Junior E&Ps Q1/12 Preview
Weak Commodity Prices Weigh In On Q1/12 Results
Q1/12 reporting for the Junior/Intermediate E&Ps is set to begin May 4 with
NuVista, followed by Parallel and Paramount on May 8 and the bulk of our
coverage during May 9 and 10.
The largest theme in Q1/12 was lower Canadian oil and natural gas prices.
During Q1/12, WTI traded at an average price of US$103.11/Bbl, up 7%
sequentially; however, Edmonton Par fell by 5% sequentially, averaging
$93.37/Bbl over the quarter, as PADD II has been fully supplied.
Q1/12 marks one of the most painful quarters for natural gas producers
since over a decade. Q1/12 NYMEX prices averaged US$2.43/Mcf, down
27% sequentially and 42% Y/Y. AECO natural gas averaged C$2.12/Mcf,
down 33% sequentially and 44% Y/Y.
As a result of the lower commodity price environment, we expect that CFPS
for the group will decline by an average 20% Q/Q (median of -18%). For
more information, please see our full report published May 2, 2012.