Quantcast

Energy Stocks Remain Active With Another Dose Of Heavy Earnings Releases


Shutterstock photo

Thursday, November 08, 2018

Sector Commentary

Energy stocks will remain active, with another dose of heavy earnings releases, continued weakness in oil prices , and softer broader equity futures.

Oil edged lower on Thursday, surrendering early gains, as investors focused on the pace of growth in global crude supply, which is increasing more quickly than many had expected.  Chinese data earlier in the day that showed record oil imports in October offered some temporary respite to bearishness that has developed in the past couple of weeks over the expected crude market balance in 2019.  Record U.S. crude production and signals from Iraq, Abu Dhabi and Indonesia that output will grow more quickly than expected in 2019 pushed the price of Brent oil to its lowest since mid-August earlier in the week.

Natural gas futures are also lower by approximately 1%, trading at $3.52, ahead of weekly inventory data.  Analysts expect a build of 58 bcf.

INTERNATIONAL INTEGRATEDS

(Late Wednesday) Press Release - Weatherford International announced it has been awarded a four-year contract with a one-year optional extension to provide drillpipe riser intervention systems and services for Petróleo Brasileiro S.A. in Brazil. This contract is expected to yield approximately $80 million in revenue during the initial four-year period. It will replace a current five-system contract that began in May 2009.

CANADIAN INTEGRATEDS

GMP upgraded Imperial Oil to 'Buy' from 'Hold'.

(Late Wednesday) Press Release - Suncor announced that Jacynthe Côté will be stepping down from Suncor's Board of Directors effective immediately.

U.S. E&PS

Press Release - Anadarko Petroleum announced a transaction to sell substantially all of its remaining midstream assets for $4.015 billion to Western Gas Partners, with $2.0075 billion cash proceeds, and the balance to be paid in new Western Gas equity. Concurrently WES announced it has entered into a merger agreement with Western Gas Equity Partners, which will result in a simplified midstream structure. The sale is expected to close in the first quarter of 2019, concurrently with the closing of the merger. The closing of the asset sale and merger is subject to the parties obtaining regulatory approvals and other customary closing conditions. The closing of the merger is subject to obtaining WES unitholder approval.

(Late Wednesday) Press Release - Abraxas Petroleum reported third quarter 2018 revenue of $41.6 million, net income of $1.8 million, or $0.01 per share and adjusted net income (excluding certain non-cash items) of $8.6 million, or $0.05 per share.

(Late Wednesday) Press Release - Berry Petroleum reported a net loss attributable to common stockholders of $50 million and adjusted net income of $41 million for the third quarter of 2018. Earnings per share for the third quarter was a net loss of $0.66 per diluted share and adjusted net income of $0.47 per diluted share. In addition, the Board approved a regular $0.12 per share dividend for the fourth quarter of 2018. On November 7, 2018 the Board declared a regular dividend for the fourth quarter at a rate of $0.12 per share on the Company's outstanding common stock. This is the Company's second regular quarterly dividend, and the Company, subject to approval by the Board, intends to pay a similar dividend in future quarters.

Press Release - Comstock Resources reported earnings of $13.8 million or $0.13 per share for the period August 14, 2018 through September 30, 2018. The results for this period included an unrealized loss from derivative financial instruments of $2.2 million and a gain on sale of oil and gas properties of $0.1 million. Excluding these items, the net income would have been $15.9 million or $0.15 per share. The financial results for the first period since closing the Jones Partnerships contribution is for 48 days from August 14, 2018 through September 30, 2018.  During that period Comstock produced 542,000 barrels of oil and 14.1 billion cubic feet of natural gas or 17.4 billion cubic feet of natural gas equivalent. Oil production averaged 11,300 barrels of oil per day and natural gas production averaged 294 million cubic feet ("MMcf") per day. Comstock's average realized oil price was $62.21 per barrel and the average realized gas price after hedging was $2.59 per Mcf during this period.

Press Release - Denbury Resources announced net income of $78 million, or $0.17 per diluted share, for the third quarter of 2018.  Adjusted net income (a non-GAAP measure) was $59 million, or $0.13 per diluted share, with the difference from GAAP net income primarily due to the exclusion of $17 million ($13 million after tax) of income from noncash fair value adjustments on commodity derivatives (a non-GAAP measure),.

BMO downgraded Extraction Oil & Gas t o 'Market Perform' from 'Outperform'.

(Late Wednesday) Press Release - Earthstone Energy reported third quarter 2018 revenues of $46.1 million, net income of $0.6 million and net income attributable to the Company of $0.2 million, or $0.01 per diluted share.

