17
Apr
Wednesday Morning – Earnings Previews
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Housekeeping Watch:
- Please bookmark our back up site, just in case: www.zmanbackup.wordpress.com.
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- We will accelerate a partial format change to this week. This will involve dedicating two new pages (links) at left to the weekly Oil Inventory and Natural Gas Storage slide shows instead of having those slide shows in the Thursday and Friday posts. This change was planned for this summer in combination with a site redesign but I frankly get the "reduced scrolling" people want to see and it's something we can do more easily than the new theme transition. While no one likes change we hope you like this one.
In today's post please find:
- the oil inventory preview,
- the natural gas inventory preview,
- a series of earnings previews,
- PED operations update,
- and some other odds and ends.
Ecodata Watch:
- We get the EIA oil inventory report at 10:30 am EST.
- We get the Beige Book at 2 pm EST.
In Today’s Post:
- Holdings Watch
- Commodity Watch - with oil and natural gas inventory previews
- Stuff We Care About Today - ENPH, RRC , EQT, AR, PED, 1Q24 Calendar Update
- Odds & Ends
Click the link directly below this to ... .
Holdings Watch:
ZLT
- Yesterday's Trades:
- SND - This is a follow on add at average $1.955. Our average cost remains $2.02 and SND remains our #3 position. We are looking for a record quarter and year for volumes that we do not feel are adequately discounted in the shares at this time as they trade <2x TEV/2024 EBITDA. Please see our recent update here:
https://zmansenergybrain.com/2024/04/03/wednesday-morning-snd-crk/ - 4/16/24 - PED - HIGHLY SPECULATIVE TRADE ONLY OPENING POSITION - We have taken a modest opening position in PEDEVCO (PED) at just under $0.85. We reviewed this tiny upstream DJ Basin and conventional Permian producer last week. They produce < 2 MBOEpd, but are very oily, have no debt and about $0.24 per share in cash. The company has operated and non operated plans in both areas this year. Management owns a majority of the shares and on a trailing basis and on one of our 2024 Base Cases they are trading at a low TEV/EBITDA multiple. This is high risk, speculative money type trade given their normally low trading volumes and often wide bid/ask spread. We have not decided to get big here and would not likely go beyond a 3 or 4% type position until we grow a lot more comfortable. They don't officially guide and they don't appear to hold quarterly conference calls. They are unhedged. Sellside coverage is limited to 2 analysts. As we noted in the piece last week we view this as a call option without an expiration date. Given their tiny production base quarter to quarter results are highly volatile. For more thoughts please see our comments and cheat sheet from last week here:https://zmansenergybrain.com/2024/04/11/thursday-morning-82/#more-70379
- SND - This is a follow on add at average $1.955. Our average cost remains $2.02 and SND remains our #3 position. We are looking for a record quarter and year for volumes that we do not feel are adequately discounted in the shares at this time as they trade <2x TEV/2024 EBITDA. Please see our recent update here:
- The Blotter is updated.
Commodity Watch:
Crude oil closed down 5 cents yesterday at $85.36.
- After the close, API reported:
-
- Crude: Up 4.1 mm barrels
- Cushing: Down 0.17 mm barrels
- Gasoline: Down 2.5 mm barrels
- Distillates: Down 0.43 mm barrels
- Crude: Up 4.1 mm barrels
- This morning crude is trading down 50 cents.
Oil Inventory Preview
This Week In History
Natural gas closed up 4 cents at $1.73.
- Production Watch: Production was 96.7 Bcfgpd on Tuesday according to BNEF, another recent history daily low.
- LNG Watch: LNG receipts for export were 9.5 Bcfgpd on Tuesday according to BNEF, also a recent history low.
- This morning gas is trading down nearly 4%.
Natural Gas Storage Preview
- Z4: > +30 Bcf
- Street: +41 (Reuters)
- Last week: +24 Bcf
- Last year: +61 Bcf
- 5 Year Avg: +61 Bcf
Stuff We Care About Today
ENPH 1Q24 Thoughts
- Residential inventor and battery name with a nascent commercial use angle.
