I am really hesitant to add a bunch of plays with oil at $120. We saw crude decline to nearly $114 on Thursday night and that would have created a monster drop in stock prices. This shows that sellers are out there and we need to be patient.
Current Watch List
PBR - Petrobras
We have had the most horrible luck on this company. As it was declining towards $110 last week some idiot in the NPA in Brazil said they had discovered a 33 billion barrel deposit. Petrobras denied it and the official may be charged with a crime for spreading disinformation. The market still has 33 billion imprinted on their foreheads and we may never see a dip here. I changed the triggers and the strikes to compensate somewhat but I am not going to chase it.
Petroleo Brasileiro SA - Petrobras (Petrobras) is a Brazil-based holding company engaged in the exploration, production, refinement and distribution of oil and gas. The Company is involved in four business areas: Exploration and Production, Downstream, Gas & Energy and International. Petrobras has 109 production platforms and 15 refineries. It operates 31,089 kilometers of pipelines. The Company has various subsidiaries: Petrobras Quimica SA - Petroquisa, which is engaged in the production, commercialization, distribution, import and export of chemical products; Petrobras Distribuidora SA - BR, which is involved in the distribution and commercialization of oil products and natural gas, and Petrobras Netherlands BV - PNBV, which is active in the purchase, sale and rent of equipment and platforms for the production of oil and gas. Petrobras operates in Brazil, Argentina, Mexico, Portugal, the United States, Peru and Turkey, among others.
Breakout trigger: $125.50
Buy 2010 $150 LEAP Call YMO-AV
Breakdown trigger: $115
Buy 2010 $120 LEAP Call YMO-AD
USO - U.S. Oil Fund
This is our Hail Mary play. If we ever get a real correction hopefully we can get long.
Breakdown trigger: $87 *** New trigger ***
Buy 2009 $90 LEAP Call OLL-AL *** New Strike ***
MOS - Mosaic
We missed our breakdown entry by $1.21 at $120 before MOS rebounded +$10. I am hesitant to add a breakout position because the options are so expensive. Let's give it another week.
The Mosaic Company (Mosaic) is a producer of phosphate and potash combined, as well as nitrogen and animal feed ingredients. The Company operates its business through four business segments: phosphates, potash, offshore and nitrogen. The Phosphates segment operates mines and concentrates plants in Florida that produce phosphate fertilizer and feed phosphate, and concentrates plants in Louisiana that produce phosphate fertilizer. The Potash segment mines ad processes potash in Canada and the United States and sells potash in North America and internationally. The Offshore segment produces and markets fertilizer products and provides other ancillary services to wholesalers, cooperatives, independent retailers, and farmers in South America and the Asia-Pacific regions. The Nitrogen segment consists of its equity investment in Saskferco and Mosaics nitrogen sales and distribution activities.
Breakdown trigger: $120
Buy 2010 $140 LEAP Call LXW-AX
BP - BP PLC
Based on the recent announcements by BP it may be time to take another run at this stock. When Thunderhorse comes online in Q3 it should get a lot of press due to the high volume of oil they expect to produce. Maybe BP's troubles are over.
*** CAUTION - Earnings are April 29th ***
BP p.l.c. (BP) is a holding company. The Company three business segments: Exploration and Production, Refining and Marketing and Gas, Power and Renewables. Exploration and Productions activities include oil and natural gas exploration, development and production (upstream activities), together with related pipeline, transportation and processing activities (midstream activities). The activities of Refining and Marketing include the supply and trading, refining, marketing and transportation of crude oil, petroleum and chemicals products. Gas, Power and Renewables activities included marketing and trading of gas and power, marketing of liquefied natural gas (LNG), natural gas liquids (NGLs) and low-carbon power generation through its Alternative Energy business. During the year ended December 31, 2007, BP acquired Chevrons Netherlands manufacturing company, Texaco Raffiniderij Pernis B.V. In April 2008, BP registered in Russia its subsidiary BP Exploration Services.
Breakdown trigger: $65.
Buy 2010 $70 LEAP Call WAO-AN
COP - ConocoPhillips
Earnings are April 24th. Maybe we can get a double dip of a drop in crude futures and earnings from ConocoPhillips.
