The only benefit to the weak and volatile oil prices is they may let Watson get a little more leasing done in the Permian. The additional hedges they've rolled in look smarter as the days go by also.
The numbers for Q2 are presumed to be awful for BAS because service prices have remained weak through June. It's all about commentary for Q3 and beyond. I like that they've put themselves on the agenda for EnerCom in Denver in mid-August. They're not ducking the public out of fear of pricing or their balance sheet.
In the vernacular of horse racing, AXAS got up late again today to post a green number.
From 1:45 pm through 4:00 pm yesterday the accumulation from $1.14 to $1.18 was almost frantic. Everything shown to those buyers was willingly taken.
Abraxas spudded the Company's first well targeting the Austin Chalk, the Bulls Eye 101H, on June 16. I'm guessing they're logging significant pay right now.
Something in the field must be looking up.
I intended to add that NBR and PTEN were also upgraded today by Seaport Global in Houston. Attention is coming back to this space.
From Morgan Stanley today:
Oil Services, Drilling & Equipment
Raising NAm Estimates,
Industry data indicate a NAm activity trough in April/May.
Conversations with service companies suggest a limited uptick in
customer activity thus far, but conversations have begun. We view the
recent sell-off as a buying opportunity, and are raising our estimates
and PTs for NAm services. (BAS is not on their coverage list, the smallest of the full line servicers being NBR, which got a 12% target boost)
The buyer of 500 contracts of 2018 Leap $1.00 Puts yesterday for $0.50 may have blinked a bit this morning. Does the CEO/CFO team suggest takeout to some or what?
I just think that if a dog like CJES can be helped to remain afloat, BAS will get help too should it become necessary, and I don't think it will be.
Goldman Sachs and Morgan Stanley both talking today about a re-boot in the services industry. "Restarting the Shale Machine" is the title of the GS piece.
"After four straight quarters of sequential declines in US oil production, a new
pressure is building: how to ramp back up for the next cycle. By our forecast,
the US rig count will need to more than double by the end of 2017 to meet
the global call on US shale. We examine how the Oil Service sector can
accommodate this rapid growth and where it faces constraints in people,
capital and equipment. In a refrain common across the New Oil Order, we
see the growth opportunities concentrating in fewer hands and we lay out
winners across the supply chain with the access to capital and the logistical
skills and scale to restart the shale machine...."
The trend change in the rig count per today's BHI survey and the commodity prices are more important than the stock price at this juncture IMO.
"The U.S. oil rig count rose for the fourth time in five weeks, adding 11 oil rigs in the week to July 1 and bringing the total count up to 341, according to Baker Hughes' latest survey.The total U.S. rig count, which includes a loss of one gas rig to 89, climbed by 10 to 431."
Bob Watson, President and CEO of Abraxas, commented, "We are filing S-3 and S-4 Registration Statements in the normal course of business. Abraxas does not have any current plans to raise capital or utilize stock for an acquisition. These registrations must be updated every three years and Abraxas last filed the Company’s Registration Statement in June 2013.”
ESTE has some work to do.