely to the dollar to end the day up $0.27 at $86.08 yesterday, reversing an early selloff along with equities. This morning crude is trading around $87.
- Iran Watch: The U.S. tightened sanctions on Iran again late yesterday by targeting front companies and indentifying a number of ships that have been renamed by Iran in an attempt to circument prior limits.
Natural gas fell after invnetories missed a consensus number that was simply too low before rebounding to close the day up two pennies at $2.87 yesterday. Natural gas is behaving a bit more predictably now than it has been in recent memory. I still think we will be weather tied but the erosion of the storage overhang has to be putting fear in the minds of shorts about a record that isn't all that bigger than last year's peak for storage and, with demand at record highs, leaving them to ask the question "then what". More in the next sections. This morning gas is trading flat.
Natural Gas Storage Review:
ZComments:
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The storage overhang fell from 573 Bcf over the 5 year average last week to 516 Bcf over it this week. Flatter slope.
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Cumulative injections for the season to date are now running a whopping 3.0 Bcfgpd behind the five year average. This is up from 2.7 Bcfgpd through last week and the highest level of the season so far. There's a new chart (i)below showing this trend. This is likely to moderate some due to this week's milder weather in next week's report and we are not going to see a a record low injection next week but it should still be on the low side of average by probably 10 to 20 Bcf.
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Storage is now 249 Bcf below the 2009 level, down from 306 Bcf last week. The chase to that level gets a bit more difficult from here on out as the summer of 2009 got pretty warm. 2009 is important since it represents the top end of the range on the envelope chart (A) below.
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Stuff We Care About Today
XCO Book Report Updated ~ Part of my ongoing series "I've Fallen, I'm Gassy, I'm Leveraged, and I Can't Get Up ... Or Can I?"
Others in this group include KWK, SD, and to a certain extent PVA. I find the beaten down by leverage fears and weak gas prices some of the most rewarding names during a natural gas price recovery. Just some more food for thought at the moment and I'll have a refereshed look a KWK out next week but here are some basic updated comments on XCO. An end of year write up with more of XCO''s history and assets can be seen here.
The Basics
- They are extremely gassy with natural gas making up 98% of 1Q volumes. Volumes come from the Haynesville and the Marcellus, and to a much lessor extent the Permian (Cline and Wolfcamp)
- Their realizations are very closely tied to average natural gas spot prices.
- They are not rapidly getting oilier although they do have oil plays they are very late to the liquids party
- They are highly leveraged and it has impacted their plans
- 58% net debt to cap
- Capex constrained by their debt but also by choice. In April, like we have seen with other gassy players, their borrowing base was cut from $1.6 B to $1.4 B (well telegraphed by management) and as of the end of April they essentially had $1.1 B outstanding on that line.
- They are within their debt covenants at 3.3x debt to trailing twelve months EBITDA
- They have $183 mm in cash, most of that restricted cash and they have been slowly paying down debt.
- They remain highly flexible on the rig count under the current weak natural gas price regime.
- Their budget for the year has already been reduced (due to weak natural gas prices and the lower borrowing base) from an early expectation of $710 mm to $470 mm at present.
- They spent 162 mm in 1Q so cash on the balance sheet, borrowing availability (about $200 mm) and EBITDA of, according to the Street about $330 mm for the last 9 months of the year ...
- ...should easily handle the remaininig $307 mm of the 2012 budget.
- And they are expecting to sell off chunks of non core producing assets and potentially some of their midstream assets while looking into making acquisitions in oil prone basins.
- This budget will allow them to limp along this year until natural gas prices improve but they are now determined to keep spending within cash flow.
- Meanwhile, they are cutting cost
- Operating costs are falling due to a concerted cost cutting program, you can see part of that effect in the table below.
- and Drilling and completion costs are fall as well as other operators flee the gas plays ... note that not cutting and running on the Haynesville has allowed them to cut CWC from $9.5 mm at YE11 to an expected $8.0 mm later this year.
- Insider Buying - seeing recent buying at the lows.
- Upcoming events: 2Q results 7/31/12, could see a midstream monetization announcemt. They will be moving to 3 stream reporting to break out their NGL production.