- Last quarter they reported another sizable revenue and earnings miss as they worked to reduce inventory in the channel in both the U.S. and Europe.
- The expected bottom was essentially pushed sideways another quarter.
- Another miss is widely expected but 1Q24 is still expected be the bottom. It's also possible 1Q and 2Q are sort of the U-shaped bottom.
- We would like to see evidence that NEM is moving from headwind to tailwind status and the same for export tolling in Europe on this call.
- We expect 2Q guide to show:
- Higher sequential but not YoY revenue,
- Strong non GAAP gross margins > 40%,
- And an uptick for the first time in several quarters in battery shipment guidance (again, NEM 3.0 effect).
- Higher for longer interest rate thinking continues to weigh on the entire solar sapce.
- ENPH reports and holds there call after the close next Tuesday.
- We own ENPH as our largest solar holding, occupying the #9 slot in the portfolio and have an average cost of $131.89. We have no plans to add more pre report but expect a sharp swing in either direction with the report and may add on strength or weakness or not at all with the report. We do not anticipate selling the position near term.
RRC (Unowned) 1Q24 Thoughts
- First big cap gassy name to report this season.
- The bar is very low given 1Q24 average prompt furtures contract pricing of just $2.15 this quarter (vs $2.74 in 4Q and $2.65 in the year ago quarter).
- Priced base misses in the gassy space are to be expected.
- RRC has a maintenance program in place for 2024 and we do not anticipate a change but think that curtailment news would be welcomed.
- Nearly 90% of their inventory is breakeven at $2.50 gas or better. At some point they should curtail (in the summer) if we don't see better pricing for that portion of the Strip soon (gas isn't over $2.50 until October).
- Look for them to highlight the improving supply demand macro on the call.
- Look for questions from the sellside regarding when it makes sense to downshift activity or curtail volumes.
- We expect the $0.08 quarterly dividend to be maintained.
- We sold RRC at $32.15, up 22%, in early March as part of gas wedge reduction and future reallocation campaign.
- RRC reports next Tuesday for a Wednesday call. We are not looking to be long again near term unless the name moves back into the high $20's or lower $30's.
EQT (Unowned) 1Q24 Thoughts
- Mega cap gassy name,
- In early March, EQT announced they would engage in a "strategic" curtailment of 1 Bcfgpd (about 17% of total daily gas volumes) for late February and all of March (total impact of 30 to 40 Bcf).
- We see EQT's decision to continue curtailments into or through the 2Q period as one of the key news items for the gassy space this quarter. Given the strip our view is that they should continue to curtail.
- For reference 4Q volumes were 564 Bcfe, 94% gas, and higher than expected as they produced more gas on the fall upturn in prices (becoming part of the problem in our view)
- For 1Q24 guidance, issued before the curtailment, was 525 to 575 Bcfe.
- They should be in the lower half of the range.
- For 2024 EQT was guiding to 12% on mid volume growth to 2.2 to 2.3 Bcfepd due to acquisitions last year.
- We may see a modest downward reduction in capex guidance.
- EQT sold $500 mm in non operated assets this week as they look to reduce leverage as they feel the pinch of weak prices.
- EQT is > 40% hedged via swaps and floors in the mid $3's 1Q-3Q24 with reduced coverage in 4Q24.
- We expect them to maintain the $0.1575 base dividend.
- We do not own the name.
- EQT is among the poorer performers in the gassy space of 2024, likely due to the increased leverage, but is still down less than 10% on the year.
- EQT reports next Tuesday for a Wednesday call (right after RRC).
AR (Unowned) 1Q24 Thoughts
- Large cap, liquids rich Marcellus player.
- AR is completely unhedged.
- 2024 is another maintenance year due to low prices.
- They have no dividend.
