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Crude Rises, Lifted by Continued Balancing of Supplies and Inventories


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Thursday, March  14, 2019

SECTOR COMMENTARY

Energy stocks are set extend their recent strength, following yesterday's session that saw the S&P 500 Index and crude oil prices reach four-month highs.  Sector movements should continue to track oil and broader markets today amid the slowdown in earnings and micro news flow.

Crude oil futures were marginally higher, lifted by continued balancing of supplies and inventories after yesterday's DOE weekly draw and continued declines in Iran and Venezuela.  "With OPEC's cuts in full swing ... persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported," said Jasper Lawler, head of research at futures brokerage London Capital Group.

Natural gas futures are also rising ahead of weekly inventory data.  Traders expect a withdrawal of 208 bcf, which would be supportive to prices.  This could bring storage levels to 30% below the 5-year average.

INTERNATIONAL INTEGRATEDS

Reuters - Eni announced a new gas discovery in the nour prospect, offshore Egypt.

HSBC upgraded Petroleo Brasileiro to 'Buy' from 'Hold.'

Press Release - Repsol has purchased a stake in Ampere Energy SL, the Valencia-based manufacturer of residential energy storage batteries, in a bid to expand its presence in the renewable energy sector.

Press Release - Total said that the Board of Directors met on March 13, 2019 and declared the distribution of a third interim dividend for the 2018 fiscal year of €0.64 per share, in accordance with the Board's decision of October 25, 2018, an amount equal to the first and second 2018 interim dividends, increased by 3.2% compared to the three interim dividends and the final dividend paid for the 2017 fiscal year. Pursuant to the fourth resolution of the Shareholders' Meeting of June 1, 2018, the option to receive this interim dividend in new shares of the Company will be offered to shareholders, including holders of its American Depositary Shares (ADS) listed on the New York Stock Exchange.

CANADIAN INTEGRATEDS

Credit Suisse downgraded Husky Energy to 'Neutral' from 'Outperform'.

(Late Wednesday) Press Release - Husky Energy has priced a $750 million US offering of senior unsecured notes. The notes will bear annual interest at a rate of 4.400 percent and mature on April 15, 2029.

Credit Suisse upgraded Imperial to 'Neutral' from 'Underperform.'

Credit Suisse upgraded Suncor Energy to 'Outperform' from 'Neutral.'

U.S. E&PS

(Late Wednesday) Press Release - Abraxas Petroleum reported financial and operating results for the three and twelve months ended December 31, 2018. The company's revenue was $36.0 million and net income of $55.8 million, or $ 0.34 per share.

Press Release - Chaparral Energy reported full year 2018 net income of $33.4 million, or 73 cents per diluted share and achieved full year 2018 adjusted EBITDA of $125 million. The company grew 2018 total proved reserves to 94.8 million barrels of oil equivalent (MMBoe), which adjusted for 2018 divestitures marks a 35% year-over-year increase, and represents a PV-10 value of $686 million.

Press Release - Kosmos Energy announced that, subject to market conditions, it intends to offer $600 million aggregate principal amount of senior notes due 2026. Kosmos intends to use the net proceeds from the offering to fund the redemption of all of its outstanding 7.875% Senior Secured Notes due 2021, of which there is $525,000,000 aggregate principal amount outstanding, to repay a portion of the outstanding indebtedness under its revolving credit facility and to pay fees and expenses related to the redemption, repayment and the offering.

Press Release - Midstates Petroleum reported net income of $49.8 million, or $1.91 per share, for the full year 2018 and net income of $35.8 million, or $1.38 per share, in the fourth quarter 2018.

(Late Wednesday) Press Release - Talos Energy announced its financial and operational results for the fourth quarter and full year 2018. The company reported net income of $306.3 million and earnings per share of $5.66 in the fourth quarter. Talos adjusted net income was $49.3 million and adjusted earnings per share of $0.91 in the fourth quarter.

CANADIAN E&PS

Press Release - Touchstone Exploration announced an operational update. The company achieved January and February 2019 crude oil sales of 1,994 and 2,179 barrels per day, respectively. Touchstone realized average prices of US$52.00 per barrel and US$56.84 per barrel for January and February crude oil volumes, respectively.

OILFIELD SERVICES

Press Release - McDermott International announced the successful commercialization and startup of its single largest CDAlky(® )reactor to date at PetroChina's refinery in Jilin, China. The 350,000 metric ton per annum (9,000 barrels per day) plant is one of four CDAlky projects awarded to the company by PetroChina and had an unusually fast schedule from design to operation, with startup occurring just 17 months after initial design.

(Late Wednesday) Press Release - Natural Gas Services Group announced that its total revenue decreased slightly from $16.7 million for the three months ended in December 31, 2017 to $16.2 million for the three months ended in December 31, 2018. Comparing quarter to quarter there was a shift in the revenue mix with rental revenues contributing 79% of total revenue compared to 69% during the same period in 2017. Total revenue decreased between consecutive quarters by 236,000 or 1.4%, to $16.2 million from $16.4 million due to a decrease in compressor sales offset by an increase in rentals. Total revenue decreased to $65.5 million from $67.7 million, or 3.3%, for the year ended December 31, 2018, compared to the year ended December 31, 2017.

DRILLERS

(Late Wednesday) Press Release - Rowan Companies announced that Repsol Exploracion Guyana, S.A. has signed a contract for the EXL II, a high-specification Super 116E Jack-up rig, for work in Guyana. The contract is for one well beginning in the third quarter of 2019 with a duration of approximately 45 days. The EXL II is currently under contract with BP in Trinidad.

MLPS & PIPELINES

(Late Wednesday) Reuters - Enterprise Products Partners expects the regulatory review for its proposed Houston crude export project to be finished by early 2020.

Credit Suisse downgraded Summit Midstream Partners to 'Underperform' from 'Outperform'.

MARKET COMMENTARY

U.S. stock index futures fell on uncertainty over U.S.-China trade talks. European shares were higher after Britain's parliament voted to reject a disorderly Brexit. Most Asian shares slipped after Chinese data signaled further weakness in the world's second-biggest economy. The dollar gained as the pound dipped after a tense vote on Brexit. Gold prices fell.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP

Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





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