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Analysis Update: ATPG and AMX (Feb 5)

Recs

12

February 05, 2010 – Comments (6)

I want to review two calls I made on Jan 17 regarding ATPG and AMX:
- http://caps.fool.com/Blogs/ViewPost.aspx?bpid=328534 and Analysis Update: ATPG and AMX

First ATPG

Here is what I wrote on Jan 17:

From December 12, ATPG did turn back up. It looked like the bull flag option might be playing out. However it would have to negotiate the first downtrend line before it could make a play for the upper downtrend line.

It moved up and broke out over the trendline. However it failed to consolidate above the trendline, resulting in false breakout. The subsequent move back down was very sharp, losing >13% in a week.

This chart still looks very bearish to me. We have a complete corrective move up. Since the peak, we had a breakdown, move back up over the trendline in a false breakout, with no consolidation and failing to make a higher high. Followed by a sharp breakdown back below the trendline.

So the question is, how will ATPG react to Natural Gas prices? Old Natty looks like it is in a bottoming stance and ready to trade up for while. (Pink line at the bottom of the chart). But ATPG put in its rally well ahead of Natural Gas bottoming (if it is indeed bottoming, which is a big *if* at this point).

I am very bullish on commodities for the long term (I am somewhat agnostic on them for the short term). But I am far more bullish on the commodities themselves than I am on producers, especially at these price levels (resistance) and valuations (high).

I really like ATPG as a short here.


The price at that time was $17.50. Here is the chart from that post from which I was making that call.

The price today (as I type) is $12.96, which is a short gain of 26%.

I still like it as a short. I broke the support quite definitively at $14, and now there is very little between that and the support at ~$8.

If my large count is correct, then ATPG will make new all time lows. But that is for the long term. For the short term I like $8 as a target (38% down from the current price) and we will see what happens when it gets there.

Here is the current chart:

ENLARGE

Next AMX:

From the Jan 17 post:

I had a similar (yet unrelated, different company in a completely different sector) conversation with Gumbo on my MTaA blog here: Updater - Updater

Gumbo was pointing out the very large wedge that formed an apex on AMX. In fact he called it the afternoon before a 7% down move over the next couple of days. Here is the conversation http://marketthoughtsandanalysis.blogspot.com/2010/01/updater-updater.html#comment-29673753


The price at that time was $47.50. The current price is $43.19. A short gain of 9%.

I there are 2 near term targets: $41 and $37. From here $37 would be a gain of 14%.

I still like it as a short. Here is the current chart

ENLARGE

NOTE: THESE ARE *NOT* RECOMMENDATIONS!!! I perform my own analysis and charts and I trade off my own charts. I am sharing my observations and my analysis of my charts. But this is not a recommendation in any way. Just sharing my thoughts

6 Comments – Post Your Own

#1) On February 05, 2010 at 3:01 PM, Tastylunch (29.48) wrote:

 Bummer about ATPG, I like the story there. Well maybe if it goes down that far, I will load the boat. I'm looking into a concept being pushed by Bill Powers about gas deliverability crisis making nat gas appear more abndant than it actually is.

speaking abot natural gas, you have any thoughts about CEP? I have a long position there that is till well in the black.

alos BTW Binve have you tabulated if your RL performance haas improved since implenting EWP or know of a EWP guy who does? Just curious. I've yet to find a EWP practioner that has publicly posted results to judge on covestor etc.

OT: gotta admit Binve I didn't expect my shorts to work out so quickly. I kind of wish I had a larger exposure than I do. I'm fearful of adding here sans bounce.

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#2) On February 05, 2010 at 3:18 PM, portefeuille (99.66) wrote:

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ATP Updates Production, Reserves, Developments and Financial Transactions

Press Release Source: ATP Oil & Gas Corporation On Tuesday February 2, 2010, 3:48 pm EST

HOUSTON--(BUSINESS WIRE)--ATP Oil & Gas Corporation (NASDAQ: ATPG - News) today announced a recent production increase in 2010 of approximately 32% over the fourth quarter 2009 and a reserve replacement ratio of approximately 376% for 2009. In addition, ATP released updates on its 2009 production, year-end 2009 oil and gas reserves, development projects, recent acquisitions, monetizations and initial estimated CAPEX for 2010. ATP also outlined the terms of a recent amendment to its credit facility.

