Today - Friday, December 6, 2013
5:38 AMTotal in deal worth up to $3.6B for InterOil LNG interests
- Total (TOT) has agreed to acquire a 61.3% holding in InterOil's (IOC) Papua New Guinea natural-gas fields for as much as $3.6B as part of a plan to develop the reserves.
- Total will pay $613M up front, with the extra money dependent on the size of the resource and a final investment decision on building an LNG export facility.
- Should the Papua New Guinean government and landowners exercise rights to acquire a 22.5% interest in the project, Total will end up with a 47% holding and InterOil 30%. (PR)
5:27 AMBrean downgrades Bonanza Creek Energy, sees more upside in PDCE, SYRG
- Brean downgrades Bonanza Creek Energy (BCEI) to Hold from Buy.
- "Attractive, linear growth and long-lived inventory make this a solid story, but we find the upside in PDC Energy (PDCE) and Synergy Resources (SYRG) as more compelling at this point despite richer multiples."
- NBL analyst meeting on December 18th might give reason to revisit NAV assumptions.
3:08 AMStatoil, ExxonMobil stake another big gas find off Tanzania
- Statoil (STO) and its JV partner ExxonMobil (XOM) make another big gas discovery off Tanzania - their fifth in the region - confirming Tanzania's emergence as a new energy region. The find, called Mronge-1, can be seen here.
- Today's find contains 2-3 trillion cubic feet (tcf) of gas, or 360-540 million barrels of oil equivalent (boe), bringing the total gas resources in the license the firms hold to 17-20 tcf or 3.06-3.6 billion boe.
- BG (BRGYY, BRGXF) and Ophir Energy (OPGYF) have also found gas off Tanzania. BG and Statoil are planning to build an LNG plant in Tanzania to ship the gas to Asia.
- STO operates the area on behalf of Tanzania Petroleum Development Corporation and owns a 65% stake; XOM owns the other 35%.
Thursday, December 5, 2013
6:51 PMKeystone South won't deliver oil before mid-January
- TransCanada (TRP) tells shippers the Gulf coast portion of its Keystone pipeline won’t be in service before mid-January, three days after it had told regulators it anticipated beginning service Jan. 3.
- Prices for West Texas crude had jumped on the initial news, narrowing WTI's discount to Brent prices,
- Plans for the southern segment show it will be able to move 700K bbl/day of crude to Port Arthur, home to 6.1% of U.S. refining capacity; Motiva Enterprises (RDS.A, RDS.B), Valero Energy (VLO) and Total (TOT) all operate plants there.
6:03 PMBallard +22.4% AH, inks MOU with Van Hool for buses, joint proposals
- Ballard Power Systems (BLDP) shares fly 22.4% higher AH after the company signs a non-binding Memorandum of Understanding with Van Hool, Europe's 4th largest bus manufacturer, in support of manufacturing/deploying zero emission fuel cell buses.
- The two companies intend to jointly submit proposals under the EU Hydrogen Fuel Cell Joint Undertaking and under future calls of the Horizon 2020 program, which has an incremental budget of €700M.
- 27 Van Hool buses powered by Ballard fuel cell modules will be deployed in 2014 and a dedicated service/parts center will be established in Belgium to support the buses.
5:56 PMUkraine, under Russian pressure, is no-show to sign gas import deal
- Ukrainian officials failed to show to sign a deal that could open up a natural gas supply route via Slovakia, WSJ reports, raising concerns that Ukraine was walking away from an agreement the European Union spent months brokering.
- The deal would have opened up a major gas supply route to Ukraine that could have greatly reduced the country's dependence on Russian supplies, but Pres. Yanukovych's government had warned it may put the deal on hold, citing trade pressure from Russia.
- Russia's Gazprom (OGZPY) meets a quarter of the EU's gas needs, the bulk of which flows via Ukraine, and supplies the vast majority of Ukraine's energy needs.
5:25 PMU.S. Silica in 4.5M-share secondary offering, -3.5% AH| 2 Comments
5:19 PMCallon Petroleum the latest Permian producer to warn of lower production
- Callon Petroleum (CPE) is the latest Permian producer to warn about the impact of recent severe weather on its operations, lowering its FY 2013 production guidance for Permian operations to 2,150-2,250 boe/day, ~4% below previous guidance.
- Laredo Petroleum (LPI) warned yesterday that more than half of its wells can't pump oil and gas, while the remainder are producing less than normal, and Energen (EGN) said Tuesday that power outages and other weather effects will hurt its Q4 bottom line.
- Apache (APA) and Pioneer Natural (PXD) said their Permian operations were been affected but haven't yet provided details.
- The cold weather power outages aren't likely to affect the long-term outlook for the companies, according to Iberia analyst Eli Kantor, but more freezing weather is expected to settle on the area through the weekend.
4:49 PMCameco ends JV exploration program with Uranium Resources| Comment!
4:31 PMGolar LNG to sell Golar Igloo to GMLP, to be funded by 5.1M-unit offering
- Golar LNG (GLNG) agrees to sell its ownership interest in the company that will own and operate the Golar Igloo floating storage and regasification unit to Golar LNG Partners (GMLP) for $310M.
- To fund the deal, GMLP plans a public offering of 5.1M common units, to include GLNG offering 3.4M common units as a selling unitholder.
