Tuesday Morning – HAL



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Market Sentiment Watch: Light week from an economic data and energy data perspective. Most energy eyes will be on natural gas with the break of $2 on Sunday night. In oil trading, very odd action overnight as prices fell despite the removal of over 1 mm bopd of production from Libya (see Commodity Watch below). In today's post please find The Week That Was, comments on the HAL quarter (beat, better than expect C&P segment margins, not much granularity of outlook until the call), The Five Things (many updates outlined in red), comments on gassy exposure by certain names of interest (top 3 most exposed, top 3 least exposed), and some other odds and ends. In case you missed The Wrap please click here.

Ecodata Watch:

  • No economic data release scheduled.

The Week Ahead: 

  • Wednesday - Chicago Fed, existing home sales, API oil inventory,
  • Thursday - Jobless claims, leading economic indicators, EIA Natural Gas and Oil Inventories,
  • Friday - Markit manufacturing and services flash PMI.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. The Week That Was
  4. Stuff We Care About Today –  HAL, The 5 Things, a few gassy exposure comments, VWDRY
  5. Odds & Ends

Click the link directly below this to ...


Holdings Watch:

ZLT (Zman Long Term portfolio)

  • Last Week’s Trades: Please see The Week That Was below for details.
  • ​The Blotter is updated.

Commodity Watch:

Crude oil eased 0.8% to close at $58.54 last week after EIA, OPEC and IEA monthlies failed to really move markets while tensions between the U.S. and Iran remained back burner for a second week. The EIA weekly was weak but please see The Week That Was below for more details. This morning crude is trading off below $58 despite the major disruption from Libya noted below and more rocket attacks in Baghdad.

  • Libya Watch:  As guessed in Friday's post, Libya experienced major outages over the weekend with Haftar's forces shuttering almost all onshore production (1.1 to 1.2 mm bopd) with force majeure declared for El Feel and El Sharara fields. Exports appear to be shuttered as well.
  • Iraq (Iran) Watch: 3 rockets reportedly struck near the US embassy in Baghdad yesterday.
  • Iraq Watch: Protests reportedly blocking access to 80,000 bopd Ahdab oil field. No disruptions noted yet and it's unclear who is behind this particular set of protests.
  • U.S. Watch:  Just an observation but the US appears ready to ignore a lot (including wounded U.S. soldiers) in the name of de-escalation now and Iran appears to be, via proxies, pushing what it can get away with.

Natural gas tumbled 9% to close at $2.00 last week after a bigger than expected but much smaller than normal withdrawal failed to buoy markets. Gas wanted and received a test of $2.  As we noted last week and often, I am not a gas bull but the market is currently ignoring a flattening of supply (see The Week That Was below for a table). Note that supply is production plus imports (or in the present case large and growing exports).   This morning gas is trading $1.93 at post time.

  • Curtailment Watch: We have not seen any press releases and may not but rest assured, curtailments will happen soon if not already in progress and this will get picked up in the natural gas daily volume tracks soon.
  • Long Term Price Graph:

Weather Watch: Better but still much warmer than normal; note we've passed the degree day peak for the season this week. 

  • Last week:  Gas Weighted Heating Degree Days (HDDs) came in at 179 vs 226 normal and 172 in the prior week. .
  • This week's forecast:  This week, CPC predicts HDDs will rise to 203 vs 224 normal.

STEO Watch:  Even EIA Sees The Rollover

The Week That Was

Stuff We Care About Today

HAL Reports 4Q19 Beat


  • $915 mm in free cash flow for 2019 with almost all of that attributable to 4Q19 and down from $1.13 B in 2018.

Completions and Production

  • Revenue down 13% sequentially (in line with guidance of low double digit declines) largely due to lower NAM operations.
  • Margins were essentially flat sequentially and better than expected. Look for questions on margins for 2020 here.

Drilling and Evaluation

  • Revenue up 4.3% sequentially, (in line with guidance for low single digit sequential growth),
  • Margins were up less than guided.

