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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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THE $32.65 -2.55 - TODCO

No news. Strong support just below at $44. No change in play

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $43

Breakdown target $39 hit 12/7/06

Position: 2009 $45 LEAP ZYU-AI @ $8.40

Insurance Put: None

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CHK $27.95 -1.85 - Chesapeake Energy

Not a good week for CHK with gas prices falling and downgrades from Goldman and Prudential. Major support at 28 has been reached. This is the recommended buy point so no reason to exit here. No change in play.

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $29

Position: 2009 $35 LEAP VEC-AG @ $5.30

Insurance put: none

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SNP - $90.95 -1.60 Sinopec *** Stop Loss $88.50 ***

Sinopec held the +$6 it gained the prior week and resisted the massive profit taking hitting PTR and CEO. Considering it gained +84.8% for all of 2006 it was due some profit taking. Definitely no complaints here.

Because this is a July call and not a LEAP and because we are up +200% I am keeping the stop at $88.50 rather than trying to add insurance in the form of a covered call or expensive put.

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $85

Entry $74.44 11/28/06

Position: July $80 Call SNP-GP @ $5.40

No insurance

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FXI $105.95 -5.26 - FTSE/Xinhua China 25 Index Fund

The FXI spiked to $118 on Wednesday's open before falling back to close just over $105 on Friday. This was a result of the China indexes getting hammered on profit taking and news that the central bank was raising the reserve requirements. The falling price of oil also helped push it lower with SNP, PTR and CEO all components in the ETF. I consider this a buying opportunity.

The iShares FTSE/Xinhua China 25 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 Index.

Component list

This iShare focuses on the largest companies in China (58% of it positions) and Hong Kong (42%). These are the most liquid companies in these markets. With Asia growing by leaps and bounds the FXI generated a +40% return in 2005 without using options. We hope to do better using LEAPs.

Current recommendation: Buy under $105

Breakout target: $94.50 hit 11/22/06 on gap open to $95.80

Position: 2009 $100 LEAP Call VHF-AT @ $13.50

No insurance

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MRO $85.92 -6.58 - Marathon Oil

Marathon took it on the chin after the Conoco earnings warnings. It had been holding in the low 90s as we waited for oil prices to firm. The Conoco warning knocked it back to support at $85. This is where I had highlighted a potential new entry point. This should be decent support assuming oil prices don't head further south. No change in play.

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $85

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

Insurance put: None

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HES - $47.95 -1.62 - Hess Corporation
(Formerly (AHC))

Hess lost -$3 on the Conoco warning and held that level the rest of the week. This is $1 over my speculative buy level at $46. Hess also announced a successful sidetrack well to its Pony 1 discovery in the Gulf. This well was 2700 feet northeast of the discovery well at a depth of 30,634 feet. They are now going to drill another appraisal well 7,400 feet northwest of the discovery well and expect a similar 300-475 feet of pay. Hess estimates this discovery to contain 100 to 600 million bbls of oil and they have a 100% working interest in the discovery. Hess announced this the same day Deutsche Securities cut them to hold. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Jan 31st

Current recommendation: Buy at $46

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

Insurance Put: Triggered Jan-3rd @ $49
01/03/07 May $45 put HES-QI @ $2.60, stop loss $51.50

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BHP - $37.15 -2.59 - BHP Billiton *** Stopped $38 ***

BHP finally hit our exit stop at $38 after support at $38.50 failed. We are going to leave the insurance put active with a profit stop at $36. Copper supplies in London totaled 195,575 tons on Tuesday and very near the 200,000 ton level which indicates a surplus.

To see the initial commentary on this position click here

Earnings schedule: N/A

Recommendation: Buy under $35 for oil assets

Position:
10/29/06 2009 $40 LEAP Call ZPK-AH @ $11.10, exit $6.80, -4.30

Insurance Put:
11/12/06 Feb $40 Put BHP-NH @ $1.50, profit target $36

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BTU - $37.25 -3.19 - Peabody Energy

BTU support at $40 crumbled after Morgan Stanley removed Arch Coal from its focus list due to warmer weather and weak demand for coal fired power generation. The drop through $39 triggered our March insurance put. The profit stop on this put will be $35 and stop loss at $42.50.

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $35

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

Insurance put: Triggered with drop through $39
01/03/07 March $35 Put BTU-OG at $1.15, stops at $35 and $42.50

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DVN - $65.32 -1.76 - Devon Energy

Devon took a smaller hit than MRO and HES on the Conoco news and lost a very respectable -1.76 for the week. Devon also reached my buy target for new entries at $65. No news and no change in play.

I suggest closing the insurance put if DVN trades at $68.50.

