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Play Updates

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The current format of the Play Updates has changed. Only the pertinent data that has changed from the prior week will be shown in an effort to concentrate more on new commentary on new plays rather than restating existing positions. Each play has a link back to either its last full commentary or its initial description.

HES - $46.00 + 1.00 - Hess Corporation (Formerly (AHC))

Hess announced last week that it joined forces with BHP and Repsol to buy the Genghis Khan site from Anadarko for $1.35 billion. The development in blocks 652 and 608 in the Gulf has estimated reserves of 65 million to 170 million BOE. No complaints, no change in play. BHP will own 44% while Hess and Repsol will each own 28%. Hess said it was paying $378 million for its interest. The three companies already have a similar ownership in the Shenzi project in the same geologic formation. HES continues to move higher setting a new two month high at $47 on Wednesday. HES rebounded from the Thursday dip with a +73 cent gain on Friday.

To see the initial commentary on this position click here

Position:
11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80

No insurance due to cheap LEAP, strong support and positive trend.

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BHP - $40.21 -2.08 - BHP Billiton

BHP was hammered on the drop in gold, copper and energy prices. It was the perfect storm for BHP and the ship sank. Fortunately we have a good insurance put position. No news and no change in play.

To see the initial commentary on this position click here

Position:
10/29/06 2009 $40 LEAP Call ZPK-AH @ $11.10

Insurance Put:
11/12/06 Feb $40 Put BHP-NH @ $1.50

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BTU - $42.00 +0.54 - Peabody Energy

BTU is still stuck in a rut between 40.50-42.50 and can't seem to find a trend. It was announced on Wednesday that Peabody would replace HCA in the S&P-500 on some future date. This should help provide a floor over the next couple of weeks. No change in play.

To see the initial commentary on this position click here

Earnings: Oct 19th .53 cents, up +26%

Position:
10/22/06 Jan-2009 $50 LEAP Call ZZT-AJ @ $8.70

No insurance put at this time.

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DVN - $69.96 -0.14 - Devon Energy

Devon announced it was shifting to horizontal wells in the Cotton Valley of east Texas and the return on investment has been very good. So good that a dozen other companies are rushing to duplicate their drilling method. XTO has already completed its first horizontal well in the play. They doubled the cost of the well from $2.5 million to $5 million but now expected to recover 10 BCF per well rather than the 2.5-3.0 BCF from vertical wells. Devon said they were spending three times as much per well but were seeing five times the recovery of a normal vertical well. Devon also said it was selling its assets in Egypt to concentrate on core exploration efforts. No price was given. No complaints and no change in play.

To see the last full commentary on this position click here

Insurance put:
Buy Apr-2007 $60 Put DVN-PL only if DVN trades at $64 again.

Earnings: Nov 1st, $1.66, beat by +14 cents

LEAP Position:
10/03/06 Position: 2009 $70 LEAP Call VVH-AN @ $9.00

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RIG - $73.39 -2.28 - Transocean Inc

RIG hit a new three-month high last week at $78.50. It has been all down hill from there. The drop in oil prices took the wind out of drillers sails. Carl Icahn also reported selling his interest in RIG as well as six other companies. Despite the drop the trend is still intact. No change in play.

Their rig report released Oct-31st: http://tinyurl.com/vkwuv

To see the last full commentary on this position click here

Insurance put:
Buy Jan $60 PUT RIG-ML only if RIG trades at $65.

Earnings: Nov 2nd, 83 cents, 12 cent beat

LEAP Position:
10/03/06 Position: 2009 $80 LEAP Call VOI-AP @ $12.90

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TSO - $66.06 +0.66 - Tesoro Corporation

TSO finally broke over resistance at $66 but the drop in oil prices brought it back to that level now functioning as support. TSO was one of the better performing refiners for the week. No news and no change in play.

TTo see the last full commentary on this position click here

Insurance put:
Buy Feb $55 PUT TSO-NK only if TSO trades at $59

Earnings: Nov 2nd, $3.92, 66 cent beat

LEAP Position:
10/04/06 Position: 2009 $70 LEAP Call ZGC-AN @ $7.70

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APC - $46.83 -0.42 Anadarko Petroleum

APC said it expected to sign a new contract with Mozambique for exploration rights on a 60,000 square kilometer parcel. This is a proven sector but due to the past problems in Mozambique it has had little exploration activity. APC is very positive on the acreage and the prospects. No change in play.

