View as an RSS Feed
View Michael Fitzsimmons' Articles BY TICKER:
AEP, APA, ARMH, AXPLF, BPL, BRK.A, BXE, CAT, CIE, CLNE, CLR, CMI, COG, COP, CPE, CRK, CVX, CWCO, DRC, DRQ, ECL, ED, EOG, ERF, ERII, EXXI, FIATY, FIW, FWLT, GAS, GE, GEOI, GEOS, GEX, GLD, GTLS, HEP, HES, HK, HMC, HPJ, IBM, IEO, IPPLF, KOG, LNDNF, MILL, MRO, MUR, NFX, NFYEF, NGS, NS, NZEOF, ORXPF, OXY, PBA, PBR, PBT, PDCE, PEO, PEYUF, PIO, PKIUF, PQ, PSX, PSXP, PXD, REN, RICE, SGU, STO, STOSF, SU, SYK, TSLA, TYG, UNG, USO, VET, WDC, WES, WLL, WRES, XEC, XLE, XOM, YOHOF
Callon Petroleum's Q1: Excellent Drilling Results In The Permian Rocket Stock Higher
- Callon Petroleum's Q1 earnings report was strong across the board with Permian production up 46% sequentially.
- Permian Basin drilling results beat expectations as a result of optimized completions with longer laterals.
- As a result, the company raised EUR estimates in the Permian and increased its full-year production guidance.
- Despite the stock's recent run-up, there appears to be potential for an additional 25% left in the stock by year-end.
Vermillion Energy: Relentless Focus On Capital Efficiency Will Drive Stock To $85 By Next Summer
- Vermilion Energy has a remarkable 20-year record of delivering total returns at a 36.6% compound annual growth rate.
- The company has achieved this long-term record by a relentless focus on capital efficiency.
- VET is not resting on its laurels. Growth in production is set to accelerate; funds flow per share will continue growing ~20%.
- The Corrib project comes online in mid-2015, adding an estimated 9,700 boe/day (net) for Vermilion. That's 24% of total 2013 average production.
- As a result of the growth in production and funds flow, VET should top $85 by next summer.
ConocoPhillips Continues To Outperform Exxon And Chevron
- ConocoPhillips delivered excellent Q1 earnings.
- Strength came from stronger NA natural gas prices, higher bitumen prices, and across COP's globally diversified portfolio.
- The company is on track to achieve management's goal of 3-5% growth in production and margins.
- COP trades at a discount to both Exxon and Chevron in terms of both P/E and dividend yield.
- Shares should be accumulated.
PetroQuest: Initial Woodford West Relay Wells Greatly Exceed Expectations, And The Stock Will Too
- PetroQuest's strategic plan is to funnel free cash flow from its Gulf Coast assets to develop its Woodford acreage.
- 50% of total 2014 cap-ex is allocated to the liquids-rich Woodford play.
- It was a wise decision: production data on the company's first 6 well completions exceeded expectations by ~50%.
- Today's Q1 EPS report was bullish: oil production increased 93%; net income of $0.15/share was up 275% and higher than full-year 2013.
- As a result of the Woodford catalyst, and today's Q1 EPS report, I am raising my previous 12-month price target to $13 - more than double the current stock price.
Natural Gas Is Pushing Energy Stocks Higher
- After years of abnormally low natural gas prices, producers are finally reaping the rewards of firmer natural gas prices.
- Domestic natural gas storage levels are still near decade-lows for this time of year.
- As a result, the energy sector is starting to outperform the broader market.
- Two companies yet to report Q1 earnings and nicely leveraged to NA natural gas prices are Enerplus and Peyto Exploration.
Enerplus: What Statoil's Q1 Results Infer For Enerplus's Q1
- Statoil's recent Q1 earnings release reported a YOY doubling of US natural gas prices.
- Like Statoil, Enerplus has significant natural gas production from the Marcellus shale.
- As a result, Enerplus will see a big jump in its Q1 earnings - due out on May 9th.
- I am raising my 12-month price target on ERF from $22 (already hit) to $25.
Statoil: Excellent Q1 Trounces Estimates; Here Come The Dividends
- First quarter earnings blowout due in part to a doubling in US gas prices this winter.
- 2013 annual dividend coming; quarterly dividends begin.
- Raising my 12-month price target (again) to $33.
Star Gas Partners: MLP Yields 5.2% And Has 20% Upside Potential
- Star Gas Partners is the nation's largest retail distributor of home heating oil.
- The MLP operates in 14 Northeast and Mid-Atlantic states, and has close to a half million customers.
- The recent Griffith Energy Services acquisition is estimated to add $13-14 million in EBITDA.
- 20% capital appreciation potential + 5.2% dividend yield = total annual return of 25%.
Is The Pendulum Swinging From Oil Back To Natural Gas? - Part 2
- Natural gas storage inventory levels are near an 11-year low and exactly half of the level of one year ago.
