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. 26, 12:58 PM
- ConocoPhillips (NYSE:COP) headlines BofA Merrill's list of five favorite large-cap energy stocks, after recently raising the stock to a Buy rating as the company has somewhat dampened earnings and growth expectations for a time even though it is cash rich.
- Occidental Petroleum (NYSE:OXY) faces the oil price correction with the strongest balance sheet in the sector, the firm says, with net cash at year-end 2014 estimated at $1.7B and a whopping $11/share of cash available for buybacks.
- Chatter about takeover speculation has resumed around Hess (NYSE:HES); with a market cap falling to just north of $21B, Merrill says the company could fall prey to larger integrated as a quick bolt-on acquisition to boost growth.
- Also recommended: XOM, PXD
Wed, Jan. 21, 3:59 PM
- Credit Suisse thinks it is still too early to buy E&P equities but the picture should brighten by late in Q1, when the firm suggests the time could be right to make a play for the strong balance sheets offered by the likes of Anadarko Petroleum (NYSE:APC), Devon Energy (NYSE:DVN), EOG Resources (NYSE:EOG), Marathon Oil (NYSE:MRO) and Pioneer Natural Resources (NYSE:PXD).
- E&P stocks historically have been highly anticipatory, the firm says, with the stocks moving ahead of crude oil, adding that the key leading indicator of U.S. drilling and completion activity is U.S. drilling permits.
Thu, Jan. 15, 3:39 PM
- Eagle Ford pipeline operator EFS Midstream, owned by Pioneer Natural Resources (PXD +0.1%) and Reliance Industries, has attracted bids from Enterprise Products Partners (EPD +1.4%), Energy Transfer Equity (ETE -1.2%) and Williams Cos. (WMB +0.4%), Bloomberg reports.
- EFS has 460 miles of pipelines and 10 gathering plants, and is forecast to generate more than $100M in cash flow this year; the unit would be expected to sell for more than $3B, according to the report.
Tue, Jan. 13, 3:23 PM
- J.P. Morgan's Joseph Allman is “mildly bullish” on oil and gas E&P companies in 2015, as short-term nervousness about the oil market’s oversupply is outweighed by the benefits of low oil prices, declining service costs and a more balanced oil market.
- Allman’s favorite picks among big-cap names are EOG, APC and NBL, among mid-caps are XEC and PXD, plus PDCE in the small-cap space; his least favorite stocks are APA, AREX, GDP and JONE.
- Among majors, JPM analysts Phil Gresh and John Royall initiate SunCor (NYSE:SU) at Overweight, citing "top tier sustainable dividend coverage and leverage, with some underlying growth potential"; the pair also downgrade Cenovus (NYSE:CVE) to Neutral, tags ConocoPhillips with an Underweight rating, and are neutral on Exxon (NYSE:XOM) and Chevron (NYSE:CVX).
- Earlier: Valero Energy upgraded, Marathon Petroleum downgraded at J.P. Morgan
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, IEO, PXE, FENY, PXJ, RYE, FXN, DDG
Tue, Jan. 13, 12:47 PM
- Traders smelling blood - or oil - in the water have piled into shorts against energy E&P companies, with short interest jumping a total of 12% for the final two weeks of 2014, according to Sterne Agee analysts using NYSE data.
- Oasis Petroleum (NYSE:OAS) led a 45.9% jump in short interest, followed by Pioneer Natural Resources (NYSE:PXD) with a 45.2% increase and Chesapeake Energy (NYSE:CHK) short growth of 31.9%.
- Sterne Agee energy analyst Tim Rezvan thinks the shorts are on the right side of the oil trade for the foreseeable future, believing a break below $40/bbl "wouldn't be a surprise in the short term."
- Short positions did not increase for all companies, as short growth fell for Viper Energy Partners (NASDAQ:VNOM), Callon Petroleum (NYSE:CPE), Energen (NYSE:EGN) and PetroQuest Energy (NYSE:PQ), among others.
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.
Wed, Jan. 7, 3:58 PM
- More icy weather is expected this week in the Permian Basin of Texas, after last week's hard freeze that snarled truck traffic, caused power outages and disrupted oil and gas work.
- Apache (APA -1.1%), a leading Permian oil producer, said today it suffered a modest impact from the freezes, while Pioneer Natural Resources (PXD -1.1%) said yesterday severe winter weather had disrupted its production and drilling operations in the Permian.
- Energy intelligence service Genscape says lost output last week in the Permian amounted to ~2.3M barrels.
Wed, Jan. 7, 12:59 PM
- Pioneer Natural Resources (PXD -1%) trades modestly lower after news that it has converted 85% of its 2015 derivatives contracts from primarily three-way collars to fixed-price swaps that cover oil production at an average price of $71.18/bbl.
- Three-way collars essentially allow oil producers to ensure they will get paid prices within a certain range for their product as long as prices stay above a specific floor; such a strategy can make sense, but it is "less than an ideal strategy” when prices are falling rapidly, writes Mercatus Energy Advisors in an analysis of the technique.
- PXD is defended at Howard Weil, however, which sees the change as a proactive move as oil volumes continue to grow as a percentage of overall production; the firm estimates that at current strip prices, PXD is receiving a benefit of ~$0.56/share to FY 2015 earnings by implementing its new hedge position (Briefing.com).
Tue, Jan. 6, 4:38 PM
- Pioneer Natural Resources (NYSE:PXD) -3.2% AH after saying severe winter weather in west Texas has significantly disrupted production and drilling operations in the Spraberry/Wolfcamp area; PXD expects an extensive recovery period, with several weeks needed before the full impact can be determined.
