Seeking Alpha
  • Friday, September 19, 2014

  • 6:25 PM
    • Patterson-UTI Energy (NASDAQ:PTEN) today announced the purchase of a fleet of pressure pumping assets from an unnamed privately held company in a move praised by analysts.
    • The acquisition includes 143,250 horsepower of fracking equipment and provides PTEN with two additional bases of operations and employees to support customer activity in the Eagle Ford and Haynesville shale plays.
    • The seller is believed to be Clearlake Capital's Platinum Energy, with an estimated $143M price.
    | Comment!
  • 5:54 PM
    • Investors apparently were underwhelmed by the $2.2B offer for Total's (NYSE:TOT) adhesive company from specialty chemicals company Arkema, even though TOT was offered ~1.5% of its market value for a business which contributes barely 0.5% of its EBITDA.
    • The offer underlines the value of consumer-facing brands lurking in the majors’ downstream chemicals divisions, and a Bloomberg analysis suggests TOT could take a cue from Sinopec's sale of a stake in its fuel retailing business; a TOT spinoff of its gas station business could bring in ~$12B.
    • While TOT has set a goal to raise crude and natural gas output substantially and to boost cash flow, analysts expect the company to cut its production and cash flow guidance at its Sept. 22 investor day.
    | Comment!
  • 5:21 PM
    • The latest speculation over Dresser-Rand (NYSE:DRC) now includes GE, which Financial Times reports is holding talks with DRC management about a possible takeover and is deciding whether to launch a bid.
    • If it does, it could be the second time GE has faced off against Siemens (OTCPK:SIEGY) over a multibillion-dollar deal in the past six months after competing over the takeover of the energy businesses of Alstom in June.
    • Siemens reportedly is in talks with DRC about a ~$80/share offer, and Swiss industrial pump maker Sulzer (OTC:SULZF) has said it is in talks with the U.S. oilfield equipment manufacturer about a possible merger.
    | Comment!
  • 4:51 PM
    • Exxon Mobil (NYSE:XOM) has put its Torrance, Calif., refinery up for sale, Reuters reports, making it the latest big oil company to consider exiting the state amid tougher environmental standards.
    • The 155K bbl/day refinery, in the south part of Los Angeles, is XOM's only refinery in California and the second smallest of its half-dozen U.S. plants.
    • XOM may have some trouble making a sale, however, because of the state's environmental regulations and since several refiners including Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Tesoro (NYSE:TSO) and Valero (NYSE:VLO) already operate two or more refineries there, limiting their ability to buy others.
    | 8 Comments
  • 3:40 PM
    • Linn Energy (LINE, LNCO) and ExxonMobil agreed to swap assets, with XOM receiving land in the west Texas Permian Basin and Linn getting land in California, which Credit Suisse views as an "incremental positive step" toward eventually resuming distribution growth.
    • While the deal was only a portion of the remaining Permian assets Line has been looking to trade or sell, it will be accretive in 2015 and will provide Linn with underdeveloped assets to develop over time in a capital-efficient manner, Credit Suisse says as it continues to watch for further steps that can strengthen the balance sheet and cash position to take distributions higher.
    | 3 Comments
  • 3:28 PM
    • Talisman Energy (TLM -2.2%) may still consider selling assets to Repsol (OTCQX:REPYY, OTCPK:REPYF) but "probably not of the significance people were expecting,” CEO Hal Kvisle tells Bloomberg.
    • Repsol reportedly dropped plans to buy all of TLM in August to instead weigh the purchase of some of the company’s shale assets.
    • Kvisle also says TLM may announce a partner to develop assets in the Duvernay shale formation in Alberta, which will require ~$20B of investment over two decades.
    | 1 Comment
  • 3:13 PM
    • PDC Energy (PDCE +0.5%) says it is settling securities class action lawsuits regarding the acquisition of certain partnerships in 2010 and 2011.
    • PDCE agrees to pay ~$11.5M in up-front cash and transfer primarily net profit interests, which would generate cash in future years, in a certain number of Wattenberg wells.
    • Topeka views the settlement positively, as it is significantly below the plaintiffs' claim of ~$175M and relieves the litigation overhang that has weighed on shares (Briefing.com).
    | 1 Comment
  • 2:59 PM
    • Mason Capital Management met with TransCanada (TRP +0.9%) shareholders to gauge interest in shaking up the company's corporate structure to boost its stock price, WSJ reports.
    • Mason Capital discussed splitting up TRP's pipeline and power generation assets, and placing at least some of these assets in an MLP but is said to have met with some shareholder skepticism.
    • Earlier today, TRP defended its corporate structure after reports suggested some U.S.-based activist hedge funds were looking at a possible breakup of the Canadian company and had contacted some large shareholders.
    | Comment!
  • 2:49 PM
    • Continental Resources (CLR -1.6%) is not enjoying a rebound from yesterday's big losses, even after various analysts come out in defense.
    • BofA reiterates its Buy rating, and says the selloff is not justified by any of the updated disclosure provided by management; the firm believes CLR is poised for a multi-year period of appreciation and outperformance vs. large-cap U.S. oil peers, and it likes CLR's new oil play in Oklahoma, a state CLR thinks is poised to surpass California and Alaska in oil production.
    • Global Hunter upgrades shares to Buy from Neutral and raises its target to $85 from $77, unmoved by investor concerns pertaining to the quality of the Bakken inventory and rising Bakken well costs (Briefing.com).
    | Comment!
  • 2:09 PM
    • Seadrill (SDRL -6.4%) says Tor Olav Troeim, who until recently was considered John Fredriksen's right-hand man, is quitting its board, sending shares sharply lower.
