One thing that many oil and natural gas equity investors have in mind is which producers will outperform or underperform when they report earnings. While there are several factors that lead to whether a producer will outperform or underperform when they report earnings, the most important item will be what their actual production is relative to what their guidance forecast was on production. One way to determine how producers will perform relative to expectations is to look at their frack crew activity relative to what they said their frack crew activity would be on their prior quarterly guidance forecast. The table below lists the producers most likely to outperform and the producers most likely to underperform based on their actualized real time frack crew activity during the 4th quarter 2022 versus what they said their frack crew activity would be when they last reported earnings in 2022. The real time actualized frack crew data is reported and calculated by Hyperion. Frack crew guidance is taken from earnings reports, presentations, and analyst conference calls for each of the producers.
The yellow rows show the companies who have averaged fewer frack crews during the 4th quarter 2022 than what the companies were planning for on their frack crew guidance. They will likely report lower production than what their guidance was for the 4th quarter 2022. The orange rows show the companies who have averaged more frack crews during the 4th quarter 2022 than what they were planning for on their frack crew guidance. Those companies will likely report higher production than what their guidance was for the 4thquarter 2022. The green rows show the companies who have already reported their 4th quarter 2022 earnings. ConocoPhillips and CNX Resources both reported lower than expected production for the 4thquarter 2022, which was correctly predicted by the fact that both companies were underperforming on their actualized real time frack crews relative to what their frack crew guidance was for the 4th quarter 2022. National Fuel Gas (Seneca) outperformed on their 4th quarter 2022 production guidance, which was correctly predicted by the fact that their actualized frack crews were well above their frack crew guidance. Murphy Oil was expected to underperform on their 4th quarter production relative to guidance, but instead their production was in line with expectations.
Hyperion’s tracking of frack crews on a real time basis allows equity investors to determine which producers will outperform or underperform on their oil and gas production before they report earnings in order to get an edge on equity investing in the E&P sector.