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November 19, 2019

Houston Chronicle

ConocoPhillips said Tuesday it aims to keep its capital spending at an average of less than $7 billion per year through 2029, including selling a 25 percent stake in its large Alaska business in order to keep costs down.

ConocoPhillips sets capital spending at less than $7B a year through 2029- oil and gas 360

Source: Houston Chronicle

The Houston oil and gas producer only wants to see spending rise a bit from its estimated $6.1 billion in 2019 capital expenditures. ConocoPhillips is sticking with its conservative, Wall Street-friendly approach to keep spending down and profit when oil prices are higher or lower. The goal is to maintain resiliency from the ups and downs of the industry’s cyclical nature.

In wooing investors, ConocoPhillips plans to spend $30 billion on share buybacks over 10 years and $20 billion in dividend payouts to investors. The company intends to generate $50 billion in free cash flow to fund these programs.

“Over the past few years, we have successfully transformed ConocoPhillips to position the company for consistent, predictable performance across the inevitable price cycles of our industry,” said Chief Executive Ryan Lance. “We believe that we offer the market a compelling, long-term E&P investment that provides downside protection and full exposure to the upside.”

By outlining a broad a 10-year plan on Tuesday to energy analysts, ConocoPhillips aims to build confidence with shareholders and attract back more general investors who have soured on the oil and gas sector.

The largest independent oil and gas firm may produce less oil and have fewer employees than it did a few years ago, but now it’s more profitable and more efficient.

The company still aims to grow its production volumes by more than 3 percent a year.

In October, ConocoPhillips announced a nearly 40 percent increase in dividend payouts to investors to help instill confidence in the company on Wall Street amid subdued oil prices and a slowing energy sector. In 2015 – near the bottom of the last oil bust – ConocoPhillips slashed its quarterly dividend from a high of 74 cents a share down to 25 cents. But the new level of 42 cents is its highest since 2015.

Still, ConocoPhillips’ stock has fallen by more than 10 percent this year, even though that’s better than the 20 percent plunge from the S&P 500’s index of oil and gas producers.

In the third quarter, the Houston firm said its production from the top U.S. shale plays — the Permian Basin, Eagle Ford shale and North Dakota’s Bakken shale — jumped 21 percent from last year. Those three basins represent nearly 30 percent of ConocoPhillips’ total production. Other key regions include Alaska, western Canada, Australia, Norway, Qatar and Malaysia. ConocoPhillips also just sold a portion of its Australia business, but that deal hasn’t closed yet.

But its future exploration is focused on areas outside of U.S. shale, instead exploring in Alaska, Canada, Colombia, Argentina, Norway and Malaysia.

November 5, 2019

Source: Reuters

(Reuters) – Chesapeake Energy Corp , once the second-largest U.S. natural gas producer, warned on Tuesday about its ability to continue as a going concern as the debt-laden company struggles with falling prices for the commodity.

Chesapeake Energy raises 'going concern' doubts-oag360

Source: chk.com

Shares of Chesapeake fell 13% to $1.35 in early trading, with the company earlier in the day also having reported a marginally bigger than expected loss and a huge shortfall in production for the third quarter.

Chesapeake has about $10 billion in debt, nearly four times its market valuation. Much of that is a result of big spending when energy prices were high and acquisitions aimed at expanding in the oil-heavy Powder River Basin to combat falling natural gas prices.

The company said its ability to meet debt covenants in the next 12 months will be affected if oil and natural gas prices continue to remain low. (bit.ly/34yczbo)

A continuous rise in U.S. gas production – a byproduct of the shale oil boom – has prices for the fuel heading toward a 25-year low, with output outpacing U.S. consumption.

The company said average realized natural gas price fell 11.5% to $2.38 per thousand cubic feet in the third quarter.

Total production fell nearly 11% to 478,000 barrels of oil equivalent per day (boe/d) from a year earlier and missed analysts’ expectations of 490,664 boe/d.

Adjusted net loss attributable to the company was $188 million, or 11 cents per share, in the third quarter ended Sept. 30 from a loss of $8 million, or 1 cent per share, a year earlier.

Analysts on average had expected the company to report a loss of 10 cents per share.

The Oklahoma-based firm expects capital expenses to range from $1.3 billion to $1.6 billion for 2020, well below $2.11 billion to $2.31 billion set aside for 2019.

