Friday Morning – COG, SWN

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Market Sentiment Watch: Nervous market conditions persist. In today's post please find the natural gas inventory review (in line), comments on the COG quarter (beat, raise, strong well results, strong balance sheet gets stronger, teases new play without spillng the name), comments on the SWN call (beat, reiteration on volumes, improved differentials, strong new zone wells, outperformance seen from enhanced completions), and some other odds and ends.  As always questions and comments are welcomed in the comments section. 

Ecodata Watch:

  • We get GDP at 8:30 am EST (F for 1Q17 = 1.0%, 4Q16 was 2.1%),
  • We get the employment cost index at 8:30 am EST (F = 0.6%, last read was 0.5%),
  • We get Chicago PMI at 9:45 am EST (no forecast, last read was 57.7),
  • We get Consumer Sentiment for April at 10 am EST (F = 98.0, last read was 98.0). 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h
  3. Natural Gas Inventory Review 
  4. Stuff We Care About Today - COG, SWN
  5. Odds & Ends


Holdings Watch:   


  • Yesterday's Trades: None
  • The Blotter is updated.

Personal Accounts

  • WLL - Added after earnings and before their call at $8.10 for a shorter trade. Please see yesterday's post for comments. 

Commodity Watch:

Crude oil closed off $0.65 yesterday at $48.97 in what we would call an extreme over reaction to about 0.4 mm bopd of capacity coming back on line in Libya.  The session was fairly volatile with a low of $48.20 and the potential for probing trades over the next week into the $47's remains elevated but beyond that we don't expect lasting or much further weakness.  In our view, the move on Libya was an excuse to push technicals, it's unwarranted as that is just not a lot of oil vs the global market and because the situation in Libya is far from stable. We should get the EIA 914 data before lunch and we're expecting the majority of an expected February small increase to be Gulf and Texas driven. We also continue to look for a slowing in the weekly rig count rise. This morning crude is trading back up to $9.50. 


Natural gas closed off 3 cents at $3.24 after EIA released an essentially in line with expectations storage build.  We get the monthly natural gas supply and demand data this afternoon and plan to have the monthly slide show update in the Monday post.  We're not expecting much if any uptick in the February monthly supply data. As recently noted we expect a flatter than average slope to the injection curve to begin to form in mid to late May. We expect a modestly smaller injection next week. This morning gas is trading flat.


Natural Gas Storage Review


Stuff We Care About Today

COG Reported A 1Q17 Beat; Increased Production Guidance; Increases Capex As They Tease New Play Entry

The 1Q17 Numbers:

  • Differentials: Natural gas $0.67 off Nymex vs $0.76 off last quarter and $0.75 off a year ago,
  • Differentials have improved $1.00 per MMBtu since the 2017 budget was established in October (diffs were $1.50 off Dom South then and are $0.50 on a one year forward basis now,
  • Cash operating costs at $1.15 / Mcfe vs a $1.16 / Mcfe last quarter and were 2% under the 1Q16 number,
  • 4th consecutive quarter of cash flow exceeding capex. 


  • 2017 volume guidance increased to 1.9 Bcfepgd on mid (range of 10 to 12%) vs prior guidance for total growth of 5 to 10% (with 15% oil growth)  and vs Street of 1.86 Bcfepd, 
  • 2017 E&P capex guidance of $775 mm vs prior guidance of $610 mm with the increase going to exploratory leasing and testing.   They spent $66 mm in 1Q on new area leasing. 
  • On current strip they still see free cash flow of $250 mm despite the additional spending.  
  • Longer term they see maintenance capex for the Marcellus of $500 mm per year with free cash flow generation of a whopping $2.02 B at $3 gas. 
  • Look for questions on the call regarding uses of free cash - share repurchase possible, increased dividend possible
  • 2017 - no change to the 90 drilled and 90 completed wells (both programs) prior guidance, 
  • 2Q17 guidance of 1.878 Bcfepd on mid, flat with 1Q levels.
  • Prior operating cost guidance was reaffirmed.


