Energen: A Permian Pure Play
Richard Zeits • 16 Comments
Richard Zeits • 16 Comments
Energen Shows Signs Of Stress With An Ill-Timed 24% Share Count Expansion
Michael Fitzsimmons • 13 Comments
Michael Fitzsimmons • 13 Comments
Mon, Sep. 19, 11:59 AM
- Energen (EGN +0.7%) is initiated with a Buy rating and a $66 price target at Canaccord, which says that until recently that EGN had been mostly an afterthought relative to Permian high flyers such as Parsley Energy, Diamondback Energy and RSP Permain due to its apparently more marginal acreage, a legacy San Juan asset and greater leverage.
- However, the firm now believes that EGN's Midland and Delaware positions both can support meaningful growth with WTI crude in the $40s.
- After having sold the rest of the San Juan and non-core Delaware this summer, the streamlined EGN should trade at a higher multiple instead at discount to peers, Canacord says.
Tue, Aug. 30, 6:52 PM
- Earlier fears that some energy companies might not be able to secure new lines of credit because of the collapse in oil prices seem to be a thing of the past; in fact, banks are willing to lend but energy companies do not seem particularly eager to borrow, says Stifel's Daniel Guffy and his analyst team.
- Banks have sought to work through the debt challenges in the energy end markets, as forcing a bankruptcy risks a liquidation that would not come close to recovering the loan value; banks seem willing to lend again as the fall redetermination begins, but E&P companies have little appetite to add leverage, although this could shift as E&P fundamentals improve, Stifel says.
- Companies in Stifel's coverage that have chosen to take a defensive posture by reigning in capex and curbing growth to protect balance sheets and/or preserve liquidity include Buy-rated CRZO, EGN, NFX and XEC, as well as Hold-rated CLR, COG, CRK and PQ.
Mon, Aug. 29, 6:25 PM
- Williams Capital believes oil industry fundamentals are solid despite current commodity price levels but is cautious overall and advises investors not to chase the recent run at current valuations.
- However, the firm recommends select underappreciated companies with lower expectations and re-rating potential, and thinks companies situated in core resource plays that can demonstrate further capital efficiency improvements with catalysts will continue to garner top valuations and M&A premiums.
- Two of Williams' favorites are SM Energy (NYSE:SM), which the firm says remains one of the cheapest names in the sector with a solid balance sheet and assets as well as a conservative management team, and Newfield Exploration (NYSE:NFX), which Williams sees thriving through the current downturn given its strong balance sheet, ample financial liquidity and strong hedge book.
- Also initiated with Buy ratings: Cabot Oil & Gas (NYSE:COG), Energen (NYSE:EGN), Gulfport Energy (NASDAQ:GPOR), Oasis Petroleum (NYSE:OAS), PDC Energy (NASDAQ:PDCE), Pioneer Natural Resources (NYSE:PXD).
- Driven largely by valuation, Williams assigns Hold ratings on Diamondback Energy (NASDAQ:FANG), Gastar Exploration (NYSEMKT:GST), Laredo Petroleum (NYSE:LPI), Parsley Energy (NYSE:PE), Rice Energy (NYSE:RICE) and Cimarex Energy (NYSE:XEC).
Mon, Aug. 8, 5:28 PM
Sun, Aug. 7, 5:35 PM
- AMPH, APLE, ARNA, ATSG, BKD, BLCM, BOJA, BWXT, CAI, CC, CLDX, CLNY, CLVS, CPE, CSC, CSLT, CUI, CVG, DTSI, DVA, EGN, EGY, ELNK, ENDP, ENV, FNV, HTZ, ICUI, IFF, IPHI, JPEP, KITE, LC, LXU, MAIN, MBI, MCHP, MODN, MTW, MXL, NCMI, NILE, NPTN, NUAN, NVGS, NVRO, NWSA, ONDK, OPK, OTTR, PFSW, PHH, PKY, PNM, PNNT, PRAA, PRI, RARE, RAX, RBA, RBC, REN, RMTI, ROG, RPD, RSPP, RWT, SHO, SINA, SREV, TUBE, TVIA, TWLO, VSLR, WB, WBMD, ZLTQ
Mon, Jun. 20, 5:48 PM
- Energen (NYSE:EGN) says it has closed or signed purchase and sale agreements for its non-core Delaware Basin and San Juan Basin assets totaling $551M in gross proceeds.