(Late Wednesday) Press Release - EP Energy produced 35.8 MBoe/d, including 25.6 MBbls/d of oil in the third quarter of 2018, a nine percent and 28% increase from the third quarter of 2017, respectively. EP Energy averaged approximately three drilling rigs, invested $92 million excluding acquisition capital and completed (frac'd) 22 gross and 10 net wells in the third quarter of 2018.

(Late Wednesday) Press Release - Halcón Resources generated total revenues of $61.6 million for the third quarter of 2018.  The Company reported a net loss available to common stockholders of $(81.8) million or a net loss per basic and diluted share of $(0.52) for the same period.  After adjusting for selected items (see Selected Item Review and Reconciliation table for additional information), the Company generated a net loss of $(9.0) million, or $(0.06) per diluted share for the third quarter of 2018.

(Late Wednesday) Press Release - Marathon Oil reported third quarter 2018 net income of $254 million, or $0.30 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $200 million, or $0.24 per diluted share. Net operating cash flow was $963 million, or $889 million before changes in working capital.

(Late Wednesday) Press Release - Murphy Oil recorded net income of $94 million, or $0.54 per diluted share, for the third quarter 2018. The company reported adjusted income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, of $61 million, or $0.35 per diluted share.

(Late Wednesday) Press Release - Midstates Petroleum Company announced changes to its Board of Directors. Midstates' Board named Randal Klein, Evan Lederman, and David Proman to the Board effective today upon the resignation of Frederic (Jake) F. Brace, Michael Reddin, and Bruce Vincent. Each of Mr. Klein, Lederman and Proman intend to stand for election at the next Annual Meeting of Stockholders in 2019.

Press Release - Penn Virginia reported net income for the third quarter of 2018 of $16.3 million, or $1.06 per diluted share, compared to net loss of $2.5 million, or $0.17 per diluted share, in the second quarter of 2018.  Adjusted net income was $41.8 million, or $2.72 per diluted share in the third quarter of 2018, versus $37.4 million, or $2.46 per diluted share in the second quarter of 2018.

(Late Wednesday) Press Release - QEP Resources reported net income of $7.3 million, or $0.03 per diluted share, for the third quarter 2018 compared with a net loss of $3.3 million, or $0.01 per diluted share, for the third quarter 2017.

(Late Wednesday) Press Release - SandRidge Energy reported net income of $12 million, or $0.33 per share, and net cash provided by operating activities of $53 million for the third quarter of 2018. After adjusting for certain items, the Company's adjusted net income amounted to $11 million, or $0.31 per share, operating cash flow totaled $48 million and adjusted EBITDA was $48 million for the quarter.

(Late Wednesday) Press Release - WildHorse Resource Development reported net income of $11.5 million for the third quarter 2018 in comparison to a net loss of $10.8 million for the third quarter 2017. Net Income available to common stockholders was $3.5 million or $0.04 per share for the third quarter 2018 in comparison to a net loss available to common stockholders of $17.3 million or $0.17 per share for the third quarter 2017. Total revenues and other income for the third quarter 2018, excluding the impact of realized hedges, were $259.5 million compared to $122.5 million for the third quarter 2017.

CANADIAN E&PS

(Late Wednesday) Press Release - Athabasca Oil recorded adjusted funds flow of $62.2 million ($0.12/sh) and operating income of $83.7 million.

(Late Wednesday) Press Release - Canacol Energy announced that the distribution to the shareholders of the Corporation of the 22,598,870 of Arrow Exploration Corp. Shares by way of a return of capital valued at US$20 million (US$0.885 cents per Arrow Share received) was effective on November 6, 2018.

(Late Wednesday) Press Release - Gran Tierra Energy announced in connection with its previously announced normal course issuer bid to purchase up to 19,269,732 of its shares of common stock, it entered into an Automatic Securities Purchase Plan with a designated broker. The ASPP is intended to allow for the purchase of Shares under the NCIB when the Company would ordinarily not be permitted to purchase shares due to regulatory restrictions and customary self-imposed blackout periods.

Press Release - Obsidian Energy reported funds flow from operations ("FFO") for the third quarter of 2018 was $26 million. Increases in FFO from higher oil prices were offset by realized risk management losses, crude oil differentials and lower production volumes. Realized risk management losses for the quarter totaled $9.28 per boe compared to $7.28 per boe in the second quarter of 2018.

