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Energy Sector Update for 03/09/2018: PBA,PPL.TO,MCF,SNMP,CGG

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Energy stocks were extending their prior gains Friday afternoon, with the NYSE Energy Sector Index posting a more than 1.3% advance in recent trade while shares of energy companies in the S&P 500 were up almost 1.9% as a group. Crude oil for April delivery settled $1.95 higher at $62.04 per barrel in New York while the benchmark Brent crude April contract climbed $1.91 - or about 3% - to $65.52 per barrel. April gas futures fell 2 cents to $2.73 per 1 million BTU. Among energy-related ETFs, United States Oil was up over 2.7% while United States Natural Gas was down 0.8%. The Philadelphia oil-service sector index also was trading more than 2.4% higher.

In industry news:

Oil prices were rising off their three-week low after U.S. President Donald Trump's surprise announcement Thursday night he plans to meet with his North Korean counterpart later this spring in a bid to resolve their stand-off over the Asian nation's nuclear weapons. Traders were buoyed by the Baker Hughes ( BHGE ) weekly rig-count report showing U.S. companies this week trimmed the number of oil rigs in use for the first time since mid-January, pulling four rigs out of the fields for a total of 796 rigs for the seven days ended March 9. The markets have been looking for more signs of rising U.S. activity that's been likely keeping a lid on commodity prices by counterbalancing production limits by OPEC members and Russia that helped prices recover since the 2014 supply glut and price crash.

Among energy stocks moving on news:

+ Pembina Pipeline Corp (PBA,PPL.TO) was staying near its session high in late Friday trade, climbing over 1% to an intra-day peak of $32.36 a share, after the Canadian pipeline company this afternoon said it has closed on a $1 billion, non-revolving term loan with some of its existing lenders. Pembina is expecting to use the new loan facility to repay a portion of its borrowings drawn its $2.5 billion revolving credit facility, working to increase liquidity and financial flexibility for the company in addition to reducing its interest expenses. The new loan initially will have a three-year term and is pre-payable at the company's options. Other terms and conditions of the loan, including financial covenants, are little changed from Pembina's $2.5 billion revolving facility, which the company extended its due date until 2023.

In other sector news

+ Contango Oil & Gas Co. ( MCF ) was higher Friday, reversing a 4% decline to a session low of $3.31 a share soon after the opening bell that followed the company more than halving its Q4 net loss compared with the final three months of 2016 but still missing Wall Street expectations. Net loss during the three months ended Dec. 31, 2017, was $0.23 per share, improving on a $0.69 per share loss during the year-ago period but coming in $0.02 per share wider than the Capital IQ consensus. Revenue fell to $20 million from $21.7 million last year, topping the $19.13 millon consensus. The company's natural gas reserves on Dec. 31 grew 25% over year-end 2016 levels to 37.5 billion cubic feet equivalent.

+ Sanchez Midstream Partners ( SNMP ) turned in a more than 12% advance at one point on Friday after the oil and gas company reported a Q4 loss of $0.62 per share, paring a $3.34 per share during the same period last year but still more than double the $0.29 per share net loss expected by the two analysts polled by Capital IQ. Total revenue of $18.7 million was up from $15.3 million in the same period a year ago, also missing the two-analyst estimate looking for $21.9 million in revenue.

- CGG ( CGG ) declined Friday, dropping over 8% to a session low of $4.00 a share, after the seismic data and imaging company reported a wider-than-expected Q4 net loss and upstaging revenue exceeding Wall analyst projections. Net loss for the three months ended Dec. 31, 2017, was $6.06 per share compared with a $2.71 per share net loss during the year-ago period and missing the Capital IQ consensus expecting a $3.55 per share net loss. Revenue grew to $400.7 million from $328.3 million during the same quarter last year and topping the $328.3 million Street view. Looking ahead, the company is expecting FY18 revenue in a range of 5% either side of $1.5 billion, or about $1.43 billion to $1.58 billion. The lone analyst following CGG is looking for $1.15 billion in FY18 revenue.

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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