Markets

Oil Prices Flat Prior to U.S. Market Open

Thursday, March 8, 2018

Sector Commentary

Energy stocks are expected to open modestly higher, tracking broader equity futures despite crude oil prices being flat to lower before the opening bell.

WTI crude oil futures are slightly lower in early trading against a backdrop of rising U.S. crude production and an increase in inventories. A build in U.S. crude inventory reported the previous day was not as large as expected, given that stocks tend to rise towards the end of the winter as refineries conduct maintenance. "Despite the global economy humming, we see fragility in the oil market," Julius Baer head of commodities and macro research Norbert Ruecker said, adding that rising inventories put pressure on oil prices in the short term.

Natural gas futures were modestly lower ahead of today's inventory data. Prices had rallied recently due to winter storms along the east coast.

U.S. INTEGRATEDS

(Late Wednesday) Reuters - Exxon Mobil’s Energy unit said on Wednesday it plugged a blown out natural gas well in rural southeast Ohio that had been leaking for nearly three weeks.

INTERNATIONAL INTEGRATEDS

Press Release - Total announced the closing of the Maersk Oil acquisition signed on 21 (st) of August 2017. It brings to Total around 1 billion barrels of oil equivalent of 2P/2C reserves and resources, mainly in the OECD countries, and a production of about 160,000 barrels of oil equivalent per day (boe/d) in 2018, ramping up to more than 200,000 boe/d by the early 2020s.

U.S. E&PS

Press Release - Devon Energy announced that it has commenced tender offers to purchase for cash up to an aggregate maximum repurchase amount of $1.0 billion.

Press Release - Devon Energy announced it has entered into a definitive agreement to sell the southern portion of its Barnett Shale position for $553 million. The transaction is subject to customary terms and conditions and is expected to close in the second quarter of 2018.

Press Release - Devon Energy announced that its board of directors approved a 33 percent increase in its quarterly common stock dividend beginning in the second quarter of 2018. The new quarterly dividend rate will be $0.08 per share, compared to the prior quarterly dividend of $0.06 per share. The increased dividend is payable on June 29, 2018 to shareholders of record as of the close of business on June 15, 2018.

Press Release - Hess Corp announced that its Board of Directors has authorized the purchase of $1.0 billion of Hess common stock by the end of 2018. The newly authorized program is in addition to the $500 million share repurchase program Hess announced in late 2017.

Press Release - The Board of Directors of Hess Corp declared a quarterly cash dividend of $20 per share on the Company’s 8.00% Series A Mandatory Convertible Preferred Stock, which is equivalent to $1.00 per depositary share, each representing 1/20(th) interest in a share of Series A preferred stock. The dividend is payable on May 1, 2018 to holders of record at the close of business on April 15, 2018.

Press Release - The Board of Directors of Hess Corp declared a regular quarterly dividend of 25 cents per share payable on the Common Stock of the Corporation on March 29, 2018 to holders of record at the close of business on March 19, 2018.

Press Release - Penn Virginia announced the resignation of Marc McCarthy from Penn Virginia's Board of Directors. Mr. McCarthy resigned on March 6, 2018 due to increased demands of his other professional commitments and has no disagreements with the Company.

CANADIAN E&PS

(Late Wednesday) Press Release - Athabasca Oil reported Q4 adjusted funds flow of $41.8 million ($0.08/share).

CIBC upgraded Obsidian Energy to ‘Neutral’ from ‘Underperformer’.

Press Release - Touchstone Exploration increased proved reserves by 20% or 1,756 Mbbl after production and increased proved plus probable reserves by 18% or 2,837 Mbbl after production.

OIL SERVICES

UBS Equities upgraded Baker Hughes to ‘Buy’ from ‘Neutral’.

Press Release - For fourth-quarter 2017, Fairmount Santrol Holdings had net income of $19.9 million, or $0.09 per diluted share, compared with net income of $34.9 million, or $0.15 per diluted share, in the third quarter of 2017. Net loss for fourth-quarter 2016 was $19.9 million, or $(0.09) per diluted share.

Press Release - Natural Gas Services Group reported total revenue held constant at $16.7 million for both the three months ended December 31, 2017 and December 31, 2016. Operating income for the three months ended December 31, 2017 was $217,000, compared to the comparative prior year's level of $967,000.

(Late Wednesday) Press Release - SEACOR Holdings announced that it has expanded its Board of Directors to six members and added Mr. Christopher P. Papouras to fill the newly created position.

DRILLERS

Press Release - Transocean announced that Transocean Ltd. along with Transocean Inc. received regulatory approval of its supplemental prospectus related to the compulsory acquisition of the remaining shares in Songa Offshore SE that are not already owned by Transocean. Transocean expects to complete the compulsory acquisition by the end of the first quarter of 2018.

REFINERs

Press Release - Calumet Specialty Products Partners and its wholly owned subsidiary Calumet Finance Corp. announced today that they have called for redemption of all of the $400 million aggregate principal amount of their outstanding 11.5% Senior Secured Notes due 2021.

Press Release - Calumet Specialty Products Partners reported $64.9 million net loss for the fourth quarter 2017 included the impact of: (1) a $172.2 million net gain on sale from the divestitures of both the Superior, Wisconsin refinery and Anchor Drilling Fluids USA, LLC; and (2) $205.7 million non-cash impairment charges primarily related to the revaluation of the Partnership's property, plant and equipment at several facilities. Without these adjustments net loss for the fourth quarter 2017 would have been $31.4 million or $(0.39) per unit.

MLPs & PipelinES

Seaport Global upgraded Enterprise Products Partners to ‘Neutral’ from ‘Buy’.

Press Release - Western Gas Partners completed the public offering of 4.5% senior unsecured notes, due March 1, 2028, for gross proceeds of US$400 million.

Press Release - Williams Partners completed the public offering of 4.85% senior notes, due March 1, 2048, for gross proceeds of US$800 million.

MARKET COMMENTARY

U.S. stock index futures were largely up as investors hoped of milder U.S. tariffs after the White House said some countries could be exempted. Shares in Asia and Europe also edged higher. A stronger dollar pressured gold prices ahead of a European Central Bank policy meeting. Meanwhile, oil prices were also down.


Nasdaq Advisory Services Energy Team Tamar Essner
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