Tue, Mar. 10, 2:27 PM
- Exxon Mobil (NYSE:XOM) and Royal Dutch Shell (RDS.A, RDS.B) are likely to withstand the oil price collapse better than their rivals because they are closer to finishing expensive investment projects, according to a Reuters analysis.
- Chevron (NYSE:CVX) and Total (NYSE:TOT), on the other hand, are both in the midst of large project spending cycles and will need to tap into more debt in order to stay afloat.
- While all companies are expected to keep paying high dividends by increasing borrowing, Exxon and Shell appear to be most able to cover both spending and dividend payouts if oil prices stay at current prices, and are likely to be able to pick up bargain assets while the price collapse shakes out the sector.
- Exxon and Shell also are ahead in terms of where their cash flow breaks even: According to analysts at Jefferies, both have 2015 breakevens of $75-$80/bbl, healthier than Chevron, BP and Eni's (NYSE:E) respective breakevens of $95, $100 and $120.
Tue, Feb. 24, 10:14 AM
- Oil production in the British section of the North Sea continued to decline in 2014 amid rising costs, high taxes and low oil prices, according to a report from an industry lobbying group which wants the U.K. government to cut taxes and streamline the complex regime for the oil and gas sector.
- British North Sea production in 2014 fell 1.1% Y/Y to 1.42M boe/day, the report says, down ~70% since the area's peak in 1999.
- The report notes that oil companies drilled only 14 exploration wells last year in the British part of the North Sea, vs. ~70 exploration wells drilled in the nearby Norwegian sector, where the government offers more generous tax incentives.
- Among the North Sea's major producers: BP, RDS.A, RDS.B, COP, E, BHP, TOT, CVX, CEO, OTCPK:BRGXF, OTCQX:BRGYY, OTCQX:REPYY, OTCPK:REPYF
Wed, Feb. 18, 9:02 AM
Wed, Feb. 18, 3:52 AM
- A sharp drop in crude prices wreaked havoc on Eni's (NYSE:E) Q4 results, as the Italian oil and gas group reported lower profits and hefty write-downs.
- Adjusted profit fell by two-thirds to €464M, way below analysts' estimates of €614M, while the company marked down the value of its inventories by €860M and booked asset impairments and other charges of €1.94B.
- Placating investors, Eni slightly raised its yearly dividend to €1.12 a share, from €1.10 a year ago.
Tue, Feb. 17, 4:39 PM
- Eni (NYSE:E) says it has reduced the number of expatriates working in Libya but that remaining expats and local workers were enough to guarantee normal production activities in the war-torn country.
- Libya, which relies on oil revenue for almost its entire budget, is producing less than 200K bbl/day, down from 1.6M bbl/day before Qadhafi's ouster in 2011; Italy, which traditionally has held close ties with Libya, closed its embassy in Tripoli on Sunday.
Tue, Jan. 27, 5:25 PM
- Commodities trader Vitol and Italian energy company Eni (NYSE:E) receive final approval from Ghana's government to develop a $7B offshore oil and gas project, in the largest project backed by foreign investment in the country since gaining independence in the 1950s.
- The Offshore Cap Three Point project would produce 15 years worth of gas for Ghana’s domestic power stations as well as crude oil for sale on international markets.
- Vitol and Eni expect oil to start flowing from the project’s five fields in 2017, with gas production expected to start a year later.
- The decision to go ahead with the project comes as many oil and gas companies are looking to cut costs and reduce spending on big developments because of sharply lower oil prices.
Fri, Jan. 23, 2:58 PM
- As investors come to terms with the ~20% drop in shares of European oil company shares since last June, their focus will now turn to how the companies will maintain cherished dividends while coping with the collapse in oil prices.
- So far there is no hint of any major oil companies scaling back their dividend payouts, which long have been the key attraction for investors; BP's Bob Dudley says the dividend is "rock solid," and CEOs at Total (NYSE:TOT) and Eni (NYSE:E) also recently said they would maintain dividends.
- Analysts at Nomura and Barclays foresee an average 7% Y/Y decline in 2015 spending for the European oil majors, but with a large part of this year's project spending already committed, borrowing is inevitable to keep up dividend payouts.
- Shell (RDS.A, RDS.B) is seen by several analysts as best able to cope in the current environment, as its refining segment benefits the most from lower crude prices; Barclays expects Shell's Q4 EPS to rise by 29% Y/Y.