North America - down 21% sequentially and down 18% for 2019. Largely due to reduced activity and pricing in NAM land.

International - up 10% sequentially and up 10% for full year 2019 with all regions growing for the year. This is the second year of growth for international.  Noting weakness in Argentina that was a drag on LAM but offset by strength in Middle East/Asia (particularly strong) and Europe/Africa/CIS.


  • NAM - not much color other than expect customer spending to be down again in 2020 (no range given but expect one on the call) and that they plan to focus on maximizing returns. Look for comments on pressure pumping capacity on the call or more likely in the Q&A of the call.
  • International - In 2020 they expect continued growth and better margins.

Nutshell: Solid quarter but as always with HAL their press release is lighter on forward granular details than we would like.  The beat should prompt a small bounce but the call details will determine if the name can extend the >25% bottom bounce the name has seen since the 3Q19 call. We continue to hold a very small position in HAL in the ZLT.

The 5 Things:  (changes are generally minor from week to week and noted in red)

  1. 2020 Guidance: On average, flat to slightly up volumes, down capex. This has only been reinforced by the commodity price volatility of the last few weeks on both the oil and natural gas fronts.  Look for upstream names to slowly begin releasing their 2020 outlooks (January to February).  Capex is likely to be down modestly across the board (see next bullet). Service names are likely to guide one quarter at a time (SLB did on Friday) with 1Q set to see a modest bounce relative to 3Q and 4Q19 levels (SLB said as much).  We plan to keep a running list of capex and volume guidance with the first list out very soon (names like COG have already put brackets on the new year, others are likely to wait for more confirmation on commodity prices and release guidance as late as the 4Q reports).  A majority of our names will look to generate free cash flow at $50+ in 2020 (some lower) and some gassy names will look to be cash neutral to slightly cash flow positive at a roughly $2.50 or $2.60 strip. COG should be cash neutral just under $2.25.  Expect upstream growth to take a backseat again in 2020 with FCF optimization (mix of volumes, price, cost vs capex) at forefront. While 2020 isn't official yet for most names the determination to be better than cash neutral is majority view and deemed critical by many. Expect some names to begin giving 2020 guidance in the next few weeks.
  2. Iran / US / Rest of World: Still relatively cool despite rocket attacks in Iraq.  Tensions in the in the Middle East had oil trading in the upper end of our near term expected band before a January cooling.   Pretty wild card like action here given no production has been impacted yet (but Iraq could see impacts in 1Q). We suspect the US will take further steps to restrict somewhat leaky Iranian export restrictions. We had expected the U.S. to take a hard look at Iraqi volumes but this is less certain now. Also just guessing that Venezuela restrictions are now more likely to be less stringent in the coming months than they would have been.  Finally, would expect more SPR releases later in 2020 than we otherwise would have seen if prices are high towards election time (if prices are, as a guess > $60 at that time which they may be as demand will be at peak seasonally then).
  3. U.S. Production Directionality:  Pace of Lower 48 production growth is retreating - rigs falling, frac spreads falling (frac spread count down 40% since April due to budget exhaustion and holidays to be sure but still way off this year's peak and down harder than we usually see at year end - expect a good bit of bounce in January), spending for 2019 was front end loaded, spending in 2020 likely down for most names (10 to 20%) and likely to be front end loaded yet again.  We see EIA as missing the turn in production now, although, the latest EIA Drilling Productivity Report clearly anticipates rapid unconventional growth deceleration even as the DUC count starts to really drop.  We expect further downward revisions to the STEO forecast, particularly for oil growth, in early 2020 (though last week they did reverse course, moving their estimate higher due to prices (if not the reality of spreads and rigs).
  4. Natural Gas sentiment - remains in extremely poor territory, driven by mild weather and production that is just off record highs. Expect to hear about curtailments on the 4Q calls. While exports hit almost weekly new highs (LNG set fresh records in January while volumes coming from Canada hit new recent lows) and non heating demand remains solid the market is more focused on near record production levels and the expected warmer than normal U.S. winter (we've not had a normal week in over a month).  Notably, the net short position is well above record high territory and we expect a move away from the lower $2's soon as natural gas storage levels fail to blow out well above the five year average (they're 5% over now). We expect a storage trough likely between 1.8 and 2.0 Tcf.
  5. 2020 Presidential Candidates:  Iowa caucus is 2 weeks out. Focus may be more foreign policy centered now than energy or other areas. Energy moderates were already gaining momentum over more draconian candidates prior to the recent U.S. / Iran events. We expect a push by candidates to more fully embrace renewables and EVs (wind is huge in Iowa).  We continue to watch the energy rhetoric and plans which still range from the extreme (frac bans, revamp of SEC reporting to reflect climate change liability (mostly Warren) to measured (a push for further improvement of ESG - our mid and larger names are putting out stronger ESG reports now).  Frac bans are generally thought to be only applicable on federal lands which are generally western U.S. states (biggest hit to growth would be New Mexico portion of the Delaware).  The political climate in CA appears to be worsening for producers. CO appears to showing some signs of less tension in the wake of recent clarifications by the state O&G agency (next worry item comes mid 2020 when proposals turn into action plans).   We currently hold > 20% of the portfolio in Wind (3 names now), Solar, and fuel cells.

