13
Jul

T.G.I.F.

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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:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today – XCO, SSN 
  5. Odds & Ends

Please click the link right below this to

Unknown Object

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: 

  • The storage overhang fell from 573 Bcf over the 5 year average last week to 516 Bcf over it this week. Flatter slope. 

  • 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. 

  • 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

  • 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

  • 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. 

107 Responses to “T.G.I.F.”

  1. 1
    zman Says:

    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. 

  2. 2
    brodway Says:

    Happy Friday the 13th everyone!!!!
    Looks 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.
     

  3. 3
    brodway Says:

    re: 1
    As 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

  4. 4
    Zorgnak Says:

     
    S&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

  5. 5
    elduque Says:

    TED unch at .36
     
    BDI down -11 to 1110
     
    Brent/WTI a little wider at 15

  6. 6
    Zorgnak Says:

     
     
    S&P Futs..Adding to the above. Early areas of interest for today. O/N highs/lows 1336.75/1328.75

  7. 7
    brodway Says:

    Eldque.
    i 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.

  8. 8
    brodway Says:

    Zorg.
    what do you make of the RRC chart. looks like solid support in low 50's going back to April of 2011.

  9. 9
    brodway Says:

    for those following BAS
    http://finance.yahoo.com/news/basic-energy-services-reports-selected-110000184.html

  10. 10
    zman Says:

    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. 

  11. 11
    Zorgnak Says:

    XCO  Since May sellers dry up below 6.50. Far support 6.22…Looks to me like we could see the 6.50 area again.
    http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_2.png

  12. 12
    zman Says:

    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. 

  13. 13
    zman Says:

    re 11 – thanks.

  14. 14
    RMD Says:

    BOP where do the XCO 7.5% Sr. Notes trade pricewise?

  15. 15
    zman Says:

    PBR 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. 

  16. 16
    BirdsofpreyRcool Says:

    RMD — i see the XCO 7.5s offered at 90.5 this morning… thats a 9.573 YTW (maturity) and 14.298 YT next call.

  17. 17
    RMD Says:

    thanks

  18. 18
    Zorgnak Says:

    #8  RRC sure looks like that…well defined.
     
    Bounced 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

  19. 19
    zman Says:

    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. 

  20. 20
    brodway Says:

    re: 18
    thanks for the look. i feel more comfortable getting in in the low 50's, so will use some patience

  21. 21
    BirdsofpreyRcool Says:

    Stocks opening green… but credit indices are red.  We will see which end of the Pushme-Pullyou wins.

  22. 22
    brodway Says:

    to 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

  23. 23
    Zorgnak Says:

    Yield stocks shining with 10 year treasury hitting 1.48% this morning

  24. 24
    brodway Says:

    re: 23
    anyone looking to refinance their home, this has got to be an opportunity of a lifetime

  25. 25
    Zorgnak Says:

    83 of 85 energy names green out the gate…15 with high short term relative volume..about like yesterday's open

  26. 26
    Zorgnak Says:

    BCEI with heavy volume out the gate

  27. 27
    BirdsofpreyRcool Says:

    Stocks won.  Credit going green now.

  28. 28
    zman Says:

    Hesitate 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. 

  29. 29
    zman Says:

    Wrote 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. 
  30. 30
    zman Says:

    And 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

  31. 31
    Zorgnak Says:

    XLE…pushing against important resistance and top of intermediate volume base at 66.60
    http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_4.png

  32. 32
    zman Says:

    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. 

  33. 33
    RB Says:

    SSN – 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…..
    All 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…. 

  34. 34
    zman Says:

    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. 

  35. 35
    zman Says:

    Guess 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. 

  36. 36
    DaveH Says:

    Re: 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?

  37. 37
    crysball Says:

    RE:  MMR / FCX / EXXI   and FLNG (Floating LNG ship)
    They  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.  

  38. 38
    zman Says:

    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. 

  39. 39
    zman Says:

    Thanks 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. 

  40. 40
    DaveH Says:

    RE: 37 GLNG +2.89% today.

  41. 41
    Zorgnak Says:

    #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…
     
     
     

  42. 42
    BirdsofpreyRcool Says:

    #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.
     
    Google it.  Never been any LNG blowups.

  43. 43
    zman Says:

    re 42 – I recall you educating me on that about 3 years ago, too true, thanks much BOP. 

  44. 44
    Zorgnak Says:

    #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.

  45. 45
    Zorgnak Says:

    Euro…a break of 1.2276 would be another catalyst for higher S&P move

  46. 46
    BirdsofpreyRcool Says:

    Not to say there have never been ANY accidents at LNG plants… but they have been associated with boiler leaks or something. 
     
    Frankly, 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.

  47. 47
    DaveH Says:

    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.

  48. 48
    Zorgnak Says:

    S&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…
    http://www.charthub.com/images/2012/07/13/ES_Composite_4.png

  49. 49
    Baylor Says:

    Anyone have the cusip handy on the pva 10 3/8?

  50. 50
    zman Says:

    Zorg – 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. 

