Tue, Nov. 24, 6:56 PM
- Alaska finalizes its deal to buy out TransCanada's (NYSE:TRP) share in the proposed Alaska LNG export project for $64.6M, giving the state direct ownership in the project along with partners BP, ConocoPhillips (NYSE:COP) and Exxon Mobil (NYSE:XOM).
- The $45B-$65B project would transport natural gas from the North Slope fields, then liquefy the fuel at a facility on Cook Inlet for shipment to markets in Asia; it has not yet been approved for construction and would not start commercial shipments before 2023.
- The state legislature earlier this month approved funding to buy out TRP’s interest in the project.
Tue, Nov. 24, 12:49 PM
- Canadian oil producers may say they are on board with Alberta’s new climate change policy goals, but the requirement that companies reduce their methane emissions by 45% will add costs "in the tens or hundreds of millions of dollars over the next five years," the Canadian Association of Petroleum Producers says.
- Alberta’s oil and gas sector produced 30.4 megatons of methane emissions in 2013, accounting for 70% of the province’s overall methane emissions.
- National Bank Financial analyst Kyle Preston calls Alberta’s climate change policy “fair and accommodating” for oil and gas companies, and says newer energy projects such as Canadian Natural Resources' (NYSE:CNQ) Horizon oil sands project and MEG Energy’s (OTCPK:MEGEF) Christina Lake facility emit less greenhouse gas than older facilities, which will be hit harder by the new policies.
- Other related tickers: TRP, ENB, IMO, XOM, RDS.A, RDS.B, OTCQX:COSWF, OTCPK:HUSKF, CVE
Mon, Nov. 23, 8:19 AM
- Alberta's government announces plans to cap oil sands emissions for producers, phase out coal power plants and implement a carbon tax in an effort to curb pollution.
- The provincial government in impose a limit of 100 megatons/year of carbon emissions, above current annual emissions of ~70 megatons, phase out coal power plants by 2030, and set a carbon price of C$20/metric ton (US$15) by 2017 which rises to C$30 in 2018.
- The Canadian Association of Petroleum Producers supports the initiative, saying it could help improve Alberta’s image in markets to which oil sands producers hope to expand access.
- "This will create a wealth of opportunities and jobs for generations to come. We in Alberta want to take a leadership role on climate," says Suncor (NYSE:SU) CEO Steve Williams.
- Coal producers criticized the new policy, however, saying it will raise electricity costs in Alberta and cost Canadian jobs.
- Other relevant tickers: TRP, ENB, IMO, XOM, RDS.A, RDS.B, OTCQX:COSWF, OTCPK:HUSKF, CVE, CNQ
Fri, Nov. 20, 10:53 AM
- Production from Argentina's Vaca Muerta shale play is expected to double by 2018, according to a new development study by Wood Mackenzie.
- The study says oil and gas output from the play will be moderate in 2016, with a Y/Y production increase of 10%, but the increase will see a sharp upturn by 2020.
- The consultant sees ~200 wells brought online in the region in 2015, with fewer in 2016 as vertical wells are phased down.
- In order to fully develop Vaca Muerta, the study suggests that more joint venture deals will be necessary, as YPF will need outside assistance to develop the 6.3M acres it holds.
- Related tickers: XOM, CVX, RDS.A, RDS.B
Wed, Nov. 18, 9:11 AM
- A Dutch court orders more cuts in gas production at the Groningen field in The Netherlands, saying the government had given too little consideration to earthquakes caused by gas extraction.
- The court says output at Europe's largest gas field will now be capped at 27B cm/year from 33B cm through October 2016, adding that the government had failed to sufficiently weigh public safety risks.
- Production already had been cut twice this year from an original target of 39.4B cm, sending regional prices higher.
- The Groningen field is operated by a joint venture including Royal Dutch Shell (RDS.A, RDS.B), Exxon Mobil (NYSE:XOM) and the Dutch government.
