XLE $70.98 - Energy Select SPDR
Our breakdown entry at $72 was triggered on Monday and the XLE is still holding just over $71. I am definitely happy about that given the drop in oil for the week.
The XLE is a group of 36 companies in the energy sector. Exxon is the largest component and Tesoro the smallest. See the complete list here.
Energy Select Sector SPDR Fund (the Fund) seeks to provide investment results that correspond to the price and yield performance of the Energy Select Sector of the S&P 500 Index (the Index). The Index includes companies that primarily develop and produce crude oil and natural gas, and provide drilling and other energy-related services. The Fund utilizes a passive or indexing investment approach to invest in a portfolio of stocks that seek to replicate the Index. The Funds investment advisor is SSgA Funds Management, Inc.
Breakdown trigger: $72.00, hit 8/04
Position: Dec $80 Call XTG-LB @ $3.00
FLR $76.32 - Fluor
Like the XLE our breakdown trigger was hit on Monday at $76 and then Fluor did its best to hold that support level the rest of the week. No complaints!
Fluor Corporation is a holding company that, through its subsidiaries, provides engineering, procurement and construction management (EPCM) and project management services. Fluor serves a number of industries worldwide, including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. Fluor is also a primary service provider to the United States Federal Government. It performs operations and maintenance activities for major industrial clients, and also operates and maintains their equipment fleet. The Company is aligned into five principal operating segments: Oil and Gas, Industrial and Infrastructure, Government, Global Services and Power. Fluor Constructors International, Inc., which is organized and operates separately from its business segments, provides unionized management, construction and management services in the United States and Canada, both independently and as a subcontractor on projects to its segments.
Breakdown trigger: $76, hit 8/04
Position: 2010 $90 LEAP Call LLF-AR @ $14.60
PBR $51.06 - Petrobras
PBR is honoring round number support at $50 and announced a new oil discovery on Friday. I don't know why PBR is languishing given they made the biggest oil discovery in the last 30 years and keep improving on that discovery with every well. Ken Hebner and I are definitely confused. He has 2 million shares.
Petroleo Brasileiro SA - Petrobras (Petrobras) is a Brazil-based holding company is engaged in the exploration, exploitation and production of oil from reservoir wells, shale and other rocks, and in the refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy related activities. Petrobras has 109 production platforms and 15 refineries. It operates 31,089 kilometers of pipelines. The Company has various subsidiaries: Petrobras Distribuidora SA - BR, which is involved in the distribution and commercialization of oil products and natural gas, and Petrobras Netherlands BV - PNBV, which is active in the purchase, sale and rent of equipment and platforms for the production of oil and gas. Petrobras operates in Brazil, Argentina, Mexico, Portugal, the United States, Peru and Turkey, among others.
Breakdown trigger: $50, hit 8/05
Position: 2010 $60 LEAP Call YMO-AL @ $8.20
RIMM $133.75 - Research in Motion
RIMM is a combo play this time around to offset the extreme cost of the call option. We bought the call for $27.50 and sold the $110 put for $20.90 for a net debit of $6.60. I put a stop loss on the play at $119. In theory the call will continue to appreciate as RIMM moves higher and the put will continue to decline as it gets farther out of the money.
Research In Motion Limited (RIM) is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, short message service (SMS) messaging, Internet and intranet-based applications. RIM technology also enables an array of third party developers and manufacturers to enhance their products and services with wireless connectivity to data. RIMs portfolio of products, services and embedded technologies are used by organizations worldwide and include the BlackBerry wireless solution, software development tools, and other software and hardware. RIM operates offices in North America, Europe and Asia Pacific.
Breakout trigger: $125, hit 8/06
Long 2010 $140 LEAP Call YKD-AH @ $27.50
UPL $64.54 - Ultra Petroleum
Ultra reported earnings on Tuesday that more than doubled the comparison quarter on a 125% increase in revenue. Production rose +23% and the average sales price of gas was $8.06 per mcf. They get less for their gas because of their location in Wyoming. Once the pipeline is finished to the east coast their profits will again accelerate sharply. They have no downside risk with an active hedging program and no offshore or out of country assets.
Ultra Petroleum Corp. (Ultra) is an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. The Companys operations are primarily in the Green River Basin of southwest Wyoming. The Company continually evaluates other opportunities for the acquisition, exploration and development of oil and natural gas properties. As of December 31, 2007, Ultra owns interests in approximately 121,652 gross (62,756 net) acres in Wyoming covering approximately 230 square miles. The Company owns an interest in approximately 676 gross producing wells in this area and is operator of approximately 50% of the 676 gross wells. The Company owns interests in 252,629 gross acres in Pennsylvania. On October 22, 2007, the Company sold Sino-American Energy Corporation (Sino-American), which owned its Bohai Bay assets in China.
Breakdown trigger: $65, hit 8/05
Position: 2010 $80 LEAP WSS-AP @ $13.50
APC $53.78 - Anadarko Petroleum
Earnings on Tuesday fell sharply due to a market to market on hedged positions of $1.3 billion. Anadarko feels confident that the hedges will reverse to a profit before they expire. These companies like Ultra, Chesapeake and Anadarko have serious hedging programs to guarantee cash flow against debt on future production. Income from continuing operations rose to $1.76 per share compared to 89 cents in the prior quarter.
Anadarko Petroleum Corporation (Anadarko) is an oil and gas exploration and production company with 2.43 billion barrels of oil equivalent (BOE) of proved reserves as of December 31, 2007. The Companys major areas of operation are located onshore in the United States, the deepwater of the Gulf of Mexico and Algeria. Anadarko also has production in China and a development project in Brazil. It markets natural gas, oil and natural gas liquids (NGLs) and owns and operates gas gathering and processing systems. In addition, Anadarko has hard minerals properties that contribute operating income through non-operated joint ventures and royalty arrangements in several coal, trona (natural soda ash) and industrial mineral mines located on lands within and adjacent to its Land Grant holdings. The Land Grant is an eight million acre strip running through portions of Colorado, Wyoming and Utah where the Company owns most of its fee mineral rights.
Breakdown trigger: $55, hit 8/04
Position: 2010 $70 LEAP Call YPC-AN @ $7.60
BHP $65.77 - BHP Billiton
BHP hit out target of $65 on Tuesday and then held that level for the rest of the week. BHP is active in almost every metal including uranium and they have a strong oil and gas business. With a global footprint and backlogs in several commodities they are assured of future profits. However, if the world does fall into a recession they will be impacted. $60-$65 should be strong support.
BHP Billiton Limited is a diversified resources group. The Company is a producer of energy-related products, such as energy coal, oil, gas, liquefied natural gas and uranium. Its customer sector groups (CGS) are organized into nine business units: petroleum, aluminium, base metals, diamonds and specialty products, stainless steel materials, iron ore, manganese, metallurgical coal and energy coal. The Company generally extracts and processes minerals, oil and gas in the southern hemisphere from its production operations in Australia, Latin America and southern Africa. Its sales are concentrated in the northern hemisphere. In August 2006, BHP Billiton plc completed the sale of its 45.5% interest in the Valesul Aluminio SA joint venture to its joint venture partner, Companhia Vale do Rio Doce. In April 2007, the Company acquired a 33.3% interest in Global Alumina's Sangaredi Refinery Project in Guinea, West Africa. In July 2008, the Company completed the acquisition of Anglo Potash Ltd.
Breakdown trigger: $65, hit 8/05
Position: 2010 $80 LEAP Call LPH-AP @ $9.50