- Nutshell: These guys would obviously benefit from higher natural gas prices. Looking at the table below in the EBITDA section and the production section, one can easily see that in a better gas price environment they would crank out some serious cash flow. Right now, despite the drop in the stock price, the high debt level and low gas prices have prompted them to repeatedly cut their budget back (3 times since November) and this leaves them lacking for growth (at present) and not exactly cheap, despite the decline, on TEV/EBITDA nor on TEV / proved reserves basis (unlike at PVA). And they are not rapidly getting oily (also unlike at PVA) but again, that's not why I'm looking here, and the stock price has taken its lumps for their seeming reticience to "go oily" already. I'm looking for the guys that everyone thought were about to die to get up off the floor as natural gas does. When people really start hunting for gas leveraged and financially leveraged names, this one will be high on the list. I think they agree or they wouldn't be buying it themselves. Moreover, I admire their resolve and think that things could begin to improve for them as the year progress as prices appear to be moving higher at a time when they are wringing costs from their system.
Other Stuff:
SSN Mini Ops Update
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About to frac the SOA well … basically saying they will know something next week. Also implies the conventional play in Wyoming is make or break on this frac
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They are going to workover Defender 2 following the work at SOA 2. Idea is to clean out the lateral and then put it on rod pump.
Odds & Ends
Analyst Watch:
- Baird cuts price targets on their E&P unverse, looks like most ratings unchanged, however they did up their rating to Outperform on COG and RRC.
Good morning
The XCO chart falls into my scoop chart category. Off the lows but not by much. Likely to add some prior to earnings at the end of the month, similar on the weekly to PVA before the rally off the lows. SD and KWK charts sort of same thing too, but not as well defined.
July 13th, 2012 at 7:46 amHappy Friday the 13th everyone!!!!
July 13th, 2012 at 7:47 amLooks like China is not falling off a cliff and neither is JP Morgan.
Maybe we will all go into the summer weekend with a breather after a 6 day losing streak.
re: 1
July 13th, 2012 at 7:49 amAs far as levels go, i've traded RRC now 3 times with purchases (over last year) between 54 and 56 and this has proved to be a pretty solid area of support for the stock. will continue to watch it closely and trade it again barring any serious market gyrations
July 13th, 2012 at 7:54 amS&P Short Term Areas of Interest 7/13 8:15AM 1332 Notes/Thoughts
Market trading around the 1330 CHVN level after rejecting the 1351 CHVN as too high. Major resistance at 1341.25 and support at 1321. A break below 1321 and then 1308.50, long and short term acceptance , becomes the magnet for price. Main scenario expecting choppy trading around the 1330 CHVN, working off short term oversold, before further testing lower. Scenario would be wrong with a volume break of 1341.25. Demand volume negative on the daily charts, flat and rolling over longer term.
CLVN=Low Volume Rejection Zone – CHVN= High Volume Price Acceptance and Congestion Zone
1340.25 Key resistance for upper trading range.
1330.25 CHVN, Expecting congestion/chop
1321 CLVN, Minor support
1308.50 Major Long and Intermediate term CHVN, Major magnet. Wide acceptance 1298-1305.50
1286.50 Key Support. A break here is a rejection of acceptance of major acceptance.
1257.50 CLVN Support. Swing lows
http://www.charthub.com/images/2012/07/13/ES_Composite.png
TED unch at .36
July 13th, 2012 at 7:55 amBDI down -11 to 1110
Brent/WTI a little wider at 15
July 13th, 2012 at 7:57 amS&P Futs..Adding to the above. Early areas of interest for today. O/N highs/lows 1336.75/1328.75
Eldque.
July 13th, 2012 at 7:58 ami was watching the Brent/WTI spread of almost $16 today and was scratching my head thinking that is a bit much given oil has dropped 20% recently.
Zorg.
July 13th, 2012 at 7:59 amwhat do you make of the RRC chart. looks like solid support in low 50's going back to April of 2011.
for those following BAS
July 13th, 2012 at 8:07 amhttp://finance.yahoo.com/news/basic-energy-services-reports-selected-110000184.html
Lot of volume XCO for time of day. Noting several names with early volume.
re 7 – the spread tightened to $11 of late and has expanded on the Norway strike first but also on worries over North Sea supply in general. I don't find it very suprising that a spread over WTI, which has just about the opposite supply picture to Brent, should be maintained around the current range for the near term.
