Today - Thursday, February 11, 2016
Wednesday, February 10, 2016
- Williams Cos. (WMB, WPZ) signs agreements to deliver dry gas to liquefied natural gas export terminals being constructed by Cheniere Energy (NYSEMKT:LNG) and Freeport LNG Development.
- Williams has secured the long-term contracts for Gulf Connector, a 475K dekatherm/day expansion of the Transco pipeline system to connect U.S. natural gas supplies with overseas markets.
- Williams says regulatory approvals are pending for Gulf Connector to add compression and make the natural gas flow bi-directional on a portion of the Transco system between Louisiana and south Texas.
- Pioneer Natural Resources (NYSE:PXD) -1.5% AH after beating Q4 earnings estimates and saying it plans to cut in half the number of rigs it operates to 12 by mid-2016.
- PXD also reverses its plan to raise drilling expenses for 2016, cutting its capex forecast to $2B from guidance of $2.4B-$2.6B just a month ago; its 2015 budget totaled $2.2B.
- Despite the cuts, PXD sees production growing ~10% this year after producing 204K boe/day in FY 2015, along with 215K boe/day in Q4, with oil accounting for 53% of total output.
- PXD says it added proved reserves totaling 210M boe during 2015 from discoveries, extensions and technical revisions of previous estimates, equating to a drillbit reserve replacement of 273% of its FY 2015 production of 77M boe.
5:56 PM| 5:56 PM
- The energy sector will not repeat last year’s mistake of rapidly boosting production the next time the price of oil hits $60/bbl, EOG Resources (NYSE:EOG) Chairman/CEO Bill Thomas says at the NAPE Summit 2016 in Houston.
- That’s the case even though a lot of EOG’s wells in the Eagle Ford and Permian Basin are profitable near $45/bbl, Thomas says: last year, EOG had a “zero” growth goal after previously surging ~40%/year.
- While admitting some disappointment that overall U.S. oil production did not decline more last year, the CEO says he expects sharper cutbacks this year with most producers cutting their capex by at least 40%.
- EOG considers itself the largest producer of oil in the continental U.S., and “we don’t plan on giving up that lead,” Thomas says, adding that “there’s no better time to pick up acreage when the industry is at a low point."
- Summit Midstream Partners (SMLP -0.9%) says it has begun operations of the Stampede Lateral crude oil transmission pipeline in North Dakota and is in the final stages of completing the nearby Little Muddy crude oil transmission pipeline.
- SMLP says the Stampede Lateral connects its Polar & Divide crude oil gathering system with Global Partners' (GLP -3.2%) Basin Transload rail terminal, and provides GLP and other producers in the region with up to 60K bbl/day of crude oil throughput capacity.
- Little Muddy will interconnect with Enbridge's (ENB -2.1%) pipeline system in the Bakken shale formation.
- Golar LNG Partners (GMLP +0.2%) agrees to acquire the Golar Tundra floating storage and regasification unit from Golar LNG (GLNG +1.4%) for $330M.
- GMLP will receive a daily fee plus operating expenses, aggregating to ~$2.6M/month, for the right to use the FSRU from the date of closing until the date the vessel begins operations under its time charter with West Africa Gas.
- GMLP says the acquisition will increase revenue backlog to $2.62B at year-end 2015 and is expected to generate ~$44M/year in net contracted revenues.
- GMLP says it will enter into a new five-year $800M senior secured credit facility, from which it will draw down $70M to fund the remaining cash purchase price for the Golar Tundra.
- Exelon (EXC -1.1%) is lower after Bernstein's Hugh Wynne says it may be one of the most adversely affected companies by yesterday's Supreme Court decision to put Pres. Obama Clean Power Plan on hold.
- Investors also may be jittery over EXC's proposed takeover of Pepco (POM +0.7%); the two agreed to combine in April 2014, but they're still awaiting approval from one of their market's regulatory bodies - the D.C. Public Service Commission - which initially voted to reject the merger last August.
