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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.

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OSX - $189.54 +4.13 Oil Service Index - Stop loss OSX $160

No change, support at $180 is holding.

Index Description:

The Philadelphia Oil Service Index is an index of 15 companies that provide drilling and production services, oil field equipment, support services and geophysical/reservoir services. This index contains companies like Halliburton, Nabors, Schlumberger, etc.

Complete list of OSX components

To see the initial commentary on this position click here

Breakdown trigger $185 hit Jan-04

Position:
SHORT Sept $250 PUT - OFJ-UJ @ 58.50, Stop loss OSX $160

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ECA - $46.64 +0.49 - Encana

Encana is respecting the support at $44 and the level where we entered the play. No change. Pray for continued cold weather.

To see the initial commentary on this position click here

Earnings schedule: Feb-15th

Current recommendation: Buy at $45

Breakdown target: $45 hit Jan-3rd

Position: 2009 $50 LEAP Call ZBM-AJ @ $6.60

Insurance put: None

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THE $32.16 -0.57 - TODCO

Lehman lowered its price targets but maintained an overweight rating on the stock. Strong support just below at $31. No change in play

To see the initial commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $32

Breakdown target $39 hit 12/7/06

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

Insurance Put: None


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CHK $28.96 +0.91 - Chesapeake Energy

CHK found a bid after being named the Best Managed Oil and Gas Company by Forbes. They also announced the addition of the Varco CEO to their board. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Feb-23rd

Current recommendation: Buy under $29

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

Insurance put: none

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FXI $106.35 +0.95 - FTSE/Xinhua China 25 Index Fund

The FXI rebounded from the prior week's dip and then stuck to $106 and did not budge for four days. This is a positive event given the profit taking in some of the Chinese stocks. I am hoping to see some further gains next week .

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 $87.17 +0.40 - Marathon Oil

Marathon announced a new deal with Syntroleum (SYNM) to license its Gas to Liquids and Coal to Liquids technology to produce synthetic crude. This was a new agreement that replaced a former agreement where they cooperated on a process demonstration facility. Marathon also got permission to begin development and operation of the Volund field on the Norwegian Continental Shelf. MRO is 65% owner of the field, which is thought to contain 50 million BOE. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Feb-1st

Current recommendation: Buy at $85

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

Insurance put: None

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HES - $50.52 +1.50 - Hess Corporation
(Formerly (AHC))

Hess set a high for the year on Friday and is preparing to test resistance at $51. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Jan 31st

Current recommendation: Buy at $47

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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BTU - $40.83 +0.83 - Peabody Energy

BTU continued to climb to a new high for 2007 on colder weather, higher gas prices and expected production cuts to stabilize coal prices. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Jan-25th

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 - $67.66 +2.03 - Devon Energy

Devon set a new high for 2007 on Friday. Devon also announced that India's Prize Petroleum was in talks to buy Devon's assets in Egypt. This is following Devon's effort to consolidate operations into its core components.

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 - $75.80 +1.13 - Transocean Inc

RIG continues to lag the rest of the sector but support at $72.50 continues to hold. No change in play.

Their rig report released Jan-5th

To see the last full commentary on this position click here

Earnings schedule: Feb-14th

Current recommendation: Buy at $75

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 - $70.67 +2.69 - Tesoro Corporation

FBR upgraded TSO to a buy and that was good for a +$6 gain over the last two weeks. FBR also said Tesoro was sitting on a pile of cash that could be used for a share buyback. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-1st

Current recommendation: Buy at $65.00 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 - $42.95 +1.12 - Anadarko Petroleum

APC announced a deal to sell its 28 Permian Basin fields in West Texas to Apache for $1 billion. They also announced the sale of its Wyoming Elk Basin and Gooseberry fields to Encore Acquisition for $400 million. Three weeks ago it announced a sale of two fields in Louisiana to Exco Resources for $1.6 billion. APC is trying to cut its debt from $26 billion to $12 billion by the end of 2007. The majority of the debt was acquired in its two major acquisitions of Kerr-McGee and Western Gas Resources in 2006. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-6th

