For Immediate Release
Chicago, IL - March 09, 2016 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Chevron Corp. ( CVX ), Anadarko Petroleum Corp. ( APC ), Canadian Natural Resources Ltd. ( CNQ ), Apache Corp. ( APA ) and Petrobras ( PBR ).
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Here are highlights from Tuesday's Analyst Blog:
Oil & Gas Stock Roundup
It was a week where oil prices climbed to the highest level since early Jan but natural gas dropped to another 17-year low.
On the news front, Chevron Corp. 's ( CVX ) multibillion-dollar Gorgon LNG venture in Australia began production.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures rallied 9.6% to close at $35.92 per barrel, natural gas prices fell 7% to $1.666 per million Btu (MMBtu). (See the last 'Oil & Gas Stock Roundup' here: EOG, Apache Wraps Up Energy Earnings Season .)
Oil bulls were encouraged by continued talks of a meeting between representatives of major producers later this month to possibly freeze output and prop up prices. Another fuel behind the upside was the U.S. Energy Department's latest inventory release that showed a slippage in domestic crude output. Things were further helped by the Baker Hughes report that showed another drop in oil-directed rigs - now at their lowest level since Dec 2009 - indicating a break in shale drilling activities.
Natural gas, on the other hand, fared badly despite an inventory report that showed a larger-than-expected withdrawal. Topping 2.5 trillion cubic feet (Tcf), it's still 36% above the 5-year average. A lukewarm conclusion to the winter heating demand also connived to bring prices down. In fact, with production remaining plentiful and expected to outpace demand for most of 2016, the commodity is likely to stay depressed for a while.
Recap of the Week's Most Important Stories
1. In a milestone move, U.S. energy giant Chevron Corp. commenced the production of liquefied natural gas (LNG) and condensate from the massive Gorgon project located offshore Western Australia. Gorgon LNG - in which Chevron has a 47.3% ownership - is touted as the largest resource development in the history of Australia.
Most importantly, the company is preparing to ship its first cargo of LNG from the project, worth as high as $54 billion, next week.
Chevron foresees the fundamentals of LNG to be favorable for the long run and revealed that there is mounting need for natural gas specifically in the Asia-Pacific area. With Gorgon project on Barrow Island underway, Chevron is hopeful of becoming one of the largest LNG suppliers globally over the next four years.
2. Oil and gas finder Anadarko Petroleum Corp. ( APC ) announced its aim to lower capital spending, monetize non-core assets and reduce the dividend rate.
The company plans to cut capital spending nearly 50% from the previous year. In particular, Anadarko is set to slash capital investments in onshore U.S. activity by almost $2.5 billion. Additionally, it will reduce its U.S. onshore rig count by 80% to 5 operated rigs from an average of 25 in 2015.
Anadarko is also concentrating on generating capital through the sale of non-core assets. Year to date, the company has monetized assets worth $1.3 billion and currently has total monetization opportunities of $3 billion in 2016 which are on track. Moreover, Anadarko's recent decision to lower the quarterly dividend rate will enable it to generate addition cash of $450 million in a year. (See More: Anadarko to Sell Assets, Trim Capex Amid Price Drop .)
3. Calgary, Alberta-based Canadian Natural Resources Ltd. ( CNQ ) reported better-than-expected fourth-quarter 2015 earnings courtesy of cost-improvement measures. The positive was partially mitigated by significantly lower commodity prices realizations.
Total expenses came in at C$2,843 million, 2.2% less than C$2,906 million incurred in the year-earlier quarter. On the other hand, the average realized liquid price was C$33.90 per barrel during the period, down 46% from last year. Also, the average realized natural gas price was C$2.96 per thousand cubic feet (Mcf), considerably below the year-ago level of C$4.32 per Mcf.
The company anticipates capital expenditure in the range of C$3.5 billion to C$3.9 billion in 2016, considerably lower than the prior projection of $4.5 billion to $5 billion. or 2016, the company expects production between 809,000 BOE/d and 868,000 BOE/d against the prior guidance of 840,000 BOE/d and 850,000 BOE/d. (See More: Canadian Natural Beats on Q4 Earnings, Cuts '16 Spending .)
4. Apache Corp. ( APA ), one of the world's leading independent energy companies, announced its intention to stop upstream operations in Alaska as oil prices are persistently low. The company revealed its plan to hold Alaskan properties although it will not renew the lease in the state that will expire by 2016 end.
Low oil prices have been hitting the market hard for over 19 months, pushing many energy players to their respective 52-week lows. Predictably, Apache is facing the heat of this unfavorable business scenario and thus plans to quit Alaska.
During the fourth-quarter report announcement, the company added that it is projecting its 2016 capital budget to be 62% lower than last year. With plans to leave Alaskan operation and lower capital spending, Apache will likely focus on select projects in international prospects and strategic North American testing.
5. Brazil's Petrobras ( PBR ), one of the largest integrated energy firms in Latin America, is in talks with Pampa Energia to sell its 67.2% of stake in subsidiary, Petrobras Argentina.
Pampa Energia, the largest electricity company in Argentina, has offered about $1.2 billion to purchase the stake. Petrobras' board of directors has approved negotiation with Pampa Energia for a period of 30 days. However, the companies may engage in talks for an additional 30 days, if required.
The deal is expected to close within two months, and if completed, this will be one of the first major deals in Petrobras' eight-month old plan to sell assets worth $15.1 billion by the end of this year. (See More: Petrobras in Talks to Sell 672 Argentine Unit Stake to Pampa .)
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