July 13th, 2012 at 8:09 amXCO Since May sellers dry up below 6.50. Far support 6.22…Looks to me like we could see the 6.50 area again.
July 13th, 2012 at 8:12 amhttp://www.charthub.com/images/2012/07/13/Stock_Weekly_2_2.png
re 2 – For my part I am not as negative as much of what I read as it pertains to crude and natural gas pricing. Some may call that apathy, I call it taking comfort in tracking a lot of data. If Europe comes completely off the rails then my numbers will be high but barring that the move in crude was engineered and I don't see falling back off for long without a lower 48 supply response.
July 13th, 2012 at 8:14 amre 11 – thanks.
July 13th, 2012 at 8:15 amBOP where do the XCO 7.5% Sr. Notes trade pricewise?
July 13th, 2012 at 8:20 amPBR raising diesel fuel prices by 6%. Good for US export demand.
I wonder if congress knows how much diesel and gasoline the US exports now?
Or for that matter, propane?
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPLLPZ_EEX_NUS-Z00_MBBLD&f=W
NGL prices fall and markets adjust. Helps when Latin America has a cold winter too but exports have more than doubled since summer 2010.
July 13th, 2012 at 8:22 amRMD — i see the XCO 7.5s offered at 90.5 this morning… thats a 9.573 YTW (maturity) and 14.298 YT next call.
July 13th, 2012 at 8:23 amthanks
July 13th, 2012 at 8:26 am#8 RRC sure looks like that…well defined.
July 13th, 2012 at 8:27 amBounced off support in the 55 area on strong demand volume to long term acceptance at 63.20. Profile shows a strong rip and dip with no areas of conviction going up and now down. Volume demand is now negative on the daily and flattening longer term. Stock hit intra-day price exhaustion yesterday with three consecutive days of rising volume. I’d watch the area between 55.70 and 54.80 for a reaction. Is this a stock that still has take out rumors swirling?
http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_3.png
re 14 – At the end of March they were just under $90. Good point because I don't think he's going to go out of business.
XCO – Ross has been a busy buyer
http://finance.yahoo.com/q/it?s=XCO+Insider+Transactions
Pickens is on the board, note the well timed sales at year end, wonder if he gets more interested again.
July 13th, 2012 at 8:28 amre: 18
July 13th, 2012 at 8:30 amthanks for the look. i feel more comfortable getting in in the low 50's, so will use some patience
Stocks opening green… but credit indices are red. We will see which end of the Pushme-Pullyou wins.
July 13th, 2012 at 8:31 amto add to above….the rumor has sort of faded now, but you know these things happen when you least expect it, so its another factor to throw into the equation
July 13th, 2012 at 8:32 amYield stocks shining with 10 year treasury hitting 1.48% this morning
July 13th, 2012 at 8:34 amre: 23
July 13th, 2012 at 8:35 amanyone looking to refinance their home, this has got to be an opportunity of a lifetime
83 of 85 energy names green out the gate…15 with high short term relative volume..about like yesterday's open
July 13th, 2012 at 8:42 amBCEI with heavy volume out the gate
July 13th, 2012 at 8:44 amStocks won. Credit going green now.
July 13th, 2012 at 8:48 amHesitate to say TPLM is likely to have an update out soon but TPLM is likely to have an update out soon. Confrimed with them that there is no change to the plan to announce the next 2 wells prior to the 2Q CC in September. Reminded them they said "days or weeks, not months" for these wells just over a month back.
July 13th, 2012 at 8:51 amWrote this in reponse to question regarding a Baron's article on April 16, still applies to my thinking.
Gas Thoughts Prompted by These Questions from the Friday Post
Z:- article in yesterday's Barron's hypothesing that if we assume storage builds at a rate equivalent to the five-year average over the next six months, inventories will hit the maximum of 4,150 Bcf by mid-September. And, if we assume in September demand is 58 Bcf/d, net imports are 4 Bcf/d, and domestic production is 64 Bcf/d, there will be 10 Bcf/d of production with nowhere to go. Do you think cut backs/production declines will occur quick enough to avoid this scenario ?
