From Raymond James this morning.
The annual North American Prospects Expo (NAPE) took place in Houston this past week. It is one of the largest annual gatherings of exploration and production (E&P) companies getting together to network, showcase deals, and discuss the current state of the energy industry. As is our tradition, we hosted our 17th annual NAPE dinner which was attended by ~150 industry representatives; with most being E&Ps and/or E&P related private equity firms. Additional attendees were also represented from oil service companies, midstream firms, and public market investors. The dinner once again utilized real-time anonymous voting from the audience addressing a handful of hotly debated industry topics. In this week’s “Stat,” we share both our and the industry insiders' views regarding some of these key questions currently facing the U.S. oil and gas industry.
Specifically, this week's "Stat" will highlight insights into the following topics:1) Where will oil and gas prices go from here?, 2) Will E&P's remain disciplined with their capital budgets or focus on growth?, 3) How will M&A activity in the E&P space evolve? 4) What will drive changes in well productivity from here?, and 5) What do industry insiders see as the best energy investment opportunities for 2018?
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Send me an email if you'd like to read the full report: dmsteffens@comcast.net
Raymond James Survey at NAPE - Feb 19
Raymond James Survey at NAPE - Feb 19
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Raymond James Survey at NAPE - Feb 19
The market overwhelmingly views oil price risk to the upside with funds being net buyers of Brent futures and options in 9 out of the last 10 weeks, according to CFTC Data, Amir Hekmati, oil futures spec trader at TradeFlow, told UPI.
With Saudi production cuts in effect, sanctions on Iran, and Venezuela in place and taking effect, and signs of a possible trade deal with China, the view is positive and there are not many sellers, he added.
Saudi Arabia has led efforts by OPEC to reduce production in a bid to help crude prices. OPEC agreed in Vienna on Dec. 7 to jointly reduce production by 800,000 barrels per day starting in January. Some non-OPEC nations, led by Russia, agreed to match the cut with 400,000 barrels.
The United States last week imposed sanctions against Venezuela in a bid to put pressure on Venezuelan President Nicolas Maduro. The sanctions include a ban against U.S. companies, including Venezuelan subsidiary Citgo, preventing them from making funds from Venezuelan crude available to Maduro and instead insisting the payments be made to National Assembly leader Juan Guaido.
Prices have seen gains in recent days, in part, on the possibility of a widespread political conflict in Venezuela. Guaido, who wants Maduro to relinquish power, has organized masses of people that will seek to introduce several tones of humanitarian aid to the country on February 23. Maduro, with the backing of the military, rejects the aid.
As for Iran, the United States issued waivers in November so that nations could continue buying its oil despite nuclear-related sanctions announced in May. The waivers expire in May and a decision by the United States on whether it would renew them or not would affect prices.
The path to $65 WTI looks very possible, possibly by April, Hekmati said.
With Saudi production cuts in effect, sanctions on Iran, and Venezuela in place and taking effect, and signs of a possible trade deal with China, the view is positive and there are not many sellers, he added.
Saudi Arabia has led efforts by OPEC to reduce production in a bid to help crude prices. OPEC agreed in Vienna on Dec. 7 to jointly reduce production by 800,000 barrels per day starting in January. Some non-OPEC nations, led by Russia, agreed to match the cut with 400,000 barrels.
The United States last week imposed sanctions against Venezuela in a bid to put pressure on Venezuelan President Nicolas Maduro. The sanctions include a ban against U.S. companies, including Venezuelan subsidiary Citgo, preventing them from making funds from Venezuelan crude available to Maduro and instead insisting the payments be made to National Assembly leader Juan Guaido.
Prices have seen gains in recent days, in part, on the possibility of a widespread political conflict in Venezuela. Guaido, who wants Maduro to relinquish power, has organized masses of people that will seek to introduce several tones of humanitarian aid to the country on February 23. Maduro, with the backing of the military, rejects the aid.
As for Iran, the United States issued waivers in November so that nations could continue buying its oil despite nuclear-related sanctions announced in May. The waivers expire in May and a decision by the United States on whether it would renew them or not would affect prices.
The path to $65 WTI looks very possible, possibly by April, Hekmati said.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Raymond James Survey at NAPE - Feb 19
Oil-gas optimism reigns, study finds . Offshore Engineer
The worldwide oil and gas industry is “resilient, confident and ready to spend” but is at risk of reverting to overspending, just as an increase in large-project approvals loom. That’s the gist of a new report from Oslo-based, all-in-one classification society, DNV GL. According to A Test of Resilience: The Outlook for the Oil and Gas Industry in 2019, 76 percent of the oil and gas industry feels “confident” in growth, or more than twice the polled number expressing that kind of confidence in 2017. Most apparently see “increases or stable capital and operating expenditure in 2019, and more large project approvals than in 2018,” the DNV GL report says, adding that the US outlook has improved the most. The Report cites optimism about achieving “high profitability over the next decade” as having also risen by double digits in all oil regions.
The worldwide oil and gas industry is “resilient, confident and ready to spend” but is at risk of reverting to overspending, just as an increase in large-project approvals loom. That’s the gist of a new report from Oslo-based, all-in-one classification society, DNV GL. According to A Test of Resilience: The Outlook for the Oil and Gas Industry in 2019, 76 percent of the oil and gas industry feels “confident” in growth, or more than twice the polled number expressing that kind of confidence in 2017. Most apparently see “increases or stable capital and operating expenditure in 2019, and more large project approvals than in 2018,” the DNV GL report says, adding that the US outlook has improved the most. The Report cites optimism about achieving “high profitability over the next decade” as having also risen by double digits in all oil regions.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group