W&T Offshore (WTI), a crude oil–weighted E&P (exploration and production) company focused on offshore drilling, was the weakest upstream stock last week. WTI plunged 18.8% at the end of the week.
WTI’s fall last week can mainly be attributed to the weakness in crude oil prices. Despite these losses, WTI is still up 123.0% in 2018 so far. A further fall in crude oil’s price could result in more profit-booking in WTI. For more information, read These Upstream Stocks Are More than 80% above Their 52-Week Lows.
California Resources (CRC), a California-focused E&P company, was the second-worst upstream performer last week with a fall of 14.8%. Like WTI, CRC saw strong profit-booking amid weakness in crude oil prices. Overall, CRC is up 102.2% YTD (year-to-date).
Resolute Energy (REN), a Delaware-focused E&P company, was the third-weakest upstream stock last week. It fell 13.7%. REN announced its preliminary third-quarter production results and provided an operational update last week. The company expects 45% production growth in the third quarter compared to the second quarter.
Strong production growth and lower costs are expected to result in ~100% adjusted EBITDA growth in REN’s third quarter compared to its second quarter. Despite strong top line growth, the company expects to see a higher net loss in the third quarter than it saw in the previous quarter due to higher noncash mark-to-market derivative losses.
Halcon Resources (HK), Berry Petroleum (BRY), Marathon Oil (MRO), Encana (ECA), Denbury Resources (DNR), Newfield Exploration (NFX), and Continental Resources (CLR) were among the top ten underperforming upstream stocks last week.
In the next article, we’ll look at last week’s best-performing upstream stocks.