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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 - $198.05 +8.44 Oil Service Index - Stop loss OSX $179

No change, nice bounce. New support now at $187.

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 - $48.19 +1.24 - Encana

Continued nice rebound from Monday's lows. No change. Six more weeks of winter?

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 $34.23 +1.76 - TODCO

No earnings date yet. 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 $29.46 +0.46 - Chesapeake Energy ** New stop loss $28.50 **

CHK is holding the bounce but I am growing skeptical with winter expiring. I am adding a new stop loss at $28.50. Earnings still a month away. No change in play.

To see the initial commentary on this position click here

Earnings schedule: Feb-23rd

Current recommendation: Hold

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

Insurance put: none

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FXI $103.95 -1.55 - FTSE/Xinhua China 25 Index Fund

The profit taking on the Chinese indexes is continuing but slowing. Eventually a rebound will appear and money will begin to flow once again. $103 is support and we are holding at that level.

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 $89.62 +0.80 - Marathon Oil

Marathon reported earnings that declined -15% on the drop in gas prices, higher operating costs and lower refining margins. Considering the record profits in the comparison quarter this is not surprising. They still earned $1.08 billion for the quarter. No change in play.

To see the initial commentary on this position click here

Earnings: Feb-1st 3.06 vs 3.43 (Q4/05) $1.08 billion profit

Current recommendation: Buy at $85

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

Insurance put: None

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HES - $54.57 +2.63 - Hess Corporation
(Formerly (AHC))

Hess reported a -20% drop in earnings for the quarter but said it replaced 310 mb of reserves or 230% of the oil produced in 2006. The reserves came from a project in the Gulf and a return to fields in Libya. Reserves rose by +14% for the year. Production for 2007 is expected to rise from the Q4 rate of 366,000 bpd to between 370,000-380,000 bpd. A more over $56 would be a breakout to a new high! No change in play.

To see the initial commentary on this position click here

Earnings: Jan 31st, $1.13, vs $1.44 in Q4/05, 230% replacement

Current recommendation: Buy at $47

Position:
11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80
Cost adjustment put exit +1.60, cost = $8.40

Insurance Put: Triggered Jan-3rd @ $49
01/03/07 May $45 put HES-QI @ $2.60, exit 1/26 $1.00

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BTU - $42.02 +1.67 - Peabody Energy

BTU is showing a steady recovery from the post earnings dip and positive comments about coal from the Arch Coal earnings on Friday did not hurt. BTU said prices and demand were rising for exports to China from their new mines in Australia. BTU would be my choice from the 4 prominent coal stocks. (MEE, CNX, ACI and BTU) No change in play.

To see the initial commentary on this position click here

Earnings: Jan-25th +42% including special items.

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 - $70.40 +2.36 - Devon Energy

Nice move higher ahead of earnings. They are now advertising their conference call so hopefully the news is good. No chang ein play.

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
Cost update: 1/22 Put exit +0.20 = $9.20

Insurance put: Triggered 12/18 at $69
Position: Apr-2007 $60 Put DVN-PL @ $1.30, exit $1.10 1/22

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RIG - $76.37 +.75 - Transocean Inc

RIG continues to move sideways ahead of earnings. I suspect investors are worried that rates are falling. I checked out their latest rig report listed below and it appears to me rig rates are still rising. Still two weeks until earnings. No change in play.

Their rig report released Feb-2nd

To see the last full commentary on this position click here

Earnings schedule: Feb-14th

Current recommendation: Buy at $74

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 $72.50, $77.50

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TSO - $83.98 +10.15 - Tesoro Corporation ** Stop Loss $79.00 **

TSO blew out earnings with a +129% increase in profits and announced a major acquisition in California. They announced they were buying a major Los Angeles refinery from Shell and 250 Southern California gas stations. Ratings upgrades were flying and everybody thought the acquisition was a great deal that gave Tesoro an retail outlet in the high demand California market.

I raised the stop loss to $79 to preserve profits. If we are stopped we will look for another entry on the next dip with a new strike.

