EOG Resources, Inc.NYSE
Can EOG Resources Grow At 25% With Oil At $65?
Richard Zeits • 42 Comments
Richard Zeits • 42 Comments
Mon, Dec. 5, 9:55 AM
- Energy Transfer Partners (ETP -3.4%) and Sunoco Logistics Partners (SXL -3.5%) open lower after the U.S. Army Corps of Engineers refused a crucial permit needed for completion of their $3.7B Dakota Access pipeline project, which said the companies would need to consider alternative routes other than passing under Lake Oahe; also ETE -1.8%.
- In an angry statement, the companies say the decision is "a purely political action... the latest in a series of overt and transparent political actions by an administration which has abandoned the rule of law in favor of currying favor with a narrow and extreme political constituency."
- Analysts generally agree that a Trump administration eventually will approve the project but warn that investors should be aware of headline pressure on Dakota names including EOG Resources (EOG +1.8%), Marathon Oil (MRO +2.2%), Whiting Petroleum (WLL +2.4%), Continental Resources (CLR +1%) and Hess (HES +3.5%).
Wed, Nov. 30, 2:30 PM
- Oil and gas names continue to surge following the news that OPEC will cut production.
- Among the 36 energy stocks in the benchmark SPDR Energy ETF, 13 are up by at least 10%: MRO +21.6%, RIG +19.6%, MUR +15.7%, DVN +15.2%, NFX +15.2%, HES +14.8%, APC +13.6%, HAL +13.6%, CXO +11.3%, XEC +10.9%, EOG +10.5%, COP +10.4%, CHK +10%.
- Continental Resources (CLR +23.6%) soars to a 52-week high, making founder and CEO Harold Hamm, already the wealthiest U.S. energy billionaire, another $3B richer.
- Offshore drillers are broadly sporting double-digit gains: ESV +24.8%, ATW +20.6%, RIGP +18.7%, SDRL +16.5%, DO +15.7%, RDC +15%.
- "For all E&P stocks, this is a bullish call for sure, because price is directly correlated with cash flow," says Luana Siegfried, energy equity research associate at Raymond James, which sees U.S. crude reaching $60/bbl by year-end.
- MarketWatch's Philip van Doorn writes that pending earnings estimate increases from analysts ought to set a floor under the energy sector and support even higher prices for oil stocks.
Wed, Nov. 16, 2:58 PM
- North Dakota’s crude oil output in September fell to the lowest level in more than two years, staying below the 1M bbl/day level for the second month in a row.
- Production fell 1.1% for the month to 971K bbl/day in September, the most recent month for which data is available, 10K bbl/day less than August and the lowest level since February 2014, when output was 952K bbl/day.
- Natural gas production in North Dakota fell 1.7% in September to 1.61B cf/day, the state also reports.
- Companies with a presence in North Dakota's Bakken shale include CLR, WLL, EOG, ERF, HK, HES, MRO, OAS, QEP, SM, STO, TPLM.
Tue, Nov. 15, 3:48 PM
- CLSA upgrades Chevron (CVX +2.3%) and EOG Resources (EOG +2%) while downgrading BP (BP +1.8%) and ConocoPhillips (COP +2.4%) following Q3 group earnings results that were better than expected, mainly benefiting from self-help initiatives.
- The firm upgrades CVX to Buy from Outperform with a $127 price target, believing the company’s strategic shift towards its short-cycle upstream business is a game changer and that the Permian update in its Q3 conference call is "just the beginning."
- CLSA upgrades EOG to Outperform from Underperform with a $105 target, as the Yates transaction in September creates a platform with 6K premium locations, and sees significant further upside underpinned by EOG’s technical innovation and operational excellence.
- However, BP is downgraded to Outperform from Buy with a $37 target, as BP has done a remarkable job in positioning for long-term growth with cash breakeven at $50-55/bbl, but the firm awaits clarity on a Lower 48 strategy.
