Wrap – Week Ended 01/04/13

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The wrap comments will be added as the weekend progresses with most being included in the Monday post. I was on vacation last week so if there is something I missed when I checked in please let me know and I'll include a response in the Monday post.

We also posted 2012 performance in the wrap table with the ZLT A coming in off 3% on the year (up 124% since inception in 2008) and the ZLT B coming in flat for 2012 (up 698% since inception). Meanwhile, in part due to an early year well timed sale of SSN and our decision to let BCEI ride into an overweight position until late in the year the ZLT C accounts, which are our lowest turnover all stock (no options) ones where we show all of the very few trades of the year were up 42% for 2012 (up 67% since inception at the end of 2010).

We included our modeling thoughts for domestic oil pricing just before year end and Tuesday we'll have our latest read on 2013 natural gas prices.

In the week ahead also look for the natural gas supply and demand slide shows and a couple of company specific pieces as well as thoughts on BCEI as it moves into new territory and our thoughts turn to deal possibilities.  

35 Responses to “Wrap – Week Ended 01/04/13”

  1. 1
    tomdavis12 Says:

    Zorg: Re SDRL. I would expect a good 4thq. Numbers always out late. End of Feb. Since they paid $1.70/sh (2 quarterly dividends on 12/22/12), the next will not be payable until end of June. I do not need to tell you about technicals. I would not expect to go below $35. If you are a woosie like me and own it here, I have sold the Apr 42 calls. Always trying to goose up the income. I have put half into SDLP. The disclaimers there are: 1. not liquid 2. Do not put in market orders. 3. expecting dividend to be approx $1.50/sh. 4. I am in because I would expect much more rapid dividend increases in SDLP than SDRL over the next 3 years. 5. SDLP less aggressive balance sheet than SDRL.  There has been some new success with oil discoveries in Seas North of Norway. If more harsh weather rigs are demanded, that will benefit SDRL. Things out of WAfrica & Brazil are helping to keep rates & utilizations high. Will be on CC and will make short report. I would buy weakness more than running after SDRL right here.

  2. 2
    crysball Says:

    BOP  et al:   Closeology……….Harvest  Natural  resources  stacked  play  discovery   in  Dussafu Marin [Next  to  EGY  Etame Marin concession]
    Here  is a map  which  shows  the  geographical relationship:
    The  green  dot   on the  South  side  of  the  Etame  Marin  is  the Elili  prospect.

  3. 3
    zman Says:

    Down but not out:


  4. 4
    BirdsofpreyRcool Says:

    crys — thanks for posting the map.  EGY has carved out a very nice little set of concessions for themselves.  Wonder if they partner with HNR in an FPSO situation.  Would make sense, as they are up against capacity and could use more storage…

  5. 5
    choices Says:

    From alpha:
    TheStreet (TST) CFO Thomas Etergino is stepping downin what's described by the company as a "mutual decision." The firm and 3 of its executives were recently charged with accounting fraud for actions taking place in 2008, but Etergino was not with TheStreet at that time.
    Looking for a statement from Cramer or Melissa at Streetsweeper or maybe even Herb
    (the accounting fraud charge was actually reported in Dec but not very widespread.)

  6. 6
    zman Says:

    re 5 – Wow. I already think their write ups are worthless. Apparently they were actually worth less. 

  7. 7
    crysball Says:

    BOP et al: re Dusafu  and HNR
    IMHO HNR lacks the experience and the will to develop the two discoveries @ Dusafu Marin (including the new stacked play Tortue discovery announced yesterday).
    .Am also hearing from a well connected friend in Houston that Panoro wants to be taken out of their 33% WI in Dusafu………because they know HNR lacks the ability to bring the Dusafu discoveries into production.
    Suggested  Vaalco approach HNR /Panoro with the idea that Vaalco becomes the operator of the Dusafu project………….if  they successfully drill Elili……..then they  would have enough  reserve potential to site an FPSO  between them.
    If Vaalco has conviction about Elili should ‘get some balls’ and go non-consent on drilling Elili ………following their Semisub drilling of the initial prospect in Angola Block 5 [a back to back to reduce costs for both].
    Would like  to  see some ‘out of the box’ but low risk/high gain thinking………..just the idea of going non-consent on your Etame partners will wake some of them up……and perhaps even draw a ‘BUYOUT’ offer from your new Chinese associates in the Etame Marin PSA.
    My  understanding  is  Panora

  8. 8
    nrgyman Says:

    Interesting article on California shale oil potential:

  9. 9
    Zorgnak Says:

    #1 Re SDRL ..perfect Tom! Thanks for the insight. Appreciate it.

  10. 10
    nrgyman Says:

    NGL price declines may be the eventual signal for less natgas supply:

  11. 11
    mimster90 Says:

    BBEP has oil and gas properties in the Los Angeles basin. I wonder what their shale potential is?

