Midstream

The mood on Wall Street is suddenly, that the market will have a traditional post-Midterm bull run into Christmas. Buy them all. There might be some threat from the major turn in the Chinese market, sucking money back into China, and of course the FTX Crypto collapse is widely reported to involve a $30bn personal net worth loss for the now-notorious Sam Bankman Fried, and an $8bn black hole. Will that negatively affect markets? Well […]

Week ahead: Fed decision and plenty of earnings. Last week was a big one for markets, to say the least. Mega-cap tech bombing the tape. Worked out great for the oils and energy. A client said my chart of oils’ share of market earnings are too low: I have the group at 5% of the S&P500, but 10% of the earnings of the market, he is getting energy earnings at 15% of the market, which […]

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 […]

What can you do but write an earnings note during earnings? Well, we put out a theme note yesterday on East Med, which had good reviews, but question marks over the materiality to the big winner, Chevron. As the oil space, and its respective components, have settled into a sensible valuation structure and lack of differentiation between themes, the quest is on to look at Kosmos or offshore drillers for some excitement. And we will […]

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 […]

This evening! Premium Event! Steve Levine on Happy Hour tonight at 5pm ET re: batteries and electric vehicles, he is a world expert. Biography was emailed to you yesterday, impressive. Steve is now Editor of The Electric, a new, exclusive premium publication at The Information on batteries and EVs. Steve Levine 5pm Thursday 29th Sept: https://us02web.zoom.us/meeting/register/tZwtduuvrDMqEta4M3eKkusntGrE1nVV2HoK ~ Watching the NASDAQ below its 200 weekly moving average for the first time in 13 years “The West” […]

With markets in flames like something out of a Naked Gun movie, Central Bankers the inept cops, rioting traders burning and looting, we continue our post Labor Day theme of advising on fire prevention and avoiding arrest. So: it is sadly time for another negative earnings revision cycle.  We rolled up over 60 US-based energy companies covering upstream, midstream, downstream, integrateds, and oilfield service to see get the booking mugshot for the group. After chasing […]

Trading call: all the world is expecting a market bounce today, quite possibly violent this week, as the Fear/Greed index gets into “Extreme Fear” Territory. We see this as a short term bounce, and are waiting until we are nearer towards full winter before looking for the big bull call on oils into 2023. Weather in Brooklyn: chilling in line with winter starting December 5th, our traditional date for first snow in NYC; key question […]

We mourn the passing of Steve Chazen on 23rd September, he will be remembered as a legend. It was a privilege to have known him. Rest in Peace. We wrote the History of Oxy in December 2021, which includes the almost 30 year impact of Steven Chazen (joined in 1994, died as Chairman 2022). ~ Bill Bishop at Sinocism: For those who have not heard the rumors, Xi [Jinping, China President] has been supposedly removed […]

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 […]

I asked a major activist investor if I should zip over to Denver this week for the Enercom conference, (starts tomorrow). It’s a staple of the August energy conference diet, which is not a rich diet. Enercom, you pay to attend and a plethora of smaller oil & gas exploration and production companies make presentations with meet & greet. I’ve been once and a client told me as I headed there, the first time he […]

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. […]

This note outlines the mega-themes that are emerging mid-way through oils’ reporting season. We listened to a lot of calls, read A LOT of transcripts, and distill it here, for your Saturday afternoon reading by the pool on your yacht. Last evening I reflected that this weekend I was as likely to bit hit by a massive piece of falling Chinese space debris, as to win the mega-millions and get my own yacht with pool. […]

Sincere thanks to research partner Greg Bordelon, who has been firing company reports at me while I stumble across Mexico in the quest to Morelia. Sorry for the invconvience, but if you would just request the company-specific notes, that would save me doing a ton of cut-and-paste into what would be a monster drone of a note. So email me and I will forward, on these companies: Key points: will we get restructuring at Baker […]

Greetings fellow earthlings, (Dow Jones WSJ 7/17/22) — Investors hoping a strong start to earnings season would jolt the stock market from its slump haven’t gotten much satisfaction. Early reports from U.S. companies have refocused attention on some of the biggest challenges facing businesses, from the threat of an economic slowdown to the pressure that rising costs are putting on corporate profits. JPMorgan Chase, Delta Air Lines and industrial supplier Fastenal are among those last […]

Good Day! You only get so many summers in life – a beautiful Sunday in mid-July, we should be at the beach or pondering the Wimbledon final. Hopefully you are on a yacht or at a swim-up bar as you read this. Here in Brooklyn Heights/Brooklyn Bridge Park they have recreated The Hill at Wimbledon with a big screen to watch tennis. Packed today. Tourists are returning en masse to New York. Week past: the […]

Back in Brooklyn, Happy July 4th weekend, insert my annual joke about my not recognising US independence, or Make America Great Britain Again. Harry and Meghan’s second kid is eligible to be a female US President, being born in California. Based on the recent candidates, not just the winning ones but the primaries, just about anybody will do better than the current political class. Enough, let’s take a quick look at the first half. As […]

