Today - Wednesday, March 4, 2015
- Exelon (EXC -0.3%) and Pepco (POM +0.2%) agree to more than double the value of a fund to benefit customers in Maryland, as EXC seeks approval from the state's regulators for its planned $6.8B acquisition of POM.
- Under the plan, EXC raises the level of the customer investment fund to $94.4M from $40M, which state regulators could earmark for benefits such as rate credits, energy efficiency or low income customer assistance.
- The plan also includes an increased commitment to reduce the length and frequency of power outages in the state, as well as non-compliance payments if reliability performance targets during 2018-20 are missed.
- Exxon Mobil (NYSE:XOM) says in its analyst day presentation that its free cash flow grew to $17.9B in 2014, up from $10.6B in 2013, and that 2014 capex came in $1.3B below plan at $38.5B.
- XOM says it achieved its upstream production target of 4M boe/day and expects 2% output growth in 2015 to 4.1M boe/day, driven by a 7% increase in liquids, and says it is on track to deliver 4.3M boe/day in 2017 as accretive new volumes more than offset declines; says it improved profitability in 2014 by $1.44/bbl.
- XOM says it has 16 projects online, adding more than 550K boe/day working interest capacity, and sees bringing another 16 projects online by 2017.
- Reaffirms expectations for 2015 capex of $34B (earlier), 11% less than 2014, and expects capex to average less than $34B/year in 2016 and 2017.
- XOM +0.2% premarket.
- Subsea 7 (OTCPK:SUBCY) is more than 5% lower in Oslo trading after the oil services company swung to a surprise Q4 operating loss and suspends dividend payments because of declines in sales and earnings margins this year.
- Subsea recorded a $1.18B impairment charge on goodwill following a downward revision of its forecast activity levels, and an $89M impairment linked to the Seven Polaris vessel and mobile equipment.
- Backlog dropped to $8.2B at the end of 2014, down from $11.8B a year ago.
- Says 2015 revenue will be "significantly" lower than the record $6.9B reached last year but did not provide specifics.
- Rio Tinto (NYSE:RIO) says its majority-owned Bengalla coal mine in Australia has been cleared to boost output by a third and operate for another two decades.
- Rio subsidiary Coal & Allied and 40% partner Wesfarmers (OTCPK:WFAFF) have been seeking the clearance by the New South Wales state government to continue mining and potentially lift production of thermal coal to 15M metric tons/year from 10.7M.
- Oasis Petroleum (NYSE:OAS) -4.5% premarket after announcing a public offering of 25M common shares, with an underwriters option to purchase up to another 3.75M shares.
- OAS says it intends to use the proceeds to repay outstanding borrowings under its credit facility and for general corporate purposes.
- Brazil's Attorney General has asked the country's top court for permission to proceed with investigations against several politicians, launching a new phase of the corruption case at Petrobras (NYSE:PBR).
- Testimony by suspects already in police custody suggests that members of Pres. Rousseff’s Workers’ Party and some of its allies could be ensnared.
- Federal prosecutors say Brazil’s biggest construction firms colluded for years to inflate prices on PBR contracts, kicking back some of the ill-gotten proceeds to politicians, major political parties and former executives at the company.
6:12 AM| Comment!
Tuesday, March 3, 2015
- Cal Dive (OTCPK:CDVI) files for Chapter 11 bankruptcy protection, while the company and its U.S. subsidiaries continue to operate their businesses during the proceedings; foreign subsidiaries have not sought bankruptcy protection and will not be affected.
- Cal Dive has a commitment for up to $120M in debtor-in-possession financing to fund the ongoing operations.
- The company will try to sell non-ore assets and reorganize or sell its core subsea contracting business.
- California regulators have ordered oil drillers including Chevron (NYSE:CVX) and Linn Energy (LINE, LNCO) to shut operations at 12 injection wells in the state because of concerns they may taint groundwater.
- All the wells are located in Kern County, northeast of Los Angeles, and are within a mile of the surface and 500 vertical feet underground of a water supply.
- The state says the orders were part of a systematic review of California's 50K injection wells, triggered by an acknowledgement that some well injections were taking place in zones that had not been approved by the U.S. EPA.
- BP Prudhoe Bay Royalty (NYSE:BPT) files to delay its 10-K, citing a material weakness in its internal control over financial reporting as of year-end 2014.
- BPT says it expects to disclose in the 10-K that its disclosure controls and procedures and its internal control over financial reporting were not effective.
- Terrorism poses a greater risk to railways and the communities they pass through than derailments, and notifying public officials of shipments of dangerous goods may actually increase the risk of attacks, says Canadian Pacific Railway (NYSE:CP) CEO Hunter Harrison.