Production – ATP’s current producing rates are averaging between 17.0-19.0 MBoe/d, an increase of approximately 32% from production during the fourth quarter which averaged 13.6 MBoe/d. The increase is primarily due to a recompletion at Mississippi Canyon Block 711 (“Gomez”). Additional contributions to first quarter 2010 production levels are expected at Canyon Express and Telemark. Estimated production for 2009 was 3.4 MMBbls and 15.1 Bcf or approximately 5.9 MMBoe. Oil continues to comprise the majority of ATP’s production volumes representing 57% of total 2009 production volumes.

Reserves – Through performance driven volume revisions, extensions and discoveries, ATP added 22.1 MMBoe of proved reserves during 2009. ATP estimates year-end 2009 proved reserves of 135.2 MMBoe and a PV-10 value of $4.0 billion while year-end proved and probable reserves are estimated at 211.8 MMBoe and a PV-10 value of $6.4 billion using strip prices as of December 31, 2009. Since independent reservoir engineers are finalizing estimates of ATP’s oil and natural gas reserves for year-end 2009, ATP will issue its final reserve amounts utilizing SEC pricing and reconciliation in conjunction with filing its Form 10-K.

The Telemark Hub is now the largest property in ATP’s portfolio in terms of reserves with 49.3 MMBoe of proved reserves and 73.2 MMBoe of proved and probable reserves. At the Telemark Hub, ATP added 17.7 MMBoe of proved reserves and 31.4 MMBoe of proved and probable reserves during 2009. The significant reserve increase is primarily due to the favorable drilling results of the Mississippi Canyon Block (“MC”) 941 #3 well. ATP encountered 266 feet of logged hydrocarbons in the MC 941 #3 well or approximately three times the amount of net feet in the discovery well. ATP also recorded net increases in proved reserves at its Gomez Hub (MC 711, MC 755 and MC 754), Ladybug (“Garden Banks 409”) and Tors in the U.K. North Sea.

...

2010 Outlook – As progress continues towards first production from the AT 63 #4 well scheduled for first quarter 2010, ATP expects volume contribution from the Telemark Hub to result in more than doubling its 2009 company production in 2010. The remaining three wells at the Telemark Hub are scheduled to be brought on production sequentially during 2010. Other wells making contributions in 2010 are at Gomez, already placed on production in January, three wells in the Canyon Express Hub and potentially one well at the Tors project in the U.K. North Sea. Other wells and opportunities may be considered as the year progresses. The estimated CAPEX budget for 2010 is $572 million which includes both infrastructure development as well as the drilling and development program.

...

Development, Acquisitions and Monetizations

Telemark Hub – In the deepwater Gulf of Mexico, the ATP Titan is on location at MC 941 and final installation work is on schedule. The topside modules have been installed, all 12 mooring lines connected and the oil and gas export pipeline risers were installed and hydro-tested. Hookup and commissioning work is ongoing to prepare the facility to produce and process oil and gas. During the next few weeks, ATP is scheduled to finish connecting the pipelines and begin the dewatering process.

ATP continues active discussions with parties to explore opportunities to monetize ATP’s investment in the ATP Titan and other assets. During December 2009, ATP sold the deep exploratory rights below the productive horizons at MC 941 for an undisclosed amount resulting in a gain. ATP had no reserves booked or future development plans in the depths sold.

First production at Telemark remains on schedule for first quarter 2010. ATP concluded the initial phase of the planned activity of its three-well drilling campaign, two wells of which were drilled to a measured depth of approximately 12,000 feet and 13 5/8 inch casing was set at Mirage (MC 941) and Morgus (MC 942) which comprises two of the blocks that make up ATP’s Telemark Hub. ATP experienced outstanding results with the MC 941 #3 well and the additional pay sands added proved and probable reserves at the Telemark Hub at December 31, 2009.

...

ATP expects to be in compliance with its covenants associated with the Senior Secured Term Loan at December 31, 2009 and throughout 2010.

--------------------

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#3) On February 05, 2010 at 3:29 PM, portefeuille (99.66) wrote:

(from this recent presentation (pdf))

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#4) On February 05, 2010 at 3:38 PM, binve (< 20) wrote:

Tastylunch ,

Hey man.

