Oil and Gas Stock Daytrading List, Part 2
Jul 29, 2017 Trading Blog
Continuing the list of my 12 favorite oil and gas daytrading stocks and trying to establish a bit of personality for each one. I covered APA, APC and CLR here last week. Up this week: COP, DVN, EOG and NBL.
ConocoPhillips – COP has a market capitalization of 55.2 billion and trades an average of 8.2 million shares per day. It is probably the thickest stock on my list with that combined market cap and volume. The spread on Conoco is almost always 1-2 cents and it is the stock that usually becomes tradable earliest in the day for me, given the tight spread. It doesn’t go on many lengthy runs since there is usually good liquidity within 20-30 cents of the price at all times. The average true range is only 89 cents. If you are a beginning daytrader, this is probably one of the safest and easiest stocks to trade.
Conoco had daily production of about 1,425,000 MBOE/day in the second quarter, but there have been some recent divestitures and the guidance for Q3 is about 1,170,000 MBOE/day. Their production mix is 50% oil, 10% NGL’s and 40% gas. COP has operations spanning the world and is easily the most geographically diverse stock on the list. On many days, it behaves very similarly to Exxon and Chevron. The company is active in the Eagle Ford, Delaware, Midland, Bakken, Central Basin, Gulf of Mexico, Colombia, Qatar, China, Malaysia, Australia, etc.
Devon Energy – Devon used to be a total disaster just a couple years ago, but has since gotten their act together and they have become a solid US onshore shale player. The stock has a market capitalization of 17.6 billion and trades an average of 5.2 million shares per day. The spread is about 5-7 cents during the first 30 minutes of the day, but then settles into a nice 1 cent spread over the remainder of the day. It has an average true range of about $1.00.
Devon had a production level of 563,000 MBOE/day in Q1 with a mix of 46% oil, 17% NGL’s and 37% gas. The geographic production breaks down as follows: STACK (17%), Delaware (10%), Eagle Ford (15%), Canada (25%), Barnett (28%) and Powder River Basin (3%). DVN is focusing most of their resources on producing growth in the Delaware and STACK plays.
EOG Resources – EOG, also referred to as the “Apple of Oil”, is the largest capitalization company on my list, just a little larger than Conoco. EOG differs from COP in that it is solely focused on US onshore production. It has a total market cap of 55.4 billion and trades an average of about 3.2 million shares per day. EOG is probably my least favorite stock to play on the list, as the spread is usually in the range of 5-10 cents most of the day. It is almost unplayable during the first 30 minutes of the day. The average true range is $1.83, so it is somewhat volatile. It is really only playable on certain days, but it is such an important US energy company that I keep it on the list mostly as a gauge of the US onshore shale business.
EOG had a production number of 570,000 MBOE/day in Q1 2017, which was broken down into 55% oil, 14% NGL’s and 31% gas. EOG has operations in the Bakken, Delaware, Eagle Ford, DJ Basin and Powder River Basin. They got their “Apple of Oil’ reputation because of their technical knowledge, use of digital information and their superiority of drilling results. Many of the best producing wells in each basin are usually EOG wells, and many of those wells are more cost efficient than lesser quality wells of competitors. Much of the premium in EOG’s stock price is a reflection of their advanced expertise in evaluation, drilling, completion and production.
Noble Energy – Noble has a market capitalization of 12.6 billion and trades an average of 5.8 million shares per day. It is one of the lower volatility stocks on the list and is a very slow trader. It is a top option on high momentum days in the XOP. On many days though, it just doesn’t produce enough movement to make it a prime option, however many people like these lower volatility stocks and find them safe to trade. It has a very tight spread throughout most of the day, usually at a single penny. It has an average true range of about 78 cents a day.
Noble is almost a carbon copy of a stock we covered in part one, Anadarko Petroleum. It had production of 382,000 MBOE/day in Q1 2017 with a mix of 31% oil, 14% NGL’s and 55% gas. It has a much lower oil percentage and a higher gas percentage than all the other oil names on my list. It’s production mix is very similar to some of the market names more known for gas production such as RRC and AR. Noble most recently drew attention for purchasing Clayton Williams Energy, which really increased their Permian presence. They get a large portion of production from the DJ Basin, and also a large portion of production from international operations in Guinea and the Eastern Mediterranean. There is also production from the Gulf of Mexico and the Eagle Ford. Noble recently divested their Marcellus properties to fund the CWEI purchase. Noble is quickly becoming one of my favorite longer term energy stocks.