- We do not expect AR to announce a curtailment but the market would likely send the shares higher if they announced moves similar to EQT or CHK's (unowned) move to delay TIL's.
- We sold AR at $27.67, up 26%, in late March as we continued to reduce gassy group exposure.
- AR reports next Wednesday for a Thursday call.
Other Stuff
- PED San Andres formation, Chavaroo Field Update
- PED announced results for their previously announce 3 wells in the San Andres (conventional Permian) drilled in 4Q and turned to sales in late January and early February.
- Peak rates were 300 to 375 BOEpd each, 80% oil.
- "The Company is pleased with the early production results, with the wells currently performing in line with expectations, but with shallower, better-than-expected declines which have yielded an average of over 750 BOEPD gross for the last 30 days." They have 50% working interest (41% net revenue interest) in the wells. For reference these are lower cost wells at $3.1 mm gross per copy.
- They are working the operator (EPM - unowned) on next steps on the 16,000 gross acres under potential 50/50 farm in from EPM. The company has 22,400 net acres between Chavaroo and the thinner Chavaroo NE extention. Previously management has spoken to as many as 6 more gross wells for 2024.
- 1Q24 Calendar Update ~ Please see the link at left or click here.
Odds & Ends
Analyst Watch:
- TBA in comments.
Analyst Watch:
CIVI – Roth ups target from $77 to $95
April 17th, 2024 at 7:34 amMorgan Stanley had a big upgrade report on gas, AR PT up to $36, it’s their favorite name. He assumes $4.25 for 2024. Generally has been a big bear on nat gas.
April 17th, 2024 at 8:21 amAt equity open
WTI down 1.25
NG down 5 cents
April 17th, 2024 at 8:29 amre 2 – thanks
$4.25 for this year?
April 17th, 2024 at 8:30 amTrades today.
April 17th, 2024 at 8:31 amsorry, $4.25 for 2025
April 17th, 2024 at 8:35 amAnalyst Watch
GOEV – Benchmark initiates coverage with a Buy and $5 target.
April 17th, 2024 at 8:36 amZman, just wondering if you are still considering adding to your NXT position. It’s trading at something like 15X this year’s projected (Street) earnings I believe, despite being on an incredible growth track. They have no shareholder return policy currently but they are building up a lot of excess cash. Do you think they might announce a share buy-back plan with their next earnings report?
April 17th, 2024 at 8:49 amre 6 – thanks, that’s still pretty aggressive but not out of the realm. Thanks for bringing the upgrade to my attention … not seeing too many ones like that right now. If LNG exports get their act together he could look like a hero.
April 17th, 2024 at 8:55 amPED – updated draft:
PEDEVCO (PED) ~ DJ and Permian Micro Cap E&P
The Basic Story: Extremely oily DJ Basin and Permian acquire and exploit micro cap upstream player. (< $70 mm Total Enterprise Value). They have an program in the conventional Northwest Shelf in the Permian and operate and participate in a number of non-operated wells each year in the DJ Basin. The balance sheet is debt free and for their size cash rich with $0.24 per share in cash (accounting for nearly one-third of their TEV). Today they announced solid Permian results from their latest 3 well series. DJ Basin: Their DJ Basin acreage is largely to the east of Civitas Resources (CIVI) in the Wattenberg extension fairway along with Occidental Petrelum (OXY) and several private operators. These are both quality operators in the DJ. While Civitas is going to be largely focused on their prolific Watkins area to the south we note that Civitas and private players Bison and Verdad have drilled a number of strong wells on the eastern flank of their position in close proximity to PEDEVCO's leases. PEDEVCO has permits to drill as many as 11 operated wells at last check and we see them drilling as many as four operated wells. In addition they participated in seven non-operated wells with 18% working interests late in 2023 that were slated to see first oil in the first quarter of 2024. There are set to be followed by six low working interest non-operated wells that were in progress at the time of the last call and should be TIL'd by the middle of 2024. Permian: In the Norwest Shelf of the Permian they are developing the shallow, oil bearing carbonate (read conventional) San Andres play via horizontal