Marcellus (94% of 1Q17 total volumes, segment volumes up 6% sequentially) - 2 rigs running

  • Favorite quote watch: "20 of the wells placed on production during the quarter were completed with our fourth generation completion design and the average cumulative production for these wells is outperforming our 4.4 Bcf per 1,000 lateral feet type curve".  Look for color on the call but the slides out this morning are showing a 14% early time uplift in production. 
  • Drilling costs per foot down 12% in 1Q17 vs 2016 average.  This is slowing as expected, look for comments on the full D&C well cost and inflation thoughts on the call.

Eagle Ford (segment volumes up 15%, it's tiny by comparison to the Marcellus but driving the high oil growth expected this year, 1 rig running)

  • Drill costs per foot down 13% vs 2016 average,
  • No well highlights offered in the stub of a operations updated provided in the press release but the EFS section of the new presentation shows the new bigger, 2,000#/ft completions with tighter stage spacing are doing 30% better 40 days in vs the early 2016 crop of wells (normalized for lateral length delta). Very nice. 

Other Items:

  • They had identified two regions where they see building sizable positions capable of generating competitive returns - this is a really rare thing for them and they did not reveal the play (didn't call it a new play or not, our guess would be it's not Delaware).
  • Look for a Pipeline progress update on the call - timing on Atlantic Sunrise most pressing item. Construction began in March with Cabot confident in mid 2018 in service date.
  • Other pipelines and the previously noted demand projects all on schedule.
  • Constitution Pipeline - expect outcome of the NYDEC permit denial appeal by end of 2Q17.
  • Look for additional demand project color (there should be more in the pipeline but not yet announced).
  • Hedges: They remain lightly hedged, no changes, just over 10% of expected production hedged via swaps and collars in the very low $3's. 

Balance Sheet: No troubles here. 

  • Net debt to EBITDA: The drive lower continues. Net debt to 1Q17 Annualized EBITDA of 0.8x, with net debt to TTM EBITDA of 1.3x (vs 1.8x at YE 16 and 2.5x at YE15), 
  • Liquidity of $2.2 B with nothing drawn on the revolver which was just reaffirmed with total commitment level holding at $1.8 B.

Nutshell: Nice quarter. Improving differentials here as well before the pipeline relief hits next year. Beat and raise will get a lot of questions as we have higher capex headed to an un-designated play (they're being coy for competitive reasons to be sure but there should be oil vs gas type and return type questions with the call). With the strong balance sheet, improving margins on better diffs and already low costs and underspend with an eye towards shareholder return of capital and with the potential for a new competitive return play we COG as a "Go To" name as sentiment for the U.S. natural gas market continues to improve.   We continue to own COG as a smallish gassy position in the ZLT and have said a number of times recently that we don't own enough. 

COG's updated slides. 

SWN Reported Better Looking 1Q17 Results; No Change Volume Guidance (but better differentials), Strong Moorefield and Utica.

The 1Q17 Numbers:

  • Differentials: Slowly improving. $0.59 off Nymex vs $0.98 off last quarter and $0.65 off a year ago (basis hedges and the impact of progress towards additional regional takeaway capacity ... there has been a sharp improvement in Dominion basis which takes roughly half their volumes in NE Appalachia); NGLs were 26% of WTI vs 25% last quarter and 15% a year ago. 
  • Cash flow from operations:  $1.49 / Mcfe vs $1.04 in 4Q and $0.39 a year ago.
  • Cash flow of $312 mm exceeded capex of $290 mm during the quarter.


  • 2017 volumes: No change noted. Current mid is 2.465 Bcfegpd (up 4%) vs Street of 2.46 Bcfepd.  Likely we see guidance move higher at mid year, 
  • 2017 capex guidance: No change. 
  • Differential guidance improves slightly to 80 to 90 cents discount vs prior range of 80 to 96 discount for the full year 2017.  We expect this to improve again as more Appalachian volumes are sent to the Gulf Coast. 