The company also plans to cut its 2020 production costs as well as general and administrative expenses by about 10% while expecting flat oil production year over year.

Source: Reuters

HOUSTON (Reuters) – Pioneer Natural Resources Chief Executive Scott Sheffield said on Tuesday that he expects the Permian Basin, the top U.S. shale field, to “slow down significantly over the next several years.”

Top shale CEO says OPEC shouldn't worry about U.S. oil growth-oag360

Source: pxd.com

“I don’t think OPEC has to worry that much more about U.S. shale growth long term,” Sheffield said on Tuesday on a call with analysts.

U.S. shale fields have driven domestic production to all time highs, prompting OPEC to cut production to keep global prices stable. But U.S. producers are under pressure to trim spending and return profits to shareholders through dividends and share buybacks.

Despite new production coming from Norway, Brazil and Guyana in the next year, “there’s not much coming on after” that, Sheffield said, adding that he is “becoming more optimistic that we’re probably at the bottom end of the cycle” in oil prices.

November 1, 2019

Source: Houston Chronicle

Exxon Mobil Corp. profits fell in the third quarter, the company reported Friday.

Exxon Mobil's profits fall in third quarter-oag360

Source: Houston Chronicle

The Irving, Texas-based oil major reported a third-quarter net profit of $3.17 billion, little more than half the profit the company reported in the same quarter last year.

Exxon reported $65.05 billion of revenue in the third quarter, down from $76.61 billion in the same quarter last year.

Still, the energy giant beat Wall Street expectations. Exxon reported earning 75 cents per share; analysts expected earnings of 67 cents a share.

Oil-equivalent production rose 3 percent from the third quarter of 2018, to 3.9 million barrels per day. Liquids production increased 4 percent, driven by Permian Basin growth, and natural gas volumes increased 1 percent.

Production in the Permian Basin increased 7 percent in the third quarter.

“We are making excellent progress on our long-term growth strategy,” said Darren W. Woods, chairman and chief executive officer in a statement.

October 30, 2019

Source: Reuters

(Reuters) – Hess Corp (HES.N) reported a quarterly loss on Wednesday, as lower oil and gas prices limited gains from higher production, sending its shares down nearly 5%.


Source: Reuters/Andrew Cullen

The results come a day after shale player Concho Resources Inc (CXO.N) posted adjusted earnings that more than halved on the back of tumbling prices.

Hess said average prices for crude, including hedging, fell more than 15% in the third quarter, while it dropped 7% for natural gas.

Global oil prices fell in the third quarter on oversupply and demand concerns fueled by the U.S.-China trade war and its impact on the global economy.

The results come a day after shale player Concho Resources Inc (CXO.N) posted adjusted earnings that more than halved on the back of tumbling prices.

Hess said average prices for crude, including hedging, fell more than 15% in the third quarter, while it dropped 7% for natural gas.

Global oil prices fell in the third quarter on oversupply and demand concerns fueled by the U.S.-China trade war and its impact on the global economy.

Oil and gas net production rose to an average of 290,000 barrels of oil equivalent per day (boepd), excluding Libya, from 279,000 boepd a year earlier.

The increased production was driven by a 38% jump in Bakken output that partially offset the hit from hurricane in the Gulf of Mexico.The higher output at Bakken also prompted the company to raise its full-year net production guidance to about 285,000 boepd, from 275,000 boepd to 280,000 boepd it forecast earlier.

Hess also cut its 2019 capital expenditure by $100 million to $2.7 billion.

The company posted an adjusted net loss of $98 million, or 32 cents per share, in the third quarter ended Sept. 30, compared with a profit of $29 million, or 6 cents per share, a year earlier.

Analyst on average expected a loss of 33 cents, according to IBES data from Refinitiv.

Shares of the company were 4.2% lower at $62.96 amid a broader fall in oil prices that dragged the S&P energy index .SPNY down 1.1%.

October 29, 2019

Source: Reuters

(Reuters) – U.S. Silica Holdings shares plunged 33% after the frac sand miner said it expects demand to slow in the fourth quarter and reported a bigger-than-expected quarterly loss on Tuesday, weighed down by lower prices.

Prices for the proppant used to crack the ground and extract oil have dropped in North America as oil producers drill and complete fewer wells under investor pressure to spend less, and as the market struggles with an oversupply in the aftermath of the shale boom.


