Saudi-led market share war with US producers continues
In a recent blog post, we focused on US shale production dynamics, and highlighted the impact of continued rig productivity improvements on US shale production.
Read more...Shell posts a blowout quarter in downstream
Shell beat consensus expectations by ~30% in 1Q thanks to a blowout quarter in refining & marketing (where BP and Total also beat on Tuesday). Its downstream division posted the best quarterly earnings since the ‘golden age of refining’ in 2006-07. R&M profits were buoyed by strong global refining margins, cost savings initiatives and a healthy contribution from trading. Other majors with high exposure to downstream such as Exxon should also benefit from the current favourable refining environment, highlighting the value of integration.
Read more...Review of US onshore - Inventories, rig productivity and production rates
Stocks
The slow down in the growth of US crude inventories has continued this week, with stocks starting to flatten out. At some point the sharp cut in rig count was going to have an effect, and this is now actually starting to be felt.
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BP’s 1Q results show refining strength + tax one-offs
BP’s first-quarter results came in slightly better than expected; however this was largely thanks to one-off positive UK tax effects (as BP booked the benefit of the North Sea tax reduction in the quarter) rather than stronger underlying performance.
Read more...A look at sentiment
Investors in E&Ps have suffered over the last few years as poor exploration success has exacerbated reducing returns (caused by increased capex and higher costs of capital). Sentiment in the sector has fallen, but is this measurable?
Read more...First Falklands well in two years looks positive
An oil discovery at the 14/5b-5 well is a successful start to the four well North Falkland Basin campaign for Rockhopper (RKH 24%), Premier Oil (PMO 36%) and Falkland Oil & Gas (FOGL 40%). The well sits immediately to the south of Sea Lion in PL004b and was testing the extension of the F2 sands that represent the existing discovered resources at Sea Lion, as well as the the deeper untested F3 sands. All seven predicted reservoirs were encountered with oil in the primary target, Zebedee, and gas in the shallower Hector target. Good oil shows were recorded in the F3 targets, but the sands were not well developed at this location.
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