Questions on the 5?  These are our top of mind thoughts at present. We keep it short for the post but please feel free to ask in comments.

Most exposed (by revenue) to natural gas prices:

  1. COG - 100% natural gas, no hedge.
  2. GDP (unowned) - 91%, 1/3 of expected gas swapped at $2.67.
  3. GPOR (unowned) - 83%, about 40% swapped at $2.88.

Least exposed to natural gas prices:

  1. MR - 57% natural gas by revenue, ~60% hedged > $2.60 for gas; 30% of revenues from oil in 3Q.
  2. AR (unowned) - 62% NG, but also 34% from NGLs. NG is highly hedged at $2.87.
  3. RRC (unowned) - 60% NG but also 30% from NGLs. 40% hedged on the NG at $2.65


Other Stuff

  • The updated 4Q19 calendar can be seen here,
  • VWDRY plans to be zero waste in manufacturing by 2040 after having said they would be carbon neutral by 2030 last week. Plan to achieve this to be announced over the next two years. VWDRY should be high on the list for those looking for strong ESG commitment names.
  •  The 4Q19 calendar has been updated.

Odds & Ends

Analyst Watch:

  • TBA in comments

67 Responses to “Tuesday Morning – HAL”

  1. 1
    zman Says:

    Baylor re your question on writedown comments by me:

    EQT https://zmansenergybrain.com/2020/01/14/tuesday-morning-wiowio-part-5/

    CVX https://zmansenergybrain.com/2019/12/11/wednesday-morning-opec-lbrt/

  2. 2
    zman Says:

    Trump at Davos Watch:

    “We urge our friends in Europe to use America’s vast supply and achieve true energy security”

    “US is on the threshold of virtually unlimited reserves of energy”

    “We’ve been so successful that the US no longer needs to import energy from hostile nations”

  3. 3
    zman Says:

    Analyst Watch

    SLB (unowned) – JPM ups target by $1 to $35.

  4. 4
    zman Says:

    HAl – 1.5 hours before the call and an hour after earnings are out, called up 2.5%.

  5. 5
    zman Says:

    Analyst Watch

    EQT (unowned) – SunTrust upgrades to Buy, trims target a buck to $12.

    Points to the name having underperformed group of late.

  6. 6
    zman Says:

    COP (unowned) – holding up nicely in recent weeks.

  7. 7
    zman Says:

    HAL call in 10 minutes, notes to follow.

  8. 8
    zman Says:

    HAL 4Q19 Call Notes

    HAL called <1% lower at start of call. This probably oil and/or the D&E margins in 4Q.

    2019 – solidified pivot from growth to capital discipline.

