I hesitate to add new plays when the potential is great that prices will fall over the next couple weeks if the Saudi meeting is successful. However, we should use that as an entry point for new positions.
Current Watch List
COP - ConocoPhillips
I raised the trigger again to $90 since that appears to be where it wants to find support.
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: $90
BUY 2010 $100 LEAP Call YRO-AT
SD - Sandridge Energy
I wanted to buy a breakout here but the LEAPS are too expensive and SD is too extended.
CEO Tom Ward, co-founder of Chesapeake with Aubry McClendon bought 230,000 of his own shares at $50 in recent weeks. This kind of confidence gave Sandridge a $5 bounce to a new high. SD announced the prior week that Williams had acquired certain assets for $285 million giving Sandridge additional cash for growth. This company appears to be in high growth mode and I want to own it on a pullback.
SandRidge Energy, Inc. (SandRidge) is an independent natural gas and oil company with its principal focus on exploration, development and production activities. The Company also owns and operates drilling rigs and a related oil field services company operating under the name Lariat Services, Inc.; gas gathering, marketing and processing facilities, and, through its wholly owned subsidiary PetroSource Energy Company, carbon dioxide (CO2) treating and transportation facilities and tertiary oil recovery operations. The Company is focused on exploration and exploitation of its significant holdings in West Texas that it refers to as the West Texas Overthrust (WTO), a natural gas prone geological region that includes the Pinon Field, and its South Sabino and Big Canyon prospects. SandRidge operates in four segments: exploration and production, drilling and oil field services, midstream gas services and other.
Breakdown trigger: $60 *** New trigger ***
Buy 2010 $70 LEAP LWE-AN
TRN - Trinity Industries
I know what you are thinking. Why a rail car manufacturer when there are 40,000 cars in storage at present? Because Trinity is rapidly remaking itself into a wind tower company. Last quarter the CEO said his wind business increased 42% and the backlog went from $200 million to $1.6 billion. They have many manufacturing lines and segments and when one is slack it can pick up for the other. I think the wind tower business is going to continue to explode.
Trinity Industries, Inc. (Trinity) is a multi-industry company that owns a range businesses, which provide products and services to the industrial, energy, transportation and construction sectors. Trinity has five business groups: Rail Group, Railcar Leasing and Management Services Group, Construction Products Group, Inland Barge Group and the Energy Equipment Group. The Company manufactures and sells railcars and railcar parts, inland barges, concrete and aggregates, highway products, beams and girders used in highway construction, tank containers, a range of steel parts, and structural wind towers. In addition, it leases railcars to its customers through a captive leasing business, Trinity Industries Leasing Company. In April 2007, its subsidiary, Transit Mix Concrete & Materials Company, acquired a combined group of East Texas asphalt, ready mix concrete and aggregates businesses operating under the name Armor Materials.
Breakout trigger: $41
Buy 2010 $50 LEAP Call YJS-AJ
Breakdown trigger: $35
Buy 2010 $40 LEAP Call YJS-AH
GDP - Goodrich Petroleum
This company is primed to explode. It quietly collected a huge acreage position in the Haynesville Shale natural gas field before it was widely known as a monster discovery. Last Monday Chesapeake agreed to pay Goodrich $178 million for a 50% ownership in a portion of the acreage. Chesapeake is planning on drilling 440 horizontal gas wells on the property. This is a monster win for Goodrich and it has been somewhat of a secret until last Monday.
Goodrich Petroleum Corporation is an independent oil and gas company engaged in the exploration, exploitation, development and production of oil and natural gas properties primarily in the Cotton Valley trend of East Texas and Northwest Louisiana. As of December 31, 2007, the Company owned working interests in 301 active oil and gas wells located in 26 fields in five states. At December 31, 2007, Goodrich had estimated proved reserves of approximately 346.9 billion cubic feet (Bcf) of natural gas and 1.8 million barrels (MMBbls) of oil and condensate, or an aggregate of 357.8 billion cubic feet equivalent (Bcfe). On March 20, 2007, the Company completed the sale of substantially all of its assets in South Louisiana to a private company. The remaining fields held for sale are St. Gabriel, Bayou Bouillon and Plumb Bob. During the year ended December 31, 2007, Goodrich acquired drilling and development rights to acreage located in the Angelina River play.
Breakdown trigger: $55
Buy 2010 $70 LEAP Call LP-AN
Breakout trigger: $66
Buy 2010 $80 LEAP Call LP-AP
HK - Petrohawk Energy
Petrohawk has been in the news a lot last week based on their Haynesville Shale acreage. They are making a career out of drilling horizontal wells in the Haynesville.
Petrohawk Energy Corporation (Petrohawk) is an independent oil and natural gas company engaged in the acquisition, development, production and exploration of oil and natural gas properties located onshore in North America. The Companys properties are primarily located in the Mid-Continent region, including North Louisiana, the Fayetteville Shale in the Arkoma basin of Arkansas and in the Western region, including the Permian Basin of West Texas and southeastern New Mexico. At December 31, 2007, the Companys estimated total proved oil and natural gas reserves were approximately 1,062 billion cubic feet of natural gas equivalent, consisting of 18 million barrels of oil, and 955 billion cubic feet of natural gas and natural gas liquids.
Breakout trigger: $40.75
Buy DEC $50 Call HK-LJ
Breakdown trigger: $36
Buy DEC $45 Call HK-LI
CHK - Chesapeake Energy
This is another stock that refuses to pull back but the news is too good to let it continue to run away from us. As I mentioned in the GDP lead CHK paid $178 million to Goodrich for a 50% working interest in some Haynesville Shale acreage. As I read further CHK said the Haynesville Shale could end up being the biggest asset they own and produce more gas than any other CHK property. That is a huge statement given CHK's massive footprint in places like the Barnett Shale in the DFW area. Encana (ECA) is the largest gas producer in North America and they said the Haynesville Shale could be the biggest deposit in North America.
Chesapeake Energy Corporation is a producer of natural gas in the United States (first among independents). It owns interests in approximately 38,500 producing oil and natural gas wells that are producing approximately 2.2 billion cubic feet equivalent (bcfe), per day, 92% of which is natural gas. Its operations are located in the Mid-Continent region, which includes Oklahoma, Arkansas, southwestern Kansas and the Texas Panhandle; the Forth Worth Basin in north-central Texas; the Appalachian Basin, principally in West Virginia, eastern Kentucky, eastern Ohio and southern New York; the Permian and Delaware Basins of West Texas and eastern New Mexico; the Ark-La-Tex area of East Texas and northern Louisiana, and the South Texas and Texas Gulf Coast regions. In July 2007, the Company announced the acquisition of Kerr-McGee Tower from Anadarko Petroleum Corporation and subsequent sale of the tower to SandRidge Energy, Inc.
Breakout trigger: $67
Buy 2010 $80 LEAP Call WZY-AP
Breakdown trigger: $60
Buy 2010 $70 LEAP Call WZY-AN