Wrap – Week Ended 09/07/12

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Nice week in the markets, and a touch nicer week in energy land at least on the equity side.  As we are getting close to the end of 3Q12 we updated the ZLT portfolio performance through Friday as we have mounted a modest recovery from the Spring lows in the ZLT A and B which are now essentially flat on the year. Both portfolios held onto roughly 90% of their core positions through the market dip and we added multiple additional trading positions throughout the summer swoon in many of them including names like TPLM where the little Bakken player continues to echo the moves of more household name Bakken player actions from 2 years ago.  The ZLT C, our least traded but relatively balanced portfolio with a long term stance, is up nicely on the year. All trades for that portfolio since inception can be viewed on the ZEB positions tab at right.  An update on last week's actions and important events will as usual be posted in The Week That Was section of the Monday post. Have a great football loaded weekend. 

14 Responses to “Wrap – Week Ended 09/07/12”

  1. 1
    brodway Says:

    Not sure there has been recent comment on OII, the stock seems to be creeping up and approaching new highs.

  2. 2
    brodway Says:

    All of a sudden there has been a number of articles of late suggesting that NOG may be a take out target because of its large land holdings in the Bakken. Some have suggested that due to its non operated structure this may be a long shot, but others believe that its a real possibility. With large cash positions companies such as CVX are going to look to be deploy it some time this year. 

  3. 3
    crysball Says:

    Re:  2……..NOG  as a CVX Takeout
    Don't  believe  NOG  would  meet  the   acquisition  requirements for a CVX………….it  does   not   meet  the  'bite  size'  requirement  for starters……IMHO

  4. 4
    crysball Says:

    Z, re:US RIG  Ccount  Data
    Does  US  Rig  Count   only  include  land  Rigs  in the  lower  48?…..if  so  should  you add  this    in the title  descruption?
    Would  it  be  helpful  to  add  a  GOM  rig  count going  forward, since  activity  seems  to  be   picking up (this assumes  it  is  not  included  in the  US  Rig  Count  and the data is readily available on a weekly  basis).
    Are   Horizontal  rigs  truly   mutually  exclusive  from   oil  rigs and/or gas  rigs?   Here  in  the  Midwest   local  drillers    use a  single  rig  to  drill the  vertical  and  horizonal   portions    of shallow  shale wells and  Silurian  Reefs.    Do  all  48  states  report   oil  rig  and  gas rig   data,,,,,,or   is  there  a cutoff   of  states  with  lower  levels  of  activity  such  as  Indiana & Illinois?   Is  the data  derived   from  State  Oil & Gas   commissions? Just  want  to  understand .
    How much  crossover  exists   on  drilling  rigs…..i.e.   are  60%  of  the  rigs  drillng  gas  also  capable (spec-wise) of drilling   oil, without  major   modification?

  5. 5
    brodway Says:

    re: 2
    Crysball.  wasn't suggesting CVX would be a suitor, but there a number of energy companies with a hefty cash position who may be pressured to deploy it as cash is not paying a whole lot of interest these days.

  6. 6
    Zorgnak Says:

    Weekly S&P 500 Futures
    Notes…Price extension rejecting CHVN into low volume zone 1440-1471.  Little defined resistance or congestion to 1471. Minor support at 1412-16.  Bullish bias above 1397.  Key short term support at 1392.50 CLVN.  Demand volume, breadth, sector rotation, currencies and POMO are supportive of further upside, to start the week.  POMO support drops out after Tuesday. Long term bond and $USD are at short term exhaustion buy setups.  Fed and multiple significant Econ reports on Thurs-Friday.
     Thoughts…. Upside bias continues above 1397 with little resistance to 1471. Expecting further upside early week with all bets off by Thursday. Low volume area between 1334-71 subject to out-sized intraday moves and overnight gaps..in either direction. 
    CLVN=Low Volume Rejection Zone – CHVN= High Volume Price Acceptance and Congestion Zone
    1434-1470 Low volume area
    1423-34  CHVN, Acceptance1412-16
    1412-16 CLVN, Minor Support
    1397       CHVN, Short term volume pivot. Bullish bias above
    1392.50  Minor CLVN, Support
    1383       Minor Support/Gap and low volume area below

  7. 7
    Zorgnak Says:

    XLE  Weekly
    Notes…Demand volume continues positive in all time frames and supportive of higher prices. High volume break of resistance (72.64) after rejecting long term acceptance (71) as too low. Upside through long term congestion with next resistance at 76.
    Thoughts… Bullish Volume and price momentum with little recent supply overhead.  Support at 72.64.

  8. 8
    Zorgnak Says:

    XOP Weekly
    Notes…Rejected long term acceptance (52.88) as too low, broke resistance (54.97) with positive demand volume in all time frames. Resistance at 58. Both XLE and XOP flying through weekly exhaustion sell setups.
    Thoughts….Room to move to resistance (58) and above on strong positive demand volume.

  9. 9
    zman Says:

    re 4 – it includes the offshore rigs. They are a small piece and don't move around much and there is no way to pull which of those are gas or oil although they are mostly oil focused rigs. 

    Horizontal just means that the well is planning to drill a horizontal well which would include the vertical and the lateral. Most places use a single rig to do most of the drilling although many use a different spudder rig for the first 150  or more fee.   My data comes straight from Baker Hughes which has been doing it for a long time and is very accurate. Smith Bits and other sources are out there as well but I've always liked Baker for this. You can get the data off their home page in a variety of forms going back a long time in history. As far as cross over, really no difference, a rig drilling gas wells can pick up and move and drill an oil well the next week. Same goes for the frac spead. 

  10. 10
    Zorgnak Says:

    OIH Weekly
    Notes…Rejected long term acceptance (40) on DeMark exhaustion buy setup. Demand volume shifted to positive in all time frames . Important resistance at 41.93.
    Thoughts..Unable to breakout with XLE and XOP last week but a big shift in demand volume has it setup to do so should positive volume continue.

  11. 11
    zman Says:

    Thanks for the levels Zorg. 

  12. 12
    Zorgnak Says:

    FCG Weekly
    Notes..Clearing thick 6 and 1 month volume base at 17.12…Climbing to mid-point in long term volume base.  Demand volume turning positive in all time frames.
    Thoughts.   Volume support below with overhead gradually diminishing above long term acceptance at 17.57.

  13. 13
    Zorgnak Says:


  14. 14
    zman Says:

    WLL in the Brown Dense, no real details, a little more comment in Monday post, look for them to talk about it soon. 

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