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Energy Stocks Rise as Oil Regains Momentum

Tuesday, March   26, 2019

SECTOR COMMENTARY

Energy stocks are higher as oil prices regain momentum and on support from the macro where stabilization in Treasury yields helped to reassure investors. Corporate news in the energy sector is light today.  The Scotia Howard Weil Energy Conference continues to be a focus.

Oil prices are stronger, hovering beneath key psychological thresholds, with WTI outperforming Brent ahead of weekly US stockpile data, which is expected to show a draw in supplies across the board.  "It appears that concerns about demand have taken something of a back seat," Commerzbank analyst Carsten Fritsch said. "Instead, market participants are focusing on the tight supply situation again."

Natural gas futures are hovering near 1 month lows on mild temperature forecasts and on weaker LNG feed gas flows. 

INTERNATIONAL INTEGRATEDS

(Late Monday) Reuters - Royal Dutch Shell and LyondellBasell Industries cut production at their Houston-area oil refineries because of shipping disruptions along a waterway affected by a petrochemical fire and spill, according to people familiar with the matter.    

U.S. E&PS

(Late Monday) Press Release - As of March 22, 2019, Apache has given notice of its intent to withdraw as Managing Partner of Apache Offshore Investment Partnership effective June 20, 2019. The investing partners who own units of partnership interests in the Investment Partnership will have 120 days from March 22, 2019 to elect to continue the business of the Investment Partnership and select a substitute Managing Partner. The information contained in the Notice of Withdrawal, attached hereto as Exhibit 99.1, is incorporated herein by reference. The Notice of Withdrawal is being sent to all Investing Partners.

OILFIELD SERVICES

(Late Monday) Press Release - ION Geophysical announced a new 2D multi-client reimaging program off the Pacific coast of Central America. The Maya Reprocessing program covers unexplored open acreage that has not had E&P activity in 40 years. Previous exploration wells along the margin suggest the presence of an active petroleum system in the Pacific forearc basins. E&P companies can use these data to evaluate the prospective areas identified from the reimaged data. The program covers ~9,000 km of data that extend from the Tehuantepec Basin of Southern Mexico to the Sandino Basin of Western Nicaragua and creates a calibrated data set. The program is expected to be completed before the end of the year.

Press Release - McDermott International announced a sizeable contract award from Unipetrol RPA for engineering, procurement and construction management (EPCM) services for its refinery in Litvinov, Czech Republic. The contract includes the full suite of EPCM services for the upgrade of Unipetrol's hydrocracking unit. McDermott previously completed the feasibility study and basic engineering design and will now execute the procurement and installation phase. 

Press Release - Weatherford International has brought to market the world's first remote-activated, single-trip deepwater completion system. By combining the upper and lower completions in one trip, the system has been shown to reduce installation time between 40 and 60 percent and to reduce rig time by four to six days. Using radio-frequency identification (RFID) technology, the field-proven TR1P system delivers 100 percent interventionless operation in both producer and injector wells.

(Late Monday) Press Release - Weatherford International announced it has completed the sale of two land drilling rigs that were relocated in Algeria and has delivered two idle land drilling rigs from Iraq. The Company received $10 million in cash for each of the land drilling rigs relocated in Algeria and an additional $12 million in cash for the delivery of two idle land drilling rigs outside of Iraq, for aggregate proceeds of $32 million.

MLPS & PIPELINES

(Late Monday) Reuters - Kinder Morgan has dropped out of a recently proposed U.S. Gulf Coast deepwater crude export venture, the project's leader Enbridge said. The $800 million project, known as Texas COLT, is one of eight similar projects proposing facilities that would move U.S. shale to overseas markets by loading supertankers able to carry up to 2 million barrels apiece.

(Late Monday) Press Release - In September 2018, Magellan Midstream Partners announced plans to jointly develop a new crude oil pipeline with Energy Transfer, MPLX and Delek US Holdings to deliver crude oil from the Permian Basin to the Partnership’s terminal in the Houston area and Energy Transfer’s terminal in Nederland, Texas. Due to recent developments, it is unlikely that the Permian Gulf Coast or PGC pipeline project as initially announced will proceed, and, therefore, the Partnership is decreasing its expansion capital spending projections by approximately $200 million for 2019 and $250 million for 2020 to reflect its previously expected share of the project. As a result, the Partnership’s spending estimates are now approximately $1.1 billion for 2019 and $150 million for 2020 to complete its expansion capital projects currently underway. The Partnership continues to actively develop a crude oil pipeline project in the Permian Basin, but the probability of success is unknown at this time.

Press Release - Noble Midstream Partners announced it has secured a $200M equity commitment from Global Infrastructure Partners Capital Solutions Fund to fund capital contributions to Dos Rios Crude Intermediate, a newly-formed subsidiary holding Noble Midstream’s 30% equity interest in the EPIC Crude Pipeline.

MARKET COMMENTARY

Wall Street is expected to open higher after ending lower the previous day, reflecting Asian and European equity markets which also traded higher, while investor sentiment remained fragile as concerns of a possible U.S. recession lingered. The dollar Index fell slightly and the euro rose on hopes of a recovery in the Eurozone economy. Oil prices rose on OPEC-led supply cuts, while gold prices fell.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


Nasdaq Advisory Services Energy Team Nasdaq's Advisory Services 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.

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