To see the last full commentary on this position click here

Earnings: Jan-29th, $2.28 +129%

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 - $43.83 +1.91 - Anadarko Petroleum ** Stop Loss $40 **

APC continued to announce sales of assets with a total of $9 billion over the last six months. They are reducing debt from $26 billion after the acquisition of Kerr McGee and Western Gas Resources to about $12 billion by the end of 2007. This is a very positive move by APC and I am expecting some strong guidance language with earnings next week. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-6th

Current recommendation: Hold

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 $73.98 -0.55 - Suncor Energy

No change in price and no news. No change in play.

To see the last full commentary on this position click here

Earnings: Jan 25th $0.78 per share

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 $65.12 +2.47 Schlumberger

SLB closed at a new high for 2007 on Friday. Strong earnings by Exxon and Weatherford helped push the service companies higher. 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 $52.20 +2.20 - Ultra Petroleum ** Stopped @ $49.50 **

We were stopped on the Monday dip but that was the plan. I expect gas prices to fall once this current cold snap is over and I am looking to reenter the UPL position with another dip to $45. We are long the March $45 put at 95 cents and we will use any gains there to offset the loss in this position.

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, exit $9.40, -4.05

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

Insurance put:
1/28 Position March $45 Put UPL-OI @ 95 cents. No stop

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SUN $63.86 +2.92 - Sunoco

Sun set another 2007 high on Thursday at $64.85. This was surprising after they reported earnings that dropped -57% due to lower refining margins. Their earnings of $1.00 still beat the street by +4 cents. Not bad when earnings fell -57% and you still beat the street. No change in play.

To see the last full commentary on this position click here

Earnings: Jan-31st, -57% $1.00 vs $.96 analyst est.

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 $48.94 +2.86 - Plains Exploration

PXP has caught fire with a nice run for the week to a new six-week high. Earnings date was announced as Feb-22nd. No other news, no change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-22nd

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 $31.99 +.52 - Forest Oil

Slowly creeping higher on no news. 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 $56.23 +3.74 - Valero Energy

Valero hit a new two-month high at $56 and is very close to a breakout to a five-month high over $57. Earnings declined -15% to $1.59 but still beat the street estimates of $1.37. VLO said it was considering selling the Lima Ohio refinery rather than spend millions upgrading it. Valero CEO said President Bush's goal of 35 billion gallons of renewable fuel by 2017 is impossible with current technology. At best Klesse said output could double to 15 bgpy. No other 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
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 - $99.46 +2.09 - Petroleo Brasileiro

Another good week for PBR and signs of a possible resumption of that elusive uptrend. PBR said it was in talks with ONGC, India's national oil company about partnerships in some deepwater plays. 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 - $84.58 +3.54 - Diamond Offshore

DO declared a special dividend of $4 per share payable March 1st to holders on Feb-14th. This helped send shares of DO to a new six-month high. Definitely no complaints here with earnings next week. 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 - $41.16 +.92 - ATP Oil and Gas Corp

ATPG hit a brick wall at $42 and a new high for 2007. No news and still no earnings date. I would continue to 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 - $124.15 +0.30 - Petrochina

Not a big gain for PTR but I believe we have seen the bottom. You know how fast this stock can move once a direction appears. I would look to add to positions here and again on a move over $128. With the Yuan expected to increase +5% over the dollar in 2007 and oil demand in China soaring I believe PTR will benefit once the profit taking in the Chinese indexes is over.

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 - $30.86 +3.04 - DR Horton

Outstanding breakout in DHI over $30 and the long term uptrend resistance. $35 is the next target and builders are catching fire again! DHI is the only stock in the group rated an aggressive buy by A.G. Edwards! The reason given by AGE is "its broad geographic diversification, focus on the first and second move-up markets, low-cost operating structure, conservative capital stewardship and industry-leading dividend." No change in play.

To see the last full commentary on this position click here

Earnings: Jan-23rd, +35 cents vs 98 cents in 2005.

Current recommendation: Hold

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

Insurance put: None
 

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