Thursday Morning – QS, MGY, AR



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In today's post please find:

  • the oil inventory review (positive side of neutral, but all eyes really on Russia),
  • the natural gas preview (another close to 200 Bcf withdrawal expected),
  • comments on the QS results,
  • comments on the MGY results,
  • comments on the AR 4Q21 results,
  • and some other odds and ends. 

Ecodata Watch:

  • We get jobless claims at 8:30 am EST (F = 218,000, last read was 223,000),
  • We get building permits at 8:30 am EST (F = 1.75 mm, last read was 1.89 mm),
  • We get housing starts at 8:30 am EST (F = 1.69 mm, last read was 1.7 mm),
  • We get Philly Fed at 8:30 am EST (F = 19.0, last read was 23.2),
  • We get the EIA Natural Gas Storage Report at 10:30 am EST. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h - propane watch, natural gas storage preview, 
  3. Oil Inventory Review 
  4. Stuff We Care About Today - QS, MGY, AR
  5. Odds & Ends


Holdings Watch:   


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

Commodity Watch:

Crude oil closed up $1.59 yesterday at $93.66 rising on claims by NATO and the U.S. that Russia isn't really pulling back from the border with a benign EIA weekly (see comments in the review section below) serving as a box checked for the week.  This morning crude is trading down $1.50.

  • Iran Watch:  JCPOA talks continue. U.S. said a deal needs to be reached in the next couple of weeks or Iran's nuclear program advancements will make a return to the JCPOA impossible. After the close yesterday Iran said a deal is closer than ever sending oil down a quick $2.

Natural gas closed up $0.41 (+9.5%) at $4.717 on a revision to the forecast calling for a large cold air mass to move from east to west pushing temps back below normal into early March. This morning gas is trading down over a dime. 

Propane Watch:

Natural Gas Storage Preview

Street is at -193 Bcf (Reuters) for today's report. 

  • Last Week: -222 Bcf, 
  • Last Year: -227 Bcf, 
  • 5 Year Average: -154 Bcf

Oil Inventory Review



Stuff We Care About Today

QS 4Q21 Update

As we note this one is not about revenue and EPS as they are pre revenue. The call was last night and notes are incorporated with the press release highlights below.


  • Battery Update:
    • Single layer cells:
      • Announced no external pressure on the single layer cells with 800 cycles and > 80% power retention.  Said this is a world first to their knowledge.   No pressure applied means "For automotive applications, it allows for simpler and lower-cost packlevel designs, and applications such as consumer electronics require zero externally applied pressure
        since there is no space for a pressure-applying apparatus."
      • Also noted in January fast charging from 10 to 80% in < 15 minutes over 400 cycles.
    • Previously announced 4 and 10 layer cells,
      • More 10 layers cells have reached the 800 cycle level.
    • This quarter announced 16 layer cells. Test results similar to 4 and 10 layer cells. 20 cycles so far and expect to improve on this in coming weeks and months.
  •  2022 Goals:
    1. Demonstrate proprietary cell format.
    2. Deliver an A sample (dozens of layers) to at least one customer for validation/testing from the Phase 2 engineering line.  Core functionality test.
    3. Increase separator capacity - plans to go from weekly film starts of 2,000 to 8,000 from 4Q21 to 4Q22
    4. Take delivery of pre pilot line equipment. QS0 is on track for 2023 start up. QS0 is expected to deliver B samples to customers (core functionality and using manufacturing processes to be an essentially working car battery but not with the final tooling that would be used).
    • Balance Sheet:
      • Liquidity of $1.46 B. They previously said to expect liquidity to be > $1.3 B at YE21.
      • Expect to have > $800 mm.
    • Nutshell: We reiterate that this is a long term hold for us. We made good coin on the initial trades but are down to our cost on this outing and remain fairly small in the holding as it sits at #18 in the portfolio.

