Energy Sector Update for 03/29/2016: VLO,VLP,ENSV,GEVO

Top Energy Stocks

XOM +0.28%

CVX -0.08%

COP -0.61%

SLB Unch

OXY -0.49%

Energy stocks were mostly lower today, with the NYSE Energy Sector Index dropping almost 1.2% while shares of energy companies in the S&P 500 also were down 1.2% as a group. Crude oil for May delivery was down $1.25 at $38.14 per barrel while April natural gas futures were 4 cents higher at $1.98 per 1 million BTU.

In company news, Valero Energy ( VLO ) was slipping in Tuesday trade after the petroleum refinery and marketing company late yesterday announced the $240 million sale of its McKee Terminal Services business to Valero Energy Partners ( VLP ).

The transaction is expected to close before the end of the week is seen adding around $28 million in earnings before interest, taxes, depreciation and amortization during the first 12 months of operation for Valero Energy Partner, boosting its bottom line. The companies also expect to sign a deal soon after closing providing Valero Energy with terminal access and services over the next 10 year.

The deal includes the terminal and related operations supporting Valero's McKee refinery in Sunray, Texas, north of Amarillo, and contains 75 tanks with 4.4 million barrels of overall storage capacity. Valero Energy Partners expects to fund the purchase with $139 million borrowed through its revolving credit facility and $65 million in available cash and by issuing around $36 million in new equity or general partnership units.

VLO shares were slightly lower at $65.20 apiece, down about 0.1% and starting to build a wider margin from their session low today at $64.37 a share. VLP units have been trading on both sides of the break-even mark today, recently turning negative again at $45.92 per unit, slipping about 0.2%.

In other sector news,

(+) ENSV, (+13.6%) Reschedules announcing its Q4 and FY14 financial results, orginally scheduled for today, until Thursday, March 31. The company also said it would explain the delay later on Tuesday.

(-) GEVO, (-37.8%) Prices $3.5 mln public offering of 3.7 mln units consisting of one share of common stock, one Series F warrant and two Series H warrant at 35 cents per unit. Also sells 6.6 mln Series D units consisting of a prefunded Series G warrant, a Series F warrant and two Series H warrants at 34 cents per unit.

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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