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Lower Oil Prices Offset Higher Broader Index Futures

Thursday, September 13, 2018

Sector Commentary

Energy equity performance should remain mixed, with lower oil prices offsetting higher broader index futures. Oilfield services and sand operators may continue to experience pressure amid further downward earnings revisions from the research analyst community.

Oil prices fell on Thursday, slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand even as supply tightens. "A bout of profit-taking is pushing the energy complex (down) after two days of stellar gains," said Stephen Brennock, markets analyst at brokerage PVM Oil in London. The IEA said on Thursday that although the oil market was tightening at the moment and world oil demand would soon reach 100 million barrels per day (bpd), global economic risks were mounting.

Natural gas futures were higher by 2 cents, trading recently at $2.85, ahead of weekly inventory data. Analysts expect a build of 66 bcf.

INTERNATIONAL INTEGRATEDS

(Late Wednesday) Reuters - Argentine investors in Brazilian state-run oil company Petroleo Brasileiro have initiated an arbitration proceeding against the firm for losses related to Brazil's sprawling Lava Jato corruption probe.

U.S. E&PS

(Late Wednesday) Press Release - Chesapeake Energy announced it has amended and restated its senior secured revolving credit facility agreement. The amended and restated facility received initial commitments from 15 institutions totaling $3.8 billion, which exceeded the $3.0 billion borrowing base the company was seeking.

(Late Wednesday) Press Release - Matador Resources announced the successful acquisition of 8,400 gross (8,400 net) acres for approximately $387 million, or a weighted average cost of approximately $46,000 per net acre, in Lea and Eddy Counties, New Mexico in the Bureau of Land Management New Mexico Oil and Gas Lease Sale on September 5 and 6, 2018.

OILFIELD SERVICES

Press Release - Fluor and IBM announced the use of artificial intelligence-based systems to predict, monitor and measure the status of engineering, procurement, fabrication and construction megaprojects from inception to completion.

DRILLERS

Press Release - Trinidad Drilling announced that the Board of Directors has unanimously determined that the hostile offer from Ensign Energy Services Inc. to acquire all of the issued and outstanding common shares of Trinidad for cash at a price of $1.68 per Common Share is not in the best interest of the Company or its shareholders.

REFINERS

Press Release - HollyFrontier announced its Board of Directors has authorized a $1 billion share repurchase program. This authorization replaces all existing share repurchase authorizations, of which there was approximately $43.6 million remaining after having purchased approximately 1.2 million shares to date in the third quarter.

Press Release - Marathon Petroleum and Andeavor announced that, in connection with the previously announced offers to exchange any and all outstanding senior notes issued by Andeavor for up to $3,375,000,000 aggregate principal amount of new senior notes issued by MPC and cash, and related consent solicitations to adopt certain amendments to each of the indentures governing the Existing Andeavor Notes, Andeavor has received the requisite number of consents to adopt the Indenture Amendments with respect to each of the six outstanding series of Existing Andeavor Notes that are subject to the Exchange Offers and Consent Solicitations. Andeavor intends to promptly enter into supplemental indentures with the trustee for the Existing Andeavor Notes to effect the Indenture Amendments.

MLPS & PIPELINES

Press Release - AltaGas announced the filing of a preliminary prospectus for the initial public offering of AltaGas Canada Inc. which includes AltaGas' Canadian utilities and certain renewable power assets.

(Late Wednesday) Press Release - Keyera announced a cash dividend for September 2018 of 15.00 cents per common share. The dividend will be payable on October 15, 2018, to shareholders of record on September 24, 2018. The ex-dividend date is September 21, 2018.

MARKET COMMENTARY

U.S. stock index futures traded higher taking a cue from global markets, which rallied on optimism over U.S. invitation to China for a fresh round of trade talks. Gold prices held steady near a more than one-week high. The dollar moved up against a basket of currencies ahead of ECB meeting.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP

TD Ameritrade Network– Trade Tariff Effects on Market & Interest Rates


Nasdaq Advisory Services Energy Team Nasdaq's Advisory Services Tamar Essner
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