CALGARY — As the oilpatch prepares for third-quarter earnings season, observers are expecting to see some good, some bad, but not nearly as much ugly as the sector has seen in the past.
“I think the tone out there is certainly more on the optimistic side than the pessimistic side, from what I’m seeing, feeling and hearing from both the companies’ perspective and investors’ perspective,” said Rob Laidlaw, with Acumen Capital Partners.
Laidlaw, who focuses mainly on junior and mid-sized companies, said oil-weighted names can expect to see better numbers, while natural gas-focused players are still in for a slog.
Spending, on exploration and acquisitions should pick up, and Laidlaw said he wouldn’t be surprised to see some equity offerings in the remainder of the year.
“They’re going to kind of pad their coffers, so to speak, and then I think that will bode well going into next year,” he said.
“A lot of people are thinking things are looking good, and to strike while the iron’s hot — get out and raise some money, spend some money and hopefully have some success.”
Analysts have warned that outages on two Enbridge (TSX:ENB) pipelines during the quarter could affect the bottom lines of oilsands companies that sell their product in the United States
Both lines have since been repaired and brought back into service.
Another not-so-positive factor companies are likely to mention in their third-quarter releases is the atrocious weather much of Western Canada encountered this summer, said Barry Munro, who heads Ernst & Young’s oil and gas practice.
“Q3 was just an awful summer in terms of how much rain we had,” he said.
“I think that delayed field operations across the basin —whether that’s northeastern B.C. or southeastern Saskatchewan.”
But investors will likely be looking beyond the weather factor and other one-offs, closely examining the company’s underlying operational performance and financial health.
“I think there’s a growing realization that the low-cost operators are the guys that are going to be the companies that are going to succeed in the long run,” Munro said.