巴克莱-美股-石油服务与设备行业-上游支出调查：全球支出踩刹车增长放缓-2019.9.3-22页.pdf

Equity Research 3 September 2019 FOCUS Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered/qualified as research analysts with FINRA.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 17.Restricted-Internal Upstream Spending Survey Update Global Spending Taps the Brakes,Growth Slows to+3%in 19;Expect More of the Same in 20 Our mid-year survey of global upstream spending across more than 175 companies shows growth slowing to 3%in 2019,a downward revision from+8%in our January spending report.North American spending was revised slightly lower(-2%)as Majors spending is largely offsetting lower E&P budgets(unchanged since March),however,we note 2H spending will be 15%below 1H,a trend we expect to continue in 2020.Surprisingly,the biggest change was IOCs underspending intl budgets and a few notable NOC reductions,trimming overall intl spending to+5%this year(vs.+8%previously).Offshore spending is a bright spot,now down only 2%this year(vs.-7%previously),building momentum into 2020 for potentially the first increase in five years.We dont expect to hear many budget announcements during the 33rd Barclays CEO Energy-Power Conference in New York this week,but early indications suggest much of the same for 2020:North America flat to down 5%(private operators being the wildcard);intl up mid-single digits driven by Middle East land activity.North America spending to decline 2%in 2019(virtually unchanged from our March survey but lower than our+9%estimate in January).E&Ps set full year budgets low this year(and are sticking to them for the most part)with spending expected to slow 15%in 2H19 vs.1H19 levels,while the Majors increasingly underpin growth in the Permian.Spending next year is an unknown at this point(none have provided 2020 guidance),but early indications are for overall budgets to be flat to down 5%in 2020.Intl spending to increase 5%in 2019(revised down from our+8%estimate in January).The downward revision reflects lower-than-expected intl spending by IOCs and some significant NOC 19 capex revisions(Petrobras).NOCs(65%of Intl spend)plan to increase spending by 8%this year,offsetting modest declines by the Majors.Regionally,Asia(+13%)is driving most of the growth,with Middle East(+6%)Latam(-5%),Russia(+9%),Africa(+12%)and Europe(+1%).Offshore spending to decline 2%in 2019(revised up from our-7%estimate in January).While companies dont break out offshore spend(25%of total 2019 E&P spend),we expect a 2%decline this year,though our preliminary views suggest a mid-single-digits increase in 2020 marking the first offshore spending increase since 2014.Survey says.Online survey of 75 smaller-caps show most plan to keep rig counts flat over the next 12mo;Labor and H20 treatment expected to be the two greatest areas of OFS cost inflation,pressure pumping and land rigs the greatest areas of deflation;the majority plans to keep completion programs flat in 20 if oil prices hold at current levels.INDUSTRY UPDATE North America Oilfield Services&Equipment NEUTRAL Unchanged North America Oilfield Services&Equipment J.David Anderson,CFA+1 212 526 4016 BCI,US Edward Kim+1 212 526 9920 BCI,US Derek Podhaizer+1 212 526 6368 BCI,US Robert Arancio+1 212 526 7604 BCI,US European Oil Services&Drilling Mick Pickup+44(0)20 3134 6695 Barclays,UK Barclays|Upstream Spending Survey Update 3 September 2019 2 Global Upstream Spending Revised Lower,Now+3%in 2019;Trends Point to Similar Growth Rate in 2020 Our mid-year update to the Barclays Upstream Spending Survey(see:34th Global 2019 E&P Spending Outlook:+8%as Intl Picks up the NAM Slack;Downside Risk on Lower Oil Prices.published 1/8/19)shows global upstream spending up 3%in 2019,a downward revision from our March survey of 5%growth and 8%back in January.We also note 2018 global upstream spending has been revised slightly higher to 9%(vs.