Colorado Political Headwinds

Colorado Political Headwinds

While discussion of political and environmental headwinds for the oil and gas industry is not new, the conversation grows louder with mounting scrutiny under a new U.S. political regime and an investor community that demands corporate and environmental responsibility.

The implementation of a new state-level bill in Colorado challenges operators to remain competitive while adhering to strict drilling rules in an urban setting. Last November, the Colorado Oil and Gas Conservation Commission (COGCC) revised regulation to increase setbacks, the distance from well pad surfaces to the edge of building units, schools and childcare facilities, from 500 feet to 2,000. The tighter standards, effective on Jan. 15, heavily impact operators drilling in the western portions of the Wattenberg field in the Denver-Julesburg (DJ) Basin, which accounts for ~90% of oil and gas production in Colorado. Wells drilled or permitted before Jan. 15 will be exempt from the increased setbacks. Figure 1 shows the existing drilled uncompleted wells (DUC)s and permit counts by major operators in the basin.

While an operator’s DUC and permits inventory will allow some reprieve in the short term, we use Enverus’ proprietary algorithms to arrive at a holistic understanding of the impacts on surface constraints and the subsurface inventory at risk. This allows us to completely model the impacts of regulation on oil and gas operations.

FIGURE 1 | DUCs, Permits by Operator in DJ Basin

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Manuj Nikhanj Named President of Enverus

Manuj Nikhanj Named President of Enverus

Austin, TX (January 26, 2021) — Enverus, the leading energy SaaS company, has announced that Manuj Nikhanj will become its new president, where he will be responsible for executing the company’s vision as a leader and innovator in the energy sector. Jeff Hughes will remain CEO of Enverus.

“The most important thing we can do as a company is to continue to innovate and be intentional about how we accelerate value to all of our customers and partners,” said Jeff Hughes, CEO of Enverus. “In nearly a year since joining Enverus, Manuj has brought his visionary mindset and deep understanding of our clients and their challenges to our combined Energy Analytics (EA) business. We’re not the same company we were five years ago or even a year ago and with Manuj as the president propelling us forward, we’ll further cement our place as the leading energy SaaS company.”

“I am humbled and excited to be stepping into the role of president alongside Jeff’s continued leadership as CEO,” Nikhanj said. “In the last year, the energy sector experienced a whirlwind of uncontrollable challenges and the Enverus team has stepped up to provide the technology and insights to support our diverse customer base. I am fortunate to lead an organization that is integral to the world’s largest industry. Not everyone gets the opportunity to be a part of a flexible, creative and energetic company at a transformational time like this.”

Nikhanj’s career in energy began in 2001 at Ross Smith Energy Group where he started as an analyst and shortly thereafter became a partner and vice president. Manuj helped set the vision and forged the buildout of the company’s intelligence business to become the leading provider of energy content and insights for institutional and corporate customers. In 2011, Ross Smith sold to ITG, a Wall Street brokerage house where Manuj was the co-head of Energy Research.

In November of 2015, with the backing of one of the world’s leading global private equity firms, Ross Smith carved back out as a standalone business and re-branded RS Energy Group (RSEG), where Manuj was president and co-CEO. RSEG aggressively invested in and built out its research, software development, product and data science capabilities. The company built an enterprise-grade analytics platform for the energy sector that transformed traditional workflows and disparate systems. Enverus acquired RSEG in February of 2020.

He obtained his Bachelor of Commerce degree, with distinction, from the University of Calgary and is a CFA and FRM charter holder.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Enverus is a portfolio company of Genstar Capital. Learn more at Enverus.com.

Rethinking ESG: Enverus Releases Analytics Empowering  Industry and Investors to See the Unseen

Rethinking ESG: Enverus Releases Analytics Empowering Industry and Investors to See the Unseen

Austin, Texas (January 26, 2021) — Enverus, the leading energy SaaS company, has released ESG Analytics, an objective, accurate and transparent evaluation standard for environmental, social and governance (ESG) benchmarks and scoring for the energy industry.

As the topic of ESG evolves, much like the energy industry itself, there are opportunities to rethink ESG. Wall Street is sending a clear message that ESG performance will be a fundamental input into its investment process. The investor community is pushing operators to disclose details related to greenhouse gas (GHG) emissions, diversity and inclusion, and other corporate governance initiatives in a more responsible way. The challenge that both the energy industry and investment community have faced is that current ESG rankings are created by generalists, with too much subjectivity, in ways that are over-reliant on public and self-reported data, and without creating meaningful comparative analytics. That is, until now.

For more than two decades, Enverus has cultivated both public and proprietary energy data to create industry-leading analytics and insights for its 6,000 customers. Enverus’ ESG Analytics lets users track emissions intensity, flaring rates, land use and water use via satellite-enabled proprietary analytics alongside industry-leading data related to production and economics. ESG Analytics users can also track the “S” and “G” elements, including pay disparity and diversity, allowing operators to benchmark themselves holistically against their peers, and giving investors the objective, verifiable data necessary to rank investments for the first time.

Enverus is in a unique position to not only create a first-of-its-kind objective scoring system, but to also combine ESG Analytics with operational and economic performance, empowering a complete end-to-end solution for all market participants.

“Just like a consumer’s credit score, preferred rates and terms will be granted to those who both show value and are deemed quantifiable leaders in environmental practices,” said Jeff Hughes, CEO of Enverus. “Objectivity, accuracy and transparency are key, and we bring all three of those elements to conversations around ESG and the future of operator valuations.”

“Corporate incentives have shifted away from production and reserve growth to living within cash flow along with a cleaner energy story,” said Manuj Nikhanj, president of Enverus. “ESG will remain in the spotlight for decades to come and we are leading on multiple fronts with this new standard. It is poised to fundamentally change how operators and investors interact.”

Enverus’ new solution will sit within Enverus Prism™, the company’s hallmark single technology platform.

About Enverus
Enverus is the leading energy SaaS company delivering highly technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Enverus is a portfolio company of Genstar Capital. Learn more at Enverus.com.

Canadian Stage-by-Stage Completion Data – Plugging Along

Canadian Stage-by-Stage Completion Data – Plugging Along

What would you do if you had stage-by-stage data for an entire basin? At Enverus we use the data from over 5,000 Canadian unconventional wells, including data from over 175,000 stages, to complete detailed multivariate analysis that identifies the most influential completions variables to optimize production results. Interestingly, there was a clear bifurcation of results when comparing isolation methodology; variables like stage spacing are highly influential for one method but are replaced by injection rates in another.

Many applications for optimization are possible. For example, this detailed stage-by-stage data allows us to take a deep dive into fracture plug performance across multiple Canadian unconventional basins. The information set includes details on the plug and perforation process including type of plug installed, depth, test results and type of failure. Figure 1 shows results of ~57,000 plugs set in Canadian unconventional plays since 2018. The top three plug providers account for ~70% of market share and are among the most reliable at a 99.5% success rate.

