Alex Chamberlin

The EIA expects less natural gas production at four key US shales by January 2017 compared to November 2016. It expects production to rise at three key US shales.

The U.S. onshore, or land-based, rig count increased by four rigs—from 1,865 to 1,869—during the week ending September 19. Land-based rigs include 13 inland water rigs. This is the highest onshore rig count in the past two years. It’s the highest rig count since August 17, 2012. This marks the eighth increase in the past ten weeks.

Schlumberger’s trailing-one-year stock price has fallen 12% as of June 16, 2017, while XLE, the broader energy industry ETF, has fallen 3%.

This was the seventh straight weekly decline in the Permian Basin oil rig count. Overall, the weekly US crude oil rig count was down 4%.

National Oilwell Varco’s cash from operating activities (or CFO) rose by more than four times in 1Q16 compared to 1Q15.

In Latin America, BHI expects year-end product sales to increase. It also expects the offshore Mexico rig activity to increase.

WFT, SPN, and FMSA have significantly underperformed the SPDR S&P 500 ETF (SPY), which has produced 23.0% returns since November 3, 2016.

For most of the last two years, WTI crude oil has been range-bound between ~$85 per barrel and ~$110 per barrel.

Since the week ending September 29, 2017, Weatherford International stock has fallen 7% until October 6, 2017. OIH has generated -2% returns.

Baker Hughes reported that the weekly US crude oil rig count rose by two rigs—from 572 to 574—in the week ended November 13, the first rise in a while.

Let’s discuss National Oilwell Varco’s growth drivers. The fall of the Wellbore Technology segment’s operating income was restricted by expense reduction.

National Oilwell Varco’s (NOV) capital expenditure or capex fell ~32% in fiscal 2017—compared to its capex spend in fiscal 2016.

As a result of steeply falling CFO, Halliburton’s free cash flow deteriorated to a negative $499 million in 3Q15 from a negative $71 million a year ago.

Between December 2014 and December 2016, Baker Hughes (BHI) stock hit its peak in April 2015. It troughed at ~$39 in January 2016.

Natural gas prices in the northeastern US have increasingly been below the Henry Hub price. This is primarily because of the Northeast’s increased access to Marcellus natural gas production.

The EIA expects less natural gas production at four key US shales by December compared to October, but it expects production to rise at three key shales.

On September 27, Weatherford International (WFT) disclosed that the SEC resolved the investigation into the company’s income tax–related accounting issues.

According to the U.S. Energy Information Administration (or EIA), the Permian Basin is the largest crude oil–producing region in the US.

According to oil service company Baker Hughes (BHI), the horizontal rig count was up by one rig in the week ended August 21, 2015.

The U.S. total rig count decreased by 17 rigs—from 1,913 to 1,896—during the week ending August 22. This marked the first rig count decline in the past five weeks. The decline was also the largest since late September 2013.

Now that Transocean has released its 4Q15 earnings, a whopping 56% of analysts have recommended a “sell.”

Enterprise Products Partners (EPD) is the largest company by market capitalization and enterprise value, or EV, among its closest peers. By market cap, Williams Companies (WMB) follows next.

Oil States International (OIS) ranks fourth on our list of the top five revenue growing OFS companies, according to analysts.

In this environment of crude oil prices declining sharply and staying low, investors continue to favor stocks that are increasing investments.

Nabor Industries’s Drilling & Rig Services segment accounted for nearly all of the company’s revenues in 2Q16.

What are Schlumberger’s views on North America?  Schlumberger (SLB) expects the North American onshore market to continue to improve in 2017. In Schlumberger’s 1Q17 earnings press release, chairman and CEO Paal Kibsgaard stated that “at present, the region in the world showing clear signs of increased E&P[1.exploration and production] investments in 2017 is North America […]

Schlumberger’s (SLB) one-year stock price fell 21.0% as of August 11, 2017. In the past year, the Energy Select Sector SPDR ETF (XLE) has fallen 7.0%.

Schlumberger’s (SLB) one-week returns were 2.0% as of September 22, 2017. Since September 15, the Energy Select Sector SPDR ETF (XLE) has risen 2.0%.

Approximately 90% of the analysts tracking Halliburton (HAL) recommended a “buy,” ~8% recommended a “hold,” and the rest recommended a “sell.”

Baker Hughes’s (BHI) management believes that international upstream operations will continue to stay pressured.

Rig counts tell us how many rigs are actively drilling for oil and gas. They can be an indication of oil and gas producers’ confidence.

Economist Karr Ingham expects that two-thirds of the Texas rigs at work will be laid down. That’s about 600 rigs if the price of crude oil stays low.

ETP’s interest in Sunoco Logistics (SXL) gives ETE acccess to SXL’s geographically diverse portfolio of complementary pipeline, terminalling, and acquisition and marketing assets.