- Finally, COP is cut to Underperform from Outperform with a $47 target, as the lack of meaningful Delaware/Midland Basin shale exposure is a key negative vs. other large-cap E&P peers.
- Oil and gas stocks are broadly higher today in a very strong session for crude oil.
Tue, Nov. 15, 10:49 AM
- West Texas' Permian Basin now holds nearly as many active oil rigs as the rest of the U.S. combined, including those offshore, the U.S. Energy Information Administration reports.
- The rig count has been rising since this summer, but the Permian began seeing rigs increase earlier than the U.S. as a whole, and is adding rigs more quickly; of the ~450 total U.S. rigs, the Permian now accounts for ~220.
- Permian production has reached 2M bbl/day of oil, while south Texas’ Eagle Ford and North Dakota’s Bakken have fallen to below 1M bbl/day.
- Top Permain producers include CVX, OXY, APA, PXD, CXO, DVN, EOG, MRO, FANG, XOM, ECA, RSPP, SM, EGN, PE, AREX, GPOR, XEC, LPI, CPE, ESTE, WPX, PDCE
Fri, Nov. 4, 3:33 PM
- EOG Resources (EOG -0.1%) is little changed after reporting a larger than expected Q3 loss but revenues that beat analyst expectations, as the company showed progress in productivity and cost reductions.
- EOG says Q3 production totaled 275.7K bbl/day of oil in the U.S., exceeding company guidance by 3%, even as investment spending fell 32% Y/Y.
- EOG raises FY 2016 production guidance to 278.5K-282.1K bbl/day, which at the midpoint is up 3% from prior guidance, as it now expects to drill 290 net wells, 40 more than its prior forecast and 90 more than its original 2016 plans; EOG also lifts capital spending guidance by $200M to $2.6B-$2.8B.
- The company also raises its estimated resource potential in the Delaware sub-basin of the Permian to 6B barrels, up 155% from its previous estimate of 2.35B, based on its study of acreage acquired earlier this year from Yates Petroleum.
Thu, Nov. 3, 4:27 PM
Wed, Nov. 2, 5:35 PM
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Thu, Oct. 13, 6:41 PM
- North Dakota oil production dropped below 1M bbl/day in August for the first time in more than two years, as the state's higher-cost production continues to struggle relative to other parts of the U.S.
- Production from North Dakota’s portion of the Williston Basin fell to 981K bbl/day in August, down 4.7% from July and the lowest since March 2014; the state's peak production, in December 2014, was more than 1.23M bbl/day.
- Lynn Helms, director of the state’s Department of Mineral Resources, expects oil production to decline to a low of ~900K bbl/day by mid-2017 before recovering.
- Companies with a presence in North Dakota's Bakken Shale include CLR, WLL, EOG, ERF, HK, HES, MRO, OAS, QEP, SM, STO, TPLM.
Thu, Sep. 29, 7:15 PM
- S&P Global Market Intelligence’s Stewart Glickman highlights four stocks - EOG Resources (NYSE:EOG), Marathon Oil (NYSE:MRO), Noble Energy (NYSE:NBL) and Cabot Oil & Gas (NYSE:COG) - that can thrive even at $45/bbl oil.
- The firm estimates nearly 6% production growth for EOG in 2017, a current net debt to capital ratio of ~33%, and projected cash from operations at 114% of anticipated 2017 capex - fundamental metrics that give EOG "a measure of safety even if the macro picture refuses to budge."
- Glickman sees MRO with 2% production growth in 2017, which might seem mediocre but not in the context of its net debt to capital ratio (18%) and its free cash flow percentage for 2017 (128%).
- The firm notes NBL's sizable domestic and international operations, with the company's strong acreage position in natural gas offshore Israel as a key catalyst.
- Glickman sees COG with production growth of 8% in 2017, led by its prolific Northeast acreage, and with a net debt to capital ratio of just 23% and a free cash flow percentage of 146%.