+8%in both March and January updates)after reflecting actual reported figures.FIGURE 1 Barclays Upstream Spending Survey Source:Barclays Research FIGURE 2 Worldwide E&P Capital Spending by Company Type/Region,2017A-2019E Source:Barclays Research and Company Reports Note:The regional breakout assumes companies spend primarily in their home region$0$100$200$300$400$500$600$70019851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019ENorth AmericaInternationalUpstream Capital Spending($bn)2002-2008 CAGR:+18%2009-2014 CAGR:+11%2016-2019E CAGR:+6%-31%-6%-2%-18%-1%-15%-27%-27%6%9%3%-40%-20%0%20%40%19851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019ETotal yoy growth%($mm)2017A2018A2019E2017-2018%2018-2019%IOCs 31,682 40,687 46,397 28%14%US Large-E&Ps 33,208 41,214 38,470 24%(7%)US SMid-E&Ps 16,152 17,652 15,014 9%(15%)Other E&Ps 20,208 24,121 20,734 19%(14%)North America Spending$101,249$123,674$120,61422%(2%)Middle East 39,388 40,657 43,171 3%6%Latin America 32,628 30,305 28,494(7%)(6%)Russia/FSU 31,403 33,753 36,685 7%9%India,Asia&Australia 54,812 66,481 75,168 21%13%Europe 19,772 20,531 20,791 4%1%Africa 15,815 15,936 17,783 1%12%Majors/IOCs(International)53,984 50,197 49,004(7%)(2%)NAM Independents (International)3,537 4,105 4,548 16%11%Other E&Ps(International)3,266 2,792 3,060(15%)10%International Spending Total$254,605$264,757$278,7044%5%Worldwide E&P Spending:$355,855$388,431$399,3179%3%Our mid-year update to the Barclays Upstream Spending survey shows global spending up 3%in 2019;low single digit growth likely in 2020 as well.Barclays|Upstream Spending Survey Update 3 September 2019 3 North America Spending Declining 2%Overall in 2019;Preliminary 2020 Flat to Down 5%E&P spending front-end loaded,slowing 15%in 2H;full year declining 8%On balance,North America spending is expected to decline 2%y/y in 2019,virtually unchanged from our March survey as E&Ps slow in the second half of 2019 while Majors increasingly underpin growth in the Permian.Very few E&Ps raised full year 2019 budgets during 1Q and 2Q earnings,with a greater number lowering budgets(albeit most only slightly at just 1-4%at the midpoint of guidance)to show their commitment to capital discipline.To date,we have yet to hear an E&P company provide 2020 capex guidance,but early indications are for budgets to be flat to down 5%;none have suggested spending will be higher next year.On the other hand,Major oil companies led by ExxonMobil and Chevron are committed to Permian activity growth with spending at 10%above 2019 levels.The wildcard is the other operators which represent 50%of the US rig count which do not face the same capital discipline pressure as publicly traded E&Ps,but are considerably more sensitive to commodity prices.Putting it all together,our best estimate is for overall North American spending to be flat to down 5%in 2020.FIGURE 3 North America Upstream Spending by Region,2017A-2019E Source:Barclays Research,Company Reports Spending trends point to increasingly front-end loaded budgets with 2H19 spending 15%lower than in 1H19.The top 35 E&Ps have spent 54%of their full year 2019 capex budgets in 1H19,which translates into 2H activity being down 15%vs.1H levels.FIGURE 4 Mix Shift:E&Ps continue to complete wells at the expense of rigs Source:EIA,Baker Hughes Note:Rig Count based on