03
Apr
Monday Morning – Natural Gas Macro Slide Show
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Housekeeping Watch: You can receive an email notification each time we post by entering your email address in the space at left.
In today's post please find:
- The Week That Was (with position weighting update at quarter end),
- The Five Things,
- and some other odds and ends.
Eco Data Watch:
- We get ISM manufacturing at 10 am EST (F = 47.3%, last read was 47.7%)
- We get construction spending at 10 am EST (F = 0.0%, last read was -0.1%)
The Week Ahead:
- Tuesday - Factory orders, job openings
- Wednesday - ADP employment, trade balance, Services PMI, ISM Services, EIA Oil Inventories,
- Thursday - Jobless claims, PPI, EIA Natural Gas Storage,
- Friday - Market closed for Good Friday.
In Today’s Post:
- Holdings Watch
- Commodity Watch
- The Week That Was
- Stuff We Care About Today - Natural Gas Macro, PTRA, VWDRY
- Odds & Ends
Holdings Watch:
ZLT (Zman Long Term portfolio)
- Last Week’s Trades:
- We added to ACDC at $11.34 early last week.
- The Blotter is updated.
- The Positions page is updated.
Commodity Watch:
Crude oil rallied 9.3% to close at $75.67 last week.
- Last week the EIA weekly was the fifth increasingly positive as weeklies go weekly with better throughput, tame production, super low net imports and a big pull on oil and gasoline stocks. Please see The Week That Was for more details.
- OPEC+ Watch: On Sunday several members of OPEC+ announced a coordinated voluntary curtailment to run from May through year end 2023. So far we've seen releases from these members totaling 1.65 mm bopd (including Russia who has agreed to extend their previously announced 500,000 bopd cut, now being matched by Saudi at 500,000 bopd and others. In Mbopd:
- Oman 40
- Algeria 48
- Kazakhstan 78
- Kuwait 128
- UAE 144
- Iraq 211
- Russia 500 (extension)
- Saudi 500
- This morning crude is trading up $5.
Natural gas fell 6.1% to close last week at $2.22.
- Last week's storage was bigger than our number but smaller that the Streets.
- Look for a "flattish" report this week. We think we are essentially at trough with builds to come either this week or in the next few reports.
- Please see The Week That Was for more details.
- This morning gas is trading down 15 cents.
Weather Watch:
- Last week: Gas-Weighted Heating Degree Days (HDDs) came in at 135 vs 122 normal and 150 in the prior week.
- This week's forecast: This week, CPC predicts HDDs will plummet to 83 vs 109 normal.
The Week That Was
Stuff We Care About Today
The Natural Gas Macro
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Other Stuff
Other Other Stuff
- PTRA - convertible note holder agreement finalized.
- VWDRY - 15 MW turbine installed in December for testing reached max 15 MW nominal power rating for the first time last week.
- VWDRY 1Q23 announced orders totaled 3.022 GW,
- Vs announced 1Q22 orders of 2.179 GW and unannounced orders of 0.769 GW
- Vs announced 4Q22 orders of 3.366 GW and unannounced orders of 0.827 GW.
- We note this is the largest first quarter announced order run rate in over 5 years.
- Look for a Permian Players smid cap update soon.
- Look for a requested oil service name quick look soon.
Odds & Ends
Analyst Watch:
- TBA in comments
MGY is unhedged for oil.
April 3rd, 2023 at 7:00 amCIVI is very lightly hedged for oil.
April 3rd, 2023 at 7:01 amAnalyst Watch
SLCA – Barclays ups to Equal from Underweight, target $17. (shares $12.50 this am).
April 3rd, 2023 at 7:03 amENPH – another weekly update, announcing launch of IQ8 batteries in France, Netherlands, Switzerland.
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230403:nGNX6FMCq6&default-theme=true
Company definitely highlighting Europe last several updates as they good on expanding European growth (last week highlighted Romanian micro capacity coming on line).
April 3rd, 2023 at 7:05 amAnalyst Watch:
ENPH – MS initiates at Equalweight with $268 target (with stock at $211).
April 3rd, 2023 at 7:06 amACDC called up 9%. We will be speaking with them this week.
April 3rd, 2023 at 7:06 amAt equity open:
WTI up $4.30, Brent up $4.50
NG down 8 cents
April 3rd, 2023 at 8:31 amEarly Read on Thursday
Consensus -20 Bcf (Reuters)
April 3rd, 2023 at 8:35 amLast Week -47 Bcf
Last Year -24 Bcf
5 Yr Avg unchanged
Analyst Watch
EE – Wells stays Overweight, trims target from $31 to $29.
April 3rd, 2023 at 8:38 am5% up morning to start, volumes are pretty light at the moment in E&P. Service a bit better.
April 3rd, 2023 at 8:46 amGetting on a conference call, back in a bit.