    MGY Reports Solid 4Q21 Results As The Balance Sheet Moves To Essentially No Net Debt; Company Guides to High Single Digits Growth for 2022, In Line With Street


    The 4Q21 Numbers (vs year ago):

    • Revenue up $24.97 per BOE
    • Operating costs up $1.53 per BOE

    2022 Guidance:

    • 1Q22 Production:  70 to 72 MBOEpd representing a 2.3% sequential increase after showing no growth in 4Q vs 3Q but 7% growth for the full year 2021.  
    • 2022 Production:  For 2022, management is guiding to a high single digits volume increase from 2021's 66.0 MBOEpd average.  For modeling purposes we have been using for a few a months now 72.0 MBOEpd and we've adjusted our oil cut assumption down to 45% while upping the NGL portion. This represents 9% annual growth.
      • The Street is currently at 71.7 MBOEpd (45% oil) (up 8.6%).
    • Capex:  $350 mm guidance which is a little unusual for them to point to a dollar figure and not just offering an iterative outcome cash flowing from the model but they also see this level as "well below" their current 55% spending cap.
      • For reference the Street was expecting spending of $347 mm.


    • Giddings Update:
      • Production was 36 MBOEpd (40% oil) just off from 3Q21's 36.8 MBOEpd (but only 36% oil) and well higher than the 28.3 MBOEpd (30% oil) in the year ago quarter.
      • Management noted ongoing improvements in drilling efficiencies. At last check we had an average completed well cost for Giddings of about $6 mm and on the call we'd like to get a sense of if these further efficiency gains are expected to offset inflation which many are highlighting as running about 10% this year.
      • For the year management sees Giddings volumes moving to average 40 MBOEpd.
      • Also on the call, we'd like to hear a rough timeline for management to have enough data and comfort to describe the next "development" area.  Recall that right now they have designated 70,000 net acres of their 450,000 net acre Giddings position as "development" meaning well delineated with few surprises but they are taking step out shots away from that acreage.
    • Karnes: Production increased 9% sequentially on a higher turn in line calendar, pushing volumes for their oily Karnes segment back up to 33.4 MBOEpd. Karnes volumes bottomed in 1Q21 after a long completion hiatus that they chose to embark on when oil prices  were low. A lot of the economics of Karnes well are derived from the first 6 months of production and burning inventory during low price times makes little sense. With prices up they started to draw down their drilled but uncompleted DUC inventory and added rig as well and the result is that this is the highest quarter of production for the segment since 3Q20. On the call, we'd like to hear color as to why they don't expect an increase in non-operated Karnes activity this year which seems odd to us given the area is thick with rigs at present vs recent history.

    Balance Sheet:

    • They've gone from a low net debt name to an essentially no net debt name. Net debt to cap is 2%.
    • Cash on the balance sheet jumped from $245 mm at the end of the 3Q21 to $367 mm at the end of the year.
    • They continue to have the $400 mm senior notes of 2026 and nothing drawn on the revolver.
    • Liquidity is now just over $800 mm which is more than adequate given their massive under-spend plan and they've actually joked in the past that they would trim the size of the revolver if this wouldn't send the wrong message.

    Other Items:

    • Buyback:
      • 25.3 mm shares or 10% of shares outstanding repurchased during 2021 (previously announced).
      • Share buyback authorization remains at 15.8 mm shares.  Our sense would be that they plan to continue to buy back at least 1% of outstanding shares per quarter but that as the share price appreciates a variable dividend would potentially be increasingly compelling.
    • Dividend:
      • Their second semi annual base dividend was announced earlier this month at $0.20, up from the prior $0.08 initial one.  It should be noted that the $0.20 dividend is based on $55 oil.
      • They have hinted at a variable dividend in the recent past. Today's release made no mention of a potential variable dividend.
    • Hedges:  They remain unhedged.
    • Short Interest: 12% of float.