- EXC CEO Chris Crane said on the company's earnings call last week that if there is no resolution from the D.C. PSC by March 4, "we have to fold up" the deal.
- The spread between the offer price and POM's stock has been volatile, but at the current level it implies an 85% probability the deal will be able to close, Bloomberg's Tara Lachapelle writes.
- Colombia's government is preparing a complaint against contractor CB&I (CBI -3.2%), which directed construction on the newly renovated Reficar refinery, after accusations that poor management sent the project ~$4B over budget, Reuters reports.
- The refinery, part of state-run Ecopetrol (EC +1.8%), reopened late last year after a multi-billion-dollar overhaul meant to increase its capacity to 165K bbl/day from 80K bbl/day to 165,000.
- Colombia's comptroller estimates final costs came in at $8B vs. the original $4B projection, although EC says the total is still being calculated.
- Devon Energy (DVN -2.3%) has hired Jefferies to sell non-core oil assets across four major shale basins in an attempt to raise $2B-$3B and slash debt, Reuters reports.
- DVN says it will offer the assets in the Permian Basin of Texas, the Granite Wash formation, East Texas and the Mississippian play as regional packages, and consider multiple packages together as a block.
- While small in size and value compared with Shell's $70B move for BG Group, bankers say DVN's block of assets is one of the biggest marketed for sale by a producer since the start of the oil market downturn.
- Plains GP Holdings (PAGP +9.4%) is downgraded to Neutral from Outperform with an $8 price target, cut from $14, at Credit Suisse, after shares already dropped ~25% this week after disappointing Q4 results at PAGP and at Plains All American Pipeline (PAA -0.2%).
- The firm believes management’s 2016 guidance is ~4% too high since it assumes $47.50/bbl crude, noting that storage continues to build, which means crude prices and volumes would deteriorate further.
- Credit Suisse expects flat distributions until 2019 when it expects coverage to return to management's targeted 1.05x-1.10x, but notes that further deterioration could pressure PAA to re-examine the distribution to take added steps to strengthen the balance sheet.
- Credit Suisse maintains its Neutral rating for PAA while slashing the price target to $19 from $33.
- Eni (E -0.8%) is in the early stages of exploring a sale of gas and power retail assets that could fetch as much as €2B ($2.3B), depending on which assets are included, Bloomberg reports.
- If Eni goes ahead with the auction, the business could attract P-E firms and utility companies, according to the report.
- Eni recently approved raising €2B in debt and scrapped its dividend and €6B stock buyback plan as it looks for ways to conserve cash.
- The U.S. shale revolution is close to losing its grip on the international oil industry, and production will decline in the long-term and reach its peak by 2017, says Rosneft (OTC:RNFTF) CEO Igor Sechin.
- Sechin says Rosneft has some of the lowest wellhead oil production costs in the world thanks to the ruble depreciation, which has cut the company's production costs from $4/bbl to $2.70, and the country's flexible tax regime.
- He also says Rosneft will defend its traditional markets and expresses doubts over any coordinated action by crude-exporting nations to curb output.
- BP (BP +0.2%) is "very bearish" in its outlook for oil prices during H1 of this year, and expects surplus production to begin declining only when storage tanks fill up during H2.
- "The market will start balancing in the second half of this year," CEO Bob Dudley says, as "every tank and swimming pool in the world is going to fill and fundamentals are going to kick in."
- The CEO predicts prices eventually will wind up “in the middle somewhere” in the $30-$100/bbl range, saying that the high figure is not a natural “resting place” but “something will happen to make prices spike up again [on occasions to $100].”
- Dudley also warns that BP sees climate emissions growing by 1%/year to 2035, a level that would fail to prevent temperatures rising by more than 2 degrees Celsius (3.6 degrees Fahrenheit).
- EIA Petroleum Inventories:
- Crude -0.8M barrels vs. +3.6M consensus, +7.8M last week.
