Wrap – Week Ended 10/29/21



Solid week for the ZLT as solar segment components of the portfolio continue to wake up from a 9 month slumber helping to drive us up 2.4% on the week while some of our more traditional energy segments slipped modestly. New all times highs in our ENPH position and multi month highs in select oilier upstream names provided balance to sharp weakness in our smaller Oil Service wedge.  After the close on Friday BCEI announced shareholder approval of the long awaited Extraction and Crestone Peak acquisitions and will emerge as Civitas (CIVI) next week.

Free Stuff Last Week:

  • Our piece on HPK for SA, free to the public in the previous week is now behind their paywall. You can see our comments on HPK using the Select Categories menu at upper left.  We only note this as we have a call set with management after they report 3Q21 results and they released a new operations update this week that makes some of our numbers there stale (our 2022 EBITDA estimate has been revised higher).

Holdings Watch: 

Notable Chart Watch: C3+ and ethane prices lingering at the highs. NGL prices in general are holding well above 3Q21 average levels and more than 2x year ago levels.

Numbers of Note from The Wrap Table.

  • TAN up 12% on the week and still down on the year. Only notable as that was one of the best weeks for the solar space in a long time. Driven by a combination of strong fundamentals in the residential solar space and supply chain challenges that have been met successfully by key inverter/storage player ENPH who yet again posted strong gross margins and revenue and bottom line beats, built cash, showed off impressive chip shortage management and generally helped drag the sector north. Demand continues to outpace supply.
  • Refiner margins - sliding from recent very strong levels but still solid. Don't expect this to forestall a move on the 2021 throughput high and note that this week we saw a slight tick higher in U.S. throughput in what is the 3rd week of the fall refiner maintenance turn. Our thought has been to expect a late, short, and shallow turn this year.
  • Gas storage - bigger than expected injection as ongoing mild weather will result in storage taking out the top of our long held 3.4 to 3.6 Tcf range (now seen topping < 3.7 Tcf).  Price is largely being driven by European and Asian prices and not on the OK-but-not-really-that-low level of U.S. storage.
    • While not on this table it's notable that LNG exports ramped back up to 11.8 Bcfgpd on Friday, just shy of 100% export capacity.
    • Also not in the table, three "gas majors" reported 3Q21 results last week, and reiterated their intentions to remain in maintenance mode. All are Marcellus centric and together they represent about 9 Bcfgpd of expected gas production in 2022 (or a little under 10% of current U.S. dry gas production).
    • Look for a modestly smaller injection this Thursday.

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Questions and comments under The Wrap will be addressed in the Subscriber Mailbag section of the Monday post.

Have a great weekend,





4 Responses to “Wrap – Week Ended 10/29/21”

  1. 1
    zman Says:

    Q from GDR

    “Z whenever you get time can you differentiate STEM and SHLS and explain why one may have a more favorable outlook than the other? Thanks in advance.”


    STEM is a storage management and AI company for small scale commercial solar (think Coops, not utilities).

    SHLS is an EBOS company, electronic balance of system – basically all the bits needed – for utility scale solar. They have systems designed to make it much simpler to hook up the panels for big installations without the need for licensed electrics. Cheaper installations that are more reliable as they take the wire work out of the field and put it in the factory, then when the install happens it’s just plug and play with the panels. The are about to announce rollout of the save for the EV charger market.

    So they’re not in the same line of work really, other than being solar segment names.

    SHLS to me is the more obvious beneficiary of solar space growth, and it’s easier to understand.

    STEM’s value is probably as much or more in the AI that manages systems as they tie into the grid to maximize economic benefits for the small solar players, extend the battery life, etc. Also the AI is where the gross margins are really driven higher.

    Our basic on STEM can be found here:

    Our basic on SHLS can be found here:

  2. 2
    zman Says:

    Analyst Watch

    HPK – Seaport with only coverage – Buy with $17 target.

    Roth just did the secondary so …

  3. 3
    crysball Says:

    Equinor plans 1 gigawatt floating offshore wind project in Scotland

    With new floating tower design for harsh weather conditions


  4. 4
    Zorgnak Says:

    Bounced off long term volume base at 74.95. Demand volume just getting going here…
    Looks like a long run just starting to me.
    Hitting supply at 88.56. Supply falls away above 91.92. Pullback support at 85.90.

    Weekly Breakout from long term value area on strong demand volume.
    Daily Much cleaner chart than PBW. Clearly rejecting the long term range. No major supply until 30.81. Historically PBW has outpermed ICLN by a sizable margin.
    Since the component change in ICLN it has outperformed PBW by 3.5% in October…

    Weekly.Broke out from long term volume base on three consecutive weeks of above average volume.
    Daily..Clean breakout…Little major supply until 117. Fall back support at 97.13. Looking for digestion here.

    MAXN Extended at important level..
    Weekly Breraks above long term volume base above 26

    TPIC Levels of Interest
    Still trading below the long term value area/volume base at 35.14.
    Daily Multiple layers of supply/resistance around the 35.50

    QS Took out previous supply at 27.67 on the second try…next supply at 30.15
    A alot of trader eyeballs on this one for Monday..high short interest

    PLUG Hit last major supply level at 37.90 last week…Pullback support at 33.12.
    Daily Looks extended…Last week’s value area in the grayed out area to the right.
    A break above that area and above 39 could continue to run. 11% short.
    Weekly. Clearing it’s base.

    ARRY Breaking out into wide volume gap. Next major level of supply at

    SHLS Breaking resistance. Next upside target at 32.63, also the major pivot point
    for the stock since listing…Getting ahead of myself but 33.75 would be the key level for the
    next major leg up..if/when

    ENPH Pull back support at 195

    IEA At resistance and thick supply until 12.34, previous major acceptance.
    Weekly Attempting to break above long term volume base…

    WTI Digesting the move. Current value range 79.45 support, 84.32 resistance. Demand volume steady/supportive of this range.

    Nat Gas Holding on to last months value range low at 5.37, as of last night…Next support at 5.03
    Daily Demand volume suggesting a test lower.

    OIH Demand rolling over on the weekly and daily time frames. NEX, LBRT, PUMP all breaking below value. No nearby clear support to my eye.
    Daily..Rejecting previous major acceptance at 222 as too high. Breaking below October’s value area/supply. Looking for support.

    XOP Demand flattening. Digesting the move. Value range low 102. Next leg up above 109, if when.
    Weekly Still in an uptrend at supply…Funds flowing out of energy last week..

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