16
Feb

Wrap – Week Ended 2/15/19

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Solid week, with the ZLT up 9.9% yielding a YTD gain of 18.3%. 

 

We had earnings or other reviews of 7 names of interest and one owned name last week. Upstream names are just starting to report 4Q18 results and on the whole they are moving better post release as long as spending remains disciplined and there are not other items of concern.  In general, Capex guidance has been down more than volume guidance relative to Street thinking.  Rigs and spreads are, again in general, ebbing on decks that are mostly holding to the $50 WTI mark. 

 

The earnings calendar gets much more full this coming week.  

 

WTI has broken out of the OPEC+ meeting base level (early December) and is near the upper end of our near term expected range. We continue to model our base case at $60 and run sensitivities at $50. This week's rally came with promises of further output cuts by Saudi (and an unplanned outage there) and with dwindling volumes from Venezuela and Iran and despite two of the big 3 reporting agencies modestly trimming global oil demand forecasts and all three of them upping their view of Non OPEC supply.  Note that Mid-Cush ended the week in premium to WTI territory, a far cry from the $18 discount level reached last fall. Permians should continue to wake up from the 4Q share price hit they took. 

 

Our thoughts on wind player TPIC will be highlighted in an Editor's Pick at Seeking Alpha on Tuesday. 

 

Presidents' Day Sale! Not a subscriber?  Let's get that fixed.  Contact zman@zmansenergybrain.com for rare savings. 

 

Questions and comments under The Wrap will be addressed in the Tuesday post or Monday if we get time. Enjoy the 3 day weekend.

Best, Z

One Response to “Wrap – Week Ended 2/15/19”

  1. 1
    Viper1 Says:

    TODAY, FEBRUARY 19, 2019

    MTDR
    07:09 

    Matador upgraded to Buy from Hold at SunTrust

    As previously reported, SunTrust analyst Neal Dingmann upgraded Matador to Buy and raised his price target to $29 from $23. The analyst cites the company's "strong continuous operational strategy" and expects it to become free cash flow positive starting in Q1 of 2020. Dingmann adds that Matador offers "some of the best" extraction ratings in the Permian given the "strong execution/quality rocks". The analyst further states that the company can fund its CAPEX through the "monetization of minerals/royalties" until it reaches cash flow break-even.

     

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