Jun. 10, 2014, 3:45 PM
- Aubrey McClendon would seem to be overpaying in his $2.5B purchase of 63K acres in the Permian Basin "unless he knows more than we do," Jim Cramer says while acknowledging that McClendon - a "genius" a buying energy-rich land - probably does.
- Some companies have figured out the "code" to drilling in the Permian Basin, and McClendon is unlikely to have overpaid in the long run, Cramer says.
- McClendon's American Energy Partners is not publicly traded, but investors can benefit from the Permian Basin boom by buying stocks such as Pioneer Natural Resources (PXD), EOG Resources (EOG) and Cimarex Energy (XEC), Cramer believes.
Jun. 9, 2014, 11:49 AM
- EOG Resources' (EOG +1.1%) crude oil production surged 42% in Q1, and if business stays on course, as expected, the E&P company could enjoy a 32% jump in earnings this year, according to a weekend profile in Barron's.
- EOG's enterprise value is 6.9x this year's estimated EBITDA, roughly in line with the EV/EBITDA multiples accorded competitors Chesapeake Energy (CHK) and Devon Energy (DVN), but the story says it deserves a loftier multiple than the group, given its significant drilling inventory, superior production growth, lower debt ratio, and 15.6% return on equity vs. an average of 9.5% among peers.
- EOG raised its 2014 goal for growth in crude oil production to 29% from a prior 27%, and for total energy production to 12% from an earlier 11.5%, but its estimates often prove conservative, sparking expectations for more upward revisions as the year unfolds.
May 23, 2014, 12:26 PM
- The revelation that California's Monterey Shale deposit will yield only 4% of what was originally hoped was not a big surprise to those in the know, who say the downgrade does little to alter the near-term trajectory of the energy renaissance.
- Monterey's terrain, as well as California's strict environmental regulation, always meant full scale drilling would be difficult; Chevron (CVX) bemoaned the lack of profit derived from its Monterey operations at a 2013 shareholders meeting, and Venoco - once one of the biggest drillers in the formation - exited most of its Monterey acreage years ago in order to reduce debt and go private.
- The Monterey news does spotlight an element of the shale boom that often goes unremarked by fracking advocates: Shale wells are prone to rapid depletion rates, as spots in North Dakota's Bakken lose 85% of their capacity within a few years.
- Among Bakken producers: CLR, EOG, KOG, WLL, HES, OAS, NOG, EOX, MRO.
May 21, 2014, 6:30 PM
- Oil and gas producers in the Bakken Shale saw a pickup in production in March and should see an even bigger increase as the weather turns warmer, according to a new report from RBC Capital.
- Bakken development activity rose to 200 well completions in March vs. 70 in February, and well backlog remains high at ~635 wells, RBC says, expecting operators to work through the backlog since North Dakota has experienced a relatively warm spring.
- "As completion activity catches up in the early summer and drilling activity remains strong, oil production should top 1M bbl/day around mid-year, the report says.
- The projection bodes well for producers with a heavy footprint in the Bakken, such as Continental Resources (CLR), EOG Resources (EOG) and Kodiak Oil & Gas (KOG).
May 20, 2014, 6:58 PM
- Bakken crude oil is similar to other North American light, sweet grades and does not pose a greater rail transportation risk than other transportation fuels, according to a report compiled for a North Dakota energy producers lobby group.
- The study shows Bakken crude is more volatile than heavier oils such as from Canada’s tar sands, but is similar to light crudes produced elsewhere in the U.S., with characteristics that fall well within the margin of safety for the current tank car fleet.
- The oil producers' study follows a report with similar results issued last week by a refining industry group.
- Among Bakken producers: CLR, EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
May 20, 2014, 3:32 PM
- Anadarko Petroleum (APC -1.1%) is looking too pricey after a 25% YTD gain for Barclays analyst Thomas Driscoll, who downgrades shares to Equal Weight from Overweight.
- It is easy to understand the enthusiasm for APC considering the strong record of deepwater exploration success, the willingness to monetize assets and the large discovery in Mozambique, Driscoll says; yet Continental Resources (CLR), EOG Resources (EOG) and Noble Energy (NBL) all are likely to grow twice as fast as APC while lacking any appreciable premium in their shares.
- The analyst prefers Devon Energy (DVN +1.2%), which he says has made decisive steps to upgrade its portfolio in recent months, significantly improving its near-term investment opportunity set.
May 16, 2014, 12:39 PM
- Data released by a lobbying group for oil refiners confirms that crude from North Dakota is very volatile and contains high levels of combustible gases, but the group says the crude is no more dangerous to ship than oil from other shale regions and new rules on safety standards are not needed.
- Oil and refining companies say it's mostly the railroads that are at fault: a probe into the derailment and explosion of a train in Lac-Megantic last year found that brakes weren’t applied correctly; a train that exploded in North Dakota in December crashed into a train that had derailed across the tracks; and the April explosion of a train carrying Bakken crude through Lynchburg, Va., may have been caused because sections of the track bed had been washed away by heavy rains.
