Blue barrels of oil stacked sideways on top of each other
Oil

Oil Climbs After Bullish Data but Coronavirus Concerns Persist

Oil prices rose about $1 a barrel, after bullish data from Asia and Europe, but investors are wary about sharp spikes in new coronavirus infections around the world and as OPEC+ members begin to increase production.

SECTOR COMMENTARY

Energy stocks are set to open the first trading session of August higher, backed by mild gains in the crude complex while U.S. stock index futures extended Friday’s rally led by mega-cap tech stocks following blow out earnings and despite law markets struggling to make progress on a new stimulus package.

In company news, Marathon Petroleum is selling its Speedway gasoline station and convenience store chain to 7-11 parent Seven & I Holdings for $21 billion in cash. Marathon had been seeking a buyer for Speedway over the past year under pressure from activist investors. Separately, Marathon reported an adjusted quarterly loss of $1.33 per share, smaller than the $1.75 per share loss that analysts’ had been predicting.

Oil prices rose about $1 a barrel, after bullish data from Asia and Europe, but investors are wary about sharp spikes in new coronavirus infections around the world and as OPEC+ members begin to increase production. U.S. stock indexes futures, which broadly rose this morning, also added support for oil prices, which at times track with equities.

Natural gas futures are up 5%, as forecasts over the weekend turn hotter for next week.

INTERNATIONAL INTEGRATEDS                

Press Release - Francesco Gattei has taken up the role of Chief Financial Officer atEni.

Morgan Stanley downgraded Eni to ‘Underweight’ from ‘Equal Weight’.

Reuters - Royal Dutch Shell's Australia unit said on Monday it will buy environmental services firm Select Carbon as it seeks to cut back its emissions and expand its low-carbon and renewable power business. Shell did not disclose a value for the deal, but said it will help in contributing towards the company's ambition of being a "net-zero emissions energy business by 2050 or sooner."

U.S. E&PS  

Press Release - Apache announced the commencement of tender offers to purchase up to $460,000,000 in aggregate purchase price (excluding accrued and unpaid interest, fees and expenses) (as such amount may be increased or eliminated by Apache pursuant to the terms of the Offers, the “Aggregate Maximum Purchase Price”) of its outstanding notes listed in the table below. The terms and conditions of the Offers are set forth in Apache’s Offer to Purchase, dated August 3, 2020 (the “Offer to Purchase”).

Press Release - Kosmos Energy announced the financial and operating results for the second quarter of 2020. For the quarter, the Company generated a net loss of $199 million, or $0.49 per diluted share. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net loss(1) of $95 million or $0.23 per diluted share for the second quarter of 2020.

Noble Energy today provided second quarter financial and operating results. The Company reported second quarter net loss attributable to Noble Energy of $408 million, or $0.85 per diluted share. Excluding items impacting comparability, the Company generated adjusted net loss and adjusted net loss per share attributable to Noble Energy for the quarter of $114 million or $0.24 per diluted share. Net cash provided by operating activities was ($82) million and was impacted by a working capital change in the quarter of ($303) million, reflecting the slowdown of capital activity from first quarter levels. Adjusted EBITDAX was $307 million. Second quarter capital expenditures funded by Noble Energy were $102 million, with $62 million related to U.S. onshore activities and $32 million invested in the offshore business between Israel and West Africa.

OILFIELD SERVICES

Press Release - Forum Energy Technologies announced the expiration and results of its previously announced offer to exchange its existing notes for new 9.00% convertible secured notes due 2025.

Barclay’s upgraded Nabors Industries to ‘Equal weight’ from ‘Underweight’. The firm also downgraded Helmerich and Payne to ‘Underweight’ from ‘Equal weight’.

Press Release - In July 2020, the BAUER Group reached an agreement withSchlumberger, to end the joint venture they began together in 2015 for development and construction of large land-based deep drilling rigs for oil and gas. The two companies agreed to discontinue their joint business due to persistently high overcapacity in the oil drilling business heightened by the low price of oil. Due to termination of the joint venture, the BAUER Group has already taken over all shares in both companies. The parties have agreed not to disclose further details. There are no significant overall effects on the group results due to the full consolidation that must be carried out as a result of the company shares purchase. Moreover, goodwill no longer needs to be reported for the participations in the balance sheet of the BAUER Group.

REFINERS

Press Release - Marathon Petroleum reported net income of $9 million, or $0.01 per diluted share, for the second quarter of 2020, compared to $1.1 billion, or $1.66 per diluted share, for the second quarter of 2019. Second-quarter 2020 results include a pre-tax lower of cost or market (LCM) inventory benefit of $1.5 billion. Details on this and other adjustments are shown in the accompanying release tables. Adjusted net loss was $868 million, or $(1.33) per diluted share, for the second quarter of 2020, compared to adjusted net income of $1.1 billion, or $1.73 per diluted share, for the second quarter of 2019.

