Credit: Shutterstock photoWednesday, December 13, 2017
Sector Commentary
The energy sector is poised for a higher start, lifted by further strength in the crude complex while major equity futures are flat ahead of a key update from the Federal Reserve on its economic and interest rate projections.
In deal news, National Oilwell Varco said it intends to acquire Vallourec Drilling Products business, from Vallourec SA, for a cash consideration of US$63 million (MM).
WTI and Brent crude oil futures continued to swing higher for the fourth-straight session, lifted by last night's API data that showed a larger-than-expected drawdown in U.S. crude stockpiles and underpinned by a supply disruption from what is expected to be an extended shutdown of a major North Sea crude pipeline. The industry report said crude stocks in the U.S. fell by 7.4 million barrels last week, almost twice the decline of analysts' expectations for a drop of 3.8 million barrels. The markets will be looking for the official EIA report later this morning to confirm. Britain's Forties crude oil pipeline remained closed today and the operator, INEOS said it was considering several options to repair the crack that has stopped shipments of oil and gas and that it will likely to be shut for several weeks for repairs.
Natural gas futures bounced back higher this morning, lifted by cold weather forecasts in key consuming regions that should bolster demand for heat.
INTERNATIONAL INTEGRATEDS
Reuters - Trafigura and Eni Trading and Shipping traded the first liquefied natural gas futures contract representing delivered prices to Dubai, Kuwait and India. Eni Trading & Shipping SpA operates as a subsidiary of Eni SpA .
Press Release - Gazprom Export fully satisfies nominations of clients after resumption of natural gas transit via Austria's Baumgarten gas hub suspended earlier because of the explosion.
Reuters - Gazprom said it had so far fully met daily supply requests for gas from clients who receive the fuel via the explosion-hit Austrian gas hub Baumgarten.
Reuters - The explosion, which rattled Austria's main gas pipeline hub and led to gas supplies disruptions in Europe, has underlined the need for Gazprom 's gas projects. Tuesday's explosion, in which one person was killed and 21 were injured, led Italy to declare a state of emergency as flows from the site were cut off for most of the day.
Press Release - LUKOIL signed contracts with Iraqi state owned Oil Exploration Company on the performance of seismic surveys. They will be held at the earlier discovered Eridu field to comprehensively appraise its geological potential, and also at Block 10's southern and central parts, previously not part of the survey.
Press Release - Repsol and Microsoft have signed a strategic agreement that will allow the energy company to advance its digitalization process, and allow the software and cloud computing company to develop innovative solutions for the energy industry.
Reuters - Gas exports from Total E&P's Elgin-Franklin gas platform in Britain's North Sea have been halted until Jan. 2 due to the shutdown of the Forties oil pipeline. It said the unplanned outage at the site, which has a capacity of 10 million cubic metres/day of gas, started on Dec. 12. Total E&P's is a subsidiary of Total SA .
U.S. E&PS
Press Release - Anadarko Petroleum Corporation today announced its wholly owned subsidiary, DBM Oil Services, LLC (DBMOS), is holding a binding open season to identify interest in a new high-vapor-pressure oil-gathering and treating system serving portions of Reeves, Loving, Ward, and Winkler Counties in West Texas. The DBMOS system is expected to have a gathering capacity of approximately 400,000 barrels of oil per day (BOPD) and a treating capacity of 120,000 BOPD by the end of 2018, increasing to 180,000 BOPD in 2019 with future expansions as needed.
Press Release - Continental Resources priced the private placement of 4.375% senior unsecured notes, due 2028, fsor gross proceeds of US$1,000 million. The company intends to use the proceeds from the placement to repay and terminate its US$500 MM term loan, and to repay a portion of outstanding borrowings under its revolving credit facility.
Press Release - Eclipse Resources entered into a definitive option agreement to acquire all the outstanding interests of Cardinal NE Holdings, LLC, a company that owns midstream assets, from Cardinal Midstream II, LLC, for a cash consideration of US$18.3 million.
Press Release - Eclipse Resources entered into a definitive purchase and sale agreement to acquire certain oil and gas assets in Flat Castle project area located in Appalachian Basin in Pennsylvania, the US, from Travis Peak Resources, LLC, for a purchase consideration of US$93.7 million.
Press Release - EQT announced the Company's 2018 capital expenditure forecast of $2.4 billion, which includes $2.2 billion for well development and $150 million for acreage fill-ins and bolt-on leasing. Based on current pricing and synergy capture, the 2018 drilling program is expected to be fully funded through adjusted operating cash flow attributable to EQT.
Reuters - EQT said it expected to spend 60 percent more on its capital budget in 2018 after it became the biggest U.S. natural gas producer when it completed its acquisition of Rice Energy last month.
Guggenheim Securities downgraded Oasis Petroleum to 'Neutral' from 'Buy'.
