Energy Sector Update for 12/23/2015: RICE,EGY,PBR
Top Energy Stocks
Energy stocks were higher again Wednesday, with the NYSE Energy Sector Index rising 1.3% while shares of energy companies in the S&P 500 were up 1.2% as a group. Crude oil for February delivery was up $1.30 at $37.44 per barrel while February natural gas futures were 4 cents higher at $2.00 per 1 million BTU.
In company news, Rice Energy ( RICE ) rose Wednesday after the oil and natural gas producer said a trust formed by Chief Executive Daniel Rice and other family members sold 5 million shares of the company's stock earlier this week to pay down loans dating back to the company's IPO nearly two years ago.
Prior to Monday's block sale by the Rice Energy Irrevocable Trust, no one in the Rice family had sold any of their shares since its January 2014 initial public offering, the company said last night. Proceeds from the sale were used to repay a $50 million line of credit extended to the trust by Morgan Stanley to pay taxes and other expenses resulting from the IPO.
Citing recent volatility for energy stocks in general, the company said the trust determined that repaying the loans preemptively now would help it avoid potential margin calls in the future and the possible impact a forced sale could have on the company's stock price.
Following this week's sale, the Rice Energy Irrevocable Trust still owns 14.8 million shares, or about 10.9% of the company's outstanding stock, and remains its largest individual investor.
RICE shares were up just under 7% at $9.80 each, slipping 11 cents under their session high.
In other sector news,
(+) EGY, (+12.7%) Avoids proxy fight with a pair of activist investors, naming Group 42 Board Chairman Michael Keane as well as another representative of the Group 42-BLR Group coalition to the EGY board, replacing two current independent directors, effective immediately. The investor groups and EGY also will name a mutually agreeable independent director at a later date.
(+) PBR, (+3.9%) Brazil's finance minister says he sees no need to inject capital into the state-run oil company. Company also reports two formation tests at its 3-SPS-105 well, confirming the high productivity of the Brazilian offshore reservoirs.
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