American-Statesman Names Enverus Winner of Austin Top Workplaces 2019 Award

Austin, TX (November 26, 2019) – Enverus, the leading energy SaaS and data analytics company, announced that it has been awarded a Top Workplaces 2019 honor by The Austin American-Statesman.

In August, marking both the company’s 20th anniversary and surpassing $300 million in Annual Recurring Revenue (ARR), Enverus (formerly Drillinginfo) rebranded to better reflect the company’s identity as a leading data, analytics, and efficiency partner across the energy sector, and their vision for the future.

The Top Workplaces list is based solely on employee feedback gathered through a third-party survey administered by research partner Energage, LLC, a leading provider of technology-based employee engagement tools. The anonymous survey measures several aspects of workplace culture, including alignment, execution, and connection, just to name a few.

“The Top Workplaces award is about much more than recognition and celebration,” said Eric Rubino, CEO of Energage. “Our research also shows that these organizations achieve higher referral rates, lower employee turnover, and double the employee engagement levels. It just goes to show that being intentional about culture delivers bottom-line results.”

“Our company’s purpose is to create the future of the energy industry together in collaboration with our customers and partners,” said Allen Gilmer, co-founder and visionary of the company. “I am so proud of our tremendous growth over the past two decades. We’ve never been better positioned to partner with our customers across the energy spectrum to help define its future. Now more than ever, we can deliver the most cutting-edge innovations to serve and fuel our industry’s leading innovators. And our team is obviously proud to be doing so.”

Jeff Hughes, CEO and President, added to Gilmer’s remarks noting that, “The vision was always to build a company that created uniquely valuable data through active connections between businesses in the energy industry. We now operate the largest such system of active networks that has ever existed, and it is growing rapidly. The data analytics that result from this historically unique graph of energy industry participants are unprecedented, and it will create value for our customers that could never be provided any other way.”

Hughes concluded by saying, “Energy is the largest industry in the world with unique regulatory, geopolitical, technological, demographic, and environmental complexities. Enverus will continue leading the industry in tackling these complexities with offerings that include irreplaceable efficiency tools and analytics that enable better, faster decisions. More powerfully, each of these capabilities connect our customers in ways which create value like no other business in the world.  And it’s incredible to be doing all this from Austin.”

During the last three years, Enverus has grown tremendously through product innovation, market expansion, and acquisitions. The company is now comprised of three business units – Enverus Drillinginfo, Enverus Trading & Risk, and Enverus Business Automation – all of which are highly complementary to one another and together create value for customers that could never be achieved otherwise.

About Enverus
Enverus is the leading data, software, and insights company focused on the energy industry. Through its SaaS platform, Enverus provides innovative technologies and predictive/prescriptive analytics, empowering customers to navigate the future. Enverus’ solutions deliver value across upstream, midstream and downstream sectors, enabling the industry to be more collaborative, efficient and competitive. With more than 1,000 employees across the globe, the Company’s solutions are sold to more than 6,000 customers across 50 countries. Enverus is a portfolio company of Genstar Capital and brings together the technology of Drillinginfo, PLS, 1Derrick, MineralSoft, Midland Map Co., MarketView, DataGenic Group, PRT, Oildex, Cortex, Red Dog Systems and RigData as one company. Creating the future of energy together. Learn more at www.enverus.com.

About Energage, LLC
Headquartered in Exton, Pa., Energage is a leading provider of technology-based employee engagement tools that help leaders to unlock potential, inspire performance, and achieve amazing results within their organizations. The research partner behind the Top Workplaces program, Energage has surveyed more than 58,000 organizations representing well over 20 million employees in the United States.

Enverus: Tracking America’s Exports Key to Understanding Future of Hydrocarbons Markets

Enverus: Tracking America’s Exports Key to Understanding Future of Hydrocarbons Markets

Austin, TX (November 19, 2019) – Enverus, the leading energy SaaS and data analytics company, released an update on U.S. hydrocarbon exports showing the impact of recent infrastructure additions on U.S. exports of crude oil, liquified natural gas (LNG), and natural gas liquids (NGL).

In the update, Enverus leveraged vessel location data to provide a lower latency view on U.S. exports. Tankers, amongst other vessels, have been required to transmit their location and other information through an AIS transponder since 2000. By processing this data through an ever-growing list of docks and pairing that information with other contextual data, vessel location data is put into context, generating intelligence on vessel activity and ultimately cargo movements.

