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Markets

Oil Prices Hit A Three-Year High

Tuesday, May 15, 2018

Sector Commentary

Energy stocks are poised for continued strength as oil prices hit a 3½-year high and as broader index futures consolidate.

Corporate-level energy news is extremely thin today. Shares of Matador Resources will be in focus as the stock prices in the equity issuances announced last night as the company funds an acreage purchase in the Delaware Basin.

Strong data from China, where refinery runs rose nearly 12% in April supported oil prices this morning amid a supportive backdrop of comments from OPEC's affirming the commitment to output cuts even in the face of US sanctions against Iran. Furthermore, yesterday's OPEC data that showed the global inventories narrowed to a mere 9 million barrels above the five-year average, which underscored that the fundamentals are tightening.

U.S. natural gas futures remained near three-month highs as continued warm weather that has been forecast is expected to increase the amount of gas that power generators will need to burn next month to keep up with air-conditioning use.

INTERNATIONAL INTEGRATEDS

Reuters - Engie said it is in talks with Petroleo Brasileiro SA to buy Petrobras' gas pipeline network Transportadora Associada de Gas.

U.S. E&PS

(Late Monday) Press Release - Apache Corp recently agreed to participate in the EPIC Crude Oil Pipeline, run by EPIC Midstream Holdings, LP. The strategic alliance also includes Noble Energy . The pipeline will connect southeastern New Mexico to Corpus Christi, TX and transport crude from the Permian Basin and Eagle Ford Shale. The under-construction pipeline will help to clear the infrastructure bottleneck caused by excessive production in the Permian, resulting in lower prices.

BMO Capital Markets discontinued coverage of Bonanza Creek Energy .

(Late Monday) Press Release - Callon Petroleum announced that at the annual meeting of shareholders held on May 10, 2018, the shareholders of the Company elected Maj. Gen. (Ret.) Barbara J. Faulkenberry and Joseph C. Gatto, Jr., the Company's President and Chief Executive Officer, to the Company's Board of Directors. The shareholders also re-elected Board Chairman Richard L. Flury. General Faulkenberry and Messrs. Flury and Gatto were each nominated to the Board of Directors by management in the Company's proxy statement dated March 23, 2018.

Press Release - Goodrich Petroleum announced a net loss of $5.3 million in the quarter, or $0.47 per basic share, versus a net loss of $5.7 million or $0.63 per basic share in the prior year period. The Company has entered into an agreement, subject to definitive documentation, to sell a portion of its interest in the western area of the Company's Tuscaloosa Marine Shale acreage position in East and West Feliciana Parishes, Louisiana for $3.3 million. The transaction is expected to close on or before June 15, 2018.

Press Release - Gulfport Energy provided an update on recent SCOOP well results. Key highlights include: Lilly 3-15X10H produced at an average 30-day production rate of 16.7 MMcfe per day, or 2,449 Mcfe per 1,000 foot of lateral.

Press Release - Matador Resources announced that it has commenced an underwritten public offering of 7,000,000 shares of its common stock.

Press Release - Rosehill Resources Inc. today reported operational and financial results for the first quarter of 2018 and recent key items. Reported a net loss attributable to Rosehill of $1.3 million, or $0.22 per diluted share, for the three months ended March 31, 2018, which included an $18.2 million non-cash, pre-tax loss on commodity derivative instruments.

(Late Monday) Press Release - Sanchez Energy announced that lenders to the Company's subsidiary-level revolving credit facility have unanimously approved an increase in the borrowing base from $330 million to $380 million.

W&T Offshore was cut by KLR Group to 'Sell' from 'Hold.'

CANADIAN E&PS

Press Release - Touchstone Exploration generated net earnings of $125,000 ($0.01 per basic share) compared to a net loss of $1,549,000 ($0.02 per basic share) recognized in the equivalent quarter of 2017. Delivered funds flow from operations of $2,601,000 ($0.02 per basic share) compared to $393,000 ($0.01 per basic share) in the first quarter of 2017.

OIL SERVICES

(Late Monday) Reuters - Baker Hughes said that on May 11, 2018, Board of Directors elected Lorenzo Simonelli as chairman of board.

(Late Monday) Press Release - Tidewater announced a net loss for the three months ended March 31, 2018, of $39.2 million, or $1.67 per common share, on revenues of $91.5 million.

DRILLERS

Press Release - Transocean announced that, through a joint venture with funds managed and/or advised by Hayfin Capital Management LLP, it has purchased a 33.3% interest in the West Rigel, a newbuild harsh environment semisubmersible. The total purchase price for the rig, built by Sembcorp Marine Ltd.'s Jurong Shipyard Pte Ltd, is $500 million.

REFINERS

Press Release - Valero Energy said on Monday it has taken over Peruvian fuel importer Pure Biofuels del Peru SAC.

MLPS & PIPELINES

Press Release - Keyera announced the development of a crude oil storage and blending terminal in Cushing, Oklahoma. The Wildhorse Terminal will include 12 above ground tanks with 4.5 million barrels of working storage capacity. The majority of the capacity is backed by fee-for-service, take-or-pay storage arrangements ranging from two to six years in length.

(Late Monday) Reuters - Kinder Morgan stockholders elected sixteen directors, each to serve until co's 2019 annual meeting at its 2018 annual meeting.

MARKET COMMENTARY

Stock futures pointed to lower start for the Wall Street, with lack of progress in U.S.-China trade talks souring investors' mood. Later in the day, focus will also be on the retails sales data. Meanwhile, a rise in U.S. borrowing costs supported the dollar, and pushed the gold down. Weak data from China and Germany weighed on the Asian and European markets respectively. Oil prices hit multi-year highs on tight supply.

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 . 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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.