- The area suffered from heavy icing and freezing temperatures at the start of January that has resulted in extensive power outages, facility freeze-ups, trucking curtailments and limited access to production and drilling facilities; Q4 production was not affected.
- Separately, PXD says it has converted ~85% of its 2015 oil derivative contracts from three-way collars to fixed-price swaps, and its 2015 fixed-price oil swaps cover 82K bbl/day of production at an average of $71.18/bbl.
Dec. 31, 2014, 2:48 AM
- The U.S. Bureau of Industry and Security said it will allow companies to sell oil condensate that has been processed through a basic distillation tower, giving them a green light for export without violating a four decade old ban.
- The agency also published a list of answers to common questions about crude exports, providing guidelines for the first time on an area that has been blanketed in confusion, although many are saying there is still a lot of room for interpretation.
- Previously: U.S. gives silent okay to condensate exports (Dec. 30 2014)
- Related tickers: PXD, EPD, BHP, PSX, KMI, ETP, RGP, CVX
Dec. 30, 2014, 8:13 AM
- The U.S. Commerce Department is telling some oil companies that they should consider exporting condensate without formal permission, Reuters reports.
- Officials familiar with the law said the agency's discussions did not represent a change in policy since self-classification is allowed under U.S. export controls.
- Despite the policy, Pioneer Natural Resources (NYSE:PXD) and Enterprise Products Partners (NYSE:EPD) obtained explicit permission from the agency to export in June, while last month BHP Billiton (NYSE:BHP) became the first company to announce that it would export condensate without authorization from the government.
- Related tickers: PSX, KMI, ETP, RGP, CVX
Dec. 22, 2014, 10:45 AM
- Natural gas prices fall 9.5% to near two-year lows at $3.133/mmBtu, in the biggest one-day percentage loss since February and the lowest intraday price since January 2013, on mild weather forecasts and inventory that is above year-ago levels.
- Prices are now down more than 15% in three straight losing sessions and are 30% lower than the six-month high closing price of $4.489/mmBtu it hit just a month ago.
- Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low stockpiles to catch up to where they were a year ago and encouraging traders to sell based on the belief that supply is relatively healthy.
- Gas producers are among the biggest early decliners: XOM -1.1%, CHK -7.3%, APC -2.6%, SWN -6%, DVN -2.2%, COP -2.3%, BP -1.5%, COG -4%, BHP -1.9%, CVX -1.3%, ECA -5.1%, EQT -4.3%, RDS.A -1.7%, UPL -12%, WPX -6.9%, EOG -1%, OXY -1.1%, RRC -6.1%, APA -2.3%, AR -3.2%, CNX -3%, QEP -4.8%, LINE -4.9%, NBL -1.6%, SM -2.6%, XEC -4.2%, PXD -2.9%, NFX -5.1%.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, NAGS, DCNG
Dec. 5, 2014, 5:38 PM
- The Eagle Ford shale formation in south Texas produced its billionth barrel of oil some time last month, according to analysts at research firm Wood Mackenzie.
- Eagle Ford now accounts for 16% of total U.S. oil production, and the firm forecasts E&P spending of $30.8B in the region next year, ~22% of the total $139.3B expected in U.S. onshore spending.
- Eagle Ford is widely considered the most profitable U.S. shale field, and many analysts speculate the break-even price for production to remain profitable is ~$50/bbl in much of the play.
- Top Eagle Ford producers include EOG, CHK, COP, MRO, BHP, APC, APA, BP, COG, CRZO, CWEI, CRK, XOM, GDP, HES, MTDR, MUR, NFX, PVA, PXD, ROSE, RDS.A, RDS.B, SN, SM, STO, SFY, TLM, ZAZA
Dec. 3, 2014, 11:32 AM
- The energy sector (XLE +1.5%) continues its momentum from yesterday, leading the way again as the best performing sector in early trading with crude oil rising 1.2% so far today and reports that U.S. well permits fell 40% last month.
- Top performers include Clayton Williams (CWEI +7.7%), Transocean Partners (RIGP +10.6%), Gaslog (GLOG +13.8%) and Energy XXI (EXXI +15.7%).
- Other leading energy names are showing stronger recoveries as they clear last Friday's bearish gap zone: XOM +0.2%, CVX +0.4%, COP +2.5%, OXY +2.5%, DVN +2.9%, EOG +2.5%, HES +2.2%, MUR +1.5%, NBL +2.3%, PXD +4.2%, SU +3%, CNQ +1.9%.
- Some analysts warn that the worst may not be over, however, as much of the advance is being driven by investors repurchasing ETFs they used to make short bets; investors also could opt to sell oil shares at a loss in coming weeks to reduce tax burdens.
Nov. 28, 2014, 7:25 AM
- OPEC yesterday decided to hold production numbers despite the bear market in oil. WTI crude is down about $5 per barrel to $69.
- A premarket look at the top 10 holdings of the XLE: Exxon Mobil (NYSE:XOM) -4.1%, Chevron (NYSE:CVX) -4.1%, Schlumberger (NYSE:SLB) -4.6%, ConocoPhillips (NYSE:COP) -4.4%, EOG Resources (NYSE:EOG) -4.3%, Pioneer Natural Resources (NYSE:PXD) -4.8%, Occidental Petroleum (NYSE:OXY) -4.3%, Haliburton (NYSE:HAL) -4.7%, Anadarko Petroleum (NYSE:APC) -5%, Williams Companies (NYSE:WMB) -1.6%.
- ETFs: ERX, VDE, OIH, XOP, ERY, FCG, DIG, PBW, GASL, DUG, IYE, XES, IEO, QCLN, IEZ, PXE, PXI, FENY, PXJ, PSCE, RYE, PUW, FXN, DDG, HECO
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