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Energy Market Commentary: Stocks Set To Open Slightly Above Yesterday's Closing Levels

Thursday, September 28, 2017

Sector Commentary

Energy stocks are set to open slightly above yesterday's closing levels, boosted by another near 1% gain in oil prices this morning, though modestly lower broader index futures are curbing the premarket gains.

In sector news, Imperial Capital initiated coverage of several E&Ps, while Nordea Capital made several recommendation changes across the driller sector, noting positive signs after three years of negative news flow.

Oil prices rose on Thursday, spurred by rising tension around northern Iraq following the Kurdistan region's vote in favor of independence in a referendum. Brent crude was up 40 cents at $58.30 a barrel recently, hitting a more than two-year high of $59.49 on Tuesday after Monday's referendum vote prompted Turkey to threaten to close the region's oil pipeline.

Natural gas prices are lower by a penny, though holding steady at $3.05, ahead of EIA weekly inventory data due out this morning. Analysts expect a build of 69 Bcf versus the 5-year average of a build of 84 Bcf.

INTERNATIONAL INTEGRATEDS

(Late Wednesday) Press Release - Eni successfully drilled the Mizton-2 well, in the shallow waters of Campeche bay, offshore Mexico, boosting the estimates of the resource in place for Contractual Area 1 to over 1.4 billion barrels of oil equivalent.

Reuters - Eni plans to expand its Singapore trading desk to market liquefied natural gas supplies from new projects such as Mozambique to buyers in Asia.

Reuters - The board of Petroleo Brasileiro voted to list its fuel distribution unit on the São Paulo Stock Exchange.

Reuters - Petroleo Brasileiro will pay 1.8 billion reais for the rights to operate seven oil blocks it obtained in an auction on Wednesday.

Press Release - TechnipFMC has been awarded by Statoil an engineering, procurement, construction and installation contract. It covers the execution of the subsea pipeline connection for the new production platform in Peregrino Phase II Project, located in Campos Basin, offshore Brazil. This new fixed platform will be connected by the in-field lines to the existing platform.

Reuters - Statoil extended an ongoing reduction in the output of Ireland's Corrib gas field to Sept. 30 at 0600 CET (0400 GMT) from Sept. 29 at 0600 CET.

Reuters - Total continues to clear pipes prior to restarting the large crude distillation unit at its 225,500 barrel per day Port Arthur, Texas, refinery.

U.S. E&PS

Imperial Capital started Bill Barrett and Whiting Petroleum at 'In Line'.

(Late Wednesday) Press Release - Chesapeake Energy announced that it has priced its private placement to eligible purchasers of $300,000,000 aggregate principal amount of additional 8.00% senior notes due 2025 at 101.25% of par, plus accrued interest from July 15, 2017 and $550,000,000 aggregate principal amount of additional 8.00% senior notes due 2027 at 99.75% of par, plus accrued interest from June 6, 2017. The private placement was upsized from a previously announced amount of $750,000,000.

(Late Wednesday) Press Release - Concho Resources announced that the cash tender offer that it commenced on September 13, 2017 to purchase any and all of its outstanding 5.5% Senior Notes due 2022 and 5.5% Senior Notes due 2023 expired at 5:00 PM ET on September 25, 2017.

Imperial Capital started EOG Resources and Noble Energy at 'Outperform'.

Press Release - EQT Corp announced that it has priced an offering of $500 million in aggregate principal amount of its 2.50% senior notes due October 1, 2020, $750 million in aggregate principal amount of its 3.00% senior notes due October 1, 2022, and $1,250 million in aggregate principal amount of its 3.90% senior notes due October 1, 2027, at prices to the public of 99.992%, 99.738% and 99.918% of their face value, respectively.

Press Release - Murphy Oil announced that its wholly owned Brazilian subsidiary, Murphy Brazil Exploração E Produção De Petróleo E Gás Ltda., has entered into a farm-in agreement with Queiroz Galvão Exploração e Produção S.A. to acquire a 20 percent working interest in Blocks SEAL-M-351 and SEAL-M-428, located in the deep water Sergipe-Alagoas Basin, offshore Brazil. QGEP will retain a 30 percent WI in the blocks, and in a related but separate transaction, ExxonMobil Exploração Brasil Ltda. has farmed into the remaining 50 percent WI as the operator.

CANADIAN E&PS

Xenos downgraded Canacol Energy to 'Hold'' from 'Buy'.

Macquarie Research upgraded Encana to 'Outperform' from 'Neutral'.

OIL SERVICES

Press Release - CalfracWell Services is pleased to announce that it has entered into an agreement with its lenders which amends and extends its credit facilities. The principal amendments to the Credit Facilities include, among others, the following items: an extension of the maturity date from September 27, 2018 to June 1, 2020; a voluntary reduction in the Credit Facilities from $300 million to $275 million, which is still anticipated to provide Calfrac with more than sufficient liquidity and will result in lower stand-by fees.

Press Release - ION Geophysical announced an approximate 50% extension to its previously announced program offshore Panama due to strong client interest and prefunding to evaluate offshore Panama in advance of the anticipated license round.

Press Release - TechnipFMC has been awarded by Statoil an engineering, procurement, construction and installation contract. It covers the execution of the subsea pipeline connection for the new production platform in Peregrino Phase II Project, located in Campos Basin, offshore Brazil. This new fixed platform will be connected by the in-field lines to the existing platform.

Press Release - Western Energy Services agreed to issue 9.1 million shares, at a price of C$1.25 per share, for gross proceeds of C$11.38 MM, in a private placement.

DRILLERS

Press Release - Helmerich & Payne said its CFO Juan Pablo Tardio will retire in June 2018. The company said it will launch a search for CFO candidates. Tardio will serve in his current role until a successor is identified and has transitioned into the position.

(Late Wednesday) Press Release - Transocean said it expects its upcoming Q3 financial results to include a $1.4 billion non-cash charge connected with its Sept. 21 decision to dispose of five ultra-deepwater floaters as well as one deepwater floater.

REFINERs

(Late Wednesday) Reuters - Andeavor plans to begin a multi-unit overhaul that includes a crude distillation unit in mid-October at its 122,000 barrel per day El Paso, Texas, refinery.

(Late Wednesday) Reuters - Valero Energy was boosting the production level at its 335,000 barrel per day Port Arthur, Texas, refinery following a Sept. 19 tank fire.

MLPs & Pipelines

(Late Wednesday) Press Release - Gibson Energy announced that it has completed the final closing of the sale of its Industrial Propane Business to Superior Plus LP, a wholly owned subsidiary of Superior Plus Corp., pursuant to the option granted by Gibson to Superior LP on March 1, 2017.

Press Release - Holly Energy Partners completed the private placement of 6% senior notes, due 2024, for gross proceeds of US$100 million. The notes are priced at 103.25% of the principal amount. Interest on the notes will be payable from August 1, 2017.

Press Release - Pembina Pipeline announced that in order to accommodate incremental volume commitments from customers, the Company is adding additional infrastructure and increasing operational flexibilities to its previously announced Phase V pipeline expansion, which included a 20 inch pipeline from Lator to Fox Creek, Alberta. The Company is also revising its capital cost estimate for Phase V by an additional $135 million for a total capital cost of $385 million.

Press Release - Veresen is pleased to announce the successful start-up of the Tower rich gas processing

MARKET COMMENTARY

U.S. stock index futures were slightly lower amid releases of several key economic data points. The dollar rose after U.S. President Donald Trump proposed the biggest shake-up of the U.S. tax system in three decades on Wednesday, before consolidating gains, while spot gold was modestly higher after falling to a six-week low. European and Asian markets were mixed.

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.