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PowerShares Dynamic Oil & Gas Services Portfolio ETF (PXJ)

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  • Thu, May 21, 3:41 PM
    | 21 Comments
  • Wed, May 20, 2:41 PM
    • Oil and gas companies so far have largely weathered the sharp drop in oil prices with minimal carnage, but Moody's predicts in a new report that the carnage could be coming.
    • Moody’s predicts the default rate for oil and gas companies with lower credit ratings may increase to 7.4% by March 2016 from 2.7%; even if oil prices recover gradually to $70-$75/bbl next year, the weaker oil and gas firms will be positioned for a “much greater risk of default," the report says.
    • Moody's expects independent E&P companies to have the most trouble, as they are typically smaller in size and more reliant on outsize capital spending to replenish their reserves, while refiners are better positioned to survive oil price volatility because their business is not directly tied to the price of oil.
    • Oil and gas companies already have suffered a drop in their credit ratings: As of May 1, the group accounted for 14.8% of all the companies covered by Moody’s with credit ratings of B3 or lower, up from 8% the prior year.
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, FIF, PSCE, NDP, RYE, FXN, DDG
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  • Tue, May 19, 12:27 PM
    • The conventional wisdom is that Royal Dutch Shell's $70B buyout of BG Group will spark a wave of M&A activity as stronger companies seek to buy assets on the cheap amid low commodity prices, but Reuters columnist Clyde Russell argues the deal probably is not the shape of things to come in energy mergers.
    • Executives may be more cautious than 15 years or so when commodity prices last fell so sharply, eschewing mega-mergers in favor of smaller acquisitions and in-house projects to add shareholder value, Russell writes.
    • ConocoPhillips (NYSE:COP) Ryan Lance said yesterday that the rationale that drove the previous round of major deals does not apply now, as the rise of U.S. shale oil and gas production and the massive addition of reserves they provide has made acquisitions for the sake of adding to reserves less likely.
    • Both large and mid-size companies also have less need to fill in their portfolios with large deals, the CEO said, while the need to merge to drive cost reductions is less urgent after work that already has been done to cut costs.
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
    | 2 Comments
  • Thu, May 14, 3:59 PM
    • "The focus is on stressed, not distressed oil and gas companies in good areas," says Patrick Fleury, managing director at Blackstone's (NYSE:BX) GSO Capital Partners. The team there feels oil prices are set to renew their decline and wants to hold assets of high enough quality and low enough cost to pay off if the price forecast is correct.
    • It's a shift in strategy from late last year and earlier this year where GSO was piling into distressed opportunities. "Now  I rather own paper that’s paying me 7% on a quality asset than buy debt on a company that has bad assets and high cost structure even though they will pay double-digits in coupon," says Fleury.
    • Source: Bloomberg
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
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  • Wed, Apr. 29, 2:19 PM
    | 41 Comments
  • Sat, Apr. 25, 7:25 AM
    • Texas regulators have ordered Exxon Mobil's (NYSE:XOM) XTO Energy subsidiary and another company to prove their wells near Fort Worth are not causing earthquakes.
    • On Friday the Texas Railroad Commission, which regulates the state’s oil and gas industry, told both companies they need to appear at hearings scheduled for June to justify why their wells should not be shut down.
    • The action follows a Southern Methodist University study released this week that linked a rash of small earthquakes in the area to nearby natural gas wells and the injection of wastewater deep underground.
    • Also this week, the U.S. Geological Survey reported that an increase in seismic activity in Texas, Oklahoma and six other states "very likely" was caused by  wastewater injection from oil and gas operations.
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, RYE, FXN, DDG
    | 132 Comments
  • Wed, Apr. 22, 7:35 PM
    • Kinder Morgan (NYSE:KMI) CEO Richard Kinder says the North American gas pipeline system is undergoing a historic reconfiguration likely to lead to a "null point" somewhere in Pennsylvania from which natural gas will flow to markets in opposite directions.
    • Kinder tells the IHS CERAWeek energy conference that the growth of gas production in the Marcellus and Utica shales has profoundly affected the flow of gas, which historically has flowed from the producing regions of Louisiana and Texas to markets in the northeast.
    • "That's why we are trying to build more capacity to New England, which has the highest natural gas prices and highest electricity prices in the nation and yet they're sitting almost on top of this tremendous asset," Kinder says.
    • The CEO also foresees $100B worth of industrial projects built across the Gulf coast, with the jump in the number of petrochemical projects leading to "a tremendous growth in the use of natural gas."
    • Kinder also chides his peers a bit, saying energy leaders had not done enough to show how important the industry is, and as a result had surrendered some of the debate to opponents of fossil fuels.
    • ETFs: XLE, VDE, ERX, OIH, ERY, FCG, DIG, GASL, DUG, IYE, FENY, PXJ, RYE, FXN, DDG
    | 18 Comments
  • Tue, Apr. 21, 6:24 PM
    • BP CEO Bob Dudley says he does not expect a wave of mergers in the energy industry unless oil prices stay low for long, downplaying talk that Shell's takeover of BG Group could trigger a wave of multibillion-dollar deals like those that reshaped the industry in the 1990s.
    • It probably will take “quite a bit of time to work off” the high levels of U.S. crude inventories at Cushing, Okla., and other oil hubs, Dudley told the IHS CERAWeek energy conference, adding that if sanctions against Iran were lifted, it would not take long to add 500K bbl/day of oil to the global market.