Appalachia: (60% of 1Q17 volumes) (Appalachian segment volumes were up 12% start to finish for quarter)

NE Appalachia - delineation and enhanced completion studies continue with encouraging results. 

  • - For the quarter, average 30 day rate of 14.8 MM/d from 15 wells that had enough data for 30 day rates from 5,800' laterals.  A year ago the average was 4.5 MM/d and last quarter it jumped to 17.2 MM/d on a 12 well sample size.  We would not construe anything negative from the sequential ebb, these are very good rates. 
  • Noting 22 optimized wells with first four month more than double the cumulative production of the previous 199 wells. 
  • - Susquehanna County - rising EURs - up 25% over legacy wells on average and noting the 5 well TNT pad with an EUR 40% over the offsets (2 months in) ... as per catalyst list, enhanced fracs bearing fruit,
  • - Susquehanna County - first sales from west side - 15 MM/d rates after almost a month, over 100% above, 
  • - Tioga County (20,000 net acres), first Marcellus completions with first production for them in the county, encouraging rates prior to compression from first two wells (Catalyst List Red Item) at 13.3 MM/d (30 day rate), three more wells drilled,  
  • - Wyoming County, previously announced Dimmig well at 15 MM/d after 6 months (well above curve); look for additional color on the call as to next wells,
  • NE Appalachia 2017 exit rate target of 30% vs 2016.

Southwest Appalachia

  • - Marshall County - First SWN Utica well, this is the O.E. Burge well,  (Catalyst List Red Item) - they see as 2.5 to 3.0 Bcfe per 1,000' of lateral, nice start in our view, this is the SWN well RRC was watching to their south of their three Washington County Utica wells which are some of the best in the play and is in close proximity to RICE's Bigfoot well .  Look for spud timing on the second well and their thoughts on how aggressively to pursue this program in 2018 on the call,
  • - Previously noted 3,500 to 5,000 #/ft completions look encouraging but no rates were given.
  •  Alice Edge pad, 300 days in, (included some 5,000 #/ft tests), Marcellus, outperforming offsets by 30% so far with EURs as high as 14.1 Bcfe vs the prior operator's 4.9 Bcfe. 
  • SW Appalachia 2017 exit rate target of 50% vs 2016.

Fayetteville (40% of total)

  • Still running only one rig (but we've heard rumors of a second one rigging up),
  • Moorefield Shale zone wells - 7 well pad - early days but see as 6.5 Bcfe, ahead of expectations; they see 100,000 net acres prospective for this newer zone.  30th day rates at 5.1 MM/d are well peak 30th day rate measured in 3Q16 of 3.4 MM/d from FS wells added in that quarter. 

Other Items:

  • Reserves - quarterly update shows reserves rallied in the last 3 months on price and other improvements resulting in a return of PUDs with total proved rising from 5.2 Tcfe to > 10 Tcfe. 

Balance Sheet:  Higher prices and to a smaller extent yield greatly improved looking debt metrics.  

  • SWN announced the early call of $316 mm of 2017 and 2018 debt with cash on hand,
  • Net debt to 1Q17 Annualized ~ EBITDA of 2.1x vs 3.6x as of 4Q,

Nutshell: Nice quarter. Management clearly grew tired of issuing boring releases. Normally the shares trade with a bit of fear that management's conservatism will snatch defeat from the jaws of victory but in this case we see the overly beat down shares combined with catalysts and a stronger balance sheet and improving 2017 natural gas macro as a good back drop for a rally towards the low double digits over the next two quarters.  We continue to own SWN as our largest gassy position in the ZLT.  We'll have an updated cheat sheet out here early next week. 


Odds & Ends

Analyst Watch:

  • TBA in comments. 

