Mindful Permian producers

[letitfly]

Dan--

Due to the spread between WTI and Brent, and the further discount due to the Permian take-away constraints, which of your Sweet 16 Permian companies are recognizing this differential and are revising their production plans to limit their production at these lower prices and able to adjust their Capex to SAVE money during this time and await a better price atmosphere versus drilling balls out just to keep cash flow going.

[ddlopata084]

It might also might be valuable to investigate Midstream’s that are banking this basin differential, and those that have marketing arms that can leverage space on their pipes for their own benefit. Last Q, ETP banked close to $100M on basin differentials - all pure profit - in their marketing group. I assume they were leveraging spare capacity on their PermExpress pipes. Can’t offer an investment thesis...

[dan_s]

You can find production estimates (based primarily on each company's guidance) at the bottom of each forecast model. Go to the EPG website and click on the Sweet 16 tab.

Very few companies have cut back on their drilling & completion programs. Very little, if any, of their oil will be "stranded".

Permian Basin companies are: CPE, CDEV, XEC, CXO, ESTE, EOG, FANG, MTDR, PE, PDCE and PXD. The pure plays on the Permian (or close to it) are highlighted.

Most of these companies are not going to get the full impact of the Permian Basin oil price differential because they have contracts with pipelines to take most of their production. They also have hedges in place. EOG produces a lot of Eagle Ford oil that sells at a premium to WTI.

At the bottom of each forecast model I have estimated what their actual gas prices for oil will be in the future periods, based on WTI at $65/bbl. The oil, gas and NGL prices are net of cash settlements on their hedges.

[dan_s]

For midstream companies, start by reading the profiles on MMP and ENLK that I posted to our website last night. PAA and OKE also are doing quite well.