1、 DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be awa
2、re 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.16 April 2019 Americas/United States Equity Research Oil&Gas Exploration&Production E&P Research Analyst
3、s Betty Jiang,CFA 212 325 6259 betty.jiangcredit- Chris Baker,CFA 212 325 6375 chris.bakercredit- SECTOR REVIEW 1Q19 SMID E&P Company Preview Bracing for a tough 1Q as E&Ps show capital discipline.2019 programs for SMID-Cap E&Ps saw the greatest downward revisions coming out of last quarter as compa
4、nies cut capex 15%YoY in order to better align capex with cash flow under a$50-$55/Bbl deck.However,as activity downshifts from elevated levels exiting 2018,E&Ps are faced with front-end weighted capex in 1Q(30%of FY budgets)while production,for most,is flat-to-down QoQ as a result of the slowdown i
5、n activity.We expect our SMID-Cap universe to deliver on average 1%miss on production(with only 2 beating volumes)and 3%miss on EBITDX vs.Street,but with 1Q capex 5.5%higher on average.Names we expect to have a positive setup going into the quarter include CLR and SRCI on production beats,and OAS on
6、 a cash flow beat.while we are more cautious on FANG,GPOR,CPE and XOG on production misses,and XEC,AR,and QEP on cash flow misses.Our companion preview covers sector themes and views for the entire Credit Suisse U.S.E&P universe.Can E&Ps maintain discipline?At strip prices,we now see 60%of SMID univ
7、erse cash flow neutral to positive in 2019,moving to nearly 80%in 2020.While investors remain skeptical of E&Ps newfound discipline,we believe the vast majority in our universe will reiterate a commitment to current 2019 budgets.Out of the existing outspenders,PE should be the first to reach neutral
8、ity in 3Q19 followed by SM and CPE in 4Q19 at current strip prices.That said,select E&Ps(CDEV,LPI,and QEP)have left the door open for potentially higher activity given the increase in oil prices.While any increase in activity should be accretive to 2020+multiples and NAV,it is uncertain how shares w
9、ill react given the intense investor pressure for discipline across all capswith the view that a positive reaction for one E&Ps activity increase would encourage others to follow.M&A aside,key themes to watch.1)Return of capital to shareholders:With rising oil prices and FCF projections,more SMID E&
10、Ps can also discuss timing of shareholder return,whether via buyback or dividend.On the former,investor preference is for sustainable buyback using organic FCF rather than one-time asset sale.GPOR and XOG should discuss timing of buybacks;CLR and MGY on potential timing of dividend initiation.PDCE w
11、ill also see elevated focus on use of potential midstream proceeds.2)Midstream monetization:Several Permian operators are either selling or evaluating midstream monetizations,particularly water assets;PDCE could announce its Permian midstream asset sale valued at$350-$400MM;PE is looking at a water
12、asset monetization in 2019,which could be worth$300MM assuming the same 2x return.Meanwhile,WPX,QEP,CPE have highlighted similar hidden values.3)Improved regulatory environment in the DJ:We expect DJ operators to deliver a bullish view on the recent regulatory reform bill with 11th hour amendments t
13、o SB-181 removing meaningful uncertainty from the DJ regulatory outlook.Still,positive fundamental revisions are needed to sustain outperformance,and with the exception of SRCI,we expect 2019 growth to be 2H weighted.Estimates.We revise CFPS estimates for QEP and XOG for 2019-21.16 April 2019 E&P 2
14、Table of contents Antero Resources(Neutral)5 Callon Petroleum(Outperform)6 Centennial Resources(Neutral)7 Cimarex Energy(Neutral)8 Continental Resources(Outperform)9 EQT Corp.(Outperform)10 Extraction Oil&Gas(Neutral)11 Diamondback Energy(Restricted)12 Gulfport Energy(Neutral)13 Jagged Peak Energy(N
15、eutral)14 Laredo Petroleum(Underperform)15 Magnolia Oil&Gas(Outperform)16 Oasis Petroleum(Neutral)17 Parsley Energy(Outperform)18 PDC Energy(Neutral)19 QEP Resources(Neutral)20 SM Energy(Neutral)21 SRC Energy(Neutral)22 Whiting Petroleum(Outperform)23 WPX Energy(Outperform)24 16 April 2019 E&P 3 CS
16、Estimate Summary Below we provide a summary of our estimates versus consensus for 1Q19 and FY2019-20.On the quarter,we are highlighting 3 potential beats,9 potential misses,and the balance providing net neutral updates.Figure 3 includes estimates for 1Q19 and FY19-20 for our 3 RoyaltyCos.Figure 1:SM
17、ID Cap E&P Credit Suisse Estimates vs.Consensus Source:Company data,Credit Suisse estimates,the BLOOMBERG PROFESSIONAL service*AR,EQT,and GPOR displaying Gas instead of Oil production and Total production in MMcfed instead of MBbld.1Q 2019 ComparisonTickerCSeCons.CSeCons.CSeCons.CSe vs.Cons.CSeCons.