- EGN says net production associated with the non-core properties being sold averaged 9K boe/day in April, of which only 34% was oil; proved reserves associated with the sales totaled 55M boe as of Dec. 31.
- EGN raises its planned 2016 capital spending to ~$450M from prior guidance of $350M-$400M, and expects to end the year with 54-58 net DUCs in the Permian Basin vs. prior guidance of 37-50 net DUCs.
Fri, May 13, 12:57 PM
- Carrizo Oil & Gas (CRZO -1.2%) and Energen (EGN -1.3%) are upgraded to Overweight from Neutral at J.P. Morgan, which says the small-to-midcap E&P sector delivered a generally positive Q1 from an operational standpoint and “several updates driving NAV accretion.”
- JPM likes CRZO as it expects lower completed well costs in the Eagle Ford and thinks the company is well-positioned entering 2017 from an operational standpoint; the firm raises its stock price target to $40 from $35.
- EGN enjoys a robust balance sheet, which may be further strengthened by an anticipated $400M in asset sales, the firm says, raising the stock price target to $51 from $43.
- The firm upgrades Laredo Petroleum (LPI -0.8%) to Neutral from Underweight with a $12 price target, raised from $9.
Thu, May 5, 6:09 PM
- Energen (NYSE:EGN): Q1 EPS of -$0.64 beats by $0.03.
- Revenue of $128.2M (-42.2% Y/Y) beats by $5.29M.
Wed, May 4, 5:35 PM
- ABCO, ABTL, ACAD, ACET, AHS, AHT, AIRM, AL, ALEX, AMBR, AMH, ANET, APLE, ASYS, ATHX, ATVI, ATW, BBG, BCEI, BIO, BIOS, BLDR, BOJA, CAA, CARA, CERN, CINR, CLNE, CLVS, CMLS, CPA, CTRL, CYBR, CZR, DATA, DCT, DEPO, DIOD, DK, DKL, DV, DWA, EBS, ECOM, ED, EFC, EGAN, EGL, EGN, EGY, ELON, ENDP, ENV, EOG, ERII, ESL, EVC, EVDY, EVHC, FCE.A, FEYE, FISV, FLR, FPRX, FTD, GBDC, GEOS, GERN, GPRO, GSAT, GST, GUID, GXP, HLF, HTGC, ICPT, IMMR, IMPV, INAP, JCOM, LADR, LOCO, MAIN, MCHX, MDR, MDRX, MDVN, MELI, MHK, MITT, MNTX, MRIN, MSI, MTD, MTZ, NBIX, NGVC, NSTG, NWSA, OLED, OMED, OUT, OVAS, PACD, PCTY, PEGA, PETX, PKI, PMT, POST, PRSS, PTCT, PTLA, QLGC, RPTP, RRMS, RWT, SAAS, SEM, SEMG, SNCR, SPPI, SPWR, SPXC, SQ, SSNC, SWIR, TCRD, TEAM, TRMR, TRUE, TRQ, TRUP, TSRO, TWOU, UBNT, UEPS, UNXL, WAGE, WAIR, WEB, WIFI, WING, XNPT, Y, YELP
Wed, Apr. 13, 2:56 PM
- Deutsche Bank upgrades Continental Resources (CLR -1.1%) is upgraded to Buy from Hold, citing a favorable outlook for the Anadarko Basin and the company's lower cost structure, while downgrading Energen (EGN -1.5%) to Hold from Buy.
- With both stocks performing strongly off February lows, the firm says its move into CLR from EGN provides additional exposure to the Anadarko Basin with upcoming acreage delineation catalysts and a producer that can better capture an improving crude outlook with a lower cost structure, unhedged profile and 100-plus core Bakken DUC count.
- Now read Continental Resources is overbought
Fri, Apr. 1, 10:48 AM
- Energen (EGN -1.2%) is initiated with an Outperform rating and a $43 target price at Credit Suisse, which cites an attractive valuation, balance sheet strength and a large inventory runway.
- While 2016 activity was slowed considerably to preserve capital in a lower-for-longer price environment, Credit Suisse says that even when factoring in a 2015 run-rate drilling program, inventory still totals ~34 years, and ~79 years given the 2016 completion rate.
