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ENER - $71.32 -5.32 Energy Conversion Devices

ENER gave back a little more than half of the +$8 it gained the prior week. ENER announced that its share offering was oversubscribed and underwriter options were exercised in full. They issued the shares to raise $400 million to increase production capability of their thin film products.

Breakout trigger: $68.50 hit 6/16

Position: 2010 $80 LEAP Call KYU-AP @ 23.10

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SGR - $61.01 Shaw Group *** Stopped ***

Shaw dipped ever so slightly to $60 at the open on Friday and that took us out of the play. The bear market last week was not kind to this sector.

Breakout trigger: $66 Hit 6/17

Position: 2010 $75 LEAP Call YCW-AO @ $14.10, exit $10.70

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FTK $20.04 -1.79 Flotek

No specific news and FTK is trying to resist the market decline. Trend is still up.

Breakout trigger: $21.00 Hit 6/17

Position: 2010 $25 LEAP Call YVB-AE @ $5.20

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BTU $84.05 +3.74 - Peabody Energy

Well off the high for the week at $87.70 but still a nice gain. Trend is still up and they opened a new mine in New Mexico on Tuesday.

Breakout target: $81 Hit 6/09

Position: 2010 $90 LEAP Call LLW-AR @ $19.92

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BP $67.35 +.43 - BP PLC

The battle still rages but Morgan Stanley upgraded them to a buy on Wednesday. BP also broke ground on a wind farm in Kansas this week.

See the June-8th newsletter for news about Russia.

Recent progress announcements on the Thunder Horse platform in the Gulf suggested that BP was going to finally start producing. BP is on track to begin producing 250,000 bpd of oil and 200 million cubic feet of gas per day from Thunder Horse. The platform covers the area of three football fields and sleeps 185 workers. The gas-powered generator could power 80,000 homes. The project cost so far has been $3.5 billion. It will collect oil from 25 wells. I am hoping the Thunder Horse project will offset any further news from Russia.

Breakdown trigger: $68. Hit June 4th.

Position: 2010 $70 LEAP Call WAO-AN @ $7.30

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PDE $47.79 +2.05 Pride International

A new all time high at Friday's close. No news and no complaints.

Zacks recently reiterated a buy rating on PDE on Friday based on their $9.4 billion backlog and their emergence as a pure play deepwater driller. They have sold off their non-core assets to leverage the deepwater play. The market is still valuing them as a shallow water jackup play and they are no longer in that sector. They are a strong takeover target given their small size and sector.

Position: Jan 2009 $50 Call PDE-AJ @ $3.70

I went with a Jan call instead of a LEAP because an acquisition would limit LEAP appreciation. I wanted to be close to the current price with a cheap option.

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FWLT $72.49 -.41 Foster Wheeler *** Stopped ***

FWLT dipped on market weakness to our stop at $70 and took us out of the play. This sector was hard hit for the week despite a lot of good news.

US Global Investors said FWLT was one of two companies you must have.

Breakout trigger: $71 Hit 5/13

Position: 2010 $80 LEAP Call LWM-AP @ $16.80, exit $14.90

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CRR $57.06 -0.47 - Carbo Ceramics

No news and CRR continues to cling to its highs.

Breakout trigger: $48 Hit 5/12

Position: Dec $50 Call CRR-LJ @ $5.80

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JEC $81.17 -6.18 Jacobs Engineering *** Stopped ***

Again, no specific news but the sector was crushed and we are out.

Breakout trigger: $90 Hit May 5th

Position: 2010 $100 LEAP Call WEU-AT @ $16, exit $13.20

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PBR $69.23 +3.96 Petrobras

Solid support at $65 and a nice bounce after Ken Heebner pounded the table again on CNBC on the merits of PBR. Petrobras is being labeled this weekend as a stock to buy for a bounce next week. Let's hope they are right.

Prior commentary:

Petrobras reportedly made another light oil discovery offshore in block BM-S-9. This is an ultra-deep field like the rest and reportedly it is a large discovery. The government officials continue to get in trouble for spilling confidential data before Petrobras does and that happened again last week. Petrobras said the Tupi field will be operational by 2010 with 100,000 bpd and will be producing 500,000 bpd by 2020. The first actual production test is set for Q1-2009. Lifting costs are expected to be $8.20 per barrel. Tupi reserves are expected to be between 5-8 billion barrels. They have only drilled two wells at Tupi and the first one took 14 months and $240 million. Now they are drilling wells in 2-3 months at $60-$80 million each. Petrobras is going out for bids on the construction of 28 new drilling rigs. They will be Brazilian made and delivered between 2013-2017.

Every dip is a buying opportunity.

Breakout trigger: $125.50 hit 4/28

Position: 2010 $150 LEAP Call YMO-AV @ $22.10

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NE $64.76 -0.79 - Noble Corp

The service companies and drillers are holding their own in the bear market but not really posting any gains. We need a big oil deal to get them moving again.

Noble recently won a $4 billion contract to drill for Petrobras off the coast of Brazil. This is a monster payday and just one area of exploration for Noble.

Breakdown trigger $56.00 hit 4/29

Position: 2010 $70 LEAP Call YVJ-AN @ $8.10

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NOV $88.41 +3.92 - National Oilwell Varco

RBC Capital upgraded NOV to an outperform on Monday and NOV hit a new high. Market weakness saw a pullback late in the week but still a nice gain. RBC price target is now $116.

Breakdown trigger: $67 Hit 4/30

Position: NOV $80 Call NOV-KP @ $5.40

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FLS $138.14 +4.84 - Flowserve

Flowserve came within 68 cents of hitting the stop at $128 before rebounding to close the week with a nice gain. No news.

Breakout trigger: $110 Hit 4/16

Position: OCT $120 Call FLS-JD @ $10.40


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Non-Energy Positions
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TRA - $50.35 -3.81 Terra Inds

That was probably the worst entry ever. After going long last Sunday TRA peaked over $55 on Monday only to collapse with the sector on Tue/Wed. Support at $47 held and Friday saw a $2 gain. Let's hope it sticks in the bear market.

Entered 6/23

Position: 2010 $60 LEAP Call KMK-AL @ $14.80
 

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