Rising U.S. Production Weighing on Energy Stocks

Monday, March 12, 2018

Sector Commentary

Energy stocks are expected to open near Friday's closing levels as lower crude oil prices are being balanced by higher equity futures.

WTI crude oil futures were lower in early trading on expectations that U.S. output will rise this year, erasing earlier gains buoyed by lower weekly U.S. rig counts and falling U.S. unemployment. Helping the dip, hedge funds and money managers cut their bullish wagers on U.S. crude oil for the first time in three weeks, data showed on Friday. "Rising production and inventory in the United States has been reducing fund sentiment since it peaked at the end of January," ING said in a note.

Natural gas futures were rallying to start the week on colder weather forecasts in key regions.


Press Release - McDermott International and Baker Hughes were selected for engineering, procurement, construction and installation for SURF and SPS for BP’s Tortue/Ahmeyim Field Development with an initial contract placed for front-end engineering and execution readiness.

(Saturday) Press Release - BP is planning to have 500 gas stations in Mexico in 2018, which would more than triple the current amount it operates in the Latin American country.

(Sunday) Press Release - Eni agreed to sell to Mubadala Petroleum, a wholly owned subsidiary of Mubadala Investment Company, a 10% stake in the Shorouk concession, offshore Egypt, where Zohr's super-giant gas field is located. Eni, through its subsidiary IEOC, currently holds a 60% stake, while the other partners are Rosneft with 30% and BP with 10%.

(Sunday) Reuters - Abu Dhabi National Oil Company said it had signed 40-year agreements with Eni, awarding the Italian company a 10 percent stake in its Umm Shaif and Nasr offshore oil concession and a 5 percent stake in Lower Zakum.

(Sunday) Press Release - Saudi Aramco signed a preliminary deal to pursue international gas opportunities with Royal Dutch Shell as part of top crude exporter Saudi Arabia's diversification drive before the listing of Aramco.

Reuters - ‍Statoil and its partners have decided to invest just over NOK 5 billion ($642.5 million) in further development of Snøhvit field in Barents Sea​.

Press Release - Reference is made to the announcement made on 26 October 2017 by Statoil regarding the dividend issue for the third quarter 2017. The subscription price shall, in accordance with the resolution made by the annual general meeting on 11 May 2017, be equal to the volume-weighted average share price over the last two trading days on Oslo Børs of the subscription period for the Dividend Issue, with a deduction of a discount of 5%.

The volume-weighted average share price for the respective trading days was NOK 177.85. The subscription price per share is consequently NOK 168.95.


Press Release - Goodrich Petroleum announced an updated and accelerated preliminary capital expenditure budget for 2018 and a preliminary capital expenditure budget for 2019 following the Company's recent $23 million asset sale.

Press Release - Stone Energy reported net income of $17.1 million on oil and gas revenue of $76.3 million, or $0.85 per share, which included $14.3 million of non-cash derivative expense. Net cash provided by operating activities for the fourth quarter of 2017 totaled $18.7 million, while discretionary cash flow for the same period totaled $57.0 million.

Press Release - Ultra Petroleum’s Warbonnet 9-23 A-2H well achieved a 24-hour initial production rate of 54.5 million cubic feet equivalent per day on March 3, 2018. The WB 9-23 A-2H is the Company's second two-mile horizontal well targeting the Lower Lance A interval. Initial production included a gas rate of 49.2 million cubic feet per day and an oil rate of 873 barrels per day.

Press Release - W&T Offshore announced that it was the successful bidder on an interest in three blocks in the Heidelberg field in the Gulf of Mexico offered in connection with the Chapter 11 bankruptcy proceedings of Cobalt International Energy and its subsidiaries.


Press Release - McDermott International and Baker Hughes were selected for engineering, procurement, construction and installation for SURF and SPS for BP’s Tortue/Ahmeyim Field Development with an initial contract placed for front-end engineering and execution readiness.

(Sunday) Press Release - Basic Energy Services announced that it has decided not to proceed with the previously announced offering of $300 million of senior secured notes.

Portzamparc upgraded CGG SA to ‘Buy’ from ‘Hold’.

Press Release - Solstad Farstad ASA and TechnipFMC have agreed to extend the Frame Agreement covering the provision of vessels for ploughing and trenching operations for one year. The Frame Agreement is now valid until 31st December 2019.

MLPs & PipelinES

Press Release - Noble Midstream Partners announced the completion of an amendment and extension of its revolving credit facility provided by 27 financial institutions. The Credit Facility will be used to provide liquidity for general corporate purposes, including working capital and expansion capital expenditures.


U.S. stock index futures rose, tracking global markets, after strong U.S. jobs data at the end of last week helped take the edge off investors' concerns on trade protectionism after President Donald Trump's decision to impose some tariffs. The euro rose ahead of a meeting of the euro zone finance ministers. Gold prices edged down pressured by a stronger equity market and revived risk appetite. Oil prices fell on expectations that U.S. output will rise this year. The Treasury Department is expected to release its report on federal budget for February.

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

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