- Among Bakken producers: CLR, EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
May 9, 2014, 11:58 AM
- Wall Street’s idea of investing in climate change means investors are piling into natural gas - the least polluting fossil fuel - as energy have accounted for nearly two-thirds of the $8B of inflows into sector-based ETFs this year.
- A White House advisory panel said this week that global warming already is blighting the U.S. with more intense coastal flooding, rainstorms and wildfires, but “weather extremes are good for the energy business," says money manager Skip Aylesworth.
- Climate change is proving to be a boon for energy investment; on the day the report was issued, the S&P Energy Index hit a record, and $322M flowed into ETFs that specialize in energy.
- "Natural gas is a potential bridge to new technologies that are green or clean,” says State Street's David Mazza, which he says has sparked investor interest in companies such as Nabors Industries (NBR), EOG Resources (EOG), Anadarko Petroleum (APC) and Chesapeake Energy (CHK).
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, DIG, DUG, GASL, IYE, GASX, PXJ, PXI, PSCE, FENY, RYE, FXN, DDG
May 6, 2014, 7:25 PM
- The U.S. energy boom is undeniable - just today, the government said the U.S. next year will import only 23% of the crude oil it needs, the lowest since 1970 - but it's worth noting that the boom has been bought on credit.
- Many oil companies that lead the way in the fracking revolution spend more cash leasing land and drilling than they make selling oil and gas; Standard & Poor’s says 75 of the 97 E&P companies it covers have junk bond ratings.
- Little wonder that EOG - which generated $2.27B from its operations and spent $1.9B in Q1, its fourth straight cash flow-positive quarter - has one of the highest credit ratings (A-) of any oil and gas driller.
- Heard On The Street's Liam Denning thinks E&P investors now may be just chasing momentum, leaving them vulnerable to sharp corrections.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, DUG, GASL, FRAK, IYE, IEO, GASX, PXE, PXJ, PXI, PSCE, FENY, RYE, FXN, DDG
May 6, 2014, 11:53 AM
- EOG Resources (EOG +3.3%) - known for quietly building up positions in areas before their potential is widely recognized - says in its Q1 earnings report that its land in the DJ and Powder River basins in Colorado and Wyoming may hold the equivalent of 400M barrels of oil.
- EOG’s move to identify the region as one of four central elements of its drilling portfolio is significant because the company has been among the most conservative in describing the potential of new developments, Oppenheimer analyst Fadel Gheit says.
- Still, the Rocky Mountain reserve base is small compared to the 3.2B barrels EOG says lies beneath its acreage in the Eagle Ford.
May 6, 2014, 8:15 AM
- EOG Resources (EOG) +3.2% premarket after reporting Q1 earnings rose 34% Y/Y and revenues that easily beat analyst estimates, benefiting from increased production.
- EOG's total crude oil and condensate production during Q1 gained 42%, including growth of 45% in the U.S.; overall total company production increased 18%, led by a 37% increase in total liquids production.
- Raised its 2014 crude oil and condensate production growth target to 29% from 27%, and raised its total production growth target for the year to 12% from 11.5%.
May 5, 2014, 6:17 PM
May 5, 2014, 6:55 AM
May 4, 2014, 5:35 PM
- AEIS, AIG, APC, APL, ARE, AXLL, BDE, BNFT, CATM, CFN, CKEC, CKP, CRK, DATA, ECOL, ECOM, EGOV, ELNK, ENH, EOG, EOX, FLDM, FN, G, HCLP, HGR, HI, IDTI, ININ, KAR, LF, MCEP, MED, MR, NLS, OAS, OTTR, PIKE, PRI, PSMI, QLYS, RBC, RGR, ROSE, RWT, SALE, SKH, SMG, SNHY, STAG, SZYM, THC, TXRH, UAM, VECO, VNO, VVUS, WG, YY, ZIPR.
Apr. 23, 2014, 12:57 PM
- North Dakota's industrial commission is considering a proposal that would cut back on the state’s booming oil production as a means of controlling the amount of natural gas that’s being burned off at well sites.
- North Dakota drillers currently flare more than a third of the gas because development of pipelines and processing facilities to capture it hasn’t kept pace with oil drilling.
- "If production curtailment is the chosen regulatory path, then wells will be shut in or not even drilled,” says Roger Kelley, director of regulatory affairs for Continental Resources (CLR), one of the biggest players in the state.
- Other top North Dakota producers include EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
Apr. 16, 2014, 6:37 PM
- EOG Resources (EOG) expects a ~$155M non-cash loss during Q1 on the mark-to-market of its crude oil and natural gas derivatives contracts, according to an SEC filing.
- EOG says the net cash paid for settlements of the derivative contracts in Q1 was $34M, while actual realizations for crude oil and natural gas differ from average Nymex prices due to delivery location and quality adjustments.
- EOG typically reports its adjusted profit figures that exclude impacts from mark-to-market commodity derivative contracts.
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