CM - Prices plunge, and then along comes earnings… - May 2020First-quarter earnings have been mostly painful with the writedowns of billions in impaired oil and gas assets. Exxon Mobil Corp. incurred its first quarterly loss in 32 years (PG.1), ConocoPhillips reported a $1.7 billion loss (PG.12), Hess Corp. a $2.4 billion loss (PG.12), Diamondback Energy Inc. lost $272 million (PG.14) and Concho Resources Inc. has reported quarterly losses in five out of the last 10 quarters but never even close to the almost $9.3 billion (PG.13) it lost in Q1. Reliable...
May 15, 2020
CM - Concho reduces capex to $1.6B, writes down $9.7B in impairments - May 2020For the remainder of 2020, Concho Resources Inc. expects to average around eight rigs and complete 110-130 gross operated wells. The company again reduced this year’s capex guidance to about $1.6 billion, representing a 40% decrease from its initial 2020 spending plan. It expects to produce 197,000 bo/d this year, flat with 2019 oil volumes, as it voluntarily curtails production mainly from low-margin vertical wells. The company is also targeting more than $100 million in operating and G&A cost...
May 15, 2020
PS - People & Companies - April 22, 2020Amazing Energy Oil & Gas Co. named Benjamin Jacobson III CFO, effective Feb. 13, replacing Marty Dobbins, who resigned. Prior to joining Amazing Energy, Jacobson co-founded ICP, LLC, which invests in E&P companies. Amplify Energy president and CEO Ken Mariani has retired. Current CFO Martyn Willsher has been appointed interim CEO. On behalf of the board, Chris Hamm will serve as lead director. Antero Resources appointed Jacqueline C. Mutschler to its board as a Class II...
Apr 22, 2020
CM - Concho protecting balance sheet, reduces spending by 25% - April 2020Concho Resources, Inc. said it will bring spending down this year to $2.0 billion from earlier guidance of $2.6-2.8 billion, which in turn was a 10% reduction from 2019 spending. The company will focus on cost structure improvement. Chairman and CEO Tim Leach said the company’s priorities are “protecting our balance sheet and the dividend, generating free cash flow and preserving our flexibility and opportunity set.” Though Concho has $4.0 billion of long-term debt outstanding, there are no...
Apr 03, 2020
CM - People & Companies - April 3, 2020Amazing Energy Oil and Gas Co. named Benjamin Jacobson III CFO effective Feb. 13, succeeding Marty Dobbins, who resigned. Prior to joining Amazing Energy, Jacobson co-founded ICP, LLC, which invests in E&P companies. Apache Corp. appointed Clay Bretches EVP, Operations, a promotion from SVP Operations. He will also continue to serve as CEO and a director of Apache subsidiary Altus Midstream Co., which he has done for over a year. Basic Energy Services, Inc. has reconfigured its...
Apr 03, 2020
OFS - People & Companies - February 4, 2020CAM Integrated Solutions, a provider of engineering, procurement and construction management services to onshore energy, promoted Israel Martinez to SVP of business operations. He has been with CAM since its founding in 2015. CAM promoted Jason Newton to Martinez’s previous role of VP of engineering operations. Wellhead and pressure control manufacturer Cactus Inc. appointed Melissa Law to the board of directors. Law currently serves as the president of global operations for Tate &...
Feb 04, 2020
CM - Analyst Notes - October 4, 2019Berry Petroleum Co. (NYSE: BRY; $9.36- Sept. 30; Buy; PT-$14) Looking ahead to 2020, we think there is downward bias to production estimates, but with less spending, when contemplating entering 2020 at 3 rigs, the industry’s general move towards reduced growth, and BRY’s unchanged focus on shareholder returns. We model ~10% y/y boe growth (to 31mboepd; 27.6mbpd oil) for ~$180MM in spending, which compares to consensus ~14% growth (to 32.5mboepd; 28.4mbpd oil) for $205MM in capex. Name...
Oct 04, 2019
CM - Paulson opposing Callon’s proposed Carrizo acquisition - September 2019Paulson & Co. Inc., which holds 9.5% of Callon Petroleum Co.’s outstanding shares, submitted a letter to Callon’s board opposing the company’s proposed $3.2 billion acquisition of Carrizo Oil & Gas Inc. and urged the board to pursue a sale of Callon instead. The Houston-based E&P firm said it remained confident the addition of Carrizo would make a stronger company. The proposed acquisition has not pleased shareholders as CPE share prices on the NYSE have fallen 36% since the...
