Oil & Gas Coverage Methodology
Detailed discussion of the methodology used to generate Ansergy's forecasts for exploration & production companies
Exploration and Production, E&P, companies produce oil and gas around the world. From a trading perspective an E&P is a naked long position in two of the more volatile commodity markets - oil and natural gas. The SEC recognizes their exposure to those markets and requires each E&P to publish all of their hedge positions, including price. Each E&P has a unique mix of oil and gas properties, located in different parts of the world, and hedged at different levels for different periods of time. Therefore, a move in the underlying wholesale market should not affect all E&P companies equally, though the market usually reacts uniformly.
Ansergy provides analysis and coverage on 115 E&Ps based on changes in real-time wholesale markets and returns valuations and ranking metrics against all E&Ps.
Data Sources & Modeling
- SEC Data - Ansergy uses SEC filings from 2009 to populate its database of production, prices, reserves, and hedges. All data is normalized into standard units (barrels/day, Mcf/day, $/barrel, $/Mcf). The database is updated within two days of a company releasing its most recent SEC filings to keep our models current.
- Market Prices - Historical and realtime futures and spot prices drive the Ansergy valuations. Each unique location, by company, is mapped to one of three futures markets:
- Nymex WTI - Used for North American crude and non gas liquids, NGL, products
- Nymex BRENT - Used for all non-North American crude and NGL products
- Nymex Natural Gas - Used for all natural gas products worldwide.
- Basis - Ansergy computes the basis for over 200 price points around the globe for all three E&P commodities (oil, gas, NGL). Basis is computed by comparing realized rates by location to realized spot markets. Basis is projected into the future using the weighted average basis for the trailing 4 quarters.
Ansergy collects wholesale prices daily for realized spot markets and in real-time for the three futures markets. Market prices, adjusted for basis, are applied against each company's daily production less their hedges. Hedges are treated either as realized or valued by applying mark-to-market treatments. As a result, Ansergy proprietary models effectively calculates a virtual real-time mark-to-market against all production, hedged and un-hedged, for all the companies in our universe.
Output from the Ansergy E&P proprietary models include the following, by Region and by Commodity:
- Per Share - Total cash flows (MTM + Realized) per share
- Enterprise Value Per Share - Present value of (future cash flows + MTM of options ) per share
- Cash Flows - Realized + mark to market of forward hedged and Unhedged positions
- Percent of Total Revenues - Current quarter revenues by region by commodity as a percent total company revenues
- Production by commodity by region expressed in volume per day
- Percent of Total Production - Current quarter production / total production (in BoE)
- Current Price - Current realized + forward market price by region by commodity adjusted for basis
- Future Price - Levelized PV future price net of hedges
- Current Hedge Percent - Current Hedge Volume / Current Production
- Future Hedge Percent - Future Hedge Volume / Future Production