Milling times for companies included on this list range from seven minutes per plug across 234 installed plugs to as high as an average of 34 minutes over 68 plugs that had several “less than optimal” plug and mill combinations. The three leading plug providers averaged mill times of 11-13 minutes per plug. Additionally, this dataset can be used to identify optimal plug and mill combinations.

FIGURE 1 | Plugs Installed by Manufacturer and Failure Rate

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Summing Up Today’s Current Oil, Gas & NGL  Markets in One Word: Hangover

Summing Up Today’s Current Oil, Gas & NGL Markets in One Word: Hangover

Austin, Texas (January 19, 2021) — Enverus, the leading energy SaaS company, has released its latest FundamentalEdge report, The Hangover, exploring the company’s current view of the oil, natural gas and natural gas liquids (NGL) markets.

“As much as the industry might hope the coronavirus vaccine is the cure for what ails oil demand, there are additional factors at play. Rising COVID-19 case numbers, increased travel restrictions and renewed lockdowns do not bode well for demand in early 2021. If not for recent action by OPEC+ members and Saudi Arabia, in particular, oil prices would be much lower than they are right now,” said Jesse Mercer, senior director of Crude Market Analytics at Enverus.

“And while the second half of 2020 was painful financially, the fourth quarter included much-needed consolidation within the U.S. shale industry, production curtailments and well-placed hedges kept many balance sheets afloat. Next up, will be completing drilled but uncompleted wells (DUCs) and a continued focus on improved efficiencies, lowering emissions, free cash flow and sustainable production growth. Additional mergers and acquisitions are still likely, all which lead to a healthy recovery for America’s oil and gas industry,” said Mercer.

Key takeaways from the report:

  • Crude oil prices have been on an upward trend after several countries granted emergency-use approvals for the Pfizer/BioNTech vaccine and, subsequently, the Moderna and Oxford/AstraZeneca vaccines. Although the news injected some much-needed optimism into market sentiment, Enverus does not expect the vaccines’ initial rollout to have a significant impact on liquids demand in the early months of 2021. In fact, we expect more demand cutbacks going into the first quarter as the number of COVID-19 cases rises globally and lockdowns are reimposed or toughened. In view of this, OPEC+ ministers’ decision to increase production slowly in 2021 (rather than pumping 1.9 MMBbl/d back into the market all at once in January) should help keep excessive pressure from bearing down on prices.
  • Natural gas operators responded quickly to stronger prices during the fourth quarter of 2020, increasing gas production by 1.7 Bcf/d in November alone. However, winter demand started weak, and prices quickly lost ground. On the demand side, LNG exports are back up from the lows observed in July as economics (Europe versus US price spread) continue to improve. Enverus expects gas prices to average $3.25/MMBtu, levels higher than those currently observed in the forward curve, particularly in 2021 and 2022, when oil prices are expected to remain depressed at $45-$50/Bbl.
  • Natural gas liquids production has been resilient through 2020. While gas and crude oil production fell, y-grade production hit record highs, largely due to economic ethane recovery and steady demand for ethane. Propane and butane prices have been propped up in the near term by global demand for the products, resulting in record high export volumes. Natural gasoline’s main demand market is in Canada, where it is used as a diluent in bitumen production. Canada was not immune to the downturn earlier this year, and production and activity decreased, resulting in less need for C5. However, rig activity and production have started to pick back up in Canada, which will lead to more C5 exports from the U.S.
  • Financials. 3Q20 was one of the toughest quarters for the industry for E&Ps. However, we saw consolidation, production curtailments subsiding, and hedges that kept many balance sheets afloat. As hedges roll off and DUCs start to draw down in 2021, operators should focus on lower emissions, free cash flow, and sustainable production growth – all of which will promote continued M&A.

The Hangover - From 2020 to 2021

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Members of the media can download a preview of the full report or contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Enverus is a portfolio company of Genstar Capital. Learn more at Enverus.com.

Associated Natural Gas in the Permian – Friend or Frenemy?

Associated Natural Gas in the Permian – Friend or Frenemy?

For years associated natural gas from oil production in the Permian Basin has been viewed as a byproduct with little monetary value. Infrastructure constraints and challenged pricing caused many operators to flare produced gas rather than capture and sell it. With significant egress capacity additions out of the Permian and gas prices expected to stay above $3/MMBtu for the next couple of years, many producers and investors are wondering if they should pay attention to associated gas.

Figure 1 shows how well-level economics are impacted by different gas and oil prices in the prolific Stateline region of the Delaware Basin in Texas and New Mexico. As gas prices increase, the value of wells in gas-prone regions improve. Despite this increase, oil-rich areas generally screen as generating higher returns. We believe that operators are more likely to target assets with higher oil cuts even as gas prices rise; if operators are unable to do this, they will benefit from their former frenemy.

FIGURE 1 |  Well-Level Net Present Value (NPV-10) at Different Gas and Oil Prices*

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*Vertically and horizontally co-completed, horizontal wells targeting the Upper Wolfcamp intervals. Assumes $800/ft drill, completion and equipment costs and 7,500-foot laterals.

What is a Forward Curve? A Beginner’s Guide (Part 1)

What is a Forward Curve? A Beginner’s Guide (Part 1)

The industry that drives global commerce and ensures our highest standards of living is underpinned by the complex and fascinating world of commodity trading.

Without commodity trading, our lives would be vastly different. The exchange of physical commodities like crude oil, natural gas, metals and power guarantee that we can do everything from turning the lights on, to receiving packages in the mail, to charging our cell phones.

The intricacies of commodity trading are hard to grasp without the right language, and several of the terms and definitions used by traders are unique from those used by the buyers and sellers of other assets like stocks, bonds, equities or even cryptocurrencies.

Since forward curve management stands at the foundation of Enverus’ key risk management solutions for the energy industry, I figured it might be helpful to take a step back and define what a forward curve is, and why it’s integral to any trading operations’ bottom line. We all have to start somewhere. This post is dedicated to the newbies.

What is a forward curve, and why is it important for risk management?

 

Simply put, a forward curve is a snapshot representation of what a commodity is currently worth today based on a possible buy or sell in the future. Using a forward curve, I can tell you what the price of WTI crude futures is currently for barrels that would change hands in 2024. Tomorrow, the forward curve will likely determine a different price.

A forward curve is built using the current day’s price values to exchange a commodity at some point in the future, and the commodity’s value will change as time progresses. This is why forward curves are not a price forecast like the formal weekly, monthly, or annual predictions that our analysts produced based on more in-depth fundamentals data. Instead, it’s an indicator based solely on the bids and offers in the marketplace for that day.

Let’s pause and view an example of how prices can be sewn together to create a forward curve. It’s easiest to explain using an instrument called a futures contract, which is exactly what it sounds like: a contract that traders exchange for a determined volume and commodity at a future time period.

