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Yesterday, 2:44 PM
- More dividend cuts and equity raises are coming for oil and gas stocks such as Apache (APA -4.3%), Devon Energy (DVN -5.1%), Encana (ECA -5.7%), Anadarko Petroleum (APC -6.2%) and Marathon Oil (MRO -5.1%), as management teams have become more willing to take stronger steps to strength balance sheets, Barclays believes.
- The firm views 4x debt to pre-interest cash flow as a warning sign that companies may have leverage concerns, at which roughly half of its energy coverage universe remains overlevered.
- Barclays thinks Canadian Natural Resource (CNQ -4.4%) likely will maintain its dividend, while Occidental Petroleum (OXY -0.8%) has the financial strength to maintain or even increase the dividend.
- The firm sees leveraged companies such as DVN, ECA and Range Resources (RRC -3%), and companies with large deficits including DVN and APC as most likely to consider raising equity; it also thinks MRO, WPX Energy (WPX -7.8%), Southwestern Energy (SWN -7.7%), Continental Resources (CLR +0.2%), Noble Energy (NBL -2%) and Newfield Exploration (NFX -1.2%) could issue equity; APA, CNQ, OXY, EOG Resources (EOG -0.9%) and Pioneer Natural Resources (PXD -0.3%) are considered unlikely to issue equity this year.
Tue, Feb. 9, 12:58 PM
- Crude oil at $30/bbl is blowing a hole in the insurance that U.S. shale drillers bought to protect themselves against a crash, Bloomberg reports.
- Companies including Callon Petroleum (CPE -5.6%), Noble Energy (NBL -3.5%), Pioneer Natural Resources (PXD -3.6%), Marathon Oil (MRO -8%), Rex Energy (REXX -1.8%) and Bonanza Creek Energy (BCEI -11.4%) used a three-way hedge strategy that does not guarantee a minimum price if oil falls below a certain level; while three-ways can be cheaper than other hedges, they leave drillers exposed to sharp declines and risk worsening a cash shortfall for companies trying to survive the worst oil crash in 30 years.
- For example, CPE CFO Joseph Gatto told investors in December that the company had hedged ~4K bbl/day in 2016, or 40% of its projected output, at $56/bbl; roughly half of those contracts are worth significantly less at $30/bbl because CPE employed three-ways.
Mon, Feb. 1, 11:57 AM
- Noble Energy (NYSE:NBL) and Delek Group (OTCPK:DGRLY) say they have signed the first contract to supply fuel from the country’s largest gas reserves, the offshore Leviathan field.
- The Leviathan partners will supply 6B cm of gas over 18 years to two power stations owned by local electricity producer Edeltech.
- “This deal marks a beginning. We are advancing more agreements with customers in Israel, Jordan, Egypt and Turkey,” Delek Drilling CEO Yossi Abu tells Bloomberg.
- NBL -3.8%.
Thu, Jan. 21, 12:34 PM
- Noble Energy (NBL +10.2%) marches more than 10% higher after Nomura upgrades shares to Buy from Neutral, citing NBL's asset quality and financial positioning.
- "NBL is well placed given its current leverage, its locked-in Israel pricing, its fixed Alba contract, and its 2016 commodity hedge," the firm says, estimating 2016 CFO of ~$2B and 16% production growth, resulting in positive growth in debt adjusted cash flow - "one of the select few in the E&P universe in 2016."
- Nomura notes NBL’s production growth is back-stopped by pre-funded growth from three Gulf of Mexico properties: Big Bend, which started up in October; Dantzler, which started in December; and Gunflint, with an anticipated mid-year 2016 start-up.
Thu, Jan. 7, 2:57 PM
- Noble Energy (NBL -2.2%) has turned sharply lower, unable to hold early gains after it secured a new $1.4B term loan and disclosed plans for a cash tender offer for three series of senior notes acquired as part of the company's acquisition of Rosetta Resources.
- Provisions of the term loan agreement, including pricing and covenants, are similar with those in NBL's existing $4B revolving credit facility.
- Separately, Deutsche Bank upgrades shares to Buy from Hold as a relatively inexpensive defensive play while still offering investors a relatively catalyst-rich story through 2016 highlighted by Israel project de-risking and upward revision momentum to Eagle Ford and Permian type curves.
