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Oil Climbs as Saudi Arabia Pushes to Renew Export Curbs


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Tuesday, June 18, 2019

SECTOR COMMENTARY

Energy stocks are moderately higher, taking cues from broader markets which are optimistic as investors bet the Federal Reserve will set the stage for more accommodative monetary policy at this week's meeting.  Corporate news is very light in the energy sector, but investors will pay attention to comments from the JP Morgan Energy Conference and a few E&Ps which provided higher production volume guidance.

WTI and Brent futures are up moderately from morning lows after yesterday's weakness.  Saudi Arabia is pushing to renew oil export curbs, have already deepened their own output this month and will press countries that aren't complying with the current agreement.  Meanwhile, the US announced 1,000 more troops are being deployed to the Middle East for "defensive purposes," which Russia said cannot be viewed as anything other than a conscious course to provoke war.

Natural gas futures are moderately higher as warmer temperatures are expected for many parts of the US through the rest of this month and the start of July, adding to recent gains in power generation demand.

U.S. INTEGRATEDS

Reuters - Exxon Mobil has sold two Russian Sokol crude cargoes loading in August at lower premiums. The company sold two of the three cargoes offered via a tender at $4.50-$4.70 a barrel above Dubai quotes. The company offered cargoes to load on Aug. 10-13, 17-20 and 27-30. Prior to this, ONGC and Trafigura sold August-loading Sokol crude at premiums between $4.60-$5.40 a barrel.

INTERNATIONAL INTEGRATEDS

Press Release - Total has brought on line its new Pangea III supercomputer, multiplying the Group's computing power by almost 5 to 31.7 petaflops1 (equivalent to 170,000 laptops combined) and tripling its storage capacity to 76 petabytes2 (equivalent to about 50 million HD movies). Developed by IBM, the new high performance computer also enhances energy efficiency, dividing the power consumption per petaflop by 11 (1.5 MW for Pangea III versus 4.5 MW for Pangea I and II).

CANADIAN INTEGRATEDS

Press Release - Cenovus Energy intends to repurchase US$748,009,000 aggregate principal amount (the "Revised Maximum Amount") of its debt as the result of successful cash tender offers for certain of its outstanding Notes announced on June 4, 2019. The repurchase demonstrates continued progress in deleveraging Cenovus's balance sheet.

U.S. E&PS

Scotiabank discontinued coverage of Anadarko Petroleum .

Scotiabank suspended coverage of Apache , Concho Resources , Continental Resources , Devon Energy , EOG Resources , Hess , Marathon Oil , Murphy Oil , Noble Energy , Occidental Petroleum and Pioneer Natural Resources Company .

Press Release - Callon Petroleum announced it has given notice for the redemption of all outstanding shares of the Company's 10.00% Series A Cumulative Preferred Stock (CUSIP: 13123X409).

(Late Monday) Press Release - EQT provided preliminary financial and operational results for the second quarter 2019 and announced additional savings under its Target 10% Initiative. Based on the Company's performance to date, EQT also expects the following financial results for the second quarter 2019: sales volumes at the high end of the Company's guidance of 355-375 Bcfe; capital expenditures in line with expectations; and adjusted free cash flow improvement of $25 million over the previously provided guidance, excluding the impact of litigation reserves and proxy-related costs.

Press Release - SM Energy announced that second quarter 2019 production is exceeding expectations and the Company is raising guidance for second quarter and full year production volumes by 0.4 MMBoe, at the mid-point, due to better than expected well performance and completion timing. Second quarter and full year production is expected to be approximately 43-44% oil. The Company also announced strong 30-day peak IP rates on two wells testing new intervals, the Dean and the Wolfcamp D in the RockStar area of the Permian Basin, which produced approximately 1,550 Boe/d and 1,400 Boe/d, respectively.

CANADIAN E&PS

RBC initiated coverage of Athabasca Oil at 'Sector Perform.'

Press Release - Enerplus announced that a cash dividend in the amount of CDN$0.01 per share will be payable on July 15, 2019 to all shareholders of record at the close of business on June 28, 2019. The ex-dividend date for this payment is June 27, 2019.

(Late Monday) Press Release - TORC Oil & Gas confirmed that a dividend of $0.025 per common share will be paid on July 15, 2019 to common shareholders of record on June 30, 2019. The ex-dividend date is June 27, 2019, with payment to be made in cash or common shares at the election of the shareholder. Any common shareholder choosing to receive common shares rather than cash must submit his or her share dividend authorization form no later than 4:30 p.m. (Calgary time) on the fourth business day immediately prior to the record date for the declared dividend payment, being June 25, 2019. This dividend has been designated as an "eligible dividend" for Canadian income tax purposes.

OILFIELD SERVICES

Press Release - Subsurface Imaging, part of CGG 's Geoscience division, has been awarded a landmark processing contract by the Abu Dhabi National Oil Company (ADNOC). Under its terms, CGG will perform high-end time and depth imaging of massive volumes of very high-spec data from what is believed to be the world's largest ocean-bottom node (OBN) seismic survey to date.

(Late Monday) Press Release - ION Geophysical announced the election of Mr. Michael McGovern to its Board of Directors, and his appointment to the Compensation Committee of the Board, effective June 17, 2019. Mr. McGovern was elected to replace Mr. Franklin Myers, who retired from ION's Board on June 17, 2019.

REFINERS

(Late Monday) Reuters - Valero Energy is restarting the small hydrocracker at its 335,000 barrel per day (bpd) Port Arthur, Texas, refinery. The 45,000 bpd hydrocracker was shut on Sunday by a malfunction. The unit converts gas oil to motor fuels, primarily diesel, using hydrogen and a catalyst under high heat and pressure.

MLPS & PIPELINES

Press Release - On June 14, 2019, Cheniere Corpus Christi Holdings, LLC ("CCH"), an indirect, wholly-owned subsidiary of Cheniere Energy , and CCH's subsidiaries Corpus Christi Liquefaction, LLC ("CCL"), Cheniere Corpus Christi Pipeline, L.P. ("CCP") and Corpus Christi Pipeline GP, LLC ("CCPGP" and together with CCL and CCP, each, a "Guarantor" and collectively, the "Guarantors"), as guarantors, entered into a Note Purchase Agreement (the "Note Purchase Agreement") with Allianz Global Investors GmbH, as noteholder consultant and the purchasers named therein (the "Purchasers"), to issue and sell to the Purchasers $727 million aggregate principal amount of its 4.80% Senior Secured Notes due 2039.

MARKET COMMENTARY

Wall Street futures were up with all eyes on the U.S. Federal Reserve which begins its two-day policy meeting, with dovish expectations of a rate cut pushing gold prices higher. Most Asian equities rose while Japan's Nikkei ended in the red. European shares rose in a knee-jerk reaction to European Central Bank President Mario Draghi's comments on further policy easing, driving the euro to take a sharp hit. The dollar remained steady. Oil prices dipped on global growth worries over the U.S.-China trade war. Housing data is scheduled for release later in the day.

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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