wells in Chaves and Roosevelt counties of New Mexico (their Chavaroo play). The San Andres is one of the most prolific oil plays in the greater Permian but unlike the Delaware and Midland players, it's far shallower and is a conventional carbonate reservoir with Wolfcamp sourcing and well defined stratigraphic traps acting to contain the hyrdrocarbons. Sidebar: I'm not a geologist. I don't pretend to be one on the internet. But I have been doing this since the 1990s and I took a rocks for jocks course many years ago from Hyne himself and this is fairly straight forward stuff. The play was originally developed going back to the 1930's with vertical wellbores. These verticals left behind significant pay while often producing excessive amounts of water. In more recent times, horizontal drilling was often confined only to the fringes of the play where verticals would not have been economic. Management believes horizontal infill drilling in the more oil saturated main pay areas (where the central portion of their acreage lies) is the most efficient way to proscute remaining stranded reserves. To date they have announced a 10 successful horizontal wells drilled on fairly tight 20 acre spacing and these made up the bulk of PEDEVCO's Permian volumes in 2023. Last fall they announced a participation agreement with Evolution Petroleum (EPM) for a 50/50 farm-in as they go to accelerate development of Chavaroo. Looking ahead they have three horizontal wells that were expected to come on line in January of 2024 potentially providing a sequential rebound in volumes. Results from these tests were announced today with management stating "the Company is pleased with the early production results, with the wells currently performing in line with expectations, but with shallower, better-than-expected declines which have yielded an average of over 750 BOEPD gross for the last 30 days." PEDEVCO has a 50% working interest (41% net revenue interest) in the wells and for reference these are lower cost wells at $3.1 mm gross per copy. They are working with partner Evolution on next steps on the 16,000 gross acres under potential (the company has 22,400 net acres between Chavaroo and the thinner Chavaroo NE extention). Previously management has spoken to as many as 6 more gross wells for 2024 with Evolution in Chavaroo. A little cautionary language: This is a micro cap. Take from that what you will and at to that that is is a public oil and gas company. Given their tiny production base (< 2 MBOEpd) quarter to quarter volumes can and will almost certainly remain lumpy. Production can move about fairly sharply with completions, natural declines, and/or a hiccup at any one key well during a quarter. This can translate to erratic revenues and costs in any given quarter. Their operating costs are high given the lack of scale. We do note that 2023 registered market improvement over 2022 and they have taken steps to shed higher cost vertical operations. They don't hold conference calls and we have not spoken with them. Aside from the required capex guidance they do not provide an outlook or formal production or cost guidance. They offer no dividend. This is not really a cautionary comment and just a bit of commentary on the E&P space right now. Many names that historically did not offer a dividend have opted to in the name of return of capital. Some of those really should not. So the absence of dividend is note as "no they don't offer on" but also "and that's a good thing, they are way too small and don't have the production base to support a viable, sustainabe dividend at this point in their history". The company is unhedged which again given their size and balance sheet is not surprising. This is also just a notation given some investors see a lack of hedges as a negative. We're fine with the nakedness. The stock trades < $1 and they appear to have one analyst (Roth MKM) in coverage with a Buy rating at last available update. The analyst had a $2.15 target but had a low growth expectation for 2024 and slightly lower annual EBITDA vs 2023. That's fine and we do our own math (see below). Their shares are fairly illiquid, trading only about $0.1 mm worth daily, and they often have wide bid/ask spreads. This makes trading in the name (and I mean short term stuff compared to what I normally call a Trade Only which is