    Z4 Upside target thoughts. MGY is set to generate significantly more cash flow this year than last on higher production, higher prices, and good cost control.   We model upside targets based upon the outcome of production, various assumed price decks, hedges (in their case none) and costs.  We then establish upside target multiples based upon our view of what the name can carry given their program, balance sheet, yield, and other characteristics. Our Base Case remains $65 oil and $3.50 natural gas and we run models at levels above that for price sensitivity. Upside targets are generally 9 to 12 month in nature. We note that on a trailing basis MGY is trading at ~ 6x.

    • Z4 Base Case ($65 oil, $3.50 natural gas) at 6.0x (no debt, modest yield, massive underspend) provides an upside target of $24.
    • Z4 Stretch Case ($75 oil, $3.50 natural gas) at 6.5x yields an upside target of $29. This case also assumes production of 74 MBOEpd as a function of assumed modest creep in the operated and non operated programs as does the Strip case below.
    • Z4 Strip Case (last Friday's $84.59 and $4.05) at 7.0x (multiple edges up with higher prices as group sentiment improves) yielding an upside target of $35.

    Nutshell: Solid quarter relative to expectations. Guidance is essentially in line. Over the last couple of years MGY targeted spending at the 60% of EBITDAX level and recent trimmed that target to 55%.  For 4Q21 and the full year capex was only 28% of EBITDAX resulting in massive underspend and allowed them to buyback 10% of outstanding shares (well ahead of planned minimum levels), initiate and increase a base dividend, and build significant cash on the balance sheet all while re-accelerating both Karnes and Giddings production (with apparent ease on a 2 rig program) and deliver total volume growth of 7% while many of their larger peers generated free cash flow only by slamming the brakes on production growth.  Our view remains that the exit plan for management is ultimately a sale of the company and our sense is the longer it trades at middling cash flow multiples while proving up greater amounts of Giddings the more those chances increase. We continue to own MGY as the 2nd largest position in the ZLT.

    AR Reports Soft 4Q21 Results; Guides Just Under Street for Production and Above for Capex; Initiates Return of Capital Program with up to $1 B Repurchase Program

    The 4Q21 Numbers:

    • Pre hedge premium to Nymex of $0.06 (this was below
      • vs a $1.14 premium in 3Q21.
      • and vs a $0.46 premium in 4Q20.
    • Comment on pricing; "Antero's average realized natural gas price before hedging was $5.89 per Mcf, representing a 124% increase compared to the prior year period. Antero realized a $0.06 per Mcf premium to the average NYMEX Henry Hub. The premium to NYMEX was lower than expected due to the significant decline in daily pricing during the months of November and December relative to NYMEX first-of-month pricing."
    • Comment on the production level: " Fourth quarter volumes were down sequentially as just 40% of the Company's 2021 completion activity occurred during the second half of 2021, including less than 20% of annual completion activity in the fourth quarter. Antero chose not to accelerate activity in the second half of 2021 in order to adhere to the capital budget."

    2022 Guidance:

    • Production:  3.2 to 3.3 Bcfepd (33% liquids), down 0.6% on mid from 2021.
      • Maintenance mode, as expected.
        • 1H22 to be lower than 2H22 due to limited completions in late 2021 and into early 2022.
          • 1H22: 3.1 to 3.2 Bcfepd
          • 2H22: 3.3 to 3.4 Bcfepd
      • Vs 3.33 Bcfepd (31% liquids) Street expectation.
      • The also added they see 2023 expected to increase by 1 to 2%.
    • Capex:  $740 to $770 mm ($675 to $790 mm D&C)
      • Vs $683 Street consensus.


    • Marcellus - 10 wells tied to sales in the quarter with an average 28.5 MM/d 60 day rate from average laterals of 15.4 K'. Above type curve.
    • Utica - 4 wells place on production with 60 day rate average of 25 MM/d with an average 10K' lateral length.
    • Noted the Shell Ethane cracker still expected to come on line 2H22.

    Other Items:

    Balance Sheet:

    • Normalized now at 1.3x net debt to TTM EBITDAX.
    • Debt reduced $875 mm during 2021.
    • Nothing drawn on the revolver.

