Seeking Alpha
  • Today - Wednesday, September 17, 2014

  • 7:15 PM
    • Cheniere Energy (NYSEMKT:LNG) shareholders delivered a stinging rebuke to CEO Charif Souki, opposing his $142M 2013 compensation package in a non-binding vote held at an annual meeting on Sept. 11.
    • Souki was awarded 6.3M stock units valued at $133M that, along with his other compensation, made him the highest paid executive of a publicly traded U.S. company last year, according to Bloomberg.
    • The vote tally was ~87.6M shares against the package vs. 75.9M in support, according to an SEC filing.
  • 7:07 PM
    • Offshore drilling stocks already have dropped 15%-20% since late June, which Societe Generale says likely has priced in much of the risk from a further deterioration in fundamentals, but that doesn't stop the firm from downgrading and/or price cutting several stocks in the group.
    • The firm downgrades Noble Corp. (NYSE:NE) to Hold from Buy with a $27 target price, down from $35, cuts Ensco (NYSE:ESV) to Sell from Hold with a $44 price target, off from $52, and slashes Rowan (NYSE:RDC) to Hold from Buy with a $31 target, from $39.
    • While adopting a neutral rather than outright bearish stance on the group, the firm sees limited prospects for a near-term rebound in offshore drilling stocks as a result of worsening conditions, and believes offshore drilling could remain the most out of favor oil services subsector for several more quarters.
  • 6:12 PM
    • Continental Resources (NYSE:CLR) appoints Jack Start as President and COO, less than a week after Rick Bott quit the position.
    • Stark joined CLR in 1992 and has served as senior VP of exploration since 1998.
    • The promotion likely makes Stark the top contender to eventually replace founder and CEO Harold Hamm.
    • CLR also issues 2014-15 guidance, projecting Y/Y production growth of 26%-32% over 2014 growth of 27%-30%, and higher drilling and completion capex for H2 2014 for full-year estimates of $4.55B in 2014 and $5.2B in 2015.
    | Comment!
  • 5:48 PM
    • Cenovus Energy (NYSE:CVE) says it achieved first oil production at its recently-completed Foster Creek phase F expansion earlier this month.
    • CVE expects Phase F to add 30K bbl/day of capacity, with production ramping up over the next 12 to 18 months; phases G and H are under construction and are expected to add another 30K bbl/day each with first production anticipated in late 2015 and 2016, respectively, bringing total expected gross production capacity at Foster Creek to 210K bbl/day.
    • Foster Creek is 50%-owned by ConocoPhillips (NYSE:COP).
    | 1 Comment
  • 4:29 PM
    • Diamondback Energy (NASDAQ:FANG) -2.8% AH on news it is launching a secondary offering of 2.5M common shares by certain entities controlled by Wexford Capital and Gulfport Energy (NASDAQ:GPOR), with an underwriters' option to purchase up to an additional 375K shares.
    • All of the net proceeds will go to the selling stockholders.
    | Comment!
  • 3:56 PM
    • CARBO Ceramics (CRR -4.9%) is sharply lower after Iberia cut its price target for CRR shares to $85 from $108, as well as 2014 earnings estimates, citing lower expected ceramic sales volumes due to bad weather and delays to the pad drilling program.
    • Iberia says it is concerned the issues may drag into Q4 and 2015, keeping an Underperform rating on the shares.
    • Elsewhere, HCLP -1.8%, SLCA +1.3%.
    | 1 Comment
  • 3:25 PM
    • Offshore drilling stocks continue to slide after fleet status reports from Ensco (ESV -1%) and Diamond Offshore (DO -1.8%) confirm that the rig market still has its problems.
    • RBC reduces its EPS estimates for ESV based on the September update which featured negative datapoints for stacked floaters, newbuild delays and idle jackups, but the company was able to keep two of its 8500 series rigs working for the rest of the year.
