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Energy Market Commentary January 20, 2017: Nasdaq Advisory Services

FRIDAY, JANUARY 20, 2017

SECTOR COMMENTARY

Energy stocks are positive in the pre-market along with U.S. stock index futures as traders eyed the inauguration of President-elect Donald Trump and stronger crude prices.

Company-specific news is light today with focus shifting to the leadership change in the US as well as earnings season, which will begin in earnest next week. Shares of Schlumberger will be in focus today, with slight pre-market weakness being seen after the company reported a smaller fourth-quarter loss than a year earlier. The latest quarter included a $536 million restructuring charge as well as a $139 million charge related to Schlumberger's acquisition of Cameron International Corp and a currency devaluation loss in Egypt, but the results were seen as being in line with expectations and containing few surprises.

Crude prices extended gains for a second straight day with prices accelerating strongly this morning on expectations that a weekend OPEC-Russia meeting in Vienna would demonstrate compliance to a global output cut deal. Further helping oil prices was the retreat in the US dollar, which moderated some of its strength after a week of volatile moves that have seen investors question the fate of the greenback under Trump. However, traders said that there was lingering pessimism from yesterday’s bearish EIA report in which showed that U.S. crude inventories rose unexpectedly last week as refineries sharply slowed production, while gasoline stocks soared amid weak demand.

Natural gas futures are down nearly 2%, on profit-taking from yesterday’s 2% rise, as forecasts continue to call for moderate temperatures.

INTERNATIONAL INTEGRATEDS

Reuters - Accidents at Statoil's giant Troll gas field and the Mongstad refinery in October last year were caused by operational mistakes and wrong prioritisation of maintenance.

U.S. E&PS

Press Release - Abraxas Petroleum announced that it has priced an upsized underwritten public offering of 25,000,000 shares of its common stock at a public offering price of $2.40 per share.

Stifel Nicolaus and Company upgraded Abraxas Petroleum to ‘Buy’ from ‘Hold.’

(Late Thursday) Press Release - Abraxas Petroleum announced the acceleration of the Company’s 2017 planned activity and updated the Company’s 2017 CAPEX and production guidance. Recognizing the success of the Caprito 99-101H, Abraxas’ Board of Directors recently approved an increase in Abraxas’ 2017 capital budget from $60 million to $110 million. Abraxas forecasts this increase in activity will lead to average production of 8,200 boepd at the midpoint of updated 2017 guidance with a 2017 exit rate of approximately 9,500 boepd.

MUFG Securities Americas downgraded Anadarko Petroleum to ‘Neutral’ from ‘Overweight.’

(Late Thursday) Press Release - Chesapeake Energy entered into privately negotiated purchase and exchange agreements under which the Company has issued or has agreed to issue an aggregate of 18,791,301 shares of the Company’s common stock, par value $0.01 per share, in exchange for (i) 150,948 shares of 5.00% Cumulative Convertible Preferred Stock Series 2005B), (ii) 95,600 shares of 5.75% Cumulative Convertible Preferred Stock, and (iii) 82,429 shares of 5.75% Cumulative Convertible Preferred Stock.

MUFG Securities Americas upgraded Concho Resources to ‘Overweight’ from ‘Neutral.’

Press Release - The Board of Directors of CONE Midstream GP LLC, the general partner of CONE Midstream Partners, announced the declaration of a cash distribution of $0.2724 per unit with respect to the fourth quarter of 2016. The distribution will be made on February 14, 2017 to unitholders of record as of the close of business on February 6, 2017. The distribution, which equates to an annual rate of $1.0896 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15.3% over the distribution paid with respect to the fourth quarter of 2015. CONE Midstream Partners is a growth-oriented master limited partnership formed by CONSOL Energy and Noble Energy.

Press Release - Rice Midstream Partners announced the Board of Directors of its general partner approved a cash distribution of $0.2505 per unit for the fourth quarter 2016, an increase of $0.0135 per unit, or 6% above the third quarter 2016 distribution. Rice Midstream Partners LP is a fee-based, growth-oriented limited partnership formed by Rice Energy.

CANADIAN E&PS 0759

Press Release - Enerplus announced that a cash dividend in the amount of CDN$0.01 per share will be payable on February 15, 2017 to all shareholders of record at the close of business on January 31, 2017.

OIL SERVICES

  • SLB reported 4Q’16 EPS of $0.27 versus Thomson Reuters I/B/E/S estimate of $0.27.

Goldman Sachs upgraded Emerge Energy Services to ‘Buy’ from ‘Neutral.’

Press Release - Schlumberger reported a smaller fourth-quarter loss than a year earlier, when it recorded more than $2 billion in restructuring and asset impairment charges. Net loss attributable to Schlumberger fell to $204 million, or 15 cents per share, in the three months ended Dec. 31, from $1.02 billion, or 81 cents per share, a year earlier. Schlumberger's revenue fell to $7.11 billion from $7.74 billion. It also said that its quarterly cash dividend of $0.50 per share was approved.

DRILLERS

Bank of America Merrill Lynch upgraded Noble Corporation to ‘Neutral’ from ‘Underperform.’

(Late Thursday) Reuters - Noble Corporation said Noble Roger Lewis contract extended to early March 2022 at dayrate of $159,000 while Noble Scott marks contract extended to early July 2022 at dayrate of $159,000.

Press Release - North Atlantic Drilling has been awarded a firm one well extension plus one optional well from Statoil Petroleum for the jack-up West Elara. Statoil Petroleum AS operates as a subsidiary of Statoil.

(Late Thursday) Press Release - Trinidad Drilling is pleased to announce it has entered into an agreement with a syndicate of underwriters led by Raymond James, to offer on a bought deal basis, by way of a short form prospectus, 31,746,032 common shares at a price of $3.15 per share for gross proceeds of approximately $100 million.

MLPs & PIPELINES

(Late Thursday) Press Release - EnLink Midstream Partners announced the quarterly distribution will be $0.39 per common unit, which represents a flat distribution as compared to both the third quarter of 2016 and fourth quarter of 2015. The distribution is payable on February 13 to unitholders of record on January 31.

(Late Thursday) Press Release - Targa Resources announced that its board of directors has declared a quarterly cash dividend of 91.00¢ per share, or $3.64 per common share on an annualized basis, for the fourth quarter 2016. The approved dividend is unchanged from the previous quarter. This cash dividend will be paid February 15, 2017 on all outstanding common shares to holders of record as of the close of business on February 1, 2017.

MARKET COMMENTARY

U.S. stock index futures pointed to a higher open on Friday as traders eyed the inauguration of President-elect Donald Trump, which is now just hours away. Trump will deliver his inauguration speech later today and traders will be keenly anticipating what he will say — and how he says it — as he speaks to the nation as president for the first time. In Europe, the pan European Stoxx 600 Index was around 0.1 percent lower on Friday.


Nasdaq Advisory Services Energy Team Nasdaq's Advisory Services 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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