Energy Market Commentary: Investors Watching U.S. Tax Efforts

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Monday, November 13, 2017

Sector Commentary

Energy stocks are supported in the pre-market with oil prices steadying near two-year highs and with corporate news flow very light. Attention is focused on the macro picture as broader equity benchmarks are under pressure as investors continue to await news on the tax situation in the U.S.

Crude oil is mixed with WTI modestly higher and Brent modestly lower as geopolitics continues to offset U.S. supply growth. OPEC's monthly report showed that output declined by 151K barrels per day in October, which supported prices. The cartel also increased demand growth estimates and trimmed supply growth estimates. CFTC data showed record high net long positions in Brent contracts. The EIA Drilling Productivity Report is due today as well as Genscape data on Cushing stockpiles at 10:00ET.

Natural gas is down well more than 1% on profit taking from gains of greater 7% last week on very cold temperatures.


(Sunday) Reuters - Japan's JERA Co and Chubu Electric Power said they received the first liquefied natural gas cargo shipped from Chevron 's Wheatstone project in Australia.


Reuters - Norway's Petroleum Safety Authority will carry out a verification process at Eni SpA 's Goliat platform before a restart of output at the 100,000-barrels-per-day field can take place.

Press Release - Royal Dutch Shell announced an agreement to sell part of its stake in Woodside Petroleum to equity investors. Shell's subsidiary Shell Energy Holdings Australia has entered into an underwriting agreement with two investment banks, for the sale of 71.6 million shares in Woodside, representing 64.0% of its interest in Woodside and 8.5% of the issued capital in Woodside, at a price of A$31.10 per share, resulting in total pre-tax proceeds of approximately $1.7 billion. The sale is expected to complete on November 14, 2017.


Susquehanna downgraded Cimarex Energy to 'Neutral' from 'Positive.'

Press Release - Hess Corp released a statement about the impact on its operations resulting from a fire at the Shell Enchilada platform in the Gulf of Mexico. Shell advised in a statement on November 12 that a plan for repairing the damaged portions of the asset is being developed. All production coming into the Garden Banks Gas Pipeline system also remains shut in until further notice.


GMP upgraded Baytex Energy to 'Buy' from 'Hold.'

Raymond James upgraded Obsidian Energy to 'Outperform' from 'Market Perform.'


(Sunday) Press Release - CGG SA announced its 2017 third quarter results quarterly EBITDA sustained by solid multi-client sales. Revenue was at $320 million. Solid Multi-Client quarterly sales was boosted by Brazilian licensing rounds. EBITDA was at $90 million. Subject in particular to the approval of the EGM and the sanctioning of the draft safeguard plan by the French commercial court, the financial restructuring plan should be implemented in Q1 2018.

Goldman Sachs removed Schlumberger NV from 'Conviction Buy List'.

(Late Friday) Press Release - ShawCor reported third quarter 2017 revenue of $397 million, an increase of 3% from the $384 million reported in the second quarter of 2017 and also 53% higher than the $259 million reported in the third quarter of 2016. Adjusted EBITDA in the third quarter of 2017 was $64 million, an increase of 19% from the $53 million reported in the second quarter of 2017 and also higher compared to $7 million reported in the third quarter of 2016. Net income in the third quarter of 2017 was $20.5 million compared with net income of $16.1 million in the second quarter of 2017 and a net loss of $174 million in the third quarter of 2016. Shawcor's Board of Directors also declared a dividend of 15.00 cents per share on the outstanding common shares of the Corporation payable on November30, 2017, to shareholders of record at the close of business on November 20, 2017.

Goldman Sachs downgraded TechnipFMC to 'Neutral' from 'Buy.'


(Sunday) Press Release - Pacific Drilling SA announced that it and certain of its domestic and international subsidiaries have filed petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. The Company intends to use the Chapter 11 process to pursue a comprehensive restructuring of the Company's approximately $3.0 billion in principal amount of outstanding funded debt. The Company also announced a net loss for third-quarter 2017 of $157.5 million or $7.38 per diluted share, compared to a net loss of $138.1 million or $6.48 per diluted share for second-quarter 2017, and net income of $0.2 million or $0.01 per diluted share for third-quarter 2016.


Raymond James upgraded Delek US Holdings to 'Strong Buy' from 'Outperform.'


Uncertainty over the U.S. tax reform deal pointed towards a lower opening for Wall Street, while investors wait to see whether a tax deal would be hammered out soon. European markets fell after utility company EDF's shares slumped on profit warning. The euro drifted lower ahead of the ECB-hosted conference in Frankfurt featuring European Central Bank chief Mario Draghi, U.S. Federal Reserve Chair Janet Yellen, Bank of Japan Governor Haruhiko Kuroda and Bank of England head Mark Carney. Oil prices steadied amid ongoing tensions in the Middle East and a rising rig count in the United States. Risk aversion pushed gold prices higher.

Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: News Headlines , MarketInsite

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