Energy Prospectus

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"The problem today is that no one has confidence in the price of oil and gas."

This is the obvious rub.

I noticed Johnson Rice today, for example, lowered their 2015 price deck to $60 for WTI and $3.25 for natural gas.

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Where is the Elite Eight discussed? The last archived newsletter I can find is #97 from the end of October.

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This has turned out to be a bad idea as the company announced it will only pay $0.40 in 2015, not $0.50, and will cut its CAPEX by half to maintain flattish production. The stock is trading at $10.50 in the pre-market on no growth, smaller dividend and senior operations management sacking. At least ...

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There will be cost to this proposed treatment, but will it retard production until treatment is up to full capacity? North Dakota regulators today proposed standards for requiring energy companies to treat the crude they pump from the Bakken Shale to make it less volatile before shipment by pipeline...

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I have shorted the November $12 Puts to own DNR at $11.75 net. You can capture $0.35 premium today to beat my net coming into it. We'll get the declared dividend too.

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The weather forecasts for this weekend in the Northeast are starting to play our tune and NG added 8 cents in New York.

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I was looking at CWEI and thought this comment by Richard Zeits, a frequent writer for Seeking Alpha, makes sense especially as more $75 stabilized calls are made for WTI: "...The sharp decline in the price of oil creates valuation uncertainty across the entire E&P sector. The key concern i...

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Should Joe have this right, watching the bears have to make a U-turn the next few weeks on their NG positioning will be a beautiful sight.

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The concerns I'm seeing center around margins in pressure pumping where PTEN was a little light according to Johnson Rice, for example.

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From RBC: "Downside scenario Our downside case for Sanchez Energy assumes that Catarina, the non-Alexander Ranch Cotulla acreage and the TMS are ultimately not economic. We also assume some downside to commodity pricing. Our downside scenario assumes a lower long-term price deck of $85 oil and ...

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The high spec Apex rigs are sold out through mid-2015, but that is the only segment PTEN was clearly reassuring about this morning. Analysts are from Missouri now with the over capacity concern from $80 oil.

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Some notes from EnerCom:
http://www.oilandgas360.com/notes-road- ... 3-20578753

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Another income opportunity I wish you'd invite to host a lunch in Dallas is The Cushing MLP Total Return Fund (SRV). Alerian is the better known company with a similar vehicle that does not produce a K-1 for its investors, but yields considerably less. SRV is a closed end fund that pays $0.225 per q...

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Global Hunter upgraded today to Buy from Neutral. "Energy XXI (NASDAQ: EXXI; $6.63; Buy; $12.00 PT) Upgrading EXXI to Buy: there's no crying in the Denny Crane room o Post our meeting with management, we feel compelled to come off the sidelines and defend the stock. EXXI is down ~66% since FQ4 ...

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Found it: "Our NAV estimate is driven by crude oil and natural gas forecasts as follows: $97.47 per barrel crude and $4.20 per MMBtu natural gas in 2014, $89 per barrel crude and $4.13 per MMBtu natural gas in 2015, $85.00 per barrel crude and $4.40 per MMBtu natural gas in 2016, and $80 per ba...

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Do you know what price deck CS is using for this initiation? It's almost like a bank stress test these days where you have to make some pretty negative assumptions and handicap the upside from that worst case.

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Global Hunter hosted a seminar by phone and slides this past week. The top two ideas from the E&P team were XEC and BBG. Cimarex (XEC: BUY- $189 Price Target) • Drastically improving return profile, sets up step potential in DAG • High Inventory quality and contiguous acreage position • Trades b...

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I'm sure Dan would agree with the comments being posted to Zoltan's article, but I'll be curious as well. The wildcard, of course, is the stabilized oil prices for The Eagle Ford and Permian producers. I bought SN at $23. Oops!

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Macquarie has an upgrade list out which includes two Sweet 16 names, SN and XEC, which they take from neutral to outperform. They put a $42 target on SN. Anybody have the report?

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SN has had some minor surface equipment issues with line pressure at W. Catarina which have hindered completions a bit. Bringing on newer wells is retarding older wells. Supposedly, 3Q volumes are as guided, but 4Q could be impacted as they reconfigure lines. The cc will clarify and Johnson Rice has...

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Seadrill used a new slide presentation at the Deutsche Bank Leveraged Finance Conference which contains a lot of comparative data that is helpful to understanding the entire group.
http://www.seadrill.com/investor-relati ... sentations

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Bought a little at $16.25

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I'm amazed that CRK has retraced 100% of its gain going back to mid-January.

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These Q3 conference calls will be interesting to see and hear who has laid on additional oil hedges and whether they've increased their relative percentage of hedged production during the slide. While WTI closed at $89.74 today, the 12 month strip closed at $86.60. We're in the heart of capex budget...

