Dec. 5, 2014, 5:38 PM
- The Eagle Ford shale formation in south Texas produced its billionth barrel of oil some time last month, according to analysts at research firm Wood Mackenzie.
- Eagle Ford now accounts for 16% of total U.S. oil production, and the firm forecasts E&P spending of $30.8B in the region next year, ~22% of the total $139.3B expected in U.S. onshore spending.
- Eagle Ford is widely considered the most profitable U.S. shale field, and many analysts speculate the break-even price for production to remain profitable is ~$50/bbl in much of the play.
- Top Eagle Ford producers include EOG, CHK, COP, MRO, BHP, APC, APA, BP, COG, CRZO, CWEI, CRK, XOM, GDP, HES, MTDR, MUR, NFX, PVA, PXD, ROSE, RDS.A, RDS.B, SN, SM, STO, SFY, TLM, ZAZA
Dec. 3, 2014, 11:32 AM
- The energy sector (XLE +1.5%) continues its momentum from yesterday, leading the way again as the best performing sector in early trading with crude oil rising 1.2% so far today and reports that U.S. well permits fell 40% last month.
- Top performers include Clayton Williams (CWEI +7.7%), Transocean Partners (RIGP +10.6%), Gaslog (GLOG +13.8%) and Energy XXI (EXXI +15.7%).
- Other leading energy names are showing stronger recoveries as they clear last Friday's bearish gap zone: XOM +0.2%, CVX +0.4%, COP +2.5%, OXY +2.5%, DVN +2.9%, EOG +2.5%, HES +2.2%, MUR +1.5%, NBL +2.3%, PXD +4.2%, SU +3%, CNQ +1.9%.
- Some analysts warn that the worst may not be over, however, as much of the advance is being driven by investors repurchasing ETFs they used to make short bets; investors also could opt to sell oil shares at a loss in coming weeks to reduce tax burdens.
Nov. 28, 2014, 7:25 AM
- OPEC yesterday decided to hold production numbers despite the bear market in oil. WTI crude is down about $5 per barrel to $69.
- A premarket look at the top 10 holdings of the XLE: Exxon Mobil (NYSE:XOM) -4.1%, Chevron (NYSE:CVX) -4.1%, Schlumberger (NYSE:SLB) -4.6%, ConocoPhillips (NYSE:COP) -4.4%, EOG Resources (NYSE:EOG) -4.3%, Pioneer Natural Resources (NYSE:PXD) -4.8%, Occidental Petroleum (NYSE:OXY) -4.3%, Haliburton (NYSE:HAL) -4.7%, Anadarko Petroleum (NYSE:APC) -5%, Williams Companies (NYSE:WMB) -1.6%.
- ETFs: ERX, VDE, OIH, XOP, ERY, FCG, DIG, PBW, GASL, DUG, IYE, XES, IEO, QCLN, IEZ, PXE, PXI, FENY, PXJ, PSCE, RYE, PUW, FXN, DDG, HECO
Nov. 14, 2014, 5:32 PM
- Freeport LNG's project to export liquefied natural gas from Texas becomes the third major proposed terminal to receive full federal authorization, as the U.S. Department of Energy approves Freeport to ship 1.8B cf/day from Quintana Island, Tex., to countries that do not have free trade agreements with the U.S.
- FERC, which is responsible for review of a gas export facility's design, engineering and environmental footprint, authorized the construction and operation of the proposed facility in an order issued July 30.
- ConocoPhillips (NYSE:COP) and Dow Chemical (NYSE:DOW) are part of Freeport LNG's ownership structure.
Nov. 13, 2014, 3:20 PM
- U.S. crude oil prices break below $75/bbl for the first time in more than three years, brushing aside an IEA report showing a surprise 1.735M barrel inventory drawdown as well as remarks by the Saudi oil minister dismissing talk of an oil price war among producers.
- West Texas crude settled today at $74.21/bbl, -3.9% and breaking below an important support level; during the past three years, futures have tested but not broken through that level three times.
- Brent crude recently was trading below $78, -3%.
- Global oil majors are all lower: COP -1.9%, BP -1.4%, CVX -1.4%, XOM -1.1%, TOT -0.9%, RDS.A -0.7%.
- Oil services companies and offshore drillers suffer even sharper drops: SDRL -4.4%, SLB -4.2%, HAL -3.9%, BHI -3.9%, RIG -3.8%, DO -3.5%, NBL -2.9%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, DIG, BNO, UGA, DTO, DBO, DUG, XES, IYE, IEO, CRUD, IXC, IEZ, PXE, USL, UWTI, IPW, FENY, PXJ, UHN, DWTI, DNO, RYE, FXN, SZO, GNAT, OLO, DDG, FILL, OLEM, TWTI
Nov. 12, 2014, 6:45 PM
- Whether or not there is an oil "price war," the U.S. shale industry is flinching only a little, essentially committing to concentrate their efforts where they will be most effective rather than admit defeat, according to an FT report.
- To be sure, activity is starting to slow: Continental Resources (NYSE:CLR), Rosetta Resources (NASDAQ:ROSE) and ConocoPhillips (NYSE:COP) are among leading shale oil companies that have announced reductions in their capital spending plans, and EOG suggested as much last week when it said it would make sure its capital spending plus dividend payments were in line with the cash flow it has coming in.
- If statements from shale industry leaders are even broadly accurate, oil prices may have to go much lower before U.S. oil production starts to fall; EOG CEO William Thomas says that even if oil fell to $40, his company could still earn a 10% return in some areas, such as the Bakken and Eagle Ford.
