Mon, Feb. 23, 1:00 PM
- Shale oil producers are cutting output so quickly that U.S. crude production could fall sooner than expected, according to several CEOs who told Reuters they were taken aback by the scale and speed of the cutbacks and that the current oil price downturn is different from previous episodes in their careers.
- Just a few weeks ago, the prevailing view among industry insiders and analysts was that U.S. oil production would keep rising for several months despite falling rig numbers because of rising productivity of active wells and drilling inertia.
- Many companies have announced 25%-70% reductions in drilling and a total of at least $25B in spending cuts; Magnum Hunter (NYSE:MHR) is one that went even further, halting all drilling and telling services firms it will not resume work unless its costs fall 40%, and CEO Gary Evans predicts such cuts foreshadow falling U.S. production within the next two months.
- After years of breakneck growth, top shale companies Apache (NYSE:APA) and EOG Resources (NYSE:EOG) have said their oil and gas output this year will be flat.
- Continental Resources' (NYSE:CLR) President Jack Stark calls the precipitous decline in the number of active U.S. land rigs to roughly the level EIA had forecast would be reached in October as "probably faster than I've ever seen."
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
Fri, Feb. 20, 8:06 AM
Fri, Feb. 13, 12:39 PM
- Apache (APA +1.9%) is upgraded to Neutral from Underperform with a $78 price target, raised from $57, at BofA Merrill, sparked by APA’s decision to reverse the planned sale of its North Sea and Egyptian assets.
- The firm sees the shift as the single biggest change to the outlook for the stock and "a game changer for the investment case... with substantial free cash flow from predominantly oil levered international production, APA secures the means to accelerate development in the lower 48, should oil prices recover."
- APA's strategy, underlined in its Q4 earnings report, seems to be to keep production at 2014 levels while cutting costs until the price of crude rises; APA then would be ready to reap a significant benefit because its well costs have been sharply cut by operating fewer rigs.
Thu, Feb. 12, 9:57 AM
- Apache (APA +1.9%) opens higher after reporting better than expected Q4 earnings and saying it will dramatically slow its activity in the face of falling oil prices.
- APA says it is reducing its rig count to 27 by the end of this month from an average of 91 rigs in Q3 2014; the company reduced its fracking crews by ~50% during that period and says it is delaying some well completions until service costs decrease materially.
- Plans 2015 capital spending of $2.1B-$2.3B in onshore North America, and $1.5B-$1.7B internationally and offshore; APA's capital budget last year was $8.5B.
- Onshore North American production in 2015 is seen relatively flat from 2014 average production of 302K boe/day.
- For Q4, APA says average selling prices for oil dropped 30% globally while sliding 26% for its North American onshore business.
- APA posted an unadjusted $4.8B loss, or a loss of $12.78/share, largely the result of charges based on a reduction in value of oil and gas assets and goodwill impairments associated with earlier acquisitions.
Thu, Feb. 12, 8:16 AM
Wed, Feb. 11, 5:30 PM
- AAP, AAWW, AB, ACOR, ANR, APA, AVP, BG, BWA, CAB, CCE, COR, CPLA, CS, CVE, DBD, DPS, FAF, FLO, GNC, HE, HERO, HIMX, HSP, IFF, INCY, JAH, K, LMNS, LNCE, LPNT, MANU, MDWD, MFA, MFC, MHFI, MINI, MPEL, MPW, NCI, NLSN, NNN, NRP, NWE, PDS, PNK, Q, RDN, RTIX, RWLK, RYN, SCOR, SHPG, SKYW, SNI, SON, SPW, STC, THS, TIME, TU, VG, VNTV, WD, WSO, WWAV, WWE
Fri, Jan. 23, 6:43 PM
- Steve Farris, who retired earlier this week as Apache's (NYSE:APA) CEO, stands to collect ~$12M in salary and bonus over the next three years as part of his retirement package, according to an SEC filing.
- Farris will act as a consultant to APA for the next three years and will collect his $1.75M annual salary during that time, as well as two bonus payments of $2.6M each and a lump sum of $1.4M; he also is entitled to the vesting of all his restricted stock and options.
Thu, Jan. 22, 5:14 PM
- Apache (NYSE:APA) selects Stephen Riley, BP's former CFO for E&P, as its new executive VP and CFO.
- In his position with BP, Riley oversaw accounting, business development, planning and commercial operations for the upstream segment.
- The change comes just two days after APA announced the resignation of longtime CEO Steven Farris.
Tue, Jan. 20, 8:19 AM
- Apache (NYSE:APA) announces the retirement of Chairman, President and CEO Steve Farris, effective immediately, although he will continue as non-executive chairman until May 1.
- North America COO John Christmann will succeed Farris President and CEO and join the board, while board member John Lowe will succeed Farris as non-executive chairman.
- Farris joined APA in 1988 and has served as CEO since 2002 and as Chairman since 2009 before being named President last year; Christmann has been with APA for 18 years and has served in a variety of leadership roles.
Thu, Jan. 15, 3:47 AM
- Apache (NYSE:APA) announced it will lay off around 250 employees this week, or 5% of its workforce.
- This is one of the first major workforce cuts at an American oil producer after the recent drop in crude prices, and others are likely to follow. Oil services companies, on the other hand, were the first to feel the pinch and have already cut their workforces.
- Apache has already been under pressure in recent months from activist investor Jana Partners to sell or spin off its international operations and focus on drilling in the U.S.
Tue, Jan. 13, 3:23 PM
- J.P. Morgan's Joseph Allman is “mildly bullish” on oil and gas E&P companies in 2015, as short-term nervousness about the oil market’s oversupply is outweighed by the benefits of low oil prices, declining service costs and a more balanced oil market.
