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Aug. 25, 2015, 6:29 PM
- The global market selloff and plunging oil prices have increased fears that some of this year’s largest takeover deals are at risk of falling apart, including Royal Dutch Shell’s (RDS.A, RDS.B) ~$70B offer for BG Group (OTCPK:BRGXF, OTCQX:BRGYY), Financial Times reports.
- Over the past week, the gap between the agreed price of several takeovers and the market price of the target companies’ shares has widened, which usually is interpreted as a signal of declining confidence that the transaction will complete as planned.
- Bets on the outcome of Shell’s deal represented the biggest trades being made by so-called event-driven hedge funds in Europe, at least one broker tells FT.
- Another deal spread to reach its widest level this week was that between Halliburton’s (NYSE:HAL) $35B offer for Baker Hughes (NYSE:BHI) and the target group’s market value.
Aug. 13, 2015, 7:27 PM
- Oil companies are bracing for "lower for longer” prices as a global supply glut persists, dragging U.S. crude to the lowest close since March 2009 at just above $42/bbl.
- More capitulation notes are out; Oppenheimer's Fadel Gheit wrote today that the "new normal" for oil in a recovery would be $65-$75, and that "the vast majority of oil companies are living beyond their means, with operating cash flow falling short of capital investments and dividend... Unless oil prices rebound significantly above future strip prices, oil stocks could sink further, as takeover premiums shrink with potential sellers significantly outnumbering potential buyers."
- The world’s biggest producers will need to trim investments by another $26B, Jefferies believes; capital spending will have to fall 10% next year, according to Banco Santander.
- CNBC's Bob Pisani says when energy stocks staged a brief bounce recently, investors repeated a frequent mistake: They tried to buy oil stocks ahead of a recovery in crude oil, instead of the other way around.
- The result today was heavy losses for many of the sector's big names: CHK -6.6%, MRO -5.4%, COP -2.8%, APC -2.4%, SWN -4.2%, RRC -4.4%, RIG -6.5%, DVN -3.9%, APA -2.6%, BHI -2.9%, CAM -3.5%.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXI, FIF, PXJ, NDP, RYE, FXN, DDG
Aug. 10, 2015, 4:48 PM
- A group of companies that say they are owed millions from Miller Energy’s (NYSE:MILL) Alaska subsidiary is trying to push the unit into bankruptcy after the SEC last week charged the company with accounting fraud.
- Creditors of MILL’s Cook Inlet Energy subsidiary including Baker Hughes (NYSE:BHI) and Schlumberger (NYSE:SLB) filed an involuntary chapter 11 petition last Thursday against MILL in U.S. Bankruptcy Court in Anchorage, claiming the Alaska subsidiary owes them ~$2.8M.
- MILL plans to fight the request and restructure its debt without bankruptcy, CEO Carl Giesler tells WSJ, and is attempting to convince BHI and SLB to pull the petition.
Aug. 3, 2015, 3:16 AM
- Although it still looks shaky, Halliburton (NYSE:HAL) has received a request from the European Commission for additional information about its proposed $35B merger with rival Baker Hughes (NYSE:BHI).
- Halliburton has also responded to a second request made by U.S. antitrust officials considering whether to approve the merger.
- Should the deal go through, the combined company would overtake Schlumberger as the world's No. 1 oilfield services provider.
- Previously: Report: Halliburton facing antitrust scrutiny in planned Baker Hughes deal (Jul. 22 2015)
Jul. 27, 2015, 10:18 AM
- Halliburton (HAL -1.5%) disclosed after last Friday's close it has cut nearly 14K jobs and Baker Hughes (BHI -1%) has laid off 13K employees since they began trimming their headcounts last year, several thousand more jobs than the companies had anticipated in April.
- HAL's latest layoff estimate exceeds its April figure by 5K jobs, bringing its cuts up to 16% of its workforce from its peak of more than 80K last year, while BHI's estimate is up by 2.5K jobs, up to 21% of its headcount of 62K at the end of last year.
- The world’s top four oilfield service companies - HAL, BHI, Schlumberger (SLB -0.7%) and Weatherford (WFT -1.3%) - have either cut or plan to cut 58K jobs this year in response to the collapse of crude prices.
Jul. 23, 2015, 12:02 PM
- Baker Hughes (NYSE:BHI) declares $0.17/share quarterly dividend, in line with previous.
- Forward yield 1.16%
- Payable Sept. 23; for shareholders of record Sept. 2; ex-div Aug. 31.
Jul. 23, 2015, 8:42 AM
- Analysts at Morgan Stanley and Deutsche Bank largely dismiss yesterday's report on antitrust hurdles in Halliburton's (NYSE:HAL) proposed takeover of Baker Hughes (NYSE:BHI) as mostly noise.
- Morgan Stanley analyst Ole Slorer says he spoke with an antitrust expert and concludes the article merely summarized well known facts, saying HAL's "exceptionally diligent" handling of the transaction has minimized risks.
