Zacks Equity Research on January 18, 2019: "Major energy players are gearing up to report Q4 results, with Kinder Morgan, Inc. (KMI) having released the numbers on Jan 16. The sector is expected to report year-over-year earnings growth of 68.3% on 14.6% revenue growth."
Read that again and let it sink in.
Sometimes I think the oil & gas sector is the most misunderstood sector by the Wall Street Gang. It certainly doesn't help that some "experts" keep saying that money spend on drilling & completing wells ("capex") is an expense. I guess they never took an accounting class.
At Tulsa University (were I got my Accounting degree and a Masters in Taxation) they taught me that money spent to build a valuable income generating asset like an oil well or a factory was an increase in Fixed Assets and s/b amortized over the life of the asset.
This morning I took a look at EOG's latest presentation. On slide 4, EOG says that they estimate that their entire 2018 drilling program will generate an After Tax Rate of Return ("ATROR") over 100%. BTW they said on their Q3 conference call that their 2017 drilling program reached Payout in nine months, which is more than a 120% ATROR. Anyone that tells you these companies aren't building value is an idiot. I worked at Hess Corp. for 18 years and we NEVER had an annual drilling program that generated more than a 30% ATROR.
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Now find out which two of our companies Zacks Equity Research thinks are going to report Q4 results that beat the First Call estimates.
https://finance.yahoo.com/news/4-energy ... 03852.html
Let this sink in
Let this sink in
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group