Sep 13, 2019
CM - Concho divestments to lead to debt cut and stock buyback - September 2019Concho Resources Inc. agreed to sell its 70,000 net acres on the Permian Basin’s Northwest Shelf to an affiliate of KKR-funded Spur Energy Partners for $925 million in cash. The company said Sept. 3 it would apply 60% of the proceeds to reducing debt and 40% to “kick start” a newly announced $1.5 billion share repurchase program. It said the sale of this legacy asset improves the cash cost structure by removing higher cost vertical wells, focuses its portfolio on its southern Delaware and...
Sep 13, 2019
A&D - Analyst Notes - August 30, 2019PDC Energy (PDCE; $26.65-Aug. 27; Buy; PT-$75) Zero premium merger gets rave initial reviews … Finally an E&P deal that gets the stamp of approval from Wall Street. We’re encouraged to see investors look past the fact that the deal is not accretive on an EV/EBITDA basis and instead focus on the accretiveness on FCF, ROCE, and NAV. Our capital efficiency report shows SRCI has the superior recycle ratio of the two companies, which, in our opinion, deserves a superior multiple....
Aug 30, 2019
CM - Analyst Notes - August 26, 2019Bonanza Creek Energy, Inc. (NYSE: BCEI; $22.03-Aug. 9; Outperform; PT-$30) BCEI reported adjusted EPS of $1.62, CFPS of $2.68, and adjusted EBITDA of $56mn, exceeding consensus estimates of $1.46, $2.62, and $55mn, respectively. The company pre-announced production volume and LOE, and other costs or revenue items were consistent with our estimates. Realized oil price of $54.10/bbl was consistent with our estimate, the realized gas price of $1.94/mcf was 10% better, and NGL of $11.66/bbl...
Aug 26, 2019
CM - Analyst Notes - August 02, 2019Bonanza Creek Energy, Inc. (NYSE: BCEI; $21.37-July 23; Outperform; PT-$30)
BCEI disclosed 2Q19 sales volume of approximately 24.4MBoepd, representing
18% sequential growth and exceeded our previous estimate of 21.7Mboepd. BCEI has
not changed its annual guidance of 20- 24Mboepd, and we now expect production
at near the top of the range…2Q19 lease operating expenses (LOE) were $2.87/boe,
compared to our previous estimate of $3.00/boe; cash G&A decreased sequentially by
24% to $3.61/boe,...
Aug 02, 2019
CM - Analyst Notes - April 18, 2019Callon Petroleum Co. (NYSE: CPE; $7.82-April 10; Outperform; PT-$15)
We are maintaining our Outperform rating and one-year price target of $15 on CPE
shares. On 4/8/19, after market close, CPE announced the sale of its Ranger assets. The
agreement gives CPE the potential to realize incremental cash payments of up to $60MM
based upon future commodity prices (upside participation starting at the $60/Bbl WTI).
The company has expressed its intention to monetize this asset in the past and...
Apr 18, 2019
A&D - Supermajors eye Permian for potential dealmaking - March 2019The Permian will likely remain an M&A epicenter in the US going forward. Two of the world’s supermajors, Chevron and ExxonMobil, recently announced plans to significantly boost their operations in the region, and they will probably need to pursue acquisitions in addition to aggressive drilling programs to make their ambitious targets realizable. “The ability of the larger companies to do an accretive acquisition is probably at its highest level since the beginning of the shale revolution,”...
Mar 13, 2019
CM - People & Companies - March 07, 2019Directors who have announced
they do not intend to stand for re-election
at their company’s next annual meeting
of shareholders: Mark C. McKinley
from Anadarko Petroleum, George
D. Lawrence from Apache, Martin S.
Craighead, vice chairman, from Baker
Hughes, a GE company, Charles
L. Fabrikant from Diamond Offshore
Drilling, Inc., B.Z. (Bill) Parker from
Laredo Petroleum, Inc., Gary L. Warren
from Newpark Resources, Inc. Berry Petroleum Corp. elected
Donald L. Paul to its board of...
Mar 07, 2019