    • Dudley’s remarks could suggest that Exxon Mobil (NYSE:XOM), which has been speculated to be considering a move, would have difficulty persuading the BP board to accept an agreed offer; BP today denied a Bloomberg report that it had stepped up internal reviews of takeover scenarios following the Shell-BG deal.
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, RYE, FXN, DDG
    | 8 Comments
  • Tue, Apr. 21, 2:15 PM
    • Exxon Mobil's (XOM -0.4%) Rex Tillerson predicts oil prices will remain low over the next few years, but says the energy industry is at a “turning point” and will show its resiliency in the current down cycle.
    • The CEO says in the keynote address at the IHS Energy CERAWeek conference in Houston that the oil industry could behave the same way U.S. shale gas did, when a significant decline in rig activity in prior years did not result in a drop in production capacity, thanks in part to improvements in efficiency.
    • Government regulators need to give oil companies the freedom to innovate to enable “safer, more secure and more efficient production,” Tillerson says, citing government oversight of fracking, a technique he says has proven effective and safe in the most delicate ecosystems.
    • Tillerson says the government should open up the U.S. Arctic to oil production, approve infrastructure projects such as the Keystone XL pipeline, and lift the decades-old ban on crude oil exports from the U.S.; the CEO says such policies would lead to more investment, which in turn would lead to more advanced technology.
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, RYE, FXN, DDG
    | 13 Comments
  • Sat, Apr. 18, 8:25 AM
    • An eventual recovery in U.S. oil drilling activity "will fall well short of reaching previous levels," because of a growing reserve of wells that have been drilled but not yet hydraulically fractured and increased activity in re-fracking wells that are running dry, Schlumberger (NYSE:SLB) CEO Paal Kibsgaard said in Friday's earnings conference call.
    • At least 2,700 wells have been identified as candidates for re-fracture in North America, representing a total market value of ~$5B, says EvercoreISI's James West, adding that the Eagle Ford likely contains 1,000 of the wells while the Bakken has ~500.
    • The assessment suggests the disconnect between oil rigs and the trajectory of U.S. production may get worse before it gets better; while output had been rising in tandem with the number of rigs, production has continued climbing even as the rig count has collapsed to less than half its October 2014 peak.
    • ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, RYE, FXN, DDG
    | 8 Comments
  • Thu, Apr. 16, 12:25 PM
    • A federal appeals court begins hearing arguments today in two cases challenging the EPA’s far-reaching proposal to cut pollution from U.S. coal-fired power plants.
    • The lawsuits - one from a coalition of 15 states and another brought by privately held coal miner Murray Energy - are part of a growing pushback from opponents who say the move is illegal and will kill jobs, hurt demand for coal and drive up electricity prices.
    • The EPA rule proposed last year requires states to cut carbon emissions by 30% by 2030, giving customized targets to each state and leaving it up to them to draw up plans to meet the targets.
    • Coal industry arguments will be helped by an unlikely ally: iconic liberal law professor Laurence Tribe, who is representing Peabody Energy (NYSE:BTU) and likens Pres. Obama's climate change policies to "burning the Constitution."
    • ETFs: XLE, XLU, VDE, ERX, OIH, KOL, IDU, VPU, ERY, DIG, DUG, IYE, FENY, PXJ, RYE, FUTY, RYU, UPW, FXN, FXU, DDG, SDP
    | 36 Comments
  • Wed, Apr. 15, 3:15 PM
    | 69 Comments
  • Wed, Apr. 8, 3:48 AM
    | 7 Comments
  • Mon, Apr. 6, 2:22 PM
    • Nymex crude oil soars 5.9% to surpass $52/bbl and Brent surges 5.4% to just short of $58 amid rising signs of demand in both the U.S. and Asia
    • Traders say stockpiles at the Cushing, Okla., storage hub barely moved last week, which may have added momentum to bulls who have bet rising demand and other factors would reverse a months-long decline in oil prices.
    • Saudi Arabia moved to boost the price for its oil sales in Asia for the second straight month, a sign that it sees improving demand from the region.
    • Also, traders may be reassessing how quickly Iran could increase exports after the nuclear deal, as initial expectations of a quick recovery in oil exports are tempered by views that it could longer than expected to roll back sanctions.
    • The gains are lifting energy stocks (+2%) to the top of the S&P 500 leader board.
    • ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, IEZ, UWTI, PXE, USL, PXI, FENY, DWTI, PXJ, DNO, RYE, SZO, FXN, OLO, DDG, TWTI, OLEM
    | 31 Comments
  • Wed, Mar. 25, 3:35 PM
    | Comment!
  • Fri, Mar. 20, 12:41 PM
    • The Obama administration confirms final rules on hydraulic fracturing activities on public and tribal lands, in an effort to set a national standard for a patchwork of state regulations governing drilling practices that have helped fuel the domestic energy boom.
    • Key components of the rule, which will take effect in 90 days, include requirements to test the quality of the cement work designed to prevent natural gas from seeping outside a well, and adhere to stricter standards for storing toxic fluids left over from drilling.
    • In a move that could upset environmental groups, companies will be required to publicly disclose chemicals they use through the industry-run FracFocus website within 30 days of completing the fracking process.
    • ETFs: XLE, ERX, VDE, OIH, XOP, ERY, FCG, DIG, GASL, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, RYE, FXN, DDG
    | 1 Comment
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PXJ Description
The PowerShares Oil & Gas Services Portfolio (Fund) is based on the Oil & Gas Services Intellidex Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index thoroughly evaluates companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors. Securities shown to possess the greatest capital appreciation potential are selected by the Index.
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