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Energy Sector Update for 05/17/2018: WPZ,WMB,PBR,SNDE,TGP


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Energy stocks were ending mostly higher today, with the NYSE Energy Sector Index rising more than 1.2% while shares of energy companies in the S&P 500 were up over 1.4% as a group. West Texas Intermediate crude oil for June delivery settled unchanged at $71.49 per barrel in New York while the global benchmark Brent crude July contract rose 13 cents to $79.41 per barrel. June natural gas futures rose 4 cents higher to $2.86 per 1 million BTU. Among energy-related ETFs, United States Oil climbed nearly 0.2% while United States Natural Gas was adding over 1.6%. The Philadelphia oil-service sector index was up more than 1.6% shortly before the closing bell.

In industry news:

Domestic natural gas supplies rose by 106 billion cubic feet to 1.538 trillion cubic feet during the seven days ended May 11, the Energy Information Administration reported Thursday, roughly in-line with consensus projections of industry analysts polled by S&P Global Platts expecting a 104 billion cubic foot build and also topping the five-year average of a 67 billion cubic foot increase in natural gas inventories during the second week in May.

Among energy stocks moving on news:

+ Williams Partners ( WPZ ) sped to a 34-month high on Thursday, climbing almost 8% to its highest share price since July 2015 at $41.34 per unit, after the energy infrastructure company agreed to a $10.5 billion all-stock buyout offer from The Williams Companies Inc ( WMB ). Under terms of the proposed transaction, Williams Partners investors will receive 1.494 of a Williams common share for each unit they now own, valuing the target at $40.88 per unit, or about 6.4% premium over Wednesday's closing price for the stock. The Williams Companies said the deal will extend the period where the natural gas company is not expected to be a cash taxpayer through 2024 and also provides for "modest" cost savings. It also said the acquisition will immediately add to the cash available to the company for dividends after closing.

In other sector news

+ Teekay LNG Partners LP ( TGP ) was fractionally higher during Thursday trading, swinging between small gains and slightly deeper loses after reporting higher adjusted Q1 net income and revenue compared with year-ago levels. Excluding one-time items, the liquefied natural gas and crude oil shipper earned $22.1 million during the three months ended March 31, improving on a $21.1 million non-GAAP profit during the same quarter last year. It also generated $115.3 million in Q1 revenue, up from $101.2 million last year but falling shy of the $120.2 million four-analyst consensus.

- Petroleo Brasileiro SA ( PBR ) declined Thursday, with its American depository receipts dropping over 2%, despite the state-owned energy major more commonly known as Petrobras reporting a 1% increase in average daily production during April compared with the prior month, reaching 2.1 million barrels per day while natural gas production excluding liquefied volume rose 1.2% month-over-month. The company also said that its overall oil and gas production last month totalled 2.7 million barrels of oil equivalent per day, with all but 95,000 barrels per day produced domestically.

- Sundance Energy ( SNDE ) tumbled over 9% lower on Thursday, sinking to a session low of $5.00 a share, after the natural gas producer swung to a Q1 net loss, reversing a year-ago profit and missing Wall Street expectations while also reporting revenue falling short of analyst projections. Net loss for the three months ended March 31 was $15.6 million compared with a $2.5 million in net during the same quarter last year and trailing the single-analyst forecast expecting a $9.9 million net loss. Revenue rose 3.4% year-over-year to $24 million from $23.2 million during the first three months of 2017 but also lagged the $27.4 million two-analyst mean.

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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This article appears in: Investing , Energy
Referenced Symbols: WMB , TGP , PBR , SNDE



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