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Inflation Report

One Oil Stock to Consider Amid Inflationary Environment: W&T Offshore Inc

Apr 21, 2023

Section 1: Company Fundamentals

1.1 Company Overview and Performance summary

Company Overview:

W&T Offshore, Inc. (NYSE: WTI) is an independent oil and natural gas producer. The Company is engaged in the exploration, development and acquisition of oil and natural gas properties in the Gulf of Mexico. The Company has interest in approximately 43 offshore producing fields in federal and state waters and has under lease approximately 606,000 gross acres, including approximately 419,000 gross acres on the Gulf of Mexico Shelf and approximately 187,000 gross acres in the Gulf of Mexico deep-water.

This US Inflation Report covers the Company Overview & Price performance, Summary table, Key positives & negatives, Key metrics, Underlying commodities analysis, Company details, Technical guidance & Stock recommendation, and Price chart.

Price Performance:

  • WTI's share price has corrected by 27.17% in the past three months. Moreover, in the long term, the stock has corrected by 12.15% over the past year.
  • The stock is currently trading near to its 52-week range of USD 16 and 52-week low price of USD 3.57, with the current forming a double bottom.
  • The price is currently below both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of around 33.42.

1.2 Summary Table

1.3 The Key Positives & Negatives

1.4 Key Metrics

Even throughout periods of rising inflation across all major economies, the firm was able to keep costs under control and maintain revenue constancy, which allowed it to earn larger net profit margins than its competitors.

1.5 Industry Analysis:

The O&G industry has entered 2023 with its healthiest balance sheet and with continued capital discipline. By practicing capital discipline and focusing on cash flow generation and payout, the global upstream industry is projected to generate its highest-ever free cash flows.

1.6 Underlying Commodity Analysis

Despite the recent pullback in the oil prices, WTI continued to trade above the downward sloping trendline on weekly as well as daily price chart.  And the leading momentum indicator 14-day RSI hovering in a neutral territory both on weekly and daily price chart. However, the market shrugged off comments from a US official after oil tumbled ~6% over past 1-week, who said that the government could start to replenish the Strategic Petroleum Reserve in the third quarter. Meanwhile, investors remain cautious as OPEC+ is set to reduce output next month, with expectations of a rebound in Chinese demand also supporting oil prices.

Section 2: W&T Offshore Inc (“Buy” at USD 4.45, current market price as of April 21, 2023, at 09:40 am PDT)

2.1 Company Details

2.2 Valuation and Technical Guidance

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 21, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.

 


Disclaimer-

Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

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