巴克莱-美股-石油与天然气行业-石油天然气勘探与产品：资本支出的削减计入了哪些因素？-2019.2.7-28页.pdf

Equity Research 7 February 2019 CORE 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.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 23.E&P Topic Du Jour Make or Break Time for E&Ps;Which Capex Cuts Are Priced in?A Fundamental Look Whats On Our Minds:We have Q4 earnings,2019 outlooks,and positive feedback loops on our minds.Capital discipline continues to dominate the E&P narrative and is a key theme for the Q4 earnings season wherein companies will initiate or update 2019 prodn/capex guidance.Capex budget reductions are the proxy for discipline and WPXs 2019 updated outlook is a good case study since it is a high-quality name with a more balanced debate between prodn growth vs.FCF.On Monday WPX cut 2019 capex by 23%(midpt)to a level that gets closer to within CF at$50 WTI while growing prodn by over 20%yoy,whereas the prior guide would have resulted in a wide outspend but with more prodn momentum.WPXs 5%outperformance vs.the XOP since the capex update sends a strong positive feedback loop to investors and E&Ps.In the near-term,the questions are what other E&Ps will reduce 2019 capex vs.prior expectations and is it already priced in?and are capex reductions enough to convince investors that E&P capital discipline will translate to better sector performance?.What We Did:See the next paragraph for the list of E&Ps that we anticipate will reduce 2019 capex.To determine if the capex cuts are priced in we looked at YTD stock price performance(especially given outperformance by perceived lower quality names),CF sensitivity to oil prices(CFO and EBITDAX margins),short interest,and%oil hedged.Whats the Conclusion?For Large Caps we anticipate that APA,DVN,and NBL will reduce 2019 capex vs.prior guidance,and XEC/EOG capex will be meaningfully lower than Street Consensus(although more in line with buy side expectations;see within for a sentiment check-in).YTD stock outperformance for APA,DVN,NBL,and XEC,the recent crude rally,and the perceived beta rally make it difficult to answer if the cuts are already priced in.Based on fundamental CF sensitivity,APA should have sharply outperformed in January,as wells as DVN/XEC but to a lesser extent.This suggests that little is priced in for capex cuts.However for better or for worse,positioning now has an outsized affect on stock performance and our sense is that the dedicated energy community is already expecting 2019 capex cuts from these names,which provides meaningful offset.For SMID Caps,CDEV has already capitulated from adding rigs and SM already guided capex down yoy.Seeing sticky and material 2019 capex reductions to increase FCF yield at$50 WTI and reasonable prodn declines are clear positives for the E&P sector,but is this enough to attract new money?Since most E&Ps have triangulated around$50 WTI as the planning deck and are keen on capital discipline,earnings call commentary on late 2019 activity additions and cost assumptions could make or break E&P sentiment as recent commentary on 2019 well cost deflation(EOG,CLR,COP,WPX,SM)could prove too aggressive(resulting in upward capex revisions)and/or facilitate reinvestment of CF to the drill-bit instead of into return of capital.INDUSTRY UPDATE North America Oil&Gas:E&P POSITIVE Unchanged For a full list of our ratings,price target and earnings changes in this report,please see table on page 2.North America Oil&Gas:E&P Jeanine Wai+1 212-526-3557 Jeanine.W BCI,US William Thompson+1 212 526 8641 BCI,US Eli Bauman,CFA+1 212 526 6972 BCI,US Kane Chen+1 212 526 6180 BCI,US 每日免费获取报告1、每日微信群内分享7+最新重磅报告；2、每日分享当日华尔街日报、金融时报；3、每周分享经济学人4、行研报告均为公开版，权利归原作者所有，起点财经仅分发做内部学习。