Hess Corp.: Caught In Deep Water During The Storm
Hess Corporation: Spectacular Midstream Valuation
Sun, May 1, 1:08 PM
- A new study finds that fracking of U.S. shale fields is causing a global surge in ethane emissions. Ethane is known to contribute to global warming and dangerous air pollution.
- Global ethane levels had been falling since the 1980s, but in 2010 a sensor in Europe picked up a surprise increase. U.S. shale fracking was thought to be the culprit. More recently, a single field in the North Dakota and Montana Bakken Formation has been found to be emitting 2% of the worldwide total.
- "Two percent might not sound like a lot, but the emissions we observed in this single region are 10 to 100 times larger than reported in inventories. They directly impact air quality across North America. And they're sufficient to explain much of the global shift in ethane concentrations," said Eric Kort, the first author of the new study published in Geophysical Research Letters.
- Ethane emissions from other U.S. fields, especially the Texas Eagle Ford, likely contributed as well, the research team says. The findings illustrate the key role of shale oil and gas production in rising ethane levels.
- Baaken stocks include: CLR, ERF, EOG, HK, HES, MRO, OAS, QEP, SM, STO, TPLM, WLL
- Eagle Ford stocks include: APC, APA, COG, CRZO, CHK, COP, ECA, XOM, MUR, PXD
- See the full study here »
Thu, Apr. 28, 11:58 AM
- Hess (HES -0.5%) is downgraded to Neutral from Outperform with a $65 price target at Credit Suisse, which the firm says is essentially a "pause" call after a strong rally across the sector.
- Credit Suisse says HES has the ingredients to successfully navigate a down cycle, with a strong balance sheet, an inventory of existing low breakeven reinvestment opportunities and the opportunity to grow its resource base in Guyana; success in Guyana or a higher longer term oil price view would create potential upside, the firm says.
- Now read Hess -3% as losses widen, revenues slide
Wed, Apr. 27, 11:58 AM
- Hess (HES -3.4%) is sharply lower after posting a large but slightly lower than expected Q1 loss on a 36% Y/Y decline in revenues.
- HES says lower realized selling prices reduced Q1 after-tax results by ~$230M due to the the weak commodity price environment, although total costs and expenses declined 20% to $1.75B.
- HES says Q1 average selling prices for crude fell to $28.50/bbl from $45.08 in the prior-year quarter, and selling prices for natural gas liquids sank 50% to $7.44.
- Q1 production fell 1.4% Y/Y to 350K boe/day, as E&P capital spending declined 56% Y/Y to $554M from $1.24B; HES expects FY 2016 net production at 320K-325K boe/day, reflecting downtime at Valhall and several other deepwater Gulf of Mexico fields.
- HES says it plans a three-rig program in the Bakken during Q2 and the closing of one rig in Q3, and notes that it is waiting for $60/bbl oil before starting to put rigs back online.
- Now read Hess Corporation: Promising exploration tailwinds heading into earnings
Wed, Apr. 27, 7:33 AM
Tue, Apr. 26, 5:30 PM
- ACCO, AGCO, ANTM, AOS, AVY, BA, BEN, BGCP, BHI, BOKF, BSX, CFR, CMCSA, CSL, DHX, DPS, DX, EVER, EVR, FDML, FI, GCI, GD, GIB, GPI, GRA, GRMN, GT, HES, HLT, IART, IP, JLL, LDOS, LEA, LLL, LRN, MDLZ, MKTX, MVIS, NAP, NDAQ, NEO, NMR, NOC, NS, OC, OSIS, PB, RDN, RES, ROK, ROL, SAIA, SC, SIX, SLAB, SLGN, SMED, SO, SONS, STM, STNG, STT, SUP, SXC, TGNA, TKR, TPH, UMC, UTX, VLY, WEX, WOOF
Mon, Apr. 18, 2:47 PM
- Goldman Sachs expects energy investors will maintain a "buy the dip" mentality, and suggests focusing specifically on its Buy-rated shale productivity favorites such as Hess (HES +4.3%), EOG Resources (EOG +2.2%), Cenovus Energy (CVE +0.3%), PDC Energy (PDCE +4.3%) and Diamondback Energy (FANG +1.7%).
- Even after the Doha collapse, Goldman maintains its forecast for Q4 2016 WTI of $45/bbl and FY 2017 average of $58/bbl, as low near-term oil prices should ultimately enable mechanisms that will bring oil markets into better balance.
- Now read Goldman names nine favorites for Goldilocks ideal $35 oil
Mon, Apr. 18, 10:25 AM
- The energy sector (XLE +0.1%) pokes into the green as crude oil prices pare earlier losses even after the collapse of the Doha meeting, and it's a mixed bag among the top global oil companies in early trading: XOM +0.1%, CVX +0.3%, RDS.A -0.9%, BP -0.3%, TOT -0.4%.
