Where many producers are struggling to transport their product to market, companies operating in the Haynesville Shale are uniquely positioned to take advantage of the Gulf Coast LNG export resurgence.
A weekly update on issues important to the oil and gas industry
Where many producers are struggling to transport their product to market, companies operating in the Haynesville Shale are uniquely positioned to take advantage of the Gulf Coast LNG export resurgence.
Improvements in technology have driven the shale revolution. Among these improvements are both cost cutting by oilfield service providers and longer laterals from E&P companies. While capacity constraints from a lack of infrastructure has led to pricing differentials (particularly in the Permian Basin), a lack of inventory in the global oil market is expected to support higher prices, while also increasing price volatility.
As we plan to do every quarter, we take a look at some of the earnings commentary of large players in the oil and gas space to gain further insight into the challenges and opportunities developing in the industry.
David Harkins recently attended the 38th Annual National Association of Royalty Owners (NARO) National Convention in Denver, Colorado. Many topics were discussed, some of which could have their own blog posts devoted to them; however, this post includes four key takeaways from the conference.
The emerging field of royalty-focused MLPs and mineral aggregation has the potential to provide growth through acquisitions, as well as distribution payments that public investors desire. Kimbell’s acquisition of Haymaker is a good example of this.
Before mid-2014, few investors took notice of efficiency-oriented metrics, instead focusing on stories of new oil discoveries and the development of new wells and new technologies. Since the crash in oil prices, a new measure of success was brought to the forefront: breakeven prices.
As more companies present this metric and more investors rely on it as an indication of performance, it becomes increasingly important to understand what it actually measures, and if breakeven prices can be compared consistently from company to company.
Upstream producers’ stock performance has been volatile, infrastructure issues are lurking and the industry ended the quarter a notch above flat. However, the strategic acquisitions by BP and Diamondback Energy highlight the segment’s continued optimism.
Private equity companies in the energy sector are positioned for an interesting opportunity. These companies have seen a surge of fundraising in recent years, leaving managers with large cash reserves or “dry powder” to be appropriately deployed. Despite the large amount of cash available, these firms are having trouble finding places to invest resulting in a decline in PE activity in 2016-2018 with deal counts dropping for the second year in a row by 8%. However, investments could see a marked increase in energy in the last quarter of 2018 and into 2019 as there is a climate of high demand for return on investment and low supply of cash needed for capital expenditures in upstream oil companies.
This blog post summarizes our whitepaper that provides an informative overview regarding the valuation of mineral royalty interests within the oil and gas industry. While there are a myriad of factors (mostly out of a royalty holder’s control) impacting the economics of a royalty interest, this blog post focuses on valuation methodology.
Companies that have maintained a presence in the Bakken since the downturn in oil prices are beginning to reap the rewards of their patience. Rising oil prices have begat increases in production, and efficiencies gained in recent years have led to higher margins and increased production. As noted in last week’s post about transaction activity in the region, while the Permian Basin has received much of the attention recently, the Bakken certainly appears to be back in business.
Over the past year, followers of the oil and gas industry have taken note of the multitude of transactions occurring in the Permian Basin with large deal values and hefty multiples. But the price differential between WTI and other benchmarks has grown over the last few months, and some attention has moved from the Permian to other domestic shale plays. The activity in other regions such as the Bakken was at one point slow (when compared to the Permian) causing the recent increase in production and the swapping of acreage to fly under the radar while many were focused on Texas.
