Crude Steadies After Hurricane, But Tracking Weekly Gains
SECTOR COMMENTARY
Energy stocks are set to open near the flat line, as broader index futures trade slightly higher and oil prices are roughly unchanged. News flow is quiet heading into the weekend.
Both WTI and Brent are currently flat on the session but up ~1.5% on the week with hurricane Laura garnering most of the market’s attention. Offshore drilling operators were expected to assess platform damage today and tomorrow before restarting production. “Crude prices have barely budged this week, but refining margins have been hammered as flash floods disrupt normal consumption patterns, likely for a longer period of time than (Gulf of Mexico) production remains offline,” said RBC Capital in a note. The Brent October contract expires today.
Natural gas futures are off about half a percent, despite temperatures today running hotter in the South, specifically in Texas with a heat advisory in effect which should boost cooling demand. Power outages in Louisiana and Texas following Laura are at 517K and 190K, respectively. LNG feedgas flows at Cameron and Sabine Pass are expected to remain offline today.
U.S. INTEGRATEDS
(Late Thursday) Reuters - Exxon Mobil restored stable power to its 369,024-barrel-per-day (bpd) Beaumont, Texas, refinery as it prepares to begin restarting production units, said sources familiar with plant operations. Exxon's Beaumont refinery and chemical plant were shut down on Tuesday, August 25, as Hurricane Laura was menacing the southeast Texas coast.
INTERNATIONAL INTEGRATEDS
(Late Thursday) Reuters - Petrobras said the company signed sales of all 27 concessions in Espirito Santo State to Karavan Spe Cricaré S.A for $115 million.
Press Release - On August 27th, 2020, TOTAL successfully priced its issuance of €1,000,000,000 undated non-call 10 year deeply subordinated fixed rate resettable notes with a fixed coupon of 2.000% until the first call date. The New Notes are scheduled to be admitted to trading on Euronext Paris. It is also expected that the rating agencies will assign the New Notes a rating of A2/A- (Moody's/ S&P) and 50% equity credit. The issuance of the New Notes is expected to occur on 4 September 2020. On August 27th, 2020, the Company launched a tender offer in order to partially repurchase its undated deeply subordinated fixed rate resettable notes with a first call date on 26 February 2021 (ISIN: XS1195201931) issued by the Company on 26 February 2015, of which €1,000,000,000 are currently outstanding, and admitted to trading on Euronext Paris. The Tender Offer is subject to a maximum acceptance amount which will be determined and announced by the Company in its sole and absolute discretion as soon as reasonably practicable on 3 September 2020.
U.S. E&PS
Press Release - Cimarex Energy announced that its Board of Directors has declared a quarterly cash dividend on its common stock of $0.22 per share. The dividend is payable on December 1, 2020, to stockholders of record on November 13, 2020.
(Late Thursday) Press Release - EP Energy announced that the United States Bankruptcy Court for the Southern District of Texas has confirmed the Company's Amended Plan of Reorganization. The Company expects to complete its financial restructuring process and emerge from Chapter 11 bankruptcy protection by October 1, 2020. Upon emergence, EP Energy will reduce its debt by approximately $4.4 billion and receive $629 million in senior secured exit financing from the Company's existing revolving loan lenders. In total, the restructuring process will have eliminated approximately 90% of pre-petition funded debt and over 90% of pre-petition annual cash interest expense. Following completion of the process, EP Energy expects to have less than $500 million of debt and a new three-year reserve based loan credit facility.
(Late Thursday) Press Release - QEP Resources announced that it has received its expected alternative minimum tax credit refund of $170.7 million, which includes $5.1 million of accrued interest. The Company expects to use the proceeds from the refund towards the repayment of its senior notes due in March 2021.
(Late Thursday) Press Release - Southwestern Energy announced the completion of its previously announced underwritten public offering of $350 million aggregate principal amount of 8.375% senior notes due 2028, with net proceeds from the Offering totaling approximately $345 million after underwriting discounts and offering expenses. The Notes were sold to the public at a price of 100% of their face value.
CANADIAN E&PS
Press Release - Paramount Resources was notified by Keyera Corp. on August 17, 2020 of an unplanned outage of the Keyera Wapiti Gas Plant related to an issue with the waste heat recovery system. On August 27, 2020, Keyera further advised that the extent of the issue is more widespread than previously indicated and that it is now unable to provide a definitive indication of the duration of the outage. Sales volumes at Wapiti during the second quarter of 2020 averaged 14,940 Boe/d. Paramount is continuing to monitor the situation and is assessing coverage under its business interruption insurance in the event that the duration of the outage exceeds 30 days.
OILFIELD SERVICES
Press Release - Calfrac Well Services announced that it has filed updated presentation materials addressing the many inaccuracies in the Wilks Brothers proxy circular pertaining to the upcoming meetings of Unsecured Noteholders and Shareholders for the Recapitalization Transaction.
MLPS & PIPELINES
(Late Thursday) Press Release - The Elba Liquefaction Company, a joint venture between Kinder Morgan and EIG Global Energy Partners (EIG), announced the commercial in-service of Unit 7, the last of 10 Movable Modular Liquefaction units of the approximately $2 billion Elba Liquefaction project. Previously only a liquefied natural gas (LNG) import terminal, the Elba Island Liquefaction facility is now also producing LNG for export purposes.
(Late Thursday) Press Release - On August 27, 2020, the sole member of Noble Midstream GP LLC, the general partner of Noble Midstream Partners, increased the size of the General Partner’s board of directors from seven to eight and appointed Robin H. Fielder as a member of the Board. Ms. Fielder currently serves as President and Chief Operating Officer of the General Partner and Senior Vice President, Midstream, of Noble Energy, Inc.
Seaport Global upgraded Oneok to ‘Buy’ from ‘Neutral’.
MARKET COMMENTARY
U.S. stock index futures were mostly higher after the Federal Reserve's policy shift on inflation suggested an extended period of low interest rates. Japanese shares dropped, with the Nikkei 225 down 1.4%, after news that the country's Prime Minister Shinzo Abe resigned for health reasons. Most European shares fell as investors dumped this year's outperformers including technology and healthcare stocks and bid up banking shares. Gold prices jumped more than 1% as the dollar retreated. Oil prices pared losses.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 1/8/20 – CNBC’s Squawk Alley: Oil market reaction to US-Iran tensions
- 1/8/20 – Bloomberg Day Break – Steady escalation of US-Iran tensions
- 12/5/19 – Bloomberg Balance of Power – OPEC's Limited Efficacy
- 9/17/19 - Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 - Discussion on Bloomberg TV about Impact of Abqaiq Attack
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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