Some thought on First Qtr Results

[dan_s]

Comments below from RBC Captial Markets (a very strong team)

Several Themes Emerged With 1Q12 Earnings. We saw several common
themes with our 1Q12 reporters. NGL pricing was weak, with realizations
often in the 35-45% of WTI range compared to 50%+ over the previous few
quarters. Names with exposure to Conway (Rockies, Mid-Con and parts of the
Permian) generally received the worst pricing. Names with the best 1Q12
NGL pricing were APC, GPOR, MMR & OXY. Several companies reported
1Q12 CapEx above our expectations and/or raised 2012 CapEx guidance,
including AREX, CHK, CLR, CRK, DNR, CRZO, GPOR, MRO, OXY, PXD
& SFY. Additionally, it seems like every company is either searching for or
announcing a new onshore US oil play. The most surprising new play was
NBL's new tertiary recovery play in Nevada, but we expect to see more new
oil plays as the year goes on. We think that the names with the best
momentum coming out of 1Q12 earnings are CRZO, CXO, DNR, EOG, NBL,
PVA, PXD, REXX, RRC & WLL. We prefer largely oil stocks or transition
stocks, such as CRZO, CXO, DNR, DVN, EOG, MTDR, PXD and PXP.
Gassy Names Outperforming Oily Names On Commodity Shift. Recent
oil weakness and a rebound in gas prices has shifted the dynamic somewhat
between gassy and oily E&Ps. Gassy E&Ps have outperformed oily E&Ps by
990 bps over the past week. Oily names have still outperformed gassy names
by 960 bps YTD, but the differential has narrowed substantially from the
20%+ outperformance oily names enjoyed as recently as late April. We think
a portion of the strength in gas names is attributable to short covering rather
than long buying. We also think oily names are still a better value, with gassy
names still discounting a higher price than the strip through 2017.