We found ourselves buyers in yesterday's session of oil. We purchased shares of SandRidge Energy to play oil, the value in the shares and earnings which came out last night. Unfortunately we purchased shares too early in the day and now have losses on the position, but we suspect that today should be a decent day in trading, especially if the jobs report is good.
Oil & Natural Gas
Chesapeake (CHK) shares rebounded yesterday after falling below $17/share in the previous session. The volume almost reached 50 million, well above the average and it is still apparent that the computers are trading this one. The highs were set in the morning, but the shares rallied into the close. Showing strength into the close is always a positive, but we still are not sold that the rally is real and the lows have been put in. This will not be a V shaped correction for shareholders, but more of a trough followed by slow and steady gains once natural gas has bottomed and more oil and liquids are being produced.
SandRidge Energy (SD) took another beating yesterday falling $0.34 (4.69%) to $6.91 in regular trading. After they released earnings just after the close their shares rallied $0.23 (3.33%) in After Hours trading to close at $7.14/share. The stock finished at the lows for the day, but based on the earnings release we read last night, that was the buying opportunity. The company reported that production was up, it appears they added acreage in their largest play - big acreage, and they beat on the top and the bottom. They also provided a glimpse into the next quarter and it appears that everything is in place for a good quarter then too. The conference call is at 9 AM EST, so that will be interesting to listen to.
It appears that Cheniere Energy (LNG) will report earnings today. All the sites we use now show the May 4th date and it would be the last day before the company would miss their timeline of releasing. We only point this out as we were caught off guard earlier this week with multiple dates on different sites and some confusion for our readers, simply looking to provide clarity on the issue and provide accurate information.
Kodiak Oil & Gas (KOG) reported their earnings as well and the shares rose in after hours trading by $0.05. The company missed revenue estimates but when selling oil in the Bakken and at such a discount one should expect that. Something else investors can expect is to see higher revenues based simply on natural gas production now being captured and higher realized prices on oil because of new pipelines which will also lower the costs of getting the oil to market as it no longer needs to be trucked around. Production growth remains impressive here and it is a good story.
Ivanhoe Mines (IVN) is trading near 52-week lows and it actually hit a new 52-week low in trading yesterday. Copper prices are down, yes, but shares are looking awful right now with the price action. Shares have really fallen off of a cliff since March, having retreated to current prices from $18/share. Should copper prices begin to recover, Ivanhoe will be a great way to play that rally but right now the copper space does not look friendly.
Disclosure: I am long SD.