3 Key Investing Trends to Watch in the Oil and Gas - International E&P Industry These operators are also exposed to exploration risks where drilling results are uncertain. A change in realizations affects their returns on drilling inventory and causes them to alter production growth rates. In fact, all E&P companies are vulnerable to historically volatile prices in the energy markets. In particular, a producer’s cash flow is primarily determined by realized commodity prices. The economics of oil and gas supply and demand is the fundamental driver of this industry. These firms find hydrocarbon reservoirs, drill oil and gas wells, and produce and sell these materials to be refined later into products such as gasoline, fuel oil, distillate, etc. The Zacks Oil and Gas - International E&P industry consists of companies primarily operating outside the United States and focused on the exploration and production (E&P) of oil and natural gas. We advise investors to focus on Kosmos Energy, Tullow Oil and Capricorn Energy. Although macro challenges are leading to some demand concerns, we think the space still has fuel left in the tank, especially for the operators that target growth opportunities and operating efficiency initiatives.
The market hasn't been kind to the Zacks Oil and Gas - Exploration and Production - International industry in 2023 due to the overall weakness in the energy space and lower realizations along with uncertainties related to slowing global economic growth and inflationary pressure.
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