Can Inefficient Markets Work To E.ON's Advantage?
Stephen Simpson, CFA
Stephen Simpson, CFA
E.ON Still Trying To Find A New Way Forward
Stephen Simpson, CFA
Stephen Simpson, CFA
Wed, Jun. 8, 4:59 PM
- The Gazprom-led (OTCPK:OGZPY) consortium has issued the first major tender for its $11B Nord Stream-2 natural gas pipeline project, which could double supplies of Russian pipeline gas across the Baltic Sea to Western Europe, WSJ reports.
- The estimated $1B-plus tender for the pipe-laying contract has been sent to interested contractors, and bids will be evaluated by the consortium on June 13, according to the report.
- The JV building the project is 51% owned by Gazprom, while Royal Dutch Shell (RDS.A, RDS.B), E.ON (OTCQX:EONGY), OMV (OTC:OMVJF) and BASF/Wintershall (OTCQX:BASFY) each own 10% and Engie (OTCPK:ENGIY) has a 9% stake.
- The existing Nord Stream pipeline has been criticized because it allows Russia to circumvent transit countries, such as Ukraine and Poland; the European Union is skeptical about the new project on antitrust grounds because Gazprom would own all the gas to be transported through the infrastructure.
Wed, May 11, 10:48 AM
- E.ON (OTCQX:EONGY) falls more than 7% in German trading after the utility warns it may have to pay as much as €10B ($11.4B) into a state fund to manage nuclear waste.
- CFO Michael Sen says E.ON is working on how to fund Germany’s exit from nuclear energy, including the possibility of accessing capital markets, and estimates a €10B payment will be needed under a proposal by a government appointed commission; while the company would be able to cancel ~€8B of provisions for waste storage, the rest would reduce equity and weigh on its BBB+ rating, the CFO says.
- E.ON reported a 30% Q1 increase in underlying net income of €1.31B on 12% lower revenue amid a slide in power prices.
Wed, May 11, 8:16 AM
Fri, May 6, 5:03 PM
- The U.S. increasingly views the Nord Stream-2 gas pipeline project, which would double the volume of gas shipped directly from Russia to Germany, as a threat to national security, according to a senior U.S. energy envoy.
- Many European Union governments complain that the project increases dependency on Russia, which supplies around a third of the EU's gas.
- The Nord Stream-2 consortium, which includes Gazprom (OTCPK:OGZPY), E.ON (OTCQX:EONGY), Royal Dutch Shell (RDS.A, RDS.B), Engie (OTCPK:ENGIY) and others, says the project is purely commercial and that Russian pipeline gas is cheaper than liquefied natural gas.
- The envoy - at a meeting in Washington this week of the U.S.-EU energy council - dismisses the argument, saying it does not make commercial sense for Europe to "double down on physical infrastructure that is not accessible to new markets."
Wed, Mar. 9, 5:12 AM
- German utility E.ON (OTCQX:EONGY) swung to a record full-year net loss, hit by an impairment charges on its conventional power operations, and said it would review its investment and dividend plans because of worsening industry conditions.
- The company's net loss for the year came to €7B ($7.71B), more than twice the loss of €3.16B for 2014.
- E.ON also noted that chairman Werner Wenning will step down on June 8, and Merck's Karl-Ludwig Kley has been nominated to fill the position.
Wed, Jan. 13, 7:52 AM
- E.ON (OTCQX:EONGY) reportedly is in advanced talks to sell its U.K. North Sea assets to Premier Oil (OTC:PMOIF), Dow Jones reports.
- Shares of Premier Oil are suspended on the London Stock Exchange ahead of an announcement of a potential asset acquisition.
- The German utility has launched a restructuring strategy to spin out conventional operations to a new company, and plans to focus on renewable energy while retaining its German nuclear operations within the parent company.
Mon, Jan. 4, 10:47 AM
- German utility E.ON (OTCQX:EONGY) says it separated its coal, gas and hydro power plants as well as its energy trading business effective Jan. 1, putting it on track to list a majority of its new Uniper business in H2 of this year.
- The plan, which still needs approval from shareholders at a June meeting, hit a snag last year when E.ON had to take back the German nuclear plants it originally wanted to move to Uniper.
- Uniper has 40 GW of power generation capacity and is led by Klaus Schaefer, who served as E.ON's CFO until mid-2015.
Dec. 1, 2015, 8:13 AM
- RWE (OTCPK:RWEOY) announces plans to spin off its renewable energy, grids and retail operations into a new publicly traded entity by the end of next year.
- RWE says it will list 10% of the spinoff in the form of a capital increase, subject to approval at a Dec. 11 board meeting, and additional stakes may be sold at the same time or at a later date.
- The move comes after RWE had long shunned the strategy of its peer E.ON (OTCQX:EONGY), which will split its conventional power, trading and production operations into a new company next year.
- RWE shares trade as much as 8.5% higher in Frankfurt, but the stock is the biggest decliner on the DAX Index this year, falling 55%.
Nov. 11, 2015, 9:49 AM
- E.ON (OTCQX:EONGY) says it booked a €8.3B impairment charge, mostly due to price assumptions and asset revaluations, amid a net loss of €7.25B in its Q3, but will stick to its plans to keep its €0.50/share dividend unchanged for the year.
- "The dividend is a clear signal to the owners of our company that we have the wherewithal and the strength to pay out a dividend, unlike some others in the industry," CFO Michael Sen says.
