Devon Energy DVN Reports Fourth Quarter and Full Year 2012 Results

Devon Energy Corporation (NYSE:DVN) today reported a net loss of $357 million for the quarter ended December 31, 2012, or $0.89 per common share ($0.89 per diluted share). The company’s fourth quarter financial results were impacted by a non-cash asset impairment charge of $896 million. Excluding the asset impairment charge and other items securities analysts typically exclude from estimates, Devon earned $316 million or $0.78 per diluted share in the fourth quarter of 2012.

Asset impairments also led to a loss of $206 million for the year ended December 31, 2012, or $0.52 per common share ($0.52 per diluted share). Excluding adjusting items, the company earned $1.3 billion or $3.26 per diluted share in 2012.

“In spite of a challenging commodity price environment that impacted our financial results, Devon delivered solid operating results in 2012. During the year, we continued to make significant progress toward the conversion of our asset portfolio to a higher oil weighting,” commented John Richels, Devon’s president and chief executive officer. “This is evident through the strong oil production growth we delivered during the year and the impressive growth in oil reserves.”........Read the entire Devon Energy earnings report.


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National Oilwell Varco and Robbins & Myers Receive Clearance

National Oilwell Varco (NYSE: NOV) and Robbins & Myers (NYSE: RBN) jointly announced today that the Antitrust Division of the United States Department of Justice has closed its investigation of the parties’ previously announced merger.

NOV and RBN also received today a no action letter from the Canadian Competition Bureau. Having received clearance from the United States and Canada, NOV and RBN expect to complete the merger tomorrow, February 20, 2013. The transaction has been cleared without modification.


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EIA: Gulf Coast Crude Stocks Generally Fall Sharply in December Because of Inventory Taxes

Crude oil inventories in the Gulf Coast often fall sharply in December, averaging a decline of nearly 8 million barrels in that month from 1981 through 2011. Preliminary data for December 2012 show a decline of more than 12.5 million barrels in the region, bringing end of year crude inventories to approximately 165 million barrels.

The reason for this sharp decline: December 31 is the typical assessment date for taxes on crude oil stocks that are collected by many states/counties/municipalities in regions where the bulk of U.S. crude oil and petroleum product inventories are stored. To decrease crude inventories, companies can do a combination of the following: delay or decrease imports, increase runs at refineries, move crude oil out of the taxable region, or sell crude oil to other market participants.



Following December declines, inventories tend to recover in January. Although large crude oil draws can be an indication of demand outpacing supply, the December phenomenon typically does not reflect tightening of the oil market, but rather how companies in the region are taxed on crude stocks. During the middle of the year, crude inventories in the Gulf Coast region both rise and fall, averaging out to relatively small net changes in stocks for a given month.

At the end of December each year, parts of Texas and Louisiana, where significant volumes of crude oil are stored, assess ad valorem taxes (meaning, according to value) on end of year crude oil inventories. These taxes, along with the generally accepted accounting practice of last in, first out (LIFO) method used to value the assets, create an incentive to draw down crude stocks in the region at the end of the year in order to reduce the tax bill.

 

If oil prices have risen during the year, this accounting practice gives companies stronger incentive to reduce inventory because doing so will further limit their tax exposure. Conversely, if oil prices have fallen throughout the year, companies have less incentive to reduce crude held in storage.

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Crude Oil, Natural Gas and Gold Weekly Technical Outlook for Sunday February 17th

It's Sunday and that means it's time to check in with our friends at Oil N'Gold.com and get their call on crude oil, natural gas and gold......

Crude oil stayed in range below 98.24 last week. With daily MACD staying below signal line, 98.24 should be a short term top and deeper decline is in favor. Below 94.97 will confirm this case and should bring deeper pull back to 55 days EMA (now at 92.47) and below. On the upside, break of 98.24 is needed to confirm rally resumption. Otherwise, near term outlook is neutral at best.

