New Energy Plays
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New Non-Energy Plays
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New Watch List Plays Triggered
IO - ION Geophysical
ION spiked to hit our breakout target of $7 on Tuesday after reporting earnings that nearly doubled the comparison quarter. Earnings were 27-cents compared to estimates of 22-cents. The company cautioned in their earnings statement that the oil industry was undergoing stress due to the restriction of financing and capital availability. They did not lower their earnings estimates but the stock sold off slightly on the caution.
ION Geophysical Corporation (ION), formerly Input/Output, Inc., is a technology-focused seismic solutions company that provides acquisition equipment, software, and planning and seismic processing and interpretation services to the global energy industry. Its products, technologies and services are used by oil and gas exploration and production (E&P) companies and seismic acquisition contractors to generate high-resolution images of the subsurface during exploration, exploitation, and production operations. The Company’s products and services include land and marine seismic data acquisition equipment, navigation and data management software products, survey design planning services, seismic data processing services and seismic data libraries. ION operates through four business segments. Three of these segments, Land Imaging Systems, Marine Imaging Systems and Data Management Solutions, make up its ION Systems division. The fourth segment is the Company’s ION Solutions division.
Breakout trigger: $7.00, hit Nov 4th
Position: 2010 $7.50 LEAP Call LAC-AU @ $2.15
Chart of IO
HK - Petrohawk Energy
Petrohawk pulled back nicely to its recent uptrend support giving us a good entry. Earnings soared with net income up eleven times to $305 million from $26.8 million including one-time items. Excluding items earnings were a penny under street estimates. Petrohawk production averaged 315 MMCFE/D for the quarter.
Petrohawk Energy Corporation (Petrohawk) is an independent oil and natural gas company engaged in the acquisition, development, production and exploration of oil and natural gas properties located onshore in North America. The Company’s properties are primarily located in the Mid-Continent region, including North Louisiana, the Fayetteville Shale in the Arkoma basin of Arkansas and in the Western region, including the Permian Basin of West Texas and southeastern New Mexico. At December 31, 2007, the Company’s estimated total proved oil and natural gas reserves were approximately 1,062 billion cubic feet of natural gas equivalent, consisting of 18 million barrels of oil, and 955 billion cubic feet of natural gas and natural gas liquids.
Breakdown trigger: $16, hit 11/6
Position: MARCH $20 Call HK-CD, $2.85
Chart of HK
XCO - EXCO ResourcesXCO Dropped sharply to nearly $6 from its $9.38 high for the week on Thursday's market sell off and its earnings report. The rebound was immediate to close back over $8 on Friday. The company reported earnings that beat the street with a +28% rise in revenue despite a loss of 3.2 Mmcfe/d of gas being shut in by hurricane Ike. Production for the quarter was 37 Bcfe. Company Info:
EXCO Resources, Inc. (EXCO) is an independent oil and natural gas company engaged in the acquisition, development and exploitation of onshore North American oil and natural gas properties. The Company’s operations are focused in key North American oil and natural gas areas, including East Texas/North Louisiana, Appalachia, Mid-Continent and Permian. As of December 31, 2007, EXCO’s proved reserves were approximately 1.9 trillion cubic feet equivalents (Tcfe), of which 93.3% were natural gas and 70.8% were proved developed reserves. During the year ended December 31, 2007, EXCO produced 121.3 billions of cubic feet equivalent (Bcfe) of oil and natural gas. On March 30, 2007, EXCO completed the acquisition of oil and natural gas properties, acreage and other assets in the Vernon and Ansley fields in North Louisiana from Anadarko Petroleum Corporation and Anadarko Gathering Company.
Breakdown trigger: $7, hit 11/6
Position: JUN $12.50 Call XCO-FV, $1.25
Chart of XCO
DRQ - Dril-Quip
DRQ declined -4.50 to hit our breakdown trigger at support at $22 on Friday. There was no news just market weakness causing the drop.
