EnerCom, Inc. compiled third quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 196 E&P and OilService companies in our database.
The median OilServices company earnings estimate for the quarter ending September 30, 2014, is $0.34 per share compared to actual earnings per share of $0.23 and $0.25 for Q2’14 and Q1’14, respectively. In Q3’13, the average OilServices company earnings were $0.25. The median E&P company earnings estimate for the quarter ending September 30, 2014, is $0.23 per share compared to actual earnings per share of $0.08 and $0.13 for Q2’14 and Q1’14, respectively. In Q3’13, the average E&P company earnings was $0.10 per share.
ENERGY COMMODITY PRICES
Near-term futures price for WTI oil averaged $97.25, $102.99, and $98.61 per barrel during Q3’14, Q2’14 and Q1’14 respectively, while the near-term futures price for Henry Hub natural gas averaged $3.95, $4.58, and $4.72 per MMBtu over the same time periods. WTI averaged $105.81 per barrel in Q3’13.
Crude Oil. U.S. oil consumption in July 2014 was 19.2 MMBOPD, up 1.8% compared to the prior month and 0.5% lower than the same month last year. U.S. crude oil production was 8.5 MMBOPD, 14.2% higher than the same month last year. The average near-term futures price for WTI in September 2014 was $93.03 per barrel, down 3.2% from the prior month and 12.4% lower than the same month last year. The five-year strip at September 30, 2014 was $85.78 per barrel.
The average price of gasoline (all grades, all formulations) in September 2014 was $3.48 per gallon, 2.3% lower than the previous month and 3.2% lower than the same month last year. In September 2014, the average near-term futures price for Brent was $94.67 per barrel, down 8.4% from the prior month and 1.8% higher than the WTI near-month futures price.
The median analyst estimate at the beginning of October for 2015 NYMEX oil was $94.04 per barrel with a high of $101.00 per barrel and a low of $89.50 per barrel.
Natural Gas. In July 2014, total natural gas consumption was 60.6 Bcf/d, up 4.1% from the prior month and 2.1% lower than the same month last year. Dry gas production in July 2014 was 70.4 Bcf/d, up 0.3% from June 2014, and up 5.2% over the same month last year.
For the month of July 2014 (the most recent data point), the EIA reported that U.S. LNG imports averaged 0.20 Bcf/d, up 100% from 0.10 Bcf/d in April 2014, the all-time low since 1999, the year in which we started tracking this data.
At 3.2 Tcf (week ending 10/3/14), natural gas storage was 10.5% below the five-year historical average, and 13.5% below the five-year high.
The average near-term futures price for Henry Hub in September 2014 increased to $3.92 per MMBtu or 0.5% higher than the prior month and 8.4% higher than the same month last year. The five-year strip at September 30, 2014 was $4.19 per MMBtu. The median analyst estimate at the beginning of October for 2015 NYMEX gas was $4.25 per MMBtu with a high of $5.00 per MMBtu and a low of $3.70 per MMBtu.
Rig Count. The U.S. land rig count sourced from RigData on October 3, 2014, stood at 2,120 rigs, an increase of 36 rigs from Q3’14. On October 3, 2014, there were 1,408 horizontal rigs in the U.S., an increase from 1,390 in Q3’2014. The number of horizontal rigs targeting natural gas exclusively dropped from December 31, 2011 by 178 rigs to 218 for a decline of 45%. The number of horizontal rigs targeting oil exclusively increased from December 31, 2011 by 142 rigs to 340 for an increase of 72%.
By play and as compared to Q3’14, rig count changes on October 3, 2014 include Haynesville (-3 rigs), Fayetteville Shale (+1 rig), Woodford Shale (no change), Appalachian Basin (-1 rig), Williston Basin (-5 rigs), Eagle Ford Shale (+1 rig), DJ Niobrara (+1 rig) and Permian Basin (+1 rig).
On October 3, 2014, 67% of working rigs were drilling horizontally, representing a 1.3% increase from Q3’2014.
Equity Markets. In September 2014, the S&P 500, XNG, XOI and OSX changed by -1.6%, -8.0%, -8.1% and -9.8% month-to-month, respectively. The S&P 500 had the largest year-over-year increase gaining 17.3%.
From EnerCom’s E&P Database: For October 3, 2014 year-to-date large-cap, mid-cap, small-cap and micro-cap E&P stocks gained 0.4 %, 3.2%, and lost -12.0% and -15.4%, respectively. Year-to-date, oil-weighted and gas-weighted companies lost -4.1% and -5.9%, respectively.
By region as of October 3, 2014 year-to-date, Bakken, Midcontinent and Diversified stocks gained 5.0%, lost -14.6%, gained 2.3%, respectively, Gulf of Mexico stocks were down -22.1%.
From EnerCom’s Oil Service’s Database: As of October 3, 2014 year-to-date, Oil Service’s large-cap and mid-cap stocks lost -1.9%, -8.3%, respectively, while small-cap and micro-cap stocks lost-15.1%, -22.6%, respectively.
Expected Themes for Conference Calls
Below are some themes and thoughts we expect to take prominence on this quarter’s conference calls.
- 2015 commodity price outlook
- Project returns if oil prices fall to $60
- New play activity and results (Tuscaloosa Marine Shale, Utica, Mississippian Lime)
- Potential for U.S. oil exports
- S. crude delivery and refining systems (rail systems, etc.)
- Increasing M&A activity in E&P
- Infrastructure build out in Marcellus, Bakken, Eagle Ford, and D-J Basins
- Crude oil and natural gas differentials (Marcellus, Wattenberg, etc.)
- Addressing natural gas inventories and implications on price
- Oil versus gas exploitation
- Midstream contracts and take-away capacity
- Micro Seismic/4D Shoots
- Drilling and completion efficiencies (Batch completions and pad drilling)
- Oilfield services costs and outlook
- Debt covenants and operating in a low commodity price environment
- Commodity price effects on basin returns and capital budgets
- Global economic outlook
- Government permitting for LNG ports
- Commodity 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
- New equipment buys and builds
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