Genscape Delivers New Equity Market Transparency; $12 Billion in CAPEX Revisions Impacts U.S. Oil & Gas Production

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Producers prepare for more volatility in face of weakened global commodity prices

2014 vs 2015 CAPEX Guidance

“Despite sometimes drastic CAPEX cuts, domestic E&P companies are expected to increase production by 21.5 percent in 2015 year-over-year, and most have started concentrating on their core areas,” said Gould.

Responding to weaker commodity prices in late 2014 and early 2015, many producers are reevaluating their capital expenditure (CAPEX) for 2015. Of the 95 E&P companies tracked by Genscape, 47 have announced their CAPEX guidance for fiscal year 2015, and analysis shows a cumulative domestic CAPEX reduction of almost 27 percent, from $44.5 billion in 2014 to $32.5 billion in 2015.

“These producers are hedging themselves against the potential for more volatility with a more resilient and flexible strategy,” said Jonathan Gould, Genscape’s Senior Natural Gas and Oil Analyst. “We saw companies like ConocoPhillips, BP, and Continental Resources giving out their 2015 capital expenditure guidance before WTI dipped below $50/bbl, and then quickly revising it to lower levels.”

ConocoPhillips’ CEO Ryan Lance provided insight into their recent $2 billion cut from its CAPEX budget for 2015: “We probably should expect -- with some of the modest growth that we’re seeing in demand and the resiliency that we see in the unconventionals having an impact on the supply -- we’re going to be in a more volatile world as we go ahead.” (Natural Gas Intelligence, Jan 29, 2015, http://www.naturalgasintel.com/articles/101202-conocophillips-production-up-4-cuts-capex-again-by-2b)

“Despite sometimes drastic CAPEX cuts, domestic E&P companies are expected to increase production by 21.5 percent in 2015 year-over-year, and most have started concentrating on their core areas,” said Gould.

As companies continue to move through the current earnings season, Genscape expects to hear about further revisions and will be sharing detailed information with Natural Gas and Oil Production Forecast subscribers. The models used in the Forecasts quantify the revisions and automatically adjust to commodity price changes to accurately generate short and long-term oil and gas production outlooks. Additional information and trials are available for natural gas (info.genscape.com/us-gas-production) and oil (info.genscape.com/us-oil-production).

About Genscape

Genscape is the leading global provider of real-time data and intelligence for commodity and energy markets, driven to improve market transparency and efficiency. With thousands of patented monitors strategically deployed worldwide, Genscape is unique in its ability to collect and report proprietary market fundamentals in real-time or near real-time. Genscape delivers innovative solutions across a number of asset classes including: Oil, Power, Natural Gas and LNG, Agriculture, Petrochemical and NGLs, Maritime, and Renewables. Genscape clients often gain first-mover advantage, improve risk management, or increase operational efficiency. For more information, please visit: http://www.genscape.com

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Molly Robinson
Genscape, Inc.
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