ConocoPhillips

There was plenty of client interest in a comment we made a while ago now, say Q1 2022, that US exploration and production (E&P) companies have become homogenized in terms of what they offer shareholders, as basically all corporate strategies now have, thankfully: Focused on returns and so capital discipline, and Reduced growth to the benefit of market supply & demand balance. Those that cannot resist growth are private or have gone private (Continental Resources) […]

There was a collision yesterday in Tribeca between your experience-bitten, long-since cynical energy (oil) analyst, and the Schlumberger’s analyst meeting. Big oil clients have seen oily friends fired, exit Wall Street forever, been asked to cover extra sectors, been bullish when they should have been bearish, watched great companies humbled, seen clients lost to 1,000 yard stares. Schlumberger is a huge part of the arc of oil history, not least on Wall Street. We, the […]

Tomorrow Happy Hour: Jon Rigby, IR ENI Thursday Nov 3, 2022 5:00 PM ET  Please click this link to register Rigby is the recently-appointed (April 2022) head of investor relations and strategy planning at Eni, the $50bn market cap Italian energy giant. Previously he was a well-known London-based sellside Lead Oil & Gas analyst, covering global major stocks, for UBS, as managing director. He joined UBS in 2004 from Commerzbank and holds Chartered Financial Analyst […]

Greetings from Texas, The world’s biggest mangrove company kindly invited Paty & me to the Austin Formula One Grand Prix (F1). Cars running E10 are screaming behind me on four source power trains; (V6 1.8 liter, one electric exhaust powered, one electric latent braking powered, and a turbocharger). The world’s biggest mangrove company is Aramco, F1 primary sponsors for this race. I think the sponsorship is genius in increasing the popularity of the world’s greatest […]

Yo, Noted, French refining strike seems to be drawing to a close, with ExxonMobil’s Fos returning to normal. Continued issues with the most extreme of the unions, the CGT, for TotalEnergies. Around 30% of French gas stations reported short of product. We perceive the refining workers strike in Iran to be a domestic issue – for now. History of the Iranian Revolution was driven by strikes by Iranian oil workers. The 1979 Iran revolution directly […]

Gossip from dinner with my London lawyer friend who is familiar with, let’s say, “emerging markets law”: Russia’s power rests between the Oligarchs who have the money, vs the military, that have the weapons. The single crossover oligarch, who controls the military, is Putin alone. Can the oligarch class form an ex-Putin alliance with the military? Difficult. Rational analysis of Nordstream pipeline explosions, which logically would conclude that Poland done it, with NATO deep state […]

Your correspondent is flying tomorrow at 7am La Guardia to Houston for Steve Chazen’s Memorial at 2pm assuming flights co-operate, and so this week’s Sunday is here on a Saturday; a brief highlight reel, or should that be “bloopers” “fails”, and “cringe” in this tape. From the UK pound, to Japanese Yen, to Credit Suisse credit default swaps (CDS) this is a market at war with itself, quite literally. The incredible sabotage to the Nordstream […]

Hate to keep going with our infuriating “bearish short term, bullish long term” call (eg refining. We had a conversation with Battery Guru Steve Levine today about how badly future electric vehicle sales are going to fail to meet expectations over the coming years, and he is confirmed on Happy Hour for next week, 29th September, 5pm ET save the date. This week: Jay Saunders, Senior Co-Portfolio Manager, Jennison (Natural Resources). Jay has been running […]

Fed decision this week. TINA is dead. Nothing big in earnings this week, Fedex reporting Friday has warned, in case you totally missed last week; if you did, you missed the largest stock market move on an economic data point, in history Rules of Wall St series: Always short the new CEO of a highly rated stock. Not in the news: Iran’s Supreme Leader said to be gravely ill – watch for upheaval ~ Fed […]

Observations on the “Inflation Reduction Act”: We read all 730 pages, with 198 being on healthcare, and conclude that, rather than calculate an “Excel told me” analysis, but rather, because of the surprise announcement of the Bill, the stock market provides an early indicator of the Bill’s likely impact: we show you key stock price performance since the Bill was shock-announced by Senators Manchin & Schumer on June 27th: We temper this market reaction. We […]

