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Sector Update: Energy

By: MT Newswires
Posted: 4/3/2013 12:23:00 PM
Referenced Stocks: CG;NKA;PVA

Energy stocks were down sharply at mid-day with the NYSE Energy Sector Index sinking nearly 1% and the S&P Energy Index retreating 1.1%. Crude oil for May delivery is down $1.48 to $95.71 per barrel. May natural gas is down 2 cents to $3.95 per 1 mln BTU.

In company news, Niska Gas Storage Partners LLC ( NKA ) is up 14.6% to $14.39 per unit, just a penny off its new 52-week high after saying it has reworked subordinated equity units and other securities held by the Carlyle Group ( CG ), converting those units into a new equity class of Incentive Distribution Rights.

Quarterly distributions for CG's 33.8 mln of subordinated units, currently totaling about $12 mln per quarter, have been suspended since November 2011. Under the new equity structure, CG will receive 48% of NKA's quarterly payouts to its unitholders after the company's common unitholders receive the minimum $0.35 per unit each quarter,

Following the deal, analysts at Goldman Sachs raised their rating on NKA units to Neutral from Sell and also increased their price target by $4 to $15 a share. Stifel Nicolaus also upgraded the stock to Buy from Hold.

In other sector news,

(+) MHR, (+4.6%) Sells all of its oil and gas properties in the Eagle Ford Shale region of southern Texas to Penn Virginia Corp ( PVA ) for $401 mln. PVA shares are up about 0.3% at $3.91 apiece.

(-) CVX, (-0.5%) Docks compensation for its CEO and two other top executives following accidents last year at the company, The Wall Street Journal reports. CEO John Watson saw his bonus reduced by 13% to $3.5 million although he received a $100,000 bump in his annual salary to to $1.8 million.