Dec. 9, 2015, 12:32 PM
- Noble Energy (NBL +2.8%) is higher after raising its expected Q4 sales volumes to 405K-415K boe/day, above the company's previous outlook for 395K boe/day.
- NBL credits improved completion practices in the Eagle Ford and DJ Basin, as well as the accelerated ramp-up and early performance of Big Bend and Dantzler in the Gulf of Mexico; combined, the two deepwater fields have achieved their targeted peak production rate of 20M boe/day net to the company.
- The production increase comes despite sizable cost-cutting, including earlier decisions to layoff workers, pull all rigs out of the gas-rich Marcellus Shale and drop down to one rig in the DJ Basin.
Nov. 2, 2015, 2:27 PM
- Noble Energy (NBL +5.9%) says it expects to make a final investment decision on the Leviathan and Tamar natural gas fields offshore Israel in about a year, a day after the country promised to fast-track the projects.
- "Yesterday's announcement from the Prime Minister's office is a further indication of the commitment to moving forward with gas development," NBL CEO David Stover said during today's earnings conference call.
- The framework deal reached in August gives control of Israel's Leviathan gas field, with reserves of 22T cf, to a consortium led by NBL and Delek Group; first production would take 3-4 years from the final investment decision, Stover said on the call.
- NBL is looking at a separate FIDs for the Tamar field, which started production in 2013 and has reserves of 10T cf, the CEO said.
Nov. 2, 2015, 10:39 AM
- Noble Energy (NBL +7.2%) pushes out to a strong early gain despite missing Q3 earnings estimates, as it raises its sales forecast for the current quarter and cutting its 2015 capital budget by $100M.
- NBL says it now expects Q4 sales volume of 385K-405K boe/day from its earlier outlook of 375K-400K boe/day after Q3 sales volume totaled 379K boe/day; Q3 sales volumes were 4K boe/day short of production due to the timing of the lifting of some oil and natural gas liquids from its Equatorial Guinea operations.
- NBL also says it now plans to spend slightly less than $3B this year, 40% less than a year ago.
Oct. 21, 2015, 12:58 PM
- Canadian Natural Resources (CNQ -2.4%) is Barclays' top E&P pick in an otherwise dismal sector, as analyst Thomas Driscoll notes that E&P firms likely slowed their completion activity due to low oil prices in Q3 while Q4 volumes may be at risk.
- But Driscoll calls Overweight-rated CNQ his "most fundamentally undervalued" name, and says the company is transitioning to a "long-lived, low-maintenance and low-decline" production profile which is not reflected in the "annuity-like character of its asset base."
- The firm also has Overweight ratings on EOG Resources (EOG -0.6%), Noble Energy (NBL -0.5%) and Southwestern Energy (SWN -4.4%).
Sep. 8, 2015, 8:07 AM
- Noble Energy (NYSE:NBL) +1.7% premarket rafter raising its Q3 sales volume outlook based on a stronger than expected performance in July and August.
- NBL says it now expects sales volume of 350K-370K boe/day, 10K boe/day higher at the midpoint than the previous range, driven mostly by enhanced well performance and infrastructure expansion in the DJ Basin in Colorado.
- NBL says it also is seeing strong production from assets in Texas, Marcellus Shale, Israel and Equatorial Guinea; natural gas sales in Israel set a record in August, as the Tamar field averaged more than 1B cf/day of natural gas.
- Says the addition of the Lucerne-2 plant has expanded total system natural gas processing capacity to 840M cf/day.
Aug. 31, 2015, 12:27 PM
- Eni’s (E +2.6%) discovery of a “super giant” natural gas field off the Egyptian coast will help make the company’s cash flow position "much more robust" and "positively" affect its dividend, CEO Claudio Descalzi says.
- Eni says the deepwater deposit in the Zohr Prospect in the Shorouk block may hold 30T cf of gas; the CEO hopes Eni can begin producing gas "in a couple of years,” the development will be “low cost” since it is located near facilities it has in the area, and the company is open to selling a stake in the field.
- The huge find could help meet energy-starved Egypt's gas needs for decades and complicate Israel's plans to export gas to Egypt; companies including Noble Energy (NBL -2.3%) and Delek Group (OTCPK:DGRLY -9.6%), which are developing gas fields in Israel, have been pushing plans to export the fuel to Egypt, Jordan and the Palestinian territories.