In the week ending September 18, 2015, the US offshore rig count didn’t change. The offshore rig counts have averaged 33 over the past eight weeks.

On October 13, Halliburton proposed to acquire Baker Hughes’ shares without prior notice. After receiving BHI’s counter proposal, Halliburton refused to increase its first value proposal.

Patterson-UTI Energy (PTEN) released its 4Q15 financial results on February 4, 2016. The company recorded total revenues of $338.5 million in 4Q15, down 62% from $901.2 million recorded in 4Q14.

PDC Energy’s 2015 forward EV-EBITDA multiple is 6.6x. So the sharply lower forward multiple indicates that Wall Street expects PDCE’s EBITDA to improve sharply in 2H15.

Short interest in Schlumberger (SLB) stock as a percentage of its float was ~1.2% on March 3, 2017, a marginal fall compared to December 30, 2016.

Generally, natural gas burns more cleanly than coal. Coal has the highest carbon intensity among major fossil fuels.

From November 2013 to November 2016, Schlumberger’s (SLB) stock price was at its highest level in January 2014. It came close to that price in June 2014.

By the end of March 2015, the horizontal rig count was up by ~125% compared to the number of rigs in January 2007.

Atlas Pipeline Partners (APL) released its financial information for 1Q14 on May 5, 2014.

Nabors Industries’ valuation, expressed as a TTM PE (price-to-earnings) multiple, isn’t available due to negative adjusted earnings.

Schlumberger’s forward PE (price-to-earnings) multiple reflects analysts’ expectation of lower earnings in the next four quarters.

Although pipelines are the cost-effective way to transport crude oil, they require huge initial investment and are often impeded by regulations from the government agencies.

Schlumberger recorded topline and bottom-line growth in its North American operations due to continued efficiency improvements and new technology.

Horizontal rig counts decreased by 35 from the previous week’s count. This was the seventh straight weekly fall. Currently, there are 1,301 horizontal rigs.

Every week, the U.S. Energy Information Administration (or EIA) reports figures on natural gas inventories, or the amount of natural gas stored in facilities across the U.S.

Approximately 35% of Wall Street analysts tracking ExxonMobil (XOM) rate it a “buy.” Approximately 10% of the analysts recommend a “sell.”

After analyzing BP’s (BP) 2Q15 performance by segment, we’ll now discuss its year-to-date (or YTD) revenues and earnings.

Nabors Industries (NBR), one of the largest land-based drilling operators in the world, had a steady run in the stock market in 2016.

Nabors Industries (NBR), one of the largest land-based drilling operators in the world, has had a steady run in the stock market in 2016.

Oilfield service company Baker Hughes’s (BHI) crude oil rig count decreased by 84 last week, from 1,140 to 1,056.

In the past year, Schlumberger’s stock price trended up. Its revenues stayed steady in 3Q16 and 2Q16 after falling in the previous three quarters.

Petrobras’ (PBR) oil and gas production from Brazil was more than 90% of its total upstream energy production. In 2013, ~96% of its total reserves were in Brazil.

In the second quarter, TechnipFMC recorded total revenues of ~$2.96 billion, down 23% from ~$3.85 billion in Q2 2017.

Genesis Energy L.P. (GEL) is a master limited partnership (or MLP) that operates in the midstream segment of the oil and gas industry in the Gulf Coast region of the United States.

In 2013, the company processed an average of 780.1 million cubic feet per day of natural gas and produced an average of 91.9 thousand barrels per day of NGLs.

Halliburton (HAL) recorded a net loss of ~$463 million in 2017—a sharp improvement compared to a net loss of $5.73 billion in 2016.

We’ve already discussed Schlumberger Limited’s (SLB) fiscal 1Q16 revenues and earnings. We’ll now look into its performance by segment in fiscal 1Q16.

Rig counts in the Permian Basin can gauge drilling activities for upstream companies. The Permian Basin rig count is now at its lowest since May 2011.

The previous parts of this series (parts 8 and 9) explained the counterintuitive relationship between low natural gas prices, falling rigs, and rising natural gas production. Oil rigs have a simpler relationship with crude oil prices and oil production.

Weatherford International’s (WFT) Latin American revenue fell the most (21.0%) from 1Q16 to 1Q17.

Halliburton’s 3Q16 FCF improved significantly over the previous year. Its CFO rose significantly due to increased rig utilization in North America.

Sunoco Logistics Partners L.P. (SXL) is a master limited partnership (or MLP). Its Crude Oil Pipelines segment transport 4,900 miles of crude oil, primarily in Oklahoma and Texas.

In 4Q14, revenues in the Drilling and Evaluation segment increased 6.5% to $3.29 billion from $3.09 billion recorded in 4Q13.

