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.
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.
Thu, Nov. 5, 3:33 PM
- The New York attorney general's office has launched a sweeping investigation of Exxon Mobil (XOM -1.2%) to determine whether the company lied to the public about the risks of climate change or to investors about how those risks might hurt the oil business, NY Times reports.
- AG Eric Schneiderman is said to have issued a subpoena last night to XOM demanding extensive financial records, emails and other documents.
- XOM has denied allegations it has suppressed climate change research, and has said it had funded mainstream climate science since the 1970s.
- The report also says coal producer Peabody Energy (BTU +6.2%) has been under investigation by the AG for two years over whether it properly disclosed financial risks related to climate change but has not resulted in any charges or other legal action.
Tue, Oct. 6, 12:44 PM
- Chevron (CVX +2.7%) could enjoy "a step forward" in its Q3 results vs. other oil majors such as Exxon Mobil (XOM +1.4%), ConocoPhillips (COP +2.9%) and Canadian Natural Resources (CNQ +4%) that are likely to muddle through another tough quarter for earnings, free cash flow and leverage creep, J.P. Morgan's Phil Gresh writes.
- The analyst sees an opportunity for CVX to take a step forward with rebuilding investor confidence around the long-term cost reduction and dividend coverage story, although the real uplift will have to come with an on-time Gorgon startup, which is still slated for Q1 2016; he rates the stock as Overweight.
- JPM has lowered its 2016-18 EPS estimates for natural gas prices in North America and Europe, which now show limited potential for recovery over the next few years and are considered most impactful for Neutral-rated XOM and CNQ and Underweight-rated COP.
Wed, Sep. 30, 4:45 PM
- PBF Energy (NYSE:PBF) +8% AH after agreeing to acquire the 155K bbl/day Torrance, Calif., refinery and related logistics assets from Exxon Mobil (NYSE:XOM) for $537M.
- The refinery has been shut down since an explosion in February injured four contractors and caused heavy damage, leading to a shortage of gasoline and higher prices at the pump for drivers in California.
- The Torrance refinery provides 10% of the state’s capacity and 20% of the capacity in Southern California, and the explosion forced XOM to cut production to less than 20%, causing the spike in gas prices.
- PBF says the refinery will be restored to full working order prior to close, and expects the deal to be immediately accretive to earnings.
- Coupled with its previously announced Chalmette acquisition, PBF says it will have increased its refining capacity by more than 60% to ~900K bbl/day and added meaningful Gulf coast and west coast assets to its refining system.
Fri, Sep. 18, 11:35 AM
- Exxon Mobil (XOM -1.9%) is actively hunting for shale bargains in west Texas, as executives with its XTO Energy shale drilling unit meet with small, closely held producers in the Permian Basin to negotiate possible purchases and joint ventures, Bloomberg reports.
- XOM is expanding its use of a new strategy first deployed in the region last year that offers operators a cut of future proceeds rather than big upfront stock or cash payouts, according to the report.
- XOM has bought drilling rights or funded partnerships in five Permian Basin transactions during the past 20 months, and now controls drilling rights to 1.5M acres in the Permian region, more than twice the size of its holdings in Iraq or the U.K. sector of the North Sea.
- The oil downturn brings plenty of bargains from distressed operators, faced with the choice of shutting down rigs and wait it out or surrender some independence to a deep-pocketed savior in exchange for a shot at a future windfall.
Fri, Sep. 18, 9:47 AM
- BP (BP -2.3%) is expected to continue as operator of the ACG oil field complex after the current production-sharing deal expires, according to Azerbaijan state oil company Socar.
- The comments signal a thawing in BP’s relations with the Azeri government, after the president three years ago blamed an unexpected decline in oil output from the ACG fields on “grave mistakes” by BP.
- BP gets ~5% of its oil output from Azerbaijan; others in the ACG development group include Chevron (CVX -2.6%), Exxon (XOM -2.7%) and Statoil (STO -2.4%).
Wed, Sep. 16, 10:45 AM
- Exxon Mobil (XOM +1.5%) says it has started production at its new Erha North project offshore Nigeria five months ahead of schedule and $400M under budget.
- The deepwater project includes seven wells, with expected peak production of 65K bbl/day of oil, and will be tied to an existing Erha North floating production, storage and offloading vessel, helping reduce infrastructure.
- XOM also affirms its forecast for 2% production growth in 2015 to 4.1M boe/day, driven by 7% liquids growth.
Wed, Sep. 9, 9:53 AM
- Oil Search (OTCPK:OISHF) will reject a demand by suitor Woodside Petroleum (OTCPK:WOPEF, OTCPK:WOPEY) to hold exclusive talks as part of its A$11.6B takeover offer, potentially paving the way for Exxon Mobil (XOM +1.5%) to emerge as a rival bidder, Sydney Morning Herald reports.