69 Responses to “Friday Morning – COG, SWN”

  1. 1
    zman Says:

    $49.50 an hour before equity open, Libya apparently yesterday's news. 



  2. 2
    zman Says:

    1Q GDP 0.7% vs 1.0% estimate. 

  3. 3
    zman Says:

    Russia volumes to be down 0.3 mm bopd by April 30, down 0.254 mm bopd at April 27.  According to Novak at least.


  4. 4
    zman Says:

    NG up 2 pennies pre market


  5. 5
    zman Says:

    2nd largest line (210,000 bopd) in Colombia bombed yesterday. 31st attack this year. 

  6. 6
    zman Says:

    Catalyst List items to think about for Tuesday's calls:



  7. 7
    zman Says:

    NG making a technical run, attempting to break $3.30. 

  8. 8
    zman Says:

    AR, COG, and RRC posting up a bit over 2% pre market, SWN up 5%. 

  9. 9
    brodway Says:

    re: 8

    all inexpensive and probably darn cheap in some instances

  10. 10
    zman Says:

    re 9 – definitely all overdone to the downside, SWN and RRC more than the others but all too low on forward EBITDA.  That SWN reserve revision was monster, should drive some NAV types who have been snoozing to up targets. 

  11. 11
    zman Says:

    Cabot call in 5 minutes, notes to follow



  12. 12
    zman Says:

    COG formed cup and handle breakout, expecting break to $26+ territory next few sessions. 

  13. 13
    tomdavis12 Says:

    ETP  Halted  maybe something to do with the SXL merger

  14. 14
    zman Says:


    COG – Added to the COG at just under 24.18 during the 1Q17 call. Beat, raise, free cash flow growth increasing, improving differentials, strong balance sheet, talk of new plays, talk of return of capital to shareholders, please see today's call for thoughts.  

  15. 15
    zman Says:

    COG 1Q17 Call Notes – stock  at $24.70 (up 2.3%) at open   (SWN opening at $8.11, up ~ 6%, call starts there in 30 minutes)

    – volumes increase, ng prices up 77% = EBITDA up 200% YoY

    – strong performance plus higher prices increases prompt increase guidance, no change to Marcellus/EFS D&C budget

    – Sees ng price realization first five months about 70% over same period 2016

    – Differentials improving in front of Rover, Atlantic Sunrise combined with upstream that's not kept pace with these coming additions

    – Guidance does not include uplift seen in Gen 4 completions

    – New areas comments – two new area, warrant further testing, we could build sizable contiguous acres at low cost of entry (really doesn't sound like Delaware Basin) – noting half spent already 

    – Over $250 mm of free cash flow on strip

    – inflation comment – anticipate 5% Marcellus, 10% in EFS.  However, in 1Q, costs came in under budget. 

    – slide 11 – update on pipelines – Atlantic Sunrise – 100% of requirements met for final permits, anticipate all permits in for the greenfield portion of the PA portion of the pipeline by July, so on track for in service mid 2018, saying they are getting a lot of positive feedback. 

    – Constitution – hoping late 2Q appeal decision

    – going over the maintenance capex vs free cash flow comments in the post. 

    Plan for free cash flow to go to Marcellus, if cannot do all there, then EFS, other possibles including share buyback (now less hesitant to return cash to shareholders as their delivery potential.

    Going to Q&A 17 minutes in …

  16. 16
    zman Says:

    We will be listening to the SWN call on replay, as COG call continues. 

  17. 17
    zman Says:

    COG 1Q17 Q&A

    Q) any color on new plays

    A) looked everywhere, they've said this many times, went through some data rooms for help with valuation thoughts beyond their own return thoughts, not going to talk in depth of where or when on timing of results. 

    Q) Marcellus – drives of 1Q wells vs Gen 4 curve

    A) the enhance cluster spacing, loaded more per foot, tweaked pump rates (faster), encouraged by the early time results, above the 4.4 Bcf/1,000' type curve.