To see the last full commentary on this position click here

No change in play.

Earnings: Nov 7th, +$1.75 vs +$1.12

LEAP Position:
9/20/06 Position: 2009 $50 LEAP Call OCP-AJ @ $6.90

Insurance put: 9/25
Position: Jan $40 PUT APC-MH @ $2.35, profit stop @ $35.00

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CEO $85.27 -2.15 Cnooc Ltd

CEO gave back about half of last week's gains but considering the drop in oil prices this was a minimal retracement. No change in play.

To see the last full commentary on this position click here

No insurance put

Earnings: Oct-31st, $2.33B rev, +25%, no EPS given

Position: March $90 Call CEO-CS @ $2.40 (no leaps)

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SU $75.62 -3.59 - Suncor Energy

Suncor received approval for the next step in upgrading its oil sands output. The approvals were conditional with stipulations, They also announced a $5.3 billion capex budget for 2007. The combination of events produced a drag as traders took profits from the two-month high the prior week. No change in play.

TTo see the last full commentary on this position click here

Earnings: Oct 26th, $1.48 vs $0.57 year ago qtr

LEAP Position: 9/11/06
Position: 2009 $80 LEAP Call OYX-AP @ $14.30

Insurance put: 9/18
Position: Dec $60 Put SU-XL @ $2.10, no stop

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SLB $63.32 +0.02 Schlumberger

SLB traded in a $4 range for the week but ended up flat for the week. We are just waiting for a rally in oil to appear. There was no news and no change in play.

To see the last full commentary on this position click here

Earnings: Oct 20th: 81 cents vs 44 in Y.A.Q.

LEAP Position:
1/2 9/11/06 @ $8.60
1/2 9/12/06 @ $8.00
Position: 2009 $70 LEAP Call VWY-AN @ $8.30

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, no stop

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NBR $30.56 -1.36 Nabors Industries

No news, no change in play. It is almost as if Nabors does not exist. They are staying out of the news and in the field doing their job quietly.

Link to recent presentation: http://tinyurl.com/o5jmy

To see the last full commentary on this position click here

Earnings: Oct 25th, $1.02 vs 0.55 in YAQ

LEAP Position:
9/12/06 2009 $40 LEAP Call VRB-AH @ $4.50

No insurance

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UPL $50.18 -1.02 - Ultra Petroleum

UPL is still suffering from a three week post earnings decline that has knocked -$6 off the price. Gas prices are still holding at $8 and any breakout should power UPL higher. No news and no change in play.

UPL said recently that their profit margins at $4 gas were +30%, $6 gas 50% and $8 gas 100%. They have a 16-year inventory of wells to be drilled.

OGIS Investment Conference on Oct-4th. http://tinyurl.com/y6xsq3
Enercom Oil and Gas presentation: http://tinyurl.com/kn5cb

To see the last full commentary on this position click here

Earnings: Oct 31st, +33 cents

LEAP Position:
9/12/06 Position: 2009 $60 LEAP Call OZH-AL @ $10.60

Insurance Put:
9/18 Position: JAN $40 Put UPL-MH @ $2.85, no stop

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SUN $64.72 -0.61 - Sunoco

SUN continues to vacillate between $64-$67 on no news. If you are a day trader this stock has been perfect with $3 swings nearly every other day. No change in play.

To see the last full commentary on this position click here

Earnings: Nov 1st, $2.76 vs $2.39

LEAP Position:
9/12/06 Position: 2009 $70 LEAP Call VUN-AN @ $13.50

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, no stop

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PXP $43.68 +0.89 - Plains Exploration

PXP was all over the chart early in the week but ended with a nice rebound and a gain. No news after announcing earnings the prior week. No change in play.

Maintain $35 profit stop on Jan $40 insurance put.