usually 3 to 6 months or long) more difficult. With this little volume we can't really get big without moving it. A Few Management Notes: Management has worked at a who's who list of upstream names from Hess (HES) to Conoco (COP) to Shell. We don't know any of them nor have we come across any of them in our time looking at companies in the segment. That's not a negative, just a comment. Their presentation is technically quite comprehensive but not overly so as we saw with many "bright spot" type presentations in the 90's and early 2000's. It is worthy of a larger company. Please see the latest one here. The CEO owns about 68% of the shares and out of 87 mm shares outstanding only 17 mm are in the float, so our sense would be that we won't see a lot of help from insider buying in the name. We note they employ Cawle,y Gillespie as their 3rd party reserves engineer. We view them as one of the top 5 firms in the space and take it as a positive sign that they are not going with a smaller outfit. Valuation: They're not overly expensive on EBITDA trading at 3.9x trailing TTM EBITDA and are quite low on a TEV to proved reserves basis at just under <$4 /BOE (and they use a name brand 3rd party engineer to audit their internal calculation of reserves). We built a simple model here. We're not forecasting production but wanted to see what reasonable EBITDA could be expected under our Sub and Base cases for 2024 so we bracketed production as flat or 40% (sounds like a lot until you note that's only 2,000 BOEpd on the upper end). On the low end it's trading at 8x this year's number and on the high end about 3x. 1Q24 should be a growthy quarter but again, it's a small name, and a lot of things can disrupt the impact of new wells when the sample is so small. Nutshell and Other Items: It's an interesting name we plan to monitor the progress of. To do so we have taken a modest "tracking" position in the name. We view this type of name kind of like a call option with no predetermined expiration. They have cash and no debt. They have quality leasehold. They have an experienced management team. These attributes should allow them to, over time, increase their scale and reduce their per unit costs. But we are very cognizant of our cautionary language above and we would not anticipate getting above a 3 to 4% type position in this type of name, again, over time. Z4 PED Cheat Sheet Z4 Energy Research
April 17th, 2024 at 9:05 amNatgas names green despite the red commodity price today ($1.67 front month price). UNL (one yr strip proxy) also -1.7% today but it is beginning to form a base and is now at the low end of that base. Is the market beginning to look ahead to 2025 for the natgas names (see the AR call)? When do you see a re-entry time for greater natgas exposure?
April 17th, 2024 at 9:20 amre 11 – I plan to listen to listen to next week’s calls from the top names and then maybe get a few more weeks into the shoulder before nibbling. May seems like a good time especially if Freeport’s return is further delayed. For now we continue to own CRK.
April 17th, 2024 at 9:25 amOily names are modestly green ahead of EIA with oil down $0.75.
April 17th, 2024 at 9:27 amOil Inventory Quick Look
WTI off $0.75 just prior
Oil +2.7 mm barrels (vs +1.4 exp)
– throughput – up > 0.1 mm bopd week to week, 2nd best of 2024 at 15.913 mm bopd.
– imports – flat w-t-w
– exports – up a 2.0 mm bopd w-t-w
– L48 oil production – unchanged
Gasoline -1.2 mm barrels (vs -0.9 exp)
– implied demand – 8.66 mm bpd, up slight but poor for time of year.
Distillates -2.8 mm barrels (vs -0.1 exp)
– implied demand – up 0.68 mm bpd week to week, much better but not anything like a positive trend.
Nutshell: Modestly better than expected.
April 17th, 2024 at 9:33 amZ – Are shls and qs looking cheap/reasonable now?
April 17th, 2024 at 9:37 amGasoline Implied Demand (000 bpd) YoY Chg
April 17th, 2024 at 9:39 am2016 9,327
2017 9,264 -1%
2018 9,312 1%
2019 9,340 0%
2020 8,140 -13%
2021 8,974 10%
2022 8,696 -3%
2023 8,811 1.3%
Prior week 8,612 -3.6%
This week 8,662 1.7%
– 0.0%
YTD 2023 8,599
YTD 2024 8,557 -0.5%
re 15 – I am not adding to SHLS until we know more about the 3rd party wiring issue and the patent issue. Also the group in bad sentiment territory given interest rates. Plan to listen to the 1Q24 call, not yet scheduled, and give it more thought.
