Tuesday, August 26, 2014
11:50 PM| Comment!
- Penn West Energy (NYSE:PWE) says the audit committee's review of accounting practices confirms that the company's reserves volumes and values are not impacted.
- PWE says the accounting practices under review have no effect on the independent estimates of the volumes of its proved and proved plus probable crude oil, natural gas and natural gas liquids reserves and the NPVs of the future net revenues of such reserves as reported at year-end 2013 and 2012.
6:30 PM| Comment!
- Repsol's (OTCPK:REPYF, OTCQX:REPYY) talks to buy oil and natural gas assets from Talisman Energy (NYSE:TLM) have stalled, WSJ reports, in a setback for both companies as they try to reposition themselves.
- TLM's stock price has been helped this summer by the talks, while Repsol has said it wants to better balance its production growth potential and risk by strengthening its business in politically stable, developed countries.
- TLM holds attractive assets in the gas-rich Marcellus and Eagle Ford shale formations, but also less desirable assets in the North Sea which are considered a source of "intractable inertia" and a major drag on TLM's earnings.
5:09 PM| 2 Comments
- WPX Energy (NYSE:WPX) agrees to jointly develop its Trail Ridge properties in western Colorado's Piceance Basin with G2X Energy subsidiary TRDC.
- WPX receives $40M for 49% of its working interest in ~100 proved developed producing wells representing 27B cu. ft. of proved developed reserves and 46B cu. ft. of proved undeveloped reserves.
- WPX will pay 28% of development costs and receive 51% of the production and reserves until TRDC has completed a $170M funding commitment; WPX will remain as operator.
- Antero Resources (NYSE:AR) raises its FY 2014 production guidance to 990M-1.01B cfe/day, up 5% from the midpoint of previously announced guidance.
- AR estimates H2 production will average 1.16B cfe/day, up 9% from the midpoint of previously estimated H2 production; also, AR raises its 2015 production target to 1.5B cfe/day from 1.4B previously and raises its 2016 target to 2.2B cfe/day from a previous 2.1B.
- Also increases its 2014 capital budget to $3.7B, which includes $2.4B for drilling and completion, and anticipates averaging 21 rigs in 2015 with plans to maintain a stable drilling and completion budget of $2.3B-$2.5B.
- Trina Solar (TSL -8.1%) shares are tumbling after the company reported in-line Q2 earnings but lower than expected revenue, dragging down other Chinese solar companies including Yingli Green (YGE -5.8%), ReneSola (SOL -1.3%), but Canadian Solar (CSIQ +0.1%) and Jinko Solar (JKS +0.6%) are slightly higher.
- TSL CEO Jifan Gao said in today's earnings call that the company continues to see "robust" demand for its products in the U.S., prompting research firm Cowen to say that today's decline in TSL's stock was overdone; TSL is suffering from capacity constraints and is adding capacity, according to the firm, which keeps an Outperform rating on the shares.
- Cash earned from operations by 25 leading North American E&P companies is expected in aggregate to exceed their capital spending next year for the first time since 2008, according to a Financial Times analysis.
- Shale companies' finances have improved rapidly as a result of a shift by many away from natural gas towards more lucrative oil production and a pick-up in natural gas prices after they fell to 10-year lows in 2012.
- Analysts’ consensus forecasts now indicate that the leading shale companies’ operating cash flows in 2015 will show an excess of ~$2.4B over their capital spending vs. a shortfall of $32.2B in 2012 and $8.8B last year.
- Case in point: Chesapeake Energy (NYSE:CHK) in 2012 had capital spending almost $12B ahead of its cash flow from operations, but this year and next it is expected to be able to cover its spending almost entirely from its income.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, IEO, GASX, PXE, PXI, PXJ, FENY, RYE, FXN, DDG
- Petrobras (PBR +1.6%) claws to new 52-week highs after confirming it found natural gas and light oil at its new Moita Bonita-3 well in the ocean ~50 miles off Brazil's Sergipe coast; PBR has 100% ownership of the ultra-deepwater well and also is its operator.
- Shares also have been helped by hopes for Pres. Rousseff's ouster in Brazil's Oct. 5 presidential election, as candidate Marina Silva seems to be gaining momentum following the death of running mate Eduardo Campos.
- Separately, PBR says it signed a three-year, technology cooperation agreement with Foro Energy to research and develop a high-powered laser drilling system.
- The legal dispute over the proposed path for the Keystone XL pipeline in Nebraska is made to order for Pres. Obama in a congressional election year, giving him leeway to hold off on deciding the fate of the project until after November.
