"We see 80-120% upside over a 6-12 month period as hedges roll off entering 2H2018 and 1H2019, and as investors recognize the gross mispricing of the company's SCOOP/STACK producing assets." Read: https://seekingalpha.com/article/418711 ... stractions
My valuation of NFX is $53.00/share and the valuation will go up if (a) WTI stays over $65/bbl and (b) NFX production is near the high end of their guidance.
Newfield Exploration (NFX) Update - July 23
Newfield Exploration (NFX) Update - July 23
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Newfield Exploration (NFX) Update - July 23
From the TPH Morning Report: 7-24-2018
NFX Stock Thoughts: Cautious into Q2 print on non-op capex and optics of headline oil mix
Sector: NAm E&P | Ticker: NFX | Recommendation: HOLD | Target: $35 | Close: $28.19
Equity has been weak over the past month, down -8% vs E&Ps +1%, and weakness could persist through the Q2 earnings print. Our negative bias is driven by higher than expected non-op activity in the STACK, which should drive a capex overshoot and a lower than expected Anadarko Basin oil cut as partner activity is on acreage that is more gas / NGL rich vs NFX's position. This is essentially a repeat of Q1, where a -1% miss on Anadarko Basin oil cut and +$17MM capex overshoot on Anadarko Basin capex had the equity down -7% on the day. To be clear, we feel comfortable the company should be able to hit Street oil volumes. All-in, we model Q2 D&C capex of $369MM vs Street $353MM / guidance $360MM and a Q2 Anadarko Basin oil cut of 33% vs guidance 34%, though TPHe 42mbpd oil is in line with guidance. Longer term, we remain sidelined as we await clarity on use of FCF (free cash flow from operations) which should ramp in H2'18+, STACK inventory expansion (TPHe <10 years of risked inventory assuming 8 Meramec wells/DSU), and increasing regulatory oversight in OK (i.e. Kingfisher County looking to reign in use of temporary pipes to transport produced water).
NFX Stock Thoughts: Cautious into Q2 print on non-op capex and optics of headline oil mix
Sector: NAm E&P | Ticker: NFX | Recommendation: HOLD | Target: $35 | Close: $28.19
Equity has been weak over the past month, down -8% vs E&Ps +1%, and weakness could persist through the Q2 earnings print. Our negative bias is driven by higher than expected non-op activity in the STACK, which should drive a capex overshoot and a lower than expected Anadarko Basin oil cut as partner activity is on acreage that is more gas / NGL rich vs NFX's position. This is essentially a repeat of Q1, where a -1% miss on Anadarko Basin oil cut and +$17MM capex overshoot on Anadarko Basin capex had the equity down -7% on the day. To be clear, we feel comfortable the company should be able to hit Street oil volumes. All-in, we model Q2 D&C capex of $369MM vs Street $353MM / guidance $360MM and a Q2 Anadarko Basin oil cut of 33% vs guidance 34%, though TPHe 42mbpd oil is in line with guidance. Longer term, we remain sidelined as we await clarity on use of FCF (free cash flow from operations) which should ramp in H2'18+, STACK inventory expansion (TPHe <10 years of risked inventory assuming 8 Meramec wells/DSU), and increasing regulatory oversight in OK (i.e. Kingfisher County looking to reign in use of temporary pipes to transport produced water).
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group