- Gasoline +1.3M barrels vs. +0.4M consensus, +5.9M last week.
- Distillates +1.3M barrels vs. -1.6M consensus, -0.8M last week.
- Futures +2.8% to $28.73
- ETFs:USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, OLEM
- Clean Energy Fuels (CLNE +3.5%) pops higher on news that UPS expanded its agreement with the company to use up to 500K gallon equivalents of renewable liquefied natural gas annually in Texas.
- CLNE says UPS stations in Houston and Mesquite will dispense the RLNG to a fleet of ~140 UPS tractors.
- The deal builds on UPS's current agreement with CLNE where UPS is using ~1.5M gallon equivalents of renewable compressed natural gas annually in California where UPS operates nearly 400 CNG vehicles.
- Coal stocks open with strong gains after yesterday's decision by the U.S. Supreme Court to block proposed regulations of coal fired power plants, likely pushing out a potential hearing after the presidential election: BTU +12.7%, CLD +19.7%, CNX +2.2%, CNXC +5.2%.
- The court’s order is temporary and is not a ruling on the merits, but it indicates the court’s conservative majority has misgivings about the emissions plan, and signals the rules could run into trouble in the courts, which could hurt the Obama administration’s ability to follow through on U.S. commitments in the Paris climate deal.
- FBR Capital says that while it does not foresee any near-term change to its outlook for coal companies, the delay could improve the long-term perception toward coal producers in maintaining meaningful market share as a fuel for domestic electricity generation (Briefing.com).
- FBR believes Westmoreland Coal (WLB -4.4%) and Alliance Resource Partners (ARLP -1.4%) could receive the most sustainable valuation benefit and investor interest following the Supreme Court action.
- ETFs: KOL
- Hess (NYSE:HES) +1.6% premarket after Goldman Sachs adds the stock to its Conviction Buy List with a $59 price target, upgrading it from a Neutral rating as it cites the company's liquidity, significant resource expansion opportunities, and strong position to benefit if oil prices rebound.
- "HES offers one of the most significant potential resource expansion opportunities among E&Ps over the next year from multiple exploration and appraisal drilling in Guyana and the Gulf of Mexico," Goldman says.
- Goldman removes Valero Energy (NYSE:VLO) from its Conviction Buy List but maintains its Buy rating.
- Husky Energy (OTCPK:HUSKF) cuts an additional estimated 500 people from its workforce, adding to the 1,400 jobs the company eliminated last fall.
- Husky is not providing specific numbers, but posts from company employees on social media suggest up to 500 jobs had been cut.
- In January, Husky cut $800M from the 2016 budget it had announced in December, and has said it would spend future capital only on new projects that will break even at $30/bbl oil prices.
- Atlantic Power (NYSE:AT) announces changes to its capital allocation strategy, including eliminating the common stock dividend, effective immediately.
- AT says it will prioritize allocation of its discretionary capital to equity and debt repurchases, and has identified additional high-return investments in its existing projects as well as potential repowering projects linked to extensions of power purchase agreements.
- AT also reaffirms its 2015 guidance for adjusted EBITDA of $200M-$215M, adjusted cash flows from operating activities of $95M-$105M and adjusted free cash flow of $0-$10M.
Tuesday, February 9, 2016
- Chesapeake Energy’s (NYSE:CHK) problems illustrate the potential for a domino effect in U.S. pipeline companies, and threatens to shatter the assumption of many investors that the companies are insulated from plunging energy prices.
- CHK has commitments to pay ~$2B/year for space on pipelines run by MLPs; Williams Cos. (WMB, WPZ) has the most exposure to CHK after buying the company's logistics assets for $6B in 2014
- CHK's distress threatens the $33B Williams-Energy Transfer (ETE, ETP) tie-up announced last September, and has been a drag on WMB's credit rating, which could cause headaches for ETE if the merger goes through.
