Upstream Losers: PE, GPOR, CRC, SWN, and SN



Upstream losers

In this part, we’ll discuss the percentage losers from the oil and gas production—or upstream—sector in the US for the current week starting January 29, 2018. To compile the list of top upstream gainers, we only used oil and gas producers with market capitalizations of greater than $100 million and last week’s average trading volume greater than 100,000 shares.

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Parsley Energy

In the week starting January 29, 2018, Parsley Energy (PE) decreased from $28.73 to $24.07—a significant decrease of ~16.2%. On Tuesday, Parsley Energy gapped down ~11% and continued with the sell-off throughout the session after it provided an operational update. On Tuesday, Parsley Energy decreased more than 14%.

On January 29, 2018, after the market closed, Parsley Energy announced that despite higher oil prices, it’s maintaining its target to place 40 gross horizontal wells every quarter in 2018. Parsley Energy expects to incur capital expenditures at the higher end of its guidance range of $1.35 billion–$1.55 billion due to the possibility of service and equipment cost inflation. Market participants didn’t like the possibility of higher capital expenditures while maintaining the same activity level. Market participants sold Parsley Energy stock heavier than the 30-day average volume.

On the list of top decliners, Parsley Energy is followed by Gulfport Energy (GPOR), California Resources (CRC), Southwestern Energy (SWN), and Sanchez Energy (SN), which have fallen ~11.9%, ~11.4%, ~11.0%, and ~9.8%, respectively.

On January 9, 2018, Gulfport Energy announced that it expects 2018 capital expenditures of $770 million–$835 million, which will be funded from the operating cash flow. Gulfport Energy expects its fiscal 2018 production to grow 15%–19% compared to 2017. Gulfport Energy also announced a common stock buyback program of up to $100 million for 2018.

Overall, the First Trust Natural Gas ETF (FCG), which represents an index of stocks across the natural gas exploration and production industry, has fallen ~4.9% this week. In comparison, the SPDR S&P500 ETF (SPY) has fallen ~1.7% this week.


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