We have a ton of economic news being released today and in those numbers we have the crude inventory numbers to be released. Although futures are lower today, we could see a rally if any of these numbers are either really good or really awful. Traders believe that either way, the economy gets better because it will either heal itself or have Fed Head Ben (Ben Bernanke) nurse it back to health with easy money and other tools at his disposal.
Oil & Natural Gas
We were looking for something from Chesapeake Energy's (CHK) conference call yesterday and ran across this article here. The article is a great summation of many of the more pertinent players in the Utica Shale play and covers a few names we routinely discuss here. For those looking for a quick highlight of the play and what other players have been doing in the play, you really should read it. Shares in Chesapeake yesterday closed higher by $0.15 (0.79%) to close at $19.21/share on volume of 15.9 million. We are still awaiting a pullback to buy shares here, but due to the fact that they have never reached our buying point, we were lucky enough to have put that money into other players in the Utica which have far outperformed shares here.
According to Bloomberg, BP (BP) is looking to sell some oil fields in the Gulf of Mexico with an asking price of $7.9 billion. These are the old Gulf of Mexico assets, not the new fields that the company has staked its future on in the deepwater of the Gulf. We saw the news come out after hours and the shares finished yesterday at $42.18/share, having risen $0.09 (0.21%) on volume of 4.3 million shares. These sales were not unexpected, as they are part of BP's plan to reorganize the company and shift focus to higher margin projects - a shift that started shortly after the Deepwater Horizon disaster.
Kodiak Oil & Gas (KOG) had a rather interesting day yesterday as shares ran up to the $9/share level early before backing off and then fighting back to close above the $8.80/share level - a level which we think is important. Shares finished at $8.81 after closing down $0.06 (0.68%) on volume of 6.5 million. We once again find ourselves above that $8.80/share level and stuck below the $9/share level which always seems to provide resistance.
As it seeks to raise capital to pay down debt, MarkWest Energy (MWE) is moving forward with a capital raise. The units were priced at almost a 4% discount which pushed units in the company's various publicly traded units lower as well. This is one of the premier mid-stream players in some of the top shale plays being developed today, and they are building an awful lot of infrastructure in Ohio's Utica shale to name one area. Shares in MarkWest Energy Partners, LP fell $2.28 (4.32%) to close at $50.47/share on volume of 7 million shares.
Shares in Vale (VALE) closed down $0.77 (4.04%) to close at $18.31/share on volume of 22.8 million shares after the company's shares were downgraded by Bank of America from a Buy to a Neutral. The shares were also under pressure due to the worldwide growth concerns which were being talked about yesterday nonstop by all of the talking heads on all of the business channels. Shares were under a lot of pressure and finished just off of the lows set near the closing bell. The yield is high here, but one must remember that some of this is due to Brazilian corporate law requiring distributions of a certain portion of profits, and with profits under pressure we could see some issues moving forward (note to readers: the company has indicated they plan to maintain the current rate with some analysts even saying they can continue to raise the distribution due to their large cash reserves).