- WMB likely will be forced to accept a 50% price cut in its contract price with CHK, either through the courts or mutual renegotiation - which would equal a drop of $300M in annual cash flow - says InfraCap portfolio manager Jay Hatfield.
- Williams and Energy Transfer "would be way better off if they did not merge,” Hatfield says. “I can’t believe that both stocks wouldn’t rocket if the deal was called off.”
- Other companies with CHK contracts include Spectra Energy Partners (NYSE:SEP), Columbia Pipeline Partners (NYSE:CPPL) and Marathon Petroleum's (NYSE:MPC) MPLX unit; a SEP spokesperson tells Reuters that its CHK contract to supply gas out of the Marcellus Shale accounted for less than 3% of its 2015 revenues.
- Kinder Morgan (NYSE:KMI) has not disclosed its exposure to CHK.
- The U.S. Supreme Court blocks Pres. Obama's planned new federal regulation that would cut emissions from power plants, halting at least for now the administration's sweeping effort to address combat climate change.
- The justices heeded calls from utilities, coal miners and more than two dozen states to halt the EPA rule while court challenges go forward.
- The delay will last at least until a D.C. appeals court rules on the plan, probably later this year after it hears arguments in June; meanwhile, the EPA will not be able to enforce a Sept. 6 deadline for states to either submit their emission reduction plans or request a two-year extension.
- ETFs: XLE, XLU, VDE, ERX, OIH, UTG, IDU, VPU, ERY, DIG, DUG, BGR, IYE, GUT, BUI, FENY, PXJ, FIF, RYE, FUTY, RYU, UPW, FXN, FXU, DDG, PUI, SDP
- Plains All American (PAA, PAGP) execs spent a good chunk of their earnings conference call today talking about the creditworthiness of their customers.
- PAA said its exposure to at-risk producers is small, with only ~2% of its adjusted EBITDA guidance at risk due to struggling producers who have signed onto its pipelines.
- Surely it is hard to imagine an E&P firm struggling to raise cash defaulting to the firm it relies on to ship its oil and gas... but not impossible, as shown by the very fact that MLPs are having to address this issue on their quarterly calls, Bloomberg's Liam Denning writes.
- Denning notes that PAA's guidance for 2016 diluted net income/unit is in a wide range of $1.00-$1.61, which illustrates oil's very cloudy outlook.
- PAA also revealed that Moody's would not be giving the company's recently issued convertibles 50% equity treatment, as had been assumed, but 25% instead.
- Earlier: Plains All American Pipeline misses expectations (Feb. 8)
- Duke Energy (NYSE:DUK) is fined $6.6M by North Carolina regulators for environmental pollution related to the 2014 spill of liquefied coal ash at its Dan River power plant.
- The fine covers violations that DUK admitted when it pleaded guilty to federal pollution crimes nine months ago and agreed to pay $102M in fines and restitution.
- DUK says it is reviewing whether to challenge the fine; the company last year contested the state’s proposed $25M fine over persistent groundwater pollution at a Wilmington power plant, and the amount was later reduced to $7M in a settlement.
- Standard & Poor's downgrades the junk ratings of 25 oil and gas companies on expectations of deteriorating credit quality due to low commodities prices and reduced production.
- The ratings firm, which also affirmed the ratings of an additional 20 speculative-grade E&P companies, says the ratings actions follow a revision of its price assumptions for crude oil and natural gas.
- Among companies receiving downgrades: AREX, BBG, BCEI, BBEP, CWEI, DNR, EPE, EVEP, GST, KOS, LGCY, MEMP, NOG, OAS, REN, SM, SGY, TPLM, UNT, WTI, WLL
- Last week, S&P cut the ratings of 10 U.S. oil and gas E&P companies, including investment-grade Chevron, and placed Exxon's AAA corporate rating on watch for a possible downgrade.
