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Sector Update: Energy

By: MT Newswires
Posted: 11/19/2013 3:41:00 PM
Referenced Stocks: TSO

Energy stocks are ending slightly higher this afternoon with the NYSE Energy Sector Index rising 0.1% while shares of energy companies in the S&P 500 also are up 0.1% as a group. Crude oil for December delivery settled 31 cents higher at $92.87 per barrel while November natural gas fell 6 cents to $3.56 per 1 million BTU.

In company news, Tesoro Corp ( TSO ) is up 1.8% at $56.35 a share, climbing as high as $56.95 earlier in today's session and the refiner late yesterday selling the rest of its transportation and storage assets in the Los Angeles region to Tesoro Logistics LP (TTLP) for $650 million.

The assets include two marine terminals with a combined throughput capacity of 285,000 barrels per day and with one of the terminals capable of handling very large crude oil carriers able to ship 2 million barrels per trip.

TLLP also will receive over 100 miles of active pipelines connecting the terminals with around 2 million barrels of additional storage facilities in the region. The deal also includes a petroleum coke handling and storage facility.

TSO will receive $585 million of the purchase price in cash with the remaining $85 million to be paid in stock based on the average closing of TLLP shares during the 10 days prior to closing.

Separately, TLLP - which was spun out of TSO in 2011 - today priced an offering of 6.3 million equity units at $51.05 each, generating nearly $322 million in gross proceeds that will help fund the cash portion of the deal.

TLLP shares are down 6.2% at $49.75 each this afternoon.

In other sector news,

(+) EQU, Pursuing exclusive negotiations through early December with an unnamed firm on a potential transaction identified during recent strategic assessment. Said it will provide more information on strategic alternatives "in due course."

(-) OILT, Prices offering of 2.6 mln common units representing limited partner interests at $61.65 apiece, a 4.3% discount to Monday's closing price and generating $160.3 million in gross proceeds. The new money will be used to reduce existing debt.