Press Release - Pengrowth Energy reported a net loss in the third quarter of $1.6 million compared with a net loss of $27.5 million in the second quarter of 2018. The improvement from the prior quarter was primarily the result of a $25.3 million positive change in fair value of commodity risk management contracts, a $5.5 million increase in adjusted funds flow, a $4.5 million positive variance in realized and unrealized foreign exchange, offset by a $6.3 million negative variance from other expenses net of the tax effect of the above items.

Press Release - Pengrowth Energy reported Pengrowth's reserves values effective September 30, 2018 based on an independent engineering evaluation conducted by GLJ Petroleum Consultants Ltd. (GLJ) using the GLJ October 1, 2018 price forecast and prepared in accordance with National Instrument 51-101 (NI 51-101) and the Canadian Oil and Gas Evaluation Handbook (COGEH).

TD Securities downgraded Peyto Exploration & Development to 'Hold' from Buy.

(Late Wednesday) Press Release - Peyto Exploration & Development reported funds from operations of $0.66/share. Generated $110 million in FFO in Q3 2018 down 21% from $139 million in Q3 2017 (down 21%/share) due primarily to lower production levels. Earnings of $0.18/share, dividends of $0.18/share. Earnings of $30 million were generated in the quarter while dividends of $30 million were paid to shareholders.

(Late Wednesday) Press Release - Tourmaline Oil reported Q3 2018 earnings were $55.3 million, up 9% from Q3 2017. The quarterly dividend for Q4 2018 will remain at $0.10/common share.

OILFIELD SERVICES

Press Release - Halliburton Company announced that its board of directors has declared a 2018 fourth quarter dividend of eighteen cents ($0.18) a share on the company's common stock payable December 27, 2018 to shareholders of record at the close of business on December 6, 2018.

Press Release - Natural Gas Services Group reported that for the quarter ended September 30, 2018, NGS reported rental revenue of $12.0 million compared to $11.3 million for the quarter ended September 30, 2017. Sequentially, rental revenue on a quarterly basis rose 5% to $12.0 million from $11.4 million. The Company reported net income of $236,000 for the third quarter compared to $522,000 in the same quarter in 2017 and $247,000 in the second quarter 2018. Earnings per diluted share for the quarter ended September 30, 2018 was 2 cents.

(Late Wednesday) Press Release - Pason Systems generated consolidated revenue of $82.3 million in the third quarter of 2018, an increase of 28% from the same period in 2017. The Company recorded net income of $24.4 million ($0.28 per share) in the third quarter of 2018, compared to net income of $7.4 million ($0.08 per share) recorded in the same period in 2017.

IA Securities upgraded Pason Systems to' Buy' from 'Hold'.

Press Release - TETRA Technologies announced consolidated third quarter 2018 net loss per share before discontinued operations attributable to TETRA stockholders of $0.06. This compares to consolidated net loss of $0.05 per share before discontinued operations attributable to TETRA stockholders in the second quarter of 2018, and earnings per share before discontinued operations attributable to TETRA stockholders of $0.03 in the third quarter of 2017. Third quarter 2018 revenue before discontinued operations was $256.9 million, a decrease of 1% from the second quarter of 2018 and an increase of 40% from the third quarter of last year.

Press Release - Trican Well Service reported net loss from continuing operations for the quarter was $12.1 million (Q3 2017 - net income of $46.9 million). Revenue in the third quarter increased 48% compared to the second quarter of 2018. Although activity levels increased when compared to the previous quarter, Q3 2018 fracturing activity levels were affected by less multi-well pad activity, weather delays and some customer slowdowns in the second half of September which resulted in relatively low utilization.

(Late Wednesday) Press Release - Weatherford International announced it has been awarded a four-year contract with a one-year optional extension to provide drillpipe riser intervention systems and services for Petróleo Brasileiro S.A. in Brazil. This contract is expected to yield approximately $80 million in revenue during the initial four-year period. It will replace a current five-system contract that began in May 2009.

DRILLERS

(Late Wednesday) Press Release - Precision Drilling announced that both Precision and Trinidad management teams have been working closely on planning efforts and completing all necessary regulatory processes related to the transaction. On October 31, 2018, Precision announced that the U.S. Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the parties expect to provide an update on the Canadian Competition Act process in the coming weeks.  In addition, on November 5, 2018, Trinidad obtained the interim order from the Court of Queen's Bench of Alberta in connection with the transaction and Precision and Trinidad have filed a joint management information circular dated November 5, 2018 which is in the process of being mailed to their respective securityholders.

REFINERS

(Late Wednesday) Press Release - HollyFrontier announced that its Board of Directors declared a regular quarterly dividend in the amount of $0.33 per share, payable on December 12, 2018 to holders of record of common stock on November 21, 2018.

