From TPH:
Oasis Petroleum (OAS) downgrade from Buy to Accumulate ($33.76 – A) – Downgrade on combination of weak crude fundamentals, stock outperformance (+15% ytd vs. flat E&P index), and near-term optics. We expect Q4 volumes to be below guidance (15.2mboe/d TPHe vs. 16.4mboe/d needed to hit guidance) with 13.5net completions vs. our 21 forecast. For 2012, we’re modeling $850mm capex (well costs now ~$10mm). Still the best company for long-term Bakken exposure with estimated 100+% y/y production growth and 80+% y/y organic reserve adds.
· SLB Q4 quick look ($72.86 – B) – Modest beat, $1.11 eps ahead of TPH $1.08 / Street $1.09. NAM revs a touch light, but op margins (~27%) better on strong GOM multi-client sales (overall multi-client sales +30% y/y and best results since Q4’07). International results above expectations on better revs in Latin America (+2c) and Europe/Africa/CIS (+2c). Middle East / Asia in-line. Commentary suggests international pricing still competitive, but SLB seeing pockets of strength pricing gains in Wireline and D&M. Curious to hear if SLB cites frac pricing weakness (in oily basins) on ccall.
· From our Watch List: WLL reserves and guidance ($50.72 – H) – Net negative on disappointing Q4 production (6.5mmboe vs. 6.9-7.3mmboe guidance) and +8% y/y 2012 LOE guidance. Impact is lower EPS with Q4’11 -11% to 89c (Street 98c) and FY’12 -16% to $3.90 (Street $4.45). Stock now half a turn more expensive at 5.2x 2012 EV/EBITDA. Reserves +13% y/y, 2012 capex $1.6B vs. $1.7B (delta was non-drilling items) and 2012 production guidance of 28.8mmboe - all in-line with our forecasts. Still a Hold as nothing new in release to warrant thesis change.