April 3rd, 2023 at 8:59 amGood Morning
April 3rd, 2023 at 8:59 amWTI Testing major resistance at 80 this morning.
Weekly
https://flic.kr/p/2oqVWQg
Brent COT
https://flic.kr/p/2oqHxei
re 12 – morning Zorg, thanks, back shortly.
April 3rd, 2023 at 9:01 amZLT related ranked by % change sine the open.
April 3rd, 2023 at 9:01 amRelative volume for time of day right column
https://flic.kr/p/2oqVYut
Sand having a good morning, SLCA, SND – interesting daily charts, especially SND.
April 3rd, 2023 at 9:02 amNXT Extended after last week’s breakout, testing potential support.
Daily
https://flic.kr/p/2oqTZoh
April 3rd, 2023 at 9:03 amre 16 – solars taking the day off this morning, may have been some general comments out of Morgan Stanley
April 3rd, 2023 at 9:06 amCIVI Gap open to next higher supply at 72.62.
65 Minute
April 3rd, 2023 at 9:10 amhttps://flic.kr/p/2oqW4X2
SND
April 3rd, 2023 at 9:17 amWeekly…
https://flic.kr/p/2oqW8tW
MGY Back to major acceptance at 23..
Max supply level.
Daily
https://flic.kr/p/2oqWw8g
April 3rd, 2023 at 9:25 amre 19 – thanks, the pattern has been to run up into and recently beyond earnings.
They are set to beat earnings handily this quarter.
April 3rd, 2023 at 9:28 amre 20 – thanks, literally no oil hedges. Today’s gap takes it above the 200 day. Not a big fan of gaps like this and volumes in the oily upstreams suggest bigger holders are not chasing on this kind of day. Me either but very much a top 2 holding here.
April 3rd, 2023 at 9:30 amWTTR (unowned) in tomorrow’s post from a requested look last week.
April 3rd, 2023 at 9:32 amInteresting. Tanker stocks like FRO and TK getting whacked.
April 3rd, 2023 at 9:36 amre 24 – yeah, less barrels on the water.
April 3rd, 2023 at 9:39 amNo plans for adds to the portfolio or sales today. Still on a call.
April 3rd, 2023 at 9:42 am#24 Meant to say TNK
April 3rd, 2023 at 9:51 amLNG names buoyant…
NEX announced their 1Q23 call date this morning for April 26th, late to announce the date for them but on time for their normal call date.
April 3rd, 2023 at 10:15 amMGY First support around 22…Hard to see it get stretched more than that.
April 3rd, 2023 at 10:19 amDaily
https://flic.kr/p/2oqUSuf
MGY A little more granular look…
April 3rd, 2023 at 10:23 amHigh 21’s looks interesting as likely support if it gets that far.
65 Minute
https://flic.kr/p/2oqWW3T
Today is initiation day (post IPO) at AESI (unowned)
Permian sand stock we reviewed here (and passed on for now),
https://zmansenergybrain.com/2023/03/03/t-g-i-f-287/
up just 2% amidst a sea of Buys.
April 3rd, 2023 at 10:40 amGap up in oily stocks testing/pausing at previous acceptance areas. Gap and go or gap and close?
April 3rd, 2023 at 10:50 amCIVI
Daily
https://flic.kr/p/2oqXxaj
FANG (non ZLT)
Daily
https://flic.kr/p/2oqXvNG
WTI 81 is next supply/resistance.
April 3rd, 2023 at 10:58 am65 Minute
https://flic.kr/p/2oqStfu
re 33 – pretty resilient action as these kind of events go.
Wondering if the WH is preparing to add to the 2Q23 planned SPR sales now.
April 3rd, 2023 at 11:11 amAESI Morning gap faded, then bought with some volume
April 3rd, 2023 at 11:16 am65 Minute…
https://flic.kr/p/2oqVwKJ
#34 WH missed that trade…
April 3rd, 2023 at 11:19 amDespite the 6% bump today, still inexpensive, still a big yielder on our numbers.
At $72.75:
April 3rd, 2023 at 11:27 amZ4 Energy Research 2023 Cases TEV/EBITDA Implied Yield
Sub Case ~ $70 oil, NGLs 40% of WTI, $4 NG 3.6x 9.4%
Base Case ~ $80 oil, NGLs 40% of WTI, $5 NG 2.9x 12.8%
Stretch Case ~ $100 oil, NGLs 40% of WTI, $7.50 NG 2.1x 19.6%
RE 34: There has been plenty of speculation that this WH had no intention of refilling the SPR. Apparently they told SA that they would be buying back crude around $70 or less–but they did not do so. The WH could argue that they never said when, only offering the acceptable price at which they would act. When the Energy Sec recently said it could be years before they act it likely motivated SA to act on cutting production. Did the WH dissemble? Did they play OPEC+? Who knows but the visibility is not favorable.
