Energy Analytics

Key Themes Heading Into 4Q20 Earnings Season, Outlooks for 2021


Despite higher oil prices, early indications from operators suggest that E&P capital expenditures will look similar to 2020. Figure 1 demonstrates the wide array of capex adjustments from 2020, yet collectively flat year over year. With free cash flow the focus of many investors, we may see more commodity price-dependent plans this year as some operators are committing to spend only a certain amount of their cash flow.

As the early-2021 activity increases from late-2020 levels, service costs will likely creep higher. How much higher will be the question, and we can expect analyst questions surrounding the supply and demand of rig and frac crews, and how they will influence 2021 plans.

After the “what” is answered about 2021 budgets, the next question will be “where.” Some operators pivoted in the second half of last year to focus on gassier wells, hoping to take advantage of highly anticipated heating season prices. A warm start to winter punished gas prices, and with WTI now in the low-$50s, investors will want to know where operators are playing their cards.

A wave of M&A activity hit in late 3Q20 and management teams were prodded on whether they would participate in the trend. Deal activity since cooled off in Q4, but the new year and a positive fundamental outlook could reignite the fire.

The downturn in drilling last year disproportionately put completion crews out of work relative to rigs. Therefore, many operators now sit on many months worth of drilled uncompleted wells. This inventory is beginning to dwindle with an increase in frac crews but many uncompleted wells remain, potentially easing 2021 expenditures.

FIGURE 1 | Forecast Spending 2021 Versus 2020



Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Energy Transition
ByCarson Kearl

In a world where energy value can make up a small portion of the revenue stream from emerging business models, what else is at play? Enverus Intelligence Research® views effective energy transition business as taking advantage of two key additive...

Intelligence Oilfield Services
ByErin Faulkner

Permitting information for oil and gas wells is one of the most readily available and least lagged pieces of data on industry activity, but it is often seen as a poor indicator of future drilling activity.

Enverus Press Release - Exploring falling rigs and rising production
Energy Analytics Minerals

While horizontal drilling and hydraulic fracturing significantly enhance well productivity, they have had the opposite effect on the land department.

ByJoseph Gyure, Editor, Enverus Intelligence

All seven regions covered by the Enverus Day Rate Survey saw rates rise sequentially for the second time in three months in January as confidence started to strengthen among U.S. land drilling contractors.

Energy Transition Intelligence
ByJoseph Gyure, Editor, Enverus Intelligence

Ørsted took a blade to its project pipeline, reducing its ambition to 35-38 GW of installed capacity by 2030 from the previous 50 GW.

ByJoseph Gyure, Editor, Enverus Intelligence

SLB has reaffirmed its 2024 financial guidance, part of an effort by international oilfield services companies to reassure investors after the Saudi Ministry of Energy called off plans to increase its maximum sustainable capacity by 1 MMbo/d to 13 MMbo/d...

Analyst Takes Energy Transition

Despite the relatively scant incentives for buying an EV in the U.S. compared to other countries, the U.S. Environmental Protection Agency (EPA) presented its plan in 2023 to tighten tailpipe emissions regulations.

Enverus Blog - Increase visibility and efficiency with OpenTicket Mobile digital field ticketing software
Trading and Risk

Amid significant volatility in global energy markets, U.S. President Joe Biden’s decision to temporarily halt approvals for pending liquefied natural gas (LNG) projects seems to defy conventional trading wisdom. This audacious move has given rise to a variety of viewpoints...

Enverus Blog
Intelligence Trading and Risk

In the ever-changing energy landscape, understanding market fluctuations, weather conditions and system resilience is paramount when factoring ideas for trading opportunities.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Get Energy Transition Research updates straight to your inbox by filling out the form below.

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert