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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.

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MRO $91.08 +2.10 - Marathon Oil

Marathon continued higher with a nice gain for the week. It appears the decision to buy the prior week's dip was the correct one. Resistance remains $92.50 at the historical high and we are rapidly approaching that level. No change in play.

To see the initial commentary on this position click here

Position 2009 $100 LEAP Call VXM-AT @ $12.60

Insurance put: None

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HES - $45.35 -0.65 - Hess Corporation (Formerly (AHC))

Hess continues to consolidate in the $45-$46 range on no news. No change in play.

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 - $40.74 +0.53 - BHP Billiton

BHP continues to hold above support despite rumors that it could outbid Freeport for Phelps Dodge. Traders appear cool to the idea but it is still just speculation. We have a good insurance put position in case they do something stupid. 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 - $42.67 +0.67 - Peabody Energy

BTU is starting to tick higher on colder weather and the S&P announcement. It was announced the prior week that Peabody would replace HCA in the S&P-500 on some future date. That date has not yet been set. 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 - $70.47 +0.51 - Devon Energy

Devon moved slightly higher on no news. Resistance is $72 and DVN is holding just close enough to breakout on any sudden spike in oil prices. It came very close on Tuesday when oil broke over $60. No complaints and no change in play.

To see the last full commentary on this position click here

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

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

Insurance put:
Buy Apr-2007 $60 Put DVN-PL only if DVN trades at $67 again.

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RIG - $75.25 +1.86 - Transocean Inc

RIG rebounded from the prior weeks dip and the trend is still intact. RIG has been commissioned to drill a new well in the Artic Barents Sea for Eni. 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

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

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

Insurance put:
Buy Jan $65 PUT RIG-ML only if RIG trades at $71.

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TSO - $68.16 +2.10 - Tesoro Corporation

TSO is holding the high ground after its breakout over resistance at $66 and the chart looks like a new leg up could be about ready to form. No news and no change in play.

To see the last full commentary on this position click here

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

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

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

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APC - $47.33 +0.50 - Anadarko Petroleum

APC is pressing Algeria for terms of the new windfall profits tax that will become effective in 2007. So far Algeria has failed to disclose the details other than the tax will provide an extra $1 billion in revenue for the country. Claiming the tax is much fairer than the nationalism of assets in countries like Bolivia and Venezuela the Algerian minister invited all oil companies to his office for coffee and a chat if they wished to discuss the terms. The current contracts were signed when oil was $15 and Algeria feels it is time to adjust those terms. APC is the largest independent company in Algeria. 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 $87.90 +2.63 - Cnooc Ltd

CEO sprinted higher late in the week after PetroChina was upgraded by Citibank. The rush to China equities appears to have restarted with the big oil companies leading the list of desirables.

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 $76.65 +1.03 - Suncor Energy

Suncor continues to be range bound over $74 but the short term internals appear to be improving. No news and no change in play.

To 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 $65.39 +2.10 Schlumberger

SLB regained its losses from the prior week but remains trapped in a range under resistance at $66. SLB earned $1.81 in 2005 and is expecting $2.96 this year and $3.74 in 2007. This suggests a forward PE of less than 17 with oil demand expected to rise by +4 mbpd by 2010. SLB is going to reap the rewards of all that exploration and production. 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 $32.63 +2.07 - Nabors Industries

Nabors spiked +$3 on Monday on rumors of a pending takeover announcement. It held its gains for the week despite many analysts saying the rumor was false. With a market cap of only $9.7 billion it would be an easy target for the LBO groups or even a larger integrated company looking to capitalize on the future of oil exploration. However, because the oil business has been very cyclical in the past it would take brass components to step up to the table with $10 billion in risk capital. NBR only trades at a PE of 10 and sees increasing backlogs despite hundreds of rigs on order. Any buyout would probably involve a significant breakup of Nabors into various parts to maximize value. After being unloved by investors for years it might take a buyout offer to rekindle their stock price.