    NAM – focused on those customers that provide the best returns. Stemmed margin erosion.

    Stressing strength of international, growth, margin improvement – all noted in post. Notes it was stronger than expected quarter for int’l (pretty in line and not on margins)

    Oil price is more constructive as we enter 2020, economic outlook has strengthened on central bank easing.

    US production is slowing due to restricted spending.

    Noted natural gas prices are below breakeven.

    International customer spending to be mid single digits 2020.
    – HAL to grow at or above that rate.
    – sees increased margins on higher utilization in N Sea and ME/Asia
    – sees 1Q down, then up rest of year.
    – pricing is improving in some markets, seeing pricing traction on new work.

    NAM – US shale faces test of lower spend and slowing efficiency.
    – activity all basins were down in 4Q
    – biggest drop in stage count in 4Q due to spend discipline.
    – HAL cut costs
    – saw clear equipment attrition in 4Q, says available equipment may be smaller than some think.
    – 22% less HP vs start of 2018.

    $300 mm savings plan started in 4Q – moving quickly, achieved $200 mm on a full year run rate basis during 4Q.

    DUCs in 2020 – less spend on rigs, more on completions.
    – expect modest improvement in completions in 1Q
    – but see year as front end loaded again.

    In 2020 – provide capacity that maximizes returns on overall fleet.
    – pricing pressure was considerable.
    – declining poor return contracts.
    – working to improve returns of non frac business.
    – redesigning way they deliver completion services.

  9. 9
    zman Says:

    HAL 4Q19 Call Notes 2

    – $2.3 B cash

    – $1.5 B capex in 2019

    – Plan $1.2 B capex in 2020

    1Q20 thoughts:
    NAM – modest increase in completions,

    C&P revenue up 2 to 4%, with margins down 125 to 150 bps.
    D&E revenue down 4 to 6%, with margins down 200 to 250 bps (check this range).

    Speaking to digitalization, permeates everything. Sees quantum leap in productivity, well along path to get this done. Lot of buzzwords here, no #s.

  10. 10
    zman Says:

    Oil at $58.25 at equity open
    NG at $1.92

  11. 11
    james T Says:

    Now China outbreak drives Oil, forget rocket attacks, Libya.

  12. 12
    zman Says:

    HAL 4Q19 call
    Int’l growth will continue. Int’l margins will expand in 2020.

    NAM – will max returns and free cash flow. Will invest in tech that improves margins, will grow non frac business that improves margins.

    Going to Q&A 33 minutes in

  13. 13
    elduque Says:

    Bastardi still calling for cold weather. Although not quite as confidently.

  14. 14
    zman Says:

    HAL 4Q19 Q&A

    Q) International
    A) margins same shape as 2019 but from a higher starting point

    Q) free cash flow 2020
    A) reduction in capex + improvement in margins = free cash flow growth in 2020.

    Q) Digital strategy – where most opportunity.
    A) will take many forms – big projects where we install or operate or just the day in, day out march of how the work gets done with digital tools, lots of scalability.

    Q) C&P in NAM – is there more than the $100 mm left in savings to achieve and are you seeing prices for frac stabilization.
    A) $300 mm in savings target has been moved quickly on, and the other $100 mm of that (ann basis) will get done in 1Q20.

    – frac market still over supplied
    – saying it’s more stable in that they decide to work or not.

    Q) 20% reduction in capex; 7 to 8% free cash flow yield at a $24 stock price? Where goes cash flow
    A) Reduction of debt.

    Q) lower capex – what areas starved
    A) spending appropriately, about 2/3 Int’l, 1/3 US. 40% C&P / 60% D&E. See this as sustainable. We may spend more down the road in a stronger environment but all will be geared to returns and free cash generation.

    Q) C&P capex over the next few years.
    A) Structurally lower, based on what we see now.

    Q) re 22% of capacity off market.
    A) that’s for us, that’s sold, gone. We’re 90% Q10 pumps now. That’s good for us. The fleet is 95% committed at start of year, best in some time.