Aug. 24, 2015, 3:27 PM
- Chevron (CVX -5%) is upgraded to Neutral from Underperform with a $100 price target at BofA Merrill, which expects CVX’s net debt to stabilize with major projects beginning to contribute in 2017 and a drop in spending to maintenance levels.
- The firm says it has been concerned throughout the past year that CVX's cash burn would dilute equity value through peak spending at the same time that oil prices collapsed, but it no longer sees a risk, as CVX is discounting below strip prices but with a dividend.
- CVX requires sustained spending of $15B-$16B to hold production flat for an extended period,” BofA's Doug Leggate explains, adding that at $45-$50 oil, cash flow by 2017 would be closer to $29B so that the dividend is "more than covered" by cash flow in an ex-growth environment.
- ConocoPhillips (COP -6.2%) is the firm's top pick among the big oils after the stock has been hit hard, which the analyst thinks reflected unwarranted concerns regarding COP's dividend; at current strip prices, Leggate believes COP's upside is second only to Buy-rated Exxon Mobil (XOM -5.3%).
- However, the firm downgrades HollyFrontier (HFC -3.5%), Marathon Petroleum (MPC -7.2%) and Valero (VLO -4.7%) to Underperform and cuts Continental Resources (CLR -10.1%), Marathon Oil (MRO -8.4%), Noble Energy (NBL -5.4%) and Whiting Petroleum (WLL -8%) to Neutral.
Aug. 19, 2015, 11:18 AM
- It's a broad decline for stocks this morning, with the S&P 500, DJIA, and Nasdaq all lower by 1% or more. Leading the way down are the energy names (XLE -2.5%) after an unexpected jump in oil inventories has sent the price of black gold down to new bear market lows at $41.30 per barrel.
- Chevron (CVX -2.9%), ConocoPhillips (COP -3.8%), EOG Resources (EOG -4.3%), Apache (APA -4.1%), Hess (HES -3.6%), Marathon Oil (MRO -5.5%), Noble Energy (NBL -3.1%), Anadarko (APC -3.6%).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Aug. 13, 2015, 2:29 PM
- At least some E&P companies are still able to sell shares despite the oil price swoon, as Diamondback Energy (FANG -1.3%) raises $176M through a stock offering - its third this year.
- FANG has completed more follow-on stock sales than any other U.S. E&P firm this year, although at $623M it has not raised the most; Noble Energy (NBL +1.6%) and Whiting Petroleum (WLL -4.5%) each have sold more than $1B.
- Crude oil’s collapse has not stopped the sector raising more money so far in 2015 - $11.6B so far - than any entire year in at least two decades, which may indicate optimism about oil nearing a bottom and that at least some E&P companies are using capital more productively.
- If a FANG investor bought its three stock sales this year, weighted by the size of each, he actually would have gained 2%; while the shares of only 10 of 35 issues YTD are higher than the price at which they sold, the group as a whole has beaten the E&P sector average by almost eight percentage points this year, adjusted for size and offer date, WSJ's Liam Denning writes.
Aug. 13, 2015, 9:10 AM
- Noble Energy (NYSE:NBL) +1.9% premarket after Israel's government said it reached a deal that will pave the way for the development of the Leviathan natural gas field.
- The controversial deal initially revealed in June will allow NBL and Israel's Delek Group (OTCPK:DGRLY) to keep ownership of Leviathan but require the sale of other assets, including stakes in the Tamar deposit.
- The deal sets a price ceiling for gas sales to Israeli companies and commits the consortium to invest $1.5B into developing Leviathan over the next two years; the field contains ~22T cf of gas, which is expected to provide billions of dollars in revenue to Israel.
- PM Netanyahu earlier this week won crucial backing for the agreement from the central bank.
Aug. 10, 2015, 10:15 AM
- Bank of Israel Governor Karnit Flug backs a disputed government plan to develop the country's natural gas industry that would allow Noble Energy (NBL +1.5%) and Delek Group (OTCPK:DGRLY) to keep ownership of the Leviathan offshore field.
- Flug says would speed up development of Leviathan and other smaller fields, and would bring "more stable regulation of the natural gas economy," making it easier to progress with financing and development.
- The outline agreement lets NBL and Delek to keep Leviathan, with estimated reserves of 22T cf, but requires the companies to sell off other assets including stakes in the large Tamar deposit.
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