Richard Zeits • 16 Comments
Michael Fitzsimmons • 13 Comments
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
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
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.
Dec. 9, 2015, 10:36 AM
- Concho Resources (CXO +2.3%) and Pioneer Natural Resources (PXD +4.3%) are named J.P. Morgan's top large-cap picks among E&P companies focused on the Permian Basin, which the firm says is positioned at the low end of the U.S. tight oil cost curve and thus poised to benefit from efficiency and productivity gains.
- CXO boasts a deep inventory of high rate of return locations in the Delaware Basin; given the company's success there, the firm sees the potential for a "positive rate of change" in the Midland Basin.
- Even though PXD has lagged its Permian peers over the past 12-18 months on a weaker capital efficiency metric, the firm expects the company to realize a positive turn in capital efficiency along with differential oil growth to drive outperformance.
- Parsley Energy (PE +4.2%) and Diamondback Energy (FANG +4.4%) are JPM's top small- and mid-cap picks; Cimarex (XEC +1.7%), Energen (EGN +1.8%) and RSP Permian (RSPP +2.6%) are rated Neutral, while Laredo Petroleum (LPI +4.7%) is tagged with an Underweight rating.
Sep. 25, 2015, 3:15 PM
- Sterne Agee CRT’s Tim Rezvan notes that investors are still shorting oil and gas stocks, especially Chesapeake Energy (CHK -5.6%), and have been rapidly increasing their short positions in Approach Resources (AREX -7.4%), Occidental Petroleum (OXY +0.7%) and Energen (EGN -0.4%).
- According to Rezvan, AREX had a 77% increase in short interest to 7.9M shares (19.6% of shares outstanding) since the end of August, OXY had an 18.9% increase to 17.9M shares (2.3% of shares outstanding), and EGN had an 8.4% increase to 3.7M shares (4.7% of shares outstanding).
- Short interest in CHK rose another 3M shares to 220.6M (33.1% of shares outstanding), the seventh consecutive increase.
Jun. 17, 2015, 3:33 PM
- Energen's (EGN -7%) public offering of 5.7M shares makes it the 30th North American oil company to raise funds from the public equity markets in 2015, and bankers and analysts say oil producers’ easy access to capital is a main reason there has not been more financial pain, M&A and debt defaults during the current oil slump.
- EGN’s $405M capital raise also could provide evidence that oil producers are beginning to call on investors not to fix their balance sheets but to help them ramp up drilling activity; EGN says it plans to use proceeds to increase drilling in the Midland Basin in H2 and begin a multi-year acceleration of development activities in the Permian Basin in 2016.
- Following the offering, Citigroup downgraded EGN's stock to Neutral from Buy and cut its price target to $78 from $80, saying near-term upside looks priced in at current valuation levels; however, Topeka Capital reiterated its Buy rating, saying it would take advantage of today's weakness, citing EGN's expanding asset base with the stacked-pay potential of the Permian Basin and optionality in the San Juan Basin Mancos oil play (Briefing.com).
Jun. 17, 2015, 7:54 AM
- Energen (NYSE:EGN) -2.3% premarket after announcing a public offering of 5.7M common shares, with an underwriters option to purchase up to an additional 855K shares.
- EGN says it plans to use the proceeds to fund a slight increase in drilling activity in the Midland Basin in H2 2015 and, more significantly, to begin a multi-year acceleration of development activities in the Permian Basin in 2016, with capital investment in 2016 of $1B or more; proceeds also may be used for other general corporate purposes, including the acquisition of proved and unproved leasehold and to repay borrowings outstanding under its credit facility.
Jun. 4, 2015, 3:49 PM
- Deutsche Bank says it enters H2 with a neutral outlook for the energy E&P sector and a cautious medium-term view on the commodities as valuations are still above past early cycle multiples.
- Although early 2015 trends of firming WTI crude prices, improved well productivity, and greater and faster than expected cost reductions provide support for the next cycle, DB sees these factors largely priced into E&P's.
- But the firm sees selective opportunities in the group, upgrading Whiting Petroleum (WLL -3%) and Bill Barrett (BBG +0.6%) to Buy from Hold, and naming Newfield Exploration (NFX -0.3%) and Energen (EGN -1.9%) as Top Picks.