The two weeks, mid-earnings, when we pull together company results transcript comments, are not a science, they are an impressionistic art; a colour to our themes. Basically these are comments that caught our eye over the past week. Like sellside analysts, the companies tend to all present the same more-or-less generic message, but occasionally, as we strive with Sankey Research, a comment stands out, is differentiated, or so wild that it is worthy of note. […]

Big week for what should be terrific oil earnings this week. Watching Iraq Highlight charts – market rebounding, oils catching a bid ~ Week ahead: It’s good to see that oil earnings have worked back onto generalist earnings calendars, as shown from “Earnings Whispers” below. Devon aftermarket Monday sure, BP, Marathon Petroleum and Oxy Tuesday, etc, but believe me, a year ago Berry and Callon did not make these lists (see Wednesday below). Marathon Oil […]

Greetings from La Villa des Orangers, Medina (Old Town), Marrakesh, Today – are the big E&Ps cheap? Antero LNG exports – 70mmcfd or 1bcf/d? Postcard from Morocco They say if you want a question answered on the internet, don’t ask the question, but rather post a bold false statement, and you will be flooded with corrections. It is an interesting point on human psychology. Earlier this week we said that Antero was exporting 1bcf/d of […]

The concept of this note is “putting the band back together” in the theme of the Blues Brothers, as we see the potential for Chesapeake to merge with Southwestern. The Blues Brothers (1980): Jake: We’re putting the band back together. Mr. Fabulous: Forget it. No way. Elwood: We’re on a mission from God. We could get into a long and tearful reminiscence about US natgas legend and Chesapeake founder Aubrey McClendon (there is a tribute […]

Strategy Session was back to the round table stock discussion. It was sufficiently enjoyable that we will now have a monthly round table on stock ideas. Next week we have Tourmaline, week after Bob McNally. In between, Memorial Day is a week Monday, check the whites in your wardrobe and start yelling at the pool guy’s voicemail. Companies mentioned last night: Long Inventory E&P’s. We discussed oil volatility and beta skew as oil holds over […]

Few, As they say on the internet. Today we have a PORTFOLIO MANAGER SPECIAL in the presentation, which includes a full glorious ppt on the largest stocks in the market, and for bonus, a Sankey Recommendation on each stock. The oils look great on these charts. The recommendations on names like Google (BUY) or Disney (SELL) are purely quanatitive interpretation of charts, we do not cover non-energy related stocks fundamentally. So this is quantitative analysis, […]

Happy May Day Sunday, Today in partnership with Greg Bordelon of Isentropic Capital, we publish a note on natural gas markets by way of thesis overview to a theme that we will continue to pursue. The note is long graphics, and particularly interesting on US markets. If you only want to read half, read the second US half. It is as noted graphic intense. European gas markets are fundamentally far more un-analysable than US right […]

This LNG round up with Gordon Shearer (Poten & Partners guru) from Thursday night took longer to write and I got tangled in the SLB results, which came in okay – readers will know I am not pushing service companies but love oils… “to 10% of S&P500!” Chatting to a client with Midstream expertise before Gordon Shearer, LNG expert, came on Strategy Session Thursday evening, the view was that Kinder Morgan results were decent owing […]

Yesterday on CNBC I repeated the call that oil could get to 10% of the S&P500 based on the current dynamics in global energy. In the segment (link below), which was in the context of Netflix stock collapsing 35% yesterday (down hard further in the pre-market today), I gave a hack explanation of how a growth stock valuation can collapse. Basically, if the market is anticipating huge growth in a zero interest rate environment, the […]

Tonight PBF management on Strategy Session, 5pm for a tight hour. RSVP. I was at the Knicks vs Nets game last night with a global oil executive; combined with conversations with ConocoPhillips management Tuesday, some brief points. First, Shell profit warning this morning. Break it up. We would like to see a global LNG & gas and power trading powerhouse, a downstream “high carbon” operation with refining, chemicals and retail, a deepwater company. We don’t […]

