By SA Editor Michelle Carini :
Welcome to the latest edition of the Energy Recap. This week, we wanted to direct readers to an interesting read provided by our own Seeking Alpha Marketplace folks, an article titled "Oil: U.S. Withdraws From Iran Deal, What's Next For Domestic Production?" It's an in-depth roundtable discussion between SA editors and Laura Starks and Richard Zeits, both of whom have energy-focused Marketplace services ( Econ-Based Energy and Zeits OIL ANALYTICS , respectively). The article covers several topics, including the possible effects of the U.S. pulling out of the Iran nuclear deal, how the Permian Basin might fare going forward, and where they think oil prices are headed.
Here are a just a couple of good quotes from the discussion:
Seeking Alpha : Energy can be a potentially volatile sector, dependent on many factors, from inventory to weather to political risk. What are some of the risks facing oil and gas producers right now? How are you working to mitigate that risk?
Laura Starks: I look for companies that can execute both in price troughs as well as at current higher prices. (Clearly, higher oil prices mean higher costs for acreage, crews, drilling, supplies, and transport.) Smaller companies choose or are required to hedge their production, so they don't make a full-on long price bet. Hedges and good capital structure (not too much debt) are positives.
Investors who know to assume oil price volatility should also keep an eye on industries that benefit from low oil prices (refiners, airlines, and chemical companies), and even other non-equity asset categories like bonds or real estate.
Richard Zeits: In the immediate term, we view cost inflation and regional differentials as two big factors that need to be taken in consideration as the upcycle unfolds.
We anticipate that the market will figure out the negative impact from these factors and set our stock price expectations accordingly.
Please leave us your thoughts about the roundtable or anything else energy-related in the comments section below.
Energy Articles of Note
" Hartstreet: Massive Devon Wells Move Permian Core 24 Miles Northwest " By Michael Filloon
" Shorting Range-Bound Natural Gas " By Viking Analytics
" BP's Russian Connection; Rosneft Exposed " By Fluidsdoc
Energy Sector Bankruptcies for the Week Ended May 18, 2018
Here's a list of the most recent bankruptcy announcements in the energy sector:
- On Friday, May 18, Rex Energy ( REXX ) announced that it's filing for Chapter 11 bankruptcy.
Feel free to add anything that we might have missed in the comments section below.
U.S. Oil Rig Count
As per Baker Hughes , the number of active U.S. oil drilling rigs was unchanged this week.
Weekly Natural Gas Storage Report and Summary
Natural Gas Rig Count
As always, we encourage you to submit your own article by clicking here , if you haven't already done so.
See also Spring 2018 Snapshot Of Expected Future S&P 500 Earnings on seekingalpha.com