Credit Suisse cuts ratings on 3 small oil producers.
"Credit Suisse cuts its ratings and price targets on three smaller oil producers: Carrizo's (CRZO -2.5%) leverage is too high to be overcome in terms of creating long-term value, Kodiak's (KOG -1.3%) share price has been propped up by the company's frequent mention as a takeover target, and Whiting's (WLL -2.2%) future growth is being driven by projects with diminishing returns."
WLL, KOG haven't even began to account for downspacing, additional benches, refracs, or enhanced oil recovery methods when it comes to listing drilling locations remaining. there is a lot of oil left in the ground everywhere they have a well that isn't accounted for in their projections yet. once they prove up the additional benches and downspacing, the number of drilling locations and the life span of the drilling inventory will go up.
Yes, interesting comment re: Whiting. I didn't think ANY of the producers in the Bakken were anywhere near peaking:
Whiting was also cut from Outperform to Neutral on the basis of “the exhaustion of the company’s high-return inventory in Sanish [in the Bakken play] and future growth being driven by projects with diminishing returns.” Credit Suisse cut its target price from $55 to $52.