Recent Posts

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

Sunday Sankey 5/9/21

Happy Mother’s Day! $AMTX – this small-cap generated way more response than my more-or-less throwaway comment on Friday ever intended, highlighting of a Twitter post. It was about related party transactions and we said it read poorly. Because it did. Apologies if your Friday was adversely affected, there is certainly hedge fund interest here. We have some strong bulls on the stock, who have done way more work than I have. The CEO is controversial, […]

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12:18 PM

Morning Sankey 5/7/21

A salesman knocks on a door, answered by a 12-year-old boy wearing slippers, an oversized silk dressing gown, smoking a fat cigar in one hand, a huge snifter of brandy in the other. Stunned, the salesman asks “Are your parents in?”  The boy replies “What the fk do you think?” Americans love T shirts. They have the constitutional right to bare arms. Wife: “You need to do more chores around the house.” Husband: “Can we […]

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8:44 AM

Morning Sankey 5/4/21

As we hoped, oils’ results are going great. The sector is powering higher, with the overall steady outperformance grind that has resumed in value over growth. The oil price for Q2 is tracking well ahead of these results, further boosting the EPS upgrade cycle. Huge result from Suncor; great commentary on cash return from COP, a surprise beat from Marathon Petroleum with major disposal and buyback coming… good results from head-to-head rivals Diamondback and Aramco, […]

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8:41 AM

Sunday Sankey 5/2/21

All presentation today, see attached link, after the Sunny Saturday Sankey published yesterday and emailed to you, outlined the past week. The week ahead is extremely busy with results – you can see my diary in the attached presentation. The monster week of earnings is behind us, with impressive results from FMAGA – Facebook, Microsoft, Amazon, Google, Alphabet. Week ahead also has Secretary of State Blinken travelling to Ukraine. “I can’t tell you that we […]

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12:25 PM

Sunday Sankey 4/11/21

This week I am heading to Oklahoma to meet Devon CEO Rick Muncrief and then Houston to bid farewell to outgoing ConocoPhillips COO Matt Fox. Opposite ends of the spectrum for me – never met Rick, have hung out many times over the years with Mr. Fox. The lowlight in professional terms with Matt was doing the first marketing trip for COP in NYC after the dividend cut in 2016. The highlight was Matt making […]

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1:36 PM

Morning PSJeff 4/9/21

What’s Sisyphus’ least favorite band? The Rolling Stones We visited Japan for two weeks and did not see a single ninja. It was really impressive. “Officer, you can’t give me a ticket. I have to go run the marathon tomorrow.” Cop: “That’s not how you play the race card.” The Ketchup shortage this year was so predictable. Heinz sight is 2020. Happy Hour yesterday evening, we had a player whose firm had done a deep […]

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8:28 AM

Morning Sankey 4/6/21

BP announced the early achievement of its 35% debt target after the strength of Q1, and we think several unhedged oil companies will surprise with the strength of their profits after a $60/bbl quarter. We believe the overall market has lost track of just how profitable major oils are when oil prices are above $60/bbl, by which we mean the entire S&P500 upstream oil sector, with the major warning on levels of hedging exposure (see […]

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9:02 AM

Sunday Sankey 4/4/21

Greetings on Easter Sunday, The oil market got excited at the end of the week with the OPEC decision, basically because the “Saudi Put” remains in place, with the tapering of OPEC and particularly Saudi cuts extended through July. While surprised at the scale of the bullish reaction, given that the market had anticipated a rollover of cuts, it has been notable that oil prices have held the $60/bbl range pretty firmly with a bouncing […]

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12:26 PM

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 CVX vs XOM

The first slide considered at the Chevron virtual analyst meeting 2021 was pretty depressing. The company showed an adjusted ROCE of 2.9% and a plan to get this to 10% by 2025. On a day when Tesla had the biggest single move by any stock in history (20% up move added $140bn, or more than the entire value of TOTAL in one day) the investment merits of a major oil taking its ROCE from 3% […]

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9:17 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

Election-free Sankey

*** This note is election commentary-free. We got definitive results last night. From Pioneer $PXD, Marathon Oil $MRO, Apache $APA, Energy Transfer $ET, and Delek $DK, boom, boom! Really notable sell-off on solar stocks which came into the past month flaming hot, and have seen major corrections led by Sunrun $RUN – 31% past month, SolarEdge -22% which compounded $RUN’s weakness with a guidance warning this week, and First Solar $FSLR down -15% this past […]