Bummer about ATPG, I like the story there

That was the problem. Everybody liked their story. Everybody was raving about it on Caps. Seemed very one-sided to me. Like I said above, I am very bullish on commodities long term, and I think ATPG will be a screaming buy at some point in the future. I just don't think it is right now (it is more like a screaming short than a screaming buy at the moment).

speaking abot natural gas, you have any thoughts about CEP? I have a long position there that is till well in the black.

I looked at the fundamentals back in Jun 2008, and liked it as a pick in binv271828 ... then it lost 75% :) LOL!. I think technically it is near the bottom but short term it is looking like it is ready for a pullback. I would like it a lot more if it had a dividend (it used to) but I personally would not go long here. I would like a long position around $2-$2.50. Here is my chart

ENLARGE

BTW Binve have you tabulated if your RL performance haas improved since implenting EWP or know of a EWP guy who does? Just curious. I've yet to find a EWP practioner that has publicly posted results to judge on covestor etc.

I have and it has definitely made me a better trader. I don't use covestor or anything fancy, but I do have a few public portfolios that I upkeep in case anybody is interested: binve/MTaA portfolios

The top two (My WSS account and my spreadsheet) best represent the perfomance of my real-life swing trading account. (They also have very similar performance to eachother, which is good corraboration :) ) . I started both in October and they are up about 25%. My WSS account is good because it is something controlled (I can't "fake" any trades) but the spreadsheet is useful because I show why I am making each trade. Of course, It is public, so I can't "fake" that either without getting caught :)

---------------------

Public Portfolios for binve and Market Thoughts and Analysis

First and foremost:

These portfolios are *NOT* meant as trading advice in any way, shape or form. They are meant as an illustration of some of the trading tactics that I employ when I use and trade off my own charts. They are representative of my trading style and do not indicate any particular real life portfolio. Moreover, as illustrative tools which are *NOT* trading advice, I will not offer any tailored trading advice associated with these portfolios or in any other form. The links provided below communicate the implementation of trading strategies and should be used only for learning / illustrative / entertainment purposes only

That out of the way, here are a few public portfolios that may be of interest to blog readers

1) MTaA public portfolio

This is a simple spreadsheet that I use to track trades (mostly medium term swing trades). This one most closely represents how I actually trade, and how I use / implement my charts. It is kept *very* simple for bookkeeping purposes (no commissions or margin) and is representative only. It is a public spreadsheet available for viewing

---- MTaA public portfolio

2) Wall Street Survivor (WSS) Portfolio

Swing trading portfolio using the WSS platform. Click on the "Permanent" portfolio tab (not the 100K or Options tabs), this is the portfolio that I use.

---- MTaA WSS porfolio - binve^jwt

3) UpDown (UD) Portfolio

Swing trading portfolio using the UpDown platform. I like the Updown interface more than WSS, but it tends to crash / hang-up *a lot*.

---- MTaA Updown porfolio - binve

4) Motley Fool Caps Portfolio

I had originally intended this portfolio to be a swing / position trading portfolio. And if you look back that my trade history I did that successfully through going long on Energy and GSMs in Dec 2008 / Jan 2009. But after the market rally in March 2009 I was caught in the cross-fire of several short term trades. Caps has 2 rules that are not conducive to short term swing trading and cutting losses short

1) Once you open a pick, you are not allowed to close it for 7 days
2) Caps places a premium on accuracy (if you close a losing pick, it will always count against your accuracy, which is a large portion of your score. Which means you are incentivized to keep losers open in order to eventually recoup and close green)

Neither one is representative of how I swing trade (I do not let losers run against me, and if I have to cut a position to cut losses then I do. No worries. Capital is the most important thing). So unfortunately the Caps platform is not useful for my purposes nor is it representative of how I trade.

I have turned this portfolio more or less into a bearish-biased thesis portfolio. And since March 2009 the bulls have been firmly in charge, so the score *stinks*. But I am including it for the sake of full disclosure.

---- binve Caps portfolio

Thanks man!!.

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#5) On February 08, 2010 at 7:12 PM, portefeuille (99.66) wrote:

a recent (somewhat "lengthy") article on ATPG.

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#6) On February 21, 2010 at 11:13 PM, portefeuille (99.66) wrote:

another presentation is here. I consider ATPG "making new all time lows" extremely unlikely. Much less likely than ATPG "making new all time highs" pretty soon ...

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