The week is perhaps going to be very busy with several companies reporting on their earnings, which includes firms within the oil industry.
Two oil stocks to watch out for are Devon Energy (NYSE: DVN) and Marathon Oil (NYSE: MRO), primarily because these companies have over the years tended to report strong figures. And their stocks have rallied on the back of these reports.
Devon: Watch out for its shale output
The Devon Energy first-quarter results will be released this Tuesday after the closing bell. The DVN stock has historically made big moves on earnings reports, with production a major factor. The share price could, therefore, take a hit if the output is below expectations.
The company expects production levels of between 478,000 and 514,000 BOE/D (barrels of oil equivalent per day) in Q1. These include 206,000 to 224,000 BOE/D in sales made from assets.
As such, investor focus should be on the 272,000 to 290,000 BOE/D the company anticipates from four of its major shale plays in the United States.
Marathon Oil: production output and cash flow key
Marathon Oil will reportedly release its first-quarter results at the end of trading on Wednesday, May 1. The driller, ideally a U.S.-focused shale company, is also notable for its big moves on reporting.
The expectation is that the driller’s output will meet the expectation to encourage its investors, with expected Q1 production pegged at between 380,000 and 400,000 BOE/D. of these, 295,000 to 305,000 BOE/D should be from Marathon’s U.S. shale assets.
The ideal outcome will output within the guidance range, something that would mean the company remains on track towards realizing its 2019 forecast.
Investor focus will also be on Marathon’s cash flow returns, with the current over $60 per barrel prices way above the anticipated average of $45 for it to support its yearly growth plan.
The MRO could rally big time if Marathon Oil managed three things: surpassed production managed its cash flow and reacquired a lot of the shares.
As well as these two oil stocks, watch out for similar moves across the sector as there is potential for even bigger moves following recent upsides in oil prices.