Oil prices rose to their highest level in nearly nine months
last week, as tensions over Iraq continued to feed supply concerns
in the Middle East. By close of trade on Friday in New York, West
Texas Intermediate (WTI) crude was up 3.5% during the week to close
at $106.91 per barrel, rising above the $106 threshold for the
first time since Sep 2013.
(Read our full coverage on the Iraq turmoil and how it affects
Crude Rallies on Iraq Conflict: Oil Stocks in
Natural gas also rallied to a five-week high on expectations of
an uptick in electric power demand with the imminent arrival of
summer months. This was supported by a bullish supply data. Natural
gas prices ended Friday at $4.74 per million Btu (MMBtu), up 0.6%
over the week.
Among the newsmakers, energy explorer and producer
Anadarko Petroleum Corp.
) stock reached a new high after being touted as a potential
takeover target for the largest U.S. oil company
Exxon Mobil Corp.
). On the other hand supermajors
Royal Dutch Shell plc
) both announced deals to sell assets.
Energy Week That Was:
The week's energy coverage was dominated by the following
Anadarko Rises on Hopes of Exxon Mobil
As per the market speculation, oil and gas explorer Anadarko
Petroleum Corp. may be acquired by the energy giant Exxon Mobil
Corp. Following the rumor, shares of Anadarko hit its 52-week high
of $109.00 on Jun 11. Finally, the stock closed at $108.32, up
roughly 4.2% from the previous day's closing. The company's
strategically located operations in several mineral-rich areas, its
active presence in numerous international markets, a disciplined
capital spending program and attractive growth ventures make it a
lucrative take-over target for energy biggies like Exxon
Chevron Sells Stake in Chad & Cameroon for
U.S. energy major Chevron Corp. announced that a subsidiary -
Chevron Global Energy Inc. - has sold to the Republic of Chad its
25% non-operated interest in an oil producing acreage located in
southern Chad, in addition to a stake in the related pipeline
system. Chevron closed the deal on Jun 13 and received about $1.3
billion. The assets under consideration include 7 oilfields located
in the Doba Basin in which the company holds stake. These fields
had an average net yield of 18,000 barrels of oil per day in 2013.
The transaction also covers sale of Chevron's 21% non-operated
interest in a pipeline that delivers oil to the Cameroon coast and
other related marine facilities. Chevron's management said that the
sale is a strategic move to maximize the value of its upstream
portfolio. The company also stated that though these assets have
been profitable for its African operations in the past 14 years of
holding, the current market scenario and size of the assets make it
an ideal time to sell.
Shell to Sell Orion Oil Sands Project to Osum for
The Canadian arm of Europe's largest oil company Royal Dutch
Shell plc entered into an agreement with private oil sands
producer, Osum Oil Sands Corp. to sell its Orion Oil Sands Project,
located in the Cold Lake oil sands area in Alberta. Shell is likely
to receive about C$325 million from the deal, the closure of which
is anticipated on or around Jul 31. Post the completion of this
transaction, Osum will be the 100% stake owner as well as operator
of the project. The Orion Oil Sands Project had started commercial
production in 2007. For the first quarter of 2014, the project
yielded about 6,700 barrels of bitumen per day from 22 well pairs.
At the forecasted rate of production, the project is estimated to
have an economic life of over 25 years.
Chesapeake's Spin-Off Plan Approved
U.S. gas giant
Chesapeake Energy Corp.
) has received the board of directors' approval for the previously
announced spin-off its oilfield services business unit - Chesapeake
Oilfield Operating LLC. The proposed restructure is in line with
the company's ongoing strategy of shifting focus from natural gas
drilling to liquids production. Involved in drilling, hydraulic
fracturing, rig relocation, and other related services, the
to-be-divested business generated revenues of $2.2 billion last
year. Post spin-off, the new unit would be named Seventy Seven
Energy Inc. The new entity would be traded on the New York Stock
Exchange under the symbol SSE.
Exxon Mobil's CLOV Projects Begins per Schedule
Integrated energy major Exxon Mobil said that the CLOV project
in Angola has commenced operations on time and is projected to
achieve daily production capacity of 160,000 barrels in the coming
months. CLOV represents the fourth major development hub in Block
17, which is operated by France-based TOTAL SA. Girassol, Dalia and
Pazflor are the first three developments in the block. An Exxon
Mobil affiliate has a 20% working interest in CLOV. The project
will produce oil from the four fields of Cravo, Lirio, Orquidea and
Violeta that lie in water depths of 3,600 feet to 4,593 feet.
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:
Oceaneering Enters Deal with FMC Tech to Provide
Oilfield services company
Oceaneering International Inc.
) announced that it has signed an agreement with a subsidiary of
the oil drilling equipment maker FMC Technologies Inc. to purvey
production control umbilicals. Per the agreement, Oceaneering will
provide super-duplex, steel tube umbilicals for FMC Technologies'
Jangkrik project, located off the coast of Indonesia, in the Muara
Bakau production sharing contract area. The umbilicals will have a
total length of roughly 50 kilometers. Product manufacturing is
slated to begin in the final quarter of this year, with projected
delivery in the second quarter of 2016.
Eni Tie-Up with KazMunayGas for Kazakhstan
) announced that it has collaborated with state-owned KazMunayGas
(KMG) to jointly discover an offshore oil field in Kazakhstan.
Notably, the move will also enable Eni to increase its footprint in
the Central Asian country. Per the agreement, both Eni and KMG will
hold 50% stake each, of the exploration and production rights in
the Isatay offshore exploration block in the north Caspian Sea. The
block, likely to be operated by a joint operating company, is
projected to have considerable oil resources.
Talisman Energy May Sell a Stake in Duvernay Gas
As per media reports, Canadian energy explorer Talisman Energy
Inc. is now in an initial stage of discussion with PT Pertamina -
an Indonesian state-owned energy company - to sell a stake at its
Alberta-based Duvernay shale gas resources. With the investment in
Duvernay shale development, Pertamina will explore oil and gas
properties in Canada for the first time. Talisman's plan to divest
its Duvernay asset reflects its intention to get rid of those
properties that do not fit into its long-term growth plan.
This Week's Outlook:
Apart from the usual releases in this week - the U.S. government
data on oil and natural gas - market participants will be closely
tracking Wednesday's Federal Reserve policy meeting, apart from
data on industrial production, housing, inflation and leading
indicators. Energy traders will also be focusing on developments in
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CHEVRON CORP (CVX): Free Stock Analysis Report
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