Wed, Oct. 21, 12:58 PM
- Canadian Natural Resources (CNQ -2.4%) is Barclays' top E&P pick in an otherwise dismal sector, as analyst Thomas Driscoll notes that E&P firms likely slowed their completion activity due to low oil prices in Q3 while Q4 volumes may be at risk.
- But Driscoll calls Overweight-rated CNQ his "most fundamentally undervalued" name, and says the company is transitioning to a "long-lived, low-maintenance and low-decline" production profile which is not reflected in the "annuity-like character of its asset base."
- The firm also has Overweight ratings on EOG Resources (EOG -0.6%), Noble Energy (NBL -0.5%) and Southwestern Energy (SWN -4.4%).
Tue, Oct. 6, 3:28 PM
- Oil industry execs speaking at the Oil and Money conference in London warn of a "dramatic" decline in U.S. production that could pave the way for a future spike in prices if fuel demand increases.
- Former EOG Resources (EOG +2.7%) CEO Mark Papa, now a partner at energy investment firm Riverstone Holdings, expects U.S. oil production to stall this month and begin to decline from early next year.
- Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden agrees, saying U.S. oil producers will struggle to refinance while prices remain so low, leading to lower output in the future.
- Weatherford (WFT +9.9%) CEO Bernard Duroc-Danner notes that the speed and brutality of cost cutting in the industry is the deepest since 1999; in addition to WFT, he thinks just two other big North American oil services companies will remain as the sector is forced to consolidate.
- November WTI crude climbed $2.27, or 4.9%, to settle at $48.53/bbl for the highest settlement since Aug. 31, propelling energy stocks (XLE +2.3%) to the top of today's stock market leaderboard.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Wed, Aug. 19, 11:18 AM
- It's a broad decline for stocks this morning, with the S&P 500, DJIA, and Nasdaq all lower by 1% or more. Leading the way down are the energy names (XLE -2.5%) after an unexpected jump in oil inventories has sent the price of black gold down to new bear market lows at $41.30 per barrel.
- Chevron (CVX -2.9%), ConocoPhillips (COP -3.8%), EOG Resources (EOG -4.3%), Apache (APA -4.1%), Hess (HES -3.6%), Marathon Oil (MRO -5.5%), Noble Energy (NBL -3.1%), Anadarko (APC -3.6%).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Wed, Jul. 8, 3:49 PM
- The U.S. E&P industry is "between a rock and a hard place" entering earnings season, Deutsche Bank says, expecting continued headwinds for the group; while momentum has been building for moderate acceleration in activity levels in H2, macro concerns from China to Greece have weighed on crude prices and introduced an “additional layer of uncertainty.”
- Among the major integrated oils, the firm prefers EOG Resources (EOG -2.5%) and Anadarko Petroleum (APC -2.8%) into Q2 results but cuts its stock price target for Marathon Petroleum (MPC -2.6%) in half to $62.
- U.S. refiners, on the other hand, continue to defy fears of a collapse in margins, with demand strength and robust gasoline cracks again driving upside to earnings estimates; the firm sees 7% upside on average to current Q2 estimates for the group, with particular strength from Tesoro (TSO -1.2%), Valero (VLO -0.9%) and HollyFrontier (HFC -1.4%).
Thu, Jun. 11, 10:57 AM
- Valero Energy (VLO +3.2%) and EOG Resources (EOG -0.1%) are maintained with Conviction List Buy ratings at Goldman Sachs, which says higher shale productivity and oil demand are likely to support the performance of the refinery sector.
- Although the firm is neutral on the refiner group after its YTD outperformance, it considers the sector as poised to benefit from higher global product demand growth and improved capture rates from lower oil prices.
- Goldman considers VLO the top pick among refiners, citing the company's focus on reducing capex and returning capital to shareholders, strong Gulf Coast product cracks, and an attractive valuation.
- The firm's six-month price target for VLO is $74, while its 12-month target for EOG is $113.
Tue, May 5, 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.
Mon, May 4, 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%.
Wed, Mar. 18, 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%).
Mon, Mar. 16, 10:17 AM
- Street chatter says Statoil (STO -2.8%) may be pursuing EOG Resources (EOG +0.5%) in a merger or acquisition that could exceed $50B.
- Analysts say the deal would make sense for STO, which is seeking to expand its U.S. shale presence; STO also has been mentioned as one of several companies showing interest in Whiting Petroleum (WLL -8%).
- Color Raymond James analyst Andrew Coleman skeptical, saying that a 25% premium over EOG's recent $85 share price - suggesting an offer near $60B - would be needed just to get a returned phone call.
Fri, Feb. 20, 12:44 PM
- EOG Resources (EOG -3.1%) is downgraded to Neutral from Buy with a $102 price target, down from $108, at UBS after EOG cut its 2015 capex by 40% and likely leading to flat Y/Y production likely.