    Hedges:  No new hedges were added in the quarter. 

    Return of Capital:

    • Plan to return 25 to 50% of free cash flow to shareholders.
    • Initially via a stock repurchase program.  They authorized $1 B (or 16% of outstanding at current share price) and plan to begin buying back stock this quarter.
    • Analysts will ask why no dividend on the call.

    Short Interest: 7% of float.

    Nutshell: It's a miss, much like with EQT (unowned) and CRK. The move to transition from debt reduction to share repurchase should be welcome news. The move to maintain volumes is as expected. We continue to own AR as the 3rd largest position in the ZLT.

    4Q21 Energy Earnings Calendar


    Odds and Ends

    Analyst Watch:

    • TBA in comments if we see any.

    56 Responses to “Thursday Morning – QS, MGY, AR”

    1. 1
      zman Says:

      ENPH – expanding battery storage in OH. Another in their series of recent color on the business pieces. This time installers seeing growth in Ohio in IQ micros + IQ batteries. Woodmac quote noting 6x expected increase in residential storage by 2026 in the state.


    2. 2
      zman Says:

      Analyst Watch:

      $AR – Benchmark ups target from $33 to $37.

    3. 3
      zman Says:


    4. 4
      zman Says:


    5. 5
      zman Says:

      Jobless claims at 218K vs 223K expected

      Building permits 1.75 mm vs 1.89 mm exp

      Housing starts 1.69 mm vs 1.70 mm exp

    6. 6
      zman Says:

      Russia expels deputy US ambassador – RIA

    7. 7
      zman Says:

      Analyst Watch

      MGY – Piper at Overweight with a $27 target.

    8. 8
      zman Says:


    9. 9
      zman Says:

      re 8 – oil fell a buck immediately on that a few minutes ago. Silly traders, both sides.

    10. 10
      zman Says:



      Define central

    11. 11
      zman Says:

      Just after equity open.

      Oil down $2+ (going to be wild today and tomorrow)

      NG down a dime.

    12. 12
      zman Says:

      BlackRock espouses liking for fossil fuels


      It’s like the Mike Tyson quote about everyone having a plan until they get punched in the face.

    13. 13
      zman Says:

      Positive opens for MGY and AR.

    14. 14
      zman Says:

      Analyst Watch

      MGY – Keybanc says to expect neutral reaction today.

      MGY up 5% now.

    15. 15
      zman Says:

      MGY about to begin, notes in a bit.

    16. 16
      zman Says:

      MGY 4Q21 Call Notes

      Stock up 1.5% at start of call, down from an early 5% pop, with the DJIA down 430 on Russia concerns.

      Chazen comments:

      very strong year with high note end.

      higher prices and management of costs

      near 0 net debt.

      Giddings going well
      – increased laterals to >7K’ and 4 wells per pad on average.

      • high single digit growth.
      • said efficiencies will offset some service inflation.

      • could see some small accretive bolt ons.

      • returns 65% of FCF in 2021. Mostly in the form of stock repurchases.

      • If Enervest continues to sell shares we continue to plan to buy 1/4 to 1/3 of their sales as we did in 2021. In 2023 would go back to about 1% of shares repurchased each quarter.

      • Dividend philosophy

        • expect to grow annually, stable, paid out of actual earnings.

      Operational plan includes some appraisal work at Giddings.

      Remain fully unhedged.

      Spend of $350 mm will be well below 55% of EBITDAX at current commodity prices.

      Ops comments:

      Production per share up 18% on the 7% volume increase and 10% share count reduction.

      Cash costs – only a modest increase relative to BOE price increase. 4Q21 vs year ago quarter:

      Revenue up $24.97 per BOE
      Operating costs up $1.53 per BOE

      The 2026 $400 mm tranche becomes callable later this year.

