Truist expects Q1 E&P earnings to decline sequentially
05/04/2024 16:29
** Truist Securities says most exploration and production
(E&P) companies are likely to post sequentially lower quarterly
earnings/free cash flow in Q1
** "We anticipate only a few notable 1Q24 impacts such as
materially weak Waha and other regional natural gas prices,
January storms and occasional lower OFS costs" - brokerage
** Most E&Ps have ample near-term inventory and continue to
operate in virtually the same areas as the prior year, likely
resulting in minimal change to well productivity, says Truist
** "Based on YTD results, valuations and our expectations
into Q1 earnings season, we favor lower cost/higher shareholder
return E&Ps and a few with more torque such as Devon Energy
DVN.N , Marathon Oil MRO.N , Permian Resources PR.N ,
Chesapeake Energy CHK.O , Gulfport Energy GPOR.N and Vital
Energy VTLE.N , among others"
** Truist expects natgas companies to keep their output cuts
in place for now, but are gearing up to increase production back
to previous levels starting as soon as mid-year, unless there is
another leg down in gas pricing
Following are some PT changes made by Truist
Company New PT Old PT
ConocoPhillips $170 $173
COP.N
Chevron Corp $156 $168
CVX.N
Exxon Mobil Corp $146 $140
XOM.N
Chord Energy Corp $224 $229
CHRD.O
APA Corp APA.O $53 $59
Devon Energy Corp $66 $69
DVN.N
EOG Resources $163 $165
EOG.N
Civitas Resources $103 $110
Inc CIVI.N
Diamondback Energy $248 $250
Inc FANG.O
Pioneer Natural $278 $238
Resources PXD.N
Chesapeake Energy $112 $119
Corp CHK.O
(Reporting by Roshia Sabu in Bengaluru)
((Roshia.Sabu@thomsonreuters.com))