Today - Thursday, December 5, 2013
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.
10:28 AMAmyris, Total form JV to produce and commercialize renewable fuels
- Amyris (AMRS +3.9%) and Total (TOT -0.4%) form a 50-50 joint venture that holds exclusive rights and a license under AMRS' intellectual property to produce and market renewable diesel and jet fuel from AMRS' renewable farnesene.
- AMRS says the JV is a first step towards the commercialization of its renewable diesel and jet fuels.
- TOT is AMRS' largest shareholder with an ~18% stake.
9:56 AMBP pushes technical limits in exploring deepwater oil fields
- Three years after the Deepwater Horizon disaster, BP is leading an industry charge to develop technology that can retrieve oil from formations that are so deep under the sea floor, and under such high pressure and temperature, that conventional equipment would melt or be crushed by the conditions.
- BP's Tiber field in the Gulf of Mexico makes the Macondo field look like a mere puddle; it is about twice as deep - 35K ft. below the sea floor - and is thought to hold 20x the amount of oil.
- Another disaster could threaten BP's existence, but success could restore its fortunes and perhaps its reputation: "There's 10B-20B barrels of oil just for BP in this" - worth up to $2T at today's prices - says Kevin Kennelly, who runs BP's global technology operations.
9:12 AMCanadian Natural upgrader to be delayed, costs rise nearly 50%
- Canadian Natural Resources (CNQ) says its 50K bbl/day Sturgeon oil sands plant backed by the Alberta government will cost C$8.5B ($8B), almost 50% more than previously estimated, and be delayed to Sept. 2017 from mid-2016.
- Both CNQ and the provincial government agree to inject further capital in the form of debt financing into the project, but at least one analyst is surprised the project is moving forward at all, citing the "huge" revised cost amounting to C$170K per bbl/day of capacity.
8:59 AMSuncor eyes heightened offshore presence in Norway
- Suncor Energy (SU) hopes to build a "material presence" offshore Norway, which is a "principal exploration theater" for the company, senior VP of exploration and production Francois Langlois says at the company's investor day.
- But SU is taking a "measured approach," he says, with not much more than 10%-15% of his business unit’s budget spent on exploration.
- CEO Steve Williams adds that while SU has “considerable firepower" on its balance sheet to grow through acquisitions, there's no rush to do so; higher on the priority list is investing in existing assets to help them run more efficiently.
8:49 AMEni's CEO is the first to meet with Iran oil minister
- Paolo Scaroni of Italy's Eni met with Iranian Oil Minister Bijan Zanganeh today, the first western oil CEO to meet publicly with the minister since last month's nuclear deal.
- The talks came after Zanganeh named Eni as one of the western companies he hoped would invest in Iran's energy sector, and covered debts Eni is owed by Iran for previous investment and future terms for foreign companies to help revive Iran's oil and gas industry.
- In addition to Eni, the minister had mentioned Chevron (CVX), ConocoPhillips (COP), BP, Shell (RDS.A, RDS.B), Total (TOT) and Statoil (STO) as foreign companies that could help develop Iran's oil fields.
8:38 AMNYT: Big companies prepared to pay a price for carbon
- More than two dozen of the biggest U.S. corporations, including the five major oil companies - Exxon (XOM), ConocoPhillips (COP), Chevron (CVX), BP and Shell (RDS.A, RDS.B) are planning their future growth on the expectation that the government will force them to pay a price for carbon pollution as a way to control global warming, NYT reports.
- Both supporters and opponents of action to fight global warming say the development is significant because businesses that chart a financial course to make money in a carbon-constrained future could be more inclined to support policies that address climate change.
- “Companies see that the trend is inevitable," says the president of environmental data company CDP.
8:19 AMShell plans 2014 Alaska drill with Noble's Discoverer
- Shell (RDS.A, RDS.B) intends to restart drilling off Alaska in 2014 with an upgraded Noble (NE) Discoverer drillship, with Transocean's (RIG) Polar Pioneer semisubmersible on standby if a relief well is needed, according to documents filed with U.S. regulators.