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I haven't seen their specific comment on CRK, but I know Stifel lowered their long term natural gas price assumption on Sept. 28 to $4.25 and passed it through their coverage universe, lowering NAV's in the process. They may have done the same for oil this week too though I haven't found it yet.

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"Gasser" will be no epithet if Joe Bastardi's temperature scenario for this winter proves to be correct. Spec hedge funds are buying the NG futures, not oil.

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There were 26M shares short as of 8/29. "Houston, we have a problem here."

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$5.95 bid at the conclusion of the A/H session tonight.

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Their Thunder Bayou well, which is 500 feet from TD, looks like a direct analog to their LaCantera discovery and PQ has 50% and operates.

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This and LINE were the most interesting stories for me yesterday in SF at the IPAA Conference.

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Nice opportunity today to buy better than the "smart money." Too bad they didn't schedule themselves into SF for IPAA where they could really bang the table with a use of proceeds message. I thought Swift did a nice job this morning too.

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I don't recall GTE coming to San Francisco previously, but here they are along with others often mentioned here: Abraxas Petroleum Corp Mon 1:30 - 1:50 PM Linn Energy, LLC Tues 1:55 - 2:15 PM Arabella Exploration, LLC Tues 3:10 - 3:30 PM Mid-Con Energy Partners, LP Tues 10:35 - 10:55 AM Arsenal Ener...

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The CL prices in the Midland Basin have been very weak, trending among three year lows. Spot in Midland on Aug. 19 was $73.48, for example, and has averaged $8 to $12 below WTI. Unless a hedge book shows swaps for prices more robust than these differentials and big volumes being swapped, there could...

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Saudis don't like these discoveries, I'm sure. "CALGARY, Alberta, Aug 22 (Reuters) - Talisman Energy Inc , Canada's No.5 independent oil producer, said Friday it still plans to sell its oil properties in Iraq's Kurdistan region, even after its partner announced a massive oil discovery on its pr...

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It can be bought on the bid with some patience as there is a seller around who apparently agrees with Dan. However, I agree on the fundamental opportunity and expect it will work higher as storm risk abates in October-November and 3Q results confirm cash flow neutrality including capex.

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SEC Announces Oil-and-Gas Fraud Charges Against Houston-Based Company and CEO
http://www.sec.gov/News/PressRelease/De ... -JIAGO1auY

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Samuels said in May RockPile has a value of $572M and Caliber has a value of $212M, each based on competitor comps. On today's close the total company is valued only at $954M.

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Slightly Bullish

EIA Natural Gas Inventory: +88 bcf vs. consensus of +93 bcf and +90 bcf last week.
Futures 1.3% to $3.834

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Their gassy nature is out of favor now on the Street, but like the old saw, you've got to buy your straw hats in the winter.

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TPLM reminds me of UNT, with three divisions within each: an E & P, a service company and a pipeline company. TPLM says it has been designed, financed and is being run with a future (18-24 months) break up in mind. UNT resists that notion and as a result has never earned the market multiple it s...

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Wow, I hadn't looked at this in a while or realized how bearish and washed out the chart had become. Will it be a dead cat bounce or a lasting turn up on these results? Some real storms in the GOM will help RRC and natural gas but it's early yet.

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Deal metrics estimated:
1.7 X their proved PV-10 as stated in their June presentation
$35.86 per proved BOE
$150,000 per flowing BOE

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Price targets for the Bakken/3 Forks players will be under review tomorrow with a take under like this.

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Joe's forecast on Weather Bell a few months ago for cool air to sweep down from Canada across the Midwest this summer looks pretty smart as others are now crying, "Summer Polar Vortex." "Call it the ghost of the polar vortex, the polar vortex sequel, or the polar vortex’s revenge. Met...

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http://www.enercominc.com/the-oil-and-g ... -schedule/

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A question to be asked of all the Bakken players now is how much gas are they flaring and can they meet North Dakota's tough new standards this fall?
http://www.thebakken.com/articles/702/n ... as-flaring

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Dan, these guys need to host a luncheon. They're a pure play Permian oiler who told a good story to the Global Hunter crowd and need more exposure. The CEO just sent a dramatic signal to the market.
https://finance.yahoo.com/news/arabella ... 00160.html

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EnerJex and a few other board favorites are presenting in Chicago tomorrow and Wednesday.
http://www.ghsecurities.com/pages/GHS100.aspx

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Broke to new 52 week high yesterday following Investor Day which focused on Caliber and RockPile.

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Simmons thought the oil cut was a little light against the consensus view, but that was the only negative comment I saw among the various notes. Johnson Rice sees the spin monetization beginning 18-24 months hence.

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