Energy Sector Update for 01/27/2017: EPE,APO,ESES,PER

Top Energy Stocks

XOM -0.40%

CVX -2.23%

COP -2.11%

SLB -0.45%

OXY +0.09%

Energy stocks were mostly lower Friday, with the NYSE Energy Sector Index dropping about 0.9% while shares of energy companies in the S&P 500 also were down 0.9% as a group. Crude oil for March delivery was down $1.05 at $52.72 per barrel while February natural gas futures were 10 cents lower at $3.30 per 1 million BTU.

In company news, EP Energy Corp ( EPE ) has turned sharply lower Friday afternoon, giving back an earlier advance that followed the energy producer last night saying it was launching a joint venture with a private capital investor affiliated with Apollo Global Management ( APO ) to fund development of up to 150 oil and natural gas developments in the Wolfcamp formation of the Permian Basin in western Texas.

Under terms of the new partnership, the companies plan to drill in two, 75-well tranches, with the Apollo entity, Wolfcamp Drillco Operating LP, assuming $450 million, or about 60%, of the drilling and related expenses while earning a 50% working interest in each well as they are completed.

EP Energy will operate all of the wells, also saying the deal "significantly" boosts its program economics at the Wolfcamp formation, producing an internal rate of return of over 80%. The first wells under the joint venture began production this month, the company said.

EPE shares were down almost 6% at $5.46 apiece in recent trade, giving back all of a 9.3% run earlier today to a session high of $6.32 a share. APO shares were down almost 2% at $21.26 each, recovering somewhat from a session low of $21.13 a share earlier today.

In other sector news,

(+) ESES, (+0.8%) Executes one-year contract, with option for second year, to expand pressure pumping operations in Oklahoma for "a well-capitalized and established" U.S. oil and natural gas producer.

(-) PER, (-15.4%) Lowers quarterly dividend by $0.014, or about 10.4%, from previous distribution to $0.12 per unit, citing current and expected declines in production volumes.

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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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