To see the last full commentary on this position click here

Earnings schedule: Feb-7th

Current recommendation: Buy at $65

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

Insurance put: Triggered 12/18 at $69
Position: Apr-2007 $60 Put DVN-PL @ $1.30, close at $68.50

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RIG - $76.59 -4.34 - Transocean Inc

RIG support at $80 crumbled with the sector on no news. RIG hit my buy level at $75 for new positions on Thursday. The insurance put was triggered and exit stops are listed below.

Their rig report released Jan-5th

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $75, or an aggressive $80

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

Insurance put: Triggered at $79 on Jan-3rd
1/3/07 Feb $75 PUT RIG-NO @ $2.55, stops $70.50, $78.50

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TSO - $65.67 -0.10 - Tesoro Corporation

TSO respected support at the 100-day and was upgraded by Citigroup to a buy from hold. This resulted in only a -10 cent loss for the week. I am in shock! No change in play.

Maintain a stop loss at $60. If we hit $60 support has failed.

To see the last full commentary on this position click here

Earnings schedule: Feb-1st

Current recommendation: Buy at $62.50 with stop at $60

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

Insurance put: None

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APC - $41.31 -2.21 - Anadarko Petroleum

APC finally broke support at $42 on the downdraft in oil and a downgrade from Prudential. The new buy level is $40 and we are very close. I changed the stop on the put to $39 since it only has two weeks until expiration. Hopefully support at $40 will hold without another implosion in oil prices.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $40, stop at $34

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, stop @ $39.00

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CEO $88.40 -6.23 - Cnooc Ltd *** Stopped $91.50 ***

CEO rolled over from its new high on Wednesday and triggered our exit stop at $91.50 on the downdraft. We entered the play back in September at $80 but CEO went dormant shortly thereafter. The premium declined with time and we ended up only exiting with a small gain. While that is better than a sharp stick in the eye it was hardly worth the effort. $4.20 was the high on Wednesday but that quickly evaporated with the -6 point drop.

To see the last full commentary on this position click here

Current recommendation: Hold

Earnings schedule: N/A

Position: March $90 Call CEO-CS @ $2.40, exit $2.90, +0.50

No insurance put

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SU $72.65 -6.26 - Suncor Energy

The Conoco warning and a downgrade by Deutsche Securities to hold combined to knock a whopping -$6 off Suncor. Suncor said it produced an average of 281,000 bpd from its oil sands facility during December compared to the average for all of 2006 at 260,000 bpd. Deutsche also said planned maintenance work would limit upside production. No change in play.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $70

LEAP Position: 9/11/06
Position: 2009 $80 LEAP Call OYX-AP @ $14.30
Cost update: +2.10 to $16.40 for expiration Dec put

Insurance put: 9/18
Position: Dec $60 Put SU-XL @ $2.10, expired

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SLB $59.32 -3.96 Schlumberger

SLB suffered with the sector on no news. I would be a buyer under $60 with a stop at $54. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan 19th

Current recommendation: Buy at $60, stop at $54

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 $28.55 -1.22 - Nabors Industries ** Closed **

Nabors warned on the 3rd that it would miss prior estimates for the quarter and the full year due to lower demand for gas well drilling services in North America. 26 rigs were out of service as of last week. S&P cut estimates for dayrate and margin growth in North America but said international drilling demand should continue to grow. With no insurance and lowered expectations I am dropping it as an active play.

Link to recent presentation

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Avoid

LEAP Position:
9/12/06 2009 $40 LEAP Call VRB-AH @ $4.50, exit 2.25, -2.25

No insurance

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UPL $46.86 -0.86 - Ultra Petroleum

UPL made a miraculous recovery after being knocked for nearly a -$4 loss on Wednesday. No news and no change in play. $45 is strong support and my recommended buy target.

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.

AMEX Oil & Gas Conference Dec 5th
OGIS Investment Conference on Oct-4th
Enercom Oil and Gas presentation

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $45, stop at $40

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, stop $39

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SUN $59.68 -2.47 - Sunoco

Another Conoco warning victim SUN fell to my recommended buy target of $60 and strong support. They also announced a 25-cent dividend and their earnings date of Jan-31st. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan-31st

Current recommendation: Buy at $60, stop at $54

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

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, stop $54

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PXP $45.85 -1.68 - Plains Exploration

Minor loss on no news and no change in play.

OGIS Investment Conference on Oct-4th

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $44, stop $40

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, $35 stop

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FST $31.17 -1.43 - Forest Oil

Minor loss and still holding in its recent range. On their last analyst conference they said production was going to spike sharply in Q1 and I suspect they will mention it again with their Q4 earnings. No news and no change in play.

