Sweet 16 Update - May 2

[dan_s]

Since April 10, which now looks like the bottom for the E&P selloff, the Sweet 16 is up 33.3%. EOG Resources (EOG) is the only stock down since April 10; just 0.56%. This is a bit strange since EOG is the largest company in the portfolio and it will "Survive 2020 to Thrive in 2021". Survival is the primary goal this summer for all upstream companies.

CXO, MTDR, RRC and SOI all reported solid Q1 results last week. MTDR is up 102.2% since April 10, partly because of good Q1 results but primarily because all of the small-caps were grossly oversold at the beginning of April. If you read my posts about each of these four, you know that they are hunkering down to survive the summer. SOI will be impacted the most from almost a complete shutdown of well completions this summer, but the company is debt free and can easily live within cash flow from operations.

The smaller companies will benefit the most from the Fed's new loan program. See my post about it under the View From Houston tab.

Reporting Q1 results this coming week:
May 4: FANG, PE
May 6: XEC, PXD, TALO
May 7: CPE, ESTE, PDCE
May 8: EOG, OVV

I will be posting each company's' Q1 highlights here and updating my forecast/valuation models on the dates above.

KEEP IN MIND: Q1 results will include some very big SEC/GAAP non-cash accounting adjustments which make "Reported Net Income" a worthless number. "Adjusted Net Income" is what you should compare to First Call estimates and to my forecasts. By far the most important number is Cash Flow from Operations before Changes in Assets & Liabilities (called "Adjusted Cash Flow from Operations").