In the bigger picture, price actions from 114.83 are viewed as a triangle consolidation pattern, no change in this view. And, such consolidation could still be in progress and Crude oil remains bounded in the converging range. Nonetheless, the pattern should be close to completion and an upside breakout should be seen soon. Above 100.42 will strongly suggest that whole rebound from 33.29 has resumed for above 114.83. And in case of another fall, strong support should be seen above 77.28 to bring rebound.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Natural gas finally broke through the medium term rising trend line last week and closed below. The development suggest that whole up trend from 1.1902 has completed at 3.933 after hitting long term channel resistance. Further decline is now expected as long as 3.323 minor resistance holds, to 3.05 first. Break will resume the whole decline from 3.933 and should target 100% projection of 3.933 to 3.05 from 3.645 at 2.762 next.

In the bigger picture, the bounce off from the long term falling channel resistance for 6.108 retained the case that such decline isn't finished. Break of 2.575 support should make a new low below 1.902 to extend the whole long term down trend. Nonetheless, strong rebound from 2.575, followed by break of 3.933 resistance, will revive that case of long term reversal and target a test on 4.983 key resistance.

Nymex Natural Gas Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Gold dropped sharply last week, especially on Friday and breached 1600 level before closing at 1610.3. The development is confirmed with the view that fall from 1798.1 is still in progress. Near term outlook stays bearish as long as 1651 minor resistance holds. Current decline should target a test on 1526.7 low next.

In the bigger picture, price actions from 1923.7 high are viewed as a medium term consolidation pattern. There is no indication that such consolidation is finished, and more range trading could be seen. In any case, downside of any falling leg should be contained by 1478.3/1577.4 support zone and bring rebound. Meanwhile, break of 1792.7/1804.4 resistance zone will argue that the long term up trend is possibly resuming for a new high above 1923.7.

In the long term picture, with 1478.3 support intact, there is no change in the long term bullish outlook in gold. While some more medium term consolidation cannot be ruled out, we'd anticipate an eventual break of 2000 psychological level in the long run

Comex Gold Continuous Contract 4 Hour, daily, Weekly and Monthly Charts


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New Video....the "Paid Pullback" Strategy

All the stock trading strategies you're using aren't producing the type of results you had hoped, are they? Sure, you thought it would. So called gurus told you how well those strategies performed and if you tried it, you'd be rich beyond your wildest dreams.

But was it a lie? Not totally, no, because some stock trading strategies do work. But those strategies that are producing consistent results are few and far between.

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Crisis Investing 101: How to Protect Your Portfolio With Commodities

There are so many traders calling for a double top and BIG pull back in this market that it might be helpful to mix in some common sense about how to protect your portfolio in the trading environment we find ourselves in. And David Goodboy is just the guy

One of our trading partners, Adam Hewison, just sent this over to us and I think it's a great read. Goodboy shows us how to allocate, how to invest and what to invest in if we want to protect our portfolio with commodities.

Read "Crisis Investing 101: How to Protect Your Portfolio With Commodities"

Baker Hughes Latest U.S. and Canadian Rig Counts

BHI Rig Count: U.S. + 3 at 1762 rigs.

U.S. Rig Count is up 3 rigs from last week at 1762, with oil rigs up 7 at 1337, gas rigs down 4 at 421, and miscellaneous rigs unchanged at 4. U.S. Rig Count is down 232 rigs from last year at 1994, with oil rigs up 65, gas rigs down 295, and miscellaneous rigs down 2.

The U.S. Offshore rig count is 55, unchanged from last week and up 14 year over year.

BHI Rig Count: Canada + 20 at 651 rigs

Canadian Rig Count is up 20 rigs from last week at 651, with oil rigs up 20 at 500, gas rigs unchanged at 151. Canadian Rig Count is down 54 rigs from last year at 705, with oil rigs down 16, gas rigs down 38.

Additional information on the rig count is available at Baker Hughes.com
 

Must see....our latest video expalining how to use our new stock selection strategy

 

Rigzone: Obama 'Will Keep Cutting' Oil & Gas Red Tape

In his State of the Union address Tuesday night President Obama pledged to keep cutting red tape in the energy sector and to speed up new oil and gas permits, while also announcing the launch of a new oil and gas sector funded Energy Security Trust aimed at developing technologies to help wean U.S. vehicles off oil.

President Obama noted that the recent U.S. boom in natural gas had led to cleaner power and greater energy independence.

"That's why my Administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water," Obama said.....Read the entire Rigzone article.


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Ever Wonder How to Find That "Perfect" Stock?

A must watch video from Todd, Doc, and Dave at Trading Concepts.......