- The CFO says he is not ruling out a Q4 charge of ~€500M but does not expect further writedowns in the quarters thereafter; last year, E.ON booked total impairments of about €5B.
- E.ON also reaffirms its forecast for FY 2015, expecting EBITDA of €7B-€7.6B and underlying net income of €1.4B-€1.8B.
Nov. 5, 2015, 7:58 AM
- Enbridge (NYSE:ENB) agrees to acquire a 24.9% stake in E.ON's (OTCQX:EONGY) €1.9B ($2.1B) offshore Rampion wind project Rampion in the U.K. for C$750M (US$570M), and will manage construction of the project.
- E.ON will remain the controlling shareholder of the 400 MW project with a 50.1% stake, with the remaining stake being held by the UK Green Investment Bank.
- ENB and E.ON already are partners in the Magic Valley wind farm in Texas and the Wildcat wind farm in Indiana.
Oct. 16, 2015, 11:30 AM
- The Nord Stream 2 natural gas pipeline consortium has begun the process of hiring contractors to build the $11B project, WSJ reports.
- The project, which will double supplies of Russian pipeline gas across the Baltic Sea to western Europe, is 51% owned by Russia’s Gazprom (OTCPK:OGZPY), with Germany’s E.ON (OTCQX:EONGY) and U.K.'s Royal Dutch Shell (RDS.A, RDS.B) among the other partners.
- Nord Stream 2 is planned to run alongside existing Nord Stream 1 pipelines, a project which has been criticized because it allows Russian gas to circumvent transit countries such as Ukraine and Poland.
Oct. 14, 2015, 7:43 AM
- German energy company E.ON (OTCQX:EONGY) agrees to sell its entire North Sea E&P division to a company controlled by Russian billionaire Mikhail Fridman in a deal valued at $1.6B.
- E.ON holds ~30 licenses in Norway but most are exploration assets and just a few are in production, with none actually operated by E.ON; its major producing fields include Njord, operated by Statoil, and Skarv, operated by BP.
- E.ON says its U.K. E&P business remains under review, adding it would "provide an update in due course."
Oct. 12, 2015, 9:14 AM
- Shares in E.ON (OTCQX:EONGY) and RWE (OTCPK:RWEOY) surge in European trading after a government review concludes German utilities have set aside enough money to decommission their nuclear plants.
- The results remove concerns that utilities may need to raise additional funding to pay for the dismantling process as well as the storage of nuclear waste, which had led investors to sell off German utility stocks in recent weeks.
- Several brokerages, including Deutsche Bank, Credit Suisse and Societe Generale, either upgraded their ratings or target prices on the utilities.
Oct. 6, 2015, 5:22 PM
- Russian billionaire Mikhail Fridman's LetterOne fund is in advanced talks to acquire German utility E.ON's (OTCQX:EONGY) Norwegian North Sea assets for more than $1B, Financial Times reports.
- The potential deal would signal a renewed push by the Russian oligarch to expand his P-E fund's oil and gas portfolio after being forced to sell his British North Sea assets because of U.S. and European sanctions.
- E.ON owns a 28% stake in the BP-operated Skarv field, which is expected to reach peak output of 165K boe/day, as well as 30% and 17.5% stakes in two Statoil-operated (NYSE:STO) fields.
- LetterOne, whose energy fund is run by former BP CEO John Browne, recently asked the U.K. to delay an October deadline to sell its North Sea assets after a first round of offers came in well short of expectations.
Sep. 11, 2015, 12:18 PM
- Eastern European nations set to lose billions of dollars in natural gas transit fees criticize the latest agreement between western European companies including Royal Dutch Shell (RDS.A, RDS.B), Germany’s EON (OTCQX:EONGY) to Paris-based Engie (OTCPK:ENGIY) for a pipeline deal with Russia's (OTCPK:OGZPY) that will circumvent Ukraine.
- The companies signed an agreement last week to expand Nord Stream by 55B cm/year, which would double its capacity to nearly 30% of current EU demand; Ukraine is set to lose $2B/year in transit fees while Slovakia could lose hundreds of millions of euros.
- Russia now ships about one third of its Europe-bound gas via Ukraine, down from two-thirds in 2011 when the Nord Stream pipeline under the Baltic Sea started supplying Germany directly; Nord Stream-2 is set to start deliveries to Europe in 2019, when the current agreement between Russia and Ukraine on gas transit ends.
Sep. 10, 2015, 8:55 AM
- German utility E.ON (OTCQX:EONGY) abandons plans to spin off its German nuclear power plants, dealing a blow to its restructuring plans and sending shares to 20-year lows.
- E.ON expects to book impairment costs this quarter of as much as €9B ($10B), triggering a multi-billion euro loss.
- The company had planned to spin nuclear operations off next year into Uniper, a company being established to operate conventional power, trading, exploration and production.
- E.ON says the spinoff would go ahead without the German nuclear plants; including the plants no longer makes sense in light of government proposals for legal changes that make utilities permanently liable for the costs of nuclear waste and plant decommissioning.
E.ON SE with its headquarter in Germany is a global provider of specialized energy solutions. Five global units are responsible for Generation, Renewables, Global Commodities, Exploration & Production, and Technology. Nine regional units manage our operating business in Europe. E.ON generated... More
Industry: Water Utilities
Other News & PR