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Energy Market Commentary February 21, 2017: Nasdaq Advisory Services

Energy stocks are poised for a stronger opening on markedly higher crude prices as well as on strength from the broader equities markets. Sector and corporate news are light this morning following the President’s Day holiday in the U.S. yesterday.

WTI prices are higher by more than $1 and by nearly 2% on lack of any new specific news and even as the dollar rose broadly after two Federal Reserve policymakers pointed to a potential U.S. interest rates rise next month. Net long positions in both Brent and WTI stand at record high levels with the optimism stemming OPEC’s high compliance rate of over 90% with recent production cut agreements. However, the EIA will report inventory data on Thursday, with more inventory builds expected in both gasoline and crude stocks.

Natural gas futures are tanking nearly 5% this morning as forecasts continue to show above seasonal temperatures for key demand centers in the East.

(Late Monday) Press Release - InterOil announced that the Supreme Court of Yukon has granted a final order approving the arrangement between InterOil and .

(Sunday) Reuters - said on Sunday operations at its 502,500 barrel-per-day (bpd) refinery in Baton Rouge, Louisiana, had returned to normal after a power supply upset on Friday.

(Late Monday) Press Release - announced that the Supreme Court of Yukon has granted a final order approving the arrangement between InterOil and Exxon Mobil.

(Late Monday) Reuters - said new LNG customers that will drive demand are looking for shorter and smaller contracts.

Reuters - Fugro awarded a contract by /BG Kenya for the execution of a seabed survey to detect natural leakages of hydrocarbons.

Reuters - Iran's oil minister said that the first of its new contracts would be finalized with within two months, according to the Mehr News agency. Bijan Zanganeh said that a contract was still being pursued with Total but noted recent comments from the chief executive of the French company indicated it was awaiting feedback from the United States.

Piper Jaffray upgraded to ‘Overweight’ from ‘Neutral.’

GMP Securities downgraded to ‘Hold’ from ‘Buy.’

Press Release - is pleased to announce its plan to reduce its outstanding debt through the use of existing cash on hand. Following the closing of the four percent non-convertible gross overriding royalty on Lindbergh on January 6, 2017, the Company's cash position was approximately $530 million.

  • HLX reported 4Q’16 EPS of ($0.05) versus Thomson Reuters I/B/E/S estimate of ($0.06).
  • MDR reported 4Q’16 EPS of $0.02 versus Thomson Reuters I/B/E/S estimate of ($0.01).

(Late Monday) Reuters - announced receipt of requisite majority consent from holders of its term loan B, 2020 notes, 2021 notes and 2022 notes and extension of consent solicitation in respect of its 2017 notes.

Press Release - announced that it has been awarded a contract by Brunei Shell Petroleum to operate a dedicated processing center at its Seria office in Brunei Darussalam. The contract will run for a period of six years, from 1 January 2017 to 31 December 2022.

(Late Monday) Press Release - announced that as part of a long planned transition its Board of Directors appointed Mr. Prady Iyyanki as President and Chief Executive Officer, effective May 16, 2017. Mr. Iyyanki currently serves as President and Chief Operating Officer. Mr. C. Christopher Gaut, the current Chief Executive Officer, will become Executive Chairman.

(Late Monday) Press Release - reported a net loss of $54.4 million, or $(0.46) per diluted share, for the fourth quarter of 2016 compared to a net loss of $403.9 million, or $(3.83) per diluted share, for the same period in 2015 and net income of $11.5 million, or $0.10 per diluted share, for the third quarter of 2016.

Press Release - Fourth quarter 2016 earnings attributable to ’s stockholders, in accordance with U.S. generally accepted accounting principles were a net loss of $0.5 million, or $0.00 per fully diluted share, compared to a net loss of $18.7 million, or $0.08 per fully diluted share, for the prior-year fourth quarter. We generated fourth quarter 2016 adjusted net income of $5.6 million, or $0.02 per adjusted fully diluted share, excluding restructuring charges of $0.6 million, an impairment loss of $10.9 million related to a marine asset and the year-end non-cash MTM pension gain of $5.4 million, compared to an adjusted net income of $15.3 million, or $0.05 per adjusted fully diluted share, excluding restructuring charges of $8.7 million and the yearend non-cash MTM pension loss of $26.0 million, in the prior-year fourth quarter.

Press Release - announced it has acquired the newly built pipelay and construction vessel Amazon to better position the Company for ultradeepwater and SURF projects.

UBS Equities upgraded to ‘Neutral’ from ‘Sell.’

(Late Friday) Press Release - ’ Board of Directors declared a cash dividend of $0.06 per common share, which will be paid on April 4, 2017 to shareholders of record at the close of business on March 14, 2017.

(Late Friday) Reuters - 's 146,000 barrel per day Borger, Texas, refinery plans to shut a gasoline-producing fluidic catalytic cracking unit by the end of February for planned work.

(Late Friday) Reuters - ’s 57,500-barrel-per-day Salt Lake City refinery remained shut on Friday due to a planned overhaul and a shut pipeline that provides crude oil to the region.

Press Release - reported financial results for the fourth quarter of 2016. Net income attributable to Holly Energy Partners for the fourth quarter was $41.4 million compared to $40.5 million for the fourth quarter of 2015. Distributable cash flow was $58.5 million, an increase of $4.9 million, or 9.2% compared to the fourth quarter of 2015. HEP announced its 49th consecutive distribution increase on January 26, 2017, raising the quarterly distribution from $0.595 to $0.6075 per unit, representing a 7.5% increase over the distribution for the fourth quarter of 2015. This distribution represents an acceleration in year over year distribution growth and progress towards HEP's 8% distribution growth rate target.

(Late Friday) Press Release - announced that it has engaged with Fluor to provide maintenance and capital project services for SunCoke's Domestic Coke facilities.

Press Release - is pleased to announce it has entered into a suite of separate agreements to sell its power generation business for $1.18 billion.

(Late Friday) Press Release - announced that its Board of Directors declared a cash dividend for February 2017 of $0.0833 per common share.

U.S. stock index futures were poised for a higher open on Tuesday as traders digested a deluge of earnings reports on the first trading day of the week. On the data front, Tuesday will see flash Markit services PMI (Purchasing Managers' Index) for February released at 9.45 a.m ET. In Europe, the pan-European Stoxx 600 index traded 0.33 percent higher. In Asia, the Shanghai Composite in China closed 0.41 percent higher, while the Nikkei in Japan closed 0.68 percent higher.


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.

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