Hess Corp.: Caught In Deep Water During The Storm
Hess Corporation: Spectacular Midstream Valuation
Yesterday, 9:55 AM
- Energy Transfer Partners (ETP -3.4%) and Sunoco Logistics Partners (SXL -3.5%) open lower after the U.S. Army Corps of Engineers refused a crucial permit needed for completion of their $3.7B Dakota Access pipeline project, which said the companies would need to consider alternative routes other than passing under Lake Oahe; also ETE -1.8%.
- In an angry statement, the companies say the decision is "a purely political action... the latest in a series of overt and transparent political actions by an administration which has abandoned the rule of law in favor of currying favor with a narrow and extreme political constituency."
- Analysts generally agree that a Trump administration eventually will approve the project but warn that investors should be aware of headline pressure on Dakota names including EOG Resources (EOG +1.8%), Marathon Oil (MRO +2.2%), Whiting Petroleum (WLL +2.4%), Continental Resources (CLR +1%) and Hess (HES +3.5%).
Wed, Nov. 30, 2:30 PM
- Oil and gas names continue to surge following the news that OPEC will cut production.
- Among the 36 energy stocks in the benchmark SPDR Energy ETF, 13 are up by at least 10%: MRO +21.6%, RIG +19.6%, MUR +15.7%, DVN +15.2%, NFX +15.2%, HES +14.8%, APC +13.6%, HAL +13.6%, CXO +11.3%, XEC +10.9%, EOG +10.5%, COP +10.4%, CHK +10%.
- Continental Resources (CLR +23.6%) soars to a 52-week high, making founder and CEO Harold Hamm, already the wealthiest U.S. energy billionaire, another $3B richer.
- Offshore drillers are broadly sporting double-digit gains: ESV +24.8%, ATW +20.6%, RIGP +18.7%, SDRL +16.5%, DO +15.7%, RDC +15%.
- "For all E&P stocks, this is a bullish call for sure, because price is directly correlated with cash flow," says Luana Siegfried, energy equity research associate at Raymond James, which sees U.S. crude reaching $60/bbl by year-end.
- MarketWatch's Philip van Doorn writes that pending earnings estimate increases from analysts ought to set a floor under the energy sector and support even higher prices for oil stocks.
Wed, Nov. 30, 9:50 AM
- Shares of energy companies surge at the open, as hopes for an OPEC deal to cut production send crude oil futures soaring.
- Reports say Saudi Arabia is prepared to accept "a big hit" to production and agree to Iran freezing output at pre-sanctions levels.
- In early trading: XOM +2.2%, CVX +2.3%, RDS.A +3.6%, BP +3.4%, TOT +1.7%, STO +5.1%, PBR +8.1%, COP +7.2%, MRO +12.1%, APC +8%, DVN +12.7%, HES +9.5%, ENB +2.1%, PSX +0.8%, SLB +4.2%, HAL +8.3%, BHI +4.3%, KMI +4.8%, EPD +2.7%, ETP +3.8%, WMB +5.4%, RIG +11.3%, SE +2.2%, CHK +9.4%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, PXI, FIF, PXJ, RYE, NDP, GUSH, PSCE, DRIP, DDG, FXN, CRAK
Tue, Nov. 29, 10:20 AM
- Crude oil continues to slide - WTI now -3.8% at $45.27/bbl, and Brent -3.8% at $46.40/bbl - dragging oil and gas equities (XLE -2.1%) down with it.
- Iran's oil minister says he is not prepared to reduce supply, and Saudi Arabia says it would not participate in a production deal without Iran and Iraq.
- Reuters reports that Iran has written to OPEC saying Saudi Arabia needs to cut oil output to 9.5M bbl/day; Saudi has said it was prepared to reduce its production only by 500K bbl/day from current levels of 10.5M.