Z..would greatly appreciate your longer term perspective on how you see the natural gas theme play out and how you think we can profit from it…my sense is your style/preference is to buy cheap e&p assets and wait for the market to re-value them..but I don't want to put words in your mouth. I wonder whether mlp's aren't a better way to participate (pipelines, e&p and lng tankers) but also consider looking at equity names like wprt, clne, gtls, lng, ftk, clb as potential long term winners. I would welcome others to feel free to share their thoughts, ideas and suggestions as well..this is a great forum and I want to thank you for all your hard work and sharing.
My thoughts in bullet format:
- Longer term is the way to be thinking about natural gas
- Price action near term ( April / May) likely to be exceedingly volatile.
- We are like near the lows. I don't see $1 or $0 or the negative prices some people are looking for happening.
- Any moves below $2 (like the current price) are likely to be short lived.
- The actual level of storage and price do not have a direct relation as far as future prices go
- The absolute volume of storage capacity is likely larger than nameplate capacity and possibly by a wide margin
- Storage is high in large part due to a mild winter and not just due to too high supply. Demand was actually quite strong in 2012 and hit record levels for gas demanded for power generation.
- If the summer is mild I fully expect to exceed 4,000 Bcf and it could be much higher depending on how mild a year we see,
- I am more concerned with the ongoing change in the supply demand picture.
- Demand is growing quick and supply growth is stalling.
- The natural gas rig count is falling off a cliff. While the shale plays will continue to see growth beyond a rig count peak for a number of months the conventional drilling programs are largely dead at current prices.
- All of the big E&P companies are pursuing liquids plays, with the gassy one scaling back gassy efforts and casting about for liquids.
- The liquids plays come with associated gas but its not enough to offset base declines of conventional and unconventional plays
- Again, I think long term have for a long time for a natural gas rebound. I have been off the gas plays for some time, only dipping a toe back into newer gassy getting oily plays recently and its a slow dip. This is going to take time. Another mild winter and this gets put back another year. But it will be awhile before rigs headed to the liquids plays make it back to the gassy plays as it will take a $6+ (according to some CEOs I can think of) and $8+ gas in my eyes to compete in any of the dry gas plays with the poorer liquids plays.
- On buying cheap I don't always like to do that, it depends on the situation. There's cheap and there's cheap for a reason. And then there is cheap for a reason and it just happens to be the wrong one. I think names like PVA fall into this last category. Gassier than not exposure that I own now tends to be leveraged … there are some more leveraged names like KWK and XCO that I don't own simply because I don't have a handle on what they are going to do if their redeterminations really go against them.
- Names like PVA seem to be on the right course of making a balanced effort to pursue liquids while maintaining their gas programs just enough to make a stable EBITDA transition. Names like GMXR are taking more of a swing for the fences approach to the transition and this is why I'd only play them as a trading play. Incidentally, they will make an interesting future case study of what happens when you completely shutter a Haynesville drilling program (insert Oh No Mr Billlll!!!! imitation here).
- Regarding MLPs perhaps a better way to play … perhaps but I'm here for the leverage involved in using beat names, like PVA, that are so equity suppressed (without a big float) that they act like long term options on gas (without the expiration date as long as I'm right about them not heading out of business).
- Regarding LNG tankers as a play I think that's smart and I simply haven't looked into it enough to know how fully valued they are and if they wouldn't move lower as gas prices begin to rise.
July 13th, 2012 at 8:53 amAnd would note that that April 16 posting was pretty much the low, lucky lucky on timing there
http://www.barchart.com/charts/futures/NGQ2&style=technical
July 13th, 2012 at 8:54 amXLE…pushing against important resistance and top of intermediate volume base at 66.60
July 13th, 2012 at 8:57 amhttp://www.charthub.com/images/2012/07/13/Stock_Weekly_2_4.png
REXX breaking out right now, moving through the 200 day SMA. Added to the ZLT C there last week so there's my current thinking on the name.
July 13th, 2012 at 9:00 amSSN – in presentations a slide called "Upside Case" used to illustrate the potential per share values of the prospects. The last time it appeared, it reflected a total potential share value of $24.52; assigning $3.38 to the Hawk Springs Niobrara (Defender) and $10.02 to the Hawk Springs Permian (SOAII) ….I haven't been encouraged by the Defender but hadn't worried over it much because it appeared to be minor in the scheme of things…but now that they come out last nighte and more or less say this frac better work or future work in the Hawk Springs Permian may not take place…I have gotten concerned…..
