Wed, May 20, 11:27 AM
- Devon Energy (DVN +0.9%) is initiated with an Outperform rating and $92 price target at Imperial Capital, which thinks DVN's Permian oil plays could offer double digit growth for several decades.
- All of DVN's large North American plays are top-tier in terms of quality acreage, the firm says, "sizable enough to move the needle" for a company as large as DVN, which produces 665K boe/day; it also is important from a focus of capital and focus of personnel standpoint to maximize returns and generate sustainable long- term growth.
- DVN is now one of the few E&P companies that have a midstream MLP (EnLink), Imperial notes, which has transformed the company and focused its production and reserves to onshore crude oil and liquids in North America.
Wed, May 13, 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.
Mon, May 11, 10:44 AM
- At least half a dozen U.S.-focused energy firms say they will pump more oil and gas this year than initially expected, but closer study suggests the upgraded forecasts reflect minor adjustments rather than an emerging trend, according to data compiled by Reuters.
- The revisions likely reflect slightly better operations than expected, not a shift to deploying more rigs, says Raymond James analyst Pavel Molchanov.
- One of the most optimistic forecasts was offered by Devon Energy (NYSE:DVN), which pumped 272K bbl/day of oil in Q1, revised its 2015 oil growth to 25%-35% from a previous 20%-25%, while also cutting its capital and lease cost estimate by more than $400M.
- Occidental Petroleum (NYSE:OXY) foresees higher 2015 oil and gas production but only by ~20K boe/day even as capex comes in below a planned $5.8B.
- Noble Energy (NYSE:NBL) said it was raising full-year oil and gas guidance to 300K-315K boe/day following a strong Q1, effectively adjusting the bottom end of its initial range by a mere 5K.
Tue, May 5, 7:35 PM
- Devon Energy (NYSE:DVN) -1.3% AH after missing estimates for both Q1 earnings and revenues, hurt by lower oil prices even as it generated record oil production.
- DVN says it received an average price of $35.17/bbl without hedges for its oil during Q2; with hedges, the price improved to $56.29, which was still 39% below the $75.65/bbl received in the year-ago quarter.
- Q1 oil and gas output averaged 685K boe/day, up 22% Y/Y and 12K boe/day above the top of the company’s guidance range; oil production was a record 272K bbl/day, up 55% Y/Y and 12K bbl/day more than the top of the company’s guidance range.
- DVN raises production guidance for FY 2015, now expecting an increase of 25%-35%, up from its earlier forecast of 20%-25% growth.
- DVN updates its 2015 planned capital spending to $3.9M-$4.1M, a $250M reduction from previous guidance.
Tue, May 5, 4:32 PM
Mon, May 4, 5:35 PM
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Mon, Apr. 27, 5:13 PM
- Select energy E&P stocks are ready to be bought on weakness following the recent rally in the space, Cowen says as it names Anadarko Petroleum (NYSE:APC), Pioneer Natural Resources (NYSE:PXD) and Range Resources (NYSE:RRC) its top picks; the three are started at Outperform with respective price targets of $72, $216 and $73.
- Cowen says its top picks have low-cost assets and high quality balance sheets that will allow them to emerge from the oil price downturn with higher margins.
- Devon Energy (NYSE:DVN), Noble Energy (NYSE:NBL) and Cimarex Energy (NYSE:XEC) also are initiated with Outperform rating, while Apache (NYSE:APA) and Continental Resources (NYSE:CLR) are started at Market Perform.
Wed, Apr. 22, 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.
Tue, Apr. 14, 5:26 PM
- The price of oil will recover but not back to triple-digits, Citigroup says, leading the firm to recommend ConocoPhillips (NYSE:COP), Devon Energy (NYSE:DVN), Total (NYSE:TOT) and Statoil (NYSE:STO) while downgrading BP.
- Many companies have not left enough headroom to deal with a lower oil price environment after the hot pursuit of growth in recent years, the firm says, believing those most challenged in the new paradigm are players focused on liquefied natural gas and heavy oil, as well as most of the big oil names.
- Citi says “shale is the core of the survivors' party,” and that investors can get "good value exposure” by buying COP and DVN; self-help also will be part of surviving $60-$75 oil, pointing to TOT and STO as having the most potential.
- The firm cuts BP to Neutral because it thinks all its potential self-help has been priced into the stock.
Fri, Apr. 10, 11:26 AM
- Credit Suisse adds four companies to its U.S. Focus List, led by Devon Energy (NYSE:DVN), which it sees as a pure-play energy stock that investors can feel comfortable holding for the long-term and is not pegged to the oil markets.
- The firm also likes DVN's defensive valuation, top quartile oil growth profile and further accretion possibilities from the EnLink Midstream assets; its $80 stock price target is among the Street's best outlook.
- Credit Suisse cites another energy choice, Marathon Oil (NYSE:MRO), for its higher multiple businesses, and believes upstream cash margins have room to move up as shale production increases and oil prices recover.
- Also added to the U.S. Focus List: JPMorgan Chase (NYSE:JPM), Dunkin' Brands (NASDAQ:DNKN).