  51. 51
    RB Says:

    PVA 10.3/8 = 707882AB2

  52. 52
    choices Says:

    TEU-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
    -currently trading down %17, for yield of 18%

  53. 53
    zman Says:

    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. 

  54. 54
    elduque Says:

    Z- 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. 

  55. 55
    zman Says:

    re 54 – you mean stock price performance next few days?  

  56. 56
    zman Says:

    On a call, back in a bit

  57. 57
    elduque Says:

    yes, relative to its peers. 

  58. 58
    Zorgnak Says:

    #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…
    So…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

  59. 59
    zman Says:

    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. 

     

  60. 60
    Zorgnak Says:

     
    #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

  61. 61
    zman Says:

    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. 

  62. 62
    Baylor Says:

    In my first foray into corporate bonds, I'm now an owner of the pva 10 3/8

  63. 63
    zman Says:

    re 62 – Congrats on that. Reminds me I called for a quote last week and forgot to pull trigger after some mulling. 

  64. 64
    zman Says:

    E&P trading very indifferently to the move in the market. 

  65. 65
    zman Says:

    and 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. 

  66. 66
    crysball Says:

    BOP , re  LNG  Tankers  and  LNG  facilities…….(Boston for  example)
     Was 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
     
     

  67. 67
    zman Says:

    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. 

  68. 68
    zman Says:

    re 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. 

  69. 69
    zman Says:

    Did note FXEN about to take out a triple top. 

  70. 70
    zman Says:

    SWN 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. 

  71. 71
    zman Says:

    ZTRADE – 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. 

  72. 72
    zman Says:

    Can't stand the excitement any more, going for a run and lunch, back in an hour. 

  73. 73
    Zorgnak Says:

    Crude Futs….coming up for a retest of low volume zone at 89…rejected there last time up. Demand volume improving  since then..
    http://www.charthub.com/images/2012/07/13/Crude_Composite_3.png

  74. 74
    milepost_43 Says:

    62 ..what did you have to pay? thanks..

  75. 75
    RB Says:

    I 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…

  76. 76
    Zorgnak Says:

    S&P Futs..grinding through congestion(and shorts)…if/when through 1351 CHVN…1354 is key  resistance for extension higher…1341 area support now. 
    http://www.charthub.com/images/2012/07/13/ES_Composite_5.png

  77. 77
    zman Says:

    re 75 – should be safer, not that I think PVA bonds are unsafe. 

  78. 78
    RMD Says:

    RBC says DVN will discuss new 250,000+ ac. stealth play on 2Q conf. call. TMS results look soso.

  79. 79
    zman Says:

    re 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. 

  80. 80
    zman Says:

    MHR 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. 

  81. 81
    zman Says:

    I'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. 

  82. 82
    Zorgnak Says:

    MHR 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. 
    http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_10.png

  83. 83
    Zorgnak Says:

    Off for the weekend..enjoy and thanks all

  84. 84
    nrgyman Says:

    Z, 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?

  85. 85
    zman Says:

    Thanks much Zorg, appreciate all the charts and thoughts as always, have a great weekend. 

  86. 86
    zman Says:

    Re 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. 

  87. 87
    nrgyman Says:

    RE 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.

  88. 88
    Baylor Says:

    Re 74, 98.02

  89. 89
    zman Says:

    Rig 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

  90. 90
    zman Says:

    re 87re MHR – strongly suspect I'm gone after the 2Q announcement, maybe before. 

  91. 91
    zman Says:

    Working on a Utica piece like the Woodbine piece so will have more on each of them soonish. 

  92. 92
    zman Says:

    ROSE moving better again, fear over NGL prices starting to feel fully discounted near term. 

  93. 93
    zman Says:

    Or it could just be the 22 point move in the S&P500. 

  94. 94
    ram Says:

    Zorg, where did KOG need to clear so it run?

  95. 95
    zman Says:

    TPLM leading grudging rebound in Bakken players list, up 3%. 

  96. 96
    zman Says:

    REXX –  trying a nice daily breakout move to close over the 200 day. 

  97. 97
    zman Says:

    Mildly 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. 

  98. 98
    zman Says:

    Non commercials 

    Long 237K down 6K

    Shorts 322K, down 14 K

    Natural gas dips being bought by covering shorts

  99. 99
    RB Says:

    glad 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….

  100. 100
    milepost_43 Says:

    69 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
    Komorze-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.

  101. 101
    zman Says:

    beerthirty

  102. 102
    elduque Says:

    Thanks Z and others, for all the help this week. 

  103. 103
    BirdsofpreyRcool Says:

    eli — 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). 

  104. 104
    BirdsofpreyRcool Says:

    #103 (that's 97.50 bid and 98.00 offered)

  105. 105
    Zorgnak Says:

    #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.
    http://www.charthub.com/images/2012/07/13/Stock_Weekly_2_13.png

  106. 106
    ram Says:

    Thank you Zorg.

  107. 107
    Drum Beats Says:

    Drum Beats

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