Recent Posts

What are you doing? Reading transcripts

The two weeks, mid-earnings, when we pull together company results transcript comments, are not a science, they are an impressionistic art; a colour to our themes. Basically these are comments that caught our eye over the past week. Like sellside analysts, the companies tend to all present the same more-or-less generic message, but occasionally, as we strive with Sankey Research, a comment stands out, is differentiated, or so wild that it is worthy of note. […]

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2:25 PM

Morning Miss

Tonight Happy Hour: Kathleen Kelley on OPEC. Frank Kelly (invited) on Washington DC – lots of action there. View share on results on what happens next. Today Thursday 4th August 5pm Eastern. Register for this meeting: https://us02web.zoom.us/meeting/register/tZUkc-qvqjgrH9NWL5mVuMMR2AyR3q1cZrtm I was on Bloomberg TV bright and early this morning and… I used the “B” word. Just to note, we are long natgas over oil into the coming economic slowdown, and playing for winter. The announcement that Freeport […]

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8:30 AM

Morning Take a Sad Song

Tomorrow KelleyKelly Hour: Kathleen Kelley on OPEC. Frank Kelly on Washington DC – lots of action there. View share from clients on results and what they expect next. Tomorrow Thursday 4th August 5pm Eastern. Register for this meeting: https://us02web.zoom.us/meeting/register/tZUkc-qvqjgrH9NWL5mVuMMR2AyR3q1cZrtm We increasingly think that we will favour buyback-heavy oils going into the second half, with our year starting, as always, day after Labor Day. What happens next? The Big Oils are all singing from the same […]

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9:23 AM

Big Oil Week Next Week

“Happy” Hour yesterday evening, an oil investor self-help group Big week for oils next week with Nordstream 1 and CPC shutdown decisions coming; Biden visits MBS Buffett buying yet more Oxy – he might go… all… the… way Warren Buffett’s Berkshire Hathaway filed notice of acquisition of 12m shares Occidental costing about $698m this week, giving it an 18.7% stake. Buffett had also purchased 9.9m OXY shares last week. Total stake is 175.4m shares worth […]

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9:06 AM

Sunday Marrakesh

Greetings from La Villa des Orangers, Medina (Old Town), Marrakesh, Today – are the big E&Ps cheap? Antero LNG exports – 70mmcfd or 1bcf/d? Postcard from Morocco They say if you want a question answered on the internet, don’t ask the question, but rather post a bold false statement, and you will be flooded with corrections. It is an interesting point on human psychology. Earlier this week we said that Antero was exporting 1bcf/d of […]

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10:06 AM

For Love & Money: Chazen Time

Recommending BUYBACK PLAYS in this tape. We love the Diamondback approach of buybacks when the stock is cheap, specials when the stock is expensive. PREMIUM EVENT Sankey Strategy Session: Kaes Van’t Hof – President and CFO, Diamondback Energy This Thursday May 12, 2022 05:00 AM US Eastern Time. Register Here: https://us02web.zoom.us/meeting/register/tZ0rcuyorD8rEtFYFdOdB79bWBSDY7MFzYzP ~ Legendary oil executive Steve Chazen on yesterday’s Magnolia $MGY conference call; “I think that the re-evaluation of the industry from 4% of the […]

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8:52 AM

Portfolio Manager Special: Sunday Calls

Few, As they say on the internet. Today we have a PORTFOLIO MANAGER SPECIAL in the presentation, which includes a full glorious ppt on the largest stocks in the market, and for bonus, a Sankey Recommendation on each stock. The oils look great on these charts. The recommendations on names like Google (BUY) or Disney (SELL) are purely quanatitive interpretation of charts, we do not cover non-energy related stocks fundamentally. So this is quantitative analysis, […]

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12:55 PM

Nets, Knicks, Refiners

Tonight PBF management on Strategy Session, 5pm for a tight hour. RSVP. I was at the Knicks vs Nets game last night with a global oil executive; combined with conversations with ConocoPhillips management Tuesday, some brief points. First, Shell profit warning this morning. Break it up. We would like to see a global LNG & gas and power trading powerhouse, a downstream “high carbon” operation with refining, chemicals and retail, a deepwater company. We don’t […]

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8:48 AM

Kazak Whisperer

Kathleen Kelley, “OPEC Whisperer” tonight on Happy Hour. Additionally in the following weeks we have two major refining CEOs ready to talk about oil markets. 3/24, 5:00PM EST – Kathleen Kelley 3/31, 5:00PM EST – Delek CEO | Uzi Yemin 4/7, 5:00PM EST – PBF CEO & CFO | Tom Nimbley and Erik Young You can participate on application, but if you don’t pay Sankey Research, why would you ask? If you want a charity, […]