    Q)  Do you need a new core area given size of Marcellus location count

    A) It's $125 mm.  This would be right in line with the historic level of exploratory capital other than the last 2 years.  Typical analyst question in that analysts want new plays and more locations, they just don't want to pay for them. Looking around is prudent and it's not like they rushed it and they're underspending.  There are a number of items that the free cash will go to, looking for new competitive plays is one of them. Reiterating the long term holding flat at the top of the Atlantic Sunrise throughput level (that's the 3.7 Bcfepd Marcellus gross) is kicking out $1.4 to $1.5 B annual cash flow. So relax pal. 

    Q) 2018 – FCF positive ?

    A) Yes.  $250 to $300 mm next year. Grows a lot more in 2019 on strip

    Q) Hedge of Dom South make sense, is this sustainable. 

    A) Encouraging how the market is reacting on the SW side, sounds like they see that same thing goes on with NE

    Noted gas to liquids projects being talked about, methanol to gasoline being talked. Increased infrastructure brings those closer. 

    Q) Timeline for the 2 exploratory efforts. 

    A) Will test both acreage pods in 2017 … plausible they give go, no go on these this year. 

      – we have seismic, will get more

      – we have well control

      – will do verticals for core data, then short lateral to evaluate target section more thoroughly, 

      – all of that science and testing is included in the increased budget. The $66 mm was most of the lease acquisition. Rest covers a bit more acreage and the testing phase. 

    – agnostic to the commodity in the past, these however are Oil. 

    Q) Eagle Ford – increase costs due to enhanced (rising sand cost)

    A) So far about $0.4 mm a copy, have budgeted more inflation rest of year. 

    Q) Eagle Ford – lot of acreage trading hands now 

    A) Our EFS has improved, op costs, the returns have improved, getting good returns now but they don't compete with our Marcellus ops. We did look at additional EFS acres in the process looking at the new areas.  Thinking the new areas will be above the EFS returns. 

    Q) Exploring other outlets for Marcellus gas, what other outlets. 

    A) Local demand initiatives.  Projects are somewhat smaller scale, attached to our gathering system, CNG, peaking plants (added a few in the last few months), ethanol, methane to gasoline. 

    Q) Plan for rig adds in 2018 as projects come on 

    A) Most likely grows from 2 rigs to 3 and 1 more frac spread. Just don't need a lot more to fill that profile 

    Call over, tone neutral, dip reminds of RRC earlier in the quarter.  Jumping to SWN in progress. 

  18. 18
    tomdavis12 Says:

    CVX & XOM both solid EPS

  19. 19
    zman Says:

    re 18 – thanks

  20. 20
    tomdavis12 Says:

    RRC  Wells Fargo upgraded to OP

  21. 21
    zman Says:

    COG retreating to touch the 200 day sma now at just under $23.50.

  22. 22
    zman Says:

    SWN 1Q17 in Q&A, joined 23 minutes into call

    Q) Moorefield Shale – water rates, that's the hurdle right?

    A)  Results of these wells are positive on a water basis, saying they are less than 50% of water delivered in first 30 days vs prior wells. That'll be a big deal for LOE.  Said we know where the water is, not hitting it. 

    Q) SW Appalachia completions – 5,000 #/ft worthwhile

    A) Performing close to 3,500 #/ft, need more time, noted the 3,500 #/ft was better than the 2,000 #/ft, were trying to see what the limit was, not sure they have reached it yet, … but then noted the next wells will be 3,500 #/ft, just need more time on the 5,000 #/ft – different draw down, (so not yet sure economically worth it). 

    Q) signs of well productivity gains throughout the portfolio – how much of that is in the 2017 guidance

    A) we have put a lot of these into our program … maybe curbing enthusiasm with that … getting some rather incredible results … but most of it we have put in the plan.

