Raymond James Energy Group Energy Outlook: Oil: Shaky Short-Term, Bullish Long-Term Gas: Bad Short-Term, Questionable Long-Term - PowerPoint PPT Presentation

Slide1 l.jpg
1 / 30

  • Uploaded on
  • Presentation posted in: General

Raymond James Energy Group Energy Outlook: Oil: Shaky Short-Term, Bullish Long-Term Gas: Bad Short-Term, Questionable Long-Term. September 2010. Collin.Gerry@RaymondJames.com. Raymond James Energy Group (800) 945-6275 . 2010 Energy Themes. Short-Term Oil Highly Volatile

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation

Raymond James Energy Group Energy Outlook: Oil: Shaky Short-Term, Bullish Long-Term Gas: Bad Short-Term, Questionable Long-Term

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript

Slide1 l.jpg

Raymond James Energy GroupEnergy Outlook: Oil: Shaky Short-Term, Bullish Long-Term Gas: Bad Short-Term, Questionable Long-Term

September 2010


Raymond James Energy Group

(800) 945-6275

2010 energy themes l.jpg

2010 Energy Themes

Short-Term Oil Highly Volatile

Trading with Broader Markets

Long-Term Oil Looks Bullish

Oil to Gas Price Disconnect Continues

Too Much Gas at $5/Mcf Pricing

Regardless, U.S. Drilling Activity will be Robust


Stock market is now driving oil prices this is very unusual l.jpg

Stock Market Is Now Driving Oil Prices(This Is Very Unusual)


2010 oil demand has been strong but what about 2011 l.jpg

2010 Oil Demand Has Been StrongBut What about 2011?


Longer term oil demand moves higher l.jpg

Longer Term, Oil Demand Moves Higher


All demand eyes are on china 20 million autos 350 000 b d oil demand l.jpg

All Demand Eyes are on China(20 million autos = 350,000 b/d oil demand)*

*Assumes 30 MPG & 8,000 miles/year/car


Non opec supply declines are the real story l.jpg

Non-OPEC Supply Declines are the Real Story


How big is u s deepwater moratorium l.jpg

How Big is U.S. Deepwater Moratorium?


Where will non opec growth come from l.jpg

Where will non-OPEC Growth come from?


Opec cut big now ramping back up l.jpg

OPEC Cut Big; Now Ramping Back Up



What about opec s excess capacity l.jpg

What About OPEC’s Excess Capacity?


We aren t buying stated opec excess capacity as of august 2010 l.jpg

We Aren't Buying Stated OPEC Excess Capacity(As of August 2010)


What is real opec capacity l.jpg

What is Real OPEC Capacity?


Oil moves higher over the next decade l.jpg

Oil Moves Higher Over the Next Decade

  • Non-OPEC supply stagnating/falling

    • U.S. deepwater shutdown is BIG

  • We are worried about the global economy

  • Excess OPEC capacity should fall

  • Market must eventually ration available oil

  • How will global money printing impact oil?


Cautious macro outlook weighs on oil forecast l.jpg

Cautious Macro Outlook Weighs on Oil Forecast


5 mcf u s gas for 5 years l.jpg

$5/Mcf U.S. Gas for 5 Years?

U.S. supply can grow at $5/Mcf

U.S. LNG imports surge at $5/Mcf

Gas to coal switching occurs at $5/Mcf

Next few years look ugly


Why have we been bearish on gas technology driving huge supply growth l.jpg

Why Have We Been Bearish On Gas?Technology Driving Huge Supply Growth!


Shale plays are much more productive l.jpg

Shale Plays Are Much More Productive



Haynesville ip rates dwarf barnett l.jpg

Haynesville IP Rates Dwarf Barnett



Horizontal screaming higher l.jpg

% Horizontal Screaming Higher


Why keep drilling in a 4 gas world l.jpg

Why Keep Drilling in a $4 Gas World?

  • Oil count not dependent on gas

  • “Oily” gas plays surging

    • Granite Wash, Eagle Ford, Etc…

  • Some gas plays work at $4 (Marcellus)

  • Leasehold drilling (~15%)

  • Pre-funded drilling programs

  • Hedging


Increasingly bearish on gas l.jpg

Increasingly Bearish on Gas



What does this mean for u s rig count l.jpg

What Does This Mean for U.S. Rig Count?


Higher oil count offsets lower gas l.jpg

Higher Oil Count Offsets Lower Gas


International rig count also growing l.jpg

International Rig Count Also Growing


Offshore fleet and utilization l.jpg

Offshore Fleet and Utilization


Wave of newbuilds in 2011 l.jpg

Wave of Newbuilds in 2011


Gom was home to high spec floaters l.jpg

GOM Was Home to High Spec Floaters


Conclusion l.jpg


  • U.S. natural gas prices will remain ugly

  • U.S. average rig count will remain strong

    • Increasing oil offsets lower gas

  • $5/Mcf gas is not a disaster

    • Sub $4/Mcf needed to slow gas rig count

  • Invest in oil for the long term

  • More of a stock-pickers market today


Disclaimer l.jpg


  • Important Investor Disclosures.

  • Stock Ratings: Within our four-tiered rating system, Strong Buy means that the stock is expected to appreciate and produce a total return of at least 15% and outperform the S&P 500 over the next six months; Outperform means the stock is expected to appreciate and outperform the S&P 500 over the next 12 months; Market Perform means the stock is expected to perform generally in line with the S&P 500 over the next 12 months and is potentially a source of funds for more highly rated securities; and Underperform means the stock is expected to underperform the S&P 500 or its sector over the next six to 12 months and should be sold.

  • Out of approximately 519 stocks in the Raymond James coverage universe, 52% have Strong Buy or Outperform ratings, 35% are rated Market Perform and 12% are rated Underperform. Within those rating categories, 25% of the Strong Buy- or Outperform-rated companies either currently are or have been Raymond James Investment Banking clients within the past three years; 17% of the Market Perform-rated companies are or have been clients and 9% of the Underperform-rated companies are or have been clients.

  • Analyst Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination including the analyst’s success in rating stocks versus an industry index, support effectiveness to the retail and institutional sales forces, traders, and investment bankers, institutional research votes, as well as overall productivity and revenue generated in covered stocks.

  • Raymond James Relationships: Raymond James & Associates may make a market in stocks mentioned in this report and may have managed/co-managed a public/follow-on offering of these shares or otherwise provided investment banking services to companies mentioned in this report in the past three years.

  • RJA or its officers, employees, or affiliates may (1) currently own shares, options, rights or warrants and/or (2) execute transactions in the securities mentioned in this report that may or may not be consistent with this report's conclusions. 

  • Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available at www.rjcapitalmarkets.com/SearchForDisclosures_main.asp. Copies of research can be obtained by contacting any Raymond James & Associates or Raymond James Financial Services office (please see www.rjf.com for office locations) or by sending a written request to the Equity Research Library, Raymond James & Associates, Inc., Tower 3, 6th Floor, 880 Carillon Parkway, St. Petersburg, FL 33716.

  • Additional information is available on request.

  • This document may not be reprinted without permission.


  • Login