- Meantime, Gulf Coast oil inventories are at record highs.
- It would appear that for the first time in years, the outlook for the price of domestic natural gas is more bullish than that of domestic oil.
- Canadian gas producer Peyto Exploration looks poised to benefit from the trend in North American natural gas prices. Stock could.
Highpower Technology's Bearish (Then Bullish) Two-Day Seesaw
- Highpower Technology announces 1 million share private placement on Monday. Stock drops 27%.
- On Tuesday, HPJ announces it is a supplier to SONY Corporation. Stock reverses course and spikes higher.
- Despite these short-term developments and stock gyrations, Highpower's long-term fundamentals are solidly bullish.
- Raising my 2014 price target from $6.40 to $8.40, double Monday's closing price.
ConocoPhillips Blows Me Away With Eagle Ford Production And Resource Upgrades
- COP Chairman & CEO says the company is adding 700 million boe of resource in its Eagle Ford acreage alone.
- COP increased its 2017 Eagle Ford production guidance to 250,000 boe/d. That's up 100,000 boe/d just over last year's guidance of 150,000 boe/d.
- Matt Fox, EVP of E&P, says COP has booked only 20% of the unconventional reserves it ultimately expects to recover from its Eagle Ford and Bakken acreage.
- With a P/E=9.6, COP is at least 20% undervalued. It is arguably the best-positioned independent E&P energy company on the planet.
Phillips 66's Big Deal To Sell LPG To Sinopec
- Last month Sinopec signed a long-term contract to purchase LPG from Phillips 66.
- While Washington restricts crude exports, there are no limits on LPG sales.
- Recent estimates have the contract at 34,000 bpd. At current LPG prices that equates to ~$850 million in annual revenue for PSX.
- Just one more reason why Phillips 66 could well be the best single investment on "Shale USA".
Peyto Exploration: A Winning Stock For Growing Oil Sands Diluent Demand
- Oil sand bitumen production requires diluent blend in order to meet pipeline flow specifications.
- Growing oil sands production is expected to increase diluent demand by ~50% to 600,000 bpd over the next 4 years.
- Canada imported 150,000 b/d of diluent from the US in 2013.
- Peyto Exploration is excellently positioned as the low cost gas producer in Alberta's Deep Basin to supply growing (and very profitable) diluent demand.
- Peyto's total 12-month return should approach 40%.
Newfield Exploration: Expect A 25% Return On Sale Of China Assets And SCOOP Drilling
- Newfield Exploration has successfully transitioned its overly diverse portfolio into one focused on 4 core area.
- The company is now focused on the liquids-rich Williston, Uinta, and Anadarko Basins, along with the Eagle Ford shale. The company's SCOOP acreage is its crown jewel.
- Domestic pre-tax PV-10 grew 44% in 2013, driven primarily by a 26% increase in liquids reserves.
- The company has turned the corner: 2013 full-year net income was $0.94/share after a huge loss in 2012.
- Stock could gain 25% this year on expected production growth of ~15%; a doubling of earnings YOY; China asset sale could fetch $500-600 million.
Warren Resources: Hidden Value Of Coal-Bed Methane Assets Will Cause Shares To Double By 2015
- Warren Resources has considerable reserves upside in its Wyoming coal-bed methane asset base.
- The company drilled 27 CBM wells in 2013; production will ramp up on these wells through 2015.
- The company acquired midstream assets from Anadarko in 2013 that will lower LOE by ~$0.70 per Mcf.
- Increases in production, reserves, and earnings will push stock price up 50% in 2014 and another 50% in 2015 (2015 PT= $10.50/share).
Is The Pendulum Swinging From Oil Back To Natural Gas?
- In the eight weeks since January 24, 2014, crude oil stocks in the Gulf Coast region grew to record levels.
- Meanwhile, domestic natural gas storage levels are 992 Bcf below the five-year average of 1,814 Bcf.
- Energy investors should consider the potential impact of potentially lower oil prices and higher natural gas prices.
Kodiak Oil & Gas: Polar Project A Grand Success - Stock Has 40% Upside In 2014
- Kodiak Oil & Gas' Polar Project showed an entrepreneurial spirit by sacrificing short-term production gains by longer term value creation.
- The 6-month production results from Polar's downspacing tests are excellent.
- As a result, KOG will approach a watershed inflection point in 2014: cash flow breakeven.
- In 2014, KOG appears to be on track to grow NPV by a similar amount as in 2013 (81%).
- Bottom line: the stock could hit $17/share in 2014 - up 40% from yesterday's close.
ConocoPhillips: Cash Margin Expansion Will Lead To Substantial Dividend Growth
- ConocoPhillips' plan to increase cash margins/boe by 3-5% through 2017 looks achievable.
- As a result, increased incremental cash flow of $6 billion could lead to an additional $0.50/share in dividends.
