Quote of the day: By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. – John Maynard Keynes

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Paul Sankey

Corporate EOG: Never got the “Cut Capex” memo

EOG never got the “cut capex” memo. It looks worse next to Coterra reporting after the market like EOG last night, but cutting capex, especially as EOG raises natgas volumes; whereas Coterra is claiming it will now deliver just oil growth. Just like that. And Chord have fully subscribed to our “Heavyweight Thesis of US E&P” leaving Devon as the bridesmaid yet again. ~ EOG Q4 results yesterday were a groaner: light on oil for…

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Paul Sankey

Morning Natural Gas: Cut Rigs Reap Rewards

Good news: Chesapeake is cutting activity in US natgas. In the “long cuts/short active” gas drillers pairs, we like propane-rich Antero long vs Short EQT who continue to keep activity high. EQT is supported by its hedging, which makes no sense to us: these financial instruments can be used to maintain cashflow, with no need to maintain activity. Generally, we do not like dry gas plays in 2024, but would favour Chesapeake with capex discipline,…

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Paul Sankey

Sunday Suddenly Presidents’ Day

Suddenly we are all bullish oils. Last week went well. Certainly it went well by oil’s atrocious recent standards vs the wider market. In fact, last week might just be a very bullish set up for the oils. But that statement depends a lot on NVDA results ahead. NVDA reports this week 21st February Wednesday after the market, going head-to-head with oil laggard APA, formerly Apache. We do not expect APA results to change the…

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