Last Week on Market Realist: Key Energy Industry Updates


Nov. 20 2020, Updated 5:03 p.m. ET

Whiting Petroleum’s updated capex

In its 2Q17 earnings conference, Whiting Petroleum (WLL) lowered its capex forecast for 2017 from $1.1 billion to $950 million. The company’s capex was ~$554 million in 2016.

As you can see in the above chart, a significant portion of Whiting Petroleum’s 2017 capex will be allocated to the Williston Basin (54.5%) and Redtail regions (~35%). In the Williston Basin, Whiting Petroleum’s operations are focused on the Bakken and Three Forks formations. Its core operations also include the DJ Basin area where it operates in the Redtail and Niobrara regions.

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Cabot Oil & Gas’s key fundamentals

Cabot Oil & Gas’s (COG) net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple rose steadily between 2Q15 and 4Q15 due to a rising net debt and a falling EBITDA trend. The net debt rose from $1.98 billion in 2Q15 to $2.02 billion in 4Q15. Its trailing 12-month adjusted EBITDA in 2Q15 was ~$1.2 billion, which fell to $636.0 million in 4Q15.

Technology innovations and Weatherford

Recently, Weatherford International’s (WFT) major technology innovations include:

  • In 2Q17, Weatherford released the ForeSite production optimization platform for upstream companies. It’s an integrated software solution that leverages the Internet of Things and advanced analytics to reduce the downtime of production assets and optimize critical maintenance routines.
  • Weatherford developed the premium version of RipTide for the offshore market. It’s a radio frequency identification controlled drilling reamer that incorporates advanced cutter technology.
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Upstream companies that could fall into a debt trap

Jones Resources (JONE), with a net debt-to-EBITDA ratio of 9.9x, leads the debt-loaded companies in the oil and gas production universe. Jones Resources is followed by Hess (HES), Sanchez Energy (SN), Denbury Resources (DNR), and Approach Resources (AREX). These companies have net debt-to-EBITDA ratios of ~9.4x, ~9.3x, ~8.4x, and ~8.0x, respectively.

Seadrill’s rise

Seadrill (SDRL) stock closed at $0.28 on September 13, 2017. The stock rose more than 20% in a single day. The previous day, the stock had a 17.6% return. In just two days, the stock price rose 41%. However, the stock is still down 91.9% from the beginning of the year.


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