Wed, Nov. 18, 8:33 AM
- Exxon Mobil (NYSE:XOM) is downgraded to Underperform from Market Perform at Raymond James, which says XOM's limited leverage to oil prices will act as a hindrance during an expected modest oil price recovery in 2016.
- Analyst Pavel Molchanov says the downgrade is not a short-term trading call but a 6-12 month time horizon, which could prove wrong if oil spends the year below $50/bbl.
- Molchanov expects XOM shares to be a source of funds for investors turning more constructive on oil in 2016.
Mon, Nov. 16, 6:53 PM
- Low crude prices have caused oil companies to cut spending but they are still protecting their hefty dividends, WSJ reports, as the four supermajors - Exxon (NYSE:XOM), Chevron (NYSE:CVX), Shell (RDS.A, RDS.B) and BP - have distributed nearly $28B to their shareholders YTD, ~10% more than the same period in 2014, and as their collective earnings have fallen by more than 70%.
- The payments to investors come amid $22B in reduced spending on exploration and development of oil fields, and 80 scrapped or delayed projects so far this year, according to BP E&P chief Lamar McKay.
- The supermajors have little choice but to pay fat dividends to keep investors, but it is a potentially risky strategy given concerns about the length of the oil price downturn and its impact on cash flow; dividend yields oil companies made last quarter are at the highest level in more than a decade, according to FactSet.
- But investors are hooked: CVX has increased its annual per-share dividend for each of the last 28 years, XOM has raised its dividend by an average of 6.4% every year for the last 33 years, and Shell and BP have reiterated that maintaining returns to shareholders is a priority.
Mon, Nov. 16, 9:59 AM
- Russia's first deputy natural resources minister says the partnership between Rosneft (OTC:RNFTF) and Exxon Mobil (XOM +0.7%) is "long-term," when asked about talks between Rosneft and Chinese firms on their possible participation in offshore Arctic projects.
- Russia's RIA news agency had quoted Russian Deputy Energy Minister Yanovsky as saying Rosneft wanted to allow Chinese companies to take part in its offshore Arctic projects.
- Rosneft suspended drilling in Kara Sea in 2014 after XOM withdrew from the project because of Western sanctions over the Ukraine crisis.
Sat, Nov. 14, 8:25 AM
- The number of oil wells in North Dakota that have been drilled but not fracked surpassed 1,000 for the first time in September, as producers wait for prices to recover before turning them on.
- As a result, more than 8% of oil wells in North Dakota now are sitting idle, harming the industry's ability to grow production; daily output in the state fell 2% in September to ~1.16M bbl/day.
- The backlog is "sending a definite signal to the market that oil and gas operators are not willing to do a lot of drilling or hydraulic fracturing or production at these low prices," says Lynn Helms, director of the state's Department of Mineral Resources, who figures the backlog is not likely to be worked off until next year at least, and only if oil prices rise.
- Top North Dakota producers include CLR, HES, EOG, WLL, XOM, OAS, NOG, EOX, MRO
Fri, Nov. 13, 9:12 AM
- Exxon Mobil (NYSE:XOM) says it plans to start drilling in Liberia in late 2016 or early 2017, in what the country's president calls a sign of economic recovery after the Ebola epidemic.
- Liberia produces no oil but has awarded a number of exploration blocs offshore, following the examples of neighbors Ghana and Nigeria.
- XOM had signed on for Block 13 in 2003 but put the project on hold due to the Ebola epidemic.
Tue, Nov. 10, 11:38 AM
- Israel's energy minister says the country is encouraging global oil companies to further explore its offshore waters for natural gas, adding that he has met senior execs of more than 20 energy companies, including Eni (NYSE:E), Royal Dutch Shell (RDS.A, RDS.B), Exxon Mobil (NYSE:XOM) and Hess (NYSE:HES) to gauge interest.
- Yuval Steinitz estimates 350T-530T cf of gas, or at least 60B boe, in the whole of the eastern Mediterranean basin, which includes Israeli, Egyptian and Cypriot waters.