Briefly noted: Gazprom shares plummet -25% as shareholders reject record dividend plan Uniper, largest German buyer of Russian gas, shares plummet -18% as it says it is receiving just 40% of volumes ordered from Gazprom After two weeks in the dark, with no weekly oil data published, the US Department of Energy released the backlog yesterday. The DOE was keen to stress the “systems outage” was not a hack. Better not be, DOE manages emergency […]

Greetings from Hyde Park, We are back in London, Paris was controversial; Patricia considers it the greatest most wonderful place on earth, I get into arguments with Parisians, Selloff dynamics Hess reminder Phillips 66 Comments Morocco? Algeria It’s only rock ‘n’ and I’m 80 On the selloff: To me, the charts are not broken, but we nibbled 5% of the S&P500, then collapsed back to just over 4.1%. It is actually barely visible on the […]

How did we get murdered? Murdered? CHK took out 3.5% of their share count in just over a month.  Why am I in Paris, writing from St Germain des Pres? Where did it all go wrong? George Best used to tell the story of winning in a casino, while dating Miss World, and lying in a hotel room with her, empty champagne bottles spread across the room. The service guy entered, looked at the scene, […]

June, A beautiful day here in Brooklyn Heights, I wish you a wonderful Sunday. I always maintain that if you ignored the media, you would think it’s a wonderful world. And it is! That said, I am enjoying the mass media coverage of the Jubilee. BREAKING NEWS: QUEEN WAVES FROM BALCONY. Headline on my screen here. And we are kicking ourselves for not being in London, given my mother lives right on Hyde Park, in […]

We hosted Kaes Van’t Hof on Thursday’s Strategy Session. He is President and CFO of Diamondback Energy, a $24bn market cap/$30bn enterprise value pure play Permian US oil & gas exploration & production (E&P) company headquartered in Midland, Texas. Kaes is impressive; client feedback on his chat was strong. A young man, 36 years old, a former tennis pro out of California/USC with Dutch heritage (he and his father Robert became the first father and […]

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 […]

Good looking results beat from Valero setting up the “$5 in Q2” call we made over the past week – CEO is Joe Gorder Valero may turn oils performance that was undermined by oil service results last week, Halliburton leading the oil tape lower; we have had a brutal week since my “Mega-bear call: Oils to 10% of S&P500 note”. Sorry about that. ARCH coal announces an $8 dividend up from 25c. Watch Peabody and […]

Quick read today as you got a longer note yesterday on LNG, and I am running late. Just pictures today, and Betsey asked to be on the cover of the Sunday Sankey so it’s a presentation. All the fun favourite charts. Key slides: next week’s earnings highlights starting with Valero. Relative performance, oils performance, high free cashflow yields, and a cash return chart that will be updated on a rolling basis through earnings. Earnings calendar […]

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 […]

Well, that was quite the Q1 2022! But we got it in the books. I think the low point of Q1 for me was the evening of Thursday 3rd March, shortly after the 24th February Russia-Ukraine invasion, when the largest nuclear plant in Europe, Zaporizhzhia, appeared to be under direct attack and burning, right as I had a one-hour briefing with the State Dept, and my contact told me that surviving a nuclear attack is […]

This week, a three page thematic overview, followed by supporting charts. First the text, then the charts. ~ Noted refinery explosion last evening, no deaths reported, at ExxonMobil’s small (“only” 60kb/d) Billings Montana niche refinery that is important for local balances. Would drive margins higher for Midcon players such as HollyFrontier, Coffeyville, Delek, and West Coast PBF, and might accelerate ExxonMobil’s long standing attempts to sell the plant (price always said to be too high). […]

Key messages from Strategy Session with Kathleen Kelley: Oil supply crisis – you ain’t seen nothing yet. The oil market is trading very physically right now, making price discovery more volatile. Watch for distillate markets, which are pricing like crazy, with particular volatility (upside) likely next Friday on expiry – we can see (Sankey says) $200/bbl on expiry of the April contract 31st March, the same day as OPEC is expected to disappoint. Kathleen boldly […]

Strategy Session this week 2/24, 5PM EST – Arjun Murti, Warburg Pincus, ConocoPhillips board member.  As lead oil analyst and then head of research for Goldman Sachs, Arjun made the greatest oil call in the history of the sellside, predicting $100/bbl oil in the early 2000s at a time when oil traded around $25/bbl and had never traded above $40/bbl. He was right for the right reasons. Now publishing a Substack “Superspiked”, Arjun is one of […]

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, […]

We have a big Renewable Diesel note coming later today, so in recognition of your Sunday time, just a couple of points on next week. Valero management are in New York City Monday/Tuesday. See what we are doing here? Our Renewable Diesel note is not published tonight by happy accident, it is a cunning plan. One Valero event is a Mark Mills presentation, presumably he of the Manhattan Institute and steely-eyed critic of the energy […]