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。Barclays|E&P Topic Du Jour 7 February 2019 2 Summary of our Ratings,Price Targets and Earnings Changes in this Report(all changes are shown in bold)Company Rating Price Price Target EPS FY1(E)EPS FY2(E)Old New 06-Feb-19 Old New%Chg Old New%Chg Old New%Chg North America Oil&Gas:E&P Pos Pos Apache Corporation(APA)UW UW 31.85 29.00 29.00-1.21 1.21-0.71-0.73-3 Cimarex Energy(XEC)EW EW 74.77 81.00 81.00-7.26 7.37 2 5.76 5.69-1 Concho Resources Inc.(CXO)OW OW 117.27 162.00 162.00-4.94 4.95 0 5.02 4.93-2 Devon Energy Corporation(DVN)EW EW 26.78 33.00 31.00-6 2.14 2.14-1.16 1.21 4 EOG Resources,Inc.(EOG)OW OW 96.18 138.00 138.00-5.39 5.48 2 2.91 2.92 0 Marathon Oil Corporation(MRO)OW OW 15.91 23.00 23.00-0.65 0.67 3-0.07-0.10-43 Noble Energy,Inc.(NBL)UW UW 22.37 27.00 27.00-0.89 0.92 3 0.06 0.05-17 Parsley Energy(PE)OW OW 18.37 38.00 34.00-11 1.52 1.56 3 2.08 2.09 0 Source:Barclays Research.Share prices and target prices are shown in the primary listing currency and EPS estimates are shown in the reporting currency.FY1(E):Current fiscal year estimates by Barclays Research.FY2(E):Next fiscal year estimates by Barclays Research.Stock Rating:OW:Overweight;EW:Equal Weight;UW:Underweight;RS:Rating Suspended Industry View:Pos:Positive;Neu:Neutral;Neg:Negative Barclays|E&P Topic Du Jour 7 February 2019 3 Company-specific Thoughts Capex Budget Reductions Are the Near-term Proxy for Capital Discipline Capital discipline continues to dominate the E&P narrative and is a key theme for the Q4 earnings season wherein companies will initiate or update 2019 prodn/capex guidance.Capex budget reductions are the near-term proxy for discipline and WPXs 2019 updated outlook is a good case study since it is a high-quality name with a more balanced debate between prodn growth vs.FCF.On Monday WPX cut 2019 capex by 23%(midpt)to a level that gets closer to within CF at$50 WTI while growing prodn by over 20%yoy,whereas the prior guide would have resulted in a wide outspend but with more prodn momentum.WPXs 5%outperformance vs.the XOP since the release sends a strong positive feedback loop to investors and E&Ps.See our WPX Energy:Threading the Needle and WPX:Forcing Itself into the Conversation with its Larger Cap Peers(2/4/2018)for details.For Large Caps we anticipate that APA,DVN,and NBL will reduce 2019 capex vs.prior guidance,and XEC/EOG capex will be meaningfully lower than Street Consensus(although more in line with buy side expectations;see within for our sentiment check-in).For SMID Caps,CDEV has already capitulated from adding rigs and SM already guided capex down yoy.While the near-term focus is on 2019 production/capex with Q418 earnings upon us,we think 2020 oil production is primed to become a larger part of the conversation.If E&Ps remain disciplined in 2019 and choose to continue that model in 2020,2020 oil production could be lower than expected.At this point,it may evolve to a whats good for the macro is bad for the micro situation.However,if attractive FCF yield accompanies lower oil production,E&Ps are more likely to get a pass on missing estimates than previously.APA.During Q318 earnings,APA provided 2019 production/capex guidance assuming commodity prices in-line with current strip,which at that time was$65 WTI.Mgmt.forecasted upstream capital investment of$3.0bn,adjusted production to the high end of the 410-440 MBOE/d guidance range(15%growth in the US and 10%growth overall),positive free cash flow including the dividend,and continued return of capital to shareholders.Given mgmt.s commitment to capital discipline and at least cash flow neutrality in 2019,we anticipate that APA will