Enercom conference presentation

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $30, stop at $27

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 $45.23 -1.67 - XTO Energy *** Closed ***

XTO was downgraded by Keybank to a hold along with 9 other companies with exposure to the rising gas risk. Since we are still positive in XTO and there is no discernable trend in this stock I am electing to take a safe exit here. The put has minimal value with six weeks left to run. I would continue to hold the put just in case.

OGIS conference presentation on Oct 4th
Enercom presentation

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Ignore

LEAP Position:
9/12/06 2009 $50 LEAP Call OUO-AJ @ $6.50, exit $7.00, +0.50

Insurance Put:
Feb $35 Put XTO-NG @ $1.40, no value, continue to hold.

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VLO $49.36 -1.76 - Valero Energy

Another Conoco casualty. No news and no change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-1st

Current recommendation: Buy at $50, stop at $45

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, stop $45

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PBR - $95.29 -7.45 - Petroleo Brasileiro

Petrobras rallied strongly into last Friday's close on news of a new discovery and then collapsed into the close this Friday giving back a whopping -7.45. Fortunately after the prior week's +4.75 gain the drop this week only took us back to levels seen on 12/19. It was simply profit taking on no news. No change in the play.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $96, stop at $88

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 - $77.17 -2.67 - Diamond Offshore

Ditto, no news, minor drop, no change in play.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $75, stop at $69

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
Cost increase: Dec $60 put expired -2.40, cost now $13.45

Insurance Put:
10/08 Dec $60 Put DO-XL @ $2.40, expired

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

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ATPG - $37.51 -2.07 - ATP Oil and Gas Corp

The dip for the week took ATPG back to my buy level at $38. No news and no change in play.

To see the last full commentary on this position click here

OGIS Investment Conference on Oct 5th

Earnings schedule: N/A

Current recommendation: Buy at $38, stop at $34

LEAP Position:
8/20/06 Position: 2009 $40 LEAP Call VCL-AH @ $11.70
12/17/06 Cost update expired Dec 35 put -1.50 = $13.20

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

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PTR - $130.70 -10.24 - Petrochina

A new high on the 29th and a new four-week low on the 5th. That is a heck of a way to celebrate the New Year. With PetroChina's 3.6% dividend and +25.2% EPS growth I doubt it will be down for long. I would view this return to $130 as a buying opportunity once the Chinese indexes end their swoon.

The insurance put I suggested last week turned out to be a quick trade with an entry at $138.50 ($1.90) and an exit at $132.50 ($4.50). I had no idea PTR would crater so rapidly or I would have gladly held the put for another day or two.

I still believe this stock could be well over $150 before our 2008 LEAP comes due.

Insurance Put: Buy Jan $135 Put PTR-MG only if PTR trades at $138.50. Once entered set a profit stop at $132.50 and a stop loss at $140.50.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $128.50, stop at $124

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
Cost adjustment: Expired Dec $100 put +2.20 = $20.00
Cost adjustment: Closed Jan $135 put -2.60 = $17.40

Insurance put: (12/31)
1/03/07 Jan $135 Put PTR-MG at $138.50, $1.90
1/04/07 Profit stop at $132.50, $4.50 for +2.60.

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

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 $50.96 -2.88 - Southern Copper *** Closed ***

PCU imploded on the sudden surplus of copper and forecasts for even more supplies to drive down the price later this year. I view PCU as promising long term but I believe there is more pain ahead before that long term appears.

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $42

Breakdown triggered at $51 on 11/14/06

Position: JUNE $55 Call PCU-FK @ $3.80, exit 2.80, -1.00
(no leaps)

Insurance Put: None

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TEX - $57.96 -6.60 - Terex Corp *** Closed ***

Citigroup downgraded Terex from a "buy" to a "sell" on sharply deteriorating fundamentals. Citigroup said the business is beginning to lose steam and a recently announced $200 million buyback shows the company has no acquisition targets or better uses for the cash. TEX dropped sharply to initial support at $60 but I fear there is more pain ahead. The gains in 2006 put TEX in the top ten but fears of an economic slowdown could knock another -8 off the stock very quickly. I would consider another entry at $50 once support has been tested. Let's exit with a profit today and review it again later.

Maintain the insurance put with a stop at $52.50 and $61.00

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Hold

Position:
10/23/06 Jan-2009 $60 LEAP VXQ-AL @ $10.90
Cost update +1.15 for stopped call, cost = $12.05
Play exit 01/07 @ 14.50, +2.45

12/24/06
Sold Jan $65 Call - TEX-AM @ $1.85, stopped 12/27 $3.00, -1.15

Insurance Put:
01/03/07 Apr-$55 PUT TEX-PK at $61 @ 2.60, stop $52.50

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DHI - $25.86 -0.66 - DR Horton

Moving slower than molasses in January but the trend is still higher. Resistance at $27.50 is the current challenge. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan-23rd

Current recommendation: Hold

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

Insurance put: None
 

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