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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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