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May 13, 2015, 5:42 PM
- U.S. oil exploration and production companies could be back drilling again sooner than expected, Susquehanna analysts say, seeing an improving landscape for many oil projects due to higher well productivity and lower service costs.
- Commentary from several Permian operators has indicated the possibility of boosting activity levels in H2, and the firm thinks producers likely will start adding rigs if oil prices remain over $60/bbl in H2, when there should be more clarity around the upcoming OPEC meeting and possible lifting of Iran sanctions, both of which have been cited as variables that could drive oil prices lower.
- Susquehanna has a generally bullish view on E&P stocks at current prices, and has a Positive rating on CLR, DVN, EOG, GPOR, NFX and RRC.
May 11, 2015, 4:59 PM
- Oil production from seven major U.S. shale plays is expected to fall by 86K bbl/day in June, according to the latest report from the Energy Information Administration.
- Oil output at the Eagle Ford shale play in South Texas is forecast to see the biggest decline, down 47K bbl/day, while production at the Bakken shale play, centered in North Dakota, is expected to drop by 31K bbl/day, the report says.
- "The data shows that production in the Bakken and Eagle Ford [plays] peaked in March at 1.33M bbl/day and 1.73M bbl/day, respectively," says WTRG Economics energy economist James Williams.
- Among the top Eagle Ford producers: EOG, BHP, COP, CHK, MRO, APC
- Among the top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
May 5, 2015, 8:55 PM
- David Einhorn's critical presentation pushed Pioneer Natural Resources (NYSE:PXD) 5% lower over the past two days, but Wolfe Research's Paul Sankey is out in defense of PXD and fracking companies generally, in large part because of their “takeover attractiveness."
- "Pioneer is the single most attractive takeover target to Exxon Mobil (NYSE:XOM), and the entire group Einhorn listed as short candidates based on a value-destructive business model has takeover merits," Sankey writes, adding the potential for a takeout is at least part of why the market is overvaluing PXD.
- Einhorn said investors in PXD and fracking companies overall - he also mentioned CXO, EOG, WLL and CLR - have been willing to largely ignore their high capital expenditures, but Sankey believes the U.S. energy revolution "is in its very early stages, and efficiency and operational performance continues to grow at high pace,” making long-term projections for both expenditures and production challenging.
- Previous: Pioneer Natural sinks 2.5% as Einhorn slams PXD, other frackers
May 5, 2015, 3:58 PM
- EOG Resources (EOG -4.8%) plans to increase drilling activity as soon as oil prices stabilize at $65/bbl - probably in Q4 2015 - CEO William Thomas said on today's earnings conference call.
- Thomas anticipates EOG would return to double-digit growth in 2016, and in this year's Q3 may begin finishing wells that it has left half-drilled, with a decision likely in July; "We don’t want to get in a hurry... We don’t want to jump-start completions" and then see the price fall, the CEO said.
- Thomas joins Pioneer Natural Resources (NYSE:PXD), whose CEO Scott Sheffield said last month he was preparing for a return to growth and may begin adding rigs as soon as June.
- EOG also said current well costs are already running at or below 2015 plan levels across all its major plays, and that it is protecting its balance sheet by meeting its cash flow and capex expectations for the year.
May 4, 2015, 6:57 PM
- EOG Resources (NYSE:EOG) -0.9% AH after reporting better than expected Q1 earnings but lower than expected revenues, as lower commodity prices more than offset increased liquids production volumes, higher cash settlements from hedges and lower operating expenses.
- EOG says its capital spending plan remains on schedule to post a 40% Y/Y decrease in 2015, even though Q1 capex exceeded discretionary cash flow by $486M due to low commodity prices and service contract commitments.
- Says overall Q1 production volumes rose 8% Y/Y to 589.5K boe/day, driven by gains in the Eagle Ford shale and Delaware basin plays; says it will begin to increase well completions in Q3 if prices continue to improve, which would produce a "U" shaped production profile in 2015.
May 4, 2015, 4:24 PM
- EOG Resources (NYSE:EOG): Q1 EPS of $0.03 beats by $0.03.
- Revenue of $2.32B (-43.1% Y/Y) misses by $390M.
May 4, 2015, 12:27 PM
- Pioneer Natural Resources (PXD -2.6%) plunges following negative comments on PXD and other frackers by Greenlight Capital's David Einhorn at the Ira Sohn conference.
- Einhorn calls for shorting PXD, which he dubs "the motherfracker," and says PXD loses $0.20 of present value for every $1 invested, is burning cash and is not growing.
- Of the sector, Einhorn says fracking companies offer an "almost infinite supply of negative return investment opportunities."
- Einhorn says he also is short WLL -2.5%, CXO -1.2%, CLR -1%, EOG -0.7%.
May 3, 2015, 5:35 PM
- ADEP, AEGR, AEIS, APC, APU, ATEN, BALT, BBRG, BKH, CAR, CDE, CGNX, CHUY, CKEC, CXO, DENN, DNB, DVA, ECOM, EGOV, ELNK, ENH, EOG, EOX, FBP, FN, FNF, HIL, IDTI, IM, ININ, INN, INVN, IRG, ITRI, KS, LMNX, LSCC, MATX, MCEP, MDU, MERU, MIC, MUSA, NLS, NUVA, ONDK, OTTR, PACD, PLOW, PPS, PQ, PTCT, QLYS, RAIL, RGR, ROSE, RWT, SGY, SHO, SNHY, STAG, THC, TXRH, UGI, VNO, XEC, XPO
May 1, 2015, 4:14 PM
- EOG Resources (NYSE:EOG) declares $0.1675/share quarterly dividend, in line with previous.