Reuters - Marathon Petroleum plans to permanently close two small U.S. oil refineries in Martinez, California, and Gallup, N.M., the company said, in response to lower fuels demand. The largest U.S. refiner by volume had earlier idled the two following COVID-19 outbreaks in the United States. Up to 800 workers at the 161,000 barrel per day (bpd) Martinez and 27,000-bpd Gallup refineries will lose their jobs beginning in October, the company said.

Press Release - Marathon Petroleum announced that it and certain of its subsidiaries have entered into a definitive agreement with 7-Eleven, Inc., a wholly owned, indirect subsidiary of Seven & i Holdings Co., Ltd. (3382: Tokyo), whereby 7-Eleven will acquire Speedway for $21 billion in cash. The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.

MLPS & PIPELINES   

SEC filing - On July 27, 2020, Kinder Morgan entered into an underwriting agreement with BofA Securities, Inc., J.P. Morgan Securities LLC,MUFG Securities Americas Inc. and RBC Capital Markets, LLC, as representatives of the several underwriters named therein, pursuant to which KMI agreed to sell$1,250,000,000 in aggregate principal amount of senior notes consisting of (i) $750,000,000 in aggregate principal amount of KMI’s 2.000% Senior Notes due 2031 (the “2031Notes”) and (ii) $500,000,000 in aggregate principal amount of KMI’s 3.250% Senior Notes due 2050 (the “2050 Notes” and together with the 2031 Notes, the “Notes”).

Press Release - MPLX reported second-quarter 2020 net income attributable to MPLX of $648 million, compared with net income of $482 million for the second quarter of 2019. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.2 billion, compared with $1.2 billion in the second quarter of 2019. During the quarter, MPLX generated $1.1 billion in net cash provided by operating activities and $1.0 billion of distributable cash flow. Distribution coverage was 1.39x for the second quarter of 2020. MPLX also announced a second-quarter 2020 distribution of $0.6875 per common unit, consistent with the prior quarter.

Press Release - Noble Midstream Partners LP reported second-quarter 2020 financial and operational results. The Partnership’s results are consolidated to include Noble Midstream’s 54.4% ownership of Black Diamond Gathering, LLC (“Black Diamond Gathering”). Generated $48 million Net Income attributable to the Partnership, $95 million Adjusted net EBITDA1 and $101 million cash flow from operations attributable to the partnership. Second-quarter 2020 revenues totaled $146 million, down 35% sequentially, due to lower oil sales revenues and lower volume from gathering and fresh water delivery related to customer activity reductions and short-term producer curtailments. Third-party crude oil sales revenue of $29 million declined 65% sequentially due to the impact of lower crude oil prices during the quarter. Total expenses were $85 million with $20 million in direct operating expenses, down 25% sequentially, as a result of continued cost-reduction measures and temporary reductions in customer activity levels. The Partnership reported second-quarter 2020 Adjusted Net EBITDA of $95 million, a sequential decline of 12%. Maintenance capital expenditures and cash interest expense attributable to the Partnership totaled $7.4 million and $7.1 million, respectively, leading to Distributable Cash Flow1 attributable to the Partnership of $80 million.

Argus Research downgraded ONEOK to ‘Hold’ from ‘Buy’.

Press Release - SunCoke Energy reported results for the second quarter 2020 and provided updates on COVID-19 impact on business and result of customer negotiations. Revenue in the second quarter 2020 decreased $69.5 million compared to the same prior year period, reflecting the pass through of lower coal prices in our Domestic Coke segment as well as lower volumes in both our Domestic Coke and Logistics segments.  Adjusted EBITDA decreased $4.1 million as compared to the same prior year period. Lower volumes were partly offset by operating and maintenance savings in our Domestic Coke segment. Net income attributable to SXC increased $4.2 million from the prior year period. The decrease in operating results discussed above was more than offset by lower depreciation expense and the absence of $4.4 million in transaction costs incurred during the prior year period. Second quarter 2020 net income attributable to SXC was $6.5 million, or $0.08 per share, compared to $2.3 million, or $0.03 per share, in the prior year period. Adjusted EBITDA was $59.0 million in the current period.

Press Release - SunCoke Energy announced that its Board of Directors declared a cash dividend of $0.06 per share of the Company's common stock to be paid September 1, 2020 to stockholders of record at the close of business on August 18, 2020. 

(Late Friday) Press Release - TC Energy announced that its wholly-owned subsidiary, Columbia Gas Transmission, LLC (Columbia), filed a general Natural Gas Act Section 4 rate case with the U.S. Federal Energy Regulatory Commission (FERC). With this filing, Columbia’s first Section 4 rate case in over 20 years, Columbia is seeking to recover its prudently-incurred operating costs, a fair return on and of its historical investment in its expansive system and to establish a third phase of its precedent-setting modernization program.

MARKET COMMENTARY

The S&P 500 and the Dow futures were muted with lawmakers at an impasse about a coronavirus relief deal, while investors remained cautious after Fitch revised its U.S. outlook to negative. European shares rose, lifted by German stocks after the country reported an expansion in monthly factory activity for the first time since 2018. Asian equities ended on a mixed note. The dollar rose due to its safe-haven appeal, while spot gold prices fell on profit-booking. The U.S. manufacturing PMI data is on the economic radar.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


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


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