ConocoPhillips is an international, integrated energy company. It has six operating segments. Exploration and Production segment explores for, produces and markets crude oil, natural gas and natural gas liquids. Midstream segment gathers, processes and markets natural gas, and fractionates and markets natural gas liquids, primarily in the United States and Trinidad. Refining and Marketing segment purchases, refines, markets and transports crude oil and petroleum products. LUKOIL Investment segment consists of its equity investment in the ordinary shares of OAO LUKOIL. The Chemicals segment manufactures and markets petrochemicals and plastics on a worldwide basis. Emerging Businesses segment includes the development of new technologies and businesses outside the Companys normal scope of operations. In October 2007, American Electric Power Company, Inc. sold its 50% interest in the Sweeny Cogeneration plant in Texas to ConocoPhillips.
Breakdown trigger: $80
BUY 2010 $90 LEAP Call YRO-AR
NE - Noble Corp
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.
Noble Corporation (Noble) is engaged in contract drilling services worldwide. It performs contract drilling services with its fleet of 62 offshore drilling units located worldwide. This fleet consists of 13 semi-submersibles, three drillships, 43 jackups and three submersibles. The fleet count includes two F&G JU-2000E jackups and three deepwater dynamically positioned semisubmersibles under construction. As of December 31, 2007, approximately 85% of its fleet was deployed internationally. Its other operations include labor contract drilling services, and through November 2007, engineering and consulting services. Its operations are conducted principally in the Middle East, India, United States, Gulf of Mexico, Mexico, the North Sea, Brazil, West Africa and Canada. During the year ended December 31, 2007, Noble completed the rationalization of its technology services division with the sale of the rotary steerable system assets of its Noble Downhole Technology Ltd. subsidiary.
Breakout trigger: $61.00
Buy 2010 $70 LEAP Call YVJ-AN
Breakdown trigger $56.00
Buy 2010 $70 LEAP Call YVJ-AN
RIG - Transocean
RIG has declined slightly from its highs at $160 early in the week. If we get a correction in oil prices we could see a touch of $145. RIG is the premier deep water driller and there is no scenario where they don't continue to move higher. We just need to catch them on a dip if possible.
Transocean Inc. (Transocean) is an international provider of offshore contract drilling services for oil and gas wells. As of February 20, 2008, the Company owned, had partial ownership interests in or operated 139 mobile offshore drilling units. Its fleet included 39 high-specification floaters (ultra-deepwater, deepwater and harsh environment semisubmersibles, and drillships), 29 midwater floaters, 10 high-specification jackups, 57 standard jackups and four other rigs. As of February 20, 2008, the Company also has eight ultra-deepwater floaters contracted for or under construction. The Companys primary business is to contract these drilling rigs, related equipment and work crews primarily on a day rate basis to drill oil and gas wells. In November 2007, the Company completed its merger transaction with GlobalSantaFe Corporation (GlobalSantaFe).
Breakout trigger: $157.50
Buy 2010 $170 LEAP Call YDR-AN
NOV - National Oilwell Varco
NOV just completed the acquisition of Grant Prideco on April 21st. This was a major acquisition for them and should be very accretive very quickly. They seem to have stagnated at $75 as the acquisition completed and if they enter a post acquisition decline as is common to most companies it could be our entry point.
National Oilwell Varco, Inc. is a provider of equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry. It has three segments: Rig Technology, Petroleum Services & Supplies, and Distribution Services. The Rig Technology segment designs, manufactures, sells and services systems for the drilling, completion and servicing of oil and gas wells. The Petroleum Services & Supplies segment provides consumable goods and services used to drill, complete, remediate and workover oil and gas wells, service pipelines, flowlines and other oilfield tubular goods. The Distribution Services segment provides maintenance, repair and operating supplies, and spare parts to drill site and production locations worldwide. In July 2007, NOV acquired, through a wholly owned subsidiary, a 76% stake in Sara Services and Engineers Private Limited. In April 2008, it acquired Grant Prideco, Inc.
Breakout trigger: $76
Buy NOV $90 Call NON-KR
Breakdown trigger: $67
Buy NOV $80 Call NOV-KP