Nov. 21, 2014, 5:55 PM
- Four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf of Mexico - bigger and more expensive than ever - even as U.S. oil prices are below $80/bbl at a four-year low.
- New projects alone have the combined capacity to pump ~900K bbl/day: Hess (NYSE:HES) said Monday it had started pumping crude from its deepwater Tubular Bells installation, Exxon (NYSE:XOM) and Anadarko (NYSE:APC) plan to start up two more major Gulf projects in coming months, and Hess, Chevron (NYSE:CVX) and other partners recently OK'd a $6B Gulf development.
- Even BP is returning in a big way, with two Gulf projects and plans to spend $4B/year in the Gulf for the next decade, as it works on technology to drill at greater depths.
- All this is happening even as costs are jumping, partly because companies are drilling farther from shore and in deeper waters; deepwater wells are up to 25% more expensive today than in 2010, and drilling the average deepwater Gulf well takes 13% longer than it did before the 2010 spill.
- Shell’s (RDS.A, RDS.B) 100K bbl/day Olympus, which came online ahead of schedule and under budget, began tapping oil and gas in the Gulf in February; it is also working on a new Gulf project that will tap an oil field under 9,500 feet of water, 3x deeper than Olympus.
Nov. 17, 2014, 3:59 PM
- In the wake of Halliburton's (NYSE:HAL) $34.6B offer for Baker Hughes (NYSE:BHI), it appears the next hot sector for M&A action is energy: More consolidation is likely, given the weakness for stocks in the oilfield services subsector, low interest rates, and as a drop in demand for oil increases cutthroat pricing competition.
- Speculation is running rampant as investors try to figure out who is next in an industry that is sure to undergo some more consolidation; some names identified as possible candidates include Kodiak Oil and Gas (NYSE:KOG), Marathon Oil (NYSE:MRO), Northern Oil and Gas (NYSEMKT:NOG), Anadarko Petroleum (NYSE:APC), Pioneer Natural Resources (NYSE:PXD).
- GE could go after National Oilwell Varco (NYSE:NOV) to show it is serious about the energy industry after last year’s purchase of pumpmaker Lufkin, Royal Bank of Canada says, and Oppenheimer says even BP could be an acquisition candidate.
- But Morgan Stanley does not see offshore drillers getting in on the action, as larger players like Diamond Offshore (NYSE:DO), Transocean (NYSE:RIG) and Seadrill (NYSE:SDRL) are still addressing dividend concerns while smaller companies such as Atwood Oceanics (NYSE:ATW) and Pacific Drilling (NYSE:PACD) still trade close to replacement value.
Nov. 14, 2014, 4:56 PM
- New developments and the expansion of older oil fields are expected to lift deepwater Gulf of Mexico production 18% Y/Y to 1.9M boe/day in 2016, the first new production peak seen since 2009, according to Wood Mackenzie’s latest outlook.
- However, production is expected to plateau for the remainder of the decade following the 2016 peak due to the depletion of legacy fields and a limited number of new projects coming onstream.
- Among top Gulf producers: RDS.A, RDS.B, BP, CVX, BHP, APC, APA, HES, E, EXXI.
Nov. 13, 2014, 5:39 PM
- Anadarko Petroleum (NYSE:APC) has suspended some operations in Colorado after a Halliburton (NYSE:HAL) worker was killed and two others were seriously injured at an APC well site in the Wattenberg oil and gas field.
- The workers were trying to heat a high-pressure water line that had frozen in record-breaking cold conditions, when it ruptured.
Nov. 11, 2014, 2:52 PM
- Count BofA's Doug Leggate among analysts seeing an opportunity to become contrarian bullish on the energy sector, which he says is now discounting $75 oil.
- His top picks in the sector are Occidental Petroleum (NYSE:OXY) and Hess (NYSE:HES), while Anadarko Petroleum (NYSE:APC) and Devon Energy (NYSE:DVN) justify another look; also, pure play gas names Cabot Oil & Gas (NYSE:COG), Range Resources (NYSE:RRC) and Southwestern Energy (NYSE:SWN) remain Buy rated.
- On the technical side, BofA's Stephen Suttmeier notes the sector hit capitulation levels in mid-October not seen since 2002, suggesting the worst is over and energy is poised to build a base and head higher.
- Earlier: Top energy stocks may have bottomed even if oil has not, J.P. Morgan says.
Nov. 11, 2014, 11:26 AM
- A new report from J.P. Morgan says hammered stocks in the energy exploration and production sector may have bottomed, even if the price of oil hasn’t yet.
- JPM says investors looking to buy energy stocks should buy the E&P names with operational momentum and strong balance sheets, including Anadarko Petroleum (NYSE:APC) and EOG Resources (NYSE:EOG), which the firm sees as potential takeover candidates.
- The firm also likes Noble Energy (NYSE:NBL), Pioneer Natural Resources (NYSE:PXD) and Cimarex Energy (NYSE:XEC).
Nov. 11, 2014, 3:25 AM
- Clearing the final hurdle for its cleanup settlement, Anadarko Petroleum (NYSE:APC) has received the green-light from a federal judge to pay $5.15B to resolve pollution claims against its Kerr-McGee unit.
- The deal, reached in April, settled a lawsuit against Anadarko from creditors of Tronox (NYSE:TROX), the paint materials maker that was once a unit of Kerr-McGee.
- The bankruptcy judge who oversaw Tronox's Chapter 11 case and presided over the trial, approved the deal in May.
- Previously: Confirmed: Anadarko settles Tronox cleanup case for $5.15B
- Previously: Anadarko Petroleum's $5.15B pollution settlement approved by judge
Nov. 7, 2014, 7:19 AM
Nov. 5, 2014, 12:45 PM
- Anadarko Petroleum (APC +2.7%) VP of international exploration Frank Patterson worries the shale boom may be less sustainable than it seems, noting that unlike conventional drilling which taps a reservoir where oil or gas has collected, fracking taps the source rock where petroleum originates - what’s left after that?
