Markets

Energy Stocks Look To Continue Their Strength

Friday, May 11, 2018

Sector Commentary

Energy stocks look to continue their strength into the last session of the week, on the back of rising U.S. stock index futures, while oil prices were flat but hovering near 3-1/2 year highs. U.S. stocks were up, supported by weaker than expected inflation numbers which helped soothe worries that the Federal Reserve might step up the pace of its rate hikes.

Oil prices were mixed in AM trading, while the dollar strengthens, but on track to post its seventh gain in the past eight sessions as well as another weekly gain. Iran remains the primary focus, with the market debating the prospect of new U.S. sanctions tightening the outlook for Middle East supply, and its impacts on its exports as well as the ability of other producers to pick up the slack.

Natural gas futures consolidated yesterday's jump, as the market digests the in-line EIA storage build, combined with warmer than seasonal weather across the bulk of the country.

U.S. INTEGRATEDS

(Late Thursday) Reuters - Exxon Mobil restarted the second-largest crude distillation unit at its 502,500 barrel-per-day Baton Rouge, Louisiana, refinery on Thursday.

INTERNATIONAL INTEGRATEDS

Press Release - LUKOIL and the Basra Oil Company signed a Development Plan of West Qurna-2 field that provides for an oil production plateau of 800 thousand barrels per day. According to the Plan, the oil production of 480 thousand barrels per day will be reached in 2020 and 800 thousand barrels per day is expected in 2025.

Reuters - Total signed a $1.5 billion deal with Sonatrach to set a petrochemical project in Algeria.

U.S. E&PS

Press Release - Cimarex Energy announced that its Board of Directors has declared a quarterly cash dividend on its common stock of $0.16 per share. The dividend is payable on August 31, 2018, to stockholders of record on August 15, 2018.

(Late Thursday) Reuters - Venezuela rejected ConocoPhillips 's moves to seize the country's Caribbean assets to collect on a $2 billion arbitration award, but in a sign the U.S. oil company's pressure might be working, Caracas also suggested it was ready to pay.

(Late Thursday) Press Release - Jagged Peak Energy reported net loss for the first quarter was $39.4 million, or $(0.18) per diluted common share. Eliminating certain non-cash and non-recurring items such as certain equity-based compensation, non-cash mark-to-market gains or losses on derivatives and impairment expense, adjusted net income was $26.4 million, or $0.12 per diluted common share.

(Late Thursday) Press Release - Noble Energy announced that it finalized an agreement with EPIC Pipeline to transport crude oil from the Company's Delaware Basin acreage position to Corpus Christi, Texas.  Noble Energy has secured firm capacity for 100 thousand barrels of oil per day for a 10-year period beginning at pipeline start-up. The Company has dedicated substantially all its Delaware Basin acreage position in Reeves County, Texas, to the EPIC crude pipeline, which the operator anticipates to commence operations in the second half of 2019.

CANADIAN E&PS

Press Release - Frontera Energy reported that during the first quarter of 2018, net loss attributable to equity holders of the Company was $3.1 million or $0.06/share, compared with a net loss of $32.5 million or $0.65/share, in the fourth quarter of 2017. Adjusted FFO totaled $34.3 million or $0.69/share for the first quarter of 2018, a decrease of 64% compared to $94.7 million or $1.89/share achieved in the fourth quarter of 2017, and $44.5 million lower than the first quarter of 2017.

Press Release - Obsidian Energy generated funds flow from operations for the first quarter was $35 million, a decrease of 33 percent from the fourth quarter of 2017. The decrease in FFO was primarily due to the conclusion of the PROP operating cost carry, realized risk management losses and lower production volumes, partially offset by higher commodity prices. Realized risk management losses for the quarter totaled $4.20 per boe compared to nil in the fourth quarter of 2017. The realized loss increased as crude oil prices strengthened in 2018.

OIL SERVICES

(Late Thursday) Press Release - CES Energy Solutions is pleased to report on its financial and operating results for the three months ended March 31, 2018.  Further, CES announced today that it will pay a cash dividend of $0.0025 per common share on June 15, 2018 to the shareholders of record at the close of business on May 31, 2018.

Revenue for the three months ended March 31, 2018 of $300.3 million is the highest revenue quarter in the Company's history exceeding the previous record quarter which was Q4 2017 with $278.8 million.

(Late Thursday) Press Release - ION Geophysical announced its seventh 3D multi-client reimaging program offshore Mexico. Based on the success of both the Campeche and Mexican Ridges 3D reimaging programs, now totaling over 130,000 sq km, ION is extending its data in a lesser explored area further to the north.

(Late Thursday) Press Release - McDermott International announced that it has completed its combination with Chicago Bridge & Iron Companys, creating a premier, fully integrated provider of technology, engineering and construction solutions for the energy industry.

DRILLERS

Press Release - Parker DrillingCompany declared a cash dividend of $1.8125 per share on its 7.25% Series A Mandatory Convertible Preferred Stock, payable on June 30, 2018, to holders of record at the close of business on June 15, 2018. The dividend is for the period beginning on March 31, 2018, and ending on June 29, 2018.

Press Release - Transocean completed the acquisition of a 33.3% interest in the West Rigel, a newbuild Moss Maritime CS60 design harsh environment semisubmersible rig, from Jurong Shipyard Pte Ltd, a wholly-owned subsidiary of Sembcorp Marine Ltd., a marine and offshore engineering company, for a purchase consideration of US$166 million.

MARKET COMMENTARY

Wall Street futures and the dollar were up, supported by weaker than expected inflation numbers which helped soothe worries that the Federal Reserve might step up the pace of its rate hikes. Meanwhile, gold prices slipped. European stocks were largely flat, headed for their longest weekly winning streak in more than three years. Asian shares were cheered on by easing tensions on the Korean peninsula. Oil prices were little changed, hovering near multi-year highs as the prospect of new U.S. sanctions on Iran tightened the outlook for Middle East supply. U.S. trade data is scheduled for release later in the day.

Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.