Well, I’m in one of those mindsets where every headline I read my reaction is “Bullish oil.” Iraq Oil report carries a much higher oil production number for Iraq than other sources. My reaction: “Bullish.” Libya struggles, my reaction: “Bullish.” These two elements are theoretically in opposition, but on the one hand, variable Libya performance is ongoing, on the other, the lack of spare capacity in oil markets is clearly driving prices and if Iraq […]

Yesterday I took on re-modelling the oil market according to the new world order: OPEC+. But I also spoke to a top hedge fund portfolio manager, US mega-player, who is based in Singapore for a couple of months. He made the following points: Strong Singapore economy with staff shortages – he waited an hour for a coffee the other day China cutting back on energy intensity. Brain drain from Hong Kong. Massive capex cycle starting […]

I got up thinking about a quick look at Russia for the Morning Note; ALMATY, Jan 6 (Reuters) – Fresh violence erupted in Kazakhstan’s main city on Thursday after Russia rushed in paratroopers to put down a countrywide uprising in one of Moscow’s closest former Soviet allies. Police in the main city Almaty said they had killed dozens of rioters overnight into the early hours of Thursday morning. The authorities said at least 18 members […]

Happy New Year! Dan Loeb was complaining on Twitter that we hardly got any time off here: “Even prize fighters get 6 months off between fights, NFL players a week. Only 2 days off between years makes me want to join a union”. He was also welcoming New York’s new mayor; I am completely with Dan on both these matters. By the same token it feels as if neither of us will be joining Gettr.com […]

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 […]

Not talking about COVID, just to say I am feeling 100% fine. This Omicron will hopefully be the largest and fast mass vaccination programme in history, whether by God or Government. Nice chart this morning from Greg Wachsteter, who kindly said I could publish. No more comment on COVID, I think the conclusion here is pretty obvious; this chart is therefore bullish S&P Energy. Sankey-Laffer curves. The presentation attached today, made me think what a […]

It was a long trip to Texas, and it is good to be back in Brooklyn; this note is a short reminder to myself where markets are, having been running around. For example my time on Wall Street this past week, was Wall Street, Midland. What a comeback for oil last week, since the brutal air drop after Thanksgiving. We need to establish a level here, most would consider that the oil equity group is […]

Presentation today, and commentary below: Thursday evening annoucement: major sellside meeting by ExxonMobil: “updates to their company plan” on Wednesday December 1st. Sellside invited. Virtual. Big deal for ExxonMobil. We had pondered how ExxonMobil would manage their annual capex announcement, due in December, vs their traditional strategy update due next March. We pondered if plans would be ready in time for a December update, given the scale of board and management change that has occurred […]

Good day, Pretty mixed, at best, Q4 so far for oil & gas and “old energy”; but thrilled to see our new energy plays,  Li-Cycle and Embark trucks, catching a bid. Oil & Gas are clinging on to our 2021 market leadership. More of that in the attached presentation. Also in the ppt, I ran a whole load of valuation tables, and performance tables. Beautiful day here, although darkness has fallen as I am late […]

Ezra’s first quarter as EOG CEO and he lofts it out of the park – massive increase in regular dividend, big special, buyback, he is in NYC next week, take a victory lap Pioneer wanes yesterday after weak buyback guidance Apache on fire We like Denbury on CO2 negative oil, and encourage Oxy carbon ventures Sunrun – we expected either a crashing miss or wild beat and massive stock reaction; we got neutral Delek beats; […]

OPEC Meeting live debating: who is Brandon? Continental shareholders overwhelmingly love the $3.3bn deal for marginal acreage in a new basin Meanwhile at seller Pioneer $1bn more than the asking price for non-core acreage; $3.02 special Final natgas injection number of the week (withdrawls start next week for winter)? The Biden Administration does not seem to understand oil, and more particularly how much spare capacity there is in OPEC. Here’s a quick lesson in global […]

Bearish DOE and dodgy Q3 oil results, with a Shell miss and disaster at EQT, not helping the sector Horrendous results from EQT as expected – increases quarterly loss from 2020 Q3, to $1.98bn? Abysmal… AR re-iterating the client bull’s $35/share target Shell miss might mean bad news for XOM tomorrow, but results are irrelevant: a Shell rant Note Big Oil CEOs in DC today for a roast. One suggestion to the executives: if they […]

In Iran, everyone is terrified of spiders, but apparently in Iraq no phobia. The bible says “he who lies with a man as with a woman must be stoned” (Leviticus 20:13). Fortunately, both are legal in Canada. I once met an Olympic athlete. I asked him – Are you a pole vaulter? He replied – No, I’m German, but how did you know my name is Walter? We met former Federal Energy Regulatory Commission head […]

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 […]

Key points: CHK new CEO EQT issues stock & hedging status Enbridge Line 3 starts tomorrow delivering oil, good for Canadian oils Emissions intensity of global oil producers Quote of the day: “I just know the the more control there is, the less growth there is. The great lesson of the twentieth century is that central planning doesn’t work” – Rick Warren (Drucker-Warren Dialogue, 2003) after @buckquivas on Twitter Chesapeake raises Domenic “Nick” Dell’Osso Jr […]

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 […]