While these contracts are bought and sold virtually on exchanges like ICE or Nymex, they represent the buying or selling of a real, tangible product. If you purchase a contract and forget about it, you will be responsible for taking delivery of the commodity you ordered.

 

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Figure 1: Nymex WTI crude futures as of 1pm CT, January 12, 2021. Futures prices shown through March 2022 via MarketView Desktop.

 

At any given moment in a trade day, there are absolute values for futures contracts far into the future – you can see here that even for contracts delivering crude in March 2022, there are thousands of trades taking place. Each of these transactions influences the movement of the price of futures for the various contract months.

This list of monthly contract prices that we have from the above data, between February 2021 and March 2022, is the foundation of a forward curve. But it makes a lot more sense plotted out in a chart, like this:

 

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Figure 2: Nymex WTI crude futures forward curve shown via MarketView Desktop.

 

A trader can look at a chart like the one above and quickly tell you if the market is oversupplied or undersupplied – and will define the market structure as either backwardated or contango.

Do you now find yourself asking, “backward-what-now?”

 

Trust me when I say that I did not just make up those words. Stay tuned for part 2 – where we will dive into the difference between backwardation and contango and share the ways that forward curves can be utilized as a risk management tool for merchants executing complex commodity trades.

The great news for now: you don’t have to be a quant to build complex forward curves. Enverus CurveBuilder gives all people in a commodity trade floor – from storied traders to brand new market analysts – the power to build complex forward curves.

Reduce Your AP Workload by Half in 2021

Reduce Your AP Workload by Half in 2021

As we kick off a new year, energy companies are running leaner than ever. A major goal is to focus on minimizing the necessary cost or effort expended. If your company is trying to figure out how free up your staff’s time or just manage a heavy workload, the number one action we recommend is to implement touchless invoicing automation.

 


In this on-demand webinar, you’ll learn:

  • How touchless invoicing helps increase your team’s overall efficiency.
  • How to implement touchless invoicing.
  • Hear from Discovery Natural Resources about how they reduced their invoice approvals by half with touchless invoicing and how this automation frees up more time to focus on the company’s future strategic initiatives.

Here’s a quick overview of what touchless invoicing is and why you should implement this workflow in 2021.

Why automation?

Automation is a proven way for energy companies looking to maximize their internal resources to:

  • Increase cost savings-96% of our clients agreed that using AP automation with our solutions has led to significant cost savings for their business.
  • Increase operating efficiency-83% of these organizations that reduce their invoice approval cycle by five to 15 days since using the various business automation solution.

 

via GIPHY

What is Touchless Invoicing?

 

In OpenInvoice, a touchless invoice means when an invoice is submitted, the system automatically validates the coding and auto-approves the invoice based on controls put in place by the customer. Once the invoice is auto-approved it automatically posts to the customer’s ERP system for payment. You can read about this concept in more detail here.

How This Can Benefit Your Business

 

Every time you find a way to automate any of your process, it has a trickledown effect. For example, when you reallocate your time away from approving thousands of low value invoices, it opens up additional time for you to put more focus on the higher value-added invoices in other processes within the organization.

Like many companies, Discovery Natural Resources (featured in the video), reduced its staff at the start of the downturn. Even though their rigs stopped operating, the invoice volume hadn’t decreased. This reduction in staff increased the invoice processing burden. With the staff having to focus on this manual and repetitive work, the company’s larger strategic initiatives were threatened.

By automating 40% of its invoice approvals, the AP staff saves an average of 40-50 hours per month. With this time savings, Discovery is back on track with its strategic goals of increasing the number of its suppliers submitting on OpenTicket, building out more robust price book reporting, driving coding in price book through integration with WellView to better understand how many vendors are changing prices and the percentages of those price changes.


If you are ready to learn more about how touchless invoicing can save your company time and resources, contact us at 
[email protected] or call us at 1-800-242-4245 to set up your complimentary business review with our team of experts.

 

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A Modest Proposal for Small Operators

A Modest Proposal for Small Operators

COVID-19 Focused Investments: Publicly Traded Companies

 

Investor demands for showing free cash flow and capital discipline have been met with oil and gas public equities tamping down their capex spend, hunkering down to wait for WTI to appreciate enough to start completing DUCs and bringing their supplies to market, and consolidating in mergers or buyouts.

Lost in all the analysis, however, is the fate of the small, privately held operators, that don’t have access to the public equity markets or indulgent lenders who will get them through hard times.

 

Well Production

 

Consider this — of the 627,520 active wells in the U.S., about half of them are stripper wells that produce 15 barrels of oil per day or less. These wells are within about 13,000 distinct fields.

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Well Search Results: Offers, Provides and Enhances. Source: Enverus

 

Constraining the wells to their most recent monthly production from Aug. 1, 2020 to Nov. 1, 2020, then summing their production, these wells account for approximately 27 million barrels (not including Indiana, Illinois or states that report on a year-behind basis). This represents just under 10% of the total production of active wells that produce above the stripper threshold of 15 BOPD.

No doubt a significant fraction of these wells is operated by large companies that have the financial wherewithal to attempt to ride out current conditions, but what about the rest? What can they do to keep themselves in business, both now and in the future? With prices where they are now and are projected to be through much of 2021, they’re not going to raise capital to go horizontal. They’re probably not going to be drilling any field expansion wells and may struggle to fund workovers. They may get some government stimulus relief to help short term, but that won’t address their long-term issues.

 

Banding Together

 

Although our industry has always valued and honored rugged individualism, there is merit in the idea of small operators in the same basin considering creating cooperatives — or at least banding together — to create some economies of scale that could allow them to reduce their costs by buying in bulk.

Consider that Gazprom Neft is dedicating gas supplies to power turbines to generate electricity for mobile crypto mining enterprises. A cooperative of small operators in a gas rich basin could theoretically pool their gas through trucked CNG to a central turbine location and generate electricity for either sales to the electric grid or for on-location use for crypto mining, or they could sell the gas to an efrac outfit completing wells on a pad currently lacking power or lease gas. They could even do a deal to truck their gas to well-positioned electric vehicle charging locales where their gas could be combusted in a gas turbine to charge on-site battery packs.

Supervisory control and data acquisition systems controls could reduce pumping and gauging costs for small oil operators, especially if they can be transacted through a bulk buying process.

A small operator cooperative could fund drone operations to conduct lease overflights to inspect lease conditions in remote locations to ensure equipment integrity.

 

Potential Benefits of Banding Together

 

Assuming ESG concerns become more prevalent, and carbon capture and sequestration needs more pronounced (especially under the new Biden administration), small operators should begin the process of determining the capacity of their reservoirs to store not only CO2 but hydrogen as well. Banding together will give small operators a chance to compete in the current and, more importantly, new energy economy. If they can see their asset base as a resource that has value beyond the straight sale of barrels or Mcf to gatherers, they might get through the current chaos in the business.