Press Release - Whiting Petroleum announced that it has priced $1.0 billion aggregate principal amount of 6.625% senior notes due 2026 in a private unregistered offering to eligible purchasers. The notes were priced at par. The offering is expected to close on December 27, 2017, subject to customary conditions.
CANADIAN E&PS
(Late Tuesday) Press Release - Gran Tierra Resources Ltd., an indirect wholly owned subsidiary of Gran Tierra Energy purchased 11 million subscription receipts of PetroTal Ltd. at a price of $1 per subscription receipt, for total consideration paid to PetroTal of $11-million. The subscription receipts were acquired as part of a non-brokered private placement offering of 34 million subscription receipts.
(Late Tuesday) Press Release - Obsidian Energy is pleased to announce that Mr. Gordon Ritchie has been appointed to the Obsidian Energy Board of Directors.
OIL SERVICES
Press Release - Baker Hughes priced the private placement of 2.773% senior notes, due 2022, for gross proceeds of US$1,250 million.
(Late Tuesday) Reuters - Fairmount Santrol Holdings said it would sell itself to Unimin Corp in a cash-and-stock deal to create one of the largest suppliers of sand for use in hydraulic fracturing to shale oil and gas producers.
Press Release - National Oilwell Varco intends to acquire Vallourec Drilling Products business, from Vallourec SA, for a cash consideration of US$63 million.
Press Release - Oil States International announced that it has entered into a definitive agreement to acquire GEODynamics. GEODynamics is being acquired from funds managed by Lime Rock Partners, members of its management team and other investors. Oil States anticipates that GEODynamics' product innovation and collaborative relationships with E&P operators will further augment its research and development efforts and lead to enhancements in its consumable product offerings in the growing markets for technology-backed products used in complex well completions.
Press Release - SEACOR Holdings announced that its SEA-Vista subsidiary has reached an agreement to sell one of its ECO-Class tankers for approximately $135 million.
DRILLERS
Press Release - Helmerich & Payne acquired Magnetic Variation Services. In connection with the transaction and in part as consideration, H&P granted certain management members restricted stock awards covering 213,904 shares.
Press Release - Seadrill Limited announced that Harald Thorstein has been appointed as Director of the Company with immediate effect.
REFINERs
Press Release - On December 6, 2017, Martin J. Power, Chief Commercial Officer, for CVR Energy and CVR Refining GP, LLC, the general partner of CVR Refining, LP provided notice of his retirement effective December 31, 2017. Mr. Power is a named executive officer of the Company and the Partnership.
Press Release - On December 8, 2017, Tim G. Taylor, President of Phillips 66 informed the Company of his intent to retire from the Company effective December 31, 2017.
MLPs & PipelinES 0845
Press Release - On December 6, 2017, Martin J. Power, Chief Commercial Officer, for CVR Energy and CVR Refining GP, LLC, the general partner of CVR Refining, LP provided notice of his retirement effective December 31, 2017. Mr. Power is a named executive officer of the Company and the Partnership.
Press Release - Keyera completed the bought deal public offering of 14.03 million shares, at a price of C$35.2 per share, for gross proceeds of C$493.86 MM, including the underwriters' option of 1.83 MM shares.
Press Release - LINN Energy completed the sale of its interest in oil and gas properties located in Williston Basin in North Dakota, South Dakota and Montana, the US, to Valorem Energy, LLC, an independent oil and gas company backed by Kayne Private Energy Income Fund, L.P, for a sale consideration of US$285 million.
Press Release - Noble Midstream Partners announced it has commenced, subject to market conditions, an underwritten public offering of approximately 3,200,000 common units pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission.
Press Release - Noble Midstream Partners and Greenfield Midstream announced the formation of a joint venture, Black Diamond Gathering. The JV has entered into definitive agreements to acquire Saddle Butte Rockies Midstream, LLC and affiliates for $625 million. Greenfield Midstream is an EnCap Flatrock Midstream portfolio company.
Press Release - Pembina Pipeline completed the bought deal public offering of 16 million Series 21 cumulative redeemable minimum rate reset class A preferred shares, at a price of C$25 per share, for gross proceeds of C$400 MM, including the underwriters' option of 4 MM shares.
Press Release - On December 8, 2017, Tim G. Taylor, President of Phillips 66 Partners GP LLC, the general partner of Phillips 66 Partners LP informed the General Partner and the Partnership of his intention to retire from his position with the General Partner and as a member of the Board of Directors of the General Partner effective December 31, 2017.
(Late Tuesday) Reuters - Opponents of TransCanada proposed Keystone XL oil pipeline argued on Tuesday that regulators in Nebraska had no authority to approve the line's "alternative" path through the state, and that the project should be considered dead.
MARKET COMMENTARY
U.S. stock index futures and European markets were little changed, as investors cautiously awaited commentary from the U.S. Federal Reserve later in the day. Asian markets were mostly higher. The dollar slipped as markets assess the political implications of Donald Trump's setback in a bitter Senate election in Alabama.
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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.
