Monday, December 18, 2017
Sector Commentary
Energy stocks are expected to open higher, lifted by higher oil prices and stronger equity futures. Volumes are expected to be lighter this week in advance of the Christmas holiday.
WTI crude oil futures are higher in early trading by less than 1%, supported by a North Sea pipeline outage and a Nigerian oil worker strike. A fall in the number of U.S. rigs drilling for oil also underpinned prices, but growth in U.S. crude output cast a shadow over the market. Despite the dip in drilling, activity is still well above this time last year, when the rig count was below 500. Actual U.S. production has soared by 16% since mid-2016 to 9.8 million bpd.
Natural gas futures are rallying by more than 4% in early trading, rebounding from last week's selling on technical buying and colder weather forecasts for next week.
U.S. INTEGRATEDs
Reuters - ExxonMobil and BHP Billiton have agreed to end a nearly 50-year-old gas marketing joint venture in Australia, bowing to pressure from the nation's competition watchdog amid concerns about gas supply and soaring prices.
(Saturday) Press Release - Exxon Mobil completed the acquisition of a 25% indirect interest in the Area 4 natural gas block located in the Rovuma Basin, offshore Mozambique, from Eni S.p.A for a cash consideration of US$2,800 million. The transaction was facilitated through the acquisition of a 35.7% interest in Eni East Africa S.p.A., which owns a 70% interest in the block.
INTERNATIONAL INTEGRATEDS
(Saturday) Press Release - BP paid $200m for a 43% stake in Europe's biggest solar developer, marking its return to the sector from which it withdrew six years ago.
Reuters - Eni resumed oil production from Norway's Arctic Goliat field. Output restarted on Dec. 17 following an outage of more than two months. Eni plans to drill two production wells and one delineation well at Goliat in 2018, and has identified further potential for exploration nearby, it added.
(Saturday) Press Release - Exxon Mobil completed the acquisition of a 25% indirect interest in the Area 4 natural gas block located in the Rovuma Basin, offshore Mozambique, from Eni S.p.A for a cash consideration of US$2,800 million. The transaction was facilitated through the acquisition of a 35.7% interest in Eni East Africa S.p.A., which owns a 70% interest in the block.
Press Release - Gazprom SPG will build a 70 million euro liquefied natural gas plant in Zvornik, in the north-eastern part of Bosnia's entity the Serb Republic, in cooperation with local peer Gas-Res.
(Saturday) Reuters - Russian gas exports outside former Soviet countries increased 8.3 percent year-on-year between Jan. 1 and Dec. 15 to 184.2 billion cubic metres, Gazprom said. Gazprom Group's gas production increased 13.4 percent to 447.9 bcm over the same period.
Reuters - Petroleo Brasileiro has closed a deal with Modec, which will build and operate a platform for oil production in the nation's Libra block.
Reuters - Petróleo Brasileiro produced 2.13 million barrels of oil per day on average in Brazil in November, 1.5 percent less than in October.
Press Release - Repsol started production from the Reggane Nord gas fields in Algeria, marking the completion of one of the company's most significant projects in Africa. Reggane Nord is in the south-west of Algeria, approximately 1,500 km from Algiers, in the Sahara desert.
(Saturday) Press Release - Cosan completed the acquisition of an additional 16.77% stake, representing approximately 21,805,645 shares, in Companhia de Gas de Sao Paulo (Comgas), from Shell Gas B.V., Shell Brazil Holding B.V., and Integral Investments BV, all three subsidiaries of Royal Dutch Shell.
Reuters - Statoil has bought a stake in Petrobras for up to $2.9 billion, nearly tripling its production off the South American country. Statoil bought a 25-percent stake in the Roncador oilfield, Petrobras' third-largest producing field, situated in the Campos basin offshore Brazil.
Press Release - Total announced that it has taken the investment decision for the first large-scale development phase of the Libra project, located deep offshore, 180 kilometers off the coast of Rio de Janeiro, in the pre-salt area of the Santos Basin in Brazil.
CAnadian INTEGRATEDS
(Saturday) Press Release - Whitecap Resources completed the acquisition of certain light oil assets located in Saskatchewan, Canada, from Cenovus Energy, for a cash consideration of C$940 million, before closing adjustments.
U.S. E&PS
Press Release - Fir Tree Partners, manager of certain funds that together beneficially own, through common stock and warrants, approximately 8.2% of the common stock of SandRidge Energy, issued an open letter to the Board of Directors of SandRidge reiterating its strong opposition to SandRidge's proposed acquisition of Bonanza Creek Energyand voicing its support for the position of Icahn Capital LP laid out in its Proxy Statement that the Company should NOT issue more shares of common stock in connection with such a transaction.
Carrizo Oil & Gas , entered into an agreement to sell certain Eagle Ford Shale assets located in LaSalle County, Texas, the US, to EP Energy Corporation, for a cash consideration of US$245 million.
Press Release - EP Energy entered into a definitive agreement to sell certain oil and gas assets located in the Altamont area of Uinta Basin, northeastern Utah, the US, for a sale consideration of US$180 million.