Please send any comments to me at [email protected].

 

International Upstream Returns Still Competitive

International Upstream Returns Still Competitive

Long-lead international upstream projects still offer returns that remain competitive with North American oil plays and the fast-growing renewable energy sector despite growing economic, investor and regulatory headwinds. As a result, long-term production declines from the international project slate will continue to be offset by world-class projects such as the Guyana/Suriname developments that offer strong economics and production growth.

International offshore project IRRs have come into question in recent years as major new development projects have thinned. The push for greater portfolio diversification among operators raised the bar for new investments in long-cycle hydrocarbons projects. While it’s impossible to establish with full certainty just how resilient and investable the global oil and gas space is, understanding the returns from long-cycle projects gives a strong steer.

Amid a broad industry expectation that the days of long-cycle oil and gas projects and, by association, international supply are numbered, this is not the case, in our view. Taking into account full-cycle returns, resource scale and asset performance, we assess that hydrocarbon projects in this sector still offer competitive double-digit returns, particularly for oil and gas tiebacks compared to standalone projects (Figure 1).

Renewable energy returns are also relevant to this discussion as international oil companies allocate increased capital to onshore and offshore wind projects. When compared side-by-side in a $50 Brent world, international hydrocarbon projects IRRs are competitive with those of offshore and onshore wind projects, supporting our view that offshore oil and gas will retain its place in operators’ portfolios.

Unlike oil and gas projects, renewable investments help companies reduce their emissions profile, offer stable cash flow through power purchase agreements, access to lower cost of capital and boost corporate green credentials. But renewables also face their own headwinds despite strong IRRs: the lack of land availability and distance to population centers often challenge onshore wind projects.

FIGURE 1 | IRR of Supermajor Offshore Project Slate

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Merger Mania Drives 2020 Upstream M&A Resurgence

Merger Mania Drives 2020 Upstream M&A Resurgence

Austin, Texas (January 6, 2021) — Enverus, the leading energy SaaS and data analytics company, is releasing its summary of Q4 and Full Year 2020 U.S. upstream M&A. After an anemic start, 2020 upstream M&A accelerated dramatically in the second half of the year as a challenging economic backdrop spurred a wave of industry consolidation. Activity crested in Q4 with three multi-billion-dollar mergers centered on the oil-rich Permian Basin driving the quarter’s total value to $27 billion, the third most active quarter by value since oil prices lost their footing in late 2014.

Top five upstream deals of Q4 2020

The biggest deal of the fourth quarter and 2020 was ConocoPhillips’ $13.3 billion acquisition of Concho Resources, one of the best-positioned, largest independent producers in the Permian. That deal, the biggest pure shale acquisition by any company since 2011, vaulted the Permian from a potential weak point in Conoco’s portfolio to a cornerstone of its global strategy.

On the heels of that merger, Pioneer Natural Resources announced its own maneuver to roll up Parsley Energy for $7.6 billion, giving it combined control of nearly 1 million acres across the Midland and Delaware sub-basins. Finally, Diamondback Energy nabbed publicly traded QEP and private equity-sponsored Guidon Operating for just over $3 billion in a combined effort to build out its position in the heart of the Midland Basin.

“As anticipated, additional merger activity during Q4 centered on E&Ps with high quality lands and reasonable debt loads, and the Permian Basin is the most target-rich region under those criteria. The fact that three of the leading Permian independents — Concho, Pioneer and Diamondback — each participated in a deal implies a recognition by the industry that scale is vital for companies to remain relevant going forward,” said Enverus M&A Analyst Andrew Dittmar.

Consistent with earlier deals like Chevron’s acquisition of Noble Energy for $13 billion in July 2020, and Devon Energy’s $5.6 billion merger with WPX Energy in September 2020, all the big Q4 public company corporate deals were all-equity, low-premium combinations.

“Wall Street appears supportive of E&P deals, but with very specific expectations on deal structure and the quality of the merger target,” added Dittmar. “The limiting factor for consolidation in 2021 will be the number of attractive merger partners left at the end of a very active year.”

While big corporate deals lifted M&A value in 2020, deal flow as measured by the number of announced deals fell to historic lows. There were only 140 announced deals with a reported value in 2020, the lowest annual total since at least 2006 and just about one-third of average deal flow over the last 10 years.

“There was very little appetite on either the public or private company side for buying upstream assets in 2020 as preserving cash to pay down debt or return to equity owners was prioritized,” said Dittmar. “In particular, companies were unwilling to invest substantially in buying undeveloped land, a staple of past upstream deal markets. What asset deals did get announced were largely focused on acquiring existing production and cash flow, sometimes through bankruptcy sales.”

The outlook for 2021 deal activity will depend largely on the trajectory of the COVID-19 pandemic, global economic activity and their associated impacts on commodity prices. Assuming a continued recovery in global activity, upstream M&A is likely to normalize relative to the boom-and-bust cycle of large corporate deals or nothing during 2020. There is a substantial backlog of non-core asset divestments for companies to pursue, particularly for those that participated in 2020’s corporate merger wave and now have expanded portfolios. Likely buyers include some public companies, but with a healthy contingent of private equity capital looking to take advantage of opportunities created by the downturn. Other potential buyers include energy-focused SPACs, which have become broadly popular on Wall Street.

Corporate consolidation is likely to continue as companies look for synergies to drive down their cost structures. That is particularly true among the industry’s small and midsize participants, which are urgently in need of scale. Companies that went through a Chapter 11 restructuring in 2020 could emerge as potential merger partners now that debt loads are rightsized. However, there may be fewer very large corporate deals because so many of those were accomplished during the last year, winnowing the list of possible participants.

Members of the media can contact Jon Haubert to request a copy of the full report or to schedule an interview with one of Enverus’ expert analysts.

About Enverus
Through its SaaS platform, Enverus is the leading data, software and insights company providing innovative technologies and predictive/prescriptive analytics, empowering customers to navigate the future. Enverus’ solutions deliver value to more than 6,000 customers in 50 countries across the upstream, midstream and downstream sectors, enabling the industry to be more collaborative, efficient and competitive. Enverus is a portfolio company of Genstar Capital. Creating the future of energy together. Learn more at www.enverus.com.

Three Stunning Power Market Trends That Emerged in 2020

Three Stunning Power Market Trends That Emerged in 2020

As I began to reflect the market trends of 2020, as well as what to expect in the New Year, I couldn’t help but laugh at my naivete in my call for more market volatility as renewables gain market share in power markets, which I published at this time last year.

To be sure, we were all naïve about the tsunami of market impacts that would come with the coronavirus, which was all but unknown to us 365 days ago. And I’ll give credit where credit’s due – the call for volatility in the CAISO market was pretty dead on! But overall, the fascinating forces that moved power markets in 2020 were in many cases impossible to predict.