    Q) balance sheet – do you expect to pull less cash off and where does leverage sit at year end on strip

    A) 2.5 to 3.0x leverage at end of year. (so gets continuosly better on a ttm basis even with the planned outspend

    Positive call tone

    Q) leverage outlook looking a bit better, are you at or above the prior EBITDA mid point guidance

    A) yes, with Nymex above $3.25, you can expect cash flow to follow it. 

    Q) how to prioritize opportunities

    A) Always a focus on returns. There is a balance on testing new vs development and delineation work.

       Moorefield – 7 wells to delineate the 100,000 acres, gotta do that

       Utica – 2nd well drilling

       Then a lot on costs and portfolio optimization.  

    Q)  Fayetteville – wait or sell?

    A) want to max value, don't believe in tossing it out, testing other benches, SWN and others working to increase value. 

    Q) Cost inflation outlook and trajectory of capex through year. 

    A) 7 to 8% in Appa, a little less in the FS, we drill all our own wells, restarting our frac equipment. Capex for rest of year, will be within cash flow plus the $200 mm from the equity raise last year. 

    Q) Fayetteville – rigs needed to hold flat

    A) About 3 rigs.

    Q) SW PA outperformance for 3,500#/ft

    A) production is slightly higher, more important, pressure drawdown is less than the 2,000#

    Q) Moorefield,

    A) 15,000 derisked out of 100,000, via a single pad, on 1,000' spacing. Could be as tight as 600', will optimize later, right now planning to derisk the rest with 7 wells (seems light).   

    Next steps: delineate, infrastructure is in place.  

    Q)  Fayetteville enhanced

    A) seeing incremental improvement, not as substantial as in the NE.  We have own sand mind so cost not troubling, better in the Moorefield than FS. 

    "congrats on a good quarter, year"

    Q) Rogersville shale test (years ago)

    A) not a priority based on returns. We won't talk about new zones until we have it working. 

    Call over, tone positive. Will circle back in a bit to grab the first part of the call, heard next to nothing new in the Q&A re Utica and SW Appa.

    SWN is our largest gassy holding, unlikely we add to that near term.  

  23. 23
    zman Says:

    EIA 914 not yet released. 

  24. 24
    nrgyman Says:

    RE 21:  COG:  The opening gap on Mar 31 still not filled ($23.24).  Also, the 50 dma is $23.35 and the 200 dma is $23.38.  These are nearby lower targets.  There are 3 more lower gaps that remain to be filled:  from opening gaps on March 23 at $22.25, March 1 at $21.90 and the big one from Feb 6 at $21.43.  This appears to be a solid report, so it would likely take a group plunge to fill those gaps.  Perhaps a pipeline issue–Constitution is in the hands of NY state and they could permanently deny it.   

  25. 25
    zman Says:

    re 24 – true.  Constitution a wild card, also less of a concern than it was a year ago with everything else running on schedule highlighted by the big impact of Atlantic Sunrise set for mid next year. This looks like a size seller early and then a drive on technicals to the 50/200 day sma confluence. We are underweight the positive, see ZLT pie, and have been saying we didn't own enough, so we can add a bit more on the weakness and plan to soon. 

  26. 26
    zman Says:

    Curious where Robry was for this past week's injection and if he has a # for next week yet and if so is it lower vs this week's report. 

  27. 27
    zman Says:

    ZTRADE – ZLT – Added to COG

    COG – Added more on post call weakness at $23.64, today's trades effectively increase position in COG to ~ 3% of ZLT putting it in 3rd place behind RICE and SWN. 


  28. 28
    james T Says:

    re – 26 Last Post by him 4/19/2017

  29. 29
    zman Says:

    re 28 – thanks for checking. 

  30. 30
    zman Says:

    COG bought Cody in 2001

    Cody drilling in Jeff Davis County, two new vertical wells filed in the last week

    Devon drilling wildcat near by


    This is SW of APA's Alpine

  31. 31
    zman Says:

    re 30 – thanks to a friend of the site for the find. 

