EnerCom was last week in Denver

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Excerpts of analysts' comments from the conference.

*Global Hunter Securities (8.20.13)

No post-earnings data point lull was present last week thanks to the 18th Annual EnerCom Conference in Denver. Greg Barnett and company always put together a great lineup of 100+ E&Ps ranging from best-of-breeds APC, MRO and CXO to small, yet influential, private companies. The majority of our 31 data points provided this week were indeed picked up at EnerCom, and we note the buzz around the conference centered on the Permian (could there really be 5+ zones perspective per location? Could the Wolfcamp in the Delaware Basin be as good as the Wolfcamp in the Midland? Is 80 acres downspacing possible?), and also the TMS (GDP's been en fuego [+17.1%] since SN jumped into the basin two weeks ago). In our short-term relative rankings section, we witness a down move in CIE on disappointing Diaman results offshore Gabon.

*Raymond James Equity Research (8.19.13)

This year's EnerCom conference was remarkably well-attended, with many presentations and breakout rooms being standing room only. We're not sure whether triple-digit WTI or 80-degree Denver sunshine was a bigger driver for investors but the oil and gas space got plenty of attention one way or another (obviously, for us it was the former, but we still packed our golf shoes…just in case). Either way, the packed house was indicative of the high level of interest in the leading energy players' operations and trends. In today's Raymond James Energy Daily Update, we are getting our teeth into the most interesting company-specific nuggets. But here, in the Stat, we're focusing on the major themes that came through from presenting companies. In particular, we highlight key conference topics including (1) equity deals heating up, (2) operators getting excited about the Tuscaloosa Marine Shale play, (3) vigorous investor enthusiasm for Permian operators, (4) much-improved drilling efficiencies still getting better, (4) takeaway trends, including crude-by-rail activity slipping sharply, and (5) equity deals are heating up.

*SunTrust Robinson Humphrey (EnerCom takeaways)

EnerCom Day 1: Honing in on Another Big Play

While day one of EnerCom demonstrated record crowds with record one on one meetings, it was the standing room only crowds with particular companies that got our attention. Though some might think that investor confidence in energy has waned, the standing room only crowds for a number of E&P companies suggested a different story. There is no denying that investors are still extremely cautious over high leverage, everyone seemed to be looking for the next big idea. We came away thinking that the next big story could be in the Tuscaloosa Marine Shale, Utica Shale, Eagle Ford Shale, Niobrara, or Williston. More particularly, Goodrich Petroleum (GDP, $19.53, Buy), Magnum Hunter Resources (MHR, $4.09, Buy), Penn Virginia (PVA, $4.60, Buy), and Whiting Petroleum (WLL, $50.72, Buy) all deserve a closer look.

EnerCom Day 2: The Continued Hunt for the Hot Play

The second day of EnerCom trended much like the first with investors crowding to see new and improving plays such as the Tuscaloosa Marine Shale (TMS) and Permian. Unfortunately a number of companies in solid plays received little investor attention, either due to lack of near-term catalysts, or the stock price has not reach a deep enough value point. Our Energen Corporation (EGN, $66.53, Buy) and Goodrich Petroleum (GDP, $21.76, Buy) dinners highlighted the tremendous resource potential of both respected companies and the various funding optionality of each. Both companies appear to have materially upside potential despite the recent stock runs given the plethora of catalysts, sizeable assets bases, and continued efficiency gains.

EnerCom Day 3: Highlights of Vast New Formation Potential

EnerCom day three was a bit more of demonstrating the upside of existing plays versus suggesting the upside potential of new plays though there was still a bit of that. Companies such as Bill Barrett (BBG, $21.43, Buy) highlighted significant additional formation potential helping them become more oily while also ramping production materially. Other companies such as Midstates Petroleum (MPO, $4.54, Buy) highlighted the material impact past acquisitions should have to the overall story. However, Midstates and other more highly levered companies continued to hear investor concern over higher than average debt (though this should change for Midstates relatively soon). Enercom wraps up today with mostly private companies trying to demonstrate to investors the staying power their various assets should provide. As always, it appears the conference provided a solid platform whereby a number of public companies were able to highlight upcoming material activity.

*Wells Fargo Securities (EnerCom takeaways)

EnerCom Day Two Takeaways: We provide takeaways from day two of the EnerCom Oil and Gas Conference in our hometown of Denver, Colorado. Covered companies presenting included APC, CXO, EQT, HK, and PVA. Among the highlights, HK was very optimistic on recent Utica well results, with expectations to ramp to 4 rigs in the play in 2014. EQT provided more color on capital allocation as the company inches closer to becoming cash flow positive. CXO believes that in the next couple wells, it will see the same results out of Southern Delaware Basin as it has seen in North. Anadarko’s lunchtime presentation focused on the broader corporate portfolio, but the breakout session provided some good tid-bits. CXO’s CEO Mr. Tim Leach is a bit more “bullish” than we have seen him as of late--although this is a continuation from the Q2 conference call. PVA discussions focused on value disconnect, as well as improved liquidity outlook.

EnerCom Day Three Takeaways: We provide takeaways from day three of the EnerCom Oil and Gas Conference in our hometown of Denver, Colorado. Covered companies presenting included BBG, CRZO, MPO, and ROSE. Among highlights, ROSE, one of many operators we heard from over the last couple days, likes what it sees in the Southern Delaware Basin. The company plans to spud its first horizontal operated well in the basin later this year. We also include takeaways from uncovered HAWK.LN, which we believe carries potential implications for PXD, APC, and CHK.

Summary. 4-day Enercom conference ends today, and this note captures our take on investor sentiment and other takeaways and tidbits from the conference. Among highlights, Street is still in love with Permian while Bakken is thrown to the wayside for now. Concerns growing over Marcellus differentials, we believe for good reason. And in Utica, Street back on the bandwagon, as core of play appears to be moving to the south. For convenience, we are also republishing our conference specific notes from each day.

Permian Still A Lovefest… We like the Permian as well, and understand the risk/reward. Street still long the Permian, which is an understatement. Maybe we are just getting a little tired of Street’s infatuation with the play.

…While Bakken Relegated To the Couch. Bakken names out of favor again. We believe it’s primarily a combination of recent CLR communication, not enough news on downspacing / bigger fracs, and the oil exposed Bakken names simply being a nice pair trade in a market neutral book. For what it’s worth, we think there is still meaningful long term upside in a number of Bakken names.

Utica – Street Liking What It Sees. Street positively biased toward the Utica, particularly results from the South. Caveat fired by some management teams concerning potential ethane bottleneck, but Street ignoring for now. As sidenote, Aubrey McClendon, CEO of American Energy Partners, has reportedly gotten aggressive in the Utica, as we detail within.

Marcellus Pricing A Concern. Street seemed to think it was an aberration when it first hit in July, but breakouts and questions indicate more long term concern about it now. Management teams all indicating situation will get better by year end, which could take care of the wide differentials, but beyond that, Street concerned about next few years. We believe Marcellus pricing going forward will lose its historical premium, and we don’t think that has yet been modeled in. Street struggling how to play it.

[dan_s]

I attended the Houston Energy Finance Group breakfast yesterday. The speakers topic was the Permian Basin. Very bullish outlook and I can see why the Wall Street crowd will love it. They love "stacked pay".

Permian Basin is very well established, so it has plenty of takeaway capacity. Wells can be completed to sales quickly.

Company mentioned at yesterday's breakfast include: CXO, EOG, XEC, FANG, AREX and SM. WLL also has a position there.