- Kuwait may have achieved what Doha failed to do, at least in the short term, as a labor strike that began Sunday has cut the country's production by 60%, shuttering 1.7M bbl/day, slightly more than H1's global surplus that caused prices drop to a 12-year low in January.
- Some oil analysts say the lack of a Doha deal is better for oil prices in the long run now that the rebalancing process of supply and demand can continue to its natural conclusion.
- Other noteworthy names: KMI -0.1%, CHK -4%, MRO -1.4%, COP +0.1%, SLB +0.2%, HAL +0.2%, BHI -0.7%, OXY +0.5%, APC -0.1%, HES +0.6%, ENB +0.8%, ETP -0.4%, EPD +1.5%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, PXI, FIF, PXJ, RYE, NDP, GUSH, PSCE, DRIP, DDG, FXN
- Now read No deal! Our 'enfant terrible' Saudi Arabia did it again
Fri, Apr. 15, 6:30 PM
- North Dakota crude oil production fell for the third straight month in February to hit its lowest level in 18 months, while the state's rig count sunk to its lowest since October 2005, according to the latest data from the state's Department of Mineral Resources.
- The U.S.’s second largest oil producing state pumped 1.118M bbl/day in February, down very slightly from January's 1.122M but January output fell 2.6% from December, which fell 2.5% from November.
- The number of rigs drilling for oil in North Dakota is now at 29, down from 52 in January and 40 in February; the all-time high was 218 in May 2012.
- However, natural gas production in the state rose 2.9% in February to 1.69B cf/day, a new all-time high.
- Bakken shale exposure includes: CLR, HES, WLL, STO, OAS, MRO, EOG, XOM, NOG, CHK, DNR, SM, NFX, OXY, MUR, COP, SSN, CXO, EOX
- Now read U.S. oil rig count falls by three in latest Baker Hughes tally
Fri, Apr. 15, 5:54 PM
- Hess (NYSE:HES) says it sold Bakken crude for export out of the U.S. Gulf Coast to Europe, the first reported shipment of the North Dakota oil since Congress lifted the ban on exporting crude last December.
- HES sold 175K barrels of Bakken crude, which loaded at St. James, La., in early April and is being transported to a European refinery, Reuters reports.
- The report comes after Exxon confirmed yesterday it was shipping 18K barrels of offshore oil produced from its Gulf of Mexico Julia field to its refinery in the Netherlands.
- Now read Hess to take out $55 shortly
Fri, Apr. 8, 5:29 PM
- Barclays expects the major oil companies' Q1 earnings results will mostly come in below expectations, with no pleasant surprises ahead.
- Since Barclays believes oil prices will be range-bound for the next 3-6 months between $30-$45, it sees limited near-term upside and anticipates better entry points over the next 6-9 months for names aside from its favorites, which remain ConocoPhillips (NYSE:COP) and Suncor (NYSE:SU).
- Even so, the firm raises its target prices for Chevron (NYSE:CVX) to $97 from $89, Exxon Mobil (NYSE:XOM) to $85 from $80, and Hess (NYSE:HES) to $54 from $48.
- Now read Suncor Energy: A safe way to ride the rally in oil
Thu, Apr. 7, 2:26 PM
- Goldman Sachs says crude oil at $35/bbl is the Goldilocks ideal - priced neither too high nor too low but just right - to make shares of U.S. explorers worth buying, suggesting investors and use volatility to add to positions of shale productivity winners.
- The $30-$35 range should keep behavior of U.S. oil producers unchanged and accommodate $55-$60 oil in 2017, Goldman says, providing opportunity for equities, while a near-term rally to $45-$50 oil would reduce 2017 upside but still be favorable for equities, at least temporarily.
- Goldman says it favors "secular productivity winners" EOG Resources (EOG -0.6%), Diamondback Energy (FANG +1.3%) and PDC Energy (PDCE -4.4%), as well as stocks in “the next rung down,” including Hess (HES -3.5%), Cenovus Energy (CVE -1.8%), Anadarko Petroleum (APC -1.1%), Encana (ECA -4%), Continental Resources (CLR -2.1%) and Whiting Petroleum (WLL -0.6%).
- Now read Oil, interest rates and game theory: Why prices have further to fall
Tue, Apr. 5, 10:05 AM
- In a research note to clients, Goldman noted that investors typically over-penalize declining profitability. To wit, the S&P 500 currently trades slightly above its 2014 year-end level of 2,059, but its P/B ratio is 4% lower at 2.7x.