April 3rd, 2023 at 11:48 amre 38 – yeah, I recall the reports at the time re telling Saudi that. The April MOMR due out 4/13 will be an interesting read for demand thoughts.
April 3rd, 2023 at 11:56 amZ, per your tweet last night on Granholm & the SPR–how can I get a Zman’s Energy cup?? 🙂 Do you sell them?
April 3rd, 2023 at 11:59 amre 40 – I think we’ve got some stuff here:
https://www.cafepress.com/z4energyresearch
April 3rd, 2023 at 12:05 pmOT – grabbing lunch, back in a bit.
April 3rd, 2023 at 12:12 pm41–Thanks!
April 3rd, 2023 at 12:15 pmThis was from Friday, other side of town from us. We got very lucky.
April 3rd, 2023 at 12:43 pm
Analyst Watch
NEX – Susquehanna trims from $10 to $8.90, fearing economic uncertainty in 2H23. Stays Neutral.
April 3rd, 2023 at 12:49 pmhttps://www.axios.com/2023/04/03/iran-biden-proposal-freeze-nuclear-activity-deal
April 3rd, 2023 at 12:56 pmEarly Read on Oil Inventories: (Reuters consensus)
April 3rd, 2023 at 1:00 pmOil down 1.8 mm barrels
Gasoline 1.4 mm barrels
Distillates down 0.1 mm barrels
SPR released 0.4 mm barrels last week. First reduction in 11 weeks. Should be part of the congressionally mandated 26 mm barrel release during 2Q23.
April 3rd, 2023 at 1:20 pmRe 44 What devastation. Unfortunate folks that had to endure that destruction. Very glad to hear you and the family are safe.
April 3rd, 2023 at 1:22 pmKodiak Gas, compression services provider, files for $100M IPO
April 3rd, 2023 at 1:23 pmVal Kennedy, SA News Editor
(Seeking Alpha)
Kodiak Gas Services (KGS), a provider of contract compression services for the oil and gas industry, has filed to raise around $100M through an initial public offering amid news that OPEC plans to cut production.
Kodiak didn’t specify in its filing how many shares it intends to offer or the price, but indicated in its filing fee schedule that it was looking to raise $100M, a number that is likely a placeholder and subject to change, according to the filing.
According to Renaissance Capital, the firm could seek to raise up to $350M.
Lead bookrunners on the deal are Goldman Sachs and JP Morgan. Other bookrunners include Raymond James, RBC Capital, Barclays, BofA Securities, Truist Securities, TPH & Co., Comerica Securities, Fifth Third Securities, Regions Securities, Texas Capital Securities, AmeriVet Securities, Guzman & Co., R Seelaus & Co., and Siebert Williams Shank.
Kodiak hopes to list its shares on NYSE under the symbol KGS. Funds associated with EQT are major investors in the company.
re 49 – yeah, crazy, thanks.
re 50 – thanks much
April 3rd, 2023 at 1:25 pmHere, reading, shout if you need something.
April 3rd, 2023 at 1:37 pmMV Pipeline key water permit vacated by Appeals Court:
https://seekingalpha.com/news/3953864-court-vacates-key-mountain-valley-pipeline-water-permit-in-major-setback?mailingid=31049821&messageid=2900&serial=31049821.12161&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha&utm_term=31049821.12161
April 3rd, 2023 at 1:42 pmre 53 – sheesh. EQT (unowned) was not expecting the pipe to be online before end of 2024 as it was (as per 10K) although they were using a 3Q24 startup for looking at basis.
April 3rd, 2023 at 1:51 pmRE 53: This will further clamp the lid on Appa natgas growth. Should be natgas price supportive. Haynesville supportive. Natgas may not have an OPEC to support prices but they do have the US courts 🙂
April 3rd, 2023 at 1:52 pmre 55 – sad but true. Cartel of hollywood types as well with unintended consequences resulting in higher energy prices, greater use of coal.
April 3rd, 2023 at 1:56 pmDBMF has already closed out its Crude short position as of their Monday holdings update. This ETF tracks broad positioning across CTAs and is more evidence that they are giving up on the short oil trade.
April 3rd, 2023 at 2:07 pmH/T Fernando Vidal
re 57 – heh.
April 3rd, 2023 at 2:18 pmRE 57: Energy trader Marc Fisher was on CNBC today to comment on the OPEC+ move. While he was supportive of higher oil prices he was much more animated about natgas prices. He sees a big rally ahead in natgas prices. He says it is necessary to induce more natgas production to supply the growing LNG export trade.
Today’s MVP ruling is not going to support that so the Haynesville should eventually see a resurgence once this overdone short trade is exhausted.
April 3rd, 2023 at 2:29 pmCHRD Rejecting previous major acceptance as too low. Nice volume…supply not showing up.