Wed, Sep. 28, 4:29 PM
Wed, Sep. 28, 3:56 PM
- EOG Resources (EOG +6.3%) is Barclays' Top Pick among natural gas producers, citing "continued progress in the Eagle Ford and Permian, strong long-term growth projections, and the recent combination with Delaware-heavy Yates Petroleum."
- Barclays expects the Yates acquisition to add 5% to EOG's oil production and total boe production, while adding 40% to premium locations and 46% to net resource potential.
- EOG provided strong production oil growth guidance during Q2 of 10%-20% during 2017-20, and Barclays sees balance sheet adjusted production growth of 14% in 2017 and 26% in 2018 vs. the group average of 2% in 2017 and 10% in 2018.
Wed, Sep. 28, 3:19 PM
- The energy sector (XLE +4%) bursts to the top of the leaderboard after OPEC announces a planned production cut to 32.5M bbl/day at the informal OPEC meeting in Algiers.
- Among individual energy stocks: XOM +3.8%, CVX +2.7%, RDS.A +2.8%, BP +3.4%, TOT +2.4%, PBR +4.5%, COP +6.4%, MRO +8%, MPC +1.4%, PSX +1.9%, VLO -0.1%, EOG +6.2%, PXD +6.4%, OXY +4.5%, DVN +7.9%, CLR +8.3%, APA +6.2%, NOV +8.1%, SLB +3.3%, BHI +3.6%, HAL +4.3%, KMI +3.4%, ENB +2.6%, EPD +1.9%, ETP +2.9%.
Tue, Sep. 6, 2:48 PM
- EOG Resources (EOG +6.7%) surges more than 6%, as analysts say its $2.5B acquisition of Yates Petroleum strengthens its Permian Basin presence at an inexpensive price.
- Tudor Pickering & Holt analysts say EOG is paying $7K-$8K/acre for the Delaware Basin properties, assuming a value on proven reserves that are producing and still being developed of ~$800M for the 29.6M boe/day EOG said it is picking up (48% oil).
- Simmons analyst Pearce Hammond calculates that the deal comes in well below some recent transactions in the play, including Diamondback Energy's (FANG +0.1%) $560M purchase of Luxe Energy, which he says came in at $26K-$27K/acre.
- Cowen analysts say EOG is paying less than $1M per new premium location, and the deal is $2/share accretive to net asset value just on initial locations.
Tue, Sep. 6, 7:37 AM
- EOG Resources (NYSE:EOG) agrees to acquire privately-held Yates Petroleum as well as some of Yates' subsidiaries and other entities in a cash and stock deal valued at $2.5B, raising its position in the Permian Basin and Powder River Basin.
- EOG will issue slightly more than 26M common shares valued at $2.3B and pay $37M in cash, and assume $245M of Yates' debt while receiving $131M in cash from Yates at closing.
- EOG says the Yates acquisition adds ~1,740 net premium drilling locations in the Delaware Basin and Powder River Basin to EOG's inventory of premium drilling locations, a 40% increase; EOG plans to begin drilling on the Yates acreage in late 2016 with additional rigs added in 2017.
Wed, Aug. 24, 5:45 PM
- Deutsche Bank analysts offer a hopeful view for top oil E&P companies as capital efficiencies continue to improve, and raise their price targets on Pioneer Natural Resources (NYSE:PXD), Devon Energy (NYSE:DVN), Marathon Oil (NYSE:MRO) and EOG Resources (NYSE:EOG).
- Capital efficiency should improve through 2017, driven by cost concessions and continued well performance efficiency gains, and while acknowledging some near-term headwinds as rigs continue to be added in the Permian and STACK in H2, the firm says it remains constructive on a tightening market into 2017.
- The firm lifts its price target for PXD to $210 from $180, for DVN to $55 from $45, for MRO to $21 from $20, and for EOG to $105 from $96.