Q2 E&P earnings should be a blast
Will investors buy the dip or sell the news?
Exploration and production companies report their second quarter results this with most reporting beginning this week and through mid-August . With commodity prices far above last year, those companies smart enough to eschew the “hedging” nonsense that cripples the potential of some great companies like ARC Resources, the earnings and cash flows will surprise many.
Here are my rough estimates for a few of my favorite names:
Cenovus - (Q2 release July 27 before the open) production of 780,000 Boe/Day and cash flow of $3.3 billion. Expect a dividend increase.
Crescent Point (Q2 release July 27 before the open) - production of 125,000 Boe/Day and cash flow of $575 million. Expect a dividend increase.
Whitecap (Q2 release July 28 before the open) - production of 130,000 Boe/Day and cash flow of $600 million. Expect a dividend increase.
ARC - (Q2 release July 28 after the close) production of 340,000 Boe/Day and cash flow of $1.3 billion after “hedging” losses of $700 million. The company may increase dividends to distract from another “hedging” disaster. If ARC guides to lower hedges, the market will react positively.
Spartan Delta (Q2 release August 5th after the close) - production of 71,000 Boe/Day and cash flow of $225 million. Expect a higher capital program and positive guidance.
Peyto (Q2 release August 10 after the close) - production of 107,000 Boe/Day and cash flow of $225 million. Expect positive guidance.
Birchcliff (Q2 release August 10 after the close) - production of 75,000 Boe/Day and cash flow of $275 million. Expect a dividend increase and positive guidance.
All companies will have oodles of free cash flow and will report sharply lower debt. Some will act on dividends and I have noted my guesses in the bulleted points.
If these estimates are already in the market, expect to see some “selling on the news”. If not and for those that increase dividends, I think we will see some share prices rise.
Guidance should be interesting since we are already halfway through Q3 and commodity prices remain quite firm.
I post these estimates with a grain of salt. I am not clairvoyant.
> I post these estimates with a grain of salt. I am not clairvoyant.
Mate, you would never make it as a fund manager ;p
Got BTE? Any estimate?