Tue, Feb. 3, 11:49 AM
- Anadarko Petroleum (APC +2.5%) will significantly cut its 2015 capital spending from last year because of the collapse in crude oil prices, but isn't offering specifics until it presents its budget for the year in early March.
- Cuts would come mostly from shorter-term investments in shale drilling where service costs have driven prices too high relative to drilling returns, CEO Al Walker says in today's earnings conference call.
- "We see ourselves in a period here of trying to build value, maintain flexibility and not grow in a low commodity price environment that we see as less than attractive," Walker says.
- Stifel upgrades shares to Buy from Neutral as it projects 2015 capex of $5.5B, down 37% from 2014, and 2015 production growth of 2% following last year's 8% increase.
- Earlier: Anadarko misses Q4 numbers, shares fall after-hours
Mon, Feb. 2, 5:45 PM
- Anadarko Petroleum (NYSE:APC) -0.9% AH as Q4 earnings and revenues fell short of Wall Street expectations.
- Q4 saw divestiture losses of $192M and impairments of $346M, among other costs that added up to $582M.
- APC improved its average daily crude oil output by 13% to 300K bbl/day in Q4, but the average sales price fell 28% to $71.67/bbl vs. a price of $99.20 in Q4 2013; APC's Q4 sales volumes of natural gas, crude oil and natural gas liquids totaled 79M boe, or an average of 854K boe/day, up 6% Y/Y.
- Estimates proved reserves at year-end 2014 totaled 2.86B boe, with 69% of its reserves categorized as proved developed.
- APC says its Heidelberg project in the Gulf of Mexico and its TEN development off Ghana remains on track for first production in 2016, and its LNG project in Mozambique also is moving forward.
- APC says its biggest production gains came from its Wattenberg field in Colorado, where it “enhanced efficiencies in our drilling and completions and leveraged the competitive advantage of our expensive midstream infrastructure to significantly bolster growth.”
Mon, Feb. 2, 4:16 PM| 1 Comment
Mon, Feb. 2, 3:44 PM
- An Anadarko Petroleum (APC +0.9%) official says the company did not pay for any cleanup or response costs for the 2010 Gulf of Mexico oil spill, according to testimony at the trial to determine pollution fines in the disaster.
- The statement may undermine APC’s argument that it should not be fined for the spill, while the U.S. government seeks more than $1B from the company.
- APC, 25% owner of the BP well that blew out in the Gulf, argues it should not pay a pollution fine because it had no fault for the disaster and paid $4B in a settlement with BP, with the money earmarked for claims to those harmed by the spill; APC began presenting witnesses in its defense today.
Sun, Feb. 1, 5:35 PM
Wed, Jan. 28, 3:59 PM
- Energy stocks are broadly lower as Nymex crude oil futures fell another $1.68/bbl (-3.6%) to $44.53 after today's inventory report showed the largest weekly supply buildup since 1982, but drilling contractor are whacked with especially large losses.
- Examples: NBR -11.7%, PTEN -8.6%, PES -10.9%, PDS -12.3%, KEG -6.5%; Helmerich & Payne (NYSE:HP), which reportedly has launched a round of steep layoffs, -6.3%.
- Among independent producers: DNR -9.7%, NFX -4.6%, SM -8.6%, SGY -10%, SD -9.7%, EOG -5.3%, PXD -6.8%, QEP -6%, APC -4.2%, XEC -3%.
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, FCG, DIG, GASL, DUG, IYE, XES, IEO, IEZ, PXE, PXI, FENY, PXJ, RYE, FXN, DDG
Tue, Jan. 27, 12:58 PM
- Marathon Oil (MRO -1.3%), Cobalt International Energy (CIE -0.3%) and RSP Permian (RSPP +0.8%) are downgraded to Neutral from Buy at UBS, as the firm cuts its 2015 Brent/WTI crude forecasts to a respective $52.50/bbl and $49/bbl, and lowers 2016 Brent/WTI crude estimates to $67.50 and $62.50.
- UBS also is cautious on several energy names with large free cash flow deficits, slowing growth profiles and rich relative valuations: COP, DVN, MUR, UPL, RRC, DNR, MHR.
- The firm's top Buys are APC, CHK and EOG.
Wed, Jan. 21, 3:59 PM
- Credit Suisse thinks it is still too early to buy E&P equities but the picture should brighten by late in Q1, when the firm suggests the time could be right to make a play for the strong balance sheets offered by the likes of Anadarko Petroleum (NYSE:APC), Devon Energy (NYSE:DVN), EOG Resources (NYSE:EOG), Marathon Oil (NYSE:MRO) and Pioneer Natural Resources (NYSE:PXD).
- E&P stocks historically have been highly anticipatory, the firm says, with the stocks moving ahead of crude oil, adding that the key leading indicator of U.S. drilling and completion activity is U.S. drilling permits.
Tue, Jan. 20, 12:26 PM
- As the penalty phase starts today in BP's (BP -0.6%) trial over the 2010 Gulf of Mexico oil spill, a U.S. prosecutor says in opening statements that the company is overstating how well it handled the 2010 Gulf of Mexico oil spill, and that the company should not get much of a break on $13.7B in potential fines for merely complying with the law..
- According to court papers, BP will argue its $42B in liabilities including $14B spent on cleanup efforts should prompt the judge to reduce environmental penalties, and that falling oil prices change the equation as its U.S. oil production unit has operated in the red since the spill and will have less capacity to weather a big fine.
- Anadarko Petroleum (APC -1.5%), which faces its own penalty of as much as $3.5B because it owned 25% of the oil well drilled by the Gulf rig, also will put up a fight as APC's lawyers say the company was "a faultless, non-operating investor" in the Deepwater Horizon venture.
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
Fri, Jan. 9, 6:12 PM
- The 5th U.S. Circuit Court of Appeals in New Orleans refuses to reconsider its 2014 ruling that BP cannot avoid federal penalties for the 2010 Gulf of Mexico oil spill by blaming another company's failed equipment.
- BP and minority partner Anadarko (NYSE:APC) had argued they should not face federal Clean Water Act penalties because the oil leaked not from the Macondo well but from the broken underwater riser that had connected the well to the Deepwater Horizon rig owned by Transocean (NYSE:RIG).
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.
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, 7:10 PM
- While the U.S. government wants BP to pay $16B-$18B in fines related to the 2010 Gulf of Mexico oil spill, the company is opening the latest round of its legal battle by arguing in a court filing that it should pay a lesser penalty partly because of the falling price of crude oil.
- In a filing to the Louisiana District Court, BP suggests that "a per-barrel penalty at the lower end of the statutory range would satisfy the goals of [the Clean Water Act].”
- Judge Barbier in New Orleans will conduct a non-jury trial next month to set pollution fines for BP and its well partner, Anadarko Petroleum (NYSE:APC).
- Meanwhile, BP says it signed a joint venture deal with Azerbaijan's Socar to explore for and develop potential prospects in the shallow water area around the Absheron Peninsula of the Caspian Sea.
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
Dec. 17, 2014, 2:20 PM
- New York Gov. Cuomo's administration says it will ban fracking statewide, citing health concerns and what it considers as limited economic benefits to drilling.
- NY's acting health commissioner said at a cabinet meeting in Albany today that studies on fracking’s effects on water, air and soil are inconsistent, incomplete and raise too many “red flags” for the state to allow it; the state Department of Environmental Conservation will now issue a legally-binding recommendation prohibiting fracking.
- The state has had a de facto moratorium on fracking for more than six years, so nothing really changes with today's decision.
- Parts of New York sit atop the gas-rich Marcellus shale formation, whose top producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
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