OGIS Investment Conference on Oct-4th: http://tinyurl.com/y7vn2w

To see the last full commentary on this position click here

Earnings: Nov 9th, +91 cents vs +37 cents

LEAP Position:
9/12/06 Position: 2009 $50 LEAP Call ZXL-AJ @ 7.50

Insurance Put:
9/25 Jan $40 Put PXP-MH @ $1.90

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FST $33.62 +0.29 - Forest Oil

FST is still fighting resistance at $35 but the long term trend is creeping higher. I still expect $35 to break and a strong trend begin. No change in play.

Enercom conference presentation: http://tinyurl.com/ggzmv

To see the last full commentary on this position click here

Earnings: Nov-8th, +1.21 vs +0.055

LEAP Position: 9/12/06
Position: 2009 $40 LEAP Call OJG-AH @ 4.50

No insurance due to cheap LEAP

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XTO $47.18 +0.90 - XTO Energy

XXTO is holding at the top of its range just under resistance at $49. See the DVN play for news about their Cotton Valley drilling results. No change in play.

OGIS conference presentation on Oct 4th: http://tinyurl.com/v6ram
Enercom presentation: http://tinyurl.com/qorbr

To see the last full commentary on this position click here

Earnings: Oct 24th, $0.99 vs $0.85 in YAQ

LEAP Position:
9/12/06 Position: 2009 $50 LEAP Call OUO-AJ @ $6.50

Insurance Put:
Feb $35 Put XTO-NG @ $1.40, no stop

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VLO $52.86 +$.10 - Valero Energy

Valero had nothing but good press for the week but resistance at $55 is holding. After the bell on Friday Valero announced it was selling its remaining 51.7% of its holdings in Valero GP Holdings and would retain only 7.7% unless the offering was over subscribed. There was no change in the price of VLO after the announcement.

To see the last full commentary on this position click here

Earnings: Oct 31st, +$2.42 vs $2.30

LEAP Position:
9/24/06 Position: 2009 $60 LEAP Call VHB-AL @ $7.70

Insurance Put:
Position: 9/25 Jan $45 Put VLO-MI @ $2.25, no stop

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PBR - $89.30 -3.58 - Petroleo Brasileiro

PBR suffered a drop due to guilt by association after the Brazilian exchange fell on a drop in commodity prices and profit taking. PBR was up +7.7% for the month going into the week. The Brazilian exchange suffered a substantial drop and Petrobras is a major component of that index. The long-term trend is still intact. Consider this a buying opportunity. No change in the play.

To see the last full commentary on this position click here

Earnings: Nov 10th, +29%

LEAP Position:
9/08/06 Position: 2009 $100 LEAP Call VDW-AT @ $14.90

Insurance put:
9/11 January $70 PBR-MN @ $1.80, no stop

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DO - $74.63 -0.63 - Diamond Offshore

DO gave back -63 cents of the +$4 it gained in the prior week. I would take that trade every week. No news and no change in play.

To see the last full commentary on this position click here

Earnings: Oct 27th. $1.19 vs $0.60 in YAQ

LEAP Position:
8/29/06 Position: 2009 $80 LEAP Call VCT-AP @ 14.20
Cost reduction: Oct $70 Put profit -3.15, cost now $11.05

Insurance Put:
10/08 Dec $60 Put DO-XL @ $2.40, no stop

Position closed:
10/03 October $70 put DO-VN @ $1.65, exit @ $4.80, +3.15

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CSX - $36.38 -0.43 - CSX Corp

CSX will be added to the MCSI 300 US Large Cap Index as of Nov-30th according to MCSI Barra. CSX said its volume growth for Q4 would be +1% compared to +2% in Q3. Most shippers have warned that Q4 volumes would decline due to a weakening in the US economy. CSX said their long term annual growth forecast of 2-3% through 2010 remained intact. Annual profit growth of +12-13% through 2010 was also affirmed. No complaints here and no change in play.

To see the last full commentary on this position click here

Earnings schedule: Oct 17th, 54 cents, +50%

LEAP Position:
9/03/06 Position: 2009 $35 LEAP Call OBC-AG @ $4.90
11/17 Cost update - expired Nov $30 put +1.40 = $6.30

Insurance put:
9/11 November $30 Put CSX-WF @ $1.40, expired

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ATPG - $45.49 +1.25 - ATP Oil and Gas Corp

ATP continued to move higher setting a new 6-month high. No news and no complaints! With a market cap of only $1.3B they could be a prime takeover candidate. No change in play.