- Deutsche Bank's Mike Urban says issues raised in the article have been a "widespread investor concern for the past couple of months," and continues to believe the deal ultimately will close.
- Slanley raises HAL's price target to $62 from $60 and BHI to $88 from $86, maintaining Overweight ratings on both stocks; Deutsche Bank keeps a Buy rating on HAL with a $68 price target.
Jul. 22, 2015, 12:51 PM
- Halliburton’s (HAL -3.2%) takeover of Baker Hughes (BHI -7.6%) is facing resistance from U.S. Justice Department officials who are concerned the deal could hurt competition, Bloomberg reports, sending shares tumbling.
- Although HAL has proposed selling some assets to other companies, antitrust enforcers reportedly are not convinced its plan would restore sufficient competition.
- The DoJ's antitrust division is positioned to carry out a legal challenge if it decides to try to halt the deal, and has assigned veteran litigator John Read to oversee the review, according to the report.
Jul. 21, 2015, 10:58 AM
- Regulatory approval for Halliburton's (HAL +4.4%) proposed acquisition of Baker Hughes (BHI +3.2%) is a "high probability event," and HAL's buyback potential post-acquisition looks significant, Citigroup's Scott Gruber says.
- The analyst estimates $5.00 pro forma EPS for HAL in 2018, suggesting 90% upside potential for shares over the next three years, also noting that applying a 16x earnings multiple yields a $78 share price.
- Gruber keeps a Buy rating on HAL with a $54 price target.
Jul. 21, 2015, 9:17 AM
- Baker Hughes (NYSE:BHI) -0.7% premarket after posting a larger than expected Q2 loss and a 33% Y/Y drop in revenues amid tumbling oil prices, and it expects to see further declines for the rest of the year.
- "In North America, we don't anticipate activity to increase while commodity prices remain depressed," says CEO Martin Craighead, who also says seasonal activity in Canada likely will be offset by a decline in the U.S., while international rig counts will continue to decline.
- Q2 revenue from North America, which accounted for nearly 38% of BHI's total revenue, fell 47% to $1.5B; overall revenue fell 33% to $3.97B but beat analyst expectations for $3.78B.
- Craighead says cost-cutting made it possible for BHI have decremental margins of 35% compared to the previous year, which he says was a significant improvement from the 2009 downturn in oil prices.
Jul. 21, 2015, 8:02 AM
- Baker Hughes (NYSE:BHI): Q2 EPS of -$0.14 misses by $0.01.
- Revenue of $3.97B (-33.2% Y/Y) beats by $190M.
Jul. 20, 2015, 5:30 PM
Jul. 20, 2015, 8:23 AM
- Halliburton (NYSE:HAL) +3.1% premarket after beating Q2 earnings and revenue expectations despite a 93% Y/Y profit drop.
- HAL says Q2 revenue of $5.9B fell 16% Q/Q while outperforming a 26% drop in the worldwide rig count; operating income fell due to lower activity levels for all product lines, exacerbated by pricing declines, primarily in North America.
- Q2 revenue In North America fell 25% Q/Q, significantly better than the 40% decline in average rig count; pricing erosion continued during the quarter, but decremental margins were less severe than previous downturns, which HAL says shows its cost reduction initiatives are helping to offset current market challenges.
- HAL says it has received the initial rounds of bids on previously announced sales related to the Baker Hughes (NYSE:BHI) acquisition, is "pleased with the prices and level of interest," remains "fully committed" to closing the deal, and expects to achieve cost synergies of nearly $2B.
Jul. 13, 2015, 2:55 PM
- Analysts continue to believe the merger of Halliburton (HAL +1.1%) and Baker Hughes (BHI +0.6%) will still go through, after the two companies agreed to extend the period for the Department of Justice review of the deal to the later of Nov. 25, 2015 or 90 days.
- Oppenheimer's James Schumm says the extension "does not change our thinking or have any impact on our estimates" for a year-end 2015 closing; beyond the DoJ, HAL and BHI still need approval from other international regulators, notably in the European Union, and Schumm expects many to "piggyback" on the DoJ decision.
- Sterne Agee analysts also believe the deal will close around year-end and expect the deal spread to close gradually over the next several months; the firm maintains a Buy rating on both stocks but prefers BHI as a less expensive way to own HAL longer term.
Jul. 10, 2015, 5:25 PM
- Halliburton (NYSE:HAL) and Baker Hughes (NYSE:BHI) say they agree to extend until at least Nov. 25 the Department of Justice's review period for the merger of the oilfield services companies.
- HAL also says it has proposed plans with various competition enforcement authorities around the world to divest more businesses than had been previously announced.
- The companies say they now expect the $35B acquisition to close by Dec. 1.
Jul. 6, 2015, 7:00 AM| Jul. 6, 2015, 7:00 AM | 1 Comment
Baker Hughes Inc operates in the oilfield services industry. It provides products and services for drilling and evaluation of oil and gas wells, completion and production of oil and gas wells, fluids and chemicals and reservoir technology.
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