Tomorrow Thursday 7th April, Strategy Session with PBF Senior Management 5pm – RSVP Today DC hearing, House Energy and Commerce “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.” ExxonMobil 8k indicates $2bn increase in upstream earnings, beermat (see below) suggests $2.50 EPS Cocktails with ConocoPhillips management yesterday evening Starting with ExxonMobil 8K on earnings guidance released yesterday evening, I am chatting to them today. The company gives you what they […]

This Thursday 7th April, Strategy Session with PBF Senior Management 5pm – RSVP Tonight – ConocoPhillips senior management in town for informal sellside drinks Tomorrow, DC hearing, House Energy and Commerce “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.” In oil, the excitement this morning is New York jet fuel prices going off the scale, part of the theme we talked about over the past couple of weeks, especially after […]

The attached note started as a focus on Coterra, the $22bn market cap combination of two US E&Ps, Cimarex and Cabot, one oily, the other gassy, that merged and just started trading as $CTRA in late 2021. In the note you will find the rank data: the value destruction for shareholders of the US oil exploration and production (E&P) industry in their giant shale oil science experiment 2010-2019. Line from the note: “from 2006-2019, the […]

Big Shot, Big Short moment. Nickel suspended at $100,000 per tonne on the London Metal Exchange. That means that today a Nickel (5c coin) is worth 12.5c, given it is 5g in weight and 25% nickel. The other 75% of a Nickel is copper, by the way. It’s being reported that Chinese entrepreneur Xiang Guangda – known as “Big Shot” – had a large short position on the LME through his company, Tsingshan Holding, the […]

Huge shock. Particularly to major European clients that had stated their house view: no invasion. Their view was weeks of noise, no invasion. What will happen to this extraordinary chart? We see demand destruction at $120/bbl, and think oil prices will continue to go to that level of demand destruction if US demand remains as strong as it currently is. Lagging US economic strength and upcoming summer speak to ongoing demand strength, even if it […]

A correspondent asked if I would be writing this Sunday about what to do if Russia invades Ukraine. “I wrote about it in early January,” I sourly texted “I am more likely to write about Venezuela,” I added snootily. “But you’ve been saying Russia won’t invade.” He pressed. “I had to take a week off because I didn’t know. No point in chasing the puck.” Not wanting to chase the “will they/won’t they” puck, I […]

Having featured a fellow independent researcher on Strategy Session last night – Doomberg – today’s note is a highlight reel of other people’s research. But of course first, Friday you demand jokes, and we are not here to disappoint clients. I used to play the triangle in a band, but it’s just one ting after another. I swallowed a dictionary, and now I have thesaurus throat. My boss arrived at work in a new Lambourghini, […]

Strategy Session this week: Doomberg 2/17, 4:30PM EST –  Click Here to register A bull market climbs a wall of fear, a bear market descends a slope of hope. With oil prices in the $90s, for oil investors traumatized by a decade of descending a slope of hope, are now climbing a wall of fear. The thinking goes like this: “Brent is at $90/bbl on a Ukraine invasion story that is de-escalating, sell quick, lock […]

Hi I am just checking in to assure you I survived the Houston NAPE conference, landmen and all, but am still on the road, headed to New Orleans. This week has been discombobulated – my initial flight on Tuesday was cancelled by United, I rushed to Newark, made the 2pm, just made dinner in Houston, made the NAPE conference yesterday, made dinner with a Nebraska CEO, went to the after party rave and here I […]

Strategy Session this Thursday 4:30pm with Joe Gorder, Valero Chairman & CEO; Lane Riggs President & COO; Jason Fraser, EVP, CFO; Homer Bhullar, VP IR & Finance. Joe has overseen enormous success as CEO of Valero overseeing a cumulative return since he started in 2014 of 94% for Valero stockholders. Not only does Joe lead the world’s largest independent refiner, he has also built the largest producer of renewable fuels in the US. All the […]