Current recommendation: Buy at $41, stop at $37

LEAP Position:
9/20/06 Position: 2009 $50 LEAP Call OCP-AJ @ $6.90
Cost adjustment for expired Jan put +2.35 = $9.35

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

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SU $73.79 +0.67 - Suncor Energy

No news but their earnings date was announced for next week. Support at $70 holding. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan 25th

Current recommendation: Buy at $70

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

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

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SLB $60.28 +3.11 Schlumberger

SLB spiked +$3 on earnings that increased +71% to $1.13 billon. The company gave golden guidance for years to come and produced a sizeable bounce for the entire energy sector. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Jan 19th, +71% to $1.13 billion

Current recommendation: Buy at $60, stop at $55

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
Cost update for expired Jan put +2.00 = $10.30

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, expired

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UPL $50.50 +2.55 - Ultra Petroleum

UPL blasted off on Friday as gas prices moved higher. UPL has been creeping higher all week and Friday's SLB news and gas jump finally produced a breakout to a new high for 2007. 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.

AMEX Oil & Gas Conference Dec 5th
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
Cost update expired Jan put +2.85 = $13.45

Insurance Put:
9/18 Position: JAN $40 Put UPL-MH @ $2.85, expired

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SUN $60.28 +0.45 - Sunoco

Sun set a new two-week high on Friday but it was less than exciting. No news and 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
Cost update expired Jan put +2.40 = $15.90

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

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PXP $44.51 -0.39 - 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
Cost update expired Jan put +1.90 = $9.40

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

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FST $30.17 +0.49 - Forest Oil

Still no earnings date but I am expecting strong results when they are announced. 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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VLO $51.04 +0.47 - Valero Energy

Valero announced a +50% increase in its dividend to 12 cents from 8 cents per share. They also announced the Chairman was leaving to spend more time in Valero LP and Valero GP. The current CEO will assume the Chairman position as well. VLO closed at a new high for 2007 on Friday. 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
Cost update expired Jan put +2.25 = $9.95

Insurance Put:
Position: 9/25 Jan $45 Put VLO-MI @ $2.25, expired

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PBR - $94.59 +0.19 - Petroleo Brasileiro

Petrobras debt was upgraded to investment grade by S&P on Friday. Petrobras had no previous rating by S&P. This is expected to help PBR reduce its borrowing costs and allow more investors access to its debt. Support held. No change in the play.

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $92, stop at $85

LEAP Position:
9/08/06 Position: 2009 $100 LEAP Call VDW-AT @ $14.90
Cost update Jan expired put +1.80 = $16.70

Insurance put:
9/11 January $70 PBR-MN @ $1.80, expired

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DO - $79.21 +2.39 - Diamond Offshore

No news, nice gain to a new closing high for 2007, no change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-8th

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 - $38.22 +0.61 - ATP Oil and Gas Corp

No further news. ATPG announced last week record production of 50.5 bcf in 2006. Oil production increased to 3.2 mmboe from its gulf operations compared to 0.7 mmboe in 2005. Still no earnings schedule. No change in play. I would be a buyer here based on the very strong outlook and activity in 2007 and beyond.

To see the last full commentary on this position click here

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 - $124.55 -2.85 - Petrochina

Wake me when the bleeding stops! I believe $120 should be the bottom for this pounding but so far there is no material rebound. Friday's +3.80 gain would be even better if we saw a back to back gain on Monday. I would be a buyer here at this level. I own it and I think the major problem was profit taking on the indexes not in oil. The profit taking on the indexes appears to be slowing.

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

To see the last full commentary on this position click here

Earnings schedule: N/A

Current recommendation: Buy at $125.50, stop at $119

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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DHI - $27.53 +1.13 - DR Horton

Homebuilders caught fire and DHI is back to 8-month resistance highs. 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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