June 5th, 2008
Written by Nilanjan Das
Of the S&P500 stocks, Gridstone covers 370 companies. We offer full coverage overlap in the Consumer Services and Nondurables (CSND), Consumer Durables, Technology, Telecom, Energy and Utilities sectors and majority overlap in Financial Services and Industrials sectors. We are not yet covering any stocks in the Materials and Health Care sectors. This note looks at the sectoral quarterly earnings trend since Sept-06 and YoY growth in diluted EPS since Sept-07 of the S&P500 companies in the Gridstone universe. read more…
April 14th, 2008
Written by Ravi Shenoy
Bharti Keswani, Mehul Ramaiya and Kavita Keyur Morparia also contributed to this note.
Drilling companies have reported contracts signed in Mar-08, that will yield revenues way up to 2015/2016. Customers are ready to pay even for idle time of rigs for upgrades as well as 10-40% higher day rates.
Gridstone Research covers 14 drilling companies (excluding GSF) within its current coverage universe of 143 oil and gas companies. Some of the drilling companies report deals struck for new rigs and new contracts on old rigs on a regular basis. This note makes an effort to look at the impact of the contracts on the earnings that these drilling companies will report in the future, during the tenure of the contract. read more…
April 14th, 2008
Written by Ravi Shenoy
Mehul Ramaiya, Kavita Keyur Morparia, Bharti Keswani and Anila Prakash also contributed to this note.
During the month of February 2008 oil companies acquired fields at ~$11-$12 per barrel of oil equivalent, and other assets at Enterprise value (EV) ranging from 4.8 to 9.1 times EBITDA.
Gridstone Research currently covers 143 Energy companies. Some of these companies have a stated intent of growing inorganically. This note is an attempt to keep track of M&A activity in the sector in the recent past and understand the impact that these could have on the financials of the acquiring company. read more…
March 31st, 2008
Written by Ravi Shenoy
Orders during the month of February 2008 strengthened order-backlogs. Gridstone Research covers 27 Oil and gas equipment and services companies within its current coverage universe of 143 Energy companies. These companies manufacture equipment for use in production or processing of oil and gas or provide services that aid the exploration of oil and gas. The oil and gas producing and processing companies place orders with equipment and services companies willing to provide the equipment\services at the lowest cost. The price discovery is through a long process which considers the financial and technical strengths of the suppliers. Orders once received are added to list of unexecuted orders and reflected as “Order backlog”. read more…
March 11th, 2008
Written by Ravi Shenoy
Contracts signed by drilling companies in Feb-08 suggests that 30 year old rigs can earn $500,000 per day
Gridstone Research covers 15 drilling companies within its current coverage universe of 137 oil and gas companies. Some of the drilling companies report deals struck for new rigs and new contracts on old rigs on a regular basis. This note makes an effort to look at the impact of the contracts on the earnings that these drilling companies will report in the future, during the tenure of the contract. read more…
February 14th, 2008
Written by Ravi Shenoy
Anila Prakash contributed to this note.
Drilling companies report in Jan-08 about many deep-water drilling contracts yielding high return on investments
Gridstone Research covers 15 drilling companies within its current coverage universe of 129 oil and gas companies. Some of the drilling companies report deals struck for new rigs and new contracts on old rigs on a regular basis. This note makes an effort to look at the impact of the contracts on the earnings that these drilling companies will report in the future, during the tenure of the contract. read more…
February 1st, 2008
Written by Ravi Shenoy
Kavita Keyur Morparia contributed to this note
There has been a perception that oil companies have returned a higher share of cash flow to shareholders rather than investing in the core business of exploration and production of crude oil. This has been suggested as one of the reasons for the lack of adequate growth in supply and hence a cause for higher oil prices. At $90/bbl of oil prices, it is therefore worthwhile to look at “whether oil and gas producing companies focused more on buying back shares as compared to putting money into their operations?” read more…
January 30th, 2008
Written by Ravi Shenoy
Anila Prakash has contributed to this note
Oil producing companies are in a sweetspot – their crude oil realization per barrel i) has risen at a pace faster than the increase in WTI price over the last two years, and ii) has narrowed the discount to WTI price over the same period. We think growing demand of heavy & sour crude from refiners would keep the average realization differential vis-à-vis WTI benchmark attractive for the oil producers. read more…
November 30th, 2007
Written by Ravi Shenoy
Upstream oil and gas (E&P) companies in the past have benefited from high crude oil prices. Thus, it would be reasonable to assume that most E&P companies should benefit from the rapid and unprecedented rise in crude oil prices to $100 per barrel in the recent past. However, our analysis of recent reported performance (Sep-07) shows that for a variety of reasons, this is not the case for a number of E&P companies. The average of the monthly price of West Texas Intermediate (WTI) crude at Cushing Oklahoma as reported by the Department of Energy, U.S. (DOE) rose $5.1 per barrel or 7.25% y/y to $75.48 per barrel during the Sep-07 quarter. Despite this, some of the upstream companies have reported lower revenue during the Sep-07 quarter. read more…