- While UBS believes EOG's ability to rapidly bring on deferred well completions will enable it to return to greater than 10% oil growth in 2016 and 7% company-wide growth, the firm still cuts its 2015 and 2016 cash flow/share estimates by ~15% to a respective $7 and $8.40 following the company's guidance.
- Similarly, Citigroup cut its rating on EOG to Neutral from Buy with a $96 target, and Macquarie lowered shares to Neutral from Outperform also with a $96 target.
Thu, Feb. 19, 9:12 AM
Wed, Feb. 18, 6:46 PM
- EOG Resources (NYSE:EOG) -6.5% AH after Q4 earnings fell sharply from the prior-year quarter and badly missed Wall Street estimates.
- The drop in profits came despite a 26% Y/Y increase in crude and condensate production during Q4 to 307.7M bbl/day.
- EOG also says it will cut its capital budget by ~40% to $4.9B-$5.1B this year, and will delay a “significant” number of well completions as part of a strategy to increase its net present value while capitalizing on future commodity price increases.
- EOG says it plans to complete fewer wells in the Eagle Ford and the Bakken in 2015 than in 2014, but it expects 95 net well completions in the Permian Basin, a 53% increase over last year’s total.
Wed, Jan. 28, 3:59 PM
- Energy stocks are broadly lower as Nymex crude oil futures fell another $1.68/bbl (-3.6%) to $44.53 after today's inventory report showed the largest weekly supply buildup since 1982, but drilling contractor are whacked with especially large losses.
- Examples: NBR -11.7%, PTEN -8.6%, PES -10.9%, PDS -12.3%, KEG -6.5%; Helmerich & Payne (NYSE:HP), which reportedly has launched a round of steep layoffs, -6.3%.
- Among independent producers: DNR -9.7%, NFX -4.6%, SM -8.6%, SGY -10%, SD -9.7%, EOG -5.3%, PXD -6.8%, QEP -6%, APC -4.2%, XEC -3%.
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, FCG, DIG, GASL, DUG, IYE, XES, IEO, IEZ, PXE, PXI, FENY, PXJ, RYE, FXN, DDG
Mon, Jan. 12, 3:17 PM
- Goldman Sachs upgrades a few energy stocks even as it cast a pall of gloom over most of the sector today (I, II, III), raising Chesapeake Energy (CHK -3.6%) to Buy from Neutral and Parsley Energy (PE -4.2%) to Neutral from Sell as potential "shale sale" winners.
- Despite PE's relative vulnerability to lower oil prices because of its weak balance sheet and negative projected free cash, Goldman has more confidence that its core Permian Basin position makes it an attractive M&A target.
- Among potential "shale scale" winners - companies that either can build positions in the core and reduce costs of capital - the firm's favorites remain EOG Resources (NYSE:EOG), Range Resources (NYSE:RRC), Pioneer Natural Resources (NYSE:PXD), Cabot Oil & Gas (NYSE:COG) and Concho Resources (NYSE:CXO).
- However, Goldman cuts Bill Barrett (BBG -8.3%) to Sell from Neutral, seeing greater downside risk to its production in a lower oil price environment, and lowers Eclipse Resources (ECR -1.5%) to Neutral from Buy due to a persistently wide funding gap through 2017 coupled with a weak balance sheet.
Mon, Jan. 12, 12:28 PM
- Wolfe Research’s Paul Sankey prefers EOG Resources (EOG -4%) as the best positioned among well exposed U.S. unconventional energy players that have the balance sheet to survive the current volatility.
- ConocoPhillips (COP -2.8%) has terrific unconventional exposure but enforced capital discipline that effectively forces the company to return cash to shareholders and shrink its size in an orderly manner.
- On Devon Energy (DVN -2.1%): "If EOG is the new Saudi Arabia of global oil, then Devon Energy is its Kuwait."
Mon, Jan. 5, 12:18 PM
- Energy stocks severely underperform the broader market, with the sector -4.2% vs. the S&P 500's -1.4%, as U.S. oil prices briefly slip below $50/bbl for the first time since April 2009; Nymex crude recently was -4.4% at $50.37, while Brent crude -5.9% at $53.08.
- Among the day's biggest losers: DNR -9%, RIG -7.6%, NBR -4.8%, CHK -5.9%, SDRL -9.1%, SD -12.3%, NOV -5.9%, PSX -6.2%, APA -5.9%, DVN -4.4%, EOG -6%, SU -5.2%, OXY -4.2%, APC -8.7%, PWE -9%, ECA -5.5%, MRO -5.3%.
- Global oil majors, which have been seen as less vulnerable to falling oil prices, are posting big losses: XOM -2.7%, COP -4.5%, CVX -3.8%, BP -5.8%, RDS.A -4.6%, TOT -6.5%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, FCG, DIG, PBW, BNO, GASL, DTO, DBO, DUG, IYE, XES, IEO, QCLN, IEZ, UWTI, PXE, USL, PXI, FENY, DWTI, PXJ, DNO, PSCE, RYE, SZO, PUW, FXN, OLO, DDG, HECO, TWTI, OLEM
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