Credit: The US Now Has Saudi Arabia Hostage on Oil
SECTOR COMMENTARY
Energy stocks are under pressure in the pre-market on the weakness in crude prices and despite the relative calm in the broader equity markets. Earnings and corporate news within energy and across the entire
Energy stocks are higher and in line with broader futures after yesterday’s market-wide sell-off and on additional support from higher oil prices.
Oil prices are accelerating gains, higher by more than 1% across most grades, on reports of a drone attack at oil pumping stations in Saudi Arabia, which was declared an “act of terrorism.” Oil production was not interrupted and supplies to Europe were not affected, but this has added to the geopolitical risk premium into the price of oil especially following Monday’s news that Saudi oil tankers were among four vessels targeted in an unspecified “sabotage attack” off the United Arab Emirates coast.
Natural gas futures are higher on more moderate storage builds expected this week.
INTERNATIONAL INTEGRATEDS
Reuters - Eni announced a new light oil discovery in block 15/06, offshore Angola. The new discovery is estimated to contain up to 250 million barrels of light oil in place, with further upside.
Press Release - McDermott International announced the award of a significant contract by Petrobras for engineering, procurement, construction and installation of subsea risers and flowlines for the first phase of the Sepia field, located 174 miles (280 kilometers) from the Rio de Janeiro coastline in Brazil.
(Late Monday) Reuters - Royal Dutch Shell began restarting the gasoline-producing unit at its 218,200-barrel-per-day (bpd) Norco, Louisiana, refinery.
U.S. E&PS
(Late Monday) Press Release - Alta Mesa Resources currently estimates the quarter ended March 31, 2019 will result in a net loss of approximately $13 million as compared to a net loss of $48 million for the quarter ended March 31, 2018. The primary drivers to the change in net loss are $27 million of increased revenue associated with increased production, $8 million in increased unrealized derivative losses, $7 million of increased lease operating expense and $6 million of increased depletion associated with increased production, $30 million of decreased G&A due to the non-recurrence of costs related to the Business Combination, $5 million of increased interest expense and other more insignificant fluctuations.
CANADIAN E&PS
(Late Monday) Press Release - MEG Energy announced that Grant Billing, Ian Bruce, and Judy Fairburn are proposed as nominees for election to the Board of Directors at the corporation's Annual and Special Meeting of Shareholders on June 13th, 2019. Collectively these nominees bring extensive experience and expertise that includes, but is not limited to, finance, operations, marketing, innovation, and stakeholder relations, that will serve and support MEG's on-going commitment to sustainable development and value creation.
Press Release - Touchstone Exploration achieved quarterly average crude oil production of 2,121 barrels per day ("bbls/d"), representing increases of 37% and 15% from the first quarter of 2018 and the fourth quarter of 2018, respectively. Touchstone generated first quarter 2019 funds flow from operations of $2,430,000 ($0.02 per share), representing an increase of $368,000 or 18% from the prior year comparative period. The company recognized a net loss of $185,000 ($0.00 per share) in the first quarter of 2019 versus net earnings of $130,000 ($0.00 per share) in the first quarter of 2018.
OILFIELD SERVICES
Press Release - CGG announced commencement of its first multi-client ocean bottom node (OBN) survey, taking CGG’s offshore data library to the next level of excellence. Located in the north-central region of the Gulf of Mexico, this dense OBN survey will provide well-sampled, full azimuthal coverage with long offsets, to deliver exceptional data for imaging the geologically complex structures in Mississippi Canyon.
Reuters - C&J EnergyServices said it sees Q2 capex from $55 million to $65 million.
Press Release - McDermott International announced the award of a significant contract by Petrobras for engineering, procurement, construction and installation of subsea risers and flowlines for the first phase of the Sepia field, located 174 miles (280 kilometers) from the Rio de Janeiro coastline in Brazil.
JPMorgan terminated coverage of Weatherford International.
REFINERS
JPMorgan upgraded Valero Energy to ‘Overweight’ from ‘Neutral.’
MLPS & PIPELINES
Reuters - Executives from U.S. liquefied natural gas (LNG) companies Cheniere Energy and Tellurian said they view the trade dispute between China and the United States as temporary, with no major impact on their ability to sell LNG. China retaliated against Washington's tariffs by raising its own duty on U.S. LNG to 25 percent from 10 percent.
Gabelli & Company initiated coverage of Cheniere Energy at ‘Buy.’
Press Release - Pembina Pipeline will host its annual Investor Day and provides update to 2019 capital program. In conjunction with Investor Day, Pembina announced an update to its forecasted 2019 capital expenditures. The update reflects the aggregate impact of recent project announcements including the Peace Pipeline Phase VIII expansion, additional spending at the Duvernay Complex, incremental funding for the Jordan Cove LNG project, as well as additional equity contributions to joint venture partnerships and advances to related parties. As a result, the Company now expects 2019 capital expenditures of approximately $2 billion.
MARKET COMMENTARY
U.S. stock futures and European shares were boosted by optimistic comments from U.S. and Chinese officials over their trade dispute. Trade optimism also helped stabilize the yuan. Asian markets were down following a selloff in Chinese shares. Oil prices gained after Saudi Arabia reported drone attacks on two pumping stations owned by Aramco. Gold prices slipped. Import and export price data is scheduled for release.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 5/2/19 - CNBC Worldwide Exchange – Energy sector M&A
- 4/23/19 - Bloomberg Daybreak Asia – Iran sanctions implications
- 3/26/19 - CNBC World Wide Exchange – Energy sector performance
- 3/18/19 - Bloomberg Daybreak Asia – OPEC meeting, Iran sanctions
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.
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