QS – may add with their upcoming update, definitely tempted.
April 17th, 2024 at 9:41 amDistillate Implied Demand (000 bpd) YoY Change
2016 3,770
2017 4,033 7%
2018 4,070 1%
2019 4,021 -1%
2020 (Covid) 3,685 -8%
2021 (back to work) 4,032 9%
2022 3,909 -3%
2023 3,788 -3%
Last Week 2,985 -21%
This Week 3,666 -3%
YTD 2023 3,826
April 17th, 2024 at 9:42 amYTD 2024 3,672 -4.0%
EQT: Has been a weak relative performer in the natgas space and the leverage increase is a key reason for that. Most of this is due to their acquisition of ETRN, which should provide a steady stream of FCF and some cost synergies. The market just focuses on the debt add and concludes shareholder returns will suffer as they pay down that debt. EQT promised asset sales to accelerate the debt retirement process and recently sold some non-op leasehold. Rumors are they are shopping the MVP to be sold once is it operational. Debt retirement is a backdoor form of shareholder returns in that shareholders will grow their share of the ownership of EQT TEV as the creditor’s share is reduced. Imo, the EQT strategy of integrating production and midstream to generate greater FCF in a no-growth, competitive market that favors low-cost producers is a good move. The short-term focus of the market doesn’t see it that way but that might prove to be an opportunity.
April 17th, 2024 at 9:43 amRefiner Throughput (m bopd)
April 17th, 2024 at 9:46 am2019 YTD 16,291
2020 YTD 15,674
2021 YTD 14,030
2022 YTD 15,523
2023 YTD 15,231
2024 YTD 15,477
SPR stocks are now just 3.1 mm barrels below year ago levels with 364.9 mm barrels remaining in the reserve.
April 17th, 2024 at 10:12 amRe – 17 – Thanks for the color.
April 17th, 2024 at 10:26 amI have been a way for last few weeks – any idea what happened to PTEN? seems like this should be a good environment given the improvement in oil prices
April 17th, 2024 at 10:31 amre 23 – nothing from a news standpoint other than the monthly rig count update which was fine, just trading sideways after the 4Q23 earnings pop. I heard from one guy saying I finally bought and it’s done nothing and I could say was your time frame is shortter than mine. Largely trading with oil on this last few days pull back. It and LBRT remain very cheap. I think ACDC is cheap as well but that’s got more debt.
April 17th, 2024 at 10:47 amIsrael response seen by some as not likely before US House bill votes and Passover.
April 17th, 2024 at 10:52 amre 25 – silly but true that oil traders are keying off an Israeli response when demand data and forecasts continue to be robust and US production is flatlining. People get caught up in the geopolitical aspects too much at times. US is probably unlikely to really increase enforcement of oil specific sanctions at the moment. Iran is not bound by OPEC+ quotas at this time. Iran is pretty unlikley to be able to effectively or sustainably shutter Hormuz. But they are likely to produce and sell as much as they can to China, Russia, India and others. Saudi and other OPEC+’s offset this with the voluntary curtailments until we see the crescendo of demand in 2H24 to new record highs.
April 17th, 2024 at 10:57 amSTRIKING IRAN’S NUCLEAR FACILITIES ‘ON THE TABLE’, SAYS EX-MOSSAD INTELLIGENCE CHIEF – SKY NEWS
Key word “ex”
Seems unlikely, maybe cyber though.
April 17th, 2024 at 10:58 amStill working a trade today.
April 17th, 2024 at 11:04 amhttps://www.bloomberg.com/news/articles/2024-04-17/us-to-reimpose-venezuela-oil-ban-unless-maduro-acts-quickly
Believe when it happens.
April 17th, 2024 at 11:33 amWTI and Brent down 3+% now.