18、CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.AR*Miss0.230.34$1.07$1.33$434$479-9.4%2,2402,2300.5%3,1753,191-0.5%$378$399-5.1%CDEVMiss0.040.050.440.47136139-2.0%39.539.8-0.9%69.468.90.7%24121014.7%CLRBeat0.560.482.001.928217765.8%190.2188.11.1%325.5324.00.5%7246836.0%CPEMiss0.140.180.420.48971
19、07-9.2%30.531.2-2.3%38.939.3-0.9%1741664.5%EQT*Neutral0.650.762.482.55686693-1.1%3,9653,9390.7%4,1894,1251.6%4804780.4%FANGRestricted1.491.453.903.99687692-0.7%174.8182.8-4.4%256.2266.4-3.8%662732-9.5%GPOR*Miss0.310.311.131.11214217-1.0%1,1841,226-3.4%1,3131,353-2.9%18315419.2%JAGMiss0.110.130.430.4
20、7100105-5.1%28.328.5-0.7%37.137.5-1.0%1671585.3%LPINeutral0.070.090.360.411061060.0%27.527.9-1.1%73.672.81.0%1501481.3%MGYNeutral0.140.150.620.68164177-7.6%32.835.0-6.2%62.160.03.6%125126-0.8%OASBeat0.100.050.690.6125823410.3%64.765.4-1.0%88.488.6-0.3%20518511.1%PDCENeutral0.450.593.113.132262240.9%
21、51.953.0-2.2%125.6126.3-0.6%25921620.2%PENeutral0.240.250.810.89290295-1.6%77.077.7-0.8%120.5121.5-0.8%384384-0.1%QEPMiss(0.11)0.010.400.54126165-23.4%56.857.0-0.5%79.979.90.1%21218414.7%SMMiss(0.26)(0.20)1.441.50203211-3.6%53.253.7-0.9%118.7120.6-1.5%3363253.5%SRCIBeat0.290.210.450.491231202.6%29.0
22、27.74.5%59.060.8-2.9%12511211.5%WLLNeutral0.170.212.462.392642611.2%84.986.0-1.3%127.4127.30.1%2121986.9%WPXNeutral0.040.040.650.65307314-2.1%96.996.90.0%153.8155.4-1.1%3663611.2%XECMiss1.181.333.373.57348369-5.4%78.779.7-1.3%249.7252.0-0.9%3633397.1%XOGMiss(0.01)0.010.830.82159163-2.1%41.843.2-3.2%
23、80.682.6-2.4%187189-1.1%Total/Average$5,751$5,846-2.8%1,1581,174-1.2%3,5133,529-0.6%$4,890$4,7175.5%1Q CFPS1Q EBITDX1Q Oil Prodn(MBoed)1Q Total Prodn(MBbld)Our View On The Quarter1Q EPS1Q Capex($MM)FY2019 ComparisonTickerCSeCons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe
24、 vs.Cons.AR*$3.60$4.42$1,525$1,749-12.8%2,2472,2420.2%3,2033,2020.0%$1,430$1,532-6.6%CDEV1.952.10612616-0.8%40.041.1-2.7%69.370.5-1.7%8598451.7%CLR8.908.413,6013,4045.8%198.6196.31.1%338.8331.92.1%2,6802,6262.0%CPE2.052.14472488-3.1%30.932.0-3.3%39.240.7-3.7%6256092.6%EQT*8.608.832,3092,333-1.0%3,86
25、93,888-0.5%4,1024,1010.0%1,9171,926-0.4%FANG19.4518.823,3803,2284.7%196.1195.40.3%284.6286.2-0.6%2,8932,933-1.4%GPOR*4.654.51854871-2.0%1,2651,2521.0%1,4001,3920.6%580584-0.8%JAG2.152.16495501-1.3%31.730.73.0%41.441.00.9%644645-0.2%LPI1.601.744604560.9%26.726.41.0%73.171.91.7%4163799.9%MGY2.902.8275
26、97215.3%35.236.0-2.2%65.663.23.7%4454283.9%OAS2.752.651,0331,0112.2%62.865.0-3.3%87.589.4-2.2%710746-4.9%PDCE13.6014.04982992-1.0%55.057.6-4.5%133.4134.3-0.7%821870-5.6%PE4.054.401,4161,424-0.6%82.882.9-0.2%130.4129.80.5%1,4731,4720.1%QEP2.302.49660725-9.0%57.456.41.8%80.078.02.5%6566402.5%SM7.657.5
27、01,0261,0022.4%58.058.00.0%129.0129.6-0.4%1,0571,063-0.5%SRCI1.851.945074884.0%27.426.91.6%62.961.32.5%4394331.4%WLL11.6010.951,2181,2031.3%88.287.80.5%130.8130.10.5%8298132.0%WPX2.952.931,3591,386-1.9%100.899.71.1%159.2159.7-0.3%1,2421,2013.4%XEC14.5515.891,5561,654-6.0%83.286.7-4.1%258.8264.9-2.3%
28、1,4581,472-1.0%XOG3.803.517356945.9%44.644.21.0%89.589.8-0.3%660751-12.0%Total/Average$24,961$24,947-0.3%1,2191,223-0.4%3,6243,6220.1%$21,836$21,969-0.2%2019 CFPS2019 EBITDX2019 Oil Prodn(MBoed)2019 Total Prodn(MBbld)2019 Capex($MM)16 April 2019 E&P 4 Figure 2:SMID Cap E&P Credit Suisse Estimates vs
