Tuesday, November 25, 2014
- Total (TOT -1.2%) will face trial in France over claims of corruption related to Iranian contracts dating from the 1990s and early 2000s, the Paris prosecutor’s office says.
- TOT agreed last year to pay $398M to settle U.S. criminal and civil allegations that it had paid ~$60M in bribes to win oil and gas contracts in Iran; at the time, the Paris prosecutor recommended that TOT and its now-deceased CEO Christophe de Margerie be brought to trial.
- The company is now facing trial in France for similar issues; TOT last year said it hoped the U.S. fine would draw a line under the issue and that it had “not committed any offense under applicable French law."
- Nuverra Environmental Solutions (NES +11.3%) agrees to provide water-related pipeline services in North Dakota for Exxon Mobil (NYSE:XOM) subsidiary XTO Energy.
- NES will build the 150-mile McKenzie County pipeline network to provide produced water gathering and disposal services and fresh water delivery as part of a long-term, fee-based gathering agreement.
- The network is projected to cost $125M-$150M, with completion expected by Q4 2015.
- Crude oil prices tumble, with West Texas crude hitting session lows and slipping below $75/bbl, on news that meetings among Saudi Arabia, Venezuela, Mexico and Russia oil minister failed to produce any agreements for oil production cuts.
- January WTI crude now -1.7% at $74.49/bbl.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, CRUD, USL, UWTI, DWTI, DNO, SZO, OLO, OLEM, TWTI
- A federal appeals court says Chesapeake Energy (CHK -1.1%) had no right to redeem $1.3B of notes early because it waited too long to tell investors of its plans, reversing a 2013 ruling by a district court.
- The 2-1 decision agrees with Bank of New York Mellon, the notes' trustee, that the notice from CHK to redeem its 6.775% notes maturing in 2019 was untimely, referring the case back to the district court.
- C&J Energy Services (CJES +3.6%) says it plans to appeal a Delaware court ruling that requires it to solicit offers from other buyers for 30 days before it can merge with a unit of Nabors Industries (NBR -0.5%).
- NBR announced in June that it would merge its completion and production business with CJES and receive $2.86B in cash and stock; the deal is structured as a Reverse Morris Trust, a transaction that allows a parent company to sell its unit in a tax-efficient manner.
- But CJES shares are higher, as investor appetite for the deal had been waning given the integration risk and less favorable industry outlook.
- Petrobras (PBR +4.1%) says it has received a subpoena from the SEC asking for documents related to an unspecified investigation it is pursuing, as the domestic probe of the company spreads beyond Brazil's borders.
- PBR also is under investigation by a U.S. Department of Justice unit that looks into potential violations of the U.S. Foreign Corrupt Practices Act, a source tells Reuters.
- Prosecutors in Brazil allege the company systematically overpaid for work by contractors and that the excess funds were then illegally funneled to political parties, including that of Pres. Rousseff.
- Nevertheless, PBR opens higher as Citigroup upgrades shares to Buy from Neutral.
- SinoCoking Coal (NASDAQ:SCOK) +23.6% premarket after announcing that its Pingdingshan above-ground facility for the conversion of carbon dioxide into clean-burning syngas is operating a full capacity and has achieved its initial production target of 25K cm/hour.
- SCOK says the facility is generating gross revenues of ~$83K/day, based on the current price of $0.139/cm for syngas, and expects gross profit margins of 45%-50%.
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