“For years, oil and gas production data provided by Enverus has helped shed light at a very granular level on the growth of U.S. oil, gas, and NGL production. With the tremendous growth in production of these fuels, exports have become the outlet to balance the market. By tracking vessel and cargo movements, Enverus is now providing increased transparency into this key area of U.S. hydrocarbon markets,” said Rob McBride, Senior Director of Strategy and Analytics at Enverus. “Whether it’s a rig count change, a planned pipeline that comes online, or an outbound tanker–it all matters in today’s infinitely connected world,” McBride said.

Enverus’ U.S. Hydrocarbon Export Update is the November FundamentalEdge report which leverages recent work by the Strategy and Analytics Group to track the global movement of tankers using AIS data and provides an updated view of U.S. hydrocarbon export activity.

Key Takeaways from the Report:

  • Enverus analysts estimate that through the first 18 days of October, LNG exports were roughly 4.1 Bcf/d. Freeport LNG came online but exports were limited at Cove Point. Elba Island appears to have received a cooldown cargo but had not started to export.
  • On the NGL side, Enverus experts estimate that through the first 18 days of October, exports from the major waterborne export districts (Houston, Port Arthur, Philadelphia, and Seattle) rose to nearly 1.4 million barrels per day. That increase was driven by Enterprise Products (ticker: EPD) which brought an expansion project online at their Houston Ship Channel terminal.
  • Enverus analysts estimate that U.S. exports of crude oil surpassed 3 million barrels a day in the first half of October. This growth was being driven by the recent startups of the EPIC and Cactus II pipelines. Exports from the Houston customs district, which contains Corpus, are estimated to be more than 1 million barrels per day from July to October as a result of these new pipelines.

Members of the media, please contact Jon Haubert for a copy of the 18-page report or to schedule an interview with one of Enverus’ expert analysts.

Equity Markets Closed for Energy Companies and Bond Markets Challenging Amid a Down Market

Austin, TX (October 30, 2019) – Enverus, the energy industry’s leading SaaS and data analytics company, has released its Q3 2019 Capital Markets Review which reports $40 billion raised via energy company debt offerings and $500 million in equity offerings. Bond issuances were actually up 198% from 2Q19 and 114% YOY, driven by Occidental’s $13 billion bond raise to support its Anadarko buy, plus offerings by midstream and utility companies. Meanwhile, equity raises were down 85% sequentially and 79% YOY.

“On the upstream side, a lack of access to capital for shale companies is becoming a defining story of 2019,” said Enverus Analyst, Andrew Dittmar. “Their stock has significantly underperformed the broader market with the S&P E&P Index (XOP) down nearly 20% in 3Q19 versus flat performance for the S&P 500. That has eroded investor appetite for new issuances or IPOs and equity capital raised at these prices may be viewed as dilutive for existing shareholders.”

The bond market has also become largely closed off except for large issuers and those carrying an investment grade rating. Those best positioned have kept debt in check and have longer-dated maturities on their bonds, giving time for the market to hopefully recover before they need to refinance. Enverus experts tracked $12 billion of total energy bonds maturing by YE19 with ~$3 billion of that from upstream companies.

With struggles in the equity and bond market, credit facilities look to be an important source of liquidity for some companies. Enverus analysts found $47 billion in facilities launched or amended in 3Q19 across 56 agreements with $15 billion of upstream facilities that are set to expire between 2019–2021.

“Upstream companies may be relying on credit facilities at an increasing rate just as banks take a more conservative outlook in their borrowing base redeterminations,” added Dittmar. “Investors will also be closely watching how drawdowns are spent. They want any use of this credit to be a short-term plug, not another way to delay getting to positive free cash flow while adding leverage to the balance sheet.”

“Companies are working hard towards hitting free cash flow goals and we expect more to reach the inflection point as CapEx is held in check and companies focus on corporate-level efficiency and full-cycle returns. Ultimately, that is likely to be what restores investor confidence in the sector and helps energy companies find some traction on stock prices. However, it may take some additional time and a tailwind from commodity prices wouldn’t hurt.”

Unfortunately, it is likely not all companies will be able to successfully transition to positive free cash flow from their current positioning, and with financing options sparse, Chapter 11 filings have also accelerated in the latest quarter. The number of bankruptcies filed in 3Q19 increased by 186% YOY, with a disclosed debt value of ~$15B. Upstream companies accounted for 16 of the 20 companies filing in 3Q19. Notable names entering restructuring include STACK-focused Alta Mesa, Eagle Ford-focused Sanchez Energy, and Permian-focused Halcon Resources.