My team and I tackled slews of new trends that impact power trading this year. We did this by leveraging the capability of artificial intelligence and machine learning to quickly adapt our abilities to measure power loads. Here’s a quick round-up of the top three power market trends that literally stunned us as they emerged.

 

3. Battling California Blackouts with Accurate Renewable Power Forecasting

 

As I mentioned above, I wrote about the increasing need for accurate power load forecasting technology as renewables gain market share and boost market volatility last year.

The possibility of power outages in California were a prospect to us based on our longer-term outlooks, but we didn’t expect the dangerous and tragic extended blackouts. I blogged about what unfolded in August:

The latest scare in California was manageable for utilities thanks to efforts of cooperation, hydro-generation and a stroke of luck with the weather. B.C. Hydro was able to send additional hydro-generation to CAISO and water supplies to Bonneville Power Administration, which increased its hydro-generation and sent more power to CAISO, too.

 

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Figure 1: Observe the peak on the chart from Monday, Aug. 17. California was able to shed enormous amounts of power before cooler weather came Tuesday and Wednesday. The public ISO forecast (orange line) is coming in much higher than the actuals, as the ISO continues to hold on to higher load forecasts to ensure the grid has the resources available in case of another spike.

This strategy is utilized across other ISOs, too, which makes sense from a strategic perspective. For utilities to get a more accurate view of power load forecasts, the AI-based methodology we utilize is lending more precision. We are hitting it right on.

 

2. Social Unrest Showed up in New York Power Loads This Summer

 

Social unrest and protests erupted around the country after the death of George Floyd. The impacts to power markets were striking in New York.

Once the epicenter of the COVID-19 outbreak in the U.S., New York maintained strict closures and travel restrictions throughout April and May. Its shutdowns were swift compared with the rest of the country. As early as March 24, my team uncovered the first hints of COVID-19-related power load demand destruction between 10-15% in NYISO compared with what our machine-learning models predicted using historical weather and demand data.

Here’s what I wrote in June:

At the end of May, demand rebounded in NYISO, as shown in Figure 2 in the black and red lines. The recovery was short-lived, however, as protests and civil unrest spread in New York City and across the U.S. Just as soon as demand started to recover, it dropped. As protest activity subsided slightly in June and more businesses reopened around the state, demand destruction once again eroded. As of June 10, the seven-day moving average on-peak demand destruction stood at 15%.  However, as protests have subsided and as New York continues to reopen, we have measured the demand destruction recovery growing.

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1. Coronavirus-Related Shutdowns Spark Power Demand Destruction All Across the U.S.

 

Just like businesses all over the world, we were faced with never-before-seen scenarios as a result of the nationwide shutdowns in March. Our machine learning-based forecasting tools have never learned the demand dynamics at play—nor had our team. Here’s a snippet from my blog entry in March:

Our old model was suddenly forced to predict demand in a scenario where it had no historical data to compute, and we had customers reach out and ask us how they can track the demand destruction underway.

We launched a new model that was capable of measuring power load demand destruction – basically charting out the new post-COVID demand trends versus the trend data that we have monitored historically, measuring temperatures, load growth, and other market factors.

The exciting new analysis was groundbreaking in measuring a completely unique and unprecedented change to consumer behavior.

We were proud to offer free trials of our ISO forecasts throughout 2020, which helped utilities and power traders hedge against the uncertainty in load impacts.

As we enter into the new unknown of 2021, we’d like to extend one last offer for a free trial of our twice-daily ISO reports that measure the COVID-19 demand destruction. Sign up here today, and have a safe, healthy and prosperous New Year!

Algo Versus Reality

Algo Versus Reality

Updating hundreds of thousands of type curves with new production data is no small feat. At Enverus, we use a proprietary type curve algorithm to draw and update type curves automatically in Enverus CORE based on our cleaned production data, leaving our analysts time to work on high-value analysis.

We conducted a study to determine the accuracy of algo-generated type curves against known production. The analysis cut off the most recent six months of production data from a randomly sampled set of 9,300 Enverus CORE type curves and redrew the type curves based on the truncated production profiles. The forecasted six months of production based on our generated type curves were compared against actual output to calculate the percentage difference in cumulative volumes. This process was repeated three more times but varied the number of months of production removed – first by removing a total of 12 months of production data, then 24 months and finally 36 months. In each case the forecasted volumes were compared against the known production. Figures 1 and 2 show results for oil and gas wells.

Our type curve accuracy on a percentage-basis generally falls in the low single digits for cumulative production and is more accurate during high-rate periods than low-rate ones. We suspect this is due in part to low-rate wells likely being shut-in targets and requiring more downtime for maintenance, and the difficulty of capturing these events in short-term forecasts.

FIGURE 1 | Comparison Between Estimated Cumulative Volumes Over Time and Actual Volumes for Oil Wells

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Note | All wells in this analysis had at least 15 months of production and less than three months of downtime.

 

 

FIGURE 2 | Comparison Between Estimated Cumulative Volumes Over Time And Actual Volumes for Gas Wells

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Note | All wells in this analysis had at least 15 months of production and less than three months of downtime.

A Geologist’s Backpack

A Geologist’s Backpack

All geologists working in the field start their day by throwing a few essential items into their backpacks: A hand lens, a hammer and a pad of paper to record the day’s findings. For geologists working from the office, we typically line our “backpacks” with other essential supplies. Geologists powered by Enverus start their day with backpacks filled with the tools necessary to evaluate and analyze different regions of a play. These include:

    1. All-encompassing mapping software (Transform VI) used to generate their own geologic interpretations.
    2. Access to Prism for a one-stop shop with access to public geological datasets, analyst-picked well tops, curated well logs and a full suite of geological maps to get you started.

Enverus unveiled the Log Viewer Widget (Figure 1) in Prism v7.9 on Oct.15. The log viewer allows for easy visualization of logs directly from our 2D mapping utility. This essential item has been added to our plethora of subsurface tools, to allow geologists to quickly navigate through their everyday analysis and get quick answers to their questions.

FIGURE 1 | Example of Log Viewer Widget

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Source | Enverus

You Don’t Have to Be a Quant to Get Complex Forward Curves

You Don’t Have to Be a Quant to Get Complex Forward Curves

Enverus has always had a flagship curve building solution with deep functionality, but it wasn’t designed for use by everybody.

Before today, our flagship solution was largely restricted to a small and technical user group. With deep functionality came a complicated interface – and if you didn’t know how to write code, CurveBuilder probably wasn’t for you.

When it comes to managing commodity risk and building a comprehensive curves solution for risk analysts and traders, ease of use matters. And we want to empower both traders and analysts to quickly build dynamic forward curve formulas in our new fast and intuitive web-based curve building interface.