April 3rd, 2023 at 2:32 pmFar upside target at 153.
https://flic.kr/p/2oqV7BV
VWDRY…Basing for a nice breakout.
April 3rd, 2023 at 2:40 pmCurrently trading above it’s previous short and longer term price/volume range.
3 Day Chart
https://flic.kr/p/2oqZdZU
Weekly
https://flic.kr/p/2oqZfhD
VWDDRY From another angle..Setting up for a possible longer term regime change.
April 3rd, 2023 at 2:44 pmWeekly
https://flic.kr/p/2or16Wj
re 160 – was $126 for our update on 3/23, now $142. At this level:
Implied yield potential:
2023
Implied Yield Potential on Z4 Sub Case 10% assumes no buyback
Implied Yield Potential on Z4 Base Case 13% assumes no buyback
Implied Yield on Z4 Base with Repurchase 8% assumes current authorization exhausted
Still inexpensive (TEV/EBITDA):
Sub Case – $70 oil and $3 natural gas 3.4x
Base Case – $80 oil and $5 natural gas 2.9x
April 3rd, 2023 at 2:49 pmre 61/62 – nice end to the quarter for orders, see comments bottom of post.
April 3rd, 2023 at 2:50 pmCOP +9% Plenty of big moves today among oil producers but this one stands out among the larger players. Unhedged. Large and growing LNG business not registering in the price. Lowest decline rate. High shareholder returns, though buyback is higher than some would like vs dividend.
HES +8.3% Another larger name doing very well. Guyana is a monster for them.
April 3rd, 2023 at 2:53 pmReuters data point to US LNG exports hit record in March. This aligns with our weekly data.
April 3rd, 2023 at 2:56 pmWe have WTTR (unowned) in tomorrow’s post, also the early reads on oil and natural gas inventories, and a Gassy Players Liquids Rich update.
April 3rd, 2023 at 2:57 pmBeerthirty, back in a bit.
April 3rd, 2023 at 3:00 pmDENVER–(BUSINESS WIRE)– Civitas Resources, Inc.(CIVI) (“Civitas” or the “Company”) today announced that Hodge Walker has been appointed Chief Operating Officer, effective April 5, 2023. He will replace Matt Owens who has left the company.
Chris Doyle, President and CEO, said, “On behalf of the Board of Directors and the Company, I am pleased to welcome Hodge to Civitas. With more than 25 years of industry experience, Hodge has a proven track record of successfully leading teams and driving a culture of operational excellence. I am confident he will help advance our already strong team and our commitment to safe, efficient, and responsible operations. Finally, I would like to thank Matt for the significant contributions he has made toward our success and wish him the best of luck in his future endeavors.”
Mr. Walker added, “I am honored to join Civitas at such an exciting time in its history. I look forward to working with Chris and the talented team to build on our strong foundation of operational performance and safely deliver for all our stakeholders.”
Mr. Walker most recently served as vice president of Chevron Corporation’s (“Chevron”) Rockies Business Unit, a position he held since October 2020 when Chevron(CVX) acquired Noble Energy, Inc. (“Noble”). Prior to joining Chevron(CVX), Mr. Walker served as Senior Vice President responsible for Noble’s U.S. onshore operations. He also served as a director of Noble Midstream GP and as Noble’s Vice President of West Africa and the U.S. Gulf of Mexico. Additionally, he served as Director of Strategic Planning, Environmental Analysis, and Reserves; managed Noble’s operated West Africa assets, non-operated international assets, and frontier business ventures; and was a member of the business development team. Prior to joining Noble in 2007, Mr. Walker held various positions of increasing importance at Amoco Corporation and BP America, Inc. He earned a BS and MS in Geology from Louisiana State University and completed the Harvard Advanced Management Program in 2018.
April 3rd, 2023 at 3:32 pmACDC 14.38 Short term upside target and supply/resistance.
April 3rd, 2023 at 3:32 pm65 Minute
https://flic.kr/p/2or1Lwa
CIVI – Former VP of CVX (unowned) Rockies division to be new COO.
April 3rd, 2023 at 3:32 pmre 69 – thanks.
April 3rd, 2023 at 3:33 pmre 70
After the close, two more Form 4’s
Director bought 5,000 shares at $12.57 on Friday.
CEO bought 12,000 shares at $12.65, also Friday.
April 3rd, 2023 at 3:34 pmCRK to report May 3
April 3rd, 2023 at 3:34 pmToday’s post has been archived under Gas Macro for ease of access using the pull down menu at upper left.
April 3rd, 2023 at 4:00 pmBIDEN ON OPEC+ OIL OUTPUT CUT SAYS IT’S NOT AS BAD AS YOU THINK
April 3rd, 2023 at 5:12 pmThe name request review line is open.
April 3rd, 2023 at 9:14 pm