- Forward yield 0.68%
- Payable July 31; for shareholders of record July 17; ex-div July 15.
Apr. 22, 2015, 6:53 PM
- Nomura came out bullish today on the energy E&P sector - issuing Buy ratings for MRO, PXD, EOG, CLR, APC, NFX, RRC, CNQ, CXO, ECA and SU - even as the firm does not foresee a V-shaped rebound in crude oil prices.
- Nomura believes core North American shale plays do not represent the economic marginal cost of supply in the world, which runs counter to commonly held views that largely see shale occupying the high end of the cost curve; thus as oil rebounds, so will investment in the shales, which should support prices, the firm says.
- In such an environment, Nomura says selecting stocks will depend on factors such as ”the reinvestment opportunity set, impact of oilfield technology, continued efficiencies, potential new geologic plays, management acumen and balance sheet strength."
- The firm is Neutral on DVN, HES, MUR, OAS, UPL, WLL, XEC, COG, COP and SWN; it rates NBL, APA, DNR, CHK and CVE as Reduce.
Apr. 14, 2015, 6:28 PM
- EOG Resources (NYSE:EOG) has the biggest share of an estimated 900 North Dakota wells waiting to be fracked, according to state data, defying conventional wisdom in the state's Bakken shale formation that smaller producers with weak cash flow comprised most of the estimate.
- The fact that strong players such as EOG are holding off fracking new wells shows how much low prices make the remote Bakken far less economical compared to other U.S. shale plays; oil producers have up to a year to frack Bakken wells before they must ask state officials to label them "temporarily abandoned."
- EOG plans to make the Eagle Ford and Permian shale fields in Texas a core focus this year, aiming to increase the number of Permian wells this year by 53%.
Apr. 9, 2015, 7:21 PM
- Radon levels have been rising measurably in Pennsylvania since 2004, when the fracking industry began drilling natural gas wells in the state, according to a new report by the Johns Hopkins Bloomberg School of Public Health.
- The report does not pinpoint the exact cause of rising radon readings or explicitly tie it to any activity, but it says that buildings in counties where natural gas is most actively being extracted have in the past decade had much higher radon measurements than buildings in low-activity areas, where no such discrepancies were found before 2004.
- Pennsylvania has long been known to have some of the highest indoor radon levels in the U.S., but the researchers say fracking of the Marcellus shale formation could exacerbate pathways for radon to enter buildings.
- Top Marcellus Shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Mar. 30, 2015, 7:11 PM
- A lawsuit in Oklahoma highlights a new worry for energy companies: the possibility of being forced to pay for damages from earthquakes if the tremors can be linked to oil and gas activity.
- Oklahoma has experienced 585 quakes of 3.0 or greater magnitude last year, more than the state had in the previous 30 years combined and the most of any state in the contiguous U.S. - even California.
- The tremors under investigation in Oklahoma and other oil-producing states have been too small to cause major damage, but the prospect of facing juries over quake-related claims is reverberating throughout the energy industry, which fears lawsuits and tighter regulations could increase costs and stall drilling.
- In financial statements, major area operators such as Continental Resources (NYSE:CLR) have flagged potential financial risks if earthquakes lead to stricter regulations; in Arkansas, BHP and Chesapeake Energy settled a case by five homeowners in 2013 for an undisclosed sum, and in Texas, a lawsuit against EOG Resources (NYSE:EOG) for quake-related damages is pending.
- Separately, a Bloomberg article today says CLR and its CEO, Harold Hamm, have tried to put pressure on scientific inquiries that linked Oklahoma earthquakes to fracking wastewater.
Mar. 25, 2015, 6:08 PM
- The number of drill rigs in North Dakota’s oil patch has slipped below 100 for the first time in five years thanks to weaker crude oil prices.
- Only 98 rigs are now drilling in the area, 100 fewer than on the same day a year ago and the lowest since March 2010.
- North Dakota has been producing ~1.2M bbl/day of oil, and industry officials say ~115 rigs need to be drilling to keep that level of production.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Mar. 20, 2015, 10:33 AM
- No matter how unfavorable market fundamentals may be to Bakken operators, North Dakota likely will see a big surge in production this June, potentially besting another supply record even if prices continue to crater, according to the director of the state's Department of Mineral Resources.
- Production is expected to remain at 1.1M-1.2M bbl/day over the next few months before skyrocketing in June by nearly 10%, or an additional 75K-100K bbl/day, propelled by a state-mandated time limit on drilling and the expected trigger of a major oil tax incentive.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Mar. 18, 2015, 3:43 PM
- Stifel analysts say oil prices could be headed even lower, but that investors should buy high quality E&P companies with strong assets and/or balance sheets before prices bottom.
- Stifel says the current cycle resembles previous patterns where large-cap E&P stocks lead the oil price, which in turn leads the rig count, thus the firm does not expect shares of the strong companies to track an oil price bottom; small-cap energy stocks, however, followed oil prices closely through the last cycle and even lagged the commodity’s recovery.
- The firm is favorably disposed to Anadarko Petroleum (APC +2.4%), Cabot Oil & Gas (COG +1%), EOG Resources (EOG +4.2%), Noble Energy (NBL +5.3%), Rosetta Resources (ROSE +5.3%) and Whiting Petroleum (WLL +8.6%).
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