      Slide 10 – share count repurchase over last 2.5 years (down 14%). Most of what they bought was from Enervest. Notes B shares bought direct from Enervest do not count against the 15.8 mm auth.

      – expect to grow at least 10% annually.

      Reserves – slide 12
      – Note they only book 1 year out of PUDs (not 5)

      2022 Program
      2 rigs (no change)
      1 at Giddings, 1 at Karnes and Giddings (including step outs) (no change)

      Oil diff is expected in line with recent (they got 99% of WTI this quarter).

      Going to Q&A 18 minutes in …

    17. 17
      zman Says:

      EIA Natural Gas Quick Look

      -190 Bcf vs -193 Bcf Street

      Storage now at 1,911 Bcf

      17.5% below year ago
      11.6% below 5 year average

    18. 18
      zman Says:


    19. 19
      zman Says:

      MGY 4Q21 Q&A

      Q) Giddings

      A) have two areas delineated now. One is the 70K, the second is a little smaller and a bit gassier, have 4 to 5 more areas in test now. THIS IS NEW.

      Working on spacing. Encouraging so far. This is generating a lot of locations. Will take years to fully understand the new areas (should be no surprise that).

      Q) Repurchase
      A) Can buy 2 mm shares a quarter in the open market. Believes buying in shares at a discount to what the business can generate.

      Notes the Enervest share sales are an opportunity, doing better than they would in a negotiated deal.

      Notes they would slow up the process at higher valuation (no change in that comment).

      Q) oil cut in 2022?
      A) similar to what we saw in 2021. Hard to tell, given wells in some parts of Giddings could make a bit gassier or more Karnes could go oilier.

      Q) Dividends
      A) We like them, this return of money to shareholders is not a new concept for me. Grew the dividend every year for a very long time at OXY (unowned).

      We’re smaller and some growth is important but the point of the growth is to increase cash and the point of the repurchase is to reduce the count to allow for the bigger dividend (no change here).

      Q) spending
      A) will be nowhere near 55%.
      With 2 rigs running, adding a 3rd would be a 50% increase in capex and we’re NOT up for that either.

      Q) Cash balance is big, repurchase has slowed a bit. Will the cash balance go to variable.

      A) We have a formula but we’re not going to tell you what it is.

      In a normal year, whatever that is, we would spend half the FCF on small bolt ons, 1/4 on dividend, 1/4 in repurchases.

      Doesn’t see a point in building cash. Says not a variable formula dividend but could do a special. Wants visibility on what Enervest is going to do (wants to have the cash on hand if they decide to sell more) and notes they will have a better handle on that by YE22.

      Q) LOE
      A) workovers, on a quarterly basis saying a little wonky.

      Q) How long can go at Giddings
      A) Have done 10K’s, can go longer, question is it worth doing and we don’t know the answer and it may vary within Giddings.

      Q) service inflation
      Tubulars will fix itself, we don’t have any purchasing issues this year.

      Labor – lot of drivers have gone to work somewhere else.

      It added about $2 / BOE to opex when it all rolls through.

      Q) Non Op activity in Karnes
      A) They don’t tell us, you get the bill and you pay it. A lot of these companies have other big positions.

      Q) NGL outlook
      A) Demand is very strong but prices float with the natural gas price.

      Notes that March and April come and it gets warmer every year. In other words, it’s a cyclical commodity that is heavily influenced by natural gas prices.


    20. 20
      zman Says:

      MGY call over, nothing really to add, tone was positive if unsurprised. The new Giddings development area was offered with little fanfare and not much of a description.

      Stock up 1.5% at end of call, with the DJIA ranging down over 400.

      AR call in 5 minutes. Notes to follow.

    21. 21
      zman Says:

      AR notes in a bit, last call of the week.

    22. 22
      zman Says:

      AR presentation:


    23. 23
      zman Says:

      AR 4Q21 Call Notes

      4 to 5% exit to exit growth
      D&C capex of $675 to $700 mm
      – includes 5% inflation.
      – having their own sand mind is saving $400 to 500K per well.
      – also includes $35 to $40 mm increase in WI in the drilling program.

