06
May

Wrap – Week Ended 05/05/17

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The ZLT ended last week up 1.5% and is down 12.7% year to date.

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The XOP ended last week down 0.3% and is down 15.9% on the year.

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The coming week's energy earnings calendar will be released on Sunday.

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7 Responses to “Wrap – Week Ended 05/05/17”

  1. 1
    Baylor Says:

    Z re 108 yesterday what is tue correlation of production to market cap?  Would you expect it to approach 1 to 1?  Trying to translate your comments to thoughts on share price over next 3-5 years. Thx

  2. 2
    zman Says:

    re 1 – no, there's no way of knowing that, there's not a strict correlation as other things like oil prices will change. Also, with higher volumes and price held flat, one would expect higher margins (unit costs come down for LOE and G&A in most cases).  So you have great EBITDA growth, assuming prices are held flat than production growth.  But you are also getting into the realm of larger volumes and a bit slower growth each year (just because of size).  So that impacts the range of TEV/EBITDA multiples that the market would likely pay for. So maybe no long 12x but 10x.  So looking out 5 years at production growth assuming a stable oil price and that kind of growth you have a higher margin per barrel and likely a lower forward multiple paid for. That yields, on that growth rate, a substantially higher stock price, even with the multiple naturally easing back a bit. 

  3. 3
    zman Says:

    REXX announced a 1 for 10 reverse split, effective after the close this Friday. 

  4. 4
    Baylor Says:

    Those reverse splits don't seem to turn out well. Maybe this time is different. 

  5. 5
    zman Says:

    True

  6. 6
    zman Says:

    Testing $47 early evening.

    http://www.cx-portal.com/wti/oil_en.html 

  7. 7
    zman Says:

    Energy earnings calendar week 4 has been added to the Calendar tab

    http://zmansenergybrain.com/subscriber-data/calendar/

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