    Q) Attrition question and pricing timing
    A) forces that have driven that have not changed, equipment still wearing out based upon usage rates. No comment on pricing, when it happens that will be great but focused on optimizing own fleet, returns.

    1) international with grow in 2020 and margins will expand.
    2) will execute returns and free cash flow in NAM

    Tone was fine

    Call over,

    Stock at 24.32, up 1.5%.

  15. 15
    zman Says:

    re 11 – hear ya Wuhan coronavirus

    re 13 – thanks much.

  16. 16
    zman Says:

    Grabbing coffee – doubled MR last week, sitting on hands for more now.

  17. 17
    brodway Says:

    SunTrust maintained Matador Resources Company (MTDR) coverage with Buy and target $25
    Past Target Price: $22

    SunTrust maintained Concho Resources (CXO) coverage with Hold and target $90
    Past Target Price: $70

    SunTrust maintained Bonanza Creek Energy (BCEI) coverage with Hold and target $24
    Past Target Price: $23

    SunTrust upgraded EOG Resources (EOG) to Buy rating with price target $110
    Previous rating: Hold
    Previous price target: $80

  18. 18
    brodway Says:

    SunTrust maintained Parsley Energy (PE) coverage with Buy and target $28
    Past Target Price: $25

    SunTrust maintained Extraction Oil & Gas (XOG) coverage with Buy and target $5
    Past Target Price: $8

    SunTrust maintained Continental Resources (CLR) coverage with Buy and target $45
    Past Target Price: $40

    estimates going up….love the PE target

  19. 19
    brodway Says:

    MR now fully filled the gap….like it much more at $5 than at $6….may join you in a trade….short term for me

    BCEI now filled gap as well. That is a $6 point drop from recent high….own some lower but may take a few shares at 19. Short term stuff thinking for me….will continue to hold core position

  20. 20
    brodway Says:

    SunTrust maintained Diamondback Energy (FANG) coverage with Buy and target $137
    Past Target Price: $115

  21. 21
    zman Says:

    re 17, 18 – thanks

    re 19 – hear ya on that. Our last add on BCEI was sub $20 too, round trip there is wild but it’s a thin name. Super cheap here.

    Here, writing, watching things ebb, shout if you need something.

  22. 22
    brodway Says:

    SunTrust maintained Falcon Minerals (FLMN) coverage with Buy and target $9
    Past Target Price: $8

  23. 23
    brodway Says:

    LPI fully filled gap….not sure i want to own more given their debt situation and recent less than favorable refinance rates…technically may be worth a trade

    LBRT approaching 50dma…would feel more comfortable getting in at 9 where gap has been lingering since early December

  24. 24
    zman Says:

    re 22 – thanks, had not seen that one.

    re 23 – re LPI – RSEG, who I think does good NAV work (if that’s your thing) called them one of the most undervalued names in the Permian over the weekend. Along with CPE (unowned) and CXO (personal only).

  25. 25
    zman Says:

    COG – most exposed and down 5% today. Working on a piece on them now.

  26. 26
    zman Says:

    Oil $58.50 now.

  27. 27
    zman Says:

    MR – highly hedged, oily, down 9%.

    Second worst gassy name performance of the day.

    First is GPOR (unowned)

    Note that the Strip is off but still well above $2. June is $2.07. December is $2.50. All too low. All about to see gas-fired demand react to low prices (in April, May but with prices likely to react before that on covering).

  28. 28
    zman Says:

    Renewables and HAL up today, everything else red at the moment.

    Oil essentially flat on day, NG at $1.90, down a dime.

  29. 29
    zman Says:

    COG piece submitted to SA, along lines here but also includes supporting graphs on why gas is too low and due for a rebound in the next few months. Nutshell is they can generate free cash below their peers, that they have a lower cost structure and a better balance sheet and that they are trading at extremely rare valuation levels for them.