      Sees low single digit growth in 2023 vs the 2H22 levels noted in the post.

      Slide 5 – shows remaining core and tier 2 acreage in SW Appalachia.

      Marcellus 4,700 industry premium locations remain. AR has 33% of the total (1,550 total and 925 of these are premium liquids locations).

      Utica – 800 industry locs with AR at 180 or 23% of the total remaining.

      They see inventory fatigue will distinguish them from others who have more lower quality acreage which will require higher commodity prices to justify drilling.

      Liquids markets comments:
      – oil at best levels since 2014
      – demand has surprised to the upside
      – Omicron more muted demand impact than expected.
      – 1Q22 could be another C3+ pricing record.
      – continued global demand growth and barriers to supply growth.
      – sees a market shift that should see C3+ at > 60% of WTI going forward.

      AR is completely unhedged on liquids.

      Propane – lower exports have prevented a propane price blowout.

      Expect some growth in NGLs in the U.S.

      Internationally this could decline enough to offset US growth.

      Sees 500,000 bpd in Asia and 110,000 bpd other international growth from 2021 to 2023.

      Steam cracker in PA – AR has 30,000 bpd to it when it comes on line. Says that pricing will improve to natural gas linked pricing when this happens for their ethane.

    24. 24
      zman Says:

      AR 4Q21 Calls Notes 2

      Debt down $876 mm from 4Q20 to 4Q21.

      FCF to pay off revolver by 2Q22.

      FCF comment – TRANSCRIPT

      FCF > $6 B through 2026.

      Highest FCF yield of peers.

      Least hedged in company history.

      Slide 11 – they prefer looking at 2022 E FCF / EV.

      Received RSG status today.

      Slide 13 – key investment themes.

      Going to Q&A 24 minutes in …

    25. 25
      zman Says:

      AR 4Q21 Q&A

      Mid point FCF for 2022 is $1.6 B.

      $800 to $900 mm level of debt reduction.

      Then share repurchases. For 2022, very much focused on share buybacks.

      Q) debt target
      A) just noting they will be down to $1.2 to $1.3 B debt which is 0.5x EBITDA, this is well below what they expected a year ago.

      Q) Other basins
      A) we don’t see going to the Permian or Bakken, like where we are.

      Q) cash taxes
      A) have NOL’s to cover next 3 years

      Q) LNG
      A) have relationships with multiple terminals, have 2.2 Bcfgpd that goes to the LNG fairway.

      Expects to see more LNG FID’s.

      Q) inflation
      A) tubulars are up, we lock in as we can, definitely pressure on hard assets and diesel and the sand mine is helping some offset.

      Notes the sand shortages in other basins.

    26. 26
      zman Says:

      AR 4Q21 Q&A 2

      Q) Hedging strategy balance with return of capital strategy.

      A) Have not added natural gas hedges in 22 months (Spring of 2020).
      – just have the 50% hedge on NG in 2022
      – no intention of adding more.
      – unhedged on the liquids side.
      – don’t want to hedge into a backwardated curve, no hedging in the foreseeable future.

      Q) FT coming off
      A) yes, that’s in the marketing expensive, about $40 mm a year rolled off late 2021, so will get the full benefit in 2022.

      Q) WI% increase on the drilling program.
      A) impacts 1 to 2% increased growth in 2023 given about a 9 month gap from spud to TIL.

      Q) buyback
      A) blackout program until Tuesday (48 hours plus president’s day after the release). So they plan to start the repurchase program next week.

      Q) EUR per 1,000′ on the longest laterals.
      A) not seeing any degradation, longest one so far is 19,998′ and not having trouble perfing the toe.

    27. 27
      nrgyman Says:

      RE 24: AR slide 9 shows that after redeeming their 2025 notes and paying off their revolver balance by mid-2022, AR will have no debt callable until 2024. They will also be below 1x on their debt metric. With massive FCF between mid-2022 and mid-2024 that is going to translate to large share repurchases and a decent dividend.