With CurveBuilder, we built a complete solution that has the ease of use, but it still has the deep functionality. So we always laugh now because it’s so easy and intuitive, a four-year-old could go in and build a curve in less than five seconds.

The launch of CurveBuilder has democratized forward curve generation.

Today, it’s the trader, it’s the risk analyst now that we’re putting the solution in their hands instead of a developer having to take control.

Before the launch of the new CurveBuilder, a trader didn’t build a curve. He would say, “Hey, could you do this for me? You know, it’s X, Y, Z, quant or X, Y, Z analyst. I need your help.” Now, traders don’t have to call on the trade floor’s quant or analysts to build a new curve. Traders have the power to open the Enverus CurveBuilder tool and build it. Enverus put in building blocks and functions where users simply drag and drop to build things together.

 

Make quick and timely market decisions with easy forward curve building software

 

Traders using CurveBuilder may just want to look at a curve formula really quickly, and view price data with ease and flexibility. Now traders have the ability to test market theories and analyze forward curves on the fly. Traders can answer these questions:

  • What does this change do to my valuation?
  • How does this change impact my mark-to-market?

So things that we’re doing now include focusing on strategy and customer value, how can we leverage the cloud to be more scalable and more performance driven within our solutions? Also, I think data is so important, right? Data provides clients that visibility to make more efficient and more profitable decisions. Or in other words: building an intelligent data enterprise. I want to be in the place that I’m providing them that data intelligence.

 

The Enverus #OneTeam evolution – Trading & Risk is now fully integrated!

 

Enverus’ Trading & Risk business unit was formed to provide predictive analytics to our clients. So now we’re to the point that we’ve settled down, we’ve integrated our technologies, and now we’re starting to bring that intelligence from our upstream group, from our power division, bringing those analytics in where they can combine.

We’ll answer questions like: How will WTI prices change due to the new supply/demand forecast?

We’re providing the robust data that our customers need to discover their market perspectives. We empower customers to watch proprietary and market data. We’re delivering data to Excel, APIs and more.

We are the only solution provider that really has everything. If you own energy assets, we have all the upstream analytics. We have the curve building. We have enterprise data management. We have a viewer, we have mobile, we have Excel tools. We have business automation. Customers can bring every link of the energy value chain from their business together from upstream to downstream, all into one place.

 

Reject Me Not: Ethane Steps Into the Spotlight

Reject Me Not: Ethane Steps Into the Spotlight

Austin, Texas (December 9, 2020) — Enverus, the leading energy SaaS and data analytics company, has released its latest FundamentalEdge report that explores the company’s current view of the oil, natural gas and natural gas liquids (NGL) markets.

“NGLs don’t always get the attention they deserve despite the fact that they form the building blocks of the modern petrochemicals industry and, consequently, many of the goods we use on a daily basis. What we are seeing with surging NGL production amid this year’s slump in oil and gas production should make people sit up and take notice,” says Jesse Mercer, senior director of Crude Market Analytics at Enverus.

“Over the past decade, the petrochemicals industry became accustomed to ever-growing supplies of low-cost NGLs from the United States. Ethane, in particular, was priced so cheaply that as much as 1 MMBbl/d was never converted to ethylene and instead burned as fuel at various points last year. Those levels of ethane rejection now seem like a distant memory. What is interesting about this year’s surging NGL production in the U.S. is just how much this is being driven by the desperate need to recover increasing amounts of ethane from places that were previously uneconomical to do so.”

Today’s FundamentalEdge report release follows a string of announcements and product offerings made by Enverus aimed at helping all segments of the industry manage a challenging energy market wrought with price drops and demand destruction tied to the COVID-19 pandemic. Members of the media can download a preview of the full report or contact Jon Haubert to schedule an interview with one of Enverus’ expert analysts.

Key takeaways from the report:

  • Although crude oil and natural gas production in the United States remains below pre-pandemic levels, production of natural gas liquids (NGLs) is setting record highs. This increase in NGL production has happened despite much weaker upstream drilling and completion activity than witnessed at the start of 2020.
  • Given lower oil and gas production since the beginning of the year, sharply reduced ethane rejection is the key driver behind the increase in overall NGL production. In April 2020, ethane rejection was in excess of 970 MBbl/d. In contrast, ethane rejection was estimated at just over 630 MBbl/d in October.
  • The drop in ethane rejection was initially widespread, but after the initial shock of upstream production shut-ins, high levels of ethane rejection returned to the Appalachian and Williston basins. Ethane rejection, however, remains subdued in the Permian basin as well as in the Rockies and Midcontinent regions.
  • The economics of recovering ethane in the Rockies and Midcontinent improved substantially starting in May, as demand from the petrochemical sector remained robust over much of Q2 and into mid-Q3. Hurricane-related impacts on steam cracker operations (such as power outages) and turnarounds have since tamped down domestic ethane demand and put downward pressure on ethane prices. Recently, higher natural gas prices have worked to chip away at the economic incentive to recover ethane in the Rockies.
  • The weakening economic incentive to recover ethane in the Rockies and Midcontinent since late September is concerning. The outlook for gas plant ethane production given current commodity pricing (oil, gas, and NGLs) suggests a plateauing of production in the final weeks of 2020. Without further increases in upstream activity (drilling and completions) or additional increases in gas plant recovery rates, ethane production may slowly decline in 2021.
  • Also, with hurricane season winding down, steam cracker operations are expected to return to normal in the coming weeks and to lift ethane demand out of the slump it has been in since Hurricane Laura. Incremental demand growth from upcoming capacity additions and the imminent start of the Orbit ethane export terminal are only going to increase near-term demand even further. Forward ethane prices, however, are not currently high enough to support increasing ethane recovery beyond current levels.
  • Against this backdrop, it is important to note that higher natural gas prices have raised the threshold for ethane prices to clear if increased recovery rates are to happen. Given Enverus’ supply/demand outlook for both ethane and natural gas, Enverus sees upside potential for ethane prices heading into the early months of 2021, potentially extending through the end of the year.

 

Reject Me Not - Ethane Steps Into the Spotlight

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About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Enverus is a portfolio company of Genstar Capital. Learn more at Enverus.com.

Market Update – Election and Vaccines

Market Update – Election and Vaccines

The consensus among market participants leading up to the U.S. election linked a Joe Biden win to a bearish outcome for global oil prices and the oil industry. Despite this fear, a rally in global oil prices drove the XOP, an ETF which tracks a basket of U.S. exploration and production equities, to outperform the S&P 500 market index by over 30% since Nov. 6, just a few days after voting results became clear (Figure 1).

We believe this rally was bolstered by positive news on the results of COVID-19 vaccines, with both Pfizer and Moderna reporting higher-than-expected efficacy in quick succession, and with hopes of a rollout to high-risk patients beginning in mid-December.