- Also, young geologists are learning the manufacturing-like process of drilling lots of shale wells at the expense of learning how to explore for new oil, which Patterson calls “potentially a big problem in the future” for E&P companies.
- Meanwhile, Denton becomes the first city in Texas to ban fracking, as voters approved an initiative against the controversial drilling method (NYSEARCA:FRAK).
Oct. 29, 2014, 3:32 PM
- Anadarko Petroleum (APC +0.5%) has been higher for most of the session despite Q3 earnings that missed analyst estimates, as record sales volumes of 849K boe/day improved its liquids product mix to 51% from 43%.
- Credit Suisse says APC’s results are "much better than meets the eye," noting that operating results were strong; in fact, APC raised its full-year production guidance by 1.5% to 305M boe at the mid-point on the strength of U.S. oil production, which the firm says is the key driver of the stock.
- APC’s adjusted cash flow reflects the anticipated deferral of the $550M Tronox tax benefit to Q1 2015; the firm says adjusted Q3 2014 cash flow/share of $4.58 would have comfortably topped its estimate and the Street.
Oct. 28, 2014, 5:46 PM
- Anadarko Petroleum (NYSE:APC) +0.4% AH after Q3 earnings fell short of analyst expectations but revenue rose 30% to $5.01B, as stronger sales volume offset the impact of weaker average selling prices.
- Q3 total sales volume of crude oil, natural gas and natural gas liquids gained 9.5% Y/Y to 849K bbl/day from 775K a year ago.
- APC had sold its China subsidiary along with other assets during Q3, increasing its cash on hand to $8.3B.
- APC raises its full-year sales volume expectations for the third time this year, to a new range of 304M-306M boe, primarily driven by strong results from its Wattenberg horizontal program, where oil volumes doubled from Q3 of last year.
- Separately, P-E firm KKR says it will help APC develop its Eaglebine acreage in south Texas with a non-operated stake in the project; financial terms were not disclosed, but KKR says it expects to participate in 500 wells.
Oct. 28, 2014, 4:14 PM
Oct. 27, 2014, 5:35 PM
- AEC, AFG, AFL, AJG, AMCC, AMP, APC, ARI, AZPN, BGFV, BLDP, BOOM, BXP, CAP, CBT, CEB, CHMT, CHRW, CINF, CRAY, DLR, DNB, DYAX, EA, EIX, EPR, EQR, ESRX, EXP, EXTR, FARO, FB, FEIC, FISV, GFIG, GILD, GPRE, HIW, HLIT, HTA, HTS, HURN, INAP, INVN, IPHI, KEYW, KIM, KONA, MAC, MAR, MCK, MRCY, MWA, NANO, NFX, OI, PEI, PLT, PNRA, PSMT, RJET, ROG, RPXC, SKT, SM, SWI, TQNT, TRN, TSS, UDR, ULTI, USNA, VRSK, VRTX, WDC, WES, WGP, WNC, WSH, WTS, WYNN, X, XCO, XOOM, ZLTQ
Oct. 21, 2014, 3:58 PM
- Global Hunter revisits its commodity price outlook, now moving to $83 long-term oil vs. $85 previously, applying a higher discount rate to future cash flows and modeling more conservative assumptions with regards to future rig activity, which results in downward revisions for several exploration and production stocks price targets and some rating changes (Briefing.com).
- Anadarko Petroleum (NYSE:APC), Gulfport Energy (NASDAQ:GPOR) and Rex Energy (NASDAQ:REXX) are upgraded to Buy; Talisman Energy (NYSE:TLM) is raised to Speculative Buy from Neutral.
- Devon Energy (NYSE:DVN), Hess (NYSE:HES), Occidental Petroleum (NYSE:OXY) and Kosmos Energy (NYSE:KOS) are upgraded to Accumulate from Neutral.
- Cobalt Energy (NYSE:CIE) is downgraded to Speculative Buy from Buy.
Oct. 16, 2014, 2:32 PM
- Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY) and partners including Anadarko Petroleum (NYSE:APC) and Kosmos Energy (NYSE:KOS) are planning to invest $2.2B next year to drill wells in Ghana’s Jubilee and Tweneboa-Enyenra-Ntomme, or TEN, oil fields, the deputy general manager of Tullow Oil Ghana says.
- The partners plan to invest $20B over the next decade to boost the country's crude oil output to 500K bbl/day from 103K now.
- Tullow, the operator of the projects, plans to drill two wells in the TEN field and as many as three wells at Jubilee.
Oct. 9, 2014, 3:25 PM
- Crushed by relentless anxiety about oversupply and weakening global demand, Nymex crude oil futures closed down $1.54 at $85.76/bbl, their lowest close since Dec. 2012, while Brent crude fell below $90/bbl for the first time in more than two years.
- Including today's losses, WTI crude is down 6.2% since the start of the month and Brent has surrendered ~5%.
- In the face of surging output, a move in WTI below its 10-year average at $82 is not out of the realm of possibility, Brown Brothers Harriman says, adding that "a break of $73/barrel could send WTI toward $64, which corresponds with the 2010 low."
- Among big oil names so far today: APC -6.3%, LINE -4.6%, EPD -3.8%, DVN -3.8%, MRO -3.6%, HES -3.8%, KMI -3.7%, TOT -3.5%, STO -3.3%, RDS.A -3.1%, OXY -3%, KMP -3%, XOM -2.6%, COP -2.6%, MUR -2.6%, CVX -2.5%, BP -2.4%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
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