    • Susquehanna notes that DO did not report any new notable contracts in its latest fleet status report, and the firm does not expect any new tenders for at least the rest of 2014 and possibly Q1 2015.
    • Also: SDRL -0.2%, RIG -1.2%, RDC -2.3%, NE -2.8%, ATW -0.2%, SDLP +0.9%, RIGP +0.4%.
  • 12:28 PM
    • Occidental Petroleum (OXY -0.2%) is in talks to sell at least one-fifth of its 24.5% stake in Dolphin Energy to Abu Dhabi-owned Mubadala Development, WSJ reports.
    • Qatar would need to approve the deal because Dolphin Energy's assets include upstream gas projects and a pipeline with the capacity to transport up to 3.2B cf/day of gas from Qatar to the United Arab Emirates and Oman.
    • Mubadala already owns 51% of the pipeline project, valued at $3.5B, while Total (NYSE:TOT) holds a 24.5% stake.
    • OXY also is said to be in talks to sell as much as a 30% stake in the $10B Shah natural gas project in the UAE to Mubadala.
  • 12:10 PM
    • Dresser-Rand (DRC +8.6%) spikes after Swiss pump maker Sulzer (OTC:SULZF) says it is in advanced discussions about a merger with the U.S. oilfield equipment maker.
    • Sulzer's statement followed a report by a Swiss newspaper which said the two companies could announce a merger as soon as next month.
    • A report last month said DRC was working with Morgan Stanley to prepare for possible takeover bids.
    | Comment!
  • 11:57 AM
    • Judge Barbier has reprimanded BP for using tactics that would "not be appropriate for a college term paper" after the company tried to sneak six extra pages into a court filing by manipulating line spacings.
    • In a case relating to the Gulf of Mexico oil spill, BP's lawyers were allowed to submit a response of up to 35 pages double-spaced, but the judge discovered the company had abused the page limit to fit in six additional pages of text; Barbier castigated BP, warning that any future briefs using similar tactics would be dismissed.
    • Earlier this month, the judge ruled that BP had been grossly negligent over the Gulf of Mexico disaster, leaving it facing up to $17.6B in potential civil fines.
  • 11:46 AM
    • Sinopec (SNP -0.4%) and PetroChina (PTR +2%), China's largest oil and gas producers, plan to increase shale gas output by 40%/year to meet the country’s production target.
    • SNP plans to invest 21.5B yuan ($3.5B) in shale gas drilling and expects to produce as much as 3.5B cu. meters by 2015, while PTR is targeting output of more than 2.5B cu. meters in 2015 after investing 11.2B yuan, according to the Ministry of Land and Resources.
    • China’s 2015 target depends on SNP's ability to produce shale gas at the Fuling project in the country’s southwest, but the company has halved its target of producing 60B cu. meters by the end of the decade because of geological challenges.
    | Comment!
  • 11:19 AM
    • The GE-Hitachi Economic Simplified Boiling Water Reactor design was approved yesterday by the NRC, allowing power companies to use it in nuclear plants they may build.
    • GE (GE +0.2%) is the majority owner with a 60% share in the venture, and GE has the right of first refusal for any new nuclear plant project anywhere in the world outside of Japan.
    • So far, two power companies have picked the ESBWR technology for planned reactors: DTE Energy will use it for a project in Michigan, and Dominion Resources for one in Virginia.
    • The move probably is not a short-term GE stock mover, but it is "one more foundation building block that can... add billions and billions in new revenues down the road," writes 24/7's Jon Ogg.
  • 10:33 AM
    • Bill Barrett (BBG +2.8%) is upgraded to Buy from Neutral with a $28 price target, up from $24, at Mizuho following the recent transactions which complete BBG's transition to a Rockies oil producer while strengthening its balance sheet.
    • Mizuho likes the transactions, whose value totaled $757M and brought in $568M of cash proceeds that BBG will use to pay down its $280M revolving credit facility.