- EGN's 2016 drilling plans call for the completion of just 46 horizontal DUC wells, plus the drilling and completion of an additional horizontal well to complete a pad as well as six vertical Wolfberry wells to hold acreage, but the firm says the company also provided a capital range that allows for acceleration if commodity prices improve materially into H2.
- Now read Energen could be near sale of Delaware property, analyst says
Thu, Mar. 31, 2:36 PM
- Energen (EGN +4.7%) could be close to selling its 31K non-core Delaware acres for as much as $300M-plus, which could boost the stock, SunTrust analysts say.
- "A strong Permian sale could cause the company to pull its San Juan proposed sale, as the proceeds combined with the recent $381M equity offering should be more than ample for upcoming activity," SunTrust writes.
- The firm says the company could increase spending on drilling and completions above $250M if the non-core Delaware Basin package is sold for more than $300M, which also would reduce the urgency for other asset sales.
- SunTrust raises its price target for Buy-rated to $43 from $30.
- Now read Energen shows signs of stress with an ill-timed 24% share count expansion
Thu, Mar. 24, 6:45 PM
- At least 15 companies in the hard-hit E&P energy industry have announced new share offerings this year, and nearly all have been rewarded by stock investors who normally would cringe as their holdings are diluted.
- Amid widespread worries about energy companies collapsing under debt loads, analysts and investors say shareholders more easily stomach the dilution if it means the companies are adding cash to strengthen their balance sheets.
- Some companies did not urgently need cash but stood to "immunize” their balance sheets in case the oil markets remain ugly into 2017, and others have asset sales pending but the newly raised money means they do not have to worry about timing of proceeds, says Wunderlich's Irene Haas.
- But "the low-hanging fruit [has] been picked," says Christian Ledoux, senior portfolio manager at South Texas Money Management, "not because [other companies] don’t want to, but because they won’t be able to attract investors" until oil prices are much higher.
- E&P companies that have outperformed the S&P 500 Energy Index by more than 10 percentage points since their respective offerings YTD: EGN, OAS, DVN, MRO, NFX, CPE, FANG, WFT, QEP, HES, SYRG.
- Outperforming the index by 1-10 percentage points: PXD, GPOR, PDCE, MTDR
- Underperforming the index: COG
Fri, Feb. 19, 2:17 PM
- Investors buying new shares issued by beaten-down energy companies seem to be betting that oil prices are near the bottom and that the shares are coming cheap, WSJ reports.
- North American oil and gas producers have sold more than $5B of new shares so far this year, and the early returns on the deals have helped stoke investor interest, says energy analyst Bill Costello of Westwood Holdings. “Anybody who has played them has made money... it gives people encouragement.”
- This week, Devon Energy (NYSE:DVN) boosted the size of its offering by 25% to more than $1.2B to meet investor interest, and Energen (NYSE:EGN) and Raging River Exploration (OTC:RRENF) also increased the amount of stock sold from their original proposals.
- At the same point a year ago, only $2.9B had been raised through energy stock offerings but activity picked up as investors bet on rising crude prices, which of course resulting in big losses for many.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Wed, Feb. 17, 7:59 AM
- Energen (NYSE:EGN) announces a public offering of 12M common shares, with an underwriters option to purchase up to an additional 1.8M shares.
- EGN says it plans to use the proceeds to repay borrowings under its credit facility, fund drilling and development activities, and other general corporate purposes.
Fri, Feb. 12, 2:37 PM
- Whiting Petroleum (WLL -8.9%) may have received the toughest treatment from Moody's, but the ratings agency downgrades a total of eight of companies as part of a sweeping re-examination of oil and gas producers.
- The ratings affected companies rated Ba, or the first tier of debt Moody’s considers risky enough to be a speculative investment.
- While Moody's cut WLL's debt rating by five notches, SM Energy (SM -1.2%) and WPX Energy (WPX +3.5%) both fell four notches to B2 from Ba1, and cites the likelihood of a "dramatic increase in financial leverage in 2017” with SM's cut.
- QEP Resources (QEP -0.5%) and Energen (EGN -11.6%) fell three notches to B1 from Ba1.
- Unit Corp. (UNT +2%) fell two notches to B2 from Ba3, which Range Resources (RRC +0.7%) and Newfield Exploration (NFX +2.7%) both slipped to Ba3 from Ba1.
- Ratings for Antero Resources (AR +2.7%) and Concho Resources (CXO +2.2%) were confirmed at Ba2 and Ba1, respectively.