Weekend Exploration

研报英文原文证据摘录

Weekend Exploration

tic market. The discovery is seen now as containing

light oil, with a moderate GOR, with the oil component powering its economics.

Second Target – What We're Hearing So Far

Heading Into 2Q...

Sector Performance Holds. It didn't feel like a positive week for Energy with oil

continuing to fall, but sector performance was flat this week. We take that as a

good sign and there are multiple reasons for the sector to continue having

support. Starting with the commodities, we see it unlikely crude oil will continue

dropping all the way back to pre-conflict levels. Inventories have drained

significantly, SPRs will need to be built back up, Strait of Hormuz traffic likely won't

get back to pre-conflict levels for 1-2 months, and any short cycle activity increases

are likely to be temporary at current levels. Additionally, the long-term natural gas

demand picture remains unchanged, which we see providing support for the FY27

strip to hold near the current $3.50 level, if not higher, as Summer cooling season

kicks into high gear. We highlighted the improving risk/reward for the Nat Gas

E&Ps last weekend, and continue to see them as increasingly attractive sitting near

YTD lows.

OFS Previews. We've previewed BKR, WFRD, and LBRT so far with our remaining

calls coming this week. While Middle East headwinds are still present and

negatively impacting 2Q-3Q results, forward outlooks continue to be strong.

Additionally, NAM price increases are still going through. The big global upcycle

may be more muted with oil prices coming down, but the 2027 outlook is still

improved vs. pre-conflict levels, yet the stocks have given everything back. This sets

up a positive risk/reward.

E&P Early Thoughts. We spoke to a few E&Ps this week and got similar takes