- Although they may be drilling less than they had expected, oil companies also will focus on maximizing production from the rigs they are already using, which encourages continued expectations for output growth from the likes of Devon Energy (NYSE:DVN), EOG, CLR and Pioneer Natural (NYSE:PXD).
Nov. 12, 2014, 8:14 AM
- A joint venture backed by Petronas, ConocoPhillips (NYSE:COP) and Royal Dutch Shell (RDS.A, RDS.B) says it started gas production from the Kebabangan gas field off Malaysia.
- The partners expect production to reach 500M cf/day of natural gas by next April, and could process up to 825M cf/day of gas, 80K bbl/day of crude oil and 22K bbl/day of condensate.
- Petronas holds a 40% stake in the JV, while COP and Shell each hold 30%.
Nov. 11, 2014, 2:36 PM
- Nearly $17B in energy company debt has been sold in the U.S. so far this month, tapping into debt capital markets despite a rise in borrowing costs as they seek to refinance or pay off existing debt amid a slump in oil prices.
- Just this week, Chevron (NYSE:CVX) offered $4B in six tranches to repay commercial paper, while Freeport McMoRan (NYSE:FCX) sold $3B in bonds in part to refinance existing debt; last week's ~$10B of energy bonds sold included a $3B offer by ConocoPhillips (NYSE:COP) also intended for refinancing purposes.
- Other energy-related deals in the pipeline for the coming days include a new loan facility for C&J Energy Services (NYSE:CJES).
- Energy bonds have been under pressure in the past couple of weeks as oil prices skid; investors are worried that a further drop in oil prices could put pressure on the highly indebted companies in the sector and potentially trigger a wave of debt restructurings.
Nov. 10, 2014, 12:20 PM
- ConocoPhillips (COP -0.8%) says it struck oil with a second exploration well offshore West Africa in the Sangomar Deep block.
- The finding is the second of a two-well program offshore in the block offshore Senegal after announcing last month that oil had been discovered in the same block.
- Cairn Energy (OTCPK:CRNCY), which operates the well and holds a 40% interest, says initial analysis shows the well has excellent reservoir sands; COP has the option to take over as operator of the project if it advances to development.
Oct. 30, 2014, 3:58 PM
- ConocoPhillips (COP +0.7%) becomes the first major oil company to announce specific plans to cut spending due to falling crude prices, as it now plans a capital budget below $16B next year, down from the $16.7B projected for this year, CEO Ryan Lance said in today's earnings conference call.
- COP will continue to invest near current levels in Eagle Ford and Bakken, but has the flexibility to pare spending in exploration and on less-developed fields in such places as the Permian Basin in west Texas and western Canada, the CEO says, noting that the planned budget cuts will not affect its ability to achieve its goal to grow production annually by 3%-5%.
- “Events like the recent price downturn underscore the importance of staying focused on the fundamentals,” Lance said.
Oct. 30, 2014, 12:33 PM
- Freeport LNG export project has secured financing for the first of three liquefaction units proposed for a natural gas export terminal.
- Japan's Osaka Gas and Chubu Electric Power, which previously contracted to buy the liquefied natural gas from the plant, will invest $1.2B in the project while Freeport LNG will borrow $3.85B from some Japanese banks to pay for the construction of the first train.
- ConocoPhillips (NYSE:COP) and Dow Chemical (NYSE:DOW) are the most well known of the project's partners.
Oct. 30, 2014, 8:37 AM
- ConocoPhillips (NYSE:COP) +0.8% premarket after reporting Q3 earnings that beat Wall Street estimates and rose 9% Y/Y on increased oil and gas production, despite a drop in selling prices.
- Q3 production from continuing operations, excluding Libya, totaled 1.473M boe/day, up 1.7% Y/Y; Eagle Ford and Bakken production jumped by 33%.
- COP says its total realized oil price was $64.78 in Q3, down from $69.68 a year earlier.
- Reaffirms its outlook for 3%-5% FY 2014 volume growth to 1.525M-1.535M boe/day.
- "We expect strong growth in 2015 driven by ongoing success in the North American unconventionals and start-up of several major projects, including Surmont 2 [in Canada] and APLNG" in Australia, CEO Ryan Lance says.
Oct. 30, 2014, 7:02 AM
Oct. 29, 2014, 5:46 PM
- ConocoPhillips’ (NYSE:COP) plan for the first oil production facilities from federal lands in Alaska moves closer to reality as the Interior Department releases a key environmental study on the project.
- Although not a final verdict, the assessment by Interior’s Bureau of Land Management sets the stage for approval later this year by outlining steps COP would need to take to mitigate environmental effects while boring up to 33 wells at its Greater Mooses Tooth site.
- The BLM recommends COP build an 8.5-mile gravel road that would provide access to the site in case of oil spills and other emergencies, which could increase costs over COP's request for a shorter access road; the Bureau says it could impose other requirements when it formally decides on the project.
Oct. 29, 2014, 5:30 PM
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Oct. 27, 2014, 5:58 PM
- ConocoPhillips (NYSE:COP) disclosed plans for a drill site on the Kuparuk oil field on Alaska’s North Slope, representing the first new drill site at the location in more than a decade.
- The decision follows moves by Alaska's legislature which paved the way for COP and BP to launch $1B in programs along with the intent to evaluate up to $3B of projects in the Greater Prudhoe Bay area.
- Peak production is expected to reach 8K bbl/day of oil.
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