- SolarCity (down 28.1%) reported Q4 solar installations of 272MW, up 54% Y/Y but below guidance of 280MW-300MW. Moreover, the company has guided for Q1 installations of 180MW (+18% Y/Y).
- Top rival Sunrun (NASDAQ:RUN) is down 7.6% after hours. First Solar (NASDAQ:FSLR) is down 2.4%. Both companies are expected to deliver their Q4 reports in the coming weeks.
4:46 PM| 4:46 PM | 1 Comment
- Though SolarCity (NASDAQ:SCTY) beat Q4 revenue and EPS estimates, the company has reported quarterly installations of 272MW (+54% Y/Y), below guidance of 280MW-300MW.
- Moreover, SolarCity expects installations in seasonally weaker Q1 to total 180MW (-34% Q/Q and +18% Y/Y). SolarCity: "This represents a higher-than-usual seasonal slowdown that we have historically experienced after strong fourth quarters largely owing to two reasons. First is the impact of our decision to end Nevada operations in December 2015; NV contributed 23 MW in Q4 2015. It also reflects our renewed focus on our cash conversion cycle, particularly in longer lead-time commercial projects." Q1 EPS guidance of -$2.55 to -$2.65 is below a -$2.36 consensus.
- The company expects installations to "ramp throughout 2016," and is reiterating full-year installation guidance of 1.25GW. SolarCity: "Though the ITC extension certainly provides us with more tailwinds to growth, the primary focus of our company in 2016 is our goal of generating positive cash by year-end ... our guidance still implies over 40% annual growth in 2016."
- Q4 metrics: Deployments +44% Y/Y to 253MW. Cumulative MW deployed +76% to 1.74GW. Cost/watt fell $0.13 Q/Q and $0.15 Y/Y to $2.71. Gross value of MW deployed fell $0.22 Q/Q and rose $0.06 Y/Y to $3.64. Delinquencies of 180+ days remain "comfortably below 1%."
- Financials: Operating lease & system incentive revenue +53% Y/Y to $75.4M. System/component sale revenue +77% to $40.1M.GAAP operating expenses +68% to $227M - sales/marketing spend totaled $128.1M, G&A $76.2M, and R&D $22.8M.
2015 capex totaled $176.6M. SolarCity ended the year with $394M in cash/investments, over $1.2B in PowerCo debt, and over $1.4B in DevCo debt. Solar bonds and convertible debt respectively accounted for $214M and $909M of the DevCo debt.
- SolarCity's Q4 results, shareholder letter (.pdf), slides (.pdf)
- Update (6:36PM ET): The post has been updated to include additional details about SolarCity's Q4. Shares are now down 32.6% after hours to $17.75.
- Empire District Electric (NYSE:EDE) agrees to be acquired by Algonquin Power & Utilities for $34/share, or ~C$3.4B (US$2.4B), including the assumption of $900M in debt.
- Algonquin says the deal will add C$4.1B of utility assets and 218K customers to its portfolio of utility operations, resulting in a total asset base of C$8.9B, an 87% increase.
- Algonquin says the purchase price represents a 21% premium to EDE's Feb. 8 closing price.
- Anadarko Petroleum (APC -5.8%) plunges 6% after announcing an 81% dividend cut, as shares resume trading following a halt; shares already had been ~3.5% lower.
- APC says the cut provides ~$450M of additional cash on an annualized basis to enhance its operations and financial flexibility.
- APC had dropped strong hints about a dividend cut last week during its earnings conference call.
- Crude oil settles below $28/bbl after falling as much as 8%, as forecasts for a persistent global glut of supplies sent WTI to its lowest close in three weeks.
- March futures fell 6% to $27.93/bbl following a report from the IEA that the crude oil glut may be worse than expected in H1 2016, while the U.S. EIA cut its 2016 crude forecasts and said U.S. oil inventories, which have now topped 500M barrels for the first time since 1930, will continue and may peak this year at 517M barrels in April.