  30. 30
    zman Says:

    Someone tell Cramer to look at HAL vs SLB (unowned) of late.

  31. 31
    tomdavis12 Says:

    30 When those two names come up he usually brings up the 5+% yield vs 3% and nothing about fundamentals.
    Where do you stand with the lack of Tier 1 properties. EOG is always puffing out their chest about how they have 13-14 years of Tier 1. High returns down to $40/bl. Have heard many others been drilling there best last few years without much Tier 1 remaining.

  32. 32
    zman Says:

    re 31 – everyone varies. I don’t think you can “everyone is out of good real estate” and be accurate. I know my names vary quite a bit. Some are still learning what they’ve got. Others are well delineated but not short of positions like a PE (monster inventory, they get critiqued for having too much at times). I don’t have anyone I see as short but I read from time to time people writing that they are short (I see this with MGY and the company basically says no way at Karnes). WPX is going to run low in the Bakken but has a lot of room in the Delaware. So I guess I’d not be in a spot to say on the whole, we are running short or not.

  33. 33
    zman Says:

    Increasingly intrigued by CPE (unowned).

  34. 34
    nrgyman Says:

    RE 33: CPE looks determined to fill the Dec 4 opening gap. At the top of that gap now. Fills completely at $3.58, which is also a multi-year closing low.

  35. 35
    zman Says:

    re 34 – agreed. Oily, high margin, looks under valued. We don’t own it now, may not but want to take another look.

  36. 36
    zman Says:

    From Zorg on WTI

    “continues to find balance around long and short term acceptance at 58.33….upside resistance at 58.88 broken briefly on overnight news….steady as she goes..for now”

  37. 37
    nrgyman Says:

    XOP now trading in the middle of the Dec 16 opening gap. CPE trading at the Dec 4 opening gap, well below the Dec 16 gap filled recently. Highlights the recent CPE under-performance vs XOP.

  38. 38
    zman Says:

    re 37 – thanks, grabbing lunch, be right back.

  39. 39
    zman Says:

    Housekeeping Watch:

    If you had trouble getting in this morning, you have my apologies,

    We’re working on a fix but in the meantime:
      When/if it gives you the error message please click on the title banner of the site.
    It should then take you to the current day’s post and you should have access. 

  40. 40
    zman Says:

    Reuters at -100 Bcf
    Bloom at -87 Bcf

    for Thursday. Next week will be bigger.

  41. 41
    zman Says:

    1st coronavirus case discovered in U.S.

    No oil price panic so far.

  42. 42
    zman Says:

    EIA Drilling Productivity Report

    More slowing shown.

    February oil production estimated to grow 22,000 bopd.

    – Permian up 45, Bakken up 5, rest of plays down.

    Feb natural gas production up just 65 MM/d, here they have Permian and Haynesville up, rest flat.
    – they have Anadarko, Appalachia, EFS down.

    – recall that about 6 months ago this was rising by 1 Bcfgpd.

  43. 43
    zman Says:

    From tomorrow’s post:

    EIA Drilling Productivity Watch:

    More slowing indicated
    Total oil production from the shale plays shown up 22,000 bopd in February vs January. 
    Last month they had January up 30,000 bopd over December,
    And the month before that they expected growth of 49,000 bopd.

    Strange action in light of the STEO.

  44. 44
    zman Says:

    Decent sized drop in DJIA being attributed to the virus showing up in the US.

  45. 45
    zman Says:

    TPIC looking like it wants to test the pre 3Q report peak of $22 soon. Early Feb investor day up next.

  46. 46
    nrgyman Says:

    RE 44: Yet the QQQ and SPY are basically Unch. Virus selloff hitting energy and materials
    and EEM disproportionately. Natgas price plunge not helping. BA plunge hurting industrials.

  47. 47
    zman Says:

    re 46 – but not hitting oil or at least not much. Although one could argue from a sentiment perspective it’s offsetting a 1 mm bopd outage from Libya I suppose.