Biden’s campaign promise to ban approval for new permits on federal lands remains a headwind for exposed producers and their investors. The proposed ban would be especially impactful for operators with large positions in New Mexico’s portion of the Delaware Basin, where the majority of land with high drilling activity is federally owned. As a result, the region has a seen a clear rush to get permits approved (Figure 2).

While the oil markets remain volatile, and we expect a shift in policy stance on environmental topics related to a Biden presidency, the market remains incrementally optimistic that the bottom of this cycle is behind us.

FIGURE 1 | WTI and XOP Compared to the S&P 500

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FIGURE 2 | Number of Permits Approved on Federal Lands in New Mexico

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RS Energy Group Disclosure Statement:

© Copyright 2020 RS Energy Group Canada, Inc. (RSEG). All rights reserved.

All trademarks, service marks and logos used in this document are proprietary to RSEG. This document should not be copied, distributed or reproduced, in whole or in part. The material presented is provided for information purposes only and is not to be used or considered as a recommendation to buy, hold or sell any securities or other financial instruments. Information contained herein has been compiled by RSEG and prepared from various public and industry sources that we believe to be reliable, but no representation or warranty, expressed or implied is made by RSEG, its affiliates or any other person as to the accuracy or completeness of the information. Such information is provided with the expectation that it will be viewed as part of a mosaic of analysis and should not be relied upon on a stand-alone basis. Any opinions expressed herein reflect the judgment of RSEG as of the date of this document and are subject to change at any time as new or additional data and information is received and analyzed. RSEG undertakes no duty to update this information, or to provide supplemental information to anyone viewing this material.  To the full extent provided by law, neither RSEG nor any of its affiliates, nor any other person accepts any liability whatsoever for any direct or consequential loss arising from any use of the information contained herein. The recipient assumes all risks and liability with regard to any use or application of the data included herein.

Caution Regarding Forward-Looking Statements:

This public communication may contain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These statements are based on our current expectations about future events or future financial performance. In this context, forward-looking statements often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” or “target” or other words that convey uncertainty of future events or outcomes.

These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. When evaluating the information included in this communication, you are cautioned not to place undue reliance on these forward-looking statements, which reflect our judgment only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.

Note to UK Persons:

RSEG is not an authorised person as defined in the UK’s Financial Services and Markets Act 2000 (“FSMA”) and the content of this report has not been approved by such an authorised person.  You will accordingly not be able to rely upon most of the rules made under FSMA for the protection of clients of financial services businesses, and you will not have the benefit of the UK’s Financial Services Compensation Scheme. This document is only directed at (a) persons who have professional experience in matters relating to investments (being ‘investment professionals’ within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”)), and (b) High net worth companies, trusts etc of a type described in Article 49(2) of the FPO (all such persons being “relevant persons”).  RSEG’s services are available only to relevant persons and will be engaged in only with relevant persons. This report must not be acted or relied upon by persons who are not relevant persons.  Persons of a type described in Article 49(2) of the FPO comprise (a) any body corporate which has, or which is a member of the same group as an undertaking which has, a called up share capital or net assets of not less than ( i ) in the case of a body corporate which has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, £500,000 and (ii) in any other case, £5 million, (b) any unincorporated association or partnership which has net assets of not less than £5 million, (c) the trustee of a high value trust within the meaning of Article 49(6) of the FPO and (d) any person (‘A’) whilst acting in the capacity of director, officer or employee of a person (‘B’) falling within any of (a), (b) or (c) above where A’s responsibilities, when acting in that capacity, involve him in B’s engaging in investment activity.

Prepare Your Royalty Owner Support for Tax Season

Prepare Your Royalty Owner Support for Tax Season

Call center support for oil & gas

The buildup to tax season can be a hectic and stressful time for operators. Every year, operators spend weeks processing and mailing 1099s and state tax documents to mineral rights owners, while handling related inquiries from owners (which could increase by up to three times normal volumes).

Unfortunately, many operators are dealing with reduced staff. Yet, their owner counts remain the same, leading many companies to evaluate how they can better use their resources moving into busy season.

How can call center support help you this tax season? Outsourcing royalty owner phone support is a highly effective solution to meet these seasonal demands, because it takes the burden of answering owner phone calls off your team so they can focus on tax prep.

Four tips for getting the most out of your call center support partnership

 

If your company is considering adding call center support during tax season, below are four ways to ensure you and your owners are getting what they need from the partnership.

  1. Plan ahead
    It is important to be able to set up your call services before your heavy call traffic comes in. Always know how long it takes for call agents to get set up and ready to take owner calls.
  2. Anticipate and prepare
    Tax season brings both common and surprising inquiries from owners. Preparing you agents with the right information on how to handle common inquiries ahead of time will provide a better experience for your owners because they get their issue or inquiry resolved faster. Call center agents use scripts to manage their conversations. Your answering services should be able to provide guidance on which scripts are most effective for different situations. They should also be able to customize scripts based on your company’s specific needs.
  3. Utilize proven industry experts
    The industry has unique accounting practices. You want to make sure your call center agents can answer owner questions. Enverus call support agents are experienced land and accounting professionals, many who have decades of experience in oil and gas accounting practices.Industry experience means more issues will be resolved during the first call. The Enverus team resolves 85% of its calls on the first inquiry. If an agent is unable to resolve the majority of inquiries and must escalate them, it defeats the purpose of outsourcing your support to free up you team’s time.
  4. Be clear and transparent
    Once you your call support is set up, make sure you make it easy for owners to find the call center number, should they need help. This means placing the number visibly and easy to find on your website, social media channels and owner communications.

Enverus Call Center for royalty owner support

 

Enverus is the only company that provides a complete owner relations platform, call center support and print and mail service, focused solely on the oil and gas sector. Our experienced team understands the nuances and challenges associated with delivering data to all stakeholders within the oil and gas ecosystem. The breadth of our services ensures owners receive world-class support and operators can focus on year-end activities that are more valuable — a win for your owners and staff. We can also help ensure your support remains uninterrupted.

The results

 

  • Strengthened owner relationships.
  • Reduced costs.
  • Operator employees better able to focus on higher value operational activities.

Provide your owners with expert oil and gas support

 

With tax season rapidly approaching, now is a great time to discuss your phone support needs. To learn more about how our call center services can provide your team with seasonal tax support, contact us today at [email protected] or call 1-800-282-4245 to get started.

 

Working From Home For the Holidays – Tips for Risk Analysts

Working From Home For the Holidays – Tips for Risk Analysts

As most risk analysts know, it’s difficult to truly observe a local holiday at home when your company does international trade deals with countries all over the world.

It’s scarcely any different for those of us who work in the business of distributing, collecting, or analyzing market data. The imports, exports, and pipeline flows you need to analyze don’t stop coming in because it’s a holiday. And neither does the data that Enverus delivers.