Source: ussilica.com

“Energy markets deteriorated further and faster than expected during the quarter as E&P budget exhaustion slowed completion activity, resulting in lower demand and pricing pressure,” Chief Executive Officer Bryan Shinn said on a post-earnings call with analysts.

While sand sales to oil and gas customers fell 1% sequentially, pricing was “significantly lower” with new mines coming online in West Texas and overcrowding the market, the company said.

Volumes in the current quarter are expected to decline at least 10% sequentially, while prices are expected to fall further, it added.

However, Shinn expects to see a rebound in oil field completions by the middle of the first quarter next year, as oil and gas producers reset their budgets.

The company also forecast net sales and profits in its industrial business, which supplies sand to construction companies and glass manufacturers, to stay flat or rise marginally in 2020, hurt by trade tariffs and fears of a global slowdown.

U.S. Silica reported a net loss of $23 million, or 31 cents per share, for the quarter ended Sept. 30, compared with a profit of $6.3 million, or 8 cents per share, a year earlier.

Excluding items, loss of 17 cents per share missed analysts’ average estimate of 3 cents, according to Refinitiv IBES data.

Revenue fell 14.5% to $361.8 million, also missing estimate of $395.5 million.

The company now expects 2019 spending to be less than $125 million it had forecast earlier, and plans to spend between $40 million and $60 million next year.

October 25, 2019


Phillips 66 beat analysts’ estimates for quarterly profit on Friday, as the refiner benefited from higher retail fuel margins, sending its shares up 4.4% to their highest in more than a year.

The Houston, Texas-based company, which retails fuel under brand names such as Conoco, 76 and JET, buys refined products from the market and resells them across its about 9,000 outlets spread across the United States and Europe.


Source: Reuters/Rick Wilking

The business, marketing & specialties, was helped by an 18% drop in crude prices in the third quarter that reduced the cost of the refined products like gasoline and aviation fuel.

“The beat was driven by stronger-than-expected results across all segments, but marketing & specialties particularly exceeded our expectations,” Morgan Stanley analysts wrote in a note.

Marketing fuel margins of $2.11 per barrel in the United States and $6.37 per barrel internationally was about 30-60% higher than the brokerage’s estimates.

Adjusted earnings in the unit rose nearly 30% to $498 million in the third quarter.

Profit in its midstream segment, which transports and stores crude, natural gas liquids (NGL) and exports liquefied petroleum gas, jumped more than 40% on the back of higher pipeline volumes and hydrocarbon trading.

Houston-based Phillips 66 has been beefing up its midstream assets, expanding its U.S. Gulf Coast NGL market hub, as well as adding storage capacity at Texas-based Clemens Caverns facility and Beaumont Terminal.

However, adjusted earnings at its largest refining segment slumped nearly 34% due to higher turnaround costs and as margins fell 16% to $11.18 per barrel.

The company’s refineries had worldwide crude oil capacity utilization rate of 97% during the quarter, compared with 93% a year earlier.

Net earnings more than halved to $712 million, or $1.58 per share, in the three months to Sept. 30.

Excluding a $690 million impairment related to investments in DCP Midstream LP, the company earned $3.11 per share, beating estimates of $2.59, according to IBES data from Refinitiv.

Smaller rival Valero Energy beat profit estimates on Thursday, thanks to cheap light crude from the prolific U.S. shale oil basins.

“Refining earnings are off to a very strong start with both PSX and VLO beating Street estimates and we expect other refiners especially Marathon Petroleum Corp and HollyFrontier Corp to follow with solid beats,” Credit Suisse analyst Manav Gupta said in a note.

Shares of Phillips 66 were trading up 4% at $115 in early trading. They have gained more than 28% this year to Thursday’s close.

October 18, 2019

Source: Houston Chronicle

The world’s largest oil field service company beat Wall Street expectations on revenue but got stung by pretax charges that resulted in a multibillion loss for stockholders during the third quarter.

Schlumberger posts $11.4 billion loss amid hefty pretax charges - oil and gas 360

Photo: Mayra Beltran

Schlumberger reported a $11.4 billion loss on $8.54 billion of revenue during the third quarter, which translated into a loss per share of $8.22 for common stockholders. The figures were mixed compared to Wall Street expectations of $8.5 billion in revenue and earnings per share of 40 cents.