- XOM is the operator and largest shareholder in Oil Search's Papua New Guinea liquefied natural gas project, and is said to have held an informal meeting with Oil Search CEO Peter Botten in the country yesterday.
- Macquarie analysts believe that XOM, as operator of PNG LNG, is unlikely to make any due diligence process easy for Woodside given sensitivities around early work it is performing on the P'nyang and Elk-Antelope gas fields; Bernstein's Neil Beveridge expects upward revisions to Woodside's offer for Oil Search and counter bids possibly from XOM, "who would be the most likely competitor."
Tue, Sep. 1, 3:58 PM
- Citigroup's energy analysts defend their bullish take on big oil stocks such as ConocoPhillips (COP -2.6%), Total (TOT -2.1%) and Statoil (STO -4.5%), pointing to 30-year valuation lows, upside asymmetric risk on oil prices and signs that managements are doing enough to turn the corner on better capital allocation and cost-cutting.
- Favoring COP, TOT and STO, the firm says its sector investment criteria are (1) growth - companies that have near-term growth are less reliant on simply cutting costs; (2) better capital allocation - combined with growth, it should deliver 2-3x the ROE uplift than cost-cutting can; and (3) a strong enough balance sheet to manage the early part of the cycle.
- Citi is staying away from Exxon Mobil (XOM -4%) because of its valuation premium to peers and low growth and from Chevron (CVX -3.2%) due to its slow response in a lower commodity world.
Tue, Aug. 25, 3:33 PM
- A New Jersey judge approves the $225M settlement between New Jersey Gov. Christie's administration and Exxon Mobil (XOM +2.1%) over dozens of polluted sites including the company’s refinery and petrochemical plants in Bayonne and Linden.
- The judge rules that while the deal is much less than the $8.9B New Jersey originally sought, it is a "reasonable compromise" considering "substantial litigation risks" faced by the state in the case.
- Democrat lawmakers and environmental groups have called the settlement inadequate, and the Sierra Club says it expects to appeal the judge's approval of the settlement.
Tue, Aug. 25, 10:20 AM
- Alaska Gov. Walker says he plans to recommend that the state buy out TransCanada's (TRP +2.3%) position in the major liquefied natural gas project Alaska is pursuing.
- Walker estimates buyout costs would total ~$100M.
- The other partners in the project are Exxon Mobil (NYSE:XOM), BP, ConocoPhillips (NYSE:COP) and the Alaska Gasline Development Corp., which would hold the state's interest in liquefaction facilities.
- No decision has been made yet on whether to build the project, which is in a phase of preliminary engineering and design.
Mon, Aug. 24, 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.
Fri, Aug. 21, 1:31 PM
- WTI crude dips below $40 for the first time since 2009 on major concerns over demand from China and a Baker Hughes report indicating producers increased their rig count for the 5th straight week.
- WTI crude traded as low as $39.86.
- Oil majors are down slightly more than broad market averages on the day. Notable decliners include Exxon Mobil (NYSE:XOM) -1.4%, Chevron (NYSE:CVX) -2.5%, Royal Dutch Shell (NYSE:RDS.A) -2.7%, Phillips 66 (NYSE:PSX) -4.5%, and ConocoPhillips -2.1%.
- Related ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Wed, Aug. 12, 3:58 PM
- A federal judge approves Exxon Mobil's (XOM +1.7%) $5M settlement of charges it violated the federal Clean Water Act and state environmental laws in connection with a 2013 oil spill in Arkansas.
- The judge says the agreement complies with the Clean Water Act and is fair to the company and the governments, and rejects a request by the water utility that serves Little Rock to have XOM move another portion of the pipeline that runs beneath a major reservoir.
- The rupture of XOM's Pegasus pipeline led to a March 2013 spill that caused ~3,190 barrels of oil to flow through Mayflower, Ark., and nearby waterways.
Tue, Aug. 11, 10:59 AM
- Many oil companies have been hit hard by low crude prices, but Chevron (CVX -2.4%) also is battling its own expansion ambitions, and some analysts say CVX should abandon its goal of tapping 3.1M bbl/day of oil and gas by 2017, WSJ's Daniel Gilbert writes.
- CVX’s stock price has underperformed Exxon Mobil (XOM -1.7%) and Royal Dutch Shell (RDS.A -0.6%) over the past year after topping them during the previous five years and betting more than them on huge energy projects such as the $54B Gorgon natural gas export plant in Australia.
- "The most important thing to preserve is value,” said IHS Energy's Lysle Brinker, and "if it means they have to sell some of their crown jewels, or small slivers of them, to raise billions of dollars and help maintain the balance sheet and the dividend, that’s what they should do."
Exxon Mobil Corporation is engaged in energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products.
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