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Oil Falls After Trump Tells OPEC to ‘Take It Easy’

Monday, February 25, 2019

SECTOR COMMENTARY

Energy stocks are higher in the pre-market in tandem with broader equity futures after President Donald Trump announced a delay in trade tariffs on Chinese goods. In corporate news, several E&Ps announced deals, including Marathon Oil and Matador Resources.

Oil prices have turned lower by more than 1%, reversing their morning gains, in a sudden move that immediately followed a Tweet from President Trump that blasted OPEC. "Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike - fragile!" the president tweeted. Earlier Monday, oil futures rose, extending last week’s four month highs, on optimism over U.S.-China trade talks and tightened supply. The situation in Venezuela remains a key focus.

Natural gas futures are higher, extending Friday’s gains, as temperatures in the upper Midwest early this week are expected to push below 20 degrees with Northeast ones below freezing through Thur.

US INTEGRATEDS

Reuters - Chevron's Gorgon liquefied natural gas (LNG) export plant in Australia brought its train 3 back online over the weekend after an unplanned outage. The train had been shut since mid-January to address a mechanical issue.

Press Release - KBR announced it has been awarded a reimbursable contract by ExxonMobil to provide detailed engineering, procurement, and construction services for the offsites and interconnecting units as part of the recently announced crude expansion project in Beaumont, Texas.

INTERNATIONAL INTEGRATEDS

(Late Friday) Reuters - An estimated 188 cubic meters of oil leaked from Petroleo Brasileiro's offshore P-58 platform in the early hours of Saturday. According to a securities filing, the leak occurred because of the failure of a hose as the oil was being transferred from the platform to an offtake tanker.

Reuters - Royal Dutch Shell reported that it’s restarting unit at Scotford, Alberta facility on Feb. 25 - community line.

Reuters - Global liquefied natural gas (LNG) trade will rise 11 percent to 354 million tonnes this year as new facilities increase supplies to Europe and Asia, Royal Dutch Shell said in an annual LNG report. Shell, the largest buyer and seller of LNG in the world, said trade rose by 27 million tonnes last year, with Chinese demand growth accounting for 16 million tonnes of those volumes.

(Late Friday) Reuters - Total plans to restart crude and vacuum distillation units next week at its 225,000 barrel per day (bpd) Port Arthur, Texas, refinery after completing a planned overhaul on a reformer. The 74,000 bpd ACU-2 crude distillation unit (CDU) and associated 50,000 bpd Vacuum Distillation Unit-1 are scheduled to restart in the middle of the week while the 35,000 continuous catalytic reformer is expected to restart late next week.

U.S. E&PS

Reuters - ConocoPhillips Grissik, a unit of ConocoPhillips, shut down the Suban gas field in Indonesia on Feb. 23 until March 1 for a planned maintenance. ConocoPhillips is making adjustments to its gas distribution during the shut down.

Press Release - Kosmos Energy announced that its Board of Directors has declared a quarterly cash dividend of $0.0452 per common share payable on March 28, 2019, to the stockholders of record at the close of business on March 7, 2019. Holders of common shares on the New York Stock Exchange will be paid in U.S. dollars, and holders of common shares through depositary interests on the London Stock Exchange will be paid in British pounds sterling. Dividends paid in British pounds sterling will be converted from U.S. dollars at the exchange rate quoted by Bloomberg (BFIX) at 5:00 pm New York time on March 14, 2019.

Press Release - Kosmos Energy announced that for the fourth quarter of 2018, the Company generated a net gain of $186 million, or $0.43 per diluted share as compared to net loss of $122 million or $0.31 per diluted share in the same period last year. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net loss of $39.4 million or $0.09 per diluted share for the fourth quarter of 2018.

Press Release - Matador Resources announced a second strategic midstream transaction (“San Mateo II”) with a subsidiary of Five Point Energy to expand San Mateo’s natural gas gathering and processing, salt water gathering and disposal and oil gathering operations in the Delaware Basin to be owned in the same proportions as San Mateo I—51% by Matador and 49% by Five Point. As part of the expansion, an additional cryogenic natural gas processing plant will be constructed in close proximity to the existing Black River cryogenic natural gas processing plant near Carlsbad, New Mexico in Matador’s Rustler Breaks asset area (the “Black River Processing Plant”).

Press Release - Marathon Oil announced the Company has entered into a share purchase agreement through its subsidiaries for the sale of its U.K. businesses Marathon Oil U.K. LLC (MOUK) and Marathon Oil West of Shetland Limited (MOWOS). The transaction represents a complete country exit for Marathon Oil. MOUK holds a 37 to 40 percent operated interest in fields in the Greater Brae Area, and MOWOS holds a 28 percent interest in the outside-operated Foinaven Field unit and 47 percent in Foinaven East. The buyer, RockRose Energy PLC, will assume all obligations associated with MOUK and MOWOS operations in the U.K, including decommissioning liability.