CANADIAN E&PS
(Late Friday) Press Release - Bonavista Energy confirmed that a quarterly dividend of $0.01 per common share will be paid in cash on January 15, 2018 to common shareholders of record on December 29, 2017. The ex‑dividend date is December 28, 2017.
Press Release - Gran Tierra Energy expects 2018 average production of 36,500 to 38,500 barrels of oil equivalent per day, representing organic growth of 20 to 27% over 2017 year to date average production and an increase of 39 to 47% over 2016 average production.
Press Release - Enerplus announced that a cash dividend in the amount of CDN$0.01 per share will be payable on January 15, 2018 to all shareholders of record at the close of business on December 29, 2017.
(Saturday) Press Release - Whitecap Resources completed the acquisition of certain light oil assets located in Saskatchewan, Canada, from Cenovus Energy, for a cash consideration of C$940 million, before closing adjustments.
OIL SERVICES
Press Release - Baker Hughes announced the early tender results of the previously announced cash tender offers by its subsidiary, Baker Hughes, a GE company, LLC to purchase up to $175 million in aggregate purchase price of the outstanding (i) 8.550% Debentures due 2024 and (ii) 6.875% Notes due 2029.
(Late Friday) Press Release - CES Energy Solutions is pleased to announce today that it will pay a cash dividend of $0.0025 per common share on January 15, 2018 to the shareholders of record at the close of business on December 29, 2017.
(Saturday) Press Release - Halliburton announced that it has received notice of an unsolicited mini-tender offer by Baker Mills LLC to purchase up to 125,000 shares of Halliburton common stock from Halliburton’s stockholders.
(Saturday) Press Release - Saudi Aramco said it has awarded Schlumberger, two lump sum contracts for drilling rigs and services for oil and gas wells. Under the contracts, Schlumberger Integrated Drilling Services will provide drilling rigs and services for up to 146 gas wells and up to 128 oil wells over three years.
(Saturday) Press Release - SEACOR Holdings, through its subsidiary, SEA-Vista, LLC, entered into an agreement to sell one eco-class product tanker for a sale consideration of approximately US$135 million.
DRILLERS
Press Release - Seadrill has prepared an updated business plan. Over the period 2017-2022, it sees revenues lower by $1,407 million, EBITDA lower by $499 million and cash flow lower by $604 million compared to the presentation published on 12 sept.
REFINERs
(Saturday) Press Release - Marathon Petroleum and MPLX announce agreement to exchange MPC's general partner economic interests, including IDRs, for MPLX common units.
MLPs & PipelinES
Press Release - Energy Transfer Partners announced that Rover Pipeline, LLC received approval from the Federal Energy Regulatory Commission to place Phase 1B of the Rover Pipeline project into service, bringing the 713-mile pipeline closer to its 3.25 billion cubic feet per day design total. With the addition of the Phase 1B facilities, the project is now capable of transporting up to 1.7 billion cubic feet per day of natural gas.
(Late Friday) Press Release - Enterprise Products Partners announced that it will adopt five new quality specifications for sweet crude oil, also referred to as West Texas Intermediate at its terminal in Cushing, Oklahoma.
Goldman Sachs downgraded Holly Energy Partners to ‘Sell’ from ‘Neutral’.
Press Release - Noble Midstream PartnersLP, a midstream company, formed joint venture with Greenfield Midstream, a midstream company backed by EnCap Flatrock Midstream. The JV company, named Black Diamond Gathering LLC, is formed to acquire Saddle Butte Rockies Midstream, LLC, a company that owns a crude oil gathering system. Noble Midstream will contribute 50% of the purchase price for the acquisition of Saddle Butte, thereby receiving a 4.4% ownership promote in the JV. Noble Midstream holds a 54.4% stake in the JV, while the remaining 45.6% stake is held by Greenfield Midstream.
(Saturday) Press Release - Marathon Petroleum and MPLX announce agreement to exchange MPC's general partner economics interests, including IDRs, for MPLX common units.
Press Release - TransMontaigne Partners announced that it has completed the previously announced acquisition of the Martinez Terminal and Richmond Terminal from an affiliate of Plains All American Pipeline . As a result of the West Coast Acquisition, the Partnership has expanded its storage and terminaling footprint into the San Francisco Bay Area refining complex. Plains will continue to operate the terminals on behalf of the Partnership until the Partnership receives all permits and approvals necessary to operate the terminals, which we expect to occur by the end of February 2018.
Goldman Sachs upgraded Phillips 66 Partners to ‘Buy’ from ‘Neutral’.
MARKET COMMENTARY
U.S. stock futures pointed to higher opening, with global stock markets hitting record highs on growing confidence the Republicans will succeed in getting a major tax bill passed this week. The dollar index fell with strategists saying forex traders had adopted more of a wait-and-see attitude to the tax bill, while Gold edged higher. An ongoing North Sea pipeline outage and a strike by Nigerian oil workers pushed oil prices higher. Futures of bitcoin received a lukewarm reception at their launch on the CME Group exchange late on Sunday.
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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