- Earlier: Dunkin' Brands tapped by Credit Suisse for new highs
Wed, Apr. 8, 7:59 AM
- Analysts at Jefferies now expect Royal Dutch Shell (RDS.A, RDS.B) to surpass Exxon Mobil (NYSE:XOM) as the world's largest publicly traded oil and gas producer by 2018, with output of 4.2M boe/day, following Shell's $69.6B deal to buy BG Group.
- But XOM has long been rumored as a potential bidder for BG, and Financial Times points out that it now has both the motive and the opportunity, raising the possibility that it could try to outbid Shell for BG.
- Like Shell, XOM is struggling to grow and will find it easier to raise production by dealmaking than by drilling; XOM’s output was ~4.3M boe/day in 2001 and 4M last year.
- With its greater size, low debt and AAA credit rating, XOM could muster a larger cash component in any offer than Shell’s 28% of its total offer of ₤13.50/share; however, hostile deals are very rare in the oil and gas industry.
- Whether or not BG is the perfect fit for XOM, Paul Sankey of Wolfe Research has suggested other midsized E&P specialists could prove tempting, including Hess (NYSE:HES), Continental Resources (NYSE:CLR), Devon Energy (NYSE:DVN), Apache (NYSE:APA) and Anadarko Petroleum (NYSE:APC).
Tue, Mar. 31, 11:53 AM
- Devon Energy (DVN -0.2%) appears to have limited downside if oil prices remain flat and as much as 30% upside if prices rise, according to a Barron's profile.
- DVN trades at just 1.2x price-to-book value and its enterprise value to EBITDA is below four, among the lowest of its peers, the report says.
- Credit Suisse yesterday raised its 12-month price target for DVN to $80, arguing the company is "well positioned to outperform given its defensive valuation, top quartile oil growth profile, and further accretion potential from EnLink," and expects DVN’s drillbit performance to improve “given the mix shift toward the Eagle Ford, Bone Spring and Cana-Woodford programs as well as low maintenance capital required at Jackfish.”
- BMO, which also has an $80 target, views DVN's positions in the Bone Spring and Eagle Ford as two of the lowest breakeven assets in the U.S. where returns are still attractive.
Tue, Mar. 24, 4:41 PM
- EnLink Midstream Partners (NYSE:ENLK) -5.2% AH after announcing a secondary offering of 22.8M common units by a subsidiary of Devon Energy (NYSE:DVN); the underwriters also are granted an option to purchase up to an additional 3.42M shares.
- ENLK will not receive any proceeds from the offering, and the total number of outstanding common units will remain unchanged.
Mon, Mar. 23, 6:26 PM
- EnLink Midstream Partners (NYSE:ENLK) agrees to acquire the Victoria Express Pipeline and related truck terminal and storage assets in a dropdown transaction from Devon Energy (NYSE:DVN) for total consideration of ~$210M.
- The deal includes $171M in cash, 338K ENLK common units and the assumption of $30M-$40M in certain construction costs to expand the system to full capacity.
- The pipeline, which became operational in Q3 2014, transports condensate from DeWitt County, Tex., to the Port of Victoria; current capacity is ~50K bbl/day, to be expanded to 90K bbl/day.
- ENLK says the transaction marks the first dropdown from DVN and expects such deals to play a significant role in its future growth.
Tue, Mar. 17, 7:12 PM
- Most of the top 15 shale oil producers in the U.S. are heavily concentrated in basins expected by NavPort to be severely affected by the decline in prices, with one major exception: ConocoPhillips (NYSE:COP).
- COP has the lowest well completion concentration in basins expected to suffer the greatest production cuts this year, implying less disruption than other shale competitors, according to NavPort, which collates oil well and rig data using regulatory reports.
- All 14 of the other top producers tracked by NavPort have at least two-thirds of well completion concentrated in the basins rated with "strong" or "severe" exposure: CHK, APC, EOG, DVN, SWN, MRO, APA, SD, XOM, CLR, PXD, NBL, BHP, WLL.
- Operators concentrated in basins that have been less severely affected - such as the Woodford, Utica and Haynesville basins - should enjoy more production than their peers through a higher volume of well completions, NavPort says.
- The study sees the Mississippi Lime, Granite Wash, Bakken and Permian basins suffering at least a 40% Y/Y reduction in drilling.
Wed, Mar. 11, 11:49 AM
- Whiting Petroleum's (NYSE:WLL) decision to put itself up for sale looks to be just the beginning of a potential wave of consolidation as $50/bbl prices undercut companies with heavy debt and high costs.
- The value of ~75 shale-focused U.S. producers based on their reserves fell by a median of 25% Y/Y by the end of 2014, according to Bloomberg, opening up new opportunities for bigger companies with a better handle on their debt.
- Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil (NYSE:XOM) or Chevron (NYSE:CVX), companies that have bided their time for years; XOM CEO Rex Tillerson suggested last week that his company is keeping its eyes open for opportunities.
- A recent analysis by Wolfe Research found the likeliest takeover candidates among major U.S. and Canadian producers included Continental Resources (NYSE:CLR), Apache (NYSE:APA), Devon Energy (NYSE:DVN) and Anadarko Petroleum (NYSE:APC).
- WLL would be an attractive target for XOM, CVX or Hess (NYSE:HES), all of which have operations in North Dakota and would benefit from scaling up, according to a Bank of America note.
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