  12. 12
    Zorgnak Says:

    S&P Weekly  
    Notes…. Mkt attemping to balance above previous minor acceptance at 1449-46, rejecting it twice as too low. Balance pivot at 1456. Major gap from the 1444.50 CLVN to below the 1428 CLVN. Within the gap area is previous minor acceptance and  mini CHVN at 1349.50. Demand volume supportive in all time periods.  Breadth strong /overbought. POMO supportive all of January. SPY on DeMark intra-day exhaustion sell setups and bar 12 of countdown. Risk Sectors leading. $USD on DeMark daily exhaustion sell setup above long term acceptance.
    Thoughts ….Expecting  Mkt  to test lower end of current 3 day balance area to acceptance at 1446-1449. Watch how pivot at 1456 is treated as early clue for this move. If profit taking becomes heavier watch for upside reversal at 1440.50 CLVN or 1439.50 CHVN.  Much below 1439.50 is not expected and likely would target gap close to below 1428.
    CLVN=Low Volume Rejection Zone – CHVN= High Volume Price Acceptance and Congestion Zone-VPOC=Daily Most Accepted Price
    1463     Swing high
    1456     3 Day volume pivot   
    1449-46 CHVN
    1444.50 Minor CLVN/Major gap below
    1439.50   Minor CHVN/Lower end of wide acceptance 1439-1449/Mini CHVN /Key volume pivot in gap
    1428  CLVN
    1422.50  CHVN/Key volume pivot 

  13. 13
    Zorgnak Says:

    Charts for #12
    S&P 500 Futs

  14. 14
    zman Says:

    re 11 – don't know, the Monterey is known to be massive but have not been unlocked yet despite that size. VQ was on the case and didn't get the job done, have not checked with OXY of late but haven't heard any progress on that front either. 

    SDCJF – new website, nice improvement: http://www.sundanceenergy.com.au/index.cfm

  15. 15
    Zorgnak Says:

    #1 Re SDRL
    SDRL Hit a ten week range low in December. Since 2009 the stock has traded up from a ten week low on all 6 occasions for gains of 6.52%,1.53%,3.63%,9.56%,15.52% and .82%. (Exit at 10 week range mid-point) Volume base and defined support is at 36. Volume spike upside  reversal on Friday.

  16. 16
    Zorgnak Says:

    OAS  Some short term selling at 33 on Friday, areas of interest at 32 and 31.50 on any pullback.

  17. 17
    Zorgnak Says:

    $USD  high volume reversal on Friday after a run up into a DeMark exhaustion sell setup on the daily time frame. Acceptance is lower at 80.

  18. 18
    Zorgnak Says:

    Crude Oil Futs trading in balance at the upper end of it's range . CLVN/support at 91.25 was rejected as too low. Upside resistance at 95 for further range expansion.  Demand volume is positive on the daily and weekly time frames. Ignored daily DeMark exhaustion setup on daily, currently working off intra-day DeMark setups. 

  19. 19
    Zorgnak Says:

    Nat Gas Futures…Trading a the bottom of it's recent range with acceptance higher at 3.47. 

  20. 20
    Zorgnak Says:

    HK Continues to hang out at the break point @ 7.29..needs to beat 7.51 to break clear of supply..Demand volume is lined up to go. 

  21. 21
    Zorgnak Says:

    TPLM..continues to follow through after the volume spike on 1/02. 6.65 Resistance

  22. 22
    Zorgnak Says:

    Nat Gas Stocks  (FCG) 
    HIgh volume bounce off of double bottom and 10 week range low. Testing resistance/short term range top at 16.32. (In a different context a high odds technical short setup on the daily , win% 79%, 5.25 PF,not suggesting it)….. Demand volume is positive on the daily, improving on the weekly. Room to move quickly to 17 with positive catalyst.

  23. 23
    Zorgnak Says:

    E&P Stocks (XOP) Follow through after volume spike rejection of lower major acceptance at 53 as too low. Minor support at 55, resistance at 57.64. Demand volume supportive in all time frames.

  24. 24
    Zorgnak Says:

    #23  correction, first resistance on XOP should be 56.80. Marked on chart below.

  25. 25
    tomdavis12 Says:

    Zorg: SDRL – Another point is that worldwide utilization is 84.4% vs 79.9% one year ago. The line in the sand is the 80% level. When the markets stay above that level generally, rig pricing goes higher. Therefore you can make the case for expanding earnings for the sector. They never trade at high multiples but the current enviornment is as good as the last bullish time in '08.

  26. 26
    Zorgnak Says:

    325..thanks Tom

  27. 27
    Zorgnak Says:

    IBD Highlighting 3 ZLT names in their weekend sector rotation piece. KOG OAS FTK

  28. 28
    zman Says:

    re 27 – thanks, nice of them to notice. 

  29. 29
    Zorgnak Says:

    They like em higher

  30. 30
    zman Says:

    Me too. Oil and gas up a touch this evening. No ecodata tomorrow, kind of a quiet week on that front. Couple of good energy conferences should give oppy's for operations updates. HK, OAS, among those in the any day now camp. KOG could stand to report their exit rate too. 

  31. 31
    BirdsofpreyRcool Says:

    crys — #7 agreed, balls and all.  It's not like EGY doesn't have the cash moolah!  The whole Gabon tax-sharing agreement arrangements can mess with upping your production too fast… but I would have to think that EGY and HNR could do something positive together.  Only makes sense…

  32. 32
    Zorgnak Says:

    Noticed a mistake in a previous post #12 …should have read 
    If profit taking becomes heavier watch for upside reversal at 1444.50 CLVN 
    rather than 1440.50

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