July 13th, 2012 at 9:01 amAll that said, if the Montana Bakken works after not such good results thus far all will be well….but I was a bit "Sleepless in DFW" last nite after getting that e-mail update from Samson….
OII (oh eye eye) moving better again. Estimates very much unchanged through all this, stock starting to reverse 4 months of slow grind lower off the February high which was a tie for their all time high. Expecting a strong quarter there (but not a big beat) and a continuation of their strong read on deepwater and offshore fundamentals.
July 13th, 2012 at 9:08 amGuess is that down the road XCO makes it and GMXR goes BK. Lesson in not chaising the next hot thing but instead cutting back on everythng to survive during lean times.
July 13th, 2012 at 9:10 amRe: 4 "1340.25 Key resistance for upper trading range. " Currently at 1346.50. What do you see as the potential results of breaking above the resistance?
July 13th, 2012 at 9:10 amRE: MMR / FCX / EXXI and FLNG (Floating LNG ship)
July 13th, 2012 at 9:13 amThey floating LNG ship was just my noodling after reading about Shell's planned FLNG and Keith's comments.
From a cost and permitting standpoint it does make sense to put it onshore………….it always makes me shudder when I see those LNG Tankers sailing in and out of Boston.
re 37 – Hear ya, I had noodled the same in the past but I think its going to be tough to get them in the Gulf. Easier to pipe to Sabine pass or similar and then liquefy and ship.
July 13th, 2012 at 9:18 amThanks for the debt market comments BOP, group has that vacation feel to it, not really buying into the move in crude or the broad markets as you'd expect from our high beta names. Feels sleepy.
July 13th, 2012 at 9:19 amRE: 37 GLNG +2.89% today.
July 13th, 2012 at 9:21 am#36…I see a run into the CHVN at 1351 , the congestion that starts at 1347…then a retest of the 1341 area (it's a wide one, 1339-1342.) Today we have a very wide initial balance area. The VPOC for the day is at 1341.50 I'd expect we trade lower and have seen the highs of the day. Hope I've got the scenario wrong..I make more money that way….I see the Euro pop and dollar drop this morning..both of which are fading now…
July 13th, 2012 at 9:30 am#37 — my husband did some work at an LNG facility… it is a fallacy that they can "blow up." You could hold a blowtorch to a load of LNG and it would do nothing. It is one of those common misperceptions that needs to be changed if we are to going to use nat gas on a grand basis.
July 13th, 2012 at 9:32 amGoogle it. Never been any LNG blowups.
re 42 – I recall you educating me on that about 3 years ago, too true, thanks much BOP.
July 13th, 2012 at 9:35 am#36……Dave..Longer term if 1341 area proves to be support again and demand volume turns up on more than just an intra day basis I would look for a break above 1351 for confirmation that more upside is possible.
July 13th, 2012 at 9:35 amEuro…a break of 1.2276 would be another catalyst for higher S&P move
July 13th, 2012 at 9:37 amNot to say there have never been ANY accidents at LNG plants… but they have been associated with boiler leaks or something.
July 13th, 2012 at 9:37 amFrankly, transporting coal is more dangerous… all that coal dust CAN ignite. And has. To various disasterous results.
So… one more thing you can amuse your friends with at cocktail parties… Can an LNG tanker be used as a terrorist weapon?" Answer is, surprisingly, no.
OT: RE: 39 BOND ETF has been rising in nearly a straight line at an annualized rate of 20%/year (with dividends reinvested) since its inception 3/1/2012. High yield was rising even faster in June but BOND has done better than high yield in July. BOND has been a good investment versus equities, especially since the summer months are often difficult for equities.
July 13th, 2012 at 9:37 amS&P Futs Here's a shot of what it's trying to do….broke CLVN at 1341…traded up into congestion around 1347…..1351 is the CHVN. Does it have enough oomph to get through 1351? Will it retest 1341? Key levels to answer that are 1347.75 HOD or a break below 1343.25 low volume node…could go either way to my eye…
July 13th, 2012 at 9:44 amhttp://www.charthub.com/images/2012/07/13/ES_Composite_4.png
Anyone have the cusip handy on the pva 10 3/8?
July 13th, 2012 at 9:49 amZorg – so $6.50 near term and then upward ? How about SD, another than I looked at recently again after a long hiatus. Looks good for a bigger bounce later this year.