“Companies have found themselves facing restructuring in a number of ways, but it usually boils down to overly aggressive CapEx to fund growth, wells substantially underperforming expectations, or some combination of the two,” added Dittmar. “However, companies are overall better prepared and more responsive to a changing market than past years, and we don’t expect to reach the level of filings from 2016, which peaked with around 40 upstream companies filing in 2Q16.”

“The majority of plans call for restructurings, with creditors taking control of the companies. White Star Petroleum (formerly one of the American Energy Partner companies) went the relatively rare route of selling its assets via a 363 process in bankruptcy. However, we could see additional liquidations if creditors decide they would rather get out what cash they can rather than own an E&P company.”

Outside of public markets, there is still some private capital being cautiously put to work. Enverus experts tracked 27 new management teams receiving commitments in 3Q19, including six upstream teams.

The largest disclosed upstream commitment went to WildFire Energy, with more than $1 billion committed from Warburg Pincus, Kayne Anderson, and its management team. WildFire is led by former WildHorse co-founder Anthony Bahr, while fellow WildHorse co-founder Jay Graham is leading KKR-sponsored Spur Energy Partners. Spur has been acting as a consolidator on the New Mexico Shelf, including a $925 million acquisition from Concho Resources. New upstream acquisitions by private capital have been focusing on buying assets with existing cash flow capable of organically funding development. Private money has also been deployed on midstream assets and select areas of the services sector that may be poised for further innovation and growth.

Full copies of the report are available upon request.

The Street Strikes Back: Oil & Gas Operators Shown No Mercy

Austin, TX (October 9, 2019) – Enverus, the leading oil and gas SaaS and data analytics company, has released The Street Strikes Back, a new report in its FundamentalEdge series focused on geopolitical and domestic impacts affecting the oil, natural gas, and NGL markets.

“Global incidents like the attack on Saudi oil facilities that used to send lasting ripples across the world and disproportionately harm the United States are now being dismissed,” said Bernadette Johnson, Vice President of Strategic Analytics at Enverus. “What used to trigger a major buy or sell in crude oil, or cause prices at the pump to skyrocket, are being shrugged off by the markets in a day,” she said. “Absorbing most of that impact is the Permian basin, which has since jumped to 40% of total U.S. oil production, but capacity and bottlenecks continue to be a major problem there. The good news is relief is on its way with several planned pipelines expected to come online soon,” she said.

“America’s energy story isn’t just about crude oil,” Johnson added. “Liquefied natural gas (LNG) exports set a record high during the summer of 2019, and our projections indicate they could nearly double from 5.0 Bcf/d to 9.0 Bcf/d by 2023. However, trade wars could certainly alter that anticipated future.”

“Also, Wall Street continues to keep a watchful eye on capital plans. This shift to generating free cash flow is reaching an inflection point for many, and with that brings reduced activity. Operators want to ensure positive cash flows exceed expenditures, which brings them one step closer to returning cash to shareholders or reducing debt,” Johnson said.

Enverus’ The Street Strikes Back is the 4Q2019 installment of its FundamentalEdge series. This market outlook service presents the company’s current view of the oil, natural gas, and NGL markets and where they are headed over the next five years.

Key Takeaways from the Report:

  • Crude markets found a brief moment of support after news broke of the September 14th attack on key Saudi oil facilities, with front month ICE Brent contracts rallying ~15% on the first trading day after the event. Backwardation in the Brent structure also briefly strengthened to more than $1.30/bbl in the prompt as it was announced that Saudi Aramco planned to fill the gap in its output by drawing down on inventories (much of which are held outside the kingdom). Markets have since shrugged off the attack’s impact on Saudi spare production capacity; prompt Brent futures are trading close to levels seen immediately before the attack, and the front spread has eased off of recent highs. Even with the steep production losses from Venezuela and Iran this year, physical markets remain well supplied. Preliminary data imply global petroleum stocks drew in the third quarter and stocks are expected to draw again in the fourth, but large supply/demand imbalances are in our outlook for early 2020 as total petroleum demand continues to soften and non-OPEC production ramps up further. Although U.S. tight oil production growth is ostensibly slowing with WTI trading in the mid-50s, production growth in Brazil and Norway will augment U.S. supplies and push non-OPEC crude and condensate production growth to 2 MM Bbl/d next year.
  • There were many developments in the natural gas market over the past months including the start of the first greenfield takeaway pipeline in the Permian, LNG exports set a record high during the summer, the start of a new pipeline export to Mexico, and strong production growth in the Marcellus and Haynesville. In 2019, supply gains have outpaced demand, causing natural gas prices to lose more than $1.00 per MMBtu, from $3.64 settlement in January to $2.43 in October. Enverus experts expect the price weakness to continue in 2020 with an average $2.60 per MMBtu. After 2020, prices are expected to return to $2.75 per MMBtu in order to allow natural gas production to grow at a rate that meets the expected demand growth.
  • During 2019, ethane and LPG prices have been depressed, mainly due to record or near-record levels of production and inventories. A slew of fractionation capacity is set to come online in the first quarter of 2020. However, recent storms and flooding along the Texas Gulf Coast near Mont Belvieu may delay some of these projects, possibly extending fractionation tightness along the Gulf Coast as y-grade production continues to increase, particularly out of PADD 3 and the Permian.
  • Operators were shown no mercy in Q2’19 earnings season. Infrastructure constraints and spacing issues caused sell-offs, while shareholder returns and free cash flow surprises continue to drive the gains. Most small to mid-sized operators are sticking to front half weighted capex programs, but lower prices did little to cause revisions to D&C plans for the remainder of the year.