- There is also little sign of any coordination on production cuts among big producers outside the U.S. after weekend talks between OPEC members Saudi Arabia and Venezuela yielded no concrete result - "The reduction of oversupply will have to come from elsewhere, namely from falling U.S. oil production," Commerzbank says in a new report.
- ETFs: UNG, USO, OIL, UGAZ, UCO, DGAZ, UWTI, SCO, BNO, BOIL, DWTI, GAZ, DBO, DTO, UGA, KOLD, USL, UNL, DNO, DBE, OLO, SZO, DCNG, RJN, OLEM
- Antero Midstream Partners (AM +0.9%) earns a Buy rating from Janney analysts, who believe the pullback in the units opens an attractive entry point for long-term investors.
- "The uncertainty surrounding drilling schedules and production volumes appears to be at a peak frenzy,” Janney says, adding that investors who buy sound assets at moments of uncertainty are usually well rewarded.
- The firm anticipates 26% annual distribution growth, an estimate it says is underpinned by attractive drilling economics at its sponsor, Antero Resources (AR -5.3%).
- Ion Geophysical (NYSE:IO) has nosedived to new multi-year lows ahead of tomorrow afternoon's Q4 report. The seismic hardware, software, and services provider now sports a $44M market cap.
- A fresh selloff in oil prices could be weighing. WTI crude oil is down 5.2% to $28.16/barrel, and Brent crude down 6.7% to $30.67/barrel.
- Ion is less than a week removed from carrying out a 1:15 reverse split. A flurry of insider buys occurred in November.
- CB&I (CBI -0.7%) says it expects Q4 earnings to beat expectations and will increasingly focus on petrochemical and liquefied natural gas projects along the Texas and Louisiana coasts while riding out the oil bust.
- CBI sees Q4 EPS of $1.56 vs. $1.48 analyst consensus estimate on revenues of $3.3B vs. $3.46B consensus, while expecting to report $3.3B in new awards for the quarter; for FY 2016: CBI sees EPS of $5.00-$5.50 vs. $5.19 consensus on revenues of $11.4B-$12.2B vs $12.7B consensus, with anticipated new awards of $13B and a $23B backlog.
- When asked whether CBI is taking on marginal terms to get more contracts and maintain market share during the downturn, CEO Phil Asherman says the company can deliver accurately on fixed-term contracts with its efficiencies and lower reliance on subcontractors.
- Crude oil at $30/bbl is blowing a hole in the insurance that U.S. shale drillers bought to protect themselves against a crash, Bloomberg reports.
- Companies including Callon Petroleum (CPE -5.6%), Noble Energy (NBL -3.5%), Pioneer Natural Resources (PXD -3.6%), Marathon Oil (MRO -8%), Rex Energy (REXX -1.8%) and Bonanza Creek Energy (BCEI -11.4%) used a three-way hedge strategy that does not guarantee a minimum price if oil falls below a certain level; while three-ways can be cheaper than other hedges, they leave drillers exposed to sharp declines and risk worsening a cash shortfall for companies trying to survive the worst oil crash in 30 years.
- For example, CPE CFO Joseph Gatto told investors in December that the company had hedged ~4K bbl/day in 2016, or 40% of its projected output, at $56/bbl; roughly half of those contracts are worth significantly less at $30/bbl because CPE employed three-ways.
- Halliburton (HAL -4.3%) plans to divest Baker Hughes' (BHI -1.7%) offshore drilling and completions fluids division and the bulk of BHI’s completion systems, adding more assets to the list of businesses it plans to sell to appease antitrust regulators, Bloomberg reports.
- HAL already had agreed to sell BHI’s core completions business, which provides equipment for controlling the flow of oil as it is readied for production, and has decided to sell most of the rest of BHI’s related completions operations at the behest of regulators, according to the report.
- HAL's acquisition of BHI was scheduled to close last year but has been delayed to no later than April 30 as the companies seek to resolve antitrust concerns in the U.S. and abroad.
