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  • Tuesday, April 22, 2014

  • 7:21 PM
    • Alaska’s legislature has approved Gov. Parnell’s plan to join four energy companies - XOM, BP, COP and TRP - in moving ahead on plans to build infrastructure to transport and market 35T cf of North Slope gas to be shipped by an 800-mile pipeline to a liquefied natural gas export plant.
    • If the $45B-$65B project comes to fruition, gas could hit local and foreign markets in the mid-2020s, according to the state’s projections.
    • The state would retain ownership of 25% of the LNG plant, which is planned at Nikiski in south central Alaska.
  • 7:11 PM
    • Enterprise Products Partners (EPD) announces plans to build an ethane export facility on the Texas Gulf coast with the capacity to load 240K bbl/day, making it the largest such facility in the world; it is expected to begin operating in Q3 2016.
    • EPD says it has received strong interest in the project from abroad and is continuing discussions with potential customers that could result in fully contracting the capacity of the facility.
    • U.S. ethane supply currently exceeds demand by ~300K bbl/day and could reach 700K bbl/day by 2020, even with new ethylene capacity being built, according to the company.
    | Comment!
  • 6:30 PM
    • Duke Energy's (DUK) North Carolina President Paul Newton tells an environmental commission that plans outlined by the utility to address coal ash in the state are estimated to cost $2B-$2.5B.
    • Newton says DUK's plans include excavating and relocating ash from company sites to a lined landfill, and converting three remaining coal units to dry-fly ash systems; costs would increase significantly, however, if DUK were to excavate and remove all ash from coal sites.
    • DUK says it is taking "full responsibility" for the February incident in which as much as 39K tons of coal ash were spilled into the Dan River.
  • 6:21 PM
    • BP agrees to sell interests in four operated oilfields on Alaska's North Slope to privately held Hilcorp, including all of BP’s interests in the Endicott and Northstar oil fields and a 50% interest in each of the Liberty and the Milne Point fields; the assets produce ~19.7K boe/day.
    • A value for the deal is not disclosed, but according to analysis from U.S. Capital Advisors, the average enterprise value of U.S. onshore oil and gas assets is ~$90K per flowing barrel, which would imply that Hilcorp could be paying BP at least $1.5B.
    • BP E&P chief Lamar McKay says the deal will free the company to focus on the giant Prudhoe Bay field and the opportunity to export Alaskan natural gas.
    | Comment!
  • 5:15 PM
    • Some S&P energy stocks set new 52-week highs today, including Hess (HES), EQT and Baker Hughes (BHI), as the sector begins to catch up to the hype about the U.S. energy renaissance.
    • Analysts say oil and gas drillers are just starting to reap the benefits of an ancillary boom in energy-related technology and innovation; RBC Capital sees bullish prospects for rig companies, adding that drillers such as Helmerich & Payne (HP), Patterson-UTI (PTEN) and Nabors Industries (NBR) are best positioned to capitalize on the boom.
    • BofA/Merrill's Stephen Suttmeier offers a technical set-up, seeing energy poised for a breakout similar to Oct. 2010, when the sector moved above its 13-, 26- and 40-week relative moving averages and outperformed for another six months.
    | Comment!
  • 5:12 PM
    • Cytec Industries Inc. (CYT): Q1 EPS of $1.42 beats by $0.09.
    • Revenue of $489M (+2.4% Y/Y) misses by $3.17M.
    • Press Release
    | Comment!
  • 4:48 PM
    • New Source Energy Partners (NSLP) announces a public offering of 2.8M common units.
    • NSLP says it expects to use all proceeds from the offering to repay a portion of the indebtedness outstanding under its revolving credit facility.
    | 1 Comment
  • 4:26 PM
    • Plug Power (PLUG) -6.7% AH after announcing a proposed public offering of common stock; the size is not disclosed.
    • PLUG plans to use the proceeds for working capital and general corporate purposes, which may include capital expenditures and potential acquisitions.
  • 4:21 PM
    • Covanta Holding Corporation (CVA): Q1 EPS of -$0.03 beats by $0.12.
    • Revenue of $401M (+7.5% Y/Y) beats by $19.9M.
    • Press Release
    | Comment!
  • 4:04 PM
    • FMC Technologies, Inc. (FTI): Q1 EPS of $0.57 beats by $0.07.
    • Revenue of $1.82B (+10.3% Y/Y) beats by $20M.
    • Press Release
    | Comment!
  • 3:33 PM
    • Nabors Industries (NBR +2.2%): Q1 EPS of $0.16 beats by $0.02.
    • Revenue of $1.56B (-3.7% Y/Y) beats by $10M.
    • Press release
    | 1 Comment
  • 2:57 PM
    • Coal shares are mostly lower after Arch Coal's (ACI -8.1%) big earnings miss on lower than expected margins across all regions and guidance for reduced shipments of met coal this year as prices and demand remain weak: ANR -2.7%, BTU -1.1%, CLD -3.4%, CNX -1.2%, WLT +0.9%, WLB +0.3%.