  32. 32
    nrgyman Says:

    RE 13:  ETP and SXL have merged.  ETP, as a separate entity, no longer exists.  SXL 'acquired' ETP, changed its name to Energy Transfer Partners LP, and as of the opening of trading on Monday May 1 will trade under the ticker ETP.  Still trading today under SXL.


  33. 33
    reefguy Says:

    30: COG drilled a Barnett horizontal gas well  in 2006.  This well was a re-entry of a 1955 vertical well.

    That 2006 well offsets one of the northern  Cody permit.

  34. 34
    zman Says:

    re 33 – thanks much

    For reference, the COG tests are skirting the southern edge of APA's Alpine High, 3rd Bone and WC play to deeper Penn, Barnett, Woodford. Oily shallower and wet gas deeper.  It would meet the low cost of entry criterion they set and be oilier than not as well. DVN will have a result out first.  

  35. 35
    nrgyman Says:

    COG just filled the opening gap from March 31.

  36. 36
    zman Says:

    re 35 – maybe they should have told people they entered the Delaware Basin through the back door on the cheap. It was a good quarter, not sure what prompted the initial dip, the rest looks technical. 

  37. 37
    zman Says:

    SWN – barely up now, post quarter euphoria abates when management starts talking. Pretty typical. Solid, improving story but trapped long selling uses significant pops to exit. This too shall pass but it needs to grind sideways as the macro continues to improve to allow more weak hands to exit before working to improve upon the multiples. 

  38. 38
    zman Says:

    Interesting Reading Watch:


  39. 39
    zman Says:

    EIA 914 data out

    February oil up 2.2%, or 193,000 bopd for the month; essentially no revision to January

    TX up 119,000 bopd; Gulf of Mexico actually slipped slightly (unexpected); smaller gains in OK, ND

    That's a big increase. Would not be surprised to see crude take a hit on that. Average of Jan and Feb is in line STEO 1Q, another month like that would drag up thoughts on 2017 volume forecast out of EIA.  


    Natural gas also showing 2.2% increase. Exactly the same, associated gas play increases where you would expect it plus Marcellus and Haynesville bounces. We will get the marketed gas numbers after the close and have the updated slide show out on Monday. 

    Both numbers a bit of a surprise to the negative side. 

  40. 40
    zman Says:

    Analyst Watch

    COG – "We think COG shares will react well to today's disclosures" … yeah, me too. I'm not short term and don't really care but the initial there is a bit puzzling. 

  41. 41
    brodway Says:

    re: 40

    great news for COG….but its shoulder season…not many want to stick their necks out and be long until cooling season is on the way

  42. 42
    zman Says:

    re 40 – that was Johnson Rice.  I don't think it's seasonal. I think its group malaise. Ongoing group malaise. It failed some technicals and may now move to more obvious supports. Those were ZLT adds, 2 to 3 year time frame but expecting an opposite reaction in the shares, based on that news as well. I think there are two analysts out there at the moment not happy about the idea of new plays even though its standard to always be on the lookout. 


  43. 43
    zman Says:

    Rig Count Watch:

    Oil up 9 to 697 vs 332 a year ago

    NG up 4 to 171 vs 87

    HZ rigs up 12 to 730 vs 324

    Biggest gains in the Eagle Ford, Cana, then Permian


  44. 44
    elijahwc Says:



  45. 45
    zman Says:

    re 44 – thanks Eli, miss your info/color/expertise buddy. Don't be a stranger, I'll buy the beer, etc. 

  46. 46
    james T Says:

    Its already cooling season in New York today and tomorrow.

  47. 47
    zman Says:

    re 46 – Nice. It chilly down here. 

    Offtopicthirty, grabbing a quick run. 

  48. 48
    james T Says:

    Does 914 data jive with the Texas RRC data  ?     http://tinyurl.com/zayejyo

  49. 49
    zman Says:

    re 48 – no, has not for a long time. 

