Markets

Production Concerns Following EIA's Data Report Affecting Oil Prices

Monday, June 04, 2018

Sector Commentary

Energy stocks are set to open higher on the back of rising U.S. stock index futures as stronger than expected U.S. jobs data for May drove global stock markets up across the board, despite weakening oil prices .

Oil prices on both sides of the Atlantic are lower in AM trading, extending last week's losses on U.S. production concerns following last week's EIA data report. U.S. crude production climbed in March to 10.47 million barrels per day, a monthly record. OPEC members are considering boosting supply ahead of the June 22 meeting. Additionally, U.S. drillers added two oil rigs last week, bringing the total to 861, the most since March 2015.

Natural gas futures eased overnight gains while forecasts shift to warmer-than-average temperatures along the eastern seaboard versus a more seasonal forecast along the east coast at the end of last week.

U.S. INTEGRATEDS

Piper Jaffray suspended coverage of Chevron and Exxon Mobil.

(Sunday) Reuters - Qatar Petroleum signed an agreement with Exxon Mobil to acquire a 30 percent stake in two of Exxon's affiliates in Argentina.

INTERNATIONAL INTEGRATEDS

Piper Jaffray suspended coverage of BP, Royal Dutch Shell, Statoil and Total .

Societe Generale downgraded Petrobras to 'Hold' from 'Buy'.

(Late Friday) Press Release - Petrobras informed that its controlling shareholder has informed the company of the appointment of the engineer Ivan de Souza Monteiro, current interim CEO, to join Petrobras' Board of Directors and hold the position as CEO of the company.

(Late Friday) Reuters - Brazil's President Michel Temer will appoint Ivan Monteiro as the new permanent chief executive officer of Petrobras . Monteiro, currently the chief financial officer, was named interim CEO earlier on Friday following the resignation of Pedro Parente, who opposed changes in pricing policy sought by the government.

Reuters - Iran has awarded its first cargo of West Karoun oil to Repsol , indicating that Tehran is keen to boost its oil exports despite the looming threat of sanctions.

CANADIAN INTEGRATEDS

Piper Jaffray suspended coverage of Suncor Energy .

U.S. E&PS

(Sunday) - Enterprise Products Partners and Apache announced they have executed a long-term agreement, with Apache committing 100 percent of its Alpine High natural gas liquids to Enterprise.

(Saturday) Press Release - Callon Petroleum completed the public offering of 25.3 million shares, at a price of US$11.8 per share, for gross proceeds of US$298.54 MM, including the underwriters' over-allotment option to purchase up to 3.3 MM additional shares.

Press Release - MatadorResources is pleased to announce it has successfully executed a firm sales agreement with an affiliate of Kinder Morgan beginning on the in-service date of the Gulf Coast Express Pipeline Project. This agreement secures firm natural gas sales for an average of approximately 110,000 to 115,000 million British Thermal Units per day at a price based upon Houston Ship Channel pricing.

Press Release - Sanchez Energy announced that the Board of Directors has declared a quarterly dividend of $0.609375 per share on its 4.875% Convertible Perpetual Preferred Stock, Series A and $0.812500 per share on its 6.500% Convertible Perpetual Preferred Stock, Series B.

Nancy K. Buese has been appointed to the Williams Board of Directors.

CANADIAN E&PS

Press Release - Frontera Energy announced that it intends to commence an offering of up to U.S.$500 million principal amount of unsecured senior notes due 2023 pursuant to Rule 144A and Regulation S of the U.S. Securities Act of 1933, as amended. The proceeds from the offering will be used to (i) repurchase, at a premium, our U.S.$250 million 10.0% senior secured notes due 2021 pursuant to a tender offer, redemption and/or satisfaction and discharge, and (ii) for general corporate purposes.

Press Release - Frontera Energy announced an operational update for the second quarter and a U.S.$30.46 million loan to Sociedad Portuaria Puerto Bahia S.A. Frontera continues its active drilling program with six drilling rigs operating continuously in the first two months of the second quarter of 2018, with three active in the Quifa heavy oil area, two on the light oil-focused Guatiquia block, and one drilling the high impact Acorazado-1 well in the Llanos 25 block.

Press Release - Obsidian Energy is pleased to announce an additional $50 million of 2018 Cardium development capital, following up on recent success in the Willesden Green play fairway.

Press Release - Pengrowth Energy confirmed that it has received a delisting notification from the New York Stock Exchange. The Company received notice on December 1, 2017 that its share price had fallen below the NYSE's continued listing standard for average closing price of less than U.S. $1.00 over a consecutive 30 trading-day period.

OIL SERVICES

(Saturday) Press Release - Calfrac Well Services completed the private placement of 8.5% senior notes, due June 15, 2026, for gross proceeds of US$650 million.

(Saturday) Press Release - Seacor Holdings , through its wholly-owned subsidiary Cleancor Holdings LLC, acquired the remaining 50% stake in Cleancor Energy Solutions LLC, a provider of energy services and solutions. Cleancor Energy operates under three business verticals which include Cleancor Liquefied Natural Gas, Cleancor Equipment Solutions, and Cleancor Power Solutions. Cleancor LNG provides LNG distribution and technical field support services.

Press Release - TechnipFMC has been awarded a subsea contract by CNOOC Limited for the Liuhua 16-2, 20-2 and 21-2 Oilfield Joint Development Project in the South China Sea, at water depths ranging from 380 to 430 meters.

Press Release - Primoris Services announced that it has completed its acquisition of Willbros Group . The Willbros Utility Transmission & Distribution segment is now a new segment for Primoris, while the Willbros Canada segment is part of Primoris' Power, Industrial, & Engineering segment and the Willbros Oil & Gas segment is part of Primoris' Pipeline & Underground segment.

DRILLERS

Press Release - Transocean announced that John Stobart, Executive Vice President, Chief Operating Officer and Chief Performance Officer, is retiring. Keelan Adamson, the company's Senior Vice President - Operations, has assumed Mr. Stobart's responsibilities, effective June 1, 2018.

REFINERS

Piper Jaffray suspended coverage of Andeavor, HollyFrontier, Marathon Petroleum, PBF Energy, PHILLIPS 66 and Valero Energy .

Raymond James upgraded PBF Energy to 'Outperform' from 'Market Perform'.

MLPS & PIPELINES

(Sunday) - Enterprise Products Partners and Apache announced they have executed a long-term agreement, with Apache committing 100 percent of its Alpine High natural gas liquids to Enterprise.

Press Release - Matador Resources is pleased to announce it has successfully executed a firm sales agreement with an affiliate of Kinder Morgan beginning on the in-service date of the Gulf Coast Express Pipeline Project. This agreement secures firm natural gas sales for an average of approximately 110,000 to 115,000 million British Thermal Units per day at a price based upon Houston Ship Channel pricing.

MARKET COMMENTARY

U.S. stock index futures rose following Friday's strong U.S. jobs report, which helped offset global trade jitters. Revised durable goods data, ISM's business indexes and employment trends are on the economic tap. European stocks were buoyed by bank stocks as investors shifted focus towards deal making. Asian shares closed mostly higher. The euro rose as political tensions in Italy eased, while gold prices were little changed. Oil edged lower as U.S. production hit a record high and OPEC members considered boosting supply to balance rising global demand.

NASDAQ ENERGY TEAM IN THE NEWS

CNBC "Squawk Box"

Oil price decline 'temporary', says pro

May 31, 2018

Tamar Essner, Nasdaq Corporate Solutions energy director, provides her outlook on oil as prices decline amid production volatility.

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.