Energy Sector Update for 02/17/2017: KMI,MTDR,CIR

Top Energy Stocks

XOM -0.85%

CVX -0.63%

COP -1.78%

SLB -0.60%

OXY -0.53%

Energy stocks fell again on Friday, with the NYSE Energy Sector Index dropping about 0.7% while shares of energy companies in the S&P 500 were down over 0.8% as a group. Crude oil for March delivery settled 4 cents higher at $53.40 per barrel while March natural gas futures fell 2 cents to $2.83 per 1 million BTU.

In company news, Kinder Morgan ( KMI ) was fractionally lower Friday following reports the American pipeline company has been talking with several Canadian institutional investors as part of its efforts to raise up to $5.2 billion (C$6.8 billion) for an expansion of its Trans Mountain pipeline in western Canada.

The company already has discussed the project with the Canada Pension Plan Investment Board and Caisse de depot et placement du Quebec as well as the Ontario Teachers' Pension Plan Board, according to a Reuters report, citing people familiar with the process. It was unclear if the talks with the three pension funds were continuing, the story said.

Kinder Morgan also has hired Toronto Dominion Bank ( TD ) to assist with finding project funding and the bank is expected to run a so-called "dual-track" process - exploring a potential initial public offering of Trans Mountain in addition to selling a 50% stake in the project after forming a joint venture to own and operate the pipeline stretching between Vancouver and the Alberta oilfields.

The upcoming project is expected to triple Trans Mountain's capacity to around 890,000 barrels per day.

KMI shares were down about 0.3% in late trade at $21.72 apiece, previously topping out today at $21.89 a share.

In other sector news,

(+) MTDR, Forms joint venture for its midstream assets in the Delaware basin with Five Point Capital Partners paying $176.4 mln in exchange for a 49% stake. MTDR will continue to operate pipelines and other assets and is eligible for up to $73.5 mln in deferred performance incentives over the next five years.

(-) CIR, KeyBanc Capital Markets downgrade to Sector Weight from Overweight. Also, Stifel lowers its investment rating to Hold from Buy but increases price target by $5 to $74 a share.

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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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