Energy Sector Update for 08/24/2020: RIG,NBL,CVX,FTSI

Energy stocks were higher this afternoon amid gains for West Texas Intermediate crude oil after more than half of US production in the Gulf of Mexico has been temporarily shut down ahead of two approaching tropical storms this week. At last look, the NYSE Energy Sector Index was climbing 2.3% while the SPDR Energy Select Sector ETF was up 2.1%.

Front-month WTI crude oil was rising 15 cents to $42.49 per barrel at the New York Mercantile Exchange while the global benchmark Brent crude contract was increasing 51 cents to $44.86 per barrel. Henry Hub natural gas futures were 9 cents higher at $2.54 per 1 million BTU.

Among energy-related ETFs, the United States Oil Fund is ahead 0.6% while the United States Natural Gas Fund is advancing 3.1%. The Philadelphia Oil-Service Sector index was posting a 3.6% gain.

In company news, Transocean (RIG) climbed almost 15% after Monday saying it will issue a prorated $518 million of its new 11.5% senior guaranteed notes due 2027 after bondholders tendered about $1.13 billion of its existing senior notes and debentures by the August 21 deadline. The contract drilling company also increased the interest rate for three series of its senior notes maturing in 2021, 2022 and 2041 to 8.375%, 5.800% and 9.35%, respectively, from 6.375%, 3.80% and 7.35% previously.

Noble Energy (NBL) rose 2.1% after Monday saying it has scheduled an Oct. 2 special meeting for shareholders to vote on Chevron's (CVX) proposed acquisition of the oil and natural gas producer following the Federal Trade Commission late last week granting an early termination of the waiting period for the deal required under federal anti-trust guidelines. Chevron shares were 1.3% higher.

FTS International (FTSI) earlier dropped 79% to an all-time low of $1.04 a share after the hydraulic fracturing company Monday said it has filed for Chapter 11 bankruptcy protection and will pursue a prepackaged reorganization after striking a deal with the majority of its bondholders and lenders that will eliminate $437.3 million of its current debt in exchange for a 90.1% equity stake in the post-bankruptcy company plus $30.6 million in cash. Existing shareholders will own the remaining 9.9% of the company.

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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