This fact of the business was all too real for some of us over the past Thanksgiving holiday. The Friday after Thanksgiving may seem to be a sacred holiday to us in the United States, but the rest of the world is still open for business.  As my American colleagues and I struggled through Teams meetings on the Monday morning after a long weekend, one admitted he got pulled back in to his work-from-home office due to the non-stop and global nature of our business.

This year, most of us will be staying home for the holidays. And for some of us, this means working from home for the holidays, probably for the first time ever. Striking a work-life balance in 2020 has been a delicate tightrope walk, especially for the members of our workforce who also happen to be raising families.

How can energy analysts and traders strike the right balance – especially during the busy end-of-year season when family time matters most?

    1. Make the most of automation – cut down on process

      When it comes to forward curves risk management, it’s pretty simple: if your forward curves aren’t automated, you’re doing it wrong. Maybe you’re manually managing dozens of individual data integration points, or using multiple Excel spreadsheets with cross-workbook references to generate curves. Ask yourself, why? Your time is precious, and there’s a faster way.

      We recently presented a public demo of our CurveBuilder technology, which shows how quickly anyone on the trade floor can create a new and complex curve. Our team also showed how forward curve formulas can be quickly updated and edited between traders and analysts. You can watch the full presentation here.

    2. Get holiday calendars in line (and automated)

      In commodity markets, missing a calendar roll can cost analysts and traders big. It’s no small task to maintain and manage the various market calendars that are ever changing, rolling and taking bank holidays.

      Enverus Calendar Manager changes that and takes away all the stress of aligning calendars in order to create accurate forward curve analysis. Watch our demo and skip to 19:30 to get straight to CurveBuilder calendar feature that literally makes our customers cheer!

    3. Save time on end-of-year audits – track every change

      Risk managers and traders know all about how important it is to get thorough audits done in a timely matter. For the risk managers who are tasked with identifying every possible market risk and must maintain a mitigation strategy that is constantly updated and provided to executive teams, CurveBuilder’s audit trails are a business necessity.

      With CurveBuilder, risk analysts and traders are beginning to see how much easier forward curve risk management can be. The tool is easy to use; and users find the sophistication of simplicity when using CurveBuilder to assemble forward curves.

      Bringing an enterprise-wide solution to your trade shop – and one that helps everyone in your organization thrive, even while working from home – can take months to consider and approve internally. To get a more digestible idea of what’s possible with CurveBuilder, try signing up for our proof of concept.

 

Lock It Down

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With the recent surge in COVID-19 infections across much of the developed world, policymakers have started to re-introduce lockdown measures to control the spread. These efforts often restrict the movement of people in public spaces, reducing close contact to one another. France is currently under a national lockdown where people are only permitted to go to work, buy essential goods like groceries or seek medical help; restaurants and bars remain closed. The U.S. has not implemented a national lockdown but many state governments, including California, Oregon, Washington and Michigan, have shut down indoor dining among other measures. The implications of lockdowns on oil demand are clear: if sustained and widespread, fewer people will be driving and therefore consuming less gasoline and diesel.

Figure 1 shows daily COVID-19 infections rates along with residential mobility in OECD and non-OECD countries. Residential mobility is one of Google’s six mobility indicators but unlike the other five, which show changes in the number of visits to parks, transit stations, retail outlets, etc. relative to pre-pandemic levels, this indicator shows how time spent at home has changed. Since the start of October, COVID-19 infections increased by nearly 300,000 cases per day in OECD countries; governments responded by gradually introducing restrictions. With greater lockdowns, residential mobility has increased as people stay home. Figure 2 compares the U.S. to OECD European countries. The U.S. is in a third wave of COVID-19 infections and residential mobility is beginning to trend upwards as governors try to curb the spread of infections in their states by imposing lockdown measures. We will be monitoring Infection rates and containment measures worldwide in coming weeks.

FIGURE 1 | COVID-19 Infections and Mobility in OECD and Non-OECD Countries

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FIGURE 2 | COVID-19 Infections and Mobility in OECD Europe and US

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RS Energy Group Disclosure Statement:

© Copyright 2020 RS Energy Group Canada, Inc. (RSEG). All rights reserved.

All trademarks, service marks and logos used in this document are proprietary to RSEG. This document should not be copied, distributed or reproduced, in whole or in part. The material presented is provided for information purposes only and is not to be used or considered as a recommendation to buy, hold or sell any securities or other financial instruments. Information contained herein has been compiled by RSEG and prepared from various public and industry sources that we believe to be reliable, but no representation or warranty, expressed or implied is made by RSEG, its affiliates or any other person as to the accuracy or completeness of the information. Such information is provided with the expectation that it will be viewed as part of a mosaic of analysis and should not be relied upon on a stand-alone basis. Any opinions expressed herein reflect the judgment of RSEG as of the date of this document and are subject to change at any time as new or additional data and information is received and analyzed. RSEG undertakes no duty to update this information, or to provide supplemental information to anyone viewing this material.  To the full extent provided by law, neither RSEG nor any of its affiliates, nor any other person accepts any liability whatsoever for any direct or consequential loss arising from any use of the information contained herein. The recipient assumes all risks and liability with regard to any use or application of the data included herein.

Caution Regarding Forward-Looking Statements:

This public communication may contain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These statements are based on our current expectations about future events or future financial performance. In this context, forward-looking statements often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” or “target” or other words that convey uncertainty of future events or outcomes.

These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. When evaluating the information included in this communication, you are cautioned not to place undue reliance on these forward-looking statements, which reflect our judgment only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.

Note to UK Persons:

RSEG is not an authorised person as defined in the UK’s Financial Services and Markets Act 2000 (“FSMA”) and the content of this report has not been approved by such an authorised person.  You will accordingly not be able to rely upon most of the rules made under FSMA for the protection of clients of financial services businesses, and you will not have the benefit of the UK’s Financial Services Compensation Scheme. This document is only directed at (a) persons who have professional experience in matters relating to investments (being ‘investment professionals’ within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”)), and (b) High net worth companies, trusts etc of a type described in Article 49(2) of the FPO (all such persons being “relevant persons”).  RSEG’s services are available only to relevant persons and will be engaged in only with relevant persons. This report must not be acted or relied upon by persons who are not relevant persons.  Persons of a type described in Article 49(2) of the FPO comprise (a) any body corporate which has, or which is a member of the same group as an undertaking which has, a called up share capital or net assets of not less than ( i ) in the case of a body corporate which has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, £500,000 and (ii) in any other case, £5 million, (b) any unincorporated association or partnership which has net assets of not less than £5 million, (c) the trustee of a high value trust within the meaning of Article 49(6) of the FPO and (d) any person (‘A’) whilst acting in the capacity of director, officer or employee of a person (‘B’) falling within any of (a), (b) or (c) above where A’s responsibilities, when acting in that capacity, involve him in B’s engaging in investment activity.