Energy Sector Update for 12/18/2015: SDLP,GMLP,URRE
Top Energy Stocks
Energy stocks were mostly lower today, with the NYSE Energy Sector Index dropping about 0.3% while shares of energy companies in the S&P 500 were down over 0.6% as a group. Crude oil for January delivery was up 42 cents at $35.37 per barrel, rebounding from an earlier slide to $34.39, while January natural gas futures were 3 cents higher at $1.79 per 1 million BTU.
In company news, equity units of Seadrill Partners LLC ( SDLP ) advanced Friday after the offshore drilling company said it was reducing its quarterly distribution by nearly 56% to $0.25 per unit following completion of its annual budgeting and forecasting cycle.
The drop from its prior dividend amount of $0.5675 per unit will take effect with payment of its Q4 distribution and is expected to increase liquidity at the company by more than $250 million, it said, adding more flexibility in managing its medium-term obligations and reducing leverage. The company also will continue to set aside around $200 million for maintenance and replacement capital spending.
Following the distribution reduction, analysts at Seaport Global Securities today lowered their investment call for Seadrill stock to Neutral from Buy.
SDLP units were up over 18% in afternoon trade at $3.69 apiece, backing down from a mid-morning climb to $5.72 a share.
In other sector news,
(+) GMLP, (+19.2%) Authorizes $25 mln stock buyback program. Also says it has not experienced any material changes in operations since reporting its Q3 results, with the company still expecting to declare a $0.5775 per unit Q4 distribution.
(-) URRE, (-18.0%) Completes $1 mln registered direct offering of 2.5 mln shares of its common stock at 40 cents apiece. Net proceeds will be used for general corporate purposes, including technical studies, restoration commitments, capital spending and working capital.
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