    • SDRL says Troeim will focus his efforts on developing liquefied natural gas shipping firm Golar LNG (GLNG +1.7%); it had been known that Troim’s position was set to change, but he was expected to remain a significant player at SDRL.
    • Troeim recently owned ~2.6M SDRL shares, but it is not known whether he would sell his stake; Fredriksen reaffirms his commitment to SDRL, in which he is the biggest investor with a 24% stake.
    • NADL -12%, SDLP -0.7%.
    | 25 Comments
  • 12:57 PM
    • Golar LNG (GLNG +1.3%) is reiterated with a Buy rating and a higher $110 stock price target, raised from $75, at BofA/Merrill, which says GLNG is benefiting from rising demand for its planned floating liquefied natural gas production units.
    • GLNG recently announced plans to build its first FLNG, and vice chairman Tor Olov Troim noted the first FLNG contract likely would be firmed in October, increasing GLNG's confidence to contract for a second FLNG and setting plans to build 10 in five years.
    • The firm believes demand continues to scale for future FLNG vessels, which will drive bottom line value and support GLNG's desire to maintain its first to market mover advantage in building FLNGs.
    | Comment!
  • 12:45 PM
    • Exxon Mobil (XOM +0.7%) confirms that it will stop drilling an exploratory well in Russia's Kara Sea in compliance with U.S. sanctions against Russia, saying it received a license from the U.S. Treasury Department to wind down operations.
    • The latest round of sanctions had called for the removal of U.S. workers on projects in the Russian Arctic by Sept. 26; it is not clear whether the license will allow XOM to stop drilling on its own schedule.
    • The drilling suspension does not immediately affect oil production for XOM or its Russian partner, Rosneft (OTC:RNFTF), since the project is aimed at deciding if future production would be economically feasible, but a potentially major source of new production could be denied if the suspension lasts.
    | 1 Comment
  • 12:26 PM
    • Renova, a holding company of Russian oligarch Victor Vekselberg, says it has bought a 4.99% stake in Dresser-Rand (DRC +10.2%), adding a twist to recent speculation on DRC's future.
    • Renova also holds a 33.19% stake in Swiss pump maker Sulzer (OTC:SULZF), which said earlier this week it was in talks with the U.S. company about a potential deal.
    • A new report says Siemens (OTCPK:SIEGY) is preparing a $6B-plus offer for DRC.
    • Meanwhile, DRC is downgraded to Sell at Gabelli, which says shares have run up too far on the M&A talk; also, a potential antitrust review, while likely not an obstacle, could mean a deal close would be 6-9 months out.
    | Comment!
  • 11:53 AM
    • Petrobras (PBR -2.2%) says it will sign a contract to build and lease a floating production ship for its Libra offshore project this month, the first FPSO to be used in the giant prospect.
    • CEO Maria das Gracas Foster says PBR had reduced the time required to construct its FPSOs in Brazil to an average of 42 weeks from 60 weeks in 2005; she says the world average is 39 weeks.
    • The ships reduce the need for expensive and technically challenging deepwater pipelines to move oil to shore.
    | Comment!
  • 11:26 AM
    • Miller Energy Resources (MILL -2.3%) is lower after a negative article on the StreetSweeper blog suggests the E&P company is likely worth no more than $0.45/share.
    • Based upon the low price MILL intends to pay for some additional reserves in Alaska, the company should be worth a "paltry" $20M, according to calculations by the site's Melissa Davis.
    • Talk of transforming the company into an MLP is "ridiculous... As a bleeding oil company that generated a mere $71M in revenue last year, Miller bears no resemblance to a normal MLP at all," according to Davis.
    | Comment!
  • 10:29 AM
    • TransCanada (TRP +4.8%) is sharply higher in early trading as speculation abounds that U.S. activist hedge funds - perhaps including Dan Loeb's Third Point, which has amassed a position in recent months - are reviewing the company for a possible breakup.
    • Responding to recent trading activity, TRP defends its corporate structure as the best way to maximize profit and dividend payouts to shareholders
    • TRP also remains committed to plans to sell the rest of its U.S. natural gas pipeline assets to its TC PipeLines (TCP +4%) MLP over the coming years; it expects the assets to generate nearly $500M EBITDA in 2016 and beyond.
    | Comment!
  • 10:15 AM
    • Covanta (CVA +0.4%) says it has reached agreement with the city of Dublin, Ireland, to build, own and operate a new 600K metric tons/year, 58 MW energy-from-waste facility.
    • The project will be funded by €375M in third party non-recourse project financing and €125M in project equity invested by CVA.
    • CVA says the facility will generate clean renewable energy to supply 80K homes upon commencement of operations, scheduled for late 2017.
    | 1 Comment
  • 9:47 AM
    • Based principally on July production, the $0.114097 distribution - payable on Oct. 15 to holders of record on Sept. 30 - makes for an annualized yield of 7.2%, based on SJT's current price of $19.09.
    • Gas production in July was 2.584 Mcf with an average price of $4.51 vs. $4.48 for June.
    • Source: Press Release
    | Comment!
  • 9:14 AM
    • Eagle Rock Energy Partners (NASDAQ:EROC) -4.5% premarket after filing for an offering of ~53.3M common units representing limited partner interests by selling unitholders.
    • EROC touched new 52-week lows earlier this week.
    | 6 Comments
  • 8:42 AM
    • Chevron (NYSE:CVX) says it has hired an investment bank to identify potential buyers for its 54K bbl/day Kapolei refinery on the Hawaiian island of Oahu.
    • The sale of the refinery - one of CVX's smallest - is part of a larger plan to divest $10B worth of assets over the next three years.
    • Closing the plant would leave Hawaii with a single 93.5K bbl/day refinery that Par Petroleum (NYSEMKT:PARR) bought from Tesoro last year.
    | 1 Comment
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