EnerCom, Inc. compiled second quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 181 E&P and OilService companies in our database.
The median OilServices company earnings estimate for the quarter ending June 30, 2014, is $0.27 per share compared to actual earnings per share of $0.25 and $0.24 for Q1’14 and Q4’13, respectively. In Q2’13, the average OilServices company earnings were $0.30. The median E&P company earnings estimate for the quarter ending June 30, 2014, is $0.26 per share compared to actual earnings per share of $0.14 and $0.03 for Q1’14 and Q4’14, respectively. In Q2’13, the average E&P company earnings was $0.28 per share.
ENERGY COMMODITY PRICES
Near-term futures price for WTI oil averaged $102.99, $98.61, and $97.61 per barrel during Q2’14, Q1’14 and Q4’13 respectively, while the near-term futures price for Henry Hub natural gas averaged $4.58, $4.72, and $3.85 per MMBtu over the same time periods. WTI averaged $94.17 per barrel in Q2’13.
Crude Oil. U.S. oil consumption in April 2014 was 18.8 MMBOPD, up 1.4% compared to the prior month and 1.2% higher than the same month last year. U.S. crude oil production was 8.4 MMBOPD, 14.6% higher than the same month last year. The average near‐term futures price for WTI in June 2014 was $105.15 per barrel, up 3.3% from the prior month and 10.8% higher than the same month last year. The five‐year strip at July 2, 2014 was $92.28 per barrel.
The average price of gasoline (all grades, all formulations) in June 2014 was $3.77 per gallon, 0.5% higher than the previous month and 2.1% higher than the same month last year. In June 2014, the average near-term futures price for Brent was $111.97 per barrel, up 2.5% from the prior month and 6.5% higher than the WTI near‐month futures price.
The median analyst estimate at the beginning of July for 2014 NYMEX oil was $97.58 per barrel with a high of $102.00 per barrel and a low of $90.00 per barrel.
Natural Gas. In April 2014, total natural gas consumption was 65.0 Bcf/d, down 23.7% from the prior month and 0.2% higher than the same month last year. Dry gas production in April 2014 was 67.1 Bcf/d, down 2.4% from March 2014, and up 1.4% over the same month last year.
For the month of April 2014 (the most recent data point), the EIA reported that U.S. LNG imports averaged 0.10 Bcf/d, reaching an all-time low since 1999, the year which we started tracking this data.
At 1.8 Tcf (week ending 6/20/14), natural gas storage was 31.0% below the five‐year historical average, and 40.0% below the five‐year high.
The average near‐term futures price for Henry Hub in June 2014 increased to $4.59 per MMBtu or 1.3% higher than the prior month, and 20.7% higher than the same month last year. The five‐year strip at July 2, 2014 was $4.41 per MMBtu. The median analyst estimate at the beginning of July for 2014 NYMEX gas was $4.25 per MMBtu with a high of $4.90 per MMBtu and a low of $3.70 per MMBtu.
Rig Count. The U.S. land rig count sourced from RigData on July 4, 2014, stood at 2,094 rigs, an increase of 75 rigs from Q2’14. On July 4, 2014, there were 1,405 horizontal rigs in the U.S., an increase from 1,325 in Q2’2014. The number of horizontal rigs targeting natural gas exclusively dropped from December 31, 2011 by 186 rigs to 210 for a decline of 47%. The number of rigs targeting oil exclusively increased from December 31, 2011 by 150 rigs to 348 for an increase of 76%.
By play and as compared to Q2’14, rig count changes on July 4, 2014 include Haynesville (‐4 rigs), Fayetteville Shale (no change), Woodford Shale (+1 rig), Appalachian Basin (+7 rigs), Williston Basin (+2 rigs), Eagle Ford Shale (+21 rigs), DJ Niobrara (+3 rigs) and Permian Basin (+16 rigs).
On July 4, 2014, 67% of working rigs were drilling horizontally, up 1% from Q2’2014.
Equity Markets. In June 2014, the S&P 500, XNG, XOI and OSX changed by 1.9%, 5.5%, 3.4% and 6.9% month‐to‐month, respectively. The XNG had the largest year‐over‐year increase gaining 30.1%.
From EnerCom’s E&P Database: For July 3, 2014 year‐to‐date large‐cap, mid‐cap, small‐cap and micro‐cap E&P stocks gained 17.3%, 25.0%, 18.8% and 26.6%, respectively. Year‐to‐date, oil‐weighted and gas-weighted companies gained 25.2% and 21.3%, respectively.
By region as of July 3, 2014 year‐to‐date, Bakken, Midcontinent and Diversified stocks gained 25.0%, 10.9%, and 25.7%, respectively, Gulf of Mexico stocks were up 22.5%.
From EnerCom’s Oil Service’s Database: As of July 3, 2014 year‐to‐date, Oil Service’s large‐cap, mid‐cap, small‐cap and stocks gained 19.2%, 10.6%, 15.2% and micro‐cap stocks gained 2.3%, respectively.
Expected Themes for Conference Calls
Below are some themes and thoughts we expect to take prominence on this quarter’s conference calls.
- New play activity and results (Tuscaloosa Marine Shale, Utica, Mississippian Lime)
- Potential for US oil exports
- U.S. crude delivery and refining systems (rail systems, etc.)
- Increasing M&A activity in E&P
- Infrastructure build out in Bakken, Eagle Ford, and D-J Basins
- Crude oil and natural gas differentials (Wattenberg, Bakken, etc.)
- Oilfield service costs and outlook
- Drilling and completion efficiencies (Batch completions and pad drilling)
- Down spacing opportunities in the Permian, Eagle Ford and Marcellus
- Addressing low natural gas inventories and implications on price
- 2014 commodity price outlook
- Oil versus gas exploitation
- Midstream contracts and take-away capacity
- Micro Seismic/4D Shoots
- Government permitting for LNG ports
- Global economic outlook
- Natural gas prices influencing activity levels
- Increasing M&A activity for service companies
- Growing pressure for US to export
- International margins vs. North American margins
- Rig Count – Effects of drilling efficiencies
- Trends and outlook on dayrates and backlog (onshore and offshore drillers)
- Balance sheet strength and liquidity
- Deepwater activity
- Oilfield service equipment utilization rates
- Work activity in Permian, Appalachia, Rockies
- New equipment buys and builds
- Potential LNG shipments
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