Members of the media can download a 17-page preview of the full 50-page report, The Street Strikes Back, or contact Jon Haubert to schedule an interview with one of Enverus’ expert market analysts.

Members of the media may also request individual operator reports from Enverus’ recently released Operator Intelligence Suite. Please indicate the name(s) of the company or companies you are requesting.

U.S. Oil & Gas M&A Maintains Momentum in Q3 Despite Challenging Environment for E&Ps

Austin, Texas (October 2, 2019) – Enverus, the leading oil and gas SaaS and data analytics company, has released its summary of Q3 2019 deal activity and published a list of the Top 10 U.S. upstream M&A transactions. Despite a difficult market, M&A activity maintained the momentum established in Q2 surpassing $17 billion in Q3. That approaches the 2016-2018 historical quarterly average of $19 billion and puts year-to-date M&A at more than $85 billion.

“Most public E&Ps are highly limited in access to external capital right now,” said Enverus Senior M&A Analyst Andrew Dittmar. “Shale companies are turning to deals as another option in the toolbox to bridge the gap to free cash flow and hopefully shift market sentiment back in their favor. In contrast to prior years, where Permian asset deals dominated, we are seeing broad geographic diversity in the current market and a variety of deal types including joint ventures and royalties.”

Reaching into a region that has not often been at the forefront of deals, Hilcorp purchased BP’s Alaska business including its Prudhoe Bay and Trans Alaska Pipeline System interests for $5.6 billion in the largest deal of Q3. Since exiting an early investment in the Eagle Ford, privately held Hilcorp has been a countercyclical buyer of conventional assets. Meanwhile BP, a pioneer and major player in Alaska, is exiting to refocus U.S. operations on shale assets purchased from BHP.

The next largest Q3 transactions were a pair of corporate mergers. Early in the quarter, Callon Petroleum purchased Permian and Eagle Ford producer Carrizo Oil & Gas for $3.2 billion in an all equity/debt transaction. The deal has run into some investor opposition spearheaded by hedge fund Paulson & Co., who specifically cites the deal premium of 25%, and the addition of Eagle Ford assets to Callon’s Permian portfolio, as points of contention.

Dodging those issues and potentially setting the template for corporate consolidation, PDC Energy acquired fellow DJ Basin producer, SRC Energy, in a zero premium stock and debt deal for $1.7 billion. In a rarity for E&P deals in this market, both companies’ stock value moved up on the announcement as investors applauded the price and commitment to core DJ Basin operations.

“There is a broad consensus that corporate consolidation is positive for the industry,” added Dittmar. “While the benefits are there, getting the right deal in place is challenging. Companies that match up on asset fit are needed, as well as a low premium to avoid a buyer selloff. Conversely, targets have to be convinced on the long-term upside since an immediate payoff isn’t evident.”

Outside of corporate-level deals, there is very little buying from public companies. Private capital has partially stepped up, most significantly KKR-sponsored Spur Energy, which has deployed more than $1 billion including a $925 million acquisition from Concho targeting the New Mexico Shelf.

“Private equity looks to be largely sticking to their script from prior quarters and cautiously deploying capital on deals secured with significant cash flow,” commented Enverus Market Research Director John Spears. “There are ample opportunities. In a quick start to Q4, Oklahoma producer Roan Resources is being taken private by Citizen Energy, an affiliate of Warburg Pincus, for more than $1 billion consisting of ~77% debt assumption and ~23% cash to shareholders. We could see other small cap E&Ps with high debt and low share prices take similar buyout offers.”

