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.
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.