Investor Relations

Energy Market Commentary November 8, 2016: Nasdaq Advisory Services

Tuesday, November 8, 2016

Sector Commentary

Energy stocks are under pressure in the pre-market on the weakness in crude prices and despite the relative calm in the broader equity markets. Earnings and corporate news within energy and across the entire market was quiet and overshadowed by the U.S. election with many saying that the polls suggest that the presidential race is too close to call.

Shares of Oasis Petroleum are under slight pressure in the pre-market despite a quiet earnings release that showed a smaller than expected loss with the volumes pre-announced last month. Extraction Oil and Gas released its first results as a public company and beat estimates on higher than expected production.

Crude oil prices are under slight pressure after yesterday’s gains, being pressured on weak oil data from China as the country bought 6.78 million barrels of oil from abroad in October, which was down 12.9% from the previous month and one of the lowest volumes this year on a daily basis. The dollar is flat ahead of the election. Additionally, OPEC forecast that its global demand for crude oil will rise in the next three years, suggesting its 2014 decision to let prices fall to curb costlier rival supplies such as U.S. shale is delivering higher market share. OPEC, which in 2014 refused to cut supply despite a glut, said in its 2016 World Oil Outlook that demand for its crude would reach 33.70 million barrels per day in 2019, up 1 million bpd from 2016.

Natural gas futures are sinking 4%, retracing yesterday’s gains, but extending last week’s sell-off, on potential for supply growth in 2017 and as weather outlooks remain mostly moderate.

U.S. INTEGRATEDS

Press Release - The founder and former Chairman and Chief Executive of InterOil, Phil Mulacek, said today that a three judge panel of the Court of Appeal for Yukon, Canada, has unanimously determined not to approve the proposed plan of arrangement by Exxon Mobil to acquire all of the shares of InterOil.

INTERNATIONAL INTEGRATEDS

Press Release - The founder and former Chairman and Chief Executive of InterOil, Phil Mulacek, said today that a three judge panel of the Court of Appeal for Yukon, Canada, has unanimously determined not to approve the proposed plan of arrangement by Exxon Mobil to acquire all of the shares of InterOil.

Artic Securities upgraded Statoil to ‘Buy’ from ‘Hold.’

Press Release - Total signed a Heads of Agreement with the National Iranian Oil Company for the development of phase 11 of South Pars, the world's largest gas field. The South Pars 11 project will have a production capacity of 1.8 billion cubic feet per day, or 370 000 barrels of oil equivalent per day. The produced gas will be fed into Iran's gas network.

(Late Monday) Reuters - Gasoline production at Total's 225,500-barrel-per- day Port Arthur, Texas, refinery remains cut by 21 percent due to a glut of supply following the week-long outage of the Colonial Pipeline Line 1.

U.S. E&PS

  • FANG reported 3Q’16 EPS of $0.54 versus Thomson Reuters I/B/E/S estimate of $0.34.
  • OAS reported 3Q’16 EPS of ($0.17) versus Thomson Reuters I/B/E/S estimate of ($0.19).
  • SGY reported 3Q’16 EPS of ($7.40) versus Thomson Reuters I/B/E/S estimate of ($6.67).
  • XOG reported 3Q’16 EPS of ($0.11) versus Thomson Reuters I/B/E/S estimate of ($0.11).

Press Release - Comstock Resources reported a net loss of $28.5 million or $2.32 per diluted share for the third quarter of 2016 as compared to a net loss of $545.0 million or $59.05 per share for the third quarter of 2015.

(Late Monday) Press Release - Diamondback Energy reported that its third quarter 2016 net loss was $2 million, or ($0.03) per diluted share. Its adjusted net income was $42 million, or $0.54 per share. The company also said that its third quarter 2016 adjusted EBITDA was $102 million, up 31% from $78 million in Q2 2016. Its third quarter 2016 revenues were $142 million, up 26% from $112 million in Q2 2016.

(Late Monday) Press Release - Extraction Oil & Gas reported net loss of $37.3 million, or $(0.11) per basic and diluted share, compared to net income of $18.7 million, or $0.07 per basic and diluted share, for the same period in 2015.

