Crude Rises on EIA Forecast Showing Slower-Than-Expected U.S. Production

Wednesday, March   13, 2019


The energy sector is poised for a mixed to higher start, supported by strength in the crude complex but optimism in the broader equity futures are flat ahead of key U.S. economic data and another key Brexit vote. Sector news is light today with the EIA data later today the next major catalyst.

WTI crude oil futures are up over 1% in early trading, outpacing Brent, supported by an updated EIA forecasts showing slower-than-originally expected U.S. production, last night’s API report and news that U.S. sanctions have stalled exports from Venezuela. The EIA yesterday reported that U.S. crude production was expected to grow more slowly in 2019 than it had previously expected, averaging about 12.30 million bpd and also revised down its projected 2020 production figure from 13.20 million bpd to 13.03 million bpd. Ahead of the official EIA data later today, the API last night reported that U.S. crude stocks fell unexpectedly last week, as supply from various producers was being curbed.

Natural gas futures are flat to lower in early trading, holding near a two-week low, driven by forecasts for slightly warmer weather over the next two weeks than previously expected.


Reuters - BP urged the U.S. government to tighten rules limiting methane leaks from oil and gas operations as it teamed up with a prominent environmental group to develop technologies to limit emissions of the potent greenhouse gas.

Reuters - Eni farms out to Qatar Petroleum a 30% participating interest in Tarfaya Offshore Petroleum agreement, offshore Morocco.

Reuters - Eni said it had made a major oil discovery in Angola that would boost its credentials as one of the most successful foreign oil producers in Africa in recent years.

Reuters - Petroleo Brasileiro has priced global notes worth $3 billion due in 2029 and in 2049 as it seeks to repurchase shorter-term debt obligations.

Reuters - Royal Dutch Shell has teamed up with Eneco and Van Oord in a bid to build two wind farms in the Dutch part of the North Sea.

Press Release - Bulgaria's government said that it accepted a request by Total, OMV and Repsol to extend by 109 days the permit held by the three companies for exploring for oil and natural gas in the 1-21 Han Asparuh offshore block in the Black Sea.

(Late Tuesday) Reuters - Total was restarting a large diesel hydrotreater at its 225,500-barrel-per-day Port Arthur, Texas, refinery.       


Press Release - Antero Resources announced receipt of consideration in connection with the closing of the previously announced simplification transaction between Antero Midstream GP LP and Antero Midstream Partners. At closing, AMGP was converted from a Limited Partnership to a Corporation and was renamed Antero Midstream Corporation.

(Late Tuesday) Press Release - Centennial Resource Development announced that its subsidiary, Centennial Resource Production, LLC, has priced its previously announced private offering of senior unsecured notes due 2027.  The 2027 Notes, which priced at 99.235% of the aggregate principal amount, will mature on April 1, 2027 and will pay interest at an annual rate of 6.875%. 

Press Release - Earthstone Energy announced financial and operating results for the fourth quarter and year ended December 31, 2018. The company reported 4Q18 revenues of $41.2 million. Net income attributable to Earthstone Energy was $36.1 million, or $1.26 per diluted share.

(Late Tuesday) Press Release - Halcón Resources reported net production for the three months ended December 31, 2018 averaged 17,196 barrels of oil equivalent per day (Boe/d).  Production was comprised of 69% oil, 14% natural gas liquids and 17% natural gas for the quarter. The company generated total revenues of $60.3 million for the fourth quarter of 2018.  The Company reported net income available to common stockholders of $146.7 million or net income per basic and diluted share of $0.93 for the fourth quarter of 2018.  After adjusting for selected items, the Company generated a net loss of $(13.9) million, or $(0.09) per diluted share for the fourth quarter of 2018.  Adjusted EBITDA totaled $24.5 million for the fourth quarter of 2018.


(Late Tuesday) Press Release - Gran Tierra Energy is pleased to announce that, based on preliminary results, the Company has made a new-country entry into Ecuador through the submission of winning bids for a total of three blocks, which were offered by the Ministerio de Energia y Recursos Naturales No Renovables in Ronda Intracampos. The three blocks are located in the Oriente Basin and are approximately 140,000 acres in total area, creating a contiguous acreage position extending from Gran Tierra’s existing assets in the Putumayo Basin in Colombia. Final award of these blocks is contingent upon regulatory approvals and the execution of the Participation Contracts.

(Late Tuesday) Press Release - Surge Energy reported adjusted funds from operations earnings per share (basic) of $0.02. The company’s Q4 2018 production of 21,047 boepd (82% oil and NGLs) increased by more than 34 percent (over 8 percent per share) as compared to Q4 2017 production volumes of 15,675 boepd (81% oil and NGLs). This production growth was predominantly generated by the addition of high-netback, light oil production. Additionally, Surge increased its Proven plus Probable ("P+P") reserves by 29 percent, from 95.2 MMboe at year-end 2017, to 122.6 MMboe at year-end 2018.


(Late Tuesday) Press Release - CES Energy Solutions is pleased to report on its financial and operating results for the three and twelve months ended December 31, 2018. Further, CES announced that it will pay a cash dividend of $0.005 per common share on April 15, 2019 to the shareholders of record at the close of business on March 29, 2019. Q4 2018 and 2018 annual revenue of $347.9 million and $1.3 billion, respectively, were both record quarterly and annual results for the Company. Further, the Company achieved Adjusted EBITDAC of $42.1 million and $167.6 million for the three and twelve months ended December 31, 2018, respectively, which represents increases over both prior year respective periods.


(Late Tuesday) Press Release - Seadrill has commenced a cash tender offer for up to c.$311 million in aggregate principal amount of its 12.0% Senior Secured Notes due 2025 pursuant to an offer to purchase, dated March 12, 2019.


(Late Tuesday) Reuters - Valero Energy was working to return the small crude distillation unit and the coker to normal operations at its 335,000 barrel per day (bpd) Port Arthur, Texas, refinery.


Evercore started coverage on Cheniere Energy at ‘Outperform.’

(Late Tuesday) Press Release - Keyera announced a cash dividend for March 2019 of 15.00 cents per common share. The dividend will be payable on April 15, 2019, to shareholders of record on March 22, 2019.

JPMorgan downgraded NuStar Energy to ‘Underweight’ from ‘Neutral.’

JPMorgan downgraded Shell Midstream Partners to ‘Neutral’ from ‘Overweight.’


U.S. stock futures edged higher with investors treading cautiously ahead of yet-another crucial Brexit vote in the British Parliament, amid concerns around global growth and trade. Asian shares fell broadly, while European stocks traded marginally higher. The British pound gained on hopes that lawmakers were set to rule out a no-deal Brexit. Gold prices moved higher on safe-haven demand and also found support from a weaker dollar. Durable goods, producer price index and construction spending data are scheduled for release later in the day.


Nasdaq Advisory Services Energy Team Nasdaq's Advisory Services Tamar Essner
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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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