29、.Consensus(continued)Source:Company data,Credit Suisse estimates,the BLOOMBERG PROFESSIONAL service*AR,EQT,and GPOR displaying Gas instead of Oil production and Total production in MMcfed instead of MBbld.Figure 3:Oil&Gas RoyaltyCo Estimates Source:Company data,Credit Suisse estimates,the BLOOMBERG
30、PROFESSIONAL service FY2020 ComparisonTickerCSeCons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.AR*$3.40$4.57$1,489$1,610-7.5%2,3912,435-1.8%3,4523,502-1.4%$1,528$1,599-4.4%CDEV2.302.80723801-9.7%44.444.9-1.1%76.076.8-1.1%868922-5.8%CLR10.0010.124,0004,038-0.9%224
31、.7222.90.8%381.3368.43.5%3,1793,0873.0%CPE2.552.70589621-5.1%35.636.7-2.8%44.050.3-12.4%6386134.1%EQT*7.757.502,1432,1280.7%4,0374,049-0.3%4,2794,2720.2%1,8121,7533.4%FANG25.9025.654,4564,2963.7%241.1229.45.1%348.3330.55.4%3,2423,2091.0%GPOR*4.655.01781886-11.8%1,2791,2641.2%1,4151,4050.7%595618-3.8
32、%JAG2.702.86612661-7.4%36.937.1-0.6%48.049.9-3.8%6826613.2%LPI1.601.824584531.2%23.423.6-1.1%67.169.4-3.3%378402-6.1%MGY3.103.068208071.6%37.838.0-0.4%71.167.25.7%4714338.7%OAS2.602.929901,109-10.7%59.867.0-10.7%85.293.8-9.2%785845-7.2%PDCE16.4017.501,1681,245-6.2%59.465.5-9.3%151.2150.70.4%877897-2
33、.2%PE5.205.651,7831,7780.3%94.995.8-1.0%151.5150.01.0%1,5311,541-0.7%QEP3.003.29829877-5.5%58.260.2-3.3%80.882.6-2.2%7827169.3%SM9.4510.071,2221,240-1.4%66.468.5-3.1%142.8142.60.1%1,0781,0453.2%SRCI2.052.37556558-0.3%28.829.6-2.6%72.069.04.4%5184876.4%WLL12.0512.221,2591,307-3.6%90.290.9-0.8%135.513
34、5.10.3%821845-2.8%WPX3.653.801,6441,751-6.1%115.0111.43.2%180.3178.21.2%1,3431,2636.3%XEC16.5018.951,7651,960-9.9%92.196.2-4.2%272.3279.7-2.7%1,5301,536-0.4%XOG4.604.228808158.1%53.748.011.7%111.0100.011.0%7356926.3%Total/Average$28,169$28,939-3.5%1,3621,366-1.1%3,9433,924-0.1%$23,392$23,1631.1%2020
35、 CFPS2020 EBITDX2020 Oil Prodn(MBoed)2020 Total Prodn(MBbld)2020 Capex($MM)1Q 2019 ComparisonTickerCSeCons.CSeCons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.FLMN$0.12N/M$0.17N/M$17.8N/M 3.04N/M 5.50N/M KRP(0.02)N/M 0.36N/M 20.3N/M 2.58N/M 10.07N/M VNOM0.060.070.480.5167.558.116.2%1
36、4.5614.460.6%20.8620.94-0.4%FY2019 ComparisonTickerCSeCons.CSeCons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.FLMN$0.49N/M$0.70N/M$74.4N/M 3.00N/M 5.47N/M KRP0.26N/M1.50N/M 79.9N/M 3.07N/M 11.39N/M VNOM0.500.642.262.30310.4281.510.3%15.4215.181.6%22.2122.140.4%FY2020 ComparisonTicke
37、rCSeCons.CSeCons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.CSeCons.CSe vs.Cons.FLMN$0.60N/M$0.85N/M$90.7N/M 3.59N/M 6.69N/M KRP0.29N/M 1.54N/M 86.0N/M 3.42N/M 12.51N/M VNOM0.150.852.673.02363.8375.7-3.2%17.5417.97-2.4%25.3025.62-1.2%2020 EPS2020 CFPS2020 EBITDX2020 Oil Prodn(MBoed)2020 Total Prodn(MBb
38、ld)2019 EPS2019 CFPS2019 EBITDX2019 Oil Prodn(MBoed)2019 Total Prodn(MBbld)1Q EPS1Q CFPS1Q EBITDX1Q Oil Prodn(MBoed)1Q Total Prodn(MBbld)16 April 2019 E&P 5 Antero Resources(Neutral)Key Considerations First quarter to report standalone upstream earnings post completion of midstream simplification.Co
39、mpared to the historical financials that consolidated midstream,go forward upstream financials will show:1)higher per-unit costs(by$0.50/Mcfe)due to removal of the AM benefit to their cost structure.AR has the highest per-unit cash cost structure vs.gas peers partly due to its liquids mix;2)higher D
