1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.

1. Today the large cap group, to which we've added ECA and NBL.  I define large cap E&P as non integrated E&Ps with a minimum total enterprise value of $10B.
   
2. Valuations remain in check.
   
3. Debt remains in check and easily serviced.
4. Note that only EOG is up on the year out of this group. The increasingly liquids weighted portfolio and conservative balance sheet along with strides to be the leader in the Eagle Ford are probably the root causes of that differentiation.
   
5. SWN is on the opposite end of the spectrum – cutting guidance and failing to hedge a significant portion of their expected production are to blame there as well although there are mitigating circumstances on the production cut which may actually translate into stronger reserve growth at year end than production growth would suggest.
6. Looking briefly at expected growth, SWN continues to lead the pack, albeit with 100% gas production. EOG's mid point is 13% with almost all of the growth coming from liquids and that largely oil. Transitions in the profiles are a set of tables I plan to add soon where available. EOG is doing the best job of "getting oily" which has been the key theme for the E&Ps in the season just past.
   
7. Field cash and total cash costs are something I look at, especially when commodity prices are weak. The low costs at SWN are part of what give the name a perpetually higher multiple.
   
8. Note that these charts have been added to the Large Cap E&P tab along with these notes.

Added for the 8/17/10 update:

• Balance sheets on the whole are in a bit better shape than they were at the end of last quarter.
• Spending is up in a few cases but not dramatically.
• Most interesting is NBL where guidance was slightly lowered on the top end due to asset sales but also where spending was reduced from their prior estimate … we haven't seen a lot of that his year.
• In coming quarters you should see EOG shoot towards a more 50/50 oil/gas profile.
  
• SWN and ECA remain your "large caps most leveraged to natural gas" and SWN takes the cake for being the least hedged as well. Given the recent fall in SWN, it should more closely play with any swings in gas prices. You can see some of the reasoning behind SWN's decision not to hedge if you skip down to the bottom of the charts and note their low cash costs.
• Sidebar: Noting RMD's comments yesterday on gas and would say that the rate of growth has slowed but that there are still A LOT of natural gas directed rigs turning to the right at the moment, the most in 18 months actually, and so while I think the month end data at the end of August will be highly scrutinized for a role, a combination of higher rig activity and an increase in the the number of frac crews later this year will keep a lid on big rallies in gas prices this year.
• Valuations … cheap. Not often do we see all of the large caps under 6.0x TEV to EBITDA.
• Now, not even EOG is up year to date.