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8:57 AM

PBF is the new Oxy

Friday joke in serious times: yesterday a “Stop Oil” pitch invader interrupted the Everton-Newcastle (Saudi-owned) Premier League soccer game by attaching himself to a goalpost mid-game. An additional 17 minutes of extra time played. The joke? What does he think the zip tie that he used to attach himself with, is made of? Yep, he used an oil product. While wearing plastic glasses. He should have used rope? So much more inconvenient. Client question of […]

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8:16 AM

Deep Thought

After a very enjoyable Strategy Session with the impressive Kimmeridge Team yesterday, I had a one hour debrief with a Senior US Government Official with long energy experience yesterday evening: Notes from deep Washington source. Watch out for oil exports from Chevron’s Tengiz, reports that 3 cargoes (of 3 tendered) were unsold yesterday. The oil is transported from Kazakhstan across the CPC pipeline in Russia and mixed with Russian crude before loading at a Russian […]

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8:54 AM

Yikes

Huge shock. Particularly to major European clients that had stated their house view: no invasion. Their view was weeks of noise, no invasion. What will happen to this extraordinary chart? We see demand destruction at $120/bbl, and think oil prices will continue to go to that level of demand destruction if US demand remains as strong as it currently is. Lagging US economic strength and upcoming summer speak to ongoing demand strength, even if it […]

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8:18 AM

Friday Highlights

Having featured a fellow independent researcher on Strategy Session last night – Doomberg – today’s note is a highlight reel of other people’s research. But of course first, Friday you demand jokes, and we are not here to disappoint clients. I used to play the triangle in a band, but it’s just one ting after another. I swallowed a dictionary, and now I have thesaurus throat. My boss arrived at work in a new Lambourghini, […]

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8:41 AM

I just dropped in…

Hi I am just checking in to assure you I survived the Houston NAPE conference, landmen and all, but am still on the road, headed to New Orleans. This week has been discombobulated – my initial flight on Tuesday was cancelled by United, I rushed to Newark, made the 2pm, just made dinner in Houston, made the NAPE conference yesterday, made dinner with a Nebraska CEO, went to the after party rave and here I […]

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10:50 AM

The Fox and the Hounds – Oxy history

Sankey Research dinner with Steve Chazen TONIGHT this Thursday in Houston. Join! RSVP Magnolia CEO Steven Chazen, CFO, Chris Stavros Houston 9th December 6pm. Chazen is clearly one of the greatest oil executives in history, a mythical figure. The approximate story that he told me over the years, is that he was a dog handler in the Vietnam War; the dog whisperer; PhD in geology; worked on the moon programme as a geologist. He told […]

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5:07 PM

Letter from the Front Line 11/28

Very tricky to call, indeed! OPEC/Saudi surely will act if markets don’t bounce – my Middle East Intelligence says Saudi is worried about the price but wants to see the market follow through Monday. Fascinating real-time week coming up, we think there might be a unilateral cut by Saudi if the market continues to collapse. But for OPEC to do a cut, is extremely complicated. The easy out, given they have to do something unless […]

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4:36 PM

Morning Be My Date 11/17/21

Big upcoming events for us: Happy Hour this week with former FERC Chairman Neal Chatterjee, along with Aaron Cutler, both now partners at major DC law firm Hogan Lovells. Aaron at 5pm, Neal at 5:30pm. Both have deep multi-decade Washington energy experience at the highest level – Neal was former Chief of Staff for Senator McConnell, Senate Republican Leader. It is obviously vital to understand the shifting energy landscape in Washington. These are the experts […]

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8:33 AM

Friday Sankey 11/5/21

Ezra’s first quarter as EOG CEO and he lofts it out of the park – massive increase in regular dividend, big special, buyback, he is in NYC next week, take a victory lap Pioneer wanes yesterday after weak buyback guidance Apache on fire We like Denbury on CO2 negative oil, and encourage Oxy carbon ventures Sunrun – we expected either a crashing miss or wild beat and massive stock reaction; we got neutral Delek beats; […]

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8:35 AM

US E&P Q3: The Power to Set Oil Prices

Key points: Clients are focused on OPEC spare capacity and demand growth, but also, rightly, North American supply growth, which is the most price elastic component of global oil supply. Halliburton results yesterday naturally raise questions over US production growth; the company stated that it sees 20% rise next year in North American revenues, which includes “solid pricing gains”. This would imply Halliburton expects US E&P capex to be ~10% higher next year; not a […]