(Late Monday) Press Release - Oasis Petroleum reported a net loss of $33.9 million, or $0.19 per diluted share, as compared to a net income of $27.1 million, or $0.20 per diluted share, for the third quarter of 2015. Excluding certain non-cash and non-recurring items and their tax effect, adjusted net loss was $29.3 million, or $0.17 per diluted share, in the third quarter of 2016, compared to adjusted net income of $12.5 million, or $0.09 per diluted share, in the third quarter of 2015. Its adjusted EBITDA for the third quarter of 2016 was $104.4 million.

(Late Monday) Press Release - Stone Energy reported a third quarter of 2016 net loss of $89.6 million, or $16.01 per share, on oil and gas revenue of $93.4 million, compared to a net loss of $292.0 million, or $52.82 per share, on oil and gas revenue of $128.4 million in the third quarter of 2015. The adjusted net loss for the third quarter of 2016, which excludes impairment charges of $36.5 million, was $41.5 million, or $7.40 per share.

CANADIAN E&PS

Press Release - Touchstone Exploration announced that it has entered into escrow arrangements for a $15 million, five-year term loan agreement from an investment fund managed by Crown Capital Partners Inc.

OIL SERVICES

TDW reported 2Q’16 EPS of ($1.00) versus Thomson Reuters I/B/E/S estimate of ($1.08).

Reuters - CGG reported Q3 group revenue $264.0 million versus $469.8 million year ago. Its Q3 operating loss before non-recurring charges $38.9 million versus profit of $4.3 million year ago. The company also announced its Q3 net loss of $87.9 million versus loss of $1.07 billion year ago.

Citigroup upgraded National Oilwell Varco to ‘Neutral’ from ‘Sell.’

Credit Suisse downgraded TETRA Technologies to ‘Neutral’ from ‘Outperform.’

(Late Monday) Press Release - Tidewater announced a second quarter net loss for the period ended September 30, 2016, of $178.5 million, or $3.79 per common share, on revenues of $143.7 million. For the same quarter last year, net loss was $43.8 million, or $0.93 per common share, on revenues of $271.9 million. The immediately preceding quarter ended June 30, 2016, had a net loss of $89.1 million, or $1.89 per common share, on revenues of $167.9 million.

DRILLERS

PACD reported 3Q’16 EPS of ($0.83) versus Thomson Reuters I/B/E/S estimate of ($0.92

(Late Monday) Press Release - Pacific Drilling announced net income for third-quarter 2016 of $0.2 million or $0.01 per diluted share, compared to net income of $8.2 million or $0.39 per diluted share for second-quarter 2016 and net income of $41.0 million or $1.95 per diluted share for third-quarter 2015.

MLPs & Pipelines

Bernstein upgraded Energy Transfer Equity and Energy Transfer Partners to ‘Outperform’ from ‘Market Perform.’

Press Release - Plains All American Pipeline recently detailed its plans to wrap up construction on three of its major oil pipeline projects, following third-quarter 2016 results that saw a gain in profits, despite an overall decline in revenues. The Diamond, Red River and Caddo pipelines are set to be completed in the coming year, substantially growing the company's services. Industrial Info is tracking $1.43 billion in active projects involving Plains All American.

Bernstein upgraded Sunoco Logistics Partners ‘Market Perform’ from ‘Underperform.’

(Late Monday) Reuters - The hydrocracking unit at Valero Energy’s 335,000 barrel per day Port Arthur, Texas, refinery was near full production on Monday.

MARKET COMMENTARY

U.S. stock index futures indicated a flat open with investors focused firmly on the elections as voters head to the ballot box on Tuesday. The Dow Jones industrial average rose approximately 370 points on Monday after the FBI again cleared Democratic nominee Hillary Clinton over her use of a private server. The S&P 500 advanced more than 2 percent on Monday. It snapped a nine-day losing streak, its longest since December 1980. The Nasdaq composite outperformed, rising 2.4 percent. The three major indexes also posted their best day since March 1.


Nasdaq Advisory Services Energy Team 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.

Other Topics

Energy