July 13th, 2012 at 9:49 amPVA 10.3/8 = 707882AB2
July 13th, 2012 at 9:51 amTEU-I mentioned this shipping co few weeks ago, pays $1.20 for yield of 14% at that price at that time-co also just happens to be Greek-heh,heh-this am, I open the screen and they did a secondary, priced @14% discount to Thurs close-heh,heh-now it comes that the owner and insiders are going to buy sizable portion at the offer price-several thoughts came to mind, e.g. bring in the sheep, it does not get any better than this, it never stops, this Greek method of doing business, etc,etc
July 13th, 2012 at 9:54 am-currently trading down %17, for yield of 18%
re 52 – Interesting way indeed. Kind of like how they play soccer too, unbelievable amount of acting that is obvious to everyone else but them.
July 13th, 2012 at 9:56 amZ- last week you thought about buy NFX, using the earnings release as a catalyst. Form past experience do you have any thoughts as to what to expect the next few days, relative to its peers. It has out performed most of the group the last two days.
July 13th, 2012 at 9:58 amre 54 – you mean stock price performance next few days?
July 13th, 2012 at 9:59 amOn a call, back in a bit
July 13th, 2012 at 10:10 amyes, relative to its peers.
July 13th, 2012 at 10:12 am#50…XCO …presently at at long term acceptance/congestion at 7 and so the trading will tend to get choppy..one step forward then back…if it rejects higher then the chances of a retest of the 6.50 area dim. I notice a huge volume gap above 7.09 much like the PVA volume gap. That is likely to be a launch pad to 7.31, much like PVA experienced, if volume comes into the name beyond 7. Above 7.60 overhead supply thins quickly..again much like PVA…
July 13th, 2012 at 10:16 amSo…if the stock pulls back,.sellers begin to tail off at 6.65 and below with 6.50 and below looking even better. …watching demand volume here to see how 7 is treated.
http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_6.png
re 57 – no thoughts next few days relative to its peers for price performance. Earnings out on 7/24, would think we trend up into them with flat oil and gas prices until then as people have expectations of news from the Uinta and the Cana plays. Last year they announced very good news from the Uinta and no one cared at all because they are still gassier than not, their growth is anemic, constrained by cash flow which is itself constrained by low natural gas prices.
re 58 – thanks.
July 13th, 2012 at 10:25 am
July 13th, 2012 at 10:36 am#50
SD Trading a wide value area from 5.92-6.85. A break of 6.94 works into considerable overhead supply as far as the eye can see. Making higher lows with selling now drying up below 6.04. Demand volume still weak on daily, weekly and monthly time frames., bouncing now on intraday strength. Would be hard for me to buy anywhere except near the bottom of the current range. Unlike PVA and XCO SD has a huge amount of supply to overcome if/when the current base is broken to the upside.
http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_8.png
Will be doing some portfolio house cleaning soon, taking out some non performing names that I don't care that much about at present … in these cases I will be selling low I know but I don't make my sell decisions based on my cost basis. The market doesn't care where I own a stock and neither do/should I.
July 13th, 2012 at 10:37 amIn my first foray into corporate bonds, I'm now an owner of the pva 10 3/8
July 13th, 2012 at 10:39 amre 62 – Congrats on that. Reminds me I called for a quote last week and forgot to pull trigger after some mulling.
July 13th, 2012 at 10:43 amE&P trading very indifferently to the move in the market.
July 13th, 2012 at 10:43 amand despite attempts to push crude higher
http://www.cx-portal.com/wti/oil_en.html
Waiting on Iran to get tired of everyone busting up their game. Read 57 renamed tankers have been id'd, ostensibly transporting Iranian crude. It's a financial embargo and not a blockade so don't think it gets hot but at some point Iran is going to have to respond or give in on the nukes … don't see that last thing occurring.
July 13th, 2012 at 10:45 amBOP , re LNG Tankers and LNG facilities…….(Boston for example)
July 13th, 2012 at 10:48 amWas not thinking about an accident. There was a fictional book about terrorists flying an aircraft into an LNG tanker having previously created and Air/fuel atmosphere above the tanker or even better a tanker docked at an LNG facility. Poke a hole into an LNG let it vent and then detonate the air/fuel mixture,,,,,, (remember the fuel/air 'daisy cutter' weapons used by USAF in Afghanistan. ).
