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Energy Market Commentary: Momentum In Crude Pushing Stocks Higher Premarket

Monday, November 06, 2017

Sector Commentary

Energy stocks are higher in premarket trade, aided by continued momentum in crude oil futures, with Brent oil futures topping $62.50, which represents the highest front-month price since July, 2015. Earnings are light this morning, with more set to be released after-market today and throughout the remainder of the week. WTI crude oil prices also broke above $56 earlier this morning for the first time since July, 2015 as well. Support came as Saudi Arabia's crown prince cemented his power over the weekend through an anti-corruption crackdown, while markets continued to tighten.

In sector news, Baker Hughes, a GE company announced a $3 billion share repurchase authorization. Additionally, in activism headlines, Jana Partners withdrew its proxy materials in opposition to EQT's announced acquisition of Rice Energy. Meanwhile, Corvex Management appealed a ruling that it can't call a special meeting of shareholders pertaining to Energen.

Natural gas futures were higher by 2.5%, moving above their 200-day moving average, a level that prices closed above only three times since May.

INTERNATIONAL INTEGRATEDS

(Saturday) Press Release - Ineos Upstream through its division INEOS Shale, acquired a 40% interest in PEDL 139 and PEDL 140; and 30% interest in PEDL 273, PEDL 305, and PEDL 316 onshore shale petroleum exploration licenses located in UK, from Total E&P UK Limited, a subsidiary of Total SA .

U.S. E&PS

(Saturday) Press Release - Anadarko Petroleum entered into an agreement to sell its Moxa asset located in southwest Wyoming, the US, for a sale consideration of US$350 million.

(Saturday) Press Release - Approach Resources entered into a definitive agreement to acquire oil and gas assets, targeting Wolfcamp shale, located in Southern Midland Basin of Texas, the US, from Amistad Energy Partners, LLC, an oil and gas company backed by Kayne Anderson Capital Advisors, L.P., for a purchase consideration of US$18.05 million.

Deutsche Bank discontinued coverage of discontinue coverage of Eclipse Resources and Rice Energy .

(Late Friday) Press Release - Gulfport Energy announced that Paul D. Westerman has been appointed to the Company's Board of Directors.

Reuters - Kosmos Energy said it expects to resume development drilling on Ghana's multi-billion dollar TEN deepwater oil and gas project in early 2018, rather than around the end of this year as it previously expected.

Press Release - Kosmos Energy announced financial and operating results for the third quarter of 2017. For the third quarter of 2017, the Company generated a net loss of $63.4 million, or $0.16 per diluted share as compared to net loss of $59.8 million or $0.15 per diluted share in the same period last year. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net loss of $36.9 million or $0.09 per diluted share for the third quarter of 2017.

Press Release - QEP Resources announced that it is commencing, subject to market conditions, a $500 million offering of senior notes due 2026. QEP intends to use approximately (i) $134 million of the net proceeds from the offering to redeem its outstanding 6.80% Senior Notes due 2018 and (ii) the remainder of the net proceeds, together with cash on hand and, if necessary, borrowings under QEP's revolving credit facility, to fund the concurrently announced tender offers to purchase up to $361 million aggregate principal amount of its outstanding 6.80% Senior Notes due 2020 and 6.875% Senior Notes due 2021, subject to the applicable priority levels.

CANADIAN E&PS

(Late Friday) Press Release - Pengrowth Energy announced that it has entered into an agreement for the sale of its Quirk Creek assets in Southern Alberta for total cash consideration of $6.5 million, subject to customary adjustments. The sale includes the Quirk Creek sour gas plant and associated gathering systems related to the production of sour gas and liquids.

OIL SERVICES

Press Release - Baker Hughes announced that its Board of Directors authorized Baker Hughes, a GE company, LLC to repurchase up to $3 billion of its common units from BHGE and GE. The Company will use the proceeds from the sale of its BHGE LLC common units to repurchase its Class A shares. In addition, the Company also announced its intention for BHGE LLC to issue new debt.

(Saturday) Press Release - Halliburton announced that its board of directors has declared a 2017 fourth quarter dividend of eighteen cents ($0.18) a share on the company's common stock payable December 28, 2017, to shareholders of record at the close of business on December 7, 2017.

Press Release - Ensign Energy Services reported revenue for the third quarter of 2017 was $247.1 million, an increase of 29 percent from revenue for the third quarter of 2016 of $191.3 million. Its funds flow from operations increased 31 percent to $39.6 million in the third quarter of 2017 compared to $30.3 million in the third quarter of the prior year. Funds flow from operations increased six percent to $129.2 million in the first nine months of 2017 compared to $121.8 million in the first nine months of the prior year. Ensign declared a fourth quarter cash dividend on common shares of $0.12 per common share, payable on January 4, 2018 with a record date of December 20, 2017.

Stifel Nicolaus & Co. downgraded SEACOR Holdings to 'Hold' from 'Buy'.

Citigroup downgraded Weatherford International to 'Neutral' from 'Buy'.

REFINERs

(Saturday) Press Release - Valero Energy Partners completed the acquisition of Valero Partners Port Arthur, LLC, and Parkway Pipeline LLC, from Valero Energy Corp , for a purchase consideration of US$508 million.

MLPs & PipelinES

(Saturday) Press Release - Valero Energy Partners completed the acquisition of Valero Partners Port Arthur, LLC, and Parkway Pipeline LLC, from Valero Energy Corp, for a purchase consideration of US$508 million.

MARKET COMMENTARY

U.S. stock futures were little changed after a busy week, with investors paying close attention to Trump's Asia visit and the oil market. Equity markets in Europe edged lower on earnings disappointments, and poor performance in Asia also weighed. The dollar steadied after reaching its biggest weekly rise in the year, while gold rose.

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.