Market data chart with calculator
Markets

Energy Market Commentary: Energy Stocks Extending Gains

Tuesday, January 09, 2018

Sector Commentary

Energy stocks are higher, extending yesterday's gains, lifted by broader equity support and strength from the crude complex, which has hit multi-year highs. The Goldman Sachs Global Energy Conference begins today as markets look to E&P 2018 capex/production guidance. Several companies provided updates including Encana and Apache, both of which noted better than expected production for their US assets.

Brent crude oil rose further above $68 a barrel briefly, touching its highest level since May 2015. Iran Oil Minister today said OPEC doesn't want to see Brent prices above $60/bbl because of the impact on shale oil. API data due to today is expected to show a large crude draw of 4.1 million barrels, an eighth week of declines.

Natural gas futures are up well over 1%, adding to yesterday's +1.4% gain as warmer temperatures this week are expected to turn colder next week and ahead of a large storage draw expected on Thursday.

INTERNATIONAL INTEGRATEDS

(Late Monday) Press Release - Rowan Companies completed the acquisition of two LeTourneau Super 116E jack-up rigs - the P-59 and P-60 - for $38.5 million per unit. The rigs, which were delivered into service in 2013, were purchased in a public auction from a subsidiary of Petroleo Brasileiro S.A .

Press Release - Air Products announced an agreement to acquire Royal Dutch Shell 's Coal Gasification Technology business as well as Shell's patent portfolio for Liquids Gasification.

Press Release - Oceaneering International announced that it secured a contract from Statoil Petroleum AS, a subsidiary of Statoil , to supply umbilicals for the Johan Castberg Project in the Barents Sea.

Reuters - Statoil CEO Eldar Saetre expects higher oil and gas prices in 2018 versus 2017 *statoil ceo doesn't see a significant cost pressure in 2018 but gradually it will start rising in certain parts of the industry *statoil ceo: could reduce costs further via innovation and digitalisation *statoil plans to approve three new developments off norway in 2018: sverdrup phase 2, troll phase 3 and askeladd -spokesman

U.S. E&PS

Press Release - Apache provided an update to its fourth-quarter 2017 production outlook and certain other items. Internationally, the company revised its production outlook to reflect the impact of unscheduled downtime at the third-party operated Forties Pipeline System and the underperformance of recent wells in the Beryl area of the North Sea. Adjusted sales volumes were also lower in Egypt, primarily due to the impact of improving Brent oil prices on the cost recovery mechanisms in Apache's production sharing contracts. As a result of these factors, the company expects fourth-quarter adjusted international production in the range of 138,000 to 140,000 barrels of oil per day and base-level production volumes to be lower than planned going into 2018.

Canaccord Genuity terminated coverage of EOG Resources .

Reuters - Marathon Oil updates impact of new corporate tax law and received an adverse ruling from the UK first-tier tax tribunal which will result in a negative impact to cash flow from operations of $110M

CANADIAN E&PS

Press Release - Encana delivered strong performance through the fourth quarter of 2017 to close another year successfully executing its strategy, delivering significant oil and condensate growth and driving additional efficiency gains. Driven by its focus on innovation and execution efficiency, Encana's core assets delivered production growth of approximately 31 percent from the fourth quarter of 2016 to the fourth quarter of 2017. This growth significantly exceeds the company's original target of greater than 20 percent and is above the top end of its revised 25 to 30 percent guidance range. Encana accomplished this growth with a capital investment of approximately $1.8 billion.

OIL SERVICES

Press Release - Ashtead Technology formed a joint venture with Forum Energy Technologies , to create a provider of subsea survey and ROV equipment rental and associated services. Under the terms, Forum contributed its subsea rentals business, formerly trading as Forum Subsea Rentals, while Ashtead provided engineered measurement solutions and asset management services.

Press Release - Oceaneering International announced that it secured a contract from Statoil Petroleum AS, a subsidiary of Statoil, to supply umbilicals for the Johan Castberg Project in the Barents Sea.

Press Release - Patterson-UTI Energy intends to issue senior unsecured notes in a private placement.

DRILLERS

(Late Monday) Press Release - Rowan Companies completed the acquisition of two LeTourneau Super 116E jack-up rigs - the P-59 and P-60 - for $38.5 million per unit. The rigs, which were delivered into service in 2013, were purchased in a public auction from a subsidiary of Petroleo Brasileiro S.A.

(Late Monday) Press Release - Trinidad Drilling provided an update on progress rolling out its RigMinder technology platform. In addition, the Company is lowering its guidance for 2018 general and administrative expenses to $43 million, following a thorough review of its cost structure. The new guidance represents a reduction of nearly 20% from prior guidance for 2018 and a 25% reduction from expected 2017 G&A expenses.

REFINERs

(Late Monday) Press Release - Delek US Holdings and Alon USA Partners announced that Delek US' Registration Statement on Form S-4 has been declared effective by the Securities and Exchange Commission and that Alon Partners has filed a definitive consent statement with the SEC with respect to the proposed acquisition. The consent process will conclude on February 5, 2018.

MLPs & PipelinES

(Late Monday) Reuters - Magellan Midstream Partners said an estimated 300 barrels of gasoline leaked from its pipeline system that hauls fuel from Rosemount, Minnesota to Minneapolis. The leak occurred in Eagan, Minnesota and was caused by third-party excavation equipment, the company said.

(Late Monday) Press Release - Pembina Pipeline announced that its Board of Directors declared a common share cash dividend for January 2018 of $0.18 per share to be paid, subject to applicable law, on February 15, 2018 to shareholders of record on January 25, 2018.

Press Release - Plains All American Pipeline announced a quarterly cash distribution of $0.30 per common unit, which is unchanged from the distribution paid in November 2017.

Press Release - Williams Partners announced that it has delivered a record amount of natural gas on its Transco interstate gas pipeline, providing essential services to gas distribution companies, power generators and other customers located along the Eastern Seaboard and Gulf Coast.

MARKET COMMENTARY

U.S. stock futures pointed to a higher open for the Wall Street, tracking gains in global stocks as markets in Europe and Asia maintained their flying start to the year. Japanese yen rose against the dollar after Bank of Japan tweaked its bond-buying program, while the greenback was higher against other major currencies, resulting in a dip in gold prices . Oil continued its rally upwards, supported by OPEC-led production cuts. 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 . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.