The energy sector is set for a lower start, pressured by weakness in the crude complex while major equity indices were flat to higher after Iran stressed no further escalation in military strikes following its attack on U.S.-led forces in Iraq overnight, easing investor concerns of a rising conflict in the region.
WTI crude oil futures are down over 1.5% in early trading, trailing Brent and well off overnight highs that came after the Iranian missile attack briefly offered support. Reports that the attack had no impact on the oil production facilities in the region and comments by President Trump and Iran's foreign minister that signaled a period of calm weighed on futures. Traders also digested last night’s API report that showed another larger-than-expected draw in crude stocks mixed with outsized builds in refined products. The markets will be looking to the EIA data later today to confirm.
Natural gas futures meanwhile bucked the trend and are up nearly 0.50% so far this morning, building on yesterday’s momentum on the backs of a cooler weather forecasts and ahead of tomorrow’s storage report.
Reuters - ExxonMobil France said that its Fos refinery was experiencing some problems shipping products because of picketing by striking union workers, but its Port Jerome-Gravenchon refinery was operating normally. A spokeswoman said the 140,0000 barrels-per-day Fos-sur-Mer plant, near Marseille had been able to ship output overnight. At the 240,000 bpd Port Jerome refinery near Le Havre, a limited number of staff had joined the national protest against pension reforms on Tuesday afternoon, January 7, but on Wednesday morning, January 8, the facility was operating and shipping its output, she added. Separately, the Environment Ministry said in a statement that production at France's oil refineries was continuing and that supply to petrol stations was at a normal level.
Reuters - ExxonMobil confirmed it is weighing an exit from a long-stalled Romanian natural gas venture and has begun providing information to potential buyers. The company holds a 50% stake in the Neptun Deep offshore project located in the Black Sea with Romanian OMV Petrom, majority-controlled by Austria's OMV, but the venture has been fraught with delays over the tax regime and regulations. No buyer has been identified and no agreements reached with outside groups, Exxon spokesman Todd Spitler said.
Stifel Nicolaus and Co upgraded Apache to ‘Buy’ from ‘Hold.’
TD Securities downgraded Cabot Oil & Gas to ‘Hold’ from ‘Buy.’
Mizuho upgraded Occidental Petroleum to ‘Buy’ from ‘Neutral.’
(Late Tuesday) Press Release - On January 2, 2020, the Board of Directors ofOccidental Petroleum increased the size of the Board from 10 to 11 directors in order to elect Andrew Gould, a former Chairman and Chief Executive Officer of Schlumberger Limited, to the Board effective March 1, 2020.
Press Release - Range Resources announced the commencement of cash tender offers to purchase up to $500 million aggregate principal amount of its outstanding 5.750% senior notes due 2021, 5.875% senior notes due 2022 and 5.000% senior notes due 2022.
Press Release - Range Resources announced that it intends, subject to market conditions, to offer $500 million aggregate principal amount of senior notes due 2026 in a private placement to eligible purchasers.
TD Securities downgraded Range Resources to ‘Reduce’ from ‘Hold.’
TD Securities upgraded Tourmaline Oil to ‘Action List Buy’ from ‘Buy.’
Press Release - Baker Hughes announced that the Baker Hughes international rig count for December 2019 was 1,104, up 8 from the 1,096 counted in November 2019, and up 79 from the 1,025 counted in December 2018. The international offshore rig count for December 2019 was 257, up 10 from the 247 counted in November 2019, and up 23 from the 234 counted in December 2018. The average U.S. rig count for December 2019 was 804, down 6 from the 810 counted in November 2019, and down 274 from the 1,078 counted in December 2018. The average Canadian rig count for December 2019 was 135, down 1 from the 136 counted in November 2019, and down 6 from the 141 counted in December 2018. The worldwide rig count for December 2019 was 2,043, up 1 from the 2,042 counted in November 2019, and down 201 from the 2,244 counted in December 2018.
Press Release - CGG provided full year 2019 & Q4 financial update. CGG anticipates Q4 2019 segment Group revenue at $393 million, Geoscience fourth quarter 2019 segment revenue around $105 million, sequentially up 11%, segment Multi-client sales around $166 million for the fourth quarter of 2019 after an exceptional third quarter 2019. After-sales are expected to be around $96 million. CGG anticipates fourth quarter 2019 segment Equipment sales around $121 million, sequentially up 25%. In addition, the company anticipates full year 2019 segment Group revenue at around $1.397 million, up 14% year on year, and year-end 2019 Net Debt to be around $584 million. The Group’s Liquidity is expected to be at $611 million at the end of December 2019.
