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Energy Sector Update for 05/11/2018: WTTR,OBE,OBE.TO,JAG,NBL,APA

Top Energy Stocks

XOM +0.44%

CVX +0.70%

COP +0.39%

SLB -0.22%

OXY +1.34%

Energy stocks were ending narrowly mixed, easing somewhat as crude oil settled near its session low. At last look, the NYSE Energy Sector Index fell less than 0.1%, giving back a small gain earlier today, while shares of energy companies in the S&P 500 were up nearly 0.1% as a group. West Texas Intermediate crude oil for June delivery settled 66 cents lower at $70.70 per barrel in New York, or just 7 cents above its session low, while the global benchmark Brent crude July contract fell 44 cents to $77.03 per barrel. June natural gas futures fell 1 cent to $2.81 per 1 million BTU. Among energy-related ETFs, United States Oil dropped just over 1.0% while United States Natural Gas climbed more than 0.3%. The Philadelphia oil-service sector index was down almost 0.9% in late trade this afternoon.

In industry news:

The North American rig count continued to increase this week, with oil and natural gas producers adding six more rigs throughout the United States and Canada during the seven days ended May 11, according to oilfield-services giant Baker-Hughes ( BHGE ). American companies added a net 13 rigs this week, bringing another 10 oil rigs and three natural gas rigs into the field, offsetting a seven-rig net decline in Canada, where producers pulled a five oil rigs and two gas rigs as the ongoing spring thaw continues to limit movement, particularly in northern Alberta and British Columbia. Overall, the North American total is ahead by 159 rigs over year-ago levels.

Among energy stocks moving on news:

+ Select Energy Services ( WTTR ) advanced on Friday, at one point rising almost 9%, after swinging to a Q1 profit from a loss during the year-ago period and nearly doubling analyst projections. The company earned $0.15 per share during the January-to-March quarter, reversing a net loss of $0.21 per share during the same quarter last year and beating the Capital IQ consensus by $0.07 per share. Revenue surged 278% year over year to $376.4 million compared with $99.9 million last year and largely in-line with $376.7 million analyst mean.

In other sector news

- Jagged Peak Energy ( JAG ) was drifting lower during Friday trading, giving back a 2.5% advance soon after the opening bell that followed it reporting improved non-GAAP Q1 adjusted net income and revenue and also topping analyst projections. Excluding one-time items, the exploration and production company earned $0.12 per share during the three months ended March 31, up from $0.05 per share last year and beating the Capital IQ consensus by $0.01 per share. Revenue grew to $129.1 million from $39.4 million during the year-ago period and also exceeding the $117.4 million Street view. Jagged Peak is expecting to produce between 31,000 to 32,000 barrels of oil equivalent during the current quarter, rising 14% over Q1 levels at the midpoint.

- Noble Energy ( NBL ) was underwater Friday afternoon, sliding as much as 1% lower, despite the oil and natural gas company late Thursday announcing a strategic partnership with privately held EPIC Midstream Holdings LP securing room in the EPIC crude oil pipeline to move 100,000 barrels per day between the Delaware Basin and Corpus Christi, Texas. The new contract will run for 10 years after the 500,000-barrel-per-day pipeline begins operations during the second half of 2019. In a related transaction, Apache Corp ( APA ) secured 75,000 barrels per day of capacity on the new pipeline. Both firms also received options expiring during Q1 in 2019 to each purchase a 30% ownership interest in the EPIC crude oil pipeline and a 15% ownership stake in the EPIC natural gas liquids pipeline running parallel to the crude oil pipeline.

- Obsidian Energy (OBE,OBE.TO) dropped as much as 4% on Friday after the Canadian oil and natural gas producer swung to a Q1 net loss following hedging losses and harsh winter conditions in Western Canada kept a lid on production during the January-to-March fiscal period. The company posted a net loss of $0.13 per share during the three months ended March 31, reversing a $0.05 per share profit during the year-ago quarter and missing the two-analyst consensus expecting a $0.04 per share net loss. Revenue fell 23% year-over-year to $1.01 million. Analyst estimates were not available for comparison for Obsidian's revenue. The company produced 29,443 barrels of oil equivalent per day during the quarter, down 6% from the first three months of 2017.

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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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