April 17th, 2024 at 11:33 amToday’s oil review slide show can now be viewed here:
https://zmansenergybrain.com/oil-inventory-slide-show/
This page is located near the top left for future reference.
April 17th, 2024 at 11:39 amZTRADE – ZLT – PED
PED – We added to our speculative position in PED in a follow on trade to yesterday’s opening position, with new adds from $0.84 to $0.88 over the course of the morning. For additional color please see today’s post including a progress update on the first set of Permian wells this year and our original piece last week for more details including cautiounary language. PED is a “Trade Only” Position for us and sits in the #16 position in the portfolio (under 2%) and we have an average cost fo $0.8541.
April 17th, 2024 at 12:24 pmThe blotter is updated
https://zmansenergybrain.com/subscriber-data/zeb-zlt-blotter-ii/
April 17th, 2024 at 12:27 pmre 32 – SA article to be published.
April 17th, 2024 at 12:30 pmPED on SA
https://seekingalpha.com/article/4684283-pedevco-corp-speculative-unhedged-oily-micro-cap-e-and-p-with-upside-potential
April 17th, 2024 at 12:56 pmBiden Admin expected to remove tariff exemptions for bifacial solar imports:
https://seekingalpha.com/news/4090653-biden-expected-to-remove-tariff-exemption-for-bifacial-solar-panel-imports-reuters?mailingid=35069585&messageid=2900&serial=35069585.18369&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha&utm_term=35069585.18369
April 17th, 2024 at 1:36 pmRE 36: Will this tariff on cheap imports raise prices for solar installs? If so, how will that increase demand? Can see how this might benefit domestic panel producers (eg FSLR) but why would ENPH or the rest of the solar space benefit?
April 17th, 2024 at 1:42 pmAR: More color on MS upgrade. That analyst claims H2 natgas prices will climb and sees $4 HH prices 2025 through 2029. With that price deck he sees AR generating 76% of current market cap in organic FCF vs 62% for gas-weighted peers during that period. No idea what NGL pricing he is using, which is a big deal for AR.
https://seekingalpha.com/news/4090658-antero-resources-raised-at-morgan-stanley-after-lagging-gas-focused-peers?mailingid=35069797&messageid=2900&serial=35069797.1457&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha&utm_term=35069797.1457
April 17th, 2024 at 1:52 pmre 37 – would not see as a benefit to projects. Probably not a harm either. Panel prices have been falling.
Don’t know of any impact on ENPH as residential not generally using bifacial, nor most commercial installs and their commercial line is barely off the ground anyway.
April 17th, 2024 at 1:58 pmHe’s also raising steel and aluminum tariffs.
April 17th, 2024 at 2:00 pmLBRT reports after the close and we’ll have some brief comments in a few hours.
April 17th, 2024 at 2:43 pmCan someone go to this page and confirm they can see the oil inventory charts?
https://zmansenergybrain.com/oil-inventory-slide-show/
April 17th, 2024 at 2:45 pmJ Rice noting bifacial impact maybe already discounted in names like SHLS and tracker names.
April 17th, 2024 at 2:48 pmBack in a couple of hours.
Beerthirty.
April 17th, 2024 at 2:49 pmThere’s a question on NXT back at #8, Looks like you were busy & overlooked it. Thanks
April 17th, 2024 at 2:58 pmRe: 42 The charts do pop up. Wish it opened a new tab when it opened.
April 17th, 2024 at 3:11 pmre 45 – thanks for that.
re 8 – apologies, missed that. I don’t know them well enough to say. Main thing for us now is maintenance of prior guidance as others are all being more cautious on project push outs due to rates. I continue to plan to add to it but unlikely before 1Q24 report.
re 46 – good, and I will ask Scott if there is anything we can do to make it open a new one. There may be also something that can be done in browswer settings. I will ask and circle back later this week on this.
LBRT on the tape but have not read it yet, back in a bit.
