Sweet 16 Update - Feb 15

[dan_s]

We will be getting the first wave of Sweet 16 Q4 results next week. Even more important is their year-end reserve reports.

Companies reporting Q4 results on Feb 18: CXO, FANG, SOI

Companies reporting Q4 results on Feb 19: XEC, OVV, PE, PXD

We should see an improvement in Permian Basin differentials thanks to more pipeline access and the slowdown in well completions.

Viper Energy Partners (VNOM) is unhedged and they reported Q4 results last week.
This what they reported for realized prices Q3 to Q4:
> Crude oil: $51.53/bbl in Q3 to $53.90/bbl in Q4
> Natural gas: $1.28/mcf in Q3 to $1.29/mcf in Q4 < Viper actually had to pay $0.65/mcf for pipelines to take their gas in Q2
> NGLs: $9.84/bbl in Q3 to $14.53/bbl in Q4 < Most of the S-16 produce a lot of NGLs, so this is very encouraging. To give you an idea of the upside, Viper's NGL's sold for $25.01/bbl in 2018

Viper was created by Diamondback Energy (FANG). Most of Viper's production comes from properties operated by FANG. "Realized" oil, gas and NGL prices are what each company got paid in cash net of regional & quality differentials and net of the cash settlements paid on their hedges during each quarter.

FEAR created by the coronavirus is the primary reason that oil prices have pulled back. Q1 is also the lowest period of the year for oil demand, especially when the eastern half of the U.S. has a mild winter. The coronavirus fear seems to have cooled a bit.

An updated Sweet 16 spreadsheet will be posted to the EPG website this afternoon. Under Tab 1 you can find my Q4 EPS forecast for each company. Remember that "Reported Net Income" will include mark-to-market adjustments on hedges, which can be quite large when commodity prices are flopping around. CLR and EOG don't have any of their oil hedged.