Traditionally, the Merchant Services segment provides wholesale distributor service of refined petroleum products in the U.S. and the Caribbean.

In 3Q15, EOG has continued to improve cost efficiency by reducing its primary cost heads including lease and well costs, measured on a per barrel of oil equivalent basis.

In 4Q14, Schlumberger’s revenues from its North American operations increased 18.5% to $4.32 billion.

Weatherford International’s (WFT) management expects crude oil price to start stabilizing by the second half of 2016. It plans to keep reducing costs to manage the current uncertainty.

U.S. total rig count increases by six The U.S. total drilling rig count increased by six rigs, from 1,883 to 1,889, during the week ending August 1 according to Baker Hughes, which publishes rig counts every week. The number of oil rigs increased by 11, while the number of natural gas rigs decreased by five. […]

Sunoco Logistics Partners, L.P. (SXL) released its financial information for 1Q14 on May 6, 2014.

In this series, we’ve seen Schlumberger’s (SLB) stock has held up following its latest quarter earnings release. Now let’s look at what Wall Street forecasts.

Last week, the offshore rig count increased by two to 60, which is close to its 4-year high of 66 that it reached on August 29, 2014.

According to oil service company Baker Hughes (BHI), the horizontal rig count fell by seven in the week ended May 15, 2015, compared to the previous week’s count.

Let’s see which energy company stands out as the most efficient in reducing debt loads and improving leverage ratios and which ones are laggards.

Between 3Q12 and 3Q14, HAL’s adjusted earnings per share (or EPS) has increased 78%. HAL has drawn the attention of Wall Street analysts to review the results and give their recommendations and target price.

The Gulf of Mexico rig count was down by 11 rigs compared to the previous week, with 35 rigs for the week ending March 20, 2015.

The four-week average fall in the US rig count was at eight for the week ending November 25. Four-week averages offer a broader view of the rig counts.

The Permian Basin spreads across a wide swath of western Texas and southern New Mexico. The name “Permian Basin” generally refers to a combination of the Delaware Basin and Midland Basin.

Last week, frac spreads traded up slightly, and over the medium term, frac spreads are up significantly. This is a positive catalyst for natural gas processors.

Wall Street analysts expect Flotek Industries (FTK) to register positive EBITDA (or earnings before interest, tax, depreciation & amortization) in 4Q16.

Halliburton (HAL) released its fiscal 2Q16 financial results on July 20, 2016. It recorded total revenues of $3.4 billion, a decline of 43% from $5.9 billion in fiscal 2Q15.

Companies in the midstream sector don’t have direct exposure to falling energy prices. At least, not in the immediate term.

In 4Q16, analysts expect Flotek Industries (FTK) to post an adjusted loss per share of ~$0.04.

Revenues from Weatherford International’s (WFT) Latin American region fell the most by 18.5% from 2Q16 to 2Q17.

Phillips 66’s net income decreased ~10% to $863 million in 2Q14—from $958 million in 2Q13. Despite the decrease, the Midstream and Chemicals segments’ share in the net income increased to 11% and 33% in 2Q14.

Wall Street analysts gave target prices for Marathon Oil after its 2Q15 financial results. Evercore ISI gave Marathon Oil a target price of $23.

Horizontal rig counts had been setting and breaking new records before last week’s fall, which marked the third decrease in the past 16 weeks.

Halliburton’s share price reacted negatively after its fiscal 4Q15 earnings release, falling by 3.9% to $29.28 on the day compared to the day before.

Wall Street’s forecasts for Halliburton include ~76% of analysts rating the company as a “buy” or some equivalent.

In the week ending July 27, Schlumberger’s (SLB) correlation with crude oil was 0.48.

National Oilwell Varco’s (NOV) net debt increased 4% in 1Q17 over 1Q16. Its net debt amounted to ~$1.7 billion in 1Q17.

On June 13, BHI’s stock price rose 2% over its previous day’s close. GE’s stock price reaction was lukewarm with a fall 2% on June 13.

As of August 4, 2017, Weatherford International’s (WFT) short interest as a percentage of its float was 15.8%—unchanged compared to June 30, 2017.

The correlation coefficient between the price of crude oil and Halliburton (HAL) stock from September 5, 2016, to September 5, 2017, is 0.65.

Schlumberger, a Houston-based energy company, provides technology, integrated project management, and information solutions to oil and gas exploration and production companies.

On May 3, 2017, after Flotek Industries’ 1Q17 earnings were released, all of the sell-side analysts tracking Flotek Industries rated it as a “buy.”

Exxon Mobil alleged that the Venezuelan government illegally expropriated its Venezuelan assets in 2007 and paid unfair compensation.

Baker Hughes, a GE Company (BHGE), is the largest company by market capitalization in our select set of major oilfield services and equipment companies.