meaningfully lower 2019 capex in order to be within cash flow at$50 WTI,which is positive from a messaging perspective.We think a steep capex reduction is broadly expected by investors since the original guidance was aligned with$65 WTI.Thus,it likely is a matter of how much capex does APA need to eliminate and from where,and what is the corresponding impact on production in both 2019 and in 2020.We forecast$2.2bn of upstream capex in 2019 assuming 3%yoy cost inflation on an apples-to-apples basis vs.APAs current$3.0bn estimate.We model$1,600mm of US capex and$605mm of international capex,which results in a 2019 outspend of$175mm at$50 WTI/$58 Brent(excluding leasehold spend).If there is downside risk to our capex estimate,our guess is that it is on the international side(North Sea,Egypt).Our 2019 adjusted total production of 410 MBOE/d is 4%below the midpoint of the current guidance range of 410-440 MBOE/d.Our 2020 unadjusted total production estimate is 471 or 13%below Street Consensus.See Fig.8 for Barclays vs.Street Consensus estimates.DVN.Alongside Q318 earnings DVN released a preliminary 2019 capex budget of$2.4-2.7bn and 15-19%oil growth for the retained US assets,which positions DVN for FCF generation.Also,at$65 WTI,$3.00 Henry Hub and then current WCS strip pricing,mgmt.forecasts a cumulative$6-8bn in“excess cash inflow”(defined as FCF+divestiture proceeds)in 2017-2020,including$5bn of excess cash inflow by YE18.Barclays|E&P Topic Du Jour 7 February 2019 4 Given mgmt.s commitment to generating FCF at a more moderate price deck of$50 WTI,we anticipate that DVN will reduce the 2019 capex range through capex cuts in Canada and the STACK,which we think is in line with broader investor expectations.With the strength of the Delaware program and higher margin operations in the Rockies and Eagle Ford,we think the capex reduction will be neutral to positive with investors.We forecast that DVN will spend$2.3bn in total capex this year,which results in$90mm of FCF at$50 WTI,$3.00 Henry Hub,and strip WCS differential pricing of($16/bbl).See Fig.8 for Barclays vs.Street Consensus estimates.NBL.In February 2018,NBLs 2018-2020 outlook called for$2.9bn of capex(excluding NBLX capex)based on$50 WTI.We anticipate that mgmt.will update the 2019-2020 outlook alongside Q418 earnings.NBL originally anticipated that it would be around CF neutral/slightly FCF positive in 2019 at$50 WTI($2.8bn in operating cash flow vs.$2.9bn in capex excluding NBLX).However,we forecast that NBL will have a wide outspend due to several events,including higher than expected cost inflation in 2018,capex reallocation within the US onshore 2018 and completions timing in the Permian in 2019.In order to narrow the outspend on NBLs$50 WTI planning price deck,we model$2.7bn of capex(excluding NBLX capex)in 2019 vs.NBLs original$2.9bn guide.We anticipate that Permian production will be back-half loaded due to timing of the start-up of the EPIC pipeline(Q319)and potentially a slower start to the year in completions.In addition,we no longer model flat Eagle Ford yoy as we think mgmt.is likely to prioritize capex in its two US onshore growth assets(Permian and DJ Basins).On a consolidated basis,our 2019 activity forecast still results in NBL outspending discretionary cash flow by$670mm at$50 WTI,although we expect the cash flow neutrality in 2020(again,based on$50 flat WTI).See Fig.8 for Barclays vs.Street Consensus estimates.CLR.CLR will release the 2019 production/capex outlook after market close on February 13th(ahead of Q418 earnings).In February 2018 mgmt.guided 2019 production growth of 15-20%on a capex budget of$2.5-2.8bn.While mgmt.did not explicitly indicate