- GLNG -1.9%, GMLP -4.9% AH.
3:57 PMExxon downgraded at Raymond James as limited upside seen
- Exxon Mobil (XOM -0.4%) is downgraded to Outperform from Strong Buy at Raymond James, which expects a more limited upside for shares after rising 10% so far in Q4.
- The firm says the tactical rating change should not obscure its fundamentally constructive outlook on XOM in the context of its below consensus 2014 oil price forecast ($95/bbl for Brent, $83 for WTI).
- Although some of the easy money has been made, the firm thinks XOM is set to generate at least as much free cash flow in 2014 as in 2013, despite its lower oil price outlook and without allowing for any spending reductions.
3:06 PMSuperior Energy +1.2% after J.P. Morgan starts coverage
- Superior Energy (SPN +1%) is initiated with an Overweight rating and $32 price target at J.P. Morgan, which sees SPN as a compelling investment alternative as a diversified, mid-cap service company that retains some of the characteristics of a small cap yet with considerably less volatility.
- Setting itself apart from the smaller U.S. land service companies, the firm says SPN boasts three key elements: a base U.S. land business that generates free cash flow, international expansion that pulls in product lines, and core earnings strength from its rentals business and Gulf of Mexico exposure.
2:51 PMCrestwood companies down sharply after providing 2014 guidance
- Crestwood Midstream (CMLP -2.4%) and Crestwood Equity Partners (CEQP -10.6%) are sharply lower after providing 2014 financial and operational guidance.
- At CMLP, adjusted EBITDA is seen at $465M-$510M, a 34% increase from anticipated 2013 performance; distributable cash flow is estimated at $330M-$360M, 6%-10% Y/Y growth at coverage of 1.05x-1.1x cash distributions paid.
- Adjusted 2014 EBITDA from operational assets owned by CEQP is estimated at $55M-$60M; distributable cash flow is estimated at $85M-$95M, 5%-10% Y/Y growth at coverage of 1x-1.05x cash distributions paid.
2:27 PMDresser-Rand's small-scale unit successfully produces LNG
- Dresser-Rand (DRC +0.5%) says it successfully produced liquefied natural gas from its small-scale LNGo facility at an undisclosed location.
- DRC has been promoting LNGo as a decentralized method of meeting increasing demand for LNG fueling; each stand-alone plant is capable of producing ~6K gal./day, with the demonstration facility now undergoing extended performance and endurance testing prior to its market release.
- DRC says it has held preliminary talks with ~90 prospective customers who could either buy or lease a LNGo plant.
2:09 PMShell will not pursue Gulf coast GTL project
- Royal Dutch Shell (RDS.A, RDS.B) says it will not move forward with its proposed 140K bbl/day Gulf Coast gas-to-liquids project in Louisiana and will suspend all further work on the project, citing development costs and the long-term uncertainty of oil and gas prices and differentials.
- CEO Peter Voser says Shell is “making tough choices here, focusing our efforts and capital on the most attractive opportunities in our worldwide portfolio."
- Shell reportedly believes its ~$19B Pearl GTL project in Qatar offers more value than the conceived Louisiana project, since it produces and owns all the natural gas it uses at Pearl but would have needed to buy gas from the U.S. grid to supply the Gulf coast project.
12:31 PMAdvantage Oil says Glacier Upper Montney well tested at record level
- Advantage Oil & Gas (AAV +3.7%) says its Glacier Upper Montney well in Alberta tested at a record 21M cfe/day and that its Lower Montney wells continue to outperform expectations.
- AAV says its Phase VI Glacier capital development program designed to ramp production to 135M cfe/day is progressing on track with three drilling rigs.
- Also, the previously announced strategic alternatives process remains ongoing; the bid date communicated to interested parties has passed and the company is reviewing proposals.
12:08 PMPenn Virginia +1.7% as Imperial starts at Outperform
- Penn Virginia (PVA +1.7%) is initiated with an Outperform rating and $13.50 price target at Imperial Capital, which says PVA has transformed itself from a gas producer to an oil producer with a 67K net acre position and rapidly growing production in the Eagle Ford oil window.
- PVA also has succeeded in improving operational efficiency and reducing costs, the firm says, anticipating liquids will grow 64% in 2014, with overall production rising by a third.
11:34 AMHalcon Resources +6.5% on Morgan Stanley upgrade
- Halcon Resources (HK +6.5%) is upgraded to Equal Weight from Underweight at Morgan Stanley, which says bearish catalysts have played out and shares no longer reflect overly optimistic growth and NAV assumptions.
- HK already has raised capex guidance and lowered production expectations for 2013 and 2014, exploration disappointed the market's high hopes, and HK raised capital to maintain liquidity.
11:12 AMEcopetrol to ramp up output in promising Colombian oil field
- Colombian's state-controlled oil company Ecopetrol (EC +1.9%) says it is ready to start ramping up production in its promising Eastern Caño Sur oil block as part of its efforts to boost production by a third over the next two years.
- EC says the block is commercially viable and will see production rise to 25K bbl/day by 2016 from the current 1,700; investment will total $656M through 2018, with ~135 wells expected to be dug.
- EC has said its 2012 production of 754K bbl/day will reach 1M by 2015, as it pours money into exploration and drilling.