Wed, Feb. 11, 3:58 PM
- Pioneer Natural Resources (PXD -3.9%) has been pummeled today after reporting disappointing Q4 results that missed estimates on production, earnings and cash flow, and providing weak 2015 production guidance; PXD also said it would cut 2015 capex by 45% to $1.85B because of low oil prices.
- In response, Barclays downgraded shares to Underweight with a $97 price target, saying the guidance implies that PXD would not be able to grow at an oil price of less than $70/bbl if it were not hedged.
- Most analysts maintained their Hold or Market Perform ratings but were surprised by the extent of the 2015 budget reductions; only Credit Suisse, with an Outperform rating and $170 price target, sounded optimistic, focusing on the positive rate of change in well performance, a key factor enhancing capital efficiency.
- For WSJ's Liam Denning, PXD is "pointing the way to a new - and subdued - normal for oil prices," noting that the company emphasized it would bring rigs back on and raise output if oil recovers sustainably this year.
Wed, Feb. 11, 9:13 AM
Tue, Feb. 10, 6:47 PM
- Figuring the debt markets are a bit more rational than the equity markets right now, Wunderlich analysts look to the bond market for some clues about energy investing.
- The firm finds that where Chesapeake Energy's (NYSE:CHK) debt is trading now as "quite refreshing" given the strong balance sheet the company has built, strengthening its conviction that CHK is a Best idea among oil stocks; others holding up well, it says, are financially strong names such as XEC, CXO, EGN, EOG, GPOR, MTZ, NBL, PTEN, PDCE, PXD and ROSE.
- In other cases, the debt is providing “equity-like returns” for investors who want to move out of stocks and into bonds, with the firm mentioning AREX, BBG, CWEI and NOG.
Tue, Feb. 10, 5:29 PM
- Pioneer Natural Resources (NYSE:PXD) says it will cut capital spending by 45% in 2015 to $1.85B amid lower oil prices and reduced margins, an announcement that comes as Q4 earnings fell short of Wall Street estimates while revenue surged 75% on strong production growth.
- PXD says it is shutting down vertical drilling in the Spraberry/Wolfcamp area and cutting roughly in half its drilling in the Spraberry/Wolfcamp and Eagle Ford Shale to 16 rigs by the end of February.
- Even with the reductions, PXD expects 2015 crude oil production to increase 20% from 87K bbl/day in 2014.
- In Q4, PXD produced 201K boe/day, up 28% Y/Y; oil production rose 39% Y/Y to 100K bbl/day.
- Says it maintained a strong year-end balance sheet with $1B of cash on hand and net debt-to-operating cash flow of less than 1x.
- PXD -0.8% AH.
Tue, Feb. 10, 4:13 PM| Comment!
Mon, Feb. 9, 5:58 PM
- Some oilfield operators have consistently shown an ability to increase production per well, so the decrease in rig count does not proportionally correlate to a change in production, says NavPort's Eric Foster, who has collated oil well and rig data.
- In a case study focusing on horizontal shale wells in the Eagle Ford basin in Texas, NavPort found that Pioneer Natural Resources (NYSE:PXD) was easily the most efficient fracker last year, with average boe per well during the first 180 days of production of ~142K barrels; ConocoPhillips (NYSE:COP) and Marathon Oil (NYSE:MRO) were the other two companies with 100K-plus boe/well.
- Murphy Oil (NYSE:MUR) showed the greatest efficiency improvement during 2014 among the top 10 Eagle Ford basin oil producers; the only producers in the top 10 showing declines in production per well were BHP Billiton (NYSE:BHP) and Rosetta Resources (NASDAQ:ROSE).
Mon, Feb. 9, 5:35 PM
Mon, Feb. 9, 11:46 AM
- Imperial Capital lowers its stock price target for Pioneer Natural Resources (PXD +0.6%) to $214 from $247 but praises PXD as one of the best positioned companies for creating momentum when oil prices rebound.
- The firm also likes PXD's recent decision to convert 85% of its three-way collar hedges to fixed-price swaps, as it ensures greater protection of its 2015 cash flow.
- Imperial sees PXD remaining a high-quality, low-cost, high-growth oil producer even if a two-year period of low oil prices transpires.
- The firm's lowered price target still would represent a 36% gain from present levels.
Tue, Feb. 3, 2:49 PM
- Veteran energy analyst Christopher Eades recommends a half-dozen safe oil majors, oilfield services firms and transport MLPs as the best bets to ride out the current storm - Halliburton (HAL +4%), Pioneer Natural Resources (PXD +2.2%), Hess (HES +3.2%), Occidental Petroleum (OXY +2.1%), Enterprise Products Partners (EPD +1.4%) and Plains All American Pipeline (PAA +2.4%) - all companies with strong balance sheets, strong growth prospects, and healthy yield levels with no dividend cuts on the table.
- Eades says he is "more enthusiastic about MLPs than I've been in some time," as the group has essentially given up two years’ worth of gains yet cash flow fundamentals have been largely unchanged - "to me, that sounds like a good opportunity, particularly in a world still so starved for yield."
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.
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