what crude price the 2019 guide was based on,WTI strip pricing at the time of the release was$55.Thus,based on strip pricing and the$60 WTI 2018 planning price deck,our sense is that the 2019 outlook was underpinned by$55-60 WTI.Since current 2019 WTI strip pricing is$55 and given recent volatility in crude prices,we do not anticipate that CLRs 2019 budget will be meaningfully different than the current$2.5-2.8bn guidance,although we think the midpoint of finalized budget is biased to the upper half of the range.CDEV.In December,CDEV walked back its plans set in early November to add 2.5 rigs in 2019(up from 7 in 2018)and retrenched from its long-held 65MBbl/d 2020 oil production target.CDEV had previously guided to reach CF neutrality during 2020 and positive FCF for full-year 2021,albeit at$75/Bbl WTI.CDEV has no protection from oil price hedges and is keen on not exceeding 25%net debt/cap.Assuming some cost deflation,CDEV may be able stay under its net debt/cap governor at strip pricing with 7 rigs,equating to$1bn capex,but DrillingInfo shows the company currently operating at only 6 rigs.Assuming 6 rigs,2019 production is still over 20%y/y but 2020 production falls to low double digits and there is still a sizeable outspend eating into$630mm of pro forma liquidity.CDEV plans to provide updated guidance on 2019 production,capex and unit costs during 4Q18 earnings later this month.Barclays|E&P Topic Du Jour 7 February 2019 5 FIGURE 1 2019 Capex and Production Outlook Source:Barclays Research,Company data.Sentiment Check-in on Q418 Earnings Although Q418 earnings is typically an information-packed quarter and this year we think it is a pivot quarter for the E&P capital discipline narrative,overall our takeaway from recent marketing meetings is that E&P conviction is lower than in recent quarters.See below for our views on the upcoming quarters vs.our take on where sentiment is.As always,we acknowledge that sentiment can change quickly and is a function of the dataset.FIGURE 2 Sentiment Check in on 4Q18 Earnings:Large Caps Source:Barclays Research Capex($bn)ProductionOil ProductionWTIHenry HubAPA$3 410-440 Mboe/d$65*APC*$4.3-$4.7712-740 Mboe/d410-435 Mbo/d$60CDEV$75CLR$2.5-$2.815%-20%$55*$2.5*CPECXO$3.4-$3.612%-16%16%-20%$55-$60DVN$2.4-$2.715%-19%for retained assets$50/$65*$3.00EOG$50*FANG$2.7-$3.1275-290 Mboe/d189.75-200.1 Mbo/dJAGMRO$50*NBL$2.90 400 MBOE/d25%CAGR through 2020$50$3.00PE$1.35-$1.55124-134 Mboe/d80-85 MBo/d$50PXD20%CAGR through 2026SM$1.11$55WPX$1.1-$1.275149-161 Mboe/d94-101 Mboe/d$50XEC$50-$55*Estimate per Barclays*Restricted on APC*Original 2017-2020 plan based on$50 WTI;updated 2017-2020 estimates based on$65 WTI per the Q318 Operations Report.Price Assumptions*2019 Capex/Production OutlookBarclaysOur Take on SentimentAPANegativeNeutral/Negative(capex cut expected,concerns on Altus funding)CLRPositiveMixedCXONeutralNeutral/Negative(pricing concerns)DVNNeutralNeutral/Positive(capex cut expected,catch-up trade given Canada/STACK overhangs removed,lower Meramec type curve expected)EOGPositiveNegative(continuation of degrading oil capital efficiency bear argument)FANGNeutralMixedMROPositivePositiveNBLNegativeNeutral/Negative(capex cut expected,potentially strong Q418 oil production,concerns on updated 2020 being weaker than expected)PENeutralNeutral/Negative(Dec pre-release,2019 execution and spacing concerns)PXDPositivePositiveXECNeutralMixed(messy 2019 guide given REN acquisition,questions on multi-year guide,positive messaging on FCF)Barclays|E&P Topic Du Jour 7 February 2019 6 What is Priced In?A Look at Fundamental Metrics A Tough Question to Answer These Days For Large Caps we anticipate that APA,DVN,a