EnerCom, Inc. compiled fourth quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 200 E&P and OilService companies in our database.

Click here for the full chart of estimates.

The median OilServices company earnings estimate for the quarter ending December 31, 2014, is $0.37 per share compared to actual earnings per share of $0.27 and $0.25 for Q3’14 and Q2’14, respectively. In Q4’14, the median OilServices company earnings were $0.24. The median E&P company earnings estimate for the quarter ending December 31, 2014, is $0.18 per share compared to actual earnings per share of $0.36 and $0.12 for Q3’14 and Q2’14, respectively. In Q4’13, the average E&P company earnings was $0.36 per share.

Energy Commodities

Crude Oil. U.S. oil consumption in October 2014 was 19.6 MMBOPD, up 3.1% compared to the prior month and 1.6% higher than the same month last year. U.S. crude oil production was 9.1 MMBOPD, up 0.7% compared to the prior month and 17.6% higher than the same month last year. The average near-term futures price for WTI in December 2014 was $59.29 per barrel, down 21.8% from the prior month and 39.4% lower than the same month last year. The five-year strip at December 31, 2014 was $64.97 per barrel.

The average price of gasoline (all grades, all formulations) in December 2014 was $2.63 per gallon, 12.2% lower than the previous month and 21.6% lower than the same month last year. In December 2014, the average near-term futures price for Brent was $63.27 per barrel, down 20.5% from the prior month and 6.7% higher than the WTI near-month futures price.

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The average price of gasoline (all grades, all formulations) in December 2014 was $2.63 per gallon, 12.2% lower than the previous month and 21.6% lower than the same month last year. In December 2014, the average near-term futures price for Brent was $63.27 per barrel, down 20.5% from the prior month and 6.7% higher than the WTI near-month futures price.

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Natural Gas. In October 2014, total natural gas consumption was 62.6 Bcf/d, up 2.4% from the prior month and 3.9% higher than the same month last year. Dry gas production in October 2014 was 72.2 Bcf/d, up 0.7% from September 2014, and up 6.9 over the same month last year.

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At 2.9 Tcf (week ending 1/9/15), natural gas storage was 3.8% below the five-year historical average, and 14.6% below the five-year high.

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For the month of October 2014 (the most recent data point), the EIA reported that U.S. LNG imports averaged 0.22 Bcf/d.

The average near-term futures price for Henry Hub in December 2014 decreased to $3.51 per MMBtu or 17.6% lower than the prior month and 18.0% lower than the same month last year. The five-year strip at December 31, 2014 was $3.69 per MMBtu.

Rig Count. The U.S. land rig count sourced from RigData on January 9, 2015, stood at 1,775 rigs, a decrease of 319 rigs from Q3’14, of which 72% were operating horizontally.

On January 9, 2015, there were 1,273 horizontal rigs in the U.S., a decrease of 9.8% from 1,411 in Q4’2014. The number of horizontal rigs targeting natural gas exclusively dropped from December 31, 2011 by 216 rigs to 180 for a decline of 55%.  The number of horizontal rigs targeting oil exclusively increased from December 31, 2011 by 103 rigs to 301 for an increase of 52%.

By play and as compared to Q4’14, rig count changes on January 9, 2015 include Haynesville (+1 rig), Fayetteville Shale (-2 rigs), Woodford Shale (-1 rig), Appalachian Basin (-21 rigs), Williston Basin (-21 rigs), Eagle Ford Shale (-16 rigs), DJ Niobrara (-2 rigs) and Permian Basin (-70 rigs).

Equity Markets. In December 2014, the S&P 500, XNG, XOI and OSX changed by -0.4%, -5.6%, +0.9% and -2.2% month-to-month, respectively. The S&P 500 had the largest year-over-year increase gaining 11.4% (Slide 24).

From EnerCom’s E&P Database: For January 9, 2015 year-to-date large-cap, mid-cap, small-cap and micro-cap E&P stocks lost -4.2%, -6.3 %, -9.2% and -9.2%, respectively. Year-to-date, oil-weighted and gas-weighted companies lost -11.0% and -5.7%, respectively.

By region as of January 9, 2015 year-to-date, Bakken, Midcontinent and Diversified stocks lost -3.5%, -7.2%, -5.3%, respectively, Gulf of Mexico stocks were down -10.1%.

From EnerCom’s Oil Service’s Database: As of January 9, 2015 year-to-date, Oil Service’s large-cap and mid-cap stocks lost -28.1%, -36.4%, respectively, while small-cap and micro-cap stocks lost-42.7%, -51.1%, respectively.

Expected Themes for Conference Calls

Below are some themes and thoughts we expect to take prominence on this quarter’s conference calls.

E&P Companies:

  • 2015 commodity price outlook
  • Hedge position and cost control
  • Balance sheet strength and near-term debt maturities
  • Borrowing base redeterminations and bank price decks
  • Midstream contracts and take-away capacity
  • 2015 CapEx and activity levels – exploration vs. development
  • Oilfield service costs and outlook
  • Crude oil and natural gas differentials (Wattenberg, Bakken, etc.)
  • S. crude delivery and refining systems (rail systems, etc.)
  • Potential for increasing M&A activity in E&P
  • Year-end reserves vs. current reserves at $46 per bbl oil
  • Production growth rates

OilService Companies:

  • Global economic outlook
  • 2015 CapEx and activity levels
  • Potential for increasing M&A
  • Balance sheet strength and near-term debt maturities
  • Government permitting for LNG ports
  • 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)
  • Oilfield service equipment utilization rates
  • Backlog of completions
  • Frac sand and proppant prices

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication.

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