MLPS & PIPELINES

Press Release - Cheniere Energy reported a net income of $65 million, or $0.26 per share(basic and diluted), for the three months ended September 30, 2018, compared to a net loss of $289 million, or $1.24 per share (basic and diluted), for the comparable 2017 period. Cheniere reported net income1 of $404 million, or $1.67 per share (basic) and $1.65 per share (diluted), for the nine months ended September 30, 2018 compared to a net loss of $520 million, or $2.24 per share (basic and diluted), for the comparable 2017 period.

Stifel downgraded Enlink Midstream Partners LP to 'Hold' from 'Buy'.

Press Release - The EnLink Midstream companies (EnLink), EnLink Midstream Partners, LP (the Partnership or ENLK) and EnLink Midstream, LLC (the General Partner or ENLC), announced that a subsidiary of the Partnership, EnLink NGL Pipeline, LP, will launch a binding open season for expansion capacity volume commitments for common carrier transportation service on its existing Cajun-Sibon natural gas liquids pipeline system. EnLink previously announced the Cajun-Sibon III pipeline expansion plans concurrently with publishing its third quarter 2018 earnings results. EnLink expects Cajun-Sibon III to be operational during the second quarter of 2019.

(Late Wednesday) Press Release - Energy Transfer LP announced that its subsidiary, Lone Star NGL LLC, will construct a seventh natural gas liquids (NGL) fractionation facility at Mont Belvieu, Texas. Fractionator VII is scheduled to be operational in the first quarter of 2020. The 150,000 barrel per day fractionator is fully subscribed by multiple long-term contracts and will provide the much needed capacity required to supplement incremental fractionation demand in excess of volumes feeding Fractionators I through VI.

(Late Wednesday) Press Release - Energy Transfer LP , formerly named Energy Transfer Equity, L.P. and also referred to herein as "ETE," reported that for the three months ended September 30, 2018, net income attributable to partners was $371 million, up 47 percent with an increase of $119 million compared to the three months ended September 30, 2017.

(Late Wednesday) Press Release - MPLX announced that it has priced $2,250,000,000 in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $750,000,000 aggregate principal amount of 4.800% senior notes due in 2029 and $1,500,000,000 aggregate principal amount of 5.500% senior notes due in 2049. The 2029 senior notes and 2049 senior notes were offered at a price to the public of 99.432% of par and 98.031% of par, respectively.

(Late Wednesday) Press Release - Pembina Pipeline announced that its Board of Directors declared a common share cash dividend for November 2018 of $0.19 per share to be paid, subject to applicable law, on December 14, 2018 to shareholders of record on November 23, 2018. This dividend is designated an "eligible dividend" for Canadian income tax purposes. For non-resident shareholders, Pembina's common share dividends should be considered "qualified dividends" and may be subject to Canadian withholding tax.

Press Release - Targa Resources reported third quarter 2018 net loss attributable to the Company of ($23.7) million compared to ($167.6) million for the third quarter of 2017. The Company reported distributable cash flow for the third quarter of 2018 of $287.2 million compared to total common dividends to be paid of $208.6 million and total Series A Preferred Stock dividends to be paid of $22.9 million. In September 2018, the Company received the annual cash payment of $43 million under its long-term condensate splitter agreement, which is included in distributable cash flow for the third quarter.

Press Release - Western Gas Partners and Western Gas Equity Partners announced they have entered into a merger agreement whereby WGP will acquire all the publicly held common units of WES and substantially all of the units owned by Anadarko Petroleum in a unit-for-unit, tax-free exchange (the "Simplification Transaction"). WES will survive as a partnership with no publicly traded equity and remain the borrower for all existing and future debt issuances, as well as the owner of all operating assets and equity investments. WGP will own 98% of WES, and APC will own the remaining 2%. In conjunction with the Simplification Transaction, WES has agreed to acquire substantially all of APC's remaining midstream assets for a price of $4.015 billion (the "Acquisition," and together with the Simplification Transaction, the "Transactions").

MARKET COMMENTARY

Stock futures for Canada's main index and Wall Street's major indexes fell, as investors await rate decision of Federal Reserve at its policy meeting. Major European shares rose, supported by strong results that soothed concerns about slowing corporate earnings and Asian indexes traded mostly higher.

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.



This article appears in: News Headlines , MarketInsite



More from Nasdaq

Subscribe






Nasdaq
Contributor:

Nasdaq











Research Brokers before you trade

Want to trade FX?