- Siemens (OTCPK:SIEGY +0.2%) is close to a deal to combine its wind business with Gamesa (OTCPK:GCTAF +7.6%), which would create world's largest wind turbine maker, Bloomberg reports.
- SIemens is the global leader in wind turbines designed for use offshore, while Gamesa specializes in onshore wind; together, the combined companies would have ~15% of the global wind market, exceeding Vestas Wind's (OTCPK:VWDRY) 10% share and GE’s 11%.
- Siemens also is holding talks about buying Iberdrola’s (OTCPK:IBDRY -0.6%) 20% in Gamesa, according to the report.
- A mysterious oil tanker is the latest in the long list of speculated reasons why Californians pay far more for gasoline than most other U.S. drivers, the LA Times reports.
- Consumer advocates contend that Exxon Mobil (XOM -0.7%) could have done more to increase gasoline inventories and help lower prices in the past year after the explosion at the Torrance refinery; now they say an Exxon tanker sailed for 70 days off the coast of Singapore but never picked up fuel for California from the company's refineries in Singapore that produce the state's special blend of environmentally friendly gasoline.
- The president of the Consumer Watchdog group told California's Petroleum Market Advisory Board yesterday that the ship stopped in Los Angeles after its Asian trip but did not unload any gasoline before taking its fuel to Florida.
- XOM dismisses the allegations without discussing the tanker's sailing records or deliveries.
- Existing lenders have offered $500M for the core assets of Alpha Natural Resources (OTCPK:ANRZQ), in a credit bid designed to get the distressed coal mining operation out of bankruptcy.
- The offer is open to competition, and is linked to a business plan that will lay the groundwork for ANR to emerge from chapter 11 by the end of June, WSJ reports, citing court papers.
- If the sale plan is approved, ANR would hold the door open until March 28 for competing bids on the assets its lenders have identified as central to the reorganization effort.
- Crude oil could drop below $20/bbl, but the oil slump does not seem likely to derail the global economy, Goldman Sachs predicts, in a bearish view that coincides with the latest report from the IEA.
- With capacity to store oil exhausted in some places, prices may need to drop low enough to halt crude output that can no longer be stockpiled, says Jeff Currie, Goldman’s head of commodities research.
- The storage sites most likely to run out of space are "landlocked,” such as Cushing, Okla., where inventories reached 64.2M barrels in the week to Jan. 15, the highest in data from the Energy Department that extend back to 2004.
- The IEA says the global oil surplus will be bigger than previously estimated, increasing the risk of further price losses, as Iran and Iraq boost production while demand growth slows.
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, DNO, OLO, SZO, OLEM
- Warren Resources (NASDAQ:WRES) says it has started discussions with its creditors regarding a restructuring of its debt obligations and would need to seek bankruptcy protection if talks fail.
- WRES had deferred a $7.5M semi-annual interest payment that was due on Feb. 1 to reach a deal with creditors.
- WRES also forecasts total revenue to fall 31.7% Y/Y to $61.1M from $89.4M, and expects oil production to fall ~18% and natural gas production to drop ~20% this year; the company expects to spend no new drilling capital on any of its properties in 2016.
- Vestas Wind Systems (OTCPK:VWDRY) reports better than expected Q4 net profit and raises its dividend on 2015 earnings by 75%.
- Vestas says its Q4 net profit grew 54% Y/Y to €298M ($333.6M), beating analyst expectations of €266M, while revenue rose 23% to €3.04B, vs. expectations of €2.95B; FY 2015 net profit gained 75% to a record €685M from €392M in 2014, on a record €8.4B of sales.
- For 2016, Vestas predicts sales to reach at least €9B with an operating margin of at least 11%.
- Vestas says it will pay a dividend of 6.82 Danish kroner/share on 2015 earnings, or 30% of net profit, in line with its policy of paying an annual dividend of 25%-30% of net profit.
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