Baker Hughes rig count data;Completions and DUCs based on EIA ($mm)2017A2018A2019E2017-2018%2018-2019%IOCs 31,682 40,687 46,397 28%14%US Large-E&Ps 33,208 41,214 38,470 24%(7%)US SMid-E&Ps 16,152 17,652 15,014 9%(15%)Other E&Ps 20,208 24,121 20,734 19%(14%)Total NAM E&P Spending:$101,249$123,674$120,61422%(2%)90100110120130140150IndexRig CountCompletionsDUCsRig count down 16%since the peak Completion efficiencies could partially explain the bifurcation(pad drilling)E&P capex has shifted from drilling to completionsCompletion activity 8%higherNorth America spend is expected to be flat this year(8%decline from E&Ps,14%growth from US IOCs)while early indications are for 2020 budgets to be flat to down 5%Barclays|Upstream Spending Survey Update 3 September 2019 4 IOCs:Majors(CVX,XOM,BP and others)are still ramping up multi-year development programs;our preliminary 2020 spending estimate is for IOCs to increase NAM spending by 5-10%.As an example,ExxonMobil announced at its analyst day in March that capital spending will increase next year to$33-35bn(note:total capex)from$30bn this year,representing a 13%increase at the midpoint,and is currently operating around 80 rigs.Current estimates indicate that the three largest IOCs in the US(XOM,CVX,COP)account for more than 10%of the US rig count.FIGURE 5 IOC Rig Count by Operator Source:RigData Note:BP completed the purchase of BHPs US onshore assets Oct 2018 Large-E&Ps:Capital gets an even greater dose of discipline,E&Ps poised to spend well within cash flow by keeping budgets flat.Large-E&Ps have given early indications of essentially flat budgets in 2020.If we assume a$55 WTI/$2.50 Henry Hub price deck,this would imply a plowback ratio(capex/discretionary CF)of 70%,taking another step down from 80%this year and 84%in 2018.FIGURE 6 Large-E&Ps 2020 y/y capex growth sensitivity table FIGURE 7 Large-E&Ps-Historical plowback ratio Source:Barclays Research Note:Large-E&Ps in table represent Barclays covered companies;plowback ratio represents D&C capex as a%of discretionary cash flow(DCF)Source:Company reports,Barclays Research 79241912543101020304050607080902020 WTI($/bbl)$50$55$602020 Gas($/MMBtu)$2.50$2.50$2.50 60%(23%)(14%)(5%)202065%(17%)(7%)3%Plowback70%(10%)0%11%Ratio75%(4%)7%19%80%2%14%27%60%70%80%90%100%110%120%130%140%150%2004200520062007200820092010201120122013201420152016201720182019E2020EPlowback Ratio(D&C Capex/DCF)Large-E&Ps84%81%69%Barclays|Upstream Spending Survey Update 3 September 2019 5 Smid-E&Ps:stuck between depleting rocks and a hard place.Smid-E&Ps are in a tough spot facing high production declines that require a high level of maintenance capex in order to keep production flat due to immature asset bases.Meanwhile,investors continue to pressure this group to spend within cash flow and return capital to shareholders.If Smid-E&P budgets remain flat in 2020,it will come at the expense of production which wont make investors happy;if they increase capex to preserve production,investor wont be happy either.Private operators are the biggest unknown,representing 50%of the rig count.Given a lack of exit opportunities for private-equity backed E&Ps,many of which are drilling to hold leases,this is the most tenuous customer base in North America.The importance of meaningful development of acreage has been substantiated in the current environment,and while lean cost structures are helpful,most private operators do not have the capital to support larger scale development that can help increase efficiencies and reduce costs.According to our survey,most private E&Ps plan to keep the rig count flat