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3:07 PM

Morning Sankey 9/30/21

Key points: CHK new CEO EQT issues stock & hedging status Enbridge Line 3 starts tomorrow delivering oil, good for Canadian oils Emissions intensity of global oil producers Quote of the day: “I just know the the more control there is, the less growth there is. The great lesson of the twentieth century is that central planning doesn’t work” – Rick Warren (Drucker-Warren Dialogue, 2003) after @buckquivas on Twitter Chesapeake raises Domenic “Nick” Dell’Osso Jr […]

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8:30 AM

Germany & Britain vs the USA

Greetings from London, You live in the UK and have avoided death by COVID? FT: In the UK, 4m households were unable to afford to adequately heat their homes even before the latest energy price crisis. Some 10,000 deaths a year are linked to living in a cold home, according to the charity National Energy Action. If that represents around 100 deaths per day over the average of four winter months, high energy prices are […]

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10:10 AM

Rocket Science & Rocket Surgery 8/4/21

In this note: the analyst who simply thanked Pioneer, with Devon, Oxy, and ConocoPhillips all cheering battered oil investors, and really strong macro news for Big Integrated Oils (ExxonMobil etc) with their lagging exposure to soaring global natgas prices that are pushing up refining margins. Global demand strength is also bullish for the oils, regardless of the market’s deep reluctance to capitalize OPEC market management. First, Tellurian offers shares: 35,000,000 shares of its common stock […]

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9:35 AM

You’re busy let’s keep this brief

Just as your correspondent was pondering the upside surprises in capital discipline and cash return to shareholders from “4P” premium Permian pure-plays Pioneer ($PXD) and Diamondback ($FANG) announced yesterday evening, and waiting for a similar positive result from ConocoPhillips, than my friends at HollyFrontier announce a $1.8bn deal to marry perennial bridesmaid Sinclair Oil, the MidCon refiner that started life in 1916 and has been private since 1976. HollyFrontier is on a roll, completely counter-cyclically […]

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8:38 AM

Sunday Sankey 8/1/21

We found ourselves standing on the North Slope, Alaska, above the Arctic Circle, surveying the endless flat tundra. There there is no sunlight from October to early March; total darkness over half the year. For the rest of the year, the sun does not go down – no darkness. That place, my friend, is Far North. The nearest city is Anchorage, 1,000 miles south, itself as distant as Perth Australia; palpably remote; strange and distant […]

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1:25 PM

Morning Sankey 7/29/21

When we wrote The Renaissance Thesis of US E&P in 2017, we argued that oil companies had to stop pursuing growth, reduce capex, increase returns and free cashflow and stop hedging. We also highlighted that management pay relative to performance was an insult to shareholders (those shareholders that remain). The anti-hedging argument was originally made successfully to the refiners. In fact, the overall thesis on E&P was based on success earlier in the decade, changing […]

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9:29 AM

Morning Sankey 6/15/21

At the last in-person Shell analyst meeting at the NYSE, I raced the head of upstream in a life-sized side-by-side Pennzoil NASCAR simulator and then moved on to talk to CEO Ben van Buerden. One key message: sell the Permian. My argument was that Shell would never be recognized as a Permian player, would never get credit, even if they out-performed the industry, and valuations were riding high. Shell should be a mega-project player in […]

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8:46 AM

Morning Sankey 6/2/21

The ostrich school of analysis would suggest that I resolutely defend my short term bear call on oil and oil stocks made only at lunchtime on Monday, but the fact is that no sooner had I hit send on the email to clients and website post, than the short term thesis caught fire and sank like Iran’s biggest warship just did: June 2, 2021, Associated Press: “The largest warship in the Iranian navy caught fire […]

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8:44 AM

Morning Sankey 5/12/21

*INVITATION * Today * 10am ET * – Happy Coffee with Li-Cycle CEO Ajay Kochhar. Ajay is extremely strong on all things to do with his business, of re-cycling lithium-ion batteries. By extension, he is extremely strong on batteries, EVs, and particularly Li-Ion factories. He is absolutely at ease with battery market dynamics. Join a conversation with Sankey + a few clients. Yesterday the company announced an agreement with Ultium Cells, a joint venture of […]

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9:01 AM

Morning Sankey 5/11/21

Noted: private equity selling down $PXD, and Antero $AR issuing. No sooner had we highlighted the Goldilocks oil market, with strong refining margins implying good demand, the potential for further upside in demand from COVID recovery especially in global jet fuel, and the “Saudi Put” back in effect since January, than a bunch of Russian hackers show up and spoil the fun. The issue is that major negative volatility events like this are negative – […]