- In early trading: XOM -1%, CVX -1.7%, RDS.A -1.4%, BP -1%, TOT -0.3%, STO -1.8%, PBR -3.7%, COP -2.9%, MRO -4%, APC -2.8%, DVN -2.7%, HES -3.6%, ENB -2.3%, PSX -1.2%, MPC -0.8%, SLB -2.2%, HAL -2.3%, BHI -2.1%, KMI -1.4%, EPD -2%, ETP -2.2%, WMB -2.4%, SE -2.3%, CHK -2.6%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, FIF, PXJ, RYE, NDP, GUSH, DRIP, DDG, FXN, CRAK
Fri, Nov. 18, 5:44 PM
- ExxonMobil (NYSE:XOM) has told the government of Guyana that it plans to fast-track development of the Liza discovery on the 6.6M-acre Stabroek block, along with partners (NYSE:HES) and Nexen (NYSE:CEO).
- XOM says its Liza-1 well encountered more than 295 ft. of high-quality, oil-bearing sandstone, and the Liza-2 well encountered more than 190 ft. of oil-bearing sandstone.
- The partners say Liza is a "world-class discovery" that probably will yield 800M-1.4B boe of crude.
Wed, Nov. 16, 2:58 PM
- North Dakota’s crude oil output in September fell to the lowest level in more than two years, staying below the 1M bbl/day level for the second month in a row.
- Production fell 1.1% for the month to 971K bbl/day in September, the most recent month for which data is available, 10K bbl/day less than August and the lowest level since February 2014, when output was 952K bbl/day.
- Natural gas production in North Dakota fell 1.7% in September to 1.61B cf/day, the state also reports.
- Companies with a presence in North Dakota's Bakken shale include CLR, WLL, EOG, ERF, HK, HES, MRO, OAS, QEP, SM, STO, TPLM.
Thu, Nov. 10, 10:58 AM
- BP (BP +0.5%) was the big winner in the latest call for exploration bids for deepwater tracts off Newfoundland and in the Jeanne d'Arc basin, Upstream reports.
- The biggest bid was a $C276M bid for one Parcel 3, which BP will operate and own 50% with Hess (NYSE:HES) and Noble Energy (NYSE:NBL) each taking on 25%, and the trio also teamed up for two other bids totaling C$137M; BP and NBL went 60-40 on another parcel.
- In the Jeanne d'Arc basin, Husky Energy (OTCPK:HUSKF) won both blocks offered with a 100% stake after bidding a combined C$244M.
Thu, Nov. 10, 8:53 AM
- Hess (NYSE:HES) has executed a round of layoffs across the company that likely cut its workforce by more than 11%, or ~238 employees, Upstream reports.
- "In the lower-for-longer oil price environment, our company continues to look at all areas to reduce costs across our portfolio," Hess says in response, without confirm the number of employees that were cut.
- The job cuts would be the first announced by Hess since the downturn began in 2014.
Wed, Nov. 2, 3:56 PM
- Oil prices and energy equities plunged sharply as the latest inventory data showed U.S. stockpiles posted the largest weekly surge in 34 years, after the consensus outlook had pointed to only a modest rise.
- WTI crude oil -2.9% to settle at $45.34/bbl, its lowest since Sept. 27, and Brent crude -2.7% to $46.86, also its lowest since late September.
- “You could easily make the argument it’s the most bearish report of all time,” says Bob Yawger, director of the futures division of Mizuho Securities USA. “There’s nothing to support the market.”
- WTI, which already was turning lower in recent days, has now fallen 12% in just two weeks since hitting a one-year high on Oct. 19 and marks the third retreat from $50/bbl toward $40 within five months.
- Among individual stocks: XOM -0.1%, CVX -0.9%, RDS.A -2%, BP -0.2%, TOT -2.4%, COP -0.6%, MRO -3.6%, HES -1.3%, PSX -2.3%, MPC -3.4%, VLO -1.9%, SLB -1%, HAL -0.5%.
- ETFs: USO, OIL, XLE, UWTI, UCO, VDE, ERX, DWTI, OIH, SCO, XOP, BNO, DBO, ERY, DIG, DTO, USL, DUG, BGR, IYE, IEO, FENY, DNO, PXE, FIF, OLO, PXJ, RYE, SZO, NDP, GUSH, DRIP, DDG, FXN, OLEM
Wed, Oct. 26, 12:49 PM
- Hess (HES -3.5%) is lower after posting a sharp Q3 loss on a 29% Y/Y revenue drop, although earnings fell a bit less than expected as the company cut spending.
