Energy stocks are lower today with the NYSE Energy Sector Index
sliding 0.8% and the S&P Energy Index also falling about 0.8%.
Crude oil for September has reversed course since this morning, now
trading down 66 cents at $92.21 a barrel. Brent crude futures
earlier topped $114 a barrel, its highest level in over three
months, while NYMEX crude crested above $94 a barrel.
In company news, Tesoro (
) shares are up 10% and have hit new year highs after the oil
refining and marketing firm agreed to acquire BP plc's (
) Arco refinery business in southern California for $1.18 billion,
plus the value of inventory at the time of closing - currently
valued at around $1.3 billion. The deal is subject to regulatory
approval and is expected to close before mid-2013.
TSO expects to finance the deal through a combination of cash
and debt and is projecting EPS should rise by 24% during each of
the first two years after the deal closes. Proceeds from the sale
of the associated logistics assets to Tesoro Logistics LP (
) should generate another $1 billion in cash proceeds within the
first year. TLLP units are up about 4% at $41.16 each.
Late Friday, BP plc (
) announced plans to sell two gas processing plants in Texas to
Eagle Rock Energy Partners (
) for $227.5 million in cash. The plants have a combined capacity
of 220 million cubic feet of gas per day and a gathering system of
about 2,500 miles of pipelines.
EROC today filed registration documents to sell 8 million shares
of common equity units, which at current prices would generate
nearly $70 million in gross proceeds. EROC share are down about
1.5% and closer to a year low $8.25 apiece. BP is down 0.6% at
$42.14 a share.
In other sector news,
(-) MPO, (-1.9%, near year lows) Paying $650 million to buy oil
acreage in the Mississippian Lime region of Oklahoma and Kansas
from Riverstone Holdings LLC (RSV.V) Deal includes $325 million in
cash and $325 million in preferred MPO stock.
(-) SOQ, (-43%, hits year lows) Adds "Going Concern" paragraph
to quarterly report because of difficulty obtaining suitable
financing for its Joint Oil Block project in north Africa. Said Q2
daily production fell 14% to 2,356 barrels of oil equivalent.