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9:02 AM

Morning Sankey 4/13/21

It seems pretty blatantly obvious that Putin is going to invade east Ukraine and join Russian rebel-held territory (see map in Sunday Sankey). He did it with Crimea. Not really a lot you can do, shall we ask Ukraine expert Hunter Biden for his take? There will be a domino effect, because the next question becomes what do you do if China invades Taiwan, given troop build-ups are as big in naval terms in the […]

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9:05 AM

Morning Sankey 3/26/21

My wife and I were sitting in the living room enjoying a bottle of wine. Out of the blue she said, “I love you. ” Surprised, I asked, “Is that you or the wine talking?” “It’s me,” she said, “talking to the wine.” What do you call a rich Centipede? A Dollarpede A mushroom walks into a bar and the bartender welcomes him. He’s a fun guy. A Freudian slip is where you say one […]

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9:05 AM

Morning Sankey 2/5/21

Max bullish oil here, buy oil leverage. That was the Happy Hour call last evening. By November last year we were saying “All in on the equities” and we ended the year with six investment grade oil stocks and six speculative oil stocks with the call: “buy both groups.” Key specifics: 2022 oil futures a bargain at $52/bbl, Oxy for operational (Brent) and financial (massive debt) leverage. MEG in Canada. Watch out for natgas exposure […]

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8:34 AM

Friday Sankey 1/29/21

Yep! It’s Friday! I called the RobinHood helpline about Gamestop and they said “Please Hold”. Got it. I want to put my life savings into the stock – its called Gamespot Total Landscaping right? The Biden team is monitoring the Gamestop situation and will let the American people know when it is time to buy a Legend of Zelda chess set in a dented box. AMC is issuing a ton of stock, but Gamestop is […]

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8:50 AM

Morning Acronyms

One of the great recent charts has been the index performance of unprofitable stocks shown below. It is notable that this index has basically doubled since the last quarterly reporting season. We expect the current reporting season to underline how insane valuations have become across non-profitable sections of the market. Furthermore, quarterly results will provide full year 2020 results and some kind of outlook for 2021. Equally, for the oils, what might be good results […]

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8:40 AM

Sunday Sankey 1/17/21

Trying to get up this morning, I was pondering whether the US military could split and part go renegade. However we continue to believe the US constitution will prevail. Rather a negative start to the day, but I moved on to put together the Sunday Sankey for you, with energy, be it alternative, or regular oil and gas, starting the year very well. We continue to be obsessive about the US$ impact on oil prices, […]

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12:06 PM

Morning $NOG

Yesterday was one of those thematic days. “You don’t buy a cheap oil stocks, you buy good management.” We started with an activist getting aggressive on Ovintiv, had a great conversation with the CEO of Northern Oil & Gas, had another activist letter to Delek USA from Carl Icahn’s CVI Refining, and rounded out with Happy Hour. But first, it’s Friday, and that means we start with… What do you call a mythical beast that […]

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8:25 AM

Sunday Sankey 12/20/20

Special Sunday Sankey featuring the legendary oil’s share of the S&P500 vs oil’s share of the S&P500 earnings charts! Sadly, it was not worth running them all year, given the horrendous earnings of the sector in what will be the worst year in the history of oil relative to expectations. Now, as we look directly into 2021, the charts are beginning to make sense. More inside this note but a couple of starters for you, […]

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11:09 AM

Sunday Sankey 12/13/20

Last week we highlighted the difference between speculation and investment. We continue that theme with six Big Oil investment picks for 2021, and six speculative picks. We defer on refining until our January 4th refining conference. NOTE we have verbal confirmation from Greg Goff, that he will join the conference for a fireside chat. See inside for details, and register on the website www.sankeyresearch.com Greg and I have to discuss what we discuss, as there […]

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12:18 PM

Pioneer-Parsley & History

Breaking news: WSJ October 18th 2020 Pioneer Natural Resources is in talks to buy Parsley Energy, according to people familiar with the matter, as a wave of consolidation takes hold in the beleaguered oil patch. Word from the oil field is the deal was due to be announced last week and got sidelined by COP-CXO. (Twitter). M&A stories in the WSJ are considered the most reliable of any business new source. Last week they were […]

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8:11 AM

Conoco Poncho

$EOG was the name most speculated about as likely to MAKE a takeover in the wake of the Conoco-Concho story yesterday; the stock that reacted most was $XEC, perceived as the most likely next TAKE over company. Continental CLR is seen as needing to deal, $MRO too, $OVV potentially to offer a blizzard of stock, $FANG and Parsley $PE potentially to join the consolidation fray one way or the other; $CDEV is due to be […]

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9:22 AM
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