With over 7,000 possible candidates, it can be overwhelming, even impossible at times, to know exactly what to look for. You're already trying to find the right stock trading strategy for placing your entry and getting out at the right price, and sometimes even that's not happening the way you hoped.

You want to trade stocks for supplementary income... build up that IRA... or, heck, maybe even go full time one of these days - but the reality is you also have a life outside of trading. And the last thing you want to do is waste all your time trying to find a stock that doesn't perform!

So you wonder: Will I be able to make stock trading work for me?

Can I find a way to select stocks that have a higher probability of making money, using a lot less of my own time? Is there an easy to understand strategy for quickly selecting stocks, using my own broker or free tools? As it turns out, there is such a strategy. And rather than trying to convince you on how powerful this is - I'm going to give it to you and let you see for yourself. Nothing to hide or buy.

You get our complete Stock Selection Strategy for narrowing over 7,000 stocks down to less than a dozen stocks in under 15 seconds.

And hey, while we are giving you this stock selection strategy - there's something else you should know (and a lot of people are going to be pretty angry at me). If you want me to let you in on a dirty Wall Street secret, designed to stack the odds against you - watch this now!

Key Onshore Crude Oil Production Basins

The growth in U.S. crude oil production over the past several years has come largely from onshore basins in which exploration and production (E&P) companies are most active Currently, the most important basins for production growth are......

* The Williston Basin in North Dakota and Montana, which includes the Bakken Formation
* The Western Gulf Basin in south Texas, which includes the Eagle Ford Formation
* The Permian Basin in West Texas and southeast New Mexico, which includes the Spraberry and Wolfcamp formations

Notice that the counties with at least one producing well from 2008 to present are shaded. Basins are represented with dashed outlines. The seven model regions are indentified with leading numbers in legend.



Click here to see the EIA complete short term energy outlook supplement.


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Refiner Oil is Cracked Up!

Mid week update from new COT contributor Chris Damas.....

Oil refining is getting more lucrative in the USA..... good for stocks, bad for consumers. Alternatively, most Canadian oil stocks were down today, with below expectations results from Encana and Cenovus.

The theoretical April oil refining crack spreads (assuming all one product produced) right now (WTI over NY Harbor) are:

$37.18 for RBOB
$41.54 for Heating Oil

All the regional cracks we cover are up too –

WTI Cushing over Gulf Coast 211 is $33.40 up $2.05
WTI Midland over 532 ULSD Mid-Con is $36.74 up $2.00
Brent over 321 NYH at $20.10 up $1.49 versus single digits a month ago
ANS (Alaskan North Slope) 321 over West Coast at $25.68 up $1.59

This is a seasonal strengthening with cracks rebounding due to maintenance at several refineries and strong distillate export demand. Closing prices for our stock universe are all up after being up 35% or so since recommending them Jan 10.

MPC $83.30 up $1.63 goes ex 35 cents tomorrow)
VLO $47.29 up $1.05
HFC $56.53 up 40 cents
NTI $30.40 up $1.36 (goes ex Tuesday)
PSX $64.81 up $0.70
TSO $55.37 up $1.30

The P/E multiples on these stocks remain low in the 8-9 range.

Note: US Holiday (Presidents Day) will close markets on Monday. You might want to lighten up on these names tomorrow towards the close. We will have a lot of media attention regarding the anti KXL/climate change rally Sunday in front of the White House.

Check out Chris Damas at BCMI Research


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Occidental Petroleum Announces Dividend Increase [OXY]

Occidental Petroleum Corporation (NYSE:OXY) announced today that its Board of Directors has increased the company’s dividend 18.5 percent to an annual rate of $2.56 per share, from the previous annual rate of $2.16 per share. This increase brings the company’s compound annual dividend growth rate over the last 11 years to 16 percent.

President and Chief Executive Officer Stephen I. Chazen said, “We have now increased our dividend every year for 11 consecutive years, and a total of 12 times during that period. This 18.5-percent increase brings the 11 year compounded dividend growth rate to 16 percent per year. The total increase in the annual dividend rate from 2002 is 412 percent.

“This increase reflects our confidence in the company’s financial strength and future performance. Consistent dividend growth, together with growing oil and gas production and well-above-average returns on capital, are the primary elements of Oxy’s long-term business strategy.”