The techincal feasibility of just such an act of terrorism in a densely populated area like Boston has always made me shudder.
Excuse me for digressing…….just wanted to clarify the basis for my statement.
p.s Have you noticed the strenght of EGY
OAS – Rounding bottom. Look for them to talk about staying at 10 rigs on their 2Q call instead of pressing on with 12 as drilling times fall and costs fall, they can get as much or more done with 10 rigs as they had thought they could with those extra 2 rigs in the back half of the year.
July 13th, 2012 at 10:49 amre EGY – no, price is low for a $12 takeout, doesn't seem to me there is a lot of faith the CEO pulls that off.
July 13th, 2012 at 10:51 amDid note FXEN about to take out a triple top.
July 13th, 2012 at 10:51 amSWN spud another well, the Dean 31, in the same part of Union Parish as the well talked about yesterday in the Brown Dense on July 10th.
July 13th, 2012 at 11:13 amZTRADE – ZLT – OEDV
OEDV – Dipped a toe back into the name at $1.20. Should get news sometime in August or September on their 2nd and 3rd Miss Lime wells. First well was impressive, second well had sand issues that they need to work through and the third well is located closer to the first well. Noted Stephen's drilling company is drilling a well very close to their acreage position and as previously mentioned DVN is just east, drilling up to their lease line in Logan County, OK. They should participate in another 3 gross wells (less than 1 net well) in September. Highly speculative little name as are most single digit midgets but I have room for some of those in the portfolio. Not getting aggressive with a big share count position here due to the low cost, but trying to take a conservative approach to adding. The name can get halved on bad news as we saw just prior to our initial purchase here. I also continue to hold the name in the ZLT C.
July 13th, 2012 at 11:22 amCan't stand the excitement any more, going for a run and lunch, back in an hour.
July 13th, 2012 at 11:30 amCrude Futs….coming up for a retest of low volume zone at 89…rejected there last time up. Demand volume improving since then..
July 13th, 2012 at 11:51 amhttp://www.charthub.com/images/2012/07/13/Crude_Composite_3.png
62 ..what did you have to pay? thanks..
July 13th, 2012 at 11:59 amI know everyone in here reaches for higher yields, but I am interested in the recently issued OAS 6.875 bonds that mature in 2023..I'm bidding for them…no joy though……they last traded at 100.5…I bot the PVA's too…
July 13th, 2012 at 12:01 pmS&P Futs..grinding through congestion(and shorts)…if/when through 1351 CHVN…1354 is key resistance for extension higher…1341 area support now.
July 13th, 2012 at 12:14 pmhttp://www.charthub.com/images/2012/07/13/ES_Composite_5.png
re 75 – should be safer, not that I think PVA bonds are unsafe.
July 13th, 2012 at 12:45 pmRBC says DVN will discuss new 250,000+ ac. stealth play on 2Q conf. call. TMS results look soso.
July 13th, 2012 at 12:55 pmre 78 – thanks.
Thinking HK, now beat down below $8.50 is going to be very chatty re their new drill programs on their 2Q call or before it.
July 13th, 2012 at 12:57 pmMHR hugging support on daily and weekly. Patience meter with the story is low however and I am tempted to take the loss and revisit down the road.
July 13th, 2012 at 1:03 pmI'm hearing, thinking about a couple of possible trades and not watching the five or six computers that are doing the trading. Shout if you need something.
July 13th, 2012 at 1:18 pmMHR Trading heavy in congestion at 3.85 long term acceptance and above a two year support level at 3.58. 10% downside risk to support on group pullback. I see volume demand picking up some but it trades heavy from Monthly to intra-day time frames. Tons of supply overhead.
July 13th, 2012 at 1:33 pmhttp://www.charthub.com/images/2012/07/13/Stock_Weekly_2_10.png
Off for the weekend..enjoy and thanks all
July 13th, 2012 at 1:33 pmZ, are you giving any consideration for future buys to the different players in the Utica. There is a positive vibe right now about well results that will be forthcoming over the next quarter or two. I know you own REXX, which has a decent position (for their size) in a good location. Any thoughts about the other players leveraged to the Utica (CHK, GPOR, PETD, EVEP) besides REXX?