Dril-Quip, Inc. (Dril-Quip) designs, manufactures, sells and services engineered offshore drilling and production equipment that is suited for use in deepwater, harsh environment and severe service applications. The Company’s principal products consist of subsea and surface wellheads, subsea and surface production trees, mudline hanger systems, specialty connectors and associated pipe, drilling and production riser systems, wellhead connectors and diverters. Dril-Quip also provides installation and reconditioning services and rents running tools for use in connection with the installation and retrieval of its products. The Company manufactures its products at its facilities located in Houston, Texas; Aberdeen, Scotland; Singapore and Macae, Brazil. The Company maintains additional facilities for fabrication and/or reconditioning in Norway, Denmark, and Australia.
Breakdown trigger: $22, hit 11/7
Position: JUN $30 Call DRQ-FF, $3.40
Chart of DRQ
MOS - Mosaic
The market weakness knocked MOS from its Wednesday high of $43.16 to Thursday's low of $33.60 to trigger our breakdown target at $35. I believe strongly that the fertilizer stocks will continue to prosper as we add 150 million to the world's population every year. Much of the existing population is upgrading their eating habits and calorie intake. This requires larger crop yields and bringing less fertile land into production.
The Mosaic Company (Mosaic) is a producer of phosphate and potash crop nutrients for the agricultural industry. The Company operates its business through three business segments: phosphates, potash and offshore. The Phosphates segment produce phosphate fertilizer and feed phosphate which are used in crop nutrients and animal feed ingredients, respectively. The principal inputs used in crop nutrients production are phosphate rock, sulfur and ammonia. The Potash segment mines ad processes potash in Canada and the United States and sells potash in North America and internationally. The Offshore segment produces and markets fertilizer products and provides other ancillary services to wholesalers, cooperatives, independent retailers, and farmers in South America and the Asia-Pacific regions. As of May 31, 2008, Cargill, Incorporated owned approximately 64.4% of the Company’s interest. As of May 31, 2008, the Company had a 50% interest in Saskferco Products Inc
Breakdown trigger: $35, hit 11/6
Position: 2010 $50 LEAP Call LXW-AJ, $7.10
Chart of MOS
DWSN - Dawson Geophysical
DWSN dropped nearly $4 on Thursday after reporting record results on Wednesday. The drop triggered our entry at $22.50. DWSN reported a 26% increase in revenue and repayment of the entire $20 million in remaining debt on its credit line. DWSN said its order book was full and backlogged through 2009. DWSN is the leading provider of seismic services in the continental USA. Company Info:
Dawson Geophysical Company is a provider of onshore seismic data acquisition services in United States. The Company acquires and processes two-dimensional (2-D), three-dimensional (3-D) and multi-component seismic data for its clients, ranging from major oil and gas companies to independent oil and gas operators, as well as, providers of multi-client data libraries. Its clients rely on seismic data to identify areas where subsurface conditions are favorable for the accumulation of hydrocarbons and to optimize the development and production of hydrocarbon reservoirs. During the fiscal year ended September 30, 2007 (fiscal 2007), all of its revenues were derived from 3-D seismic data acquisition operations. As of September 30, 2007, it operated 15 3-D seismic data acquisition crews in the lower 48 states of the United States and a seismic data processing center.
Breakdown trigger: $22.50, 11/06
BUY MAR $30 Call DVQ-CF, $2.05
Chart of DWSN
BUCY - Bucyrus International
Tuesday's spike in energy triggered the BUCY breakout entry just in time to see a -$9 drop on Wed/Thr. Still BUCY is holding at support and has not violated any recent lows. No specific news.
Bucyrus International, Inc. designs, manufactures mining equipment for the extraction of coal, copper, oil sands, iron ore and other minerals in mining centers throughout the world. In addition to the manufacture of original equipment, the Company also provides the aftermarket replacement parts and service for equipment. The Company operates in two business segments: surface mining and underground mining. The Company’s manufacturing facilities include Australia, China, Germany, Poland and the United States, and service and sales centers include Australia, Brazil, Canada, Chile, China, England, India, Mexico, Peru, Russia, South Africa and the United States. The Company’s surface mining equipment includes draglines, electric mining shovels and rotary blasthole drills. In May 2007, the Company completed the acquisition of DBT GmbH, a subsidiary of RAG Coal International AG.
Breakout trigger: $28.50, 11/4
Position: 2010 $40 LEAP Call YHB-AH, $5.40
Chart of BUCY