April 17th, 2024 at 3:53 pmEQT cut to Equal Weight at Wells for the same reasons highlighted in post 19. This rating change seems stale as the stock has already adjusted to the market’s disappointment with expected reductions in shareholder returns being the narrative. They do cite LT benefits of the deal but fall back on the older ST model of preferences for pure play names vs integrated names.
https://seekingalpha.com/news/4090667-eqt-cut-at-wells-fargo-as-equitrans-merger-deal-raises-near-term-risk?mailingid=35070679&messageid=2900&serial=35070679.2120&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha&utm_term=35070679.2120
April 17th, 2024 at 4:40 pmDRAFT
LBRT Reports Solid 1Q24 Results; Positive Outlook, Better Than Expected 2Q24 Guidance
– table prepped
Note:
1Q24 revenue was sequentially flat as expected —
EBITDA was light to Street on the slightly lower than Street expected revenue.
We see this as noise relative to the outlook and 2Q guide in particular.
Outlook
“Frac industry dynamics remain constructive”
With “relatively steady demand”
and “disciplined pricing”
2Q24 Guidance
Double digit sequential revenue growth.
Current 2Q consensus calls for 4.6% revenue growth.
Favorite Quotes Watch:
Macro Quotes:
“Global oil and gas commodity prices have diverged and moved materially in recent months. Yet these changes have not materially impacted demand for North American frac services. Oil prices have rallied since early in the year, owing to an improved global economic outlook, ongoing OPEC+ voluntary production cuts, and rising geopolitical tensions. Natural gas prices have conversely declined considerably since last fall, primarily owing to strong production and mild winter weather driving high natural gas inventories. Natural gas prices are likely to strengthen in the future with increasing LNG exports and surging domestic power demand in the years ahead. Global energy demand continues to march higher, supporting a strong North American oil and gas industry in future years.
Other Notable Quotes
“growing demand for power from AI-driven data centers and reshoring of industrial and manufacturing activity require reliable sources of energy, which we believe will be best served by domestic natural gas. Liberty Power Innovations (LPI) is well-positioned to benefit from these wider opportunities beyond the oilfield.”
Balance Sheet:
In good shape at 0.15x net debt to annualized 1Q EBITDA.
Return of Capital:
Buyback:
They bought back 0.9% of shares for $30 mm in the quarter after announced an expanded buyback program in January. This takes them to 12.5% repurchased since mid 2022.
They have $392 mm or 11% of current market cap remaining as authorized for repurchase.
Dividend:
The 7 cent quarterly base only dividend was maintained on Tuesday.
Implied yield on last night’s close of 1.3%.
On the call:
Look for them to reiterate their views on quality over discounting
and service industry capex discipline with upgraded or new equipment continuing to be replacement and not additive for industry horsepower.
Look for analysts to try to get a better understanding of the drivers of growth in 2Q (more fleets vs more price) and how this will impact 2Q profitability.
Look for analysts to ask about the power segment as it pertains to non frac related business.
Nutshell:
OK quarter.
April 17th, 2024 at 4:49 pmAs expected outlook with better than expected 2Q revenue guiance.
LBRT is up 17% since the last call and has, along with other names in the space, taken a bit of a breather into the 1Q24 reporting season and with a little softening in oil.
We expect this report to be well received, all other things like commodity prices and broad market moves held equal.
We own LBRT as our 17th largest position with an average cost of $20.97 and plan to grow the position into the top 15 opportunistically.
To the dude that wished a link would open in a new tab (valid request!), remember that you can right-click on a link and select “Open in a new tab” to do the same thing (in Windows, anyway).
April 17th, 2024 at 8:08 pmhttps://www.naturalgasintel.com/freeport-lngs-extended-drop-in-feed-gas-adds-pressure-to-u-s-natural-gas-demand/
This facility continues to have problems.
April 17th, 2024 at 8:37 pmre 50 – thanks – there is also a way we can do it automatically in WordPress.
April 17th, 2024 at 9:42 pm