      Stock trades now at a 22% FCF yield, with majors trading at 12% and the SP500 at 6%.

    28. 28
      zman Says:

      AR 4Q21 Q&A 3

      Q) program split Marcellus vs Utica
      A) almost all Marcellus, better economics, will be that way next few years, just do a pad a year in Utica to keep volumes flat into the FT on Rexx pipe.

      Call over.
      Positive tone.
      What a difference a year makes.
      Analysts pretty happy here.

    29. 29
      zman Says:

      re 27 – yes. It’s our 3rd largest position. Sold some recently to spread around in the gassy sector but still very much on board here.

    30. 30
      zman Says:

      CRK edged up above yesterday’s initial pop off earnings.

      OT – grabbing coffee, back in 10.

    31. 31
      nrgyman Says:

      RE 26: Makes sense for AR to focus FCF allocation (after debt redemptions by mid-2022) to share repurchases. Stock is still very cheap for what it offers (low debt, high FCF yield, excellent inventory and FT). Better to buy back stock when it is well below intrinsic value, shrink the share count and make future dividends more cost effective and sustainable.

    32. 32
      zman Says:

      re 31 – exactly so.

    33. 33
      zman Says:

      Analyst Watch

      AR – Peters and Co upgrades to Outperform.

    34. 34
      zman Says:

      Iran Watch:


    35. 35
      Bill Potter Says:

      Z, when you have a chancec could you speak to the demand inrease in 18

    36. 36
      zman Says:

      re 35 – I was not on the call but presumably he’s speaking to the OPEC section of the Monday post.

      OPEC Watch 2: Demand:
      Growth Total
      MM bopd MM bopd
      2013 A: 91.1
      2014 A: 0.9 92.0
      2015 A: 1.54 93.7
      2016 A: 1.72 95.4
      2017 A: 1.83 97.3
      2018 A: 1.59 98.8
      2019 A: 1.13 100.0
      2020 E: -9.0 91.0 Initiated July 2019 @ 101.01. Then Covid hit.
      2021 E: 5.68 96.7 Initiated July 2020 @ 97.70.
      2022 E: 4.15 100.8 Initiated July 2021 @ 99.86.

    37. 37
      zman Says:

      re 36 – that’s expected 2022 growth of 4.15 mm bopd for the planet.

      A lot of people think OPEC spare capacity is < 3 mm bopd right now.

    38. 38
      Bill Potter Says:

      re 36, do you agree with those numbers? That is a lot of growth.

      Iran possibly .5 to 1.5 if I remember correctly
      US .5 to 1

      the rest would come from OPEC + theoretically? Is this going to push US producers to start pumping more?

    39. 39
      zman Says:

      re 38 – thoughts

      The numbers are OPEC #’s. They’ve got a lot of talent working on the Monthly and they’re pretty good at what they do.

      Note that the growth is really just “recovery plus”

      2019: 100 mm bopd
      2020: 91 mm bopd – oh no Covid
      2021: 96.7 mm bopd – living with Covid
      2022: 101.8 mm bopd – moving ahead.

      Iran will be back, if back, for only a part of the year.

      Non OPEC supply is seen up 3.0 mm bopd as activity recovers. That’s U.S. plus Russia, Canada, Kazakh, Norway and some other nits.

      The actual “call on OPEC” is much less strenuous at 28.9 mm bopd vs 27.9 mm bopd last year.

      PXD’s comments are just saying their spare cap is tight and they couldn’t meet it all on their own. Of course, they don’t have to.

      But lower spare capacity at OPEC is a partial driver of higher prices.

    40. 40
      zman Says:

      DJIA down 530 points.

    41. 41
      zman Says:

      Oil closed at $91.76, down a $1.90.

    42. 42
      zman Says:

      Broad market trading scared.