July 13th, 2012 at 1:50 pmThanks much Zorg, appreciate all the charts and thoughts as always, have a great weekend.
July 13th, 2012 at 1:50 pmRe 84 – Not as to CHK, maybe PETD but I get a lot overlap there with BCEI and maybe SYRG if I add that one. I also own HK which is going to be a Utica name too. I have not done the work on the others to say one way or the other.
July 13th, 2012 at 1:52 pmRE 86: Ah yes, forgot about HK. You also have MHR with a position in the Utica, though it looks like you may move somewhere else with that money.
July 13th, 2012 at 1:54 pmRe 74, 98.02
July 13th, 2012 at 1:55 pmRig count watch
NG and oil rigs up 2 but the horizontal rig count fell 15
Haynesville count dropped 1 to 50, down from 116 at the start of the year
July 13th, 2012 at 1:56 pmre 87re MHR – strongly suspect I'm gone after the 2Q announcement, maybe before.
July 13th, 2012 at 1:57 pmWorking on a Utica piece like the Woodbine piece so will have more on each of them soonish.
July 13th, 2012 at 2:00 pmROSE moving better again, fear over NGL prices starting to feel fully discounted near term.
July 13th, 2012 at 2:14 pmOr it could just be the 22 point move in the S&P500.
July 13th, 2012 at 2:15 pmZorg, where did KOG need to clear so it run?
July 13th, 2012 at 2:15 pmTPLM leading grudging rebound in Bakken players list, up 3%.
July 13th, 2012 at 2:16 pmREXX – trying a nice daily breakout move to close over the 200 day.
July 13th, 2012 at 2:17 pmMildly surprised we are seeing no profit taking in NG yet given that next week's number is going to be a bigger injection number. It may be that we are seeing continued short covering preventing some of the bigger dips.
CFTC data posted early this week for last week showed the net short position move below 100,000 for the first time in a long time, just scanning back through the wrap file, the last time I see it below -100,000 net contracts (so 100,000 more on the short than the long side) for the non commeicals was August 2010.
Should have the next CFTC set of data in 5 minutes.
July 13th, 2012 at 2:26 pmNon commercials
Long 237K down 6K
Shorts 322K, down 14 K
Natural gas dips being bought by covering shorts
July 13th, 2012 at 2:31 pmglad to hear some think residential real estate has bottomed out….just got two capital calls on partnerships where I've held, with other partners, land for housing….I'm not so convinced actually….
July 13th, 2012 at 2:41 pm69 FXEN…from Wed PR….should have some more news by Aug earnings…but the BIG one Kutno has just started drilling the +1000m of Zechstein…FXEN should report earnings about 8-6ish
July 13th, 2012 at 2:48 pmKomorze-3
The Komorze-3 well has reached a depth of 3,950 meters at the base of the Zechstein and a 7” liner will be set and cemented. Drilling into the Rotliegend is expected later next week….hope to see the flare…LOL….. Komorze-3 targets a satellite structure located less than 3 kilometers from the Company’s 2011 Lisewo-1 Rotliegend gas discovery. PGNiG is the operator of the well and holds 51% interest; the Company holds 49% interest.
beerthirty
July 13th, 2012 at 3:00 pmThanks Z and others, for all the help this week.
July 13th, 2012 at 3:16 pmeli — GEVO converts are trading 97.50 – 98.00… that's about an 8% yield. Not "busted" yet… but cheaper than 100 (where they were issued).
July 13th, 2012 at 3:21 pm#103 (that's 97.50 bid and 98.00 offered)
July 13th, 2012 at 3:32 pm#94….KOG ran up to major well defined long and short term acceptance/magnet at 8.75, moving easily ahead of the Bakken pack. On a price chart alone KOG looks ready to break higher with a little volume push. I don't see it really clearing recent supply until above 9.30. Demand volume is the best of the Bakken pack but has gone flat here at acceptance. Great setup in-line with the longer term volume flows with new sustained volume demand into this stock and the group in general.
July 13th, 2012 at 6:37 pmhttp://www.charthub.com/images/2012/07/13/Stock_Weekly_2_13.png
Thank you Zorg.
July 14th, 2012 at 11:43 pmDrum Beats
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March 6th, 2015 at 7:13 am