(Late Friday) Press Release - Resolute Energy announced that at a special meeting of stockholders, Resolute’s stockholders voted to approve the adoption of the merger agreement between Resolute and Cimarex Energy. 15,950,431 shares voted in favor of the proposal to adopt the merger agreement. This represents approximately 85% of the total shares of Resolute’s common stock represented and entitled to vote at the special meeting, and more than 99% of the votes cast, excluding those stockholders who abstained from voting on the merger proposal. Resolute will file the final vote results with the Securities and Exchange Commission on a Form 8-K.

OILFIELD SERVICES

Core Laboratories was upgraded to buy from hold at Tudor Pickering Holt.

Press Release - KBR announced it has been awarded a reimbursable contract by ExxonMobil to provide detailed engineering, procurement, and construction services for the offsites and interconnecting units as part of the recently announced crude expansion project in Beaumont, Texas.

Press Release - McDermott International reported revenues of $2.1 billion and net loss of $(2.8) billion, or $(15.33) per diluted share, for the fourth quarter of 2018.

Press Release - McDermott International announced a substantial contract award from Saudi Aramco for engineering, procurement, construction and installation (EPCI) services in the Marjan field, offshore Saudi Arabia. The contract includes the design, procurement, fabrication, and installation, testing and pre-commissioning of the TP-10 tie-in platform, six gas lift topside modules and associated pipeline and subsea cables. The total weight of the structures will exceed 29,000 short tons (27,000 metric tons) and pipelines totaling over 40 miles (65 kilometers).

Press Release - TETRA Technologies announced that Stuart M. Brightman, Chief Executive Officer and a director of TETRA, has advised the Board of Directors of his intent to retire from his role as Chief Executive Officer immediately following the Annual Meeting of TETRA stockholders on May 3, 2019. In connection with Mr. Brightman's planned retirement, the Board of Directors of TETRA has appointed Brady M. Murphy, as Chief Executive Officer, to be effective on Mr. Brightman's retirement. Mr. Murphy joined TETRA in February of 2018 and is currently President, Chief Operating Officer, and a director of TETRA. Mr. Brightman has been nominated for election to TETRA's Board of Directors for an additional one year term, from May 2019 to May 2020. Mr. Brightman will continue as a non-executive employee, and will be available to support the board and management in an advisory role.

DRILLERS

Press Release - Nabors Industries announced that it has expanded its Board to seven members and appointed Anthony R. ("Tony") Chase to fill the vacancy.

Press Release - Noble announced, on behalf of its indirect, wholly-owned subsidiary, Noble Holding International Limited ("NHIL"), that NHIL has commenced cash tender offers (the "Tender Offers") for up to an aggregate principal amount that will not result in an Aggregate Purchase Price that exceeds $400,000,000 (subject to increase or decrease by NHIL, the "Aggregate Maximum Tender Amount") of NHIL's bonds.

(Late Friday) Press Release - Seadrill has commenced a consent solicitation process to amend certain terms of the indenture and the escrow agreement related to its outstanding 12.0% Senior Secured Notes due 2025. Contingent on the successful completion of the Consent Solicitation, the Company plans to launch a c.$340 million tender offer at a price of 107 plus accrued and unpaid interest shortly thereafter.

REFINERS

(Late Friday) Reuters - Repairs on the gasoline-producing unit at PBF Energy's 190,000 barrel-per-day (bpd) Chalmette, Louisiana, refinery may take an additional 10 days to two weeks to complete. The 68,000-bpd gasoline-producing fluidic catalytic cracking unit (FCCU) shut down on Jan. 12 due to a malfunction. The repairs were originally expected to take two to three weeks to complete.

MLPS & PIPELINES

(Late Friday) Reuters - EnLink MidstreamLLC said it may offer & sell common units with offering price of up to $400 million from time to time - SEC filing.

GMP downgraded Keyera to ‘Hold’ from ‘Buy’.

Press Release - Plains All American Pipeline and Plains GP Holdings announced changes to PAA’s senior management team in connection with its long-term succession plans. Jeremy Goebel, currently Sr. Group Vice President, Commercial, has been appointed Executive Vice President, Commercial, and Chris Chandler, Sr. Vice President, Strategic Planning and Acquisitions has been appointed Executive Vice President and Chief Operating Officer. These appointments are effective March 1, 2019. Additionally, Matt Isom, previously Director, Engineering has been promoted to Vice President, Engineering and Dan Reinbold, previously Vice President of Information Services at Plains Midstream Canada has been promoted to Vice President, Information Services North America. Mark Gorman, previously Executive Vice President, has retired.

MARKET COMMENTARY

Global equity markets rose after U.S. President Donald Trump said he would hold off on hiking tariffs on Chinese imports, buoying hopes of a resolution to a trade war between the world's two biggest economies. The trade news was largely priced into currency markets, with the dollar falling against a basket of currencies amid the risk-on mood. In commodities, oil prices turned lower and gold prices were little changed.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


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