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8:17 AM

Friday Saturday Sankey

Yesterday was tricky to publish a worthy note, until conference calls were complete. So this is the Friday Sankey on a Saturday. Happy Halloween! If life gives you melons you may be dyslexic What’s Sherlock Holmes’ favourite tree? A lemon tree Daddy, do all fairy tales start with “Once upon a time”? “No kid, there’s a whole series of fairly tales that start with “If elected, I promise…”” There were two key takeaways from ExxonMobil’s […]

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2:51 PM

Morning Sankey 10/21/20

I am thinking on a long refining short airlines trade. Not least because all my clients are complaining that you cannot make money in the E&P tape. I have a few who say they have been the right side of all four major deals year to date; and barely made money. While you get a 10% pop “this is not why you owned them.” In fact the latest disappointment was definitely Pioneer-Parsley, with an investment […]

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8:39 AM

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

Sunday Sankey 10/11/20

Good Day, Guess what, we are back to results. In the week ahead Q3 EPS starts. Crazy to think, Schlumberger reports Friday; nothing much on Monday but watch JP Morgan report massive trading results on Tuesday – work from home right – starting off the week. Also Citi reports Tuesday, and important for Bail Out, Delta Airlines too, with United Airlines Wednesday alongside some bank called Goldman. Could be a bullish week for the market, […]

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1:40 PM

Morning Titanic Sankey

Three analyst meetings in two weeks: BP, Apple, Tesla. Confirmed by Tesla Battery Day: the Big Oils need to pursue a strategy of “orderly liquidation” in line with our “Renaissance of US E&P” thesis. Cut capex, reduce growth, return cash to shareholders. Orderly liquidation. Shrink to grow value. We are advising a refiner to go private, we have been for years, arguably we have been for all refiners. No growth capex, buy back stock until […]

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9:17 AM

Synthetic XOM

A client pointed out that DOW stock has been on a bit of a tear recently, while XOM cannot catch a bid. This is a reasonable point, and the same could be said of Phillips 66 PSX, which has also been languishing, despite its chemicals exposure. That stock shrugged off a bad 2019 for chemicals margins, which then got truly abysmal with COVID. Subsequently controversy/risk around the Dakota Access Pipeline has ailed PSX, with the […]

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6:39 PM

Where is oil as Laura hits? Morning Sankey 8/27/20

Corporate newsflow remains quiet, with the market awaiting more details on the historic announcement from BP on its climate change plans, due September 14th-16th. Several major US oil investors consider this BP move a 100-year strategy shift for big oil. Notably the stunning -40% oil and gas production reduction, as a strategy pillar. US investors remain cynical, the most negative seeing the announcement as a smokescreen for the dividend cut. Elsewhere re-injection issues for ExxonMobil/Hess […]

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8:35 AM

Sunday Sankey 8/9/20

In this week’s edition of the Sunday Sankey we bring you the mega-bear argument for tech (it’s a commodity business), comments on BP’s remarkable transition which coincided with continuing remarkable transition among US E&Ps – mostly. Tomorrow Oxy reports and there is a group that is now in the debt service zombie mode, which will fight to maintain production levels… to pay debt service. But on the positive side, PXD Pioneer took leadership on what Cimarex tagged “Shale 3.0”, see within. We were critical of EOG in this regard in a note published yesterday and linked within. Great stuff on China from Oilx, our favourite oil intelligence consultancy/data provider, and Saudi Arabia cuts production… in Iraq… in Iran? Amazing. Continue reading

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9:51 AM

Morning Sankey 8/6/20

Yesterday ExxonMobil slipped a 20% reserves writedown warning into the 10Q. Didn’t mention it on the earnings call last Friday. Were they assuming nobody reads a 10Q? It was almost as bad as Oxy re-raising executive pay in an 8K last Friday evening after the market closed after a long week of earnings. Continue reading

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8:57 AM

Morning Sankey 8/5/20

Q2 2020 will be remembered as a hugely historic quarter for the oil sector, not because it was massively bearish, with record losses, but because it was massively bullish. Particularly for the oil equities at historic lows. Mark my words. Continue reading

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8:40 AM
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