Stock performance In this final part of our series, we’ll discuss Stone Energy’s (SGY), Sandridge Energy’s (SD), Murphy Oil’s (MUR), QEP Resources’ (QEP), and Southwestern Energy’s (SWN) stock performance. As we saw in the previous part, these companies had the lowest last-12-month EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) ratios as […]
Top five upstream stocks by valuation In this part, we’ll compare stocks’ adjusted EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) ratios. Enterprise value is the sum of a company’s market capitalization and debt, minus cash and cash equivalents. A low EV-to-EBITDA ratio indicates that a company may be undervalued. Let’s look at the five […]
Stock performance In this part, we’ll compare Ring Energy’s (REI), Centennial Resource Development’s (CDEV), Sandridge Energy’s (SD), Jagged Peak Energy’s (JAG), and Callon Petroleum’s (CPE) stock performance. As we discussed in Part 7, these companies had the lowest last-12-month leverage ratios. Outliers and underperformers Ring Energy (REI) has outperformed peers significantly, rising ~39% YoY (year-over-year). Meanwhile, Centennial […]
The five upstream with the lowest leverage In this part, we’ll look at the five upstream companies with the lowest leverage based on asset-to-equity ratios. A high asset-to-equity ratio indicates that debt is financing a larger portion of a company’s assets. The industry average ratio is 2.2x. The five upstream companies with the lowest LTM (last-12-month) leverage are Ring Energy […]
On July 16, the EIA will release the weekly natural gas report for the week ending July 10. Natural gas inventories rose by 91 Bcf for the week ending July 3.
The EIA released its weekly natural gas report on July 9. It showed that natural gas stocks rose by 91 Bcf to 2,668 Bcf for the week ending July 3, 2015.
A rise in inventories for the week ending July 3 would mean that natural gas stocks rose for 14 consecutive weeks. The puts pressure on natural gas prices.
The US rig count fell by 40% compared to a year ago, but 9.6 million bpd were still pumped in the United States, the highest since 1970. Hedging by oil companies has helped.
Smithwood Advisers was among the hedge funds that sold their stakes in SandRidge Energy in 1Q15. Hancock Holding was one of the firms that sold stakes in Vaalco Energy.
On a year-to-date basis, high yield bond funds have witnessed net investments to the tune of $7.5 billion. But, net outflow totaled $111 million in the week ended May 29.
Refinancing has been the chief motivator for high yield debt issuers since mid-February 2015. Acquisition-related deals have also been catalysts on occasion.
June natural gas futures increased marginally by 0.27% on Friday. Prices surged for the fourth consecutive day. Natural gas prices settled at $3.01 per MMBtu.
Natural gas futures for May delivery settled unchanged at $2.53 per MMBtu on April 24, 2015. The EIA released the natural gas weekly report on April 23.
Crude oil prices have declined substantially since Freeport acquired its oil and gas production assets. Freeport produced 12.4 MMBOE in 1Q15, down 22% YoY.
NYMEX May natural gas futures slumped by 2.88% and closed at $2.60 per MMBtu on Thursday, April 23, 2015. Natural gas in storage increased to record levels.
In terms of operating cash flows, Denbury seems undervalued compared to its larger peers. It trades at the highest dividend yield compared to its peers.
Omega Advisors trimmed its position in SandRidge Energy (SD) this month. It holds 32,162,580 shares, a 6.63% stake, via an amended 13G filing this month.
Omega Advisors’ top holdings at end of third quarter were American International Group (AIG), Citigroup (C), SiriusXM (SIRI), and Chimera Investment (CIM).
SandRidge promotes itself as a turnaround story after ousting CEO Tom Ward in June 2013. It sold Gulf of Mexico assets in January 2014 for $750 million.
SandRidge is expanding its low-cost multilateral program and is successfully extending its mid-continent resource base with Chester and Woodford production.
Allison Transmission posted a 19% net sales increase in 3Q14 to $553 million, resulting from recovery in the North American on- and off-highway end markets.
TPD-Axon invests in public and private equity markets across the globe, especially healthcare, pharmaceuticals, financial services, technology, and energy.
Despite the crude oil price fall, Continental Resources’ revenues increased. This was primarily due to higher production and higher natural gas prices.
Although Halcon’s quality of earnings is among the weakest in the group, its asset turnover ratio and projected earnings growth are in line with its peers.
Halcon Resources (HK) has the highest EV to earnings before interest, taxes, depreciation, and amortization (or EBITDA) multiple at 7.2x. XCO has the lowest EV to EBITDA in the group at 6.1x. HK is a component of the Energy Select Sector SPDR (XLE).
In 2014, Halcon Resources (HK) outperformed the industry and broader market. HK’s stock has returned ~34% year-to-date (or YTD). On an annualized basis, this means a return of ~50%. In comparison, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has returned ~12% YTD—or ~17% annualized.
Halcon Resources’ (HK) revenues for the first half of 2014 increased 49% to $602.3 million—from $405.2 million in the first half of 2013. This was mainly due to increased production volumes. The increased volumes were associated with property development in the Bakken or Three Forks and El Halcon areas.
Operating costs per unit of production decreased by 8% to $28.40 per boe in 1Q14—compared to the same period in 2013. The costs are taken out of the revenues. This gives the operating income. However, on an absolute basis, operating costs increased 78% to $283.5 million in 2Q14—from $158.2 million in 2Q13.
Between 2Q12 and 2Q14, Halcon Resources’ (HK) earnings before interest, taxes, depreciation, and amortization (or EBITDA) increased more than nine times. It increased ~70% from $126 million in 2Q13 to $214 million in 2Q14. Reported EBITDA fell short of the consensus EBITDA for most of the last nine quarters.
Halcon recorded $327.1 million in total revenues for 2Q14—up 53% from $213.6 million recorded in 2Q13. The increase was mainly due to higher production. Production for 2Q14 increased 44% over 2Q13. It increased to an average of 42,055 barrels of oil equivalent per day (or boe/d).
Halcon Resources (or HK) has been making strategic acquisitions. It has been restructuring its core resource plays to maximize its oil and liquids-rich natural gas production. It looks for shale resources that provide repeat drilling opportunities and significant initial production rates. Its operations are geographically diversified.
Halcon Resources (HK) is a Texas-based energy exploration and production company. The company mainly focuses on developing onshore liquids-rich oil and natural gas assets. As of June 30, 2014, Halcon Resources’ estimated total proved oil and natural gas reserves were ~120 million barrels of oil equivalent (or MMBoe).
Point72 Asset Management, the new name for SAC Capital Advisors, initiated a new position in Midstates Petroleum Company (MPO) last month, according to a 13G filing.
SandRidge Energy exited the Gulf of Mexico, selling its operations there for $750 million in cash and the assumption of $370 million in abandonment liabilities.
The Bank of America Merrill Lynch High Yield Index rate fell, meaning cheaper financing. This is a positive for many independent high yield energy companies.
The rates on high yield bonds continue to drift upward, spelling increased borrowing costs for high yield companies, many of which are energy companies. This is especially relevant for those energy companies which will be outspending cash flow and will need to look for outside funding such as the debt markets to finance themselves.
Corporate credit yields indicate the rate at which companies can borrow money “Corporate credit yields” is a general term for the rate at which companies can issue debt (that is, borrow money). Higher corporate credit yields mean more expensive borrowing rates for companies. So higher yields are generally negative for companies—especially those with high funding […]
