Leadership

Crude Slides on Profit Taking After Larger-Than-Expected Inventory Draw

Thursday, March  21, 2019

SECTOR COMMENTARY

Energy stocks are set to open lower, tracking weaker broader indices and oil prices.  In company news, Murphy Oil shares are higher following the announcement of a divestiture of its Malaysian portfolio, which accompanied a share repurchase announcement and debt reduction plan. 

Oil prices are giving back a small portion of yesterday’s strong gains on profit taking, following the much larger than expected 9.6 million barrel oil drawdown in weekly inventories.  Ongoing OPEC+ cooperation has also kept support strong for prices.

Natural gas futures were near flat-line ahead of weekly inventory data.  Analysts said utilities likely pulled 48 bcf from inventories.

U.S. INTEGRATEDS

Barclays discontinued coverage of Chevron and Exxon Mobil.

INTERNATIONAL INTEGRATEDS

Barclays discontinued coverage of Petroleo Brasileiro.

Reuters - Petroleo Brasileiro is reevaluating a partnership with the China National Petroleum Corporation to build a refinery in Rio de Janeiro state.

(Late Wednesday) Press Release - Petróleo Brasileiro informs that its Board of Directors, at a meeting, elected Mrs. Anelise Quintão Lara for the position of Chief Refining and Natural Gas Executive Officer and approved the reappointment of the CEO Roberto Castello Branco and the other Executive Officers of the company for a term of two years, with the exception of the Chief Financial and Investor Relations Officer, who shall remain in his current position until his successor takes office. 

(Late Wednesday) Reuters - Petróleo Brasileiro said Government Tax Council (CARF) ruled against co in case regarding 2.2 billion reais tax bill. Petrobras plans to appeal tax ruling and said that the decision does not change expectation of possible losses in case.

(Late Wednesday) Reuters - Argentina's energy secretariat said it authorized oil companies YPF and Total to make new gas exports to neighboring Chile. The exports will take place in an eight-month period of lower local demand in Argentina. The government authorized state-controlled oil company YPF to send 500,000 cubic meters per day, and French company Total to send 1.5 million cubic meters per day, the secretariat said in a statement.

CANADIAN INTEGRATEDS

Barclays discontinued coverage of Cenovus Energy, Husky Energy, Imperial Oiland Suncor Energy.              

U.S. E&PS

Morgan Stanley started coverage of Callon Petroleum at ‘Equal-Weight.’

Simmons upgraded ConocoPhillips to ‘Overweight’ from ‘Neutral.’

Barclays discontinued coverage of ConocoPhillips, Hess, Murphy Oil and OccidentalPetroleum.

Press Release - Toby Z. Rice and Derek A. Rice, shareholders of EQT, announced they have nominated a slate of nine highly qualified candidates for election to the EQT Board of Directors at EQT’s Annual Meeting on July 10, 2019.

Press Release - Murphy Oil announced that a subsidiary has signed a sale and purchase agreement to divest the fully issued share capital of its two primary Malaysian subsidiaries, Murphy Sabah Oil Co., Ltd. and Murphy Sarawak Oil Co., Ltd., to a subsidiary of PTT Exploration and Production Public Company Limited (“PTTEP”). PTTEP will pay Murphy US$2.127 billion in an all-cash transaction, payable upon closing and subject to customary closing adjustments, plus up to a US$100 million bonus payment contingent upon certain future exploratory drilling results prior to October 2020. Murphy’s Board of Directors has approved a new $500 million share repurchase program, expiring on December 31, 2020, of which approximately $300 million is planned to be executed in the first tranche, with the remaining $200 million expected in the second tranche.

Press Release - SM Energy provided certain operational updates for the first quarter of 2019 and announces participation in an upcoming investor event. The 25-well Merlin Maximus development located in the heart of the RockStar area is off to a successful start. All 25 wells were drilled and completed as planned and on budget. 24 of the 25 wells (one well intentionally shut-in to monitor sub-surface pressure) are on production as scheduled. While it is very early data, all wells are meeting or exceeding production expectations.

CANADIAN E&PS 

Barclays discontinued coverage of Canadian NaturalResources.

Press Release - Encana announced the appointment of Corey D. Code as Executive Vice-President & Chief Financial Officer, effective May 1, 2019. Sherri A. Brillon, who has served as Encana’s CFO since 2009, will be retiring at the end of May 2019. 

OILFIELD SERVICES

Press Release - McDermott International announced a substantial contract award from a Middle East customer for engineering, procurement, construction and installation (EPCI) services in the Arabian Gulf. The contract for new facilities includes the full suite of EPCI services for six new offshore jackets as well as three associated topsides. The project scope also includes eight kilometers (4.9 miles) of 28-inch corrosion resistant alloy cladded pipeline, two inter-platform bridges, eight kilometers (4.9 miles) of composite cables as well as brownfield works at the existing offshore facilities. The duration of the work is expected to be approximately 34 months and the contract award will be reflected in McDermott's first quarter 2019 backlog.

REFINERS 

Barclays discontinued coverage of CVR Energy, Delek US Holdings, HollyFrontier, Marathon Petroleum, PBF Energy, Phillips 66 and Valero Energy.

MLPS & PIPELINES 

Press Release - AltaGas announced that after careful consideration, David Cornhill, Founder of AltaGas and Chairman, has elected to step down on April 1, 2019 from the Chairman position. The new Chair, Pentti Karkkainen has been appointed by the Board of Directors, effective April 2. Mr. Cornhill will remain on the Board, ensuring an orderly transition and continuity.

MARKET COMMENTARY

U.S. stock index futures were muted, a day after the Federal Reserve abandoned projections for any interest rate hikes this year amid signs of an economic slowdown. The dollar index recovered from Fed-induced sell-off and traded off two-week lows. Most European indexes traded lower, hurt by losses in bank stocks. Asian shares ended lower on reduced optimism around a resolution to the U.S.-China trade spat.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


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