While some public companies could announce all-stock acquisitions like Callon and PDC did in Q3, cash offers will likely need to come from the private market or the largest public companies, which still have substantial internally generated funds and high, investment grade credit ratings.

Low company and asset prices in the U.S. are also starting to draw interest from abroad. Japanese LNG importer Osaka Gas purchased East Texas gas producer Sabine Oil & Gas for a reported $610 million. A few days later, Colombia-based Ecopetrol signed a $1.5 billion joint development deal with Occidental targeting undeveloped acreage in the Midland Basin. While the Osaka deal was more narrowly tailored to source gas for LNG, the Ecopetrol JV shows that international companies view U.S. shale assets as competitive on a global basis. On a dollar-per-acre basis, the deal looks to have priced relatively in line with past Permian deal activity.

There were also a handful of Chapter 11 filings during 3Q19 including Halcon, Sanchez, and Alta Mesa. Thus far, the majority of Chapter 11 filings have ended in a recapitalization with creditors taking control of the company, but there could be a shift to more liquidations via bankruptcy sales processes as some lose patience and see companies going through multiple reorganizations.

Moving into the final quarter of 2019, public companies are likely to remain highly focused on keeping capex in check while maintaining moderate production growth to deliver on promised free cash flow. Investors will likely closely watch as 2020 capex guidance is rolled out to look for any inflation. Current company valuations show a strong investor preference for E&Ps with clean balance sheets and established capital returns from dividends or buybacks versus high growth. That may translate to little appetite for making acquisitions among most independent public E&Ps.

Click Here for additional detail on Q3 2019 Oil & Gas M&A activity.

Members of the media may also request individual operator reports from Enverus’ recently released Operator Intelligence Suite. Please indicate the name(s) of the company or companies you are requesting.

Grasping the Importance of Spacing and Parent-Child Well Relationships Emerging as Make-or-Break Distinction in Today’s Free Cash Flow Era

Austin, TX (September 24, 2019) – Enverus, the leading oil and gas SaaS and data analytics company, has released a new report in its FundamentalEdge series highlighting the importance of well spacing utilizing more than 300 comprehensive attributes in its calculations. Decisions on optimal well spacing are multidimensional and are a function of numerous geological, engineering, operational, and economic variables.

“Well spacing is complex and incredibly important in today’s current free cash flow era,” said Sarp Ozkan, Energy Analysis Director at Enverus. “As documented in this report and the case studies supporting it, understanding well spacing is like peeling back an onion. It is far more complex than something that can be understood by a single distance measurement. An inaccurate, simple spacing metric has ripple effects across all parts of the industry,” he said.

The report addresses some of the biggest challenges for U.S. onshore field development and points to various case studies indicating how proper spacing may result in less drilling, but more hydrocarbon production. Also, at the forefront of the industry, is the impact of parent-child well development and well interactions, raising questions about neighboring wells interacting with each other, potential degrading well performance, and offset well interference from newly drilled infill wells.

Key Takeaways from the Report:

  • Spacing is a complex problem. Solving it leads to optimal spacing within a drilling unit. Additionally, it is key to proper development of a particular formation in an area to get the highest per well returns and minimize productivity degradation and handle parent/child interactions.
  • Figuring out how to optimize well spacing to maximize productivity is an incredibly complex challenge. This changes from basin to basin, formation to formation, sometimes even section to section.
  • Understanding parent-child relationships and optimized spacing at a basin level is important to understand trends. It’s essential to get more granular and dive deeper to get the full picture and this requires a reliable, robust, and engineered dataset.
  • Enverus’ Well Spacing Solutions give the user the ability to dive through the most comprehensive Well Spacing dataset available. By combining geology, completion, production, M&A, and well placement and timing data sets rather than looking at well spacing metrics in a vacuum, Enverus reveals the important factors that impact operations and productivity.
  • The parent/child interactions, future field developments and inventory studies, cost savings through spacing pilot, and formation delineation programs must be mastered to facilitate operations excellence as well as deliver growth, cash flow, and returns for shareholders. Enverus’ Well Spacing Solutions is a comprehensive and technically robust well-spacing solution that can help companies navigate through all these challenges and drive value.

Members of the media can download the full 18-page Well Spacing & Case Studies or contact Jon Haubert to schedule an interview with one of Enverus’ expert market analysts.

Members of the media may also request individual operator reports from Enverus’ recently released Operator Intelligence Suite. Please indicate the name(s) of the company or companies you are requesting.