The $0.64 per share quarterly dividend will be payable on April 15, 2013, to stockholders of record as of March 8, 2013.

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A Better Method to Choose Stocks.....in 15 Seconds

When a big time fund manager makes it a daily practice to sit down with his staff to review the trading techniques from these guys....you have to wonder why.

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Watch it today since this presentation won't be up for about 48 hours. Stop everything you're doing and watch it before you miss out.

Inside this rare presentation, you not only get their proprietary stock selection strategy for narrowing down over 7,000 candidates to just under a dozen of the highest probability stocks in 15 seconds, they're also blowing the whistle on a dirty Wall Street secret that's intentionally designed to keep you in the dark.

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Total [TOT] Reports Fourth Quarter and Full Year 2012 Results

On Wednesday Total [TOT] reported a 4th quarter net profit, excluding changes inventories, of +13% to €3.08B vs consensus of €3B, EPS +3% to €1.05 and revenue +5% to €49.89B, with earnings boosted by higher refining margins and crude prices.

Production -4%to 2.29M barrels of oil equivalent a day, due to a shutdown at the Elgin platform in the North Sea and flooding in Nigeria. Expects output to rise 2-3% in 2013, to sell $9B worth of assets. Proposes 2012 dividend of 2.34/share.

Read the entire Total earnings report

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Northern Tier Energy Announces Fourth Quarter 2012 Dividend

Northern Tier Energy (NYSE: NTI) announced on Tuesday the declaration of a cash distribution of $1.27 per common unit for the fourth quarter of 2012. The distribution will be paid on February 28, 2013 to holders of record as of February 21, 2013.

This will be the second cash distribution paid by Northern Tier Energy since it's initial public offering in July 2012 and will result in cumulative cash distributions since the initial public offering of $2.75 per common unit. Northern Tier Energy LP is a variable distribution master limited partnership. As a result, its quarterly distributions, if any, will vary from quarter to quarter as a result of variations in, among other factors....

1. It's operating performance
2. Cash flows caused by fluctuations in the prices it pays for crude oil and other feedstocks and the prices it receives for finished products
3. Working capital fluctuations
4. Capital expenditures
5. Cash reserves deemed necessary or appropriate by the board of directors of its general partner

Read the entire NTI distribution report


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Are you prepared for the pain..... This may be a double top in the market

 I won't lie, our COT Fund is a buy and hold fund in the spirit of great long term investors like Graham and Buffett. But when it comes to trading, we aren't naive. This market is now set to move one way or the other, is this just a double top in the market?


Whether you think this market is moving higher or falling apart and heading south you need to listen to one of the best educators in our industry. Todd Mitchell. Here's what he is saying......

If you have stock investments then grab hold of your jaw because it is about to drop.....

A widely recognized pioneer in the trading world recently stated that not only has "buy and hold" stock investing stopped working since the year 2000, but it probably won’t work again for a decade or more!

Answer these questions to see what impact this could have on YOU:

*     Do you have an IRA invested in mutual funds?
*     Do you have a stock portfolio that holds positions longer than a month?
*     Did you lose wealth in the 2008 credit crisis?

If you answered YES to any of these questions then you may be in serious trouble for the next several years.

The pioneering trader is none other than Todd Mitchell and today he just released a video that breaks down the current crisis for investors and tells you step by step how to start making money by reinvigorating an over 100 year old trading methodology that optimizes today's unusual market activity.

Instantly opt-in with your email and access Todd's video here. And don't worry, we respect your privacy 

Also as a nice bonus famous trader Doc Severson makes an appearance in the video as well. This video will only be available for the next few days so be sure to check it out.

Automatically opt-in to view the video by following this link >  "Trading through the pain....a trading method that's worked for 100 years"

SeaDrill - Completion of the $2.9 billion sale agreement with SapuraKencana SDRL

Seadrill (SDRL) is set to seal a proposed $2.9B deal to sell its tender rig business to Malaysian JV partner SapuraKencana Petroleum after finalizing details of the cash and shares transaction. An earlier agreement on a merger of the two companies’ existing tender rig business now has SapuraKencana taking on capital commitments plus outstanding debt of $780M as part of the acquisition price.

From SeaDril.com......

