Crude prices edged down for the first time in 3 weeks on the
imminent resumption of Libyan exports, while natural gas also
declined amid expectations of lower heating demand with the onset
of warmer spring temperatures.
Among the newsmakers, The Woodlands, Texas-based oil and gas
Anadarko Petroleum Corp.
) stock jumped 15% after it confirmed the settlement of an
environmental dispute for $5.15 billion.
Crude prices got a boost from the latest jobs report that did
not meet some of the more optimistic estimates, but it
nevertheless provides further evidence that the U.S. economy is
coming out of its winter freeze. This has fueled hopes for robust
fuel and energy demand in the world's biggest oil consumer. The
bullish momentum was further propelled by hopes of a stimulus
package out of China to revive the slowing growth.
However, the bulls were more than offset by expectations of
oil export resumption from the Libyan coast, which has witnessed
an eight-month impasse between armed protestors and the
government. Even an unexpected drop in crude stockpiles could not
deter the negative sentiment, as the decline was termed as an
aberration, attributed to the recent temporary suspension of
marine traffic in a Gulf Coast waterway.
As a result of these factors, by close of trade on Friday,
West Texas Intermediate (WTI) oil settled at around $101.14 per
barrel, losing 0.6% for the week.
Natural gas fell last week on forecasts of soft spring
temperatures across the U.S., partially offset by an in-line
In particular, milder weather predictions - in bulk of the
country over the next few days - are likely to limit natural gas'
demand for heating. Also, the period of hot summer weather, which
increases the fuel's usage for air conditioning, remain weeks
Some of this headwind was compensated by the EIA's weekly
inventory release, showing that natural gas stockpiles held in
underground storage in the lower 48 states fell by 74 billion
cubic feet (Bcf) for the week ended Mar 28, within the guided
range (of 73-77 Bcf drawdown).
Influenced by these factors,
ended Friday at $4.44 per million Btu (MMBtu), down 1.0% over the
Energy Week That Was:
The week's energy coverage was dominated by the following
Anadarko Settles Environmental Cleanup Lawsuit, Shares
Good news flowed in at the exploration & production
company Anadarko Petroleum Corp. after it settled a long,
drawn-out pollution case. Anadarko agreed to pay $5.15 billion to
the plaintiffs in environmental clean-up costs associated with
its 2006 acquisition of Kerr-McGee Corp.
The arrangement - following a lengthy legal battle - was well
received by the investors, with Anadarko's shares gaining 14.51%
in intraday trade. The lawsuit has long been the albatross tied
to Anadarko's neck and the settlement can only mean good for the
company. Moreover, the value of the final settlement is much
lower than what was expected.
BP Australia Refinery to Cease Operations
) intends to terminate operations at its 102,000 barrels-per-day
Bulwer Island refinery in Brisbane, Australia by mid 2015,
blaming heightened competition from the cheap new mega-refineries
in Asia. In particular, a higher local dollar, strict fuel
quality standards, and the introduction of super-sized refineries
in Asia, has rendered the facility uncompetitive and loss making.
London-based BP is considering converting the refinery into a
multi-product import terminal.
McDermott Tumbles 10% on Stock Offering, Operational
Offshore oil and gas-focused engineering and construction firm
McDermott International Inc.
) share price plummeted 10.1% after the company declared its
intention to offer around 10,000,000 stocks at $25.00 per apiece.
Separately, McDermott warned that its first quarter results might
be worse-than-expected, with profit margin - from the operation
of backlog projects - not able to cover its fixed expenses and
Encana to Sell Wyoming Assets for $1.8B
Canadian energy explorer
) has reached an agreement to unload some of its Wyoming natural
gas assets to an affiliate of U.S. private investment firm TPG
Capital for about $1.8 billion. The to-be-sold properties are
located in the Jonah field with approximately 24,000 acres of
productive area and more than 1,500 active wells, holding proved
reserves of about 1,493 billion cubic feet equivalent. Encana
management stated that this divestment is in sync with its
current strategy of shifting focus to the more lucrative
Apache Getting Rid of Canadian Acreage
U.S. energy firm
) announced the sale of its Western Canada oil and gas producing
properties in the Deep Basin area of western Alberta and British
Columbia for $374 million. These mainly dry gas producing assets
- spread across 328,400 net acres - had per day production of 101
million cubic feet of natural gas and 1,500 barrels of liquid
hydrocarbons last year. Apache is rebalancing its portfolio to
facilitate greater focus on the liquids-linked assets in North
America and the sale of the aforesaid natural gas properties are
in tune with its strategy.
Performance Chart of Some Major Companies:
The following table shows the price movement of the major oil
and gas players over the past 5 days and during the last 6
Last 5 Day's Performance
6 month performance
Other Headline News on Energy:
Cheniere Signs LNG Export Deal
Cheniere Energy Inc.
) entered into a deal to sell about 1.5 million tons of liquefied
natural gas (LNG) per annum from its planned Corpus Christi
export operations to Spanish energy company Endesa Genercion S.A.
As per the contract, Cheniere would provide LNG to Endesa for a
period of 20 years, possibly starting in 2018.
Weatherford to Relocate to Ireland
Oilfield services giant
Weatherford International Ltd.
) announced that its board of directors has approved the
relocation of its legal domicile to Ireland from Switzerland. The
incorporation under the Irish law will strengthen Weatherford's
activities and facilitate operations at the lowest possible cost.
It will also boost the company's ability to rapidly and
efficiently carry out and progress on its transformational path.
The move will enable Weatherford to retain and further attract
the finest personnel in the industry.
SeaDrill Ltd. Inks $319M Rig Deals
Offshore drilling firm SeaDrill Ltd. announced the receipt of
new contracts for its four jack-up rigs. The units are West
Tucana, West Telesto, West Ariel and West Prospero. The company
also secured a four-month contract extension for its West
Mischief jack-up unit. It is expected that the extension
agreement along with the four new deals will generate roughly
$319.0 million in revenues.
This Week's Outlook:
Apart from the usual releases - the U.S. government data on
oil and natural gas - market participants will be tracking
monthly supply/demand numbers from global energy bodies IEA and
OPEC. Wednesday's minutes of Federal Reserve's policy meeting
will also be closely watched.
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