- Steinitz also says a framework agreement on two gas fields would be signed off by the prime minister this year and that exploration for more fields could begin thereafter; Noble Energy (NYSE:NBL) and Delek (OTCPK:DGRLY) had been negotiating long-term contracts to sell gas from the fields to companies in Egypt, but the deals were delayed by bureaucratic hurdles in Israel.
Tue, Nov. 10, 10:59 AM
- Executives from Exxon Mobil (XOM +0.1%), BP (BP -0.5%) and Total (TOT -0.9%) tell an oil industry conference in Abu Dhabi that the global oil glut is likely to last longer than expected and may depress oil prices for many more months if not years.
- BP's and XOM's heads of exploration and production Lamar Mckey and Jack Williams both say low oil prices likely will stay for a while, and BP's Middle East chief Michael Townshend says he foresees oil fluctuating ~$60/bbl for another three years.
- But the oil industry is quickly becoming more efficient by learning how to recover more resources from existing fields; Williams cites the 36% decline in the cost of well drilling in North Dakota over the past four years while generating higher production.
Mon, Nov. 9, 7:23 PM
- Exxon Mobil (NYSE:XOM) has acquired a 35% stake in an oil block off Uruguay's coast and will team up with Total (NYSE:TOT) to spud the country's first offshore exploratory well, according to Uruguay's state oil company.
- The well will be drilled ~250 miles from the seaside capital Montevideo at a depth of 3,400 meters (11,155 ft.).
- The two companies will invest $200M and begin drilling the well in H1 of next year, the state-run firm says.
Mon, Nov. 9, 3:34 PM
- Apache (APA +14.3%) shares reach their highs of the day after a report that the company had rejected a takeover offer after a suitor was lured by APA's $1.6B in cash and low leverage to help strengthen its balance sheet and fund a dividend.
- One analyst thinks Hess (HES -0.8%) and Murphy Oil (MUR +0.5%) - with strong balance sheets and which have materially underperformed in 2015 as investors have focused on E&Ps with longer life onshore portfolios - also could be buyout targets.
- But shares of APA’s peers have enjoyed little benefit from the report, which Heard On The Street's Spencer Jakab says suggests that the bargains on offer among North American oil and gas producers are not compelling enough to kick off a round of consolidation and that the list of buyers is short.
- Analysts at Simmons thinks Exxon Mobil (XOM -2.1%) and BP (BP -0.5%) are the most likely prospective buyers for APA.
Mon, Nov. 9, 11:14 AM
- Ineos, owner of Scotland's Grangemouth refinery, signs a deal with Exxon Mobil (NYSE:XOM) and Royal Dutch Shell (RDS.A, RDS.B) to supply ethane derived from U.S. shale gas imported into Scotland to their nearby chemical plant.
- Swiss-based Ineos, which recently acquired the U.K. North Sea natural gas field interests of Russian billionaire Mikhail Fridman's LetterOne investment fund, will supply ethane from Grangemouth to the Fife Ethylene Plant at Mossmorran in Scotland from mid-2017.
- The plant is owned by an Exxon subsidiary, and a Shell subsidiary has 50% capacity rights.
Fri, Nov. 6, 10:25 AM
- The New York attorney general's investigation of Exxon Mobil's (XOM -1.8%) record on climate change may prompt legal inquiries into other oil companies, NY Times reports, citing legal and climate experts.
- Prosecutors could decide to probe companies that funded or joined groups that questioned climate science or policies designed to address the problem to see if discrepancies exist between the companies’ public and private statements, according to the report.
- For example, internal documents discussing climate change from companies belonging to the Global Climate Coalition - including XOM, BP, Shell (RDS.A, RDS.B) and Texaco (now part of Chevron CVX) - could contradict what the companies said as part of the group, which disbanded in 2002.
- Energy experts say it would be harder to make cases against oil companies than it was against tobacco companies that deliberately hid research from their customers, since many oil company scientists, including those of XOM, have presented papers on climate change publicly at conferences and contributed to research of groups concerned with the issue.
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