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Energy Market Commentary: Seasonal Slowdown Nears


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Thursday, December 7, 2017

Sector Commentary

Energy stocks are set to open right around breakeven, with higher oil prices counteracted by slight losses in broader equities futures. Corporate news flow across the sector continues to lighten as the seasonal slow-down nears.

Oil rose on Thursday in a sign that investors are wary of pushing the market lower in response to an unexpectedly large rise in U.S. stocks of refined products that has increased concern about the demand outlook. "We had a nice run to the downside yesterday and it seems for now that it's 'take your short profits soon and keep your longs for longer'," Saxo Bank senior manager Ole Hansen said.

Natural gas futures fell to a near two-week low on Thursday on forecasts for less heating demand later in December than previously expected. That drop came ahead of a government report expected to show an unusually small draw from stockpiles amid mild weather last week. Analysts said utilities probably pulled just 7 billion cubic feet of gas from storage during the week ended on December 1, the smallest draw for that week since 2001.

U.S. INTEGRATEDS

(Late Wednesday) Press Release - Chevron announced a 2018 capital and exploratory spending program of $18.3 billion. This figure includes $5.5 billion for the company's share of expenditures by affiliated companies. "Our 2018 budget is down for the fourth consecutive year, reflecting project completions, improved efficiencies, and investment high-grading," said Chairman and CEO John Watson. "We're fully funding our advantaged Permian Basin position and dedicating approximately three-quarters of our spend to projects that are expected to realize cash flow within two years."

Press Release - Exxon Mobil said it has entered into a partnership with retailer Grupo Orsan to open eight Mobil-branded service stations this week in Queretaro as part of the company's entry in Mexico's fuels market.

(Late Wednesday) Press Release - Exxon Mobil sent two cargoes of diesel and gasoline to the neighboring Mexico's newly freed markets. The company sent 120,000 barrel of diesel and gasoline from its refinery in Texas, the United States, to a private terminal in Mexico.

U.S. E&PS

Imperial Capital downgraded Bill Barrett to 'In-Line' from 'Outperform.'

Press Release - The Board of Directors of Hess declared a regular quarterly dividend of 25 cents per share payable on the Common Stock of the Corporation on December 29, 2017 to holders of record at the close of business on December 18, 2017.

CANADIAN E&PS

BMO upgraded Athabasca Oil to 'Market Perform' from 'Underperform.'

(Late Wednesday) Press Release - Athabasca Oil has set its 2018 capital budget at $140-million, consisting of $70-million for each of light oil and thermal oil. It has estimated 2018 production at 38,500 boe per day to 41,000 boe per day.

Press Release - Baytex Energy announced that its Board of Directors has approved a 2018 capital budget of $325 to $375 million, which is designed to generate average annual production of 68,000 to 72,000 boe/d.

OIL SERVICES

Press Release - Baker Hughes announced that the Baker Hughes international rig count for November 2017 was 942, down 9 from the 951 counted in October 2017, and up 17 from the 925 counted in November 2016. The international offshore rig count for November 2017 was 183, down 21 from the 204 counted in October 2017, and down 28 from the 211 counted in November 2016.

Press Release - Baker Hughes announced that its subsidiary, Baker Hughes, a GE company, LLC ("BHGE LLC") has priced an offering of $3,950,000,000 aggregate principal amount of its senior notes, consisting of $1,250,000,000 aggregate principal amount of its 2.773% senior notes due 2022, $1,350,000,000 aggregate principal amount of its 3.337% senior notes due 2027 and $1,350,000,000 aggregate principal amount of its 4.080% senior notes due 2047 (collectively, the "Notes"). Baker Hughes Co-Obligor, Inc. is a co-obligor of the Notes. The sale of the Notes is expected to close on December 11, 2017, subject to customary closing conditions.

(Late Wednesday) Press Release - Mitcham Industries announced financial results for its fiscal 2018 third quarter ended October 31, 2017. Total revenues for the third quarter of fiscal 2018 increased to $8.6 million compared to $8.1 million in the third quarter of fiscal 2017. Revenues from the Equipment Manufacturing and Sales segment increased to $6.0 million in the third quarter, compared to $5.3 million in the same period last year mainly due to increased product shipments. Revenues from the Equipment Leasing segment were $2.7 million in the third quarter compared to $2.8 million in the same period last year. The Company reported a net loss attributable to common shareholders of $5.5 million, or $(0.46) per share, in the third quarter of fiscal 2018 compared to a net loss of $7.5 million, or $(0.62) per share, in the third quarter of fiscal 2017. Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation, non-cash costs of lease pool equipment sales and non-cash foreign exchange gains and losses) for the third quarter of fiscal 2018 was a loss of approximately $406,000 compared to a loss of approximately $513,000 in the same period last year.

MLPs & Pipelines

Press Release - Kinder Morgan Canada Ltd. is selling $200-million in shares even as the company dials back spending and warns of additional delays to its marquee Trans Mountain pipeline expansion.

Press Release - Pembina Pipeline is pleased to announce that it has closed its previously announced public offering of cumulative redeemable minimum rate reset class A preferred shares, Series 21 (the "Series 21 Preferred Shares") for aggregate gross proceeds of $400 million (the "Offering").

MARKET COMMENTARY

The benchmark S&P 500 Index was set to open flat. Taking cues from Asian markets, European shares were trading modestly higher. Gold slipped to its lowest level in four months as a bounce in the dollar pushed the metal out of its narrow trading range.

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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