Halcon Resources Corp

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.

The EIA reported that US crude oil production increased by 100,000 bpd (barrels per day) to a record high of 10.9 MMbpd on June 1–8.

Horizontal wells increase the length of the well that’s exposed to the reservoir. This increases production. In vertical drilling, a well goes straight down until it reaches the formation.

NYMEX-traded WTI crude oil futures for March delivery fell and closed at $29.64 per barrel on February 19. Oil prices fell due to long-term oversupply concerns.

Talos Energy, an exploration and production company involved in offshore drilling, was the weakest upstream stock in the week ending September 21.

For the week ending October 20, 2017, crude oil (USO) prices rose from $51.45 per barrel to $51.84 per barrel—an increase of 0.76%.

December WTI crude oil futures contracts trading in NYMEX fell by 1.4% on Monday, October 26, 2015. Crude oil prices fell for the second day.

The US Dollar Index fell ~0.13% to 93.89, and July WTI oil futures rose ~1.2% on June 5.

AlixPartners surveyed 134 public companies in the US and Canada. The surveys showed that they had a cumulative long-term debt of more than $353 billion in 2015.

The CFTC’s COT report states that hedge funds reduced their long positions for the week ending January 12, 2016. The net long positions fell by 20,673 contracts to 163,504 contracts during the week.

For the week ending November 14, 2014, the number of horizontal rigs increased by seven from the previous week’s count. Currently, there are 1,369 horizontal rigs.

Russia’s energy minister reported that Russia is targeting to produce ~10.9 MMbpd of crude oil in 2016 compared to 10.7 MMbpd in 2015. It’s the highest in 30 years.

On March 14, OPEC’s delegates reported that Russia, Saudi Arabia, Venezuela, and Qatar will meet in Doha in April. The meeting will renew talks to stabilize the oil market.

For the week ending September 26, 2014, the number of horizontal rigs increased by six to 1,347—compared to 1,341 last week. This is the highest horizontal rig count on record.

US commercial crude oil (USO) (UWTI) inventories fell by 3.4 MMbbls (million barrels) compared to the previous week for the week ending May 6, 2016.

From August to November, returns on drilling wells in shale plays such as the Eagle Ford dropped from more than 20% to the 15% range.

This week’s fall in oil rig count marked the third decrease in the past four weeks, and the highest decrease since August 22’s fall.

Last week, the Baker Hughes oil rig count decreased by nine—from 1,601 to 1,592. This marked the first decrease in the past five weeks. Despite the decrease, oil rigs are still close to the record high.

China’s controversial Hong Kong national security law could be a nightmare for US tech companies. Overall, the law would give China more power.

For the week ending October 31, 2014, the number of horizontal rigs decreased by two from the previous week’s count. Currently, there are 1,353 horizontal rigs.

For the week ended October 24, the number of horizontal rigs increased by two to 1,355, the highest horizontal rig count on record.

Knowing the breakeven price of crude oil is important when trying to figure out what OPEC needs in order to regain market share.

Before learning the costs components of crude oil extraction, let’s take a look at how producers extract crude oil from the ground.

Recent consensus says the production cost of crude oil could range from $20 to $25 per barrel.

In the week starting July 2, Legacy Reserves (LGCY) decreased from $6.90 to $6.22, a fall of almost 9.9%.

As of June 26, Gulfport Energy (GPOR) had risen ~6.9% from last week’s close of $11.62 to $12.42, above its 50-day and 200-day moving averages of $10.31 and $11.59, respectively.

Russia’s crude oil output averaged 10.97 MMbpd (million barrels per day) in May. Russia’s crude oil production averaged 11.1 MMbpd in early June.

To conclude our series, we’ll discuss analysts’ recommendations for this year’s weakest upstream stocks.

We’ll now look at Wall Street’s recommendations for the worst performers in 2018 from the US oil and gas production, or upstream, sector.

Year-to-date in 2018, Halcon Resources (HK) is turning out to be the worst-performing energy stock from the US oil and gas production, or upstream, sector.

So far this week, Legacy Reserves (LGCY) has risen from its last week’s close of $1.49 to $1.63 on October 10—a significant rise of more than 9%.

On August 5, 2016, Stone Energy (SGY) had the highest implied volatility among the upstream stocks. Its implied volatility was ~355.5%.

August West Texas Intermediate crude oil futures contracts trading on the NYMEX rose slightly by 0.59% and closed at $45.95 per barrel on July 15, 2016.

August West Texas Intermediate crude oil futures contracts fell by ~2.8% and settled at $46.33 per barrel on Monday, June 27, 2016. Prices fell for the second day due to the aftermath of the Brexit vote on June 24.

On April 26, 2016, the API (American Petroleum Institute) released its weekly crude oil inventory report. It showed that US crude oil inventory fell 1.1 MMbbls for the week ended April 22.

The rise in gasoline demand in 2016 compared to 2015 has boosted gasoline prices. Consequently, it boosted crude oil prices.

OPEC’s (Organization of the Petroleum Exporting Countries) crude oil production fell by 79,000 bpd (barrels per day) to 33.1 MMbpd (million barrels per day) in February 2016 compared to January 2016.

WTI (West Texas Intermediate) crude oil futures contracts for April delivery fell 0.88% and settled at $32.78 per barrel on Friday, February 26, 2016.

The EIA (U.S. Energy Information Administration) reported that US crude oil production fell marginally by 14,000 bpd (barrels per day) to 9.2 MMbpd (million barrels per day) for the week ending January 22, 2016.

Crude oil prices have gained ~6.4% within the last two days, ignoring the gasoline and crude oil inventory builds.

The US crude oil production rose due to technological advancement, higher crude oil prices between 2010–2014, and cheaper credit facilities in 2015.

US oil and gas exploration and production companies are under severe pressure.

During the 1985-86 crude oil crash, OPEC (Organization of Petroleum Exporting Countries) decided to defend its market share by pumping more oil.

The net debt of US oil and gas exploration and production companies increased from $81 billion in 2010 to $169 billion by 1H15. The main reason is the catastrophic fall in crude oil prices.

August WTI crude oil futures contracts settled above $52 per barrel for third day. Crude oil prices closed above the key support level of $52 per barrel as of July 14.

Lower WTI crude will hurt U.S. oil producers’ profitability. These companies include Whiting Petroleum, Halcon Resources, Laredo Petroleum and Pioneer Natural Resources.