MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, May 21, 2013
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6:32 PM If you harbor doubts about the sharp rise of energy MLPs, you don’t have many short sellers on your side. Fewer than 1% of the shares of MLP constituents of the Alerian index (AMJ) are out on loan. Low short interest may have less to do with a lack of negative opinion than with the nature of who owns MLPs, but it’s a notable feature since it should mean a classic short squeeze isn’t possible. 4 Comments
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6:12 PM Four companies ignoring their shareholders' votes, according to Theo Francis: Impax Labs (IPXL), where three directors were retained despite failing to reach 50% approval; Occidental Petro (OXY), which counted 55M non-voting shares as voting against a proposal; Hecla Mining (HL), which left open a say-on-pay vote for an extra month; and NYSE Euronext (NXY), which continues to thwart the right to call special shareholder meetings. Comment!
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5:54 PM As a second U.S. liquefied natural gas export project gets the green light, Credit Suisse is the latest to predict how much LNG the U.S. might send overseas: potentially 10B cu. ft./day by the end of the decade. Growing confidence that more export approvals are ahead has lifted U.S. natural gas calendar-strip prices for 2015, '16 and '17 by 3%, 4% and 5%, respectively, CS says. (earlier) 1 Comment
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5:36 PM Enbridge (ENB) CEO Al Monaco says he's spending more time seeking public support for projects such as the proposed Northern Gateway pipeline than regulatory approval as opponents try to block new routes to market. New conduits are needed from Canada to correct a "huge disconnect” in North American oil prices as supply exceeds pipeline capacity - a $25B/year "value destruction" gap for Canada's economy. 2 Comments
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5:09 PM KBR is awarded a contract by Pacific NorthWest LNG, a subsidiary of Malaysia's state-owned oil company Petronas and Japan Petroleum Exploration, to execute front-end engineering and design and early detailed engineering work for a proposed $11B two-train liquefied natural gas export facility in British Columbia with a yearly capacity of 12M tons. Comment!
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4:58 PM Pioneer Natural Resources (PXD) says initial production results for its First Horizontal Wolfcamp Shale well in Texas showed a 24-hour peak natural flow rate of 1,572 boe/day. PXD says the results demonstrate the prospectivity of its 900K-acre Spraberry/Wolfcamp leasehold, which holds an estimated net resource potential of more than 4.6B boe. Comment!
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4:28 PM CVR Partners (UAN) -3.3% AH after announcing a secondary offering of 12M common units by CVR Energy (CVI). UAN will receive no proceeds from the offering. 9 Comments
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3:57 PM SinoCoking Coal and Coke (SCOK +27.8%) shares skyrocket after Fenwei Energy Consulting says China's proposed ban on imports of lower-quality coal could boost domestic benchmark prices by as much as 8%. Comment!
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3:28 PM Shares of Pacific Ethanol (PEIX +20.2%) and BioFuel Energy (BIOF +11.5%) surge after the most recent EIA supply report shows ethanol stockpiles at 16.4M barrels in the week ended May 10, the lowest level since Dec. 2010. Production of ethanol also is at below-average levels for this time of year, Bloomberg data shows. 1 Comment
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2:49 PM Five cars from a Canadian Pacific (CP -0.2%) train derailed earlier today in Saskatchewan, and one leaked crude oil; there is no estimate of the amount of oil spilled. CP already has suffered two derailments involving crude oil this year, one in Ontario and the other in Minnesota. CP denies any link between the accidents and defends its safety record. Comment!
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2:26 PM Synergy Resources (SYRG -1.2%) increases proved reserves by 40% in its mid-year update. For the period ending Feb. 28, SYRG grew reserves to 13.6M boe vs. 10.6M boe in the previous six-month period. SYRG has not booked any of its 10 non-operated horizontal wells, so it expects another reserves increase for the next six months; also is on track to drill five operated horizontal wells. Comment!
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12:47 PM Energy infrastructure largely escapes damage from yesterday's tornado that ripped through Oklahoma, though a Southern Star natural gas pipeline reports some damage. Valero (VLO) and Phillips 66 (PSX) say their refineries escaped damage, Enterprise Products Partners (EPD) reports no damage to its Seaway pipeline, and operations at the Cushing crude hub are unaffected. 2 Comments
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12:38 PM Oil States (OIS -0.6%) is downgraded to Neutral from Buy at Sterne Agee after shares jump 30% since Jana Partners disclosed its big stake and suggested turning its worker accommodations business into a REIT. Indeed, OIS shares could be worth $130-$145 with such a change, the firm says, but investors buying shares now are betting on exactly that; Sterne says it isn't yet willing to handicap the potential. Comment!
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12:17 PM ConocoPhillips (COP +0.7%) is pulling back its plans to sell Canadian oil sands assets in Alberta after it exceeded its target for raising capital by divesting energy properties elsewhere in the world, The Globe and Mail reports. COP is the latest energy company to hold on to assets it planned to divest amid a disappointing environment for selling Canadian oil reserves. 2 Comments
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11:43 AM Halliburton (HAL -1%) says its Q2 operating profit margin will be negatively impacted by a decline in rigs working in Mexico as the country transitions to a new way of awarding service contracts. HAL had earlier seen a margin close to the mid-teens for the quarter. In North America, HAL says the market for pressure pumping equipment remains 20% over-supplied, which should be cut in half by year's end. Comment!
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11:31 AM Royal Dutch Shell (RDS.A +0.8%) aims to start production from a greenfield project in Iraq's Majnoon oil field within the next two to three months, with total output expected to reach 175K bbl/day by the end of the year, CEO Simon Henry says. The ramp up in output has been delayed while Shell resolved operational and legislative issues such as cost recovery and importing equipment. Comment!
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10:57 AM Given their activity in the Platts oil trading window, it’s not surprising that European regulators would send questionnaires to Glencore (GLCNF.PK), Vitol and other trading houses asking for information about how fuel pricing works. But no one knows exactly what is being investigated; a look at the Platts daily European oil markets newsletter shows the EU could be looking at any of dozens of daily price assessments. Comment!
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10:43 AM Liquefied natural gas exports from the U.S. are looking more likely after the Freeport LNG terminal gained conditional approval, Goldman Sachs says, supporting its view that at least 6.8B cu. ft./day of liquefaction capacity will be built in the U.S. The market needs no more than 7.7B/day for the next decade, and Henry Hub prices need to stay at or below $5.10/MBtu to keep U.S. LNG competitive in Europe, Goldman says. 5 Comments
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10:21 AM As Shell (RDS.A) focuses on a succession plan at its annual meeting today, a Coast Guard panel in Alaska is hearing how Shell feared disaster before its Kulluk drilling rig ran aground. Environmental groups warn that risks of Arctic drilling are a gamble like "five bullet Russian roulette." Meanwhile, Alaska is offering $50M to jump-start a study to determine the size of oil resources in the Arctic National Wildlife Refuge. Comment!
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9:52 AM FX Energy (FXEN +9.3%) reports a successful production test at its Tuchola-3K well and says it plans to collect final data from the downhole pressure gauges and finish completing the well for production. The test flowed gas at rates of 3.8M-5.5M cu. ft./day with no water, and "raises the real possibility of opening a significant new exploration play for us in Poland," CEO David Pierce says. Comment!
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