Mardi Gras is over, but the city also known as the Big Easy will host another party of sorts next week.
Scotia Howard Weil, Bank of Nova Scotia’s U.S. energy unit, kicks off its 47th annual energy conference Monday at the Roosevelt New Orleans hotel, a key event for investors to mingle and gain insight into the state of companies in the industry.
Oil & gas companies have been shifting their spending to shareholder returns, boosting buybacks over capital spending, in hopes of garnering more investor attention, but interest remains scant. Evercore ISI described the recent mood in Houston meetings as “circumspect at best,” despite oil climbing 30 percent this year to hover around $60 per barrel.
Read More: What We Learned From CERAWeek Energy Conference in Houston
Here’s what analysts are saying ahead of next week’s conference:
“We expect investors to continue to focus on returns and free cash flow. We fear the 2H19 consensus Ebitda sequential ramp for U.S.-focused companies may prove too steep,” Scotia Howard Weil analyst Vebs Vaishnav said in a note.
For Halliburton Co., attention will focus on the impact of pressure pumping oversupply, and the potential for any pricing improvement in the latter half of the year, he added.
On peer service giant Schlumberger Ltd., investors are “looking forward to learning about SLB’s latest thinking and strategy change, if any.” Vaishnav also notes the debate swirling around whether SLB will lower its guidance for the first quarter. Howard Weil sees first-quarter consensus estimates as “achievable.”
Separately, free cash flow on an “absolute basis and as a percentage of Ebitda will be the most important factor driving stock performance, and should be a focus of March conference season and 1Q earnings reports,” Cowen analyst Marc Bianchi told clients in a note this month.
Exploration & Production
Spending discipline remains the key theme in E&P, although investors will eye potential merger and acquisition commentary. Royal Dutch Shell Plc is on the hunt for deals to bulk up its position in the Permian Basin, while Carrizo Oil & Gas Inc. is weighing a tie-up with U.S. energy explorer SM Energy Co., according to people familiar with the matter.
During last year’s Howard Weil conference, Concho Resources Inc. announced plans to buy rival shale oil producer RSP Permian Inc. in an $8 billion all-share deal.
Key Presentations (all times ET)
Monday, March 25
9am: SLB 9:50am: HAL 10:40am: RIGTuesday, March 26
9:25am: EOG 11:20am: PE, CNQ 1pm: Lunch speaker Mark Finley, general manager, global energy markets at BP Plc 2:15pm: VLOWednesday, March 27
9:25am: EPD 10:15am: LNG breakout session 11:05am: PAA breakout sessionREAD MORE: Wall Street firm urges energy investors to watch for a potential “2020 reversion trade”