Seadrill and SapuraKencana have today entered into a conditional sale and purchase agreement in relation to the proposed transaction. SapuraKencana will acquire all the tender rigs in Seadrill's fleet except for the West Vencedor, T15, and T16. These three rigs are either owned or planned to be owned by Seadrill Partners LLC. Seadrill will in a transition period in co-operation with SapuraKencana retain the management of all tender rigs that are in operation outside Asia.

The agreed acquisition price is for an enterprise value of US$2.9 billion and includes future capital commitments for newbuildings T17, T18, and West Esperanza. Seadrill will furthermore continue to manage and supervise the construction of the current new building program on behalf of SapuraKencana. In addition, the enterprise value includes all the debt in the tender rig business which is estimated at US$780 million as of February 6, 2013. Seadrill has agreed to pay US$75 million to SapuraKencana at closing to compensate for cash flow from the tender rig business from February 8, 2013 to closing, netted off for lost interest income.

The transaction is expected to close by the end of April 2013.

John Fredriksen, Chairman, President and Director of Seadrill says in a comment, "We are pleased to have reached an agreement with our long term partner, SapuraKencana, regarding the sale of our tender rig fleet. We look forward to support the integration of the tender rig fleet and are excited to start a new phase of our long and profitable relationship. Seadrill is as a large shareholder of SapuraKencana and is excited to contribute building SapuraKencana into the leading offshore service provider in South East Asia. Seadrill will as stated before use the net proceeds from the transaction to continue to aggressively grow our modern ultra deep water and jack up exposure."

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The Anatomy of an XOM Earnings Trade

If you have been following our trading partner J.W. Jones on his Apple options trades you'll want to take a minute to see how he uses the same methods to trade COT favorite ExxonMobil [XOM].........

One of the most interesting aspects of options is the myriad opportunities presented for high probability trades for those who understand the details of option behavior.

For example, I have recently discussed the routinely observed collapse of implied volatility immediately following an earnings release. We have looked at several examples of profitable trades constructed to benefit from this expected decline in implied volatility.

Today I would like to review another group of trades based on a fundamental characteristic of option pricing. In order to understand this phenomenon, we need to review briefly the anatomy of the price of an option.

Remember that an option’s price, while quoted as a pair of bid / ask values, is in reality the sum of two components. The current market price is the combination of the extrinsic and intrinsic components of the individual option contract.

The extrinsic component can comprise the entirety or only a variable portion of the market price of an option. All options contain at least a small amount of extrinsic component.

The intrinsic component of an option may comprise the majority of the value of an option, as for example a "deep in the money" option. Conversely, an individual "out of the money" option routinely contains no intrinsic value whatsoever.

Here is an example of the trades and the charts to go with them.



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Marathon Oil Corporation Reports Fourth Quarter and Full Year 2012 Results

Marathon Oil Corporation (NYSE:MRO) today reported fourth quarter 2012 net income of $322 million, or $0.45 per diluted share, compared to net income in the third quarter of 2012 of $450 million, or $0.63 per diluted share. For the fourth quarter of 2012, adjusted net income was $388 million, or $0.55 per diluted share, compared to adjusted net income of $454 million, or $0.64 per diluted share, for the third quarter of 2012.

Marathon Oil reported full-year 2012 net income of $1.582 billion, or $2.23 per diluted share. Net income in 2011 was $2.946 billion, or $4.13 per diluted share. Net income for 2011 included income of $1.239 billion from the Company's former Refining, Marketing and Transportation business, which was spun off on June 30, 2011 and reported as discontinued operations in 2011, so income from continuing operations is better suited for year over year comparison. For full year 2012, adjusted income from continuing operations was $1.736 billion, or $2.45 per diluted share, compared to adjusted income from continuing operations of $2.293 billion, or $3.21 per diluted share, for full year 2011.

Read the entire earnings report

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Baker Hughes to Retain Process and Pipeline Services Business

Baker Hughes Incorporated (NYSE: BHI) announced today that it will retain its Process and Pipeline Services business. Going forward, this business will be reclassified as continuing operations within the Industrial Services segment.

Baker Hughes is a leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. The company's 58,000 plus employees today work in more than 80 countries helping customers find, evaluate, drill, produce, transport and process hydrocarbon resources. For more information on Baker Hughes' century long history, visit Baker Hughes.com
 

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