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Energy Sector Update for 01/12/2017: HES,MNGA,KOS

Top Energy Stocks

XOM -0.49%

CVX -0.08%

COP -1.64%

SLB -0.93%

OXY -0.71%

Energy stocks were declining Thursday, with the NYSE Energy Sector Index dropping about 0.4% while shares of energy companies in the S&P 500 were down 0.6% as a group. Crude oil for February delivery was up 70 cents at $52.95 per barrel while February natural gas futures were 18 cents higher at $3.40 per 1 million BTU.

In company news, Hess Corp ( HES ) declined Thursday after the production and refinery petroleum company today said it will take a non-cash $3.8 billion charge against its Q4 financial results to create valuation allowances against its deferred tax assets through the end of 2016.

The charge was required under accounting standards after three years of the company producing a cumulative loss. It also will take a $700 million charge to fully account for the impaired carrying value of Hess' stake in the Equus natural gas fields as well as an after-tax charge of $140 million for rig exit costs at Equus.

The company Thursday also disclosed its FY17 capital expenditures budget, boosting capex this year by 18.4% compared with prior-year levels to $2.25 billion. It expects to use around $700 million for developing unconventional shale resource and $825 million for other developments. The remaining 32% is split almost equally, with $375 million budgeted for production and $350 million for exploration and appraisal activities.

Hess is expecting to produce between 300,000 to 310,000 equivalent barrels of oil per day this year.

HES shares were down over 5% today at $58.60 apiece, previously sinking more than 8% to a session low of $56.65.

In other sector news,

(+) MNGA, (+34.3%) Received final $191,500 progress payment from Green Arc Supply, lifting the total to fund construction of a plasma-arc gasification system to $775,000.

(-) KOS, (-5.4%) Prices $199.5 mln secondary offering of 16.5 mln shares owned by Warburg Pincus and 13.5 mln shares held by the Blackstone Group ( BX ) at $6.65 apiece, a 5.8% discount to Wednesday's closing price.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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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.

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