- The firm downgrades WPX Energy (WPX -3.5%), which it says faces the challenge of meeting 2016 oil growth expectations against a backdrop of declining H2 volumes as Bakken completions slow and lower cash flow in 2016, and Cimarex Energy (XEC -1.4%) on lower volume growth and FY 2016 cash margins than peers with no support from hedges.
Sep. 29, 2014, 12:26 PM
- Encana’s (ECA +2.3%) takeover of Athlon Energy (ATHL +24.6%) is good news for Diamondback Energy (FANG +2.3%) and Energen (EGN +2.2%), according to analysts at Sterne Agee.
- The acquisition implies a value of $98/share for FANG, Sterne says, based on FANG's 85K net acre leasehold position, estimated 19.8K boe/day of Q3 production, $585M of assumed debt, and a $1.7B market value for the Viper Energy Partners (NASDAQ:VNOM) units it owns.
- The firm sees even more upside for EGN, as ECA’s price implies a value of $102/share for EGN, based on 180K net acres across both sides of the Permian Basin, 48K boe/day of Q3 Permian Basin production, 132M cfe/day of Q3 San Juan Basin, and $835M of pro forma net debt as of Sept. 30.
- Permian producers Laredo Petroleum (LPI +5%), Parsley Energy (PE +5%) and RSP Permian (RSPP +4.8%) also are higher following the acquisition news.
Apr. 30, 2014, 5:33 PM
- Energen Corporation (EGN): Q1 EPS of $1.05 misses by $0.15.
- Revenue of $561.17M (+18.4% Y/Y) misses by $3.3M.
- Shares +1.5% AH.
Jan. 28, 2014, 11:18 AM
- Energen (EGN +5.2%) reportedly is shopping its Alabama natural gas utility, and is working with J.P. Morgan on the sale, as it looks to refocus its operations on its core oil and gas extraction business.
- EGN has indicated in the past that it might sell the Alagasco business, which distributes gas to ~425K customers in central Alabama and whose worth Citi has estimated at ~$1.2B.
- Macquarie analysts have said a main risk facing EGN's stock was any change in Alabama utility regulations, but the unit has long contributed much of EGN's dividend.
Aug. 1, 2013, 3:51 PM
- Energen (EGN +10.5%) moves up today on a solid Q2 earnings beat.
- Net earnings fell 37% Y/Y on higher costs, however, as gains in operating revenue were offset by higher costs.
- The company lowered its FY13 view, now expecting an EPS of $3.15 to $3.55, citing increased estimates for lease operating expenses and slight changes to product mix, from its prior view of $3.34 to $3.74 a share.
- UBS raises their price target to $67 from $60 on the back of the report, citing strong upper Wolfcamp results.
Aug. 1, 2013, 10:49 AM
- Pioneer Natural Resources (PXD +14.8%) powers higher following Q2 results that included significant progress in its horizontal well drilling program in the heart of the Midland Basin.
- FBR awards a Street-high $250 target price to the shares, seeing risk/reward significantly skewed toward a favorable outcome in the Spraberry/Wolfcamp drilling program.
- BAML analysts note PXD's first Wolfcamp interval well tested out as one of the best wells in the play, and sees upside to its $200 target.
- Other names with a strong Wolfcamp presence: LPI +10.6%, EGN +10.7%.
Apr. 26, 2013, 5:31 PM
Dec. 18, 2012, 4:50 PM
Energen (EGN) -2.8% AH after issuing downward guidance for FY 2012, seeing EPS of $3.15-$3.25 vs. $3.42 analyst consensus. Says its 2013 capital budget of $975M will focus primarily on the exploration and development of its liquids-rich assets in the Permian Basin, but infrastructure-related issues will negatively affect production in Q4 2012 and possibly H1 2013.| Dec. 18, 2012, 4:50 PM
Oct. 25, 2012, 12:11 PM
Energen (EGN -6.9%) slides on wide Q3 miss late yesterday. Net earnings plunged 98% as the company saw a 27% drop in operating revenue for oil and gas operations and a 30% plunge in natural-gas prices. The company says it plans to cut investment in natural-gas production this year due to the low prices, and turn its attention instead to its oil-and liquids-rich Permian Basin operations in Texas.| Oct. 25, 2012, 12:11 PM