    • ACI said in its earnings call that its main market for met coal demand is healthy, citing U.S. steel utilization trending above the five-year average and auto sales projected to reach nearly 16.5M units in 2014, the highest level since 2006.
    • Looking for a silver lining in the Q1 results, Sterne Agee says ACI’s attention to cost control, improved thermal competitive economics with natural gas, supportive balance sheet liquidity and a continued long-term role of U.S. coal into the global markets should support a cyclical valuation turn.
    • Citigroup’s Brian Yu, meanwhile, expects ANR to follow ACI and WLT in cutting met coal production.
    | 1 Comment
  • 2:35 PM
    • QEP Resources (QEP -2.2%) is downgraded to Equal Weight from Overweight with a new $31 price target, down from $36, at Barclays as the firm lowers its 2014 and 2015 debt-adjusted cash flow estimates by 14%, primarily reflecting negative revisions in production forecasts following the disappointing outlook provided by QEP earlier this year.
    • Barclays is cutting 2014-15 production estimates by 11% and 16%, respectively, including 8% and 9% cuts in oil production.
    | Comment!
  • 1:05 PM
    • In an operational update, Camac Energy (CAK +7.3%) provides 2014 year-end production exit rate guidance of 14K bbl/day, as two wells at the Oyo field offshore Nigeria continue to be on track to begin production this year.
    • The Northern Offshore Energy Searcher drillship is awaiting final clearance by the Nigerian government to start drilling operations at Oyo; CAK says approval is imminent.
    • CAK also says it received parliamentary ratification of its petroleum agreement related to the Expanded Shallow Water Tano Block in Ghana.
    | Comment!
  • 12:48 PM
    • Exxon Mobil (XOM -0.3%) is working to reopen one of the U.K.'s main underground fuel pipelines after the discovery of a tapping device and a stash of diesel that police believe was siphoned off by thieves.
    • XOM, which operates as Esso in Britain, says the device was found on the Midline pipeline that transports fuel from its Fawley Refinery near the south coast to its Birmingham fuel terminal in central England.
    • XOM does not expect retail customers to be affected by the pipeline closure because it has made alternative supply arrangements.
  • 12:32 PM
    • Oil services firms Baker Hughes (BHI +0.4%) and Aker Solutions (AKKVF) agree to form an alliance to develop subsea production solutions to boost recovery rates at a lower cost in offshore fields.
    • The two companies say the new venture aims to combine Aker's strengths in subsea production and processing systems with BHI's well completion and artificial lift specializations, as well as advance industry capabilities in subsea well intervention.
    • The deal is being driven by deepwater subsea fields which have "so far been characterized by low recovery rates, and new discoveries in deeper and more hostile environments are making these fields even more costly to develop," says BHI CEO Martin Craighead.
    • Separately, BHI is upgraded to Buy from Neutral with a $80 price target, up from $60, at Global Hunter following the strong Q1 earnings report citing expected efficiency enhancements and a potential upcycle in U.S. onshore development.
    | Comment!
  • 12:16 PM
    • Gevo (GEVO +32.1%) shares soar as the biofuels company says it reached an agreement with Lufthansa to evaluate Gevo's renewable jet fuel with the goal of approving Gevo's alcohol-to-jet fuel for commercial aviation use.
    • Lufthansa's testing is being supported through work with the European Commission.
    | Comment!
  • 11:57 AM
    • Teck Resources (TCK +0.8%) rises despite a 68% Y/Y drop in Q1 adjusted earnings, hurt by weak commodity prices, particularly for coal.
    • TCK says it will lay off ~600 people, ~5% of its workforce, part of a broader cost reduction program it has implemented; TCK says it has achieved $345M in annual cost cuts to date, and is now targeting another $200M in cuts plus a $150M reduction in capital spending.
    • As expected, TCK will defer the restart of its Quintette coal project in British Columbia, as higher met coal prices are needed for the project to make sense, but it will move ahead with a restart of the Pend Oreille zinc mine in Washington state as the outlook for zinc has increased.
    | Comment!
  • 10:55 AM
    • Valero Energy (VLO -0.6%) is downgraded to Neutral from Buy with a $63 price target at BofA/Merrill, as the firm closes out its longstanding constructive view of the U.S. refinery segment.
    • Upward earnings momentum that has underpinned a threefold jump in sector valuations has stalled and embedded volatility has increased to the point where risk/reward is no longer attractive, the firm says in re-categorizing U.S. refiners as a trading call.
  • 10:42 AM
    • A court challenge holding up the Keystone XL (TRP +0.6%) pipeline should be dismissed, Nebraska Gov. Dave Heineman says as he asks the state’s top court to throw out a trial judge’s February ruling that the route for the pipeline was approved without proper authority.
    • The Nebraska Supreme Court may not hear the case until at least September and probably will not rule until after November's congressional elections; if the court upholds the trial outcome, Keystone would need to apply to the state’s Public Service Commission for approval in a process that could take as much as seven months.
    • The trial judge erred in allowing a challenge by three property owners to move forward because they hadn’t shown they had been injured as taxpayers by the state’s plan, the governor said in a court filing yesterday.
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