Before we argue that Big Cap tech can stabilise the market here, on a fast & personal take of last week’s and next week’s earnings, in recognition that we need to focus on mega-themes, the latest population data from China is extremely important. NYT January 17th, 2022: China announced on Monday that its birthrate plummeted for a fifth straight year in 2021, moving the world’s most populous country closer to the potentially seismic moment when […]

Mike Masters was the first American to score a goal at Wembley. But we had a different Mike Masters on Happy Hour last night, the hugely successful hedge fund manager who had a swimming scholarship to Tennessee, and started Masters Capital in 1994. He became highly prominent in 2008, testifying to Congress on oil speculation. Mike Masters: the market is obsessed with post-COVID recovery, but is not thinking enough about the decade prior to COVID […]

This morning! PSX Phillips 66 Call 11am ET fireside with Greg Garland, Chairman & CEO, Mark Lashier, President & COO, and Jeff Dietert, IR.  This note has a brief history of PSX. Register here: https://www.sankeyresearch.com/2022-refining-conference/ There have not been Friday jokes for quite some time. You will never believe the theme: What’s the most positive thing about 2022 so far? COVID tests. We are mystified that people are so angry about Djokovic being an anti-vaxer. His […]

Thinking about the year ahead, one of my favourite Twitter follows @Raisingthebar47 published the following deliberately non-consensus list of things that will happen energy in 2022. The list is interesting, notably for natgas theorists, but also because it represents what could be considered a list of unexpected events for the year; it was just a quick checklist of things to consider: Natgas back to <$2.50/mcf MVP cancelled/pushed to ’23 (Mountain Valley Pipeline) Oil hits <$50/bbl […]

A couple of stories over the past week have highlighted the precarious nature of global oil supply Outage in Libya 300kb/d Force majeure declared in Ecuador, cutting exports by at least 200kb/d Upstream Online 20th December 2021 Production from four Libyan oilfields has been shut in, causing NOC, the state oil company, to declare force majeure on crude exports from two ports the Zawia and Mellitah terminals. NOC said in a statement on Monday that […]

Busted flat in Baton Rouge, waiting for a train… ExxonMobil has called a historic snap analyst meeting for this Wednesday 1st December. The first meeting under a new, externally appointed, CFO, former Diageo executive, Kathryn Mikells. She is now in charge of finance, strategy, communication, and investor relations (IR). Kathy already refreshed her first earnings call, Q3 2021, interjecting, freely commenting, communicating; the company also gave clear guidance over what to expect from this update […]

Big upcoming events for us: Happy Hour this week with former FERC Chairman Neal Chatterjee, along with Aaron Cutler, both now partners at major DC law firm Hogan Lovells. Aaron at 5pm, Neal at 5:30pm. Both have deep multi-decade Washington energy experience at the highest level – Neal was former Chief of Staff for Senator McConnell, Senate Republican Leader. It is obviously vital to understand the shifting energy landscape in Washington. These are the experts […]

Saturday: there’s an unrelenting element to being a stock analyst. “You are only as good as your last note.” The need to constantly publish is relentless. With that in mind, it has been my intention to write an oil book. Something that can sit on a shelf. One of my favourite oil books is Anthony Sampson’s “The Seven Sisters”, which provides a brilliant, and concise, history of the seven major oil companies that formed the […]

Quick note today as I have two events. One of my favourite parties, this morning an NY Marathon party in Carroll Gardens adjacent to the running route, which starts at 9am. It is the only party I know of that starts at 9am on a Sunday. And then to the NY Giants game playing the Raiders at Meadowlands 1pm. You can get there easily, getting out involves multiple trains. It is a family tradition to […]

Mega-theme, ESG backlash: progressive Dem agenda whacked by Virginia governor Republican backlash Mega-theme, short wind, long coal: second 2021 profit warning from Vestas Mega-theme, global energy crisis: European gas prices bouncing on Russia natgas supply outages Mega-theme, Renaissance of US E&P: Devon with great results, COP is about as good, Pioneer after market tonight ESG backlash: the general disarray in the current US administration has been exacerbated by the major swing of Virginia voters to […]