- The Discoverer includes major repairs and improvements after a setback-ridden season in 2012 that saw the rig fail 16 items on a Coast Guard inspection and nearly run aground after slipping its moorings.
- Shell says lessons learned from 2012 spurred planned and ongoing upgrades to the Discoverer; the vessel is now in an Asian shipyard, where workers are tackling its hull and “major ship systems with a focus on improving safety and environmental performance and operational efficiency."
7:54 AMStatoil, Woodside join hunt for hydrocarbons in New Zealand
- Statoil (STO) and Woodside Petroleum (WOPEF, WOPEY) were among the successful bidders in New Zealand's latest auction of oil and gas permits, five offshore and five onshore, joining Royal Dutch Shell (RDS.A, RDS.B) and a handful of smaller players in the hunt for oil and gas in the country.
- New Zealand has been trying to spark additional interest among larger oil companies due to a steady decline in production over the past five years; oil output in 2012 averaged just over 40K bbl/day, down 13% Y/Y.
4:33 AMOPEC maintains crude output cap at 30M bpd
- As expected, OPEC has agreed to keep its daily oil production limit at 30M barrels, due to uncertainty about the outlook for supply and demand.
- However, there are factors that could force prices to fall from the relatively stable level of $100 a barrel.
- Iran plans to increase output as quickly as possible if and when international sanctions are lifted. The country produces 2.7M bpd but wants to return to its former level of 4M bpd.
- Meanwhile, U.S. shale supply continues to rise, while new oil from Kurdistan could boost Iraqi exports.
Wednesday, December 4, 2013
6:17 PMCheniere Energy, Pertamina sign 20-year LNG agreement
- Cheniere Energy (LNG) signs a 20-year liquefied natural gas sale and purchase agreement with Indonesia's PT Pertamina, in which Pertamina will purchase ~800K/year metric tons of LNG upon commencement of operations from the LNG export facility being developed near Corpus Christi, Tex.
- Pertamina is the first foundation customer for the Corpus Christi project, and the deal is the first long-term commitment made to procure liquefied natural gas from the international market for delivery into Indonesia.
5:49 PMAnadarko, BP ask court to reverse key spill decision
- Anadarko (APC) and BP ask the U.S. Appeals Court in New Orleans to toss out Judge Barbier's finding that both companies were liable under the Clean Water Act for the 2010 Gulf of Mexico oil spill.
- Both companies contend that Barbier improperly decided the issue of liability before trial; APC also says the government is trying to shift the burden to the owners of the spilled oil rather than who’s responsible for the discharge.
- Barbier’s ruling left both companies immediately vulnerable to $1,100/bbl fines.
5:34 PMTiny pipeline cracks jeopardize giant Kashagan oil field
- Operators of the giant Kashagan oil field in Kazakhstan are scrutinizing microscopic cracks in a steel pipeline as they race to understand the cause of dangerous gas leaks that have forced them to halt output indefinitely and could result in hefty repair costs.
- A prolonged stoppage could be a drag on the finances of consortium members, including Royal Dutch Shell (RDS.A, RDS.B) and Eni (E), and could jeopardize Kazakhstan hopes of using the expected Kashagan windfall - the field is projected to yield 1.5M boe/day when it reaches full capacity - to turn it into a major oil exporter.
- If an investigation of the leaks shows cracks are affecting all the welds because the wrong alloy was selected during construction, the consortium may need to replace the entire pipeline and perhaps other equipment.
4:47 PMEnbridge raises dividend by 11%, sees 2014 EPS above consensus
- Enbridge (ENB) increases its quarterly dividend by 11% to C$0.35/share, and announces a 2014 EPS guidance range of C$1.84-C$2.04 vs. C$1.79 analyst consensus estimate.
- ENB is positioned to deliver 10%-12% average annual EPS growth through 2017, and stands at $29B of commercially secured growth capital to be in service by 2017 out of a $36B total growth capital plan, CEO Al Monaco says.