over the next 12 months,but private operators still remain the invisible hand representing the most risk to 2020 spending.FIGURE 8 US Rig Count by Operator Type Source:RigData,Barclays Research Note:This is a US Rig Count number compared to our NAM E&P Spending estimate,which we look at directionally and as representative of most of the NAM market Large-E&P26%Majors15%SMid-E&Ps9%Other E&Ps50%Barclays|Upstream Spending Survey Update 3 September 2019 6 FIGURE 9 NAM 2019 spending budgets for 15 Large-E&Ps and 20 Smid-E&Ps Source:Company Reports,Barclays Research Note:2017A and 2018A E&P capex per reported actuals;2019E E&P capex per company guidance(as of August 2019);however,E&P capex shown above may not match headline capex figures disclosed by the company as figures reflect E&P capex only(ie excludes midstream,land,corporate capex,and non-US-onshore capex)and specifically for North America(some large-E&Ps also have international operations)NAM spendNAM spend y/y growth1H19 vs.2H19 weighting($mm)Company17181918191H192H19FY19 capex guide changed during 2Q?FY capex comment1EOG Resources3,735 5,270 5,166 41%-2%52%48%No2Occidental2,081 3,418 3,200 64%-6%55%45%No3Anadarko2,960 3,875 3,770 31%-3%N/AN/AN/A4Pioneer2,475 3,040 2,900 23%-5%52%48%Yeslowered by 2%at midpoint5Apache1,556 2,415 1,800 55%-25%49%51%No6Noble Energy2,060 2,233 1,713 8%-23%54%46%Yeslowered by 4%at midpoint7Diamondback1,639 2,730 2,425 67%-11%45%55%Yeslowered by 2%at midpoint8EQT Corporation2,243 2,255 1,600 1%-29%48%52%No9Devon1,947 2,056 1,850 6%-10%51%49%Yeslowered by 2%at midpoint10Concho2,347 2,321 2,726-1%17%59%41%No11Marathon2,063 2,252 2,378 9%6%50%50%No12Chesapeake2,264 2,203 2,185-3%-1%49%51%No13Continental Resources1,720 2,400 2,200 40%-8%55%45%No14Hess1,356 1,378 1,795 2%30%43%57%Yeslowered by 3%15Encana2,762 3,367 2,762 22%-18%72%28%NoLarge-E&PsTotal33,208 41,214 38,470 24%-7%53%47%16Parsley1,050 1,510 1,228 44%-19%52%48%No17Antero Resources1,282 1,500 1,338 17%-11%51%49%No18Cimarex980 1,350 1,150 38%-15%50%51%No19WPX Energy1,048 1,328 1,113 27%-16%53%47%No20SM Energy824 1,148 923 39%-20%56%44%Yeslowered by 1%at midpoint21QEP Resources1,220 1,089 530-11%-51%57%43%Yeslowered by 6%at midpoint22PDC Energy790 985 785 25%-20%67%33%Yeslowered by 2%at midpoint23Southwestern943 887 896-6%1%60%40%Yesset cap at midpoint of prior range24Range Resources1,181 836 685-29%-18%55%45%No25Cabot757 816 810 8%-1%52%48%Yesincreased by 1%at midpoint26Extraction865 805 630-7%-22%55%45%No27Centennial624 766 675 23%-12%55%45%No28Whiting Petroleum912 832 820-9%-1%55%45%No29Gulfport1,100 695 538-37%-23%81%19%No30CNX Resources624 724 720 16%-1%N/AN/ANo31Matador Resources493 686 660 39%-4%51%49%No32Laredo Petroleum515 575 400 12%-30%65%35%No33Callon Petroleum389 546 508 40%-7%57%43%No34Denbury241 323 250 34%-23%55%45%No35Montage Resources(formerly Eclipse)314 250 358-20%43%61%39%Yeslowered by 8%at midpointSmid-E&PsTotal16,152 17,652 15,014 9%-15%56%44%GRAND TOTAL49,360 58,866 53,483 19%-9%54%46%Barclays|Upstream Spending Survey Update 3 September 2019 7 The Survey Says.During August,we received over 75 responses to our online survey,providing valuable insight into spending patterns,key assumptions,and trends in service pricing and the supply of equipment.Please see Appendix A for detailed results from the online survey.FIGURE 10 Summary Results of 2019 mid-year E&P online survey with over 75 respondents(details in Appendix)Source:Barclays Research Survey QuestionsResponse(all response and details in appendix)What oil price is your 2H19 budged based upon?(WTI)$50-55/bbl(50%of respondents);$55-60/