What We're Watching this Earnings Season

TL;DR

Analysts discuss Big Oil earnings, capital obligations, production, and potential dividend cuts.

Transcript

Sean O’Reilly: So, we're going to do a little round-robin question for everybody: What storylines are you following in the most recent earnings season that is now well underway? Who goes first? Anyone? Draw straws? Tyler Crowe: I'll go first. I follow Big Oil a lot-- O'Reilly: ExxonMobil? Crowe: --so I'm definitely going to be watching how the Big ... Read More

Key Insights

• 😚 Big Oil players' earnings and outlook for 2016 are under close scrutiny.
• 🌥️ Concerns about companies meeting capital obligations due to investments in large projects.
• 💇 Interest in production levels amid significant capital expenditure cuts in the industry.
• 💇 Speculation on potential dividend cuts and their impact on market sentiment.
• 💇 Harold Hamm's company, Continental, stands out with its capex cuts and production projections.
• 🍝 Analysts are cautious about trusting projections after past misjudgments in the industry.
• 📈 Discussions on industry efficiency gains and production trends amidst budget adjustments.

Questions & Answers

Q: What storylines are analysts following in the current earnings season for Big Oil players?

Analysts are closely monitoring Big Oil companies' performance this quarter and their projections for 2016, particularly looking at capital obligations, production levels, and potential dividend cuts.

Q: Why are companies like Chevron facing challenges in meeting their capital obligations?

Companies like Chevron are struggling to meet capital obligations due to significant investments in large projects like Gorgon and Wheatstone, which are putting a strain on their balance sheets.

Q: What is the significance of companies cutting capex and its impact on production levels?

Companies cutting capital expenditures may lead to efficiency gains, but it raises questions about production levels for the year. Analysts are curious to see how companies adjust their budgets amidst these changes.

Q: How does Harold Hamm's company, Continental, stand out in terms of capex cuts and production projections?

Continental's decision to cut capex by a significant percentage while expecting only a slight drop in production and an increase in natural gas production raises eyebrows, prompting discussions on outlier behaviors in the industry.

Summary & Key Takeaways

• Analysts discuss watching Big Oil players' performance this quarter and their outlook for 2016.

• Concerns about companies meeting their capital obligations, especially Chevron due to large projects.

• Interest in production levels and potential dividend cuts in the industry.