- Hess says its Q3 net production fell 17.4% Y/Y to 314K boe/day, while total costs and expenses fell 18% Y/Y.
- Hess’ E&P business posted a $234M Q3 loss, vs. a $188M loss a year ago, even as the segment’s capital and exploratory expenditures were cut nearly in half to $435M.
- In today's earnings conference call, CEO John Hess said 2016 E&P capex should come in at ~$2B, down $100M from previous guidance more than 50% below 2015 levels.
- Hess reaffirms FY 2016 production guidance of 315K-325K boe/day, with Bakken production at ~105K boe/day; for Q4, Bakken production is seen averaging 100K-105K boe/day, reflecting fewer new wells being brought online.
Wed, Oct. 26, 7:33 AM
Tue, Oct. 25, 5:30 PM
- AB, AGCO, AIT, ALLY, AOS, AVX, AVY, BA, BCO, BEN, BIIB, BOKF, BSX, CFR, CG, CMCSA, DTE, ENTG, EVR, EXAS, FDML, FLIR, GD, GNRC, GRA, GRMN, GRUB, HBAN, HES, HLT, IR, KO, LEA, LH, LRN, LUV, MDCO, MDLZ, MKTX, MMYT, NAP, NDAQ, NEO, NOC, NSC, NYCB, OC, PAG, PB, POL, RES, ROL, SAIA, SIX, SLAB, SLGN, SMED, SONS, SPG, STRA, STT, UCBI, VG, VLY, VNTV, WEC, WM, WOOF, WYN
Fri, Oct. 21, 10:22 PM
- Raymond James analyst Pavel Molchanov has long been bearish on ExxonMobil (NYSE:XOM), and now he recommends the same advice for current InterOil (NYSE:IOC) shareholders following XOM's buyout: Sell.
- Molchanov says XOM is poorly positioned to take full advantage of a sustained oil price recovery, as the company's structural overweight to refining, chemicals, and (within upstream) non-LNG gas does not directly benefit from rising oil prices; he also says XOM shares already are pricing in long-term oil prices at an above-consensus WTI at $70/bbl.
- For current IOC shareholders, Molchanov says sell the post-buyout shares and use the proceeds to reinvest into any of a wide range of oil-levered stocks such as Halliburton (NYSE:HAL), Hess (NYSE:HES), Marathon Oil (NYSE:MRO) and Whiting Petroleum (NYSE:WLL).
- Molchanov believes the IOC founder's last-ditch attempt to delay XOM’s purchase will not succeed; the next hearing is scheduled for Oct. 31.
Thu, Oct. 13, 6:41 PM
- North Dakota oil production dropped below 1M bbl/day in August for the first time in more than two years, as the state's higher-cost production continues to struggle relative to other parts of the U.S.
- Production from North Dakota’s portion of the Williston Basin fell to 981K bbl/day in August, down 4.7% from July and the lowest since March 2014; the state's peak production, in December 2014, was more than 1.23M bbl/day.
- Lynn Helms, director of the state’s Department of Mineral Resources, expects oil production to decline to a low of ~900K bbl/day by mid-2017 before recovering.
- Companies with a presence in North Dakota's Bakken Shale include CLR, WLL, EOG, ERF, HK, HES, MRO, OAS, QEP, SM, STO, TPLM.
Wed, Sep. 7, 5:20 PM
Wed, Aug. 31, 8:52 AM
- Crude oil prices are slightly lower, unaffected by disruptions caused by a tropical storm in the eastern Gulf of Mexico that is expected to hit Florida later this week and bypass the bulk of oil production near Louisiana and Texas.
- U.S. authorities said ~22%, or ~353 boe/day, of production in U.S. regulated areas of the Gulf had been shut as of late yesterday because of the storm threat.
- Personnel had been evacuated from nine production platforms out of 750 manned platforms in the Gulf; one rig evacuation was reported, and seven dynamically positioned rigs have moved off location.
- Operators that have pulled workers off platforms in the area include BP, Royal Dutch Shell (RDS.A, RDS.B), Anadarko Petroleum (NYSE:APC), BHP Billiton (NYSE:BHP) and Hess (NYSE:HES).