The company’s third quarter figures were mixed compared to the $659 million of net income, $8 billion of revenue and earnings per share of 47 cents during the third quarter of 2018.

Schlumberger attributed the third quarter loss to $12.7 billion of pretax charges for the impairment of goodwill, intangible assets and fixed assets. Out of those figures, $8.8 billion were attributed to company-wide goodwill charges while another $1.6 billion was specifically attributed to the company’s North American hydraulic fracturing business.

Without those charges, the company made earnings per share of 43 cents — beating Wall Street expectations of 40 cents per share. In a statement, Schlumberger CEO Olivier Le Peuch focused on the year-over-year revenue growth but acknowledged challenges in the North American market.

“Sustained international activity drove overall growth despite mixed results in North America,” Le Peuch said. “The North America business saw strong offshore sales with minimal growth on land due to slowing activity and further pricing weakness.”

Headquartered in Paris with its principal offices in Houston, Schlumberger is the largest oilfield service company in the world with more than 100,000 employees in 85 nations.

The company posted a $2.2 billion profit on $32.8 billion of revenue in 2018.

July 18, 2019

By Aaron Vandeford, Managing Director, EnerCom

EnerCom, Inc. has compiled Second quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 95 E&P and 73 Oilfield Service companies in the EnerCom database.

Download EnerCom’s full chart of estimates.

Listen to Q2 earnings calls.

The median E&P company earnings estimate for the quarter ending June 30, 2019, is $0.12 per share compared to actual earnings per share of ($0.03) and $0.33 for Q1’19 and Q4’18, respectively.

The median OilServices company earnings estimate for the quarter ending June 30, 2019, is ($0.03) per share compared to a loss per share of ($0.01) and ($0.11), for Q1’19 and Q4’18, respectively.


Energy Commodities

Crude Oil

U.S. crude oil production and lease condensate reached another milestone in April 2019, totaling 12.2 MMBOPD. April 2019 marks the first time that monthly U.S. crude oil production levels surpassed 12 MMBOPD, and this milestone comes less than a year after U.S. crude oil production surpassed 11 MMBOPD August 2018.

At a July 1, 2019 press conference following OPEC’s annual meeting in Vienna, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources Khalid Al-Falih, also the chairman of the Joint Ministerial Monitoring Committee of OPEC+ (OPEC plus non-OPEC countries), said the OPEC+ group had agreed to continue production curtailments for up to nine more months (click here to read more).

Bam! - It’s Earnings Season Again - Oil & Gas 360

Click the above picture to view EnerCom’s interactive dashboard

The average spot price for WTI in Q2 2019 was $59.92 per barrel, up 9.3% from the prior quarter and down 11.6% from the same quarter last year. The five-year strip at July 16, 2019 was $55.50 per barrel.

The median analyst estimate in mid-July for 2019 NYMEX oil was $60.50 per barrel with a high of $69.82 and a low of $55.50 per barrel.

Bam! - It’s Earnings Season Again - Oil & Gas 360

Source: EnerCom Analytics


Natural Gas

For April 2019, total natural gas consumption was 72.8 Bcf/d, down 6.6% from the same month last year. Total natural gas production in April 2019 was 109.9 Bcf/d, up 11.4% from the same month last year.

Net injections to working gas totaled 81 Bcf for the week ending July 5. Working natural gas stocks are 2,471 Bcf, which is 13% more than the year-ago level and 5% lower than the five-year average for this week.

Bam! - It’s Earnings Season Again - Oil & Gas 360

Click the above image to view EnerCom’s interactive inventories dashboards

As production of American natural gas has increased, so has exports, leading to the U.S. becoming a net exporter of natural gas in 2017. In 2018, that trend continued, with the U.S. exporting a record of approximately 4 Tcf, while only importing 3 Tcf, the lowest figure since 2015 (click here to read more).

The average spot price for Henry Hub in Q2 2019 was $2.52 per MMBtu, 12.2% lower than the previous quarter and 9.3% higher than the same quarter last year. The five-year strip at July 16, 2019 was $2.65 per MMBtu.

The median analyst estimate in mid-July for 2019 NYMEX Henry Hub was $2.83 per MMBtu with a high of $3.40 and a low of $2.50 per MMBtu.