- Goldman recommends clients consider the following stocks with low P/B ratios:
- AIG - P/B of 0.73, implied upside 22%.
- BAC - P/B of 0.89, implied upside 26%.
- C - P/B of 0.7, implied upside 25%.
- CFG - P/B of 0.89, implied upside 24%.
- HES - P/B of 0.8, implied upside 29%.
- LNC - P/B of 0.92, implied upside 17%.
- RF - P/B of 0.96, implied upside 34%.
- ZION - P/B of 0.88, implied upside 24%.
- Now read Best-Performing Value Strategies: The Price-To-Book Ratio »
Thu, Mar. 24, 6:45 PM
- At least 15 companies in the hard-hit E&P energy industry have announced new share offerings this year, and nearly all have been rewarded by stock investors who normally would cringe as their holdings are diluted.
- Amid widespread worries about energy companies collapsing under debt loads, analysts and investors say shareholders more easily stomach the dilution if it means the companies are adding cash to strengthen their balance sheets.
- Some companies did not urgently need cash but stood to "immunize” their balance sheets in case the oil markets remain ugly into 2017, and others have asset sales pending but the newly raised money means they do not have to worry about timing of proceeds, says Wunderlich's Irene Haas.
- But "the low-hanging fruit [has] been picked," says Christian Ledoux, senior portfolio manager at South Texas Money Management, "not because [other companies] don’t want to, but because they won’t be able to attract investors" until oil prices are much higher.
- E&P companies that have outperformed the S&P 500 Energy Index by more than 10 percentage points since their respective offerings YTD: EGN, OAS, DVN, MRO, NFX, CPE, FANG, WFT, QEP, HES, SYRG.
- Outperforming the index by 1-10 percentage points: PXD, GPOR, PDCE, MTDR
- Underperforming the index: COG
Thu, Mar. 24, 1:11 PM
- It's 1986 all over again in the current crude oil environment, CLSA analysts say as they recommend investors stick with safer stocks such as Occidental Petroleum (OXY +0.4%), Total (TOT -0.9%) and Hess (HES +0.4%).
- Despite crude's solid rally in recent weeks from a very low base, CLSA sees strong headwinds including high storage, tepid demand and an Iran overhang; the firm expects a wide performance gap between the industry's haves and have-nots, and would avoid companies with balance sheet and cash flow issues as well as those being forced to cut too deeply.
- CLSA thinks the recovery will be stronger for companies that can emerge from the downturn relatively intact such as OXY and TOT; the firm also likes HES based on its strong balance sheet and liquidity, leverage to oil prices and upcoming exploration catalysts such as offshore Guyana.
Sat, Mar. 12, 8:25 AM
- Markets have been waiting for U.S. oil companies to cut production amid lower crude prices, but many of the companies have been paying their top executives to keep the oil flowing, according to a WSJ analysis.
- “You want to know why most of the industry outspent cash flow last year trying to grow production? That's the way they're paid," says EOG Resources (NYSE:EOG) CEO William Thomas.
- An example: Hess (NYSE:HES) CEO John Hess earned more than $1M in 2014 (the most recent year available for pay data), which was more than a third of his bonus, because the company beat production and reserve targets.
- Also: Anadarko Petroleum (NYSE:APC) CEO R.A. Walker earned ~$1.5M because the company’s output rose 8% and exceeded goals for finding new oil and gas deposits.
- Thomas and others at EOG derived just 8% of their bonuses from hitting production and reserve targets in 2014, and instead placed more emphasis on return on capital, relative stock price and spending, WSJ says.
- Some shareholder activists are seeking to limit bonuses tied to production and reserve growth, pitching proxy ballot measures at companies such as Chesapeake Energy (NYSE:CHK), ConocoPhillips (NYSE:COP) and Devon Energy (NYSE:DVN).
- Companies will detail how they calculated 2015 bonuses in proxy filings beginning this month.
Wed, Mar. 2, 5:15 PM
- Hess (NYSE:HES) names James Quigley as its new Chairman, succeeding Mark Williams, who has retired effective immediately due to unspecified health reasons.
- Quigley, a current Hess board member, is the former CEO of the Deloitte accounting firm and spent 37 years with the company.
- Williams worked for 33 years at Royal Dutch Shell, most recently as a member of Shell's executive committee, where he was one of the top three operating executives collectively responsible for all strategic, capital and operational matters.
Hess Corp. is a global exploration and production company which engages in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids, and natural gas with production operations. It operates the business through two segments: Exploration and... More
Sector: Basic Materials
Industry: Oil & Gas Refining & Marketing
Country: United States