40、&C capex(by$200MM,or+18%)related to water fees that were previously not shown due to intersegment elimination;3)lower proved reserve PV-10 given the YE SEC measures used consolidated operating and D&C costs.We believe their YE18 SEC PV-10 of$12.6bn would have been meaningfully lower(est 30%)using st
41、andalone costs.While theyve been providing standalone guidance and financials in 10-Q/K filings,improved go forward disclosure should enable better comparability across gas peers and Street estimates.C3+NGL realization a key focus for 1Q19 financials,though weak ethane prices could add to pricing co
42、ncern.C3+NGL realizations are the most critical driver of ARs ability to reach cash flow neutrality under the current capex outlook.AR guided to C3+NGL differential of 60-65%WTI,which reflects the benefit of Mariner East 2 start-up(enables AR to export 50%of NGL production at a$2-4/Bbl premium to Mt
43、.Belvieu benchmark),and expected improvement in in-basin pricing.However,Mt.Belvieu NGL prices have deteriorated,with C3+NGL as a%of WTI having declined from 64%in 4Q18 to 60%in 1Q19&56%on 2019 strip and AR historically received$6-$7/Bbl below benchmark.Actual 1Q19 results should provide much needed
44、 clarity around impact of exports on pricing and transportation costs for investors to gain comfort on 2019 and more importantly,2020 cash flow projections.Assuming 50%ME2 benefit for 1Q(ramped to full capacity in March),wed view 1Q C3+NGL around$29/Bbl(53%)as neutral,and$30/Bbl(55%)as positive whic
45、h would imply strong March pricing due to export uplift.With the ethane price decline YTD,we estimate AR would need to see C3+NGL realization of$37/Bbl(60%)in both 2019 and 2020 to be cash flow neutral based on our production&capex estimates.AM proceeds going towards debt reduction we see limited sc
46、oop for additional share buyback without organic FCF generation.As part of midstream simplification,AR received$297MM of cash proceeds and retains 158MM units of the new AM.While the proceeds were originally earmarked for buyback,AR used the cash to bring pro forma upstream debt to$3.53bn.Originally
47、,the$600MM buyback($470MM remaining)was supposed to be funded by the AM proceeds in 2019 plus$125MM of water earn-out in 2020.However,at the current pricing environment,proceeds from both sources are more likely to go towards debt reduction.1Q19 Miss;CSe EPS/CFPS$0.23/$1.07 vs.cons.of$0.34/$1.33 Lar
48、ge EBITDX miss vs.noisy consensus though pricing and marketing expense also would contribute to the difference.We are in-line with Street on production,reflecting a modest QoQ decline after a large ramp in 4Q18.However,our estimates are lower due to weaker NGL prices(C3+at$29.20,53%WTI;ethane at$9.0
49、5,or 17%)as well as high marketing expense(peak for the year with start-up of Mountaineer express.We forecast EBITDX of$434MM,9.4%below Street.1Q capex should be on track vs.budget and only be modestly higher than the quarterly run rate.CSeBbg Cons.CSe vs.Cons.Guidance1Q19Prodn(MMcfed)3,1753,191-0.5
50、%Gas(MMcfd)2,2402,230+0.5%EBITDX($MM)$434$479-9.4%EPS$0.23$0.34-31.4%CFPS$1.07$1.33-19.5%Capex($MM)$378$399-5.1%Gross Completions302Q19Prodn(MMcfed)3,1843,182+0.1%Gas(MMcfd)2,2362,213+1.0%EBITDX($MM)$322$337-4.3%EPS($0.05)$0.03NMCFPS$0.72$0.96-25.1%Capex($MM)$371$379-2.2%Gross Completions30Full Year