Bam! - It’s Earnings Season Again - Oil & Gas 360

Source: EnerCom Analytics


Rig Count – U.S. Rig Count

The U.S. rig count stood at 958 for the week ended July 12, 2019, down five from the week before and down 96 from the same week last year.

For the week ended July 12, 2019, there were 831 horizontal rigs active in the United States, a decrease of 99 from the same week a year ago. By play and as compared to the same week last year, rig count changes for the week ended July 12, 2019, include Haynesville (+3 rigs), Woodford Shale (-23 rigs), Marcellus (+6 rigs), Williston Basin (-2 rigs), Eagle Ford Shale (-15 rigs), DJ Niobrara (+2 rigs) and Permian Basin (-39 rigs).

Bam! - It’s Earnings Season Again - Oil & Gas 360

Click the above image to access EnerCom’s interactive rig count dashboard



Expected Themes for Conference Calls

Below are some themes and thoughts we expect to take prominence on the 2019 Q2 conference calls.

E&P Companies:

  • Free cash flow – When can you get there and what will you do with it
  • Potential for M&A activity
  • Well spacing and parent-child issues
  • Oil, gas takeaway capacity
  • Breakevens
  • Differentials
  • Full cycle returns
  • Liquidity, capital market funding and debt maturities
  • Hedge positions
  • Operating efficiencies


OilService companies:

  • Margin trends
  • Pricing trends
  • Service cost inflation
  • Infrastructure buildout and bottlenecks (particularly water and sand)
  • Oilfield service equipment utilization rates and the potential for added capacity
  • Global economic outlook
  • S. vs international activity
  • Potential impacts of sanctions and changing trade relationships
  • Maintenance needs

May 1, 2019

More capacity coming: another $3.5 billion of projects now under construction will go into service in 2019

Houston’s Enterprise Products Partners L.P. (stock ticker: EPD, $EPD) reported record net income attributable to limited partners of $1.3 billion, or $0.57 per unit on a fully diluted basis for Q1 2019.

2018’s Q1 net income came in at $901 million, or $0.41 per unit on a fully diluted basis, for comparison. The company said cash flow from operations was $1.2 billion for both the first quarters of 2019 and 2018. Both Adjusted EBITDA and DCF, which exclude the effects of non-cash, mark-to-market earnings, increased 18% to $2.0 billion and $1.6 billion, respectively, the company said.

Jim Teague, CEO of Enterprise’s general partner said his team made it possible for the company to set eleven operational and financial records during the quarter.

Teague said the business saw a benefit from production increases in the Permian and Haynesville shale regions.

All of the Permian’s projected 700,000 BOPD 2019 production volume increase will be exported overseas – Teague

“Our crude oil marine terminals reported record volumes of nearly 900,000 barrels per day in the first quarter of 2019 despite the temporary closure of the Houston Ship Channel. With Permian crude oil volumes forecasted to increase by approximately 700,000 barrels per day in 2019, we believe substantially all of this increase in volumes will be destined for international markets.”

He said that Enterprise expects 300,000 barrels per day of new ethane demand from ethylene facilities on the U.S. Gulf Coast forecasted to begin operations during the remainder of 2019.

“Through April 2019, we placed $1.9 billion of growth capital projects into service. We have another $5.0 billion of major growth assets under construction of which we expect to put $3.5 billion of these projects into service between now and the end of the year.”

These projects include:

  • a third train at the Orla natural gas processing complex in the Permian,
  • a tenth NGL fractionator and an isobutane dehydrogenation (iBDH) plant at our Mont Belvieu complex.
  • crude oil, natural gas, NGL and petrochemical pipelines,
  • natural gas processing plants in the Permian,
  • a second PDH facility, and
  • the Texas deep water crude oil port.

“With the flexibility to self-fund our equity needs and strong balance sheet, we believe these new projects will enable us to increase cash flow per unit and the equity value of our partnership,” Teague said.

Read the full Q1 Earnings Release here.

April 25, 2019

EQT Reports First Quarter 2019 Results

Lilis Energy Achieves First Quarter 2019 Production Guidance and Provides Operational Update

QEP Reports First Quarter 2019 Financial and Operating Results

March 25, 2019

Sinopec’s Net Profit Up Over 20% to RMB 61.6 Billion in 2018