To see the last full commentary on this position click here

OGIS Investment Conference on Oct 5th. http://tinyurl.com/y5jod2

Earnings schedule: N/A

LEAP Position:
8/20/06 Position: 2009 $40 LEAP Call VCL-AH @ $11.70

Insurance put:
9/06 Position Dec $35 PUT HKU-XG @ $1.50, stop at $30

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PTR - $114.65 -0.89 - Petrochina

PTR gave up some ground after gaining +$8 over the last 3 weeks. Resistance at $117 was hit on Thursday just as the bottom fell out of the December oil contract. That combination knocked -$4 off the price but PTR quickly recovered. This is another buying opportunity in my opinion. No change in play.

I caught a quote from the President of a Petrochina division in an unrelated article earlier this week. They are developing an area called the Tarim River Basin. "The Tarim River Basin [in Xinjiang] alone is expected to produce about 750 million barrels of oil between 2006 and 2010," says Sun Longde, president of the PetroChina Tarim. If this is true then China's demand growth will be lessened from internal production. That equates to something around 500,000 bpd at full production. It also means Petrochina will see a significant increase in production.

To see the last full commentary on this position click here

Current recommendation: Buy under $110

Earnings: August 24th, $10.1 billion, +29%

LEAP Position:
5/14/06 Position: 2008 $120 LEAP Call LJC-AD @ $16.20
Cost adjustment: Close short Dec $115 call +1.30 = $17.50
Cost adjustment: Close long July $90 puts +3.00 = $20.50
Cost adjustment: Close long Sept $110 put -2.60 = $17.90

Insurance put: (9/11)
Position: December $100 Put PTR-XT @ $2.20, stop $90

Insurance put: (8/13)
Position closed:
Sept $110 Put PTR-UB @ $2.40, stop @ $106 @ $5.00, +2.60

Insurance combo: Closed
Short: Dec $115 Call PTR-LC @ $3.20, 6/13, exit $4.50, -1.30
Long: (2) July $90 Puts PTR-SR @ $3.70, 6/13, exit $0.70, -3.00

Insurance puts: (Closed 6/7)
Closed: June $105 PUT PTR-RA, @ $4.20 (5/22), exit 6/7 @ $4.30


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Non Energy Positions
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CAT - $60.94 +1.34 - Caterpillar ** Stop loss $58 **

CAT retested the resistance at $62 and continues to languish in the $59-$62 channel. They announced they bought out their joint venture partner in India and renamed the Hindustan PowerPlus Ltd venture Caterpillar Power India Private Ltd. India is one of their fastest growing regions. No change in play as we await some good news to restart their trend upward.

To see the initial commentary on this position click here

Position:
10/22/06 JAN-2009 $70 LEAP Call VKT-AN @ $7.20

Insurance Put: none

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TEX - $55.92 +3.33 - Terex Corp

A big week for TEX as it set a new all time high at $57. TEX also scored a new COO, Tom Riordan, who resigned from SPX to take on the new position at TEX. No change in play.

To see the initial commentary on this position click here:
http://tinyurl.com/yy2ysv

Earnings: Oct 25th, $0.98 vs $0.51 in YAQ

Position:
10/23/06 Jan-2009 $60 LEAP VXQ-AL @ $10.90

Insurance Put:
10/23/06 Jan-$45 PUT TEX-MI only is TEX trades at $48.

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DHI - $25.10 +2.65 - DR Horton

Surprise! DHI beat the street with earnings of +88 cents when analysts were only expecting 69 cents. They did confirm that future sales would be weak just like everyone else but the stock jumped nearly +20% from last week's lows. While this jump may bleed away eventually the housing market will find a bottom that sticks so no change in play.

To see the last full commentary on this position click here

Earnings: Nov 14th, 88 cents vs analysts est of 69 cents

LEAP Position:
9/24/06 Position: 2009 $25 LEAP Call VEI-AE @ $5.10
 

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