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 $51.31 + 1.13 - Ultra Petroleum

UPL is like watching paint dry as we await the winter ramp on gas prices. 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 $64.00 -0.72 - Sunoco

SUN took a turn for the worse this week with more selling than buying and the top of the intra-week swing was about -1.50 below the last three weeks. Valero needs to get out their checkbook and write a big one for $8.5 million and put SUN out of its misery. Like UPL we are just waiting for the winter demand cycle to begin. 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 $44.38 +0/70 - Plains Exploration

PXP appears ready to break resistance at $44.50 and make a run for its highs at $47. The two week trend has been solidly higher. No news and 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 $34.20 +0.58 - Forest Oil

FST is still fighting resistance at $35 but the long term trend is creeping higher even if it is at a snails pace. 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 +0.05

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

XTO raised their dividend +20% to nine cents but the stock is still stuck under resistance at $48. 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 $52.35 -0.51 - Valero Energy

Valero continues to be range bound between $51-$54. Nothing should change until winter demand returns. No change in play.

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 - $90.61 +1.31 - Petroleo Brasileiro

PBR moved slightly higher after last week's drop but Wednesday's higher was still a lower high. PBR needs to break out of the doldrums and the resistance at $95. No news and 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 - $76.65 +2.02 - Diamond Offshore

DO is easing back towards the resistance at $77.50 and a breakout there could have it testing $80 very quickly. The underlying support for DO appears to be growing. I considered a new put on DO but the price for the Jan $70 is excessive in my opinion. 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 - $36.19 -0.19 - CSX Corp

CSX is flat ahead of its index upgrade. CSX will be added to the MCSI 300 US Large Cap Index as of Nov-30th according to MCSI Barra. The transport index is holding the high ground but the railroads are not participating. 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 - $46.34 +0.85 - ATP Oil and Gas Corp

ATP continued to move higher setting another new 6-month high. They announced this week they were redeeming their 12.5% and 13.5% preferred shares in a move to further reduce costs. They continue to move higher with a target of resistance at $49.50. 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 - $123.42 + 8.77 - Petrochina

PTR received an upgrade from Citigroup to a buy with a price target of $139 and the reaction was immediate. The stock gapped open on both Wednesday and Friday. Friday's closing price was a new historic high. We waited a log time for PTR to recover from its plunge to $90 and our wait was worth it. No complaints and no change in play.

To see the last full commentary on this position click here: http://tinyurl.com/yest3l

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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PCU $53.10 +2.95 - Southern Copper

It appears the breakdown entry at $51 just above support at $50 was a good entry. We saw PCU spike up last Monday and continue higher into Friday. The reason for the bounce was the Freeport-McMoRan announcement it was planning to buy Phelps Dodge to create the worlds largest copper company. Evidently Freeport is not afraid of the dip in copper prices and actually expects them to rebound. The offer price was nearly +$30 over the PD price prior to the announcement. No complaints here!

To see the initial commentary on this position click here

Breakdown triggered at $51 on 11/14/06

Position: JUNE $55 Call PCU-FK @ $3.80
(no leaps)

Insurance Put:
PCU-XW Dec $47.50 put only if PCU trades at $49.50


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CAT - $62.88 +1.94 - Caterpillar ** Stop loss $58 **

CAT finally found some traction on news that CAT expects its growth in China to quadruple by 2010. To underscore this trend in growth CAT announced it was moving its Asia Pacific headquarters from Tokyo to Beijing. Sales from China are expected to grow to 10% of CAT's total up from 2.5% today. This announcement came just one day after Cummins said its sales would double by 2010. A pure case of one-upmanship from CAT. 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 - $57.59 +1.67 - Terex Corp

Another new historic high but a four-day stall as well. $58 has appeared as resistance. No news and no change in play.

To see the initial commentary on this position click here

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-$50 PUT TEX-MI only is TEX trades at $54.

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DHI - $25.57 +0.47 - DR Horton

DHI continued to show gains a week after its surprising jump on better than expected earnings. Bad news in the housing sector is being ignored and we are not complaining. 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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