Last night on Happy Hour I was complaining that my calls are stone-cold right now, and sure enough, the theory that Chevron would have a messy quarter just got blown out of the water. Actually, I will take it, because my thesis all year has been long oils / short Big Tech, and these past two weeks, with feeble earnings from Oil Service, Kinder, Range Resources, EQT, badly received results from Hess (raising capex for […]

Huge week for earnings on deck this week, just about 50% of the market cap of the S&P500 reports,  and to celebrate, the traditional Sunday Sankey is back with a full presentation attached. Sample slide: Bloomberg lists Kuwait’s oil production capacity as 3.08mb/d. In the slide shown in the Sunday Sankey presentation today from the authoritative MEES, Kuwait’s production capacity has dropped by more than 500,000 b/d over the past three years to just 2.63mn […]

Key points: Clients are focused on OPEC spare capacity and demand growth, but also, rightly, North American supply growth, which is the most price elastic component of global oil supply. Halliburton results yesterday naturally raise questions over US production growth; the company stated that it sees 20% rise next year in North American revenues, which includes “solid pricing gains”. This would imply Halliburton expects US E&P capex to be ~10% higher next year; not a […]

Mega-theme: the backlash against the nonsense elements of ESG Mega-theme: LNG Friday, so here’s a longer joke (?): Conspiracy theory: The UK climate protest group Insulate Britain are so completely bone-headed and infuriatingly disruptive (blocking the key London ring road, M25), that I can only assume they are a British Government/MI6 counter-environment group that is working to increase public opposition to the environmental movement in the sensitive run up to COP26 on 1st November in […]

The class system in the USA is: never been to Disney; been to Disney once; goes to Disney annually. Why did Chewbacca crash the Millennium Falcon when he first piloted it? He made a Wookiee mistake. Besides watermelon, there should be windmelon, firemelon, and earthmelon: the four elemelons We had Kathleen Kelley on Happy Hour last night; formerly senior oil market advisor to Saudi Oil Minister Khalid Al-Falih. He is now Minister for Investment of […]

The headlines from yesterday’s OPEC meeting were “oil jumps to its highest level since 2014”. We finally made it back, and goodness me, it was a long road. Of course, the WTI price we have attained today with a super-bullish backdrop is completely different from what we faced in October/November 2014. At the time, we had peaked at $107/bbl in mid-2014, after a sustained period 2010-2014 when oil traded in a range with $80/bbl as […]

Jolly Sunday to you, Global energy crisis: Having written at length about this eight days ago in the note “Germany & UK vs the USA”, all week I have been reading about the global energy crisis led by the UK and Germany. Everyone makes the same points, last year cold global winter leading to low natgas storage, lack of wind in Europe, nuclear shutdowns, Asia squeeze, Russia squeeze etc. The one I talked about in […]

Certain cities, like New York, London, and Paris, are an experience, like being in a movie, so strong is their identity. The same goes for San Francisco, the very name a romantic invocation of California and the Pacific, Gold Rush. The beauty of the Bay, the Golden Gate Bridge. Beautiful physically, and host to massive tech companies such as Uber and Twitter, with huge property prices, there are some major problems, the greatest of which, […]

Greetings from London, You live in the UK and have avoided death by COVID? FT: In the UK, 4m households were unable to afford to adequately heat their homes even before the latest energy price crisis. Some 10,000 deaths a year are linked to living in a cold home, according to the charity National Energy Action. If that represents around 100 deaths per day over the average of four winter months, high energy prices are […]

Welcome to mid-August, I am taking it easy for a couple of weeks. Good week ahead for fishing offshore Ixtapa on the Pacific. Really nothing on the calendar next week for oil analysts unless we stretch to retail such as Walmart, Home Depot, and Target, all reporting. Roblox is an interesting company. A call last week from the White House for OPEC+ to produce more oil and for the FTC to investigate high pump prices […]