- COP should achieve a total return of 20% in 2014.
Inter Pipeline: Big Volume Spike And Shareholder Rights Plan Not Indicative Of An Imminent Takeover Bid
- Inter Pipeline shipped ~30% of Canadian crude oil supply and ~40% of total oil sands volumes in 2012.
- Inter Pipeline transports ~1 million b/d of petroleum products and processes 40% of natural gas exported from Alberta.
- On February 28th, the company experienced a huge increase in daily trading volume (57x average).
- That was followed up by the adoption of a shareholder's rights plan. Is the company in play?
HighPower Technology: Easy 30% Upside As Lithium-Ion Battery Demand Set To Go Parabolic
- HighPower's new state-of-the art automated battery manufacturing facility has come online just as lithium-ion battery demand is expected to explode.
- HPJ's small size means it is highly leveraged to rechargeable lithium-ion battery growth.
- A new battery recycling facility starts up in Q2 - a new catalyst; should lead to additional customers and revenue.
- Q4 earnings were outstanding; earnings set to grow by 300% in 2014.
- After rising ~100% over the last 6 months, the stock easily has another 30% to go in 2014.
Vermilion Energy Enters Williston Basin By Buying Reserves On The Cheap
- Latest acquisition continues the company's history of value-oriented and accretive deals; cash flow of new assets will self-fund future growth.
- Based on current netbacks, VET paid ~50% below the cash flow value of proved reserves; potential upside for another doubling of the assets' reserves due to unbooked drilling locations.
- Bargain deal buys reserves on the cheap and opens up a new core area for the company in the Williston Basin.
- For $400 million (~5.5% of EV), VET grew proved reserves by 8%. Conservative upside is another 4% growth in proved reserves.
Peyto Exploration: Set To Soar On Higher Production, Gas Prices, And Profit Margin Expansion
- Peyto is the lowest cost gas producer in Alberta's Deep Basin.
- Operating margins were 76% in 2013; profit margins were ~25%.
- Production expected to grow ~30% in 2014 while the AECO gas price is up 30% YOY: profit margin/Mcfe could double in 2014.
- As a result, total distributions will grow to an estimated ~$1.36/share in 2014; stock could appreciate 40% over the next twelve months.
Gold: U.S. Income Inequality Is A Powerful Long-Term Bullish Catalyst
- Income inequality in the US is far worse than most people realize.
- As a result, the government will be the backstop for more poor people and will, in effect, subsidize private corporations. That means more debt.
- As a result, ever more US debt will drive gold prices substantially higher.
Oryx Petroleum Strikes Another Gusher In Kurdistan - Stock Has Significant Upside Potential
- Oryx announces its 4th consecutive discovery in Kurdistan: well flowed at 5,500 bbl/day of light sweet crude oil.
- Production expected to go from zero to 16,250 bbl/day (net) by 2014 year end.
- Oryx's cut of 2P reserves in Hawler license have an estimated value of 2-3x current market cap with huge upside potential.
Phillips 66: Significant Insider Buying A Very Bullish Indicator
- Several executives increased their share holdings in January and February.
- Many large transaction were direct buys in the low $70s.
- Insider buys and a relative lack of insider selling are a bullish indicator moving forward, as is the potential for weakening WTI and mid-con crude prices.
PetroQuest Energy: A Strategy For Success
- After a big loss in 2012, the company posted net income of $0.14/share in 2013.
- Reserves replacement was 295% in 2013; PV-10 grew by 99%.
- The company has positive momentum and an excellent strategy to create shareholder value; share price could double over the next 12 months ($11).
Resolute Energy: Excellent Q4 Operational Performance Bodes Well For 2014
- Despite a $188 million impairment charge, underlying operations and production is very strong.
- Today's sell off in response to the earnings report is irrational and present a great entry point for investors.
- Stock is undervalued; reiterate expectations for 6-month return of 25%.
Exxon Mobil Needs A Big Dividend Hike This Year
- Exxon Mobil pays the lowest dividend yield in its peer group.
- At the same time, the stock has also been a laggard in terms of capital appreciation.
- At a minimum, shareholders expect a dividend yield competitive with Exxon's peers.
Vermilion Energy: A Compelling Combination Of Capital Appreciation And Yield
- This lightly followed Canadian energy company has a 15-year total return CAGR of 25%.
- Bullish catalysts include the outlook for strong European natural gas prices for years to come and the Corrib natural gas project in Ireland.
- Long-term success is due to a very selective acquisition strategy combined with focused high-return capital investments.
- The current yield is 4.1%.
- Whiting's Niobrara Reserves And Top Shale Oil Producers' 2013 Reserve Replacement Ratios
- Dril-Quip Reports Powerful Q4 EPS And Very Strong Backlog
- Resolute Energy's Big Q4 Earnings Surprise: Stock Should Be Propelled 25% Higher Within 6 Months