- Next Friday, the Nebraska Supreme Court will begin hearing oral arguments over whether a 2012 law giving Nebraska's governor authority to approve the state’s portion of the Canada-to-Texas oil sands pipeline violates the state constitution.
- If the Court upholds a lower court ruling favoring landowners, TransCanada (NYSE:TRP) would have to convince the state’s Public Service Commission to approve the proposed route, which could take six to nine months.
- Transocean Partners (RIGP +3.1%) is started with an Overweight rating and a $31 price target at Morgan Stanley. representing a total potential return of ~35%.
- The firm sees a robust distribution growth story, with an estimated ~25% compound annual growth rate through 2016, as a result of Transocean's (RIG +1.7%) strong motivation to drop down assets.
- Statoil (STO +0.6%) says its activity level is at its highest ever, with 100-plus projects in planning or execution, and says it aims to maintain its current oil and gas production in coming years.
- STO is heading 61 projects in the execution phase, with capex totaling 205B kroner ($33.2B), a bill that will be shared with its project partners; the portfolio also includes eight mega projects, defined as exceeding a cost of 12B kroner or being highly complicated.
- STO's 2013 oil and gas output totaled 1.94M bbl/day, up 5.5% from 2007, but targets flat output in Norway in the coming years as mature giant fields are fading, so it plans to make up the difference by increasing its international output.
- Norway is open to Rosneft (OTC:RNFTF) deepening its involvement in the country, as western Europe’s largest oil and natural gas producer seeks to counter a slowdown in investments and output.
- Norway is struggling to sustain oil production which has been cut by more than half since its 2000 peak as producers including Statoil (NYSE:STO) and Royal Dutch Shell (RDS.A, RDS.B) have postponed projects and cut planned investments.
- Rosneft in partnership with Statoil is currently drilling its first well in Norway's Barents Sea, has signed deals to explore blocks in Russia’s Barents Sea and the Sea of Okhotsk, and plans pilot projects for heavy oil in Siberia and shale oil in the Samara region.
- Norway's energy minister says European sanctions against Russia will not be relevant for foreign companies’ participation in petroleum activities or licensing rounds offshore Norway.
- Sinopec (SNP +0.4%) continues to move higher after yesterday's Q2 earnings beat and news of 37 bidders vying for a 30% stake in SNP's profitable retail business, but analysts are turning cautious on the stock.
- UBS removes SNP from its Key Call list (though it maintains a Buy rating), noting the stock has climbed to its highest level since Jan. 2008 even though there has been little change in the consensus earnings outlook.
- J.P. Morgan is concerned about the lack of comments on timing for the retail divestment, and it sees more risk of disappointment to existing and further corporate reforms with an increasingly fragile near-term refining outlook.
- Consol Energy (CNX +1.7%) makes official its MLP plans for its midstream assets in the Marcellus Shale, as it and joint venture partner Noble Energy (NBL +1.2%) files with the SEC for an IPO in what will be known as Cone Midstream Partners.
- The companies say they hope to finish the IPO by early Q4, and Cone Midstream will trade on the NYSE under the ticker CNNX.
- The number of shares to be offered and the price have not been determined, but FBR Capital estimates CNNX could be valued at ~$1B (Briefing.com).
- NuVista Energy (OTC:NUVSF) agrees to buy additional land in the Montney play in the Wapiti region of Alberta for C$35M, expanding its land position to more than 220 gross sections in the area.
- National Bank calls the purchase “another positive stride” for the oil and gas company.
- NuVista also announces plans to sell up to 2.4M shares to raise C$29.4M.
- Golar LNG (GLNG +3.3%) moves higher after reporting better than expected Q2 revenues and noting that recent weeks have shown a moderate improvement in chartering demand.
- GLNG says rates took a downward turn near the end of the quarter despite a flurry of fixtures with steam vessels fixing at a daily average of $48K during June and TFDEs averaging of $61K; reports wide variations in rates depending on delivery and redelivery positioning requirements.
- As fundamentals remain challenging, GLNG expects H2 operating results to be generally in line with H1, with Q3 results likely to show some minor improvement over Q2.
- Cimarex Energy (XEC +0.9%) says it signed various purchase and sale agreements to sell $326M of oil and gas assets.
- Included is the sale of 4,200 net acres and associated wells in the Texas Midland Basin for $242M, with an additional $84M of non-core properties in the Mid-Continent and Gulf Coast also being sold.
- In total, the properties contain ~47B cfe of proved developed reserves (63% natural gas) and production of ~11M cfe/day.
- Topeka Capital edges its XEC price target higher to $153 from $150, as the sale allows the company to redeploy additional proceeds to its high rate-of-return projects in the Delaware Basin and Cana-Woodford (Briefing.com).