- Allman’s favorite picks among big-cap names are EOG, APC and NBL, among mid-caps are XEC and PXD, plus PDCE in the small-cap space; his least favorite stocks are APA, AREX, GDP and JONE.
- Among majors, JPM analysts Phil Gresh and John Royall initiate SunCor (NYSE:SU) at Overweight, citing "top tier sustainable dividend coverage and leverage, with some underlying growth potential"; the pair also downgrade Cenovus (NYSE:CVE) to Neutral, tags ConocoPhillips with an Underweight rating, and are neutral on Exxon (NYSE:XOM) and Chevron (NYSE:CVX).
- Earlier: Valero Energy upgraded, Marathon Petroleum downgraded at J.P. Morgan
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, IEO, PXE, FENY, PXJ, RYE, FXN, DDG
Mon, Jan. 12, 2:56 PM
- Apache (NYSE:APA) appears to have gone cold on the $3B sale of its remaining West Australian gas and oil assets as oil prices plunge and potential buyers struggle, The Australian reports.
- Sales talks with potential buyers are said to have been held up in the wake of sliding prices and high Western Australia gas prices amid falling international oil prices and U.S. gas prices that could make a deal look less appealing.
- At the same time, last month’s $2.75B sale of its Wheatstone LNG stake in Australia and in the yet-to-be approved Kitimat venture in British Columbia may have eased the pressure from activist shareholders who were pushing APA to focus on the U.S.
- Among potential buyers, Santos (OTCPK:STOSF) is APA’s partner in some Australian fields but is now in conservation mode following the oil price slide, Origin Energy (OTC:OGFGF) is facing a downgrade of its credit rating if oil prices fall and will not want to weaken its balance sheet, and even BHP - APA’s partner in the Macedon gas plant - is facing challenges maintaining its A-grade credit rating.
Wed, Jan. 7, 7:35 PM
- Energy bonds have become one of the riskiest sectors in the bond market, as the cost of buying five-year credit default swaps protecting $10M of bonds has jumped from $139K/year last June to $377K today for companies in the S&P/ISDA CDS U.S. Energy Select 10 Index.
- The index consists of 10 large major energy companies: APC, APA, CHK, COP, DVN, OTCQB:FSTO, HAL, BTU, VLO and WMB.
- Even though most of the companies boast investment-grade ratings, it now costs more to insure bonds in that index against default than it costs to insure bonds of an average junk-rated company, according to S&P.
Wed, Jan. 7, 3:58 PM
- More icy weather is expected this week in the Permian Basin of Texas, after last week's hard freeze that snarled truck traffic, caused power outages and disrupted oil and gas work.
- Apache (APA -1.1%), a leading Permian oil producer, said today it suffered a modest impact from the freezes, while Pioneer Natural Resources (PXD -1.1%) said yesterday severe winter weather had disrupted its production and drilling operations in the Permian.
- Energy intelligence service Genscape says lost output last week in the Permian amounted to ~2.3M barrels.
Mon, Jan. 5, 12:18 PM
- Energy stocks severely underperform the broader market, with the sector -4.2% vs. the S&P 500's -1.4%, as U.S. oil prices briefly slip below $50/bbl for the first time since April 2009; Nymex crude recently was -4.4% at $50.37, while Brent crude -5.9% at $53.08.
- Among the day's biggest losers: DNR -9%, RIG -7.6%, NBR -4.8%, CHK -5.9%, SDRL -9.1%, SD -12.3%, NOV -5.9%, PSX -6.2%, APA -5.9%, DVN -4.4%, EOG -6%, SU -5.2%, OXY -4.2%, APC -8.7%, PWE -9%, ECA -5.5%, MRO -5.3%.
- Global oil majors, which have been seen as less vulnerable to falling oil prices, are posting big losses: XOM -2.7%, COP -4.5%, CVX -3.8%, BP -5.8%, RDS.A -4.6%, TOT -6.5%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, FCG, DIG, PBW, BNO, GASL, DTO, DBO, DUG, IYE, XES, IEO, QCLN, IEZ, UWTI, PXE, USL, PXI, FENY, DWTI, PXJ, DNO, PSCE, RYE, SZO, PUW, FXN, OLO, DDG, HECO, TWTI, OLEM
Dec. 22, 2014, 10:45 AM
- Natural gas prices fall 9.5% to near two-year lows at $3.133/mmBtu, in the biggest one-day percentage loss since February and the lowest intraday price since January 2013, on mild weather forecasts and inventory that is above year-ago levels.
- Prices are now down more than 15% in three straight losing sessions and are 30% lower than the six-month high closing price of $4.489/mmBtu it hit just a month ago.
- Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low stockpiles to catch up to where they were a year ago and encouraging traders to sell based on the belief that supply is relatively healthy.
- Gas producers are among the biggest early decliners: XOM -1.1%, CHK -7.3%, APC -2.6%, SWN -6%, DVN -2.2%, COP -2.3%, BP -1.5%, COG -4%, BHP -1.9%, CVX -1.3%, ECA -5.1%, EQT -4.3%, RDS.A -1.7%, UPL -12%, WPX -6.9%, EOG -1%, OXY -1.1%, RRC -6.1%, APA -2.3%, AR -3.2%, CNX -3%, QEP -4.8%, LINE -4.9%, NBL -1.6%, SM -2.6%, XEC -4.2%, PXD -2.9%, NFX -5.1%.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, NAGS, DCNG
APA vs. ETF Alternatives
Apache Corporation is an independent energy company that explores, develops and produces natural gas, crude oil and natural gas liquids.It has interests in six countries: the U.S., Canada, Egypt, Australia, the U.K. North Sea (North Sea), and Argentina.
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