Press Release - Petrofac has been selected by Petrogas NEO UK - a jointly owned company created by Petrogas E&P UK, and NEO Energy, a portfolio company of private equity fund HitecVision - to establish its new North Sea operation following its recently announced asset acquisition. In a two-year deal valued in the region of US$50million, Petrofac will integrate the services of its Operations, Projects and Well Engineering service lines. As well as assisting in the transition of operations on the Quad 15 & Flyndre area assets, Petrofac will also provide ongoing operational, maintenance, engineering and construction support; and deliver well engineering and project management support services for Petrogas NEO UK's activities.
(Late Tuesday) Press Release - Nabors Industries announced that it has priced $600 million in aggregate principal amount of senior guaranteed notes due 2026 and $400 million in aggregate principal amount of senior guaranteed notes due 2028 in the private placement offering it announced. The 2026 Notes will bear interest at an annual rate of 7.25% and are being offered to investors at an initial price of 100% of par. The 2028 Notes will bear interest at an annual rate of 7.50% and are being offered to investors at an initial price of 100% of par. The notes will be fully and unconditionally guaranteed by certain of Nabors' indirect wholly-owned subsidiaries consisting of Nabors Industries, Inc., Nabors Drilling Holdings Inc., Nabors International Finance Inc., Nabors Lux Finance 1, Nabors Global Holdings Ltd. and Nabors Holdings Ltd. The sale of the notes to the initial purchasers is expected to close on January 10, 2020, subject to customary closing conditions, and is expected to result in approximately $986 million in net proceeds to Nabors after deducting offering commissions payable by Nabors.
Press Release - Transocean announced that as the offshore drilling market continues to improve, the company is observing an increase in contract opportunities for its ultra-deepwater and harsh environment drilling services. Since its last Fleet Status Report issued in October 2019, the company has secured an additional $352.9 million of contract backlog from new contracts and extensions to existing contracts.
Press Release - Transocean Ltd announced that Transocean Inc., its wholly-owned subsidiary, has commenced an offering of $750 million aggregate principal amount of senior unsecured notes due 2027 to eligible purchasers pursuant to Rule 144A/Regulation S. The Notes will be fully and unconditionally guaranteed by Transocean Ltd. and certain of Transocean Inc.’s subsidiaries. Transocean intends to use the net proceeds from this offering to refinance, repurchase and/or redeem certain of its existing indebtedness in one or more transactions, and/or for general corporate purposes.
MLPS & PIPELINES
(Late Tuesday) Press Release - Energy Transfer Operating announced that it has priced an underwritten public offering of $1.0 billion aggregate principal amount of its 2.900% senior notes due 2025, $1.5 billion aggregate principal amount of its 3.750% senior notes due 2030 and $2.0 billion aggregate principal amount of its 5.000% senior notes due 2050 at a price to the public of 99.924%, 99.843% and 99.914%, respectively, of their face value.
Press Release - Enterprise Products Partners and Navigator Holdings Ltd. announced that the first cargo of ethylene has been exported from their 50/50 joint venture marine terminal located at Morgan’s Point, Texas along the Houston Ship Channel. The Navigator Europa recently departed the facility carrying 25 million pounds of ethylene for Marubeni Corporation, a large Japanese trading company and long-term terminal customer.
(Late Tuesday) Press Release - Pembina Pipeline along with Petrochemical Industries Company K.S.C. of Kuwait, announced that Canada Kuwait Petrochemical Corporation has executed a lump sum engineering, procurement and construction contract related to the construction of the propane dehydrogenation facility within its integrated PDH and polypropylene upgrading facility. With this contract, CKPC has fixed approximately 60 percent of the cost of the PDH/PP Facility thus far. In conjunction with execution of the lump sum contract, the Company also announces an update to its share of the capital cost for the PDH/PP Facility and project timing.
Wall Street futures turned higher and the dollar rose, while the Japanese yen and Swiss franc gave up gains, as investors foresaw no immediate military escalation between Iran and the U.S. following Tehran's attack on Iraqi bases housing U.S. forces. Most European and Asian shares tumbed on fears of a wider war in the Middle East. Gold retired from its near seven-year peak. Oil prices retreated, as fears of disruption to crude flows faded.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 9/17/19 - Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 - Discussion on Bloomberg TV about Impact of Abqaiq Attack
- 7/1/19 - OPEC meeting discussion with CNBC TV
- 7/1/19 - Oil Market Geopolitics with Bloomberg TV
- 5/23/19 - Oil's New Bear Market Discussion with Bloomberg TV
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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