      Our gassy names are flat to up 5%

      Oil names are mixed, with MGY up 1.5% now (with the SPX over > 2%) and HPK and CIVI off slightly.

      Everything else down modestly.

      DJIA off 650 points now.

    43. 43
      zman Says:


    44. 44
      zman Says:

      Very interesting quick read on Fujairah (UAE) stocks – new low since monitoring began 4 years ago.


    45. 45
      zman Says:

      PUMP strength.

      NEX reports next week. Should be very upbeat although that’s to be expected and the stock is 2x off the lows this year. Still, should be good for PUMP and LBRT and probably RES (unowned).

    46. 46
      Skeptcl Says:

      43–Not a Pro level subscriber. Is this your write up?

    47. 47
      zman Says:

      re 46 – Yes it is.

    48. 48
      zman Says:

      AR chart looks pretty nice to my layman’s TA eye.

    49. 49
      zman Says:

      PXD (unowned) on their call also called for private E&P’s excessive flaring to be reined in.

      Says publics have driven vent and flared volumes <1% and target 0.2%. Says privates are much greater than 1%.

    50. 50
      zman Says:

      Beerthirty, back in a bit.

    51. 51
      nrgyman Says:

      RE 39: HFIR out with some stats showing implied US oil demand at an all-time high (4-week avg) of 22 million bpd. He is showing OECD oil demand >2 million b/d more than “any analyst estimates”. Total liquids stockpile <80 days. Product storage <28 days–one of the lowest coverage ratios ever.

      Cannot vouch for the accuracy of these numbers (he tends to be hypey) but if accurate they are very supportive of even higher oil prices. An Iran deal could knock prices $3 initially into the high $80s, according to Lippow.

    52. 52
      Skeptcl Says:

      Z–At first blush, RUN looks like they posted decent numbers except for eps. I know you dont own it, but it should be good news for the space if we were in a normal market. From Briefing:

      Sunrun misses by $0.04, beats on revs (23.07 -1.55)
      2/17/2022, 4:04:12 PM ET
      Reports Q4 (Dec) loss of $0.19 per share, $0.04 worse than the S&P Capital IQ Consensus of ($0.15); revenues rose 35.8% year/year to $435.23 mln vs the $408.96 mln S&P Capital IQ Consensus.
      In the fourth quarter of 2021, Customer Additions were 29,870, including 22,017 Subscriber Additions. As of December 31, 2021, Sunrun had 660,311 Customers, including 567,744 Subscribers. Customers grew 20% in 2021 compared to 2020, pro-forma of Vivint Solar.
      Total revenue was $435.2 million in the fourth quarter of 2021, up $114.8 million, or 36%, from the fourth quarter of 2020. Customer agreements and incentives revenue was $200.6 million, an increase of $36.2 million, or 22%, compared to the fourth quarter of 2020. Solar energy systems and product sales revenue was $234.6 million, an increase of $78.7 million, or 50%, compared to the fourth quarter of 2020.

    53. 53
      zman Says:

      re 51 – thanks, yeah, I’m not one to review his #s.

      re 52 – thanks for the headsup.

    54. 54
      nrgyman Says:

      PXD: Some color on their CC comments:

      “demand is stronger than it ever has been in the world and OPEC and OPEC Plus is going to run out of capacity by the end of ’22…that’s ignoring the Iran and the Ukraine situation.”

      Public producers supply growth 0%-5%. Privates (mostly smaller names) could grow 15%-25%, until their inventory runs out.


    55. 55
      zman Says:

      Looks like next week’s withdrawal will be a bit over 100 Bcf. Mild plus wells back on line from the freeze.

    56. 56
      zman Says:

      FLMN (unowned) declares 4Q21 dividend of $0.145.

      This is down a penny from the 3Q dividend and below the 2Q dividend of 15.0 cents despite higher prices in 4Q relative to those two quarters.

      Go figure, it’s Falcon. Probably a good thing this name’s team is getting merged out of a job.

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