  48. 48
    zman Says:


  49. 49
    zman Says:

    Renewables held almost all up, everything else down.

    Watching BE trade with more volatility after failing to really break over $10 last week, loss of momentum there should lead to sharp profit taking. We own a little, plan to own more again once it falls.

    Beerthirty, back in a bit.

  50. 50
    zman Says:

    COG closed at the December lows.

  51. 51
    zman Says:

    MR closed at December support level.

  52. 52
    brodway Says:

    LBRT doing a good job of attempting to fill the gap down around $9….

  53. 53
    zman Says:

    Gassy names – all unowned save COG and MR

    GPOR – 12%
    MR – 9%
    RRC – 8%
    COG – 7.7% (this is the only one with no hedges)
    AR – 7.5%
    SWN – 7.5%
    EQT – 8%
    CRK – 4.6%
    GDP + 2.2%

  54. 54
    zman Says:

    re 52 – perhaps I should be more nimble, got the rally off the lows, the news has only improved (unless you were looking for gassy spreads to bounce but they are not in gassy areas – all oily Rockies, to Permian to S. Tx).

  55. 55
    zman Says:

    GPOR (unowned) – at new lows.

    More debt than MR or COG
    Some of their senior notes trading off sharply 2020 YTD

    EQT (unowned) at new low as well. EQT just starting to see some of their debt come off.

  56. 56
    zman Says:

    AR (unowned) – size grants with 1 year, 18 month, and 2 year vests to officers today. Some of these are to officers that have punted almost all shares prior to getting reloaded.

  57. 57
    zman Says:

    Analyst Watch

    SLB (unowned) – downgraded to Market Perform, and $42 target at Cowen.

  58. 58
    zman Says:

    Analyst Watch

    CDEV (unowned) = cut to hold at SunTrust

  59. 59
    bill Says:


    Id like to get my expired AR jan 7.5 calls repriced

    Obviously disgusting.

    GPOR<RRC<AR its a race to extinction. I dont know why they just dont shut off the spigot

  60. 60
    zman Says:

    re 59 – hey, just back to the office.


    – Debt service often dictates spending.
    – Those names can’t afford to meaningfully curtail.
    – I’m sure they are going to optimize spending for minimum level of outspend.
    – They have to think about 2020 exits and the lack of growth that will occur if they cut spending too much.
    – As far as curtailing go, they can certainly do that for short periods of time. Individually they won’t have much impact and they can’t act in coordination. Together they can boost it for short amounts of time but there’s no way to offset 35 Bcfgpd type R&C demand vs 45 type R&C demand.
    – This weather is extremely poor.
    – It’s masking both slowing production growth (EIA has volumes lower starting with the current quarter), higher exports, and what’s soon to be a recurring theme in the energy price of low natural gas prices crushing coal fired generation.

  61. 61
    zman Says:

    Ha, like this one:


  62. 62
    zman Says:

    CPE (unowned) – requested quick look will be in the Thursday or Friday post.

  63. 63
    zman Says:

    The first analyst on the JKS call was overtly negative. Very odd action.

  64. 64
    zman Says:

    JKS reaction kind of reminds me of the TPIC post 4Q, minor shift in quarterly revenues and in JKS’s story, made up entirely yet, there is slippage on a strong quarter and what should be, if you believe management, word that things are getting back to normal in China for their operations. TPIC said things came back on faster than expected and that’s a US company operating over there, less reason to be skeptical than a Chinese company. See this as buying oppy in JKS.

  65. 65
    zman Says:

    This market looks far from certain. Concerned we could see a Friday / Monday event unless WH and Congress really impress. We added capital last night but I’m just going to sit on it for awhile.

    OT – gotta run to a thing, back in 30 minutes.

  66. 66
    zman Says:

    Nevermind, still here, shout if you need something.

  67. 67
    zman Says:

    I will be having a news conference today at 3:00 P.M., The White House. Topic: CoronaVirus!

    Trump tweet.

    At the same time this headline hit:


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