    Feb state data = 2.815 mm bopd

    Feb fed data = 3.309 mm bopd

    Calls into TX RRC in the past have been met with shoulder shrugs as to where Fed's get that much volume.


  50. 50
    james T Says:

    re49 Someone tell Trump

  51. 51
    james T Says:

    There a good thing to Tweet out.

  52. 52
    zman Says:


  53. 53
    james T Says:

    Z   AR has to show improvements with some of best hedges around. 

  54. 54
    zman Says:

    re 53 – In recent quarters they have been showing increased cash flow on rapid growth and higher prices as they push a higher % of volumes to better priced markets.  

  55. 55
    nrgyman Says:

    AR was highly hedged last year, this year and going forward.  One issue with them (if I read this correctly) is the avg hedge price last year was higher than this year, so if volume stayed constant natgas ebitda would drop.  But they have growing natgas volume, falling diffs, high and growing NGL content that is rising in price faster than oil or natgas, and growing ebitda from their midstream investment AM–so ebitda grows nicely.  Just not as fast as COG, who was unhedged so larger ebitda growth is expected from COG.    

  56. 56
    zman Says:

    re 55- true

  57. 57
    zman Says:
    CFTC Data – non commerical NYMEX        
       Natural Gas      12/27/2016 4/18/2017 4/25/2017 Week
        Longs            321,658       344,810         335,103  
        Shorts            321,909       341,206         338,001  
      Net Position                (251)          3,604          (2,898) NM
       Crude Oil – Light Sweet     12/27/2016 4/18/2017 4/25/2017 Week
        Longs            614,401       648,535         608,765  
        Shorts            111,755       151,268         152,072  
      Net Position          502,646      497,267        456,693 -8%
  58. 58
    zman Says:

    J Rice out saying next week better injection, cold, flat supply, lower nukes on. 

  59. 59
    tomdavis12 Says:

    Trump signed EO to allow offshore drilling in places not approved before.

  60. 60
    zman Says:

    re 59 – Atlantic, Arctic … I see no impact next 5+ years.  

  61. 61
    RB Says:

    cleaning out my office and found a Feb 16, Ned Davis Sector research piece.  Says and I will paraphrase a bit…"We start 2017 with a bullish outlook on energy and oil…..Within the sector we favor equipment and services names over more integrated…we also like the refiners….within E&P we continue to like the Marcellus Shale producers which benefit from the continued build-out of gas storage and pipeline infrastructure in the region…..

    What to Watch…crude continues to trade 50-55 and we are watching the work of our Energy Strategist for insight on whether it will move above or below the range.  With oil flat, the sector has been an underperformer so far in 2017, we are watching to see if this performance gap closes in the next few months.

    Was telling Z I follow a guy that tracks earnings estimates and his followers and clients were overweight energy because of expected improvements and easy comparisons.

    Also told Z, that I thought continued weakness would flush these guys and there followers and help us to put in, at least a tradeable bottom.  Not sure we are there yet, so I've been a minimalist on my trading.  A few months from Feb would be May.  So, I'd expect the NDR people, who are pretty patient will wait until June, but followers might not.

    Spent the day cleaning my office and studying the racing form.  Everyone have a good weekend!  


  62. 62
    j Says:

    Z or anyone – do you know of a free charting source where one can see the crack spread (321)?  TIA

  63. 63
    zman Says:

    Thanks RB, have a good one. 

  64. 64
    zman Says:

    re 62 – not free, Bloom has it.

    You can get an idea of regional weekly and quarterly ones here for free in a table:


    Click the Industry Differentials PDF. 


  65. 65
    james T Says:

    re57 – I assume thats a slight  positive for Oil.

  66. 66
    zman Says:

    re 65 – that's how I'd see it. 

  67. 67
    zman Says:

    Ending the week about flat. 

    The Wrap will be out tomorrow evening. 


  68. 68
    j Says:


  69. 69
    montre connectee Says:

    montre connectee

    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Friday Morning – COG, SWN

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