- The CEO says he is happy to divulge information about shipments but warns that it could fall into the wrong hands, pointing to Toronto and Chicago as examples of major cities that are at risk of rail-related accidents or terrorist attacks.
- Following the Lac-Mégantic oil train disaster in 2013, Canada introduced new regulations that require Class 1 railways, including CP and Canadian National Railway (NYSE:CNI), to provide a quarterly breakdown of the nature and volume of dangerous goods they transport through each municipality.
- Chart Industries (NASDAQ:GTLS) jumped 4.5% in today's trade after Piper Jaffray upgraded shares to Overweight from Neutral with a $45 price target, raised from $36, as valuation has tumbled due to weak oil prices and several guidance misses.
- China's announced price cut for natural gas this signals an effort to support natural gas vehicle sales despite cheap oil, the firm says, while adding that China could boost orders significantly for GTLS.
- The firm predicts GTLS will no longer trade near the bottom end of its four-year range thanks to rising investor expectations that estimates have finally bottomed, but admits "it is still difficult to predict what will happen in 2016."
- Environmental groups opposed to Royal Dutch Shell's (RDS.A, RDS.B) exploration plans in the Alaskan Arctic file a lawsuit challenging the ability of the Port of Seattle to lease out one of its terminals to serve as a home base for Shell's drilling fleet.
- The Sierra Club and others file the suit in a Washington state court, arguing the drilling operation was substantially different from the terminal's prior use, meaning an environmental review had to be done under state law.
- The complaint against the port and Shell contractor Foss Maritime also alleges that officials reached the arrangement without public disclosure and that the fleet could pollute the area's water.
- Western Gas Partners (NYSE:WES) agrees to acquire Anadarko Petroleum's (NYSE:APC) 50% interest in the Delaware Basin JV gathering system.
- WES paid no consideration at closing, but agreed to make a future payment in 2020 equal to 8x the average of the asset's 2018 and 2019 EBITDA, less capex incurred by WES from closing through Feb. 29, 2020; based on its current forecast of the asset's performance and capital needs, WES estimates a future payment of $283M.
- WES also provides its 2015 outlook, including expectations for adjusted EBITDA of $725M-$775M and capex of $675M-$745M; sees WES distribution growth of no less than 15%, and distribution growth for Western Gas Equity Partners (NYSE:WGP) of no less than 30%.
- Uranium Resources (URRE -13.3%) is sharply lower on plans for a securities purchase agreement with institutional investors to sell 4M common shares and warrants to purchase 2.2M common shares.
- The securities will be sold at $1.50/unit, with each unit consisting of one common share and a warrant to purchase 0.55 shares at an exercise price of $2.00/whole share.
- URRE plans to use the proceeds to fund ongoing business activities, including an $800K exploration drilling program in South Texas, reclamation work, capital expenditures, working capital and other general corporate purposes.
- Nabors Industries (NBR +0.4%) has cut 12% of its 29K employee workforce, including a 20% reduction in its U.S. drilling workforce, and could ax up to 15% of its workforce this year which would bring its layoffs to 4,350 jobs, CEO Anthony Petrello said during today's earnings conference call.
- "We are not counting on the ‘V,’” CEO Anthony Petrello said of a potential V-shaped - or rapid - recovery, warning that NBR is preparing for the possibility of a long-term downturn in oil prices.
- The CEO said the impacts of pricing and reduced activity "will be evident" in NBR's Q1 results, and "based on the current trajectory of the decline in our rig count, we expect financial results to decline further" in Q2.
- NBR's average utilization for its U.S. rigs has fallen to 78%, and its active U.S. rig count is down 32% from its peak last year at 138 rigs, largely indifferent to rig types and capabilities; CFO William Restrepo said the drop likely will hit 50%.
- Sanchez Energy (SN +6.5%) posts strong gains despite missing analyst estimates for Q4 earnings and revenues, as it reported quarterly records of $172M in Q4 revenues, up 33% Y/Y, and for average production at ~43.9K boe/day.
- Year-end 2014 estimated proved reserves totaled ~135M boe, up 6% from the end of Q3 and up 129% from ~59M boe at year-end 2013.
- Says it has 513 gross producing wells with 37 gross wells in various stages of completion, continuing to focus most of its resources on Catarina and planning to average 4 gross rigs over 2015.
- SN also says its recently revised $600M-$650M capex will be fully funded through operating cash flow and cash on hand, without utilizing any of its undrawn bank credit facility
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