    • Lower leverage, a leaner and more attractive portfolio, and improved growth trajectory should generate multiple expansion, according to the firm, which believes valuation is supportive at these levels and sees upside to NAV from downspacing and longer laterals in the DJ Basin.
    | Comment!
  • 10:30 AM
    • EIA Petroleum Inventories:
    • Crude +3.7M barrels vs. -1.6M expected, -1M last week.
    • Gasoline -1.6M barrels vs. -0.3M expected, +2.4M last week.
    • Distillates +0.3M barrels vs. +0.5M expected, +4.1M last week.
    • Futures -0.50% to $93.35
    | Comment!
  • 9:49 AM
    • Statoil (STO -0.4%) says overcapacity in its rig portfolio will cause it to temporarily suspend the COSL Pioneer rig in Q4.
    • The rig is currently carrying out an assignment on the Visund field, where it is scheduled to complete work at the end of this month.
    • STO says the move will have no impact on its production targets or planned exploration activity on the Norwegian shelf, where STO still expects to drill 20-25 exploration wells in 2014.
    | 1 Comment
  • 8:25 AM
    • Enbridge (NYSE:ENB) proposes to transfer its 66.7% interest in the U.S. segment of the Alberta Clipper Pipeline to its Enbridge Energy Partners (NYSE:EEP) affiliate for ~$900M in cash and units; EEP owns the other 33.3% interest.
    • ENB says EEP's valuation has improved to the point where a drop down is now accretive to both EEP's distributable cash flow and to ENB's earnings.
    • ENB says the proposed transfer would not require any equity issuance by EEP, and is expected to be immediately accretive to distributable cash flow per unit by ~3%.
    | 1 Comment
  • 7:58 AM
    • Eni (NYSE:E) says it made a new oil discovery at the Ochigufu exploration deepwater prospect off Angola; it is the 10th commercial oil discovery in the country's Block 15/06 and is estimated to contain 300M barrels in place.
    • Eni also says the Ochigufu 1 NFW well, which led to the discovery, will be brought into production "in record time."
    • Eni is operator of Block 15/06 with a 35% stake.
    | Comment!
  • 7:47 AM
    • Greenbrier (NYSE:GBX) says it received new orders for 15K railcar units valued at $1.37B during its FQ4 ended Aug. 31 through the present date.
    • In addition, GBX received a recent deck cargo barge order which brings total marine backlog to $112M and extends its marine backlog to 2016.
    • Says it has received orders for nearly 39K railcars in North America and Europe valued at $3.72B since Sept. 1, 2013.
    | 1 Comment
  • Tuesday, September 16, 2014

  • 7:27 PM
    • A new study finds that it's not the actual process of fracking that can cause water pollution; the bigger problem is faulty well construction.
    • The real concern, according to an analysis published yesterday by the peer-reviewed Proceedings of the National Academy of Sciences, are leaks in the steel-and-cement casings surrounding the well bore, which let gas escape before it gets to the surface, making water undrinkable and in some cases explosive.
    • "Where contamination occurs, it related strictly to well integrity," says a co-author of the study, who adds, "The answer is not to stop drilling. The fix is better executions on the construction of the well and improving well integrity."
    • The study is fueling calls for stricter standards for well construction that could increase costs for energy companies.
  • 4:59 PM
    • Argentina’s oil-producing provinces and the federal government agree to revise a 1967 energy bill to include shale, two provincial officials tell Bloomberg.
    • State-run producer YPF is seen benefiting most from the new legislation, which should ease political tensions stemming from unclear rules governing the country’s shale boom and attract investors to areas such as Vaca Muerta, the huge shale formation where companies such as Chevron (NYSE:CVX), Shell (RDS.A, RDS.B) and Exxon (NYSE:XOM) are drilling wells.
    • The new bill would allow energy companies that invest $250M over a five-year period to sell 20% of production in international markets without paying export taxes and to keep some export revenue outside the country for shale and conventional projects.
    | Comment!
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