Fri, Jan. 23, 11:52 AM
- Eni (E -2.2%) expects to cut costs this year by 10%-15% while postponing investments in its most costly projects, Chairwoman Emma Marcegaglia tells WSJ.
- The company has managed to obtain better terms - discounts of as much as 30% vs. the recent past - on new contracts with its contractors and the governments in the countries where it operates, Marcegaglia also says.
Wed, Jan. 21, 5:58 PM
- BP boss Bob Dudley says oil prices probably will remain low for at least a year and perhaps for as many as three years, and the company must plan for that possibility.
- BP's two large projects in the North Sea, including the Clair field, "are challenged now with these new prices... but we're in the North Sea for the long term," the CEO says in a BBC interview at the World Economic Forum in Davos.
- Globally, BP and the rest of the energy industry likely would see "significant workforce reductions," Dudley adds.
- At the same venue, Eni (NYSE:E) CEO Claudio Descalzi predicts the oil industry would cut capital spending by 10%-13% this year because of slumping prices, which should create longer-term shortages and sharp price rises in 4-5 years.
Thu, Jan. 15, 8:39 AM| Comment!
Fri, Jan. 9, 8:38 AM
- Eni (NYSE:E) says it has signed an agreement to operate a new exploration block in the western desert of Egypt, strengthening its position in the country where it has held sway since 1954 with an equity production of ~210K boe/day.
- The agreement as the government settles debt owed to energy companies with a legacy of operations in the country.
Thu, Jan. 8, 12:06 PM
- Big oil companies including Exxon (NYSE:XOM), Shell (RDS.A, RDS.B) and BP soon must decide whether to risk upsetting investors by cutting dividends, risk earnings by cutting projects, or take on more debt in the hope that oil prices will soon recover, according to a WSJ report.
- A Citi analysis shows spending on dividends and capital investment was 24% higher than cash flow in 2013; Shell, for example, had $40B in net cash flow in 2013 but its capital spending and dividend payments outstripped cash flow by 36%, while XOM's shareholder payouts and investment are seen exceeding cash flow by 22% in 2015.
- Estimated capex and dividends also are expected to exceed cash flow by 20% or more this year at ConocoPhillips (NYSE:COP), Chevron (NYSE:CVX), Eni (NYSE:E), Total (NYSE:TOT) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY).
Thu, Jan. 8, 9:14 AM
- DryShips (NASDAQ:DRYS) +3.9% premarket on news that its Ocean Rig UDW (NASDAQ:ORIG) subsidiary has secured a contract extension for one of its drillships with Eni (NYSE:E) and gains work for possibly another two units.
- As part of the contract extension for the Ocean Rig Poseidon, ORIG will adjust the existing dayrate of the Ocean Rig Poseidon contract and Eni will enter into two contracts for the employment of one or more of ORIG's available drillships in West Africa starting in Q1.
- DRYS says the agreement increases ORIG's total contract backlog by ~$187M.
Mon, Jan. 5, 2:44 PM
- Chevron (CVX -3.8%) is downgraded to Neutral from Buy at Citigroup after outperforming big oil peers in the past three months in a reflection of the resilience of CVX's balance sheet.
- Citi revises its earnings forecasts to reflect lower oil prices, and says the stock now offers little upside in absolute and relative terms, "certainly when balanced against a portfolio that still carries uncertainties around both execution and reinvestment."
- The firm also downgrades Eni (E -8.6%) and Repsol (OTCQX:REPYY -5.8%), whose business models and valuations will look more challenged in a lower oil environment, but prefers companies it says boast strong growth credentials, such as BG (OTCPK:BRGXF), Total (NYSE:TOT) and ConocoPhillips (NYSE:COP); it keeps Exxon (XOM -2.6%) at Neutral, thinking share buybacks likely will be dialed down to preserve the balance sheet for a prolonged period of lower prices or eventual acquisitions.
Mon, Jan. 5, 12:39 PM
- ConocoPhillips (COP -4.8%) says it is flowing its first barrels of oil from the Eldfisk II project in the Norwegian North Sea, in the company’s second big startup off the coast of Norway since late 2013.
- COP says its newly productive project, alongside its other Norwegian offshore wells, will boost its output by 60K boe/day by 2017, and plans to drill 40 new water-injection and oil wells at its Norwegian field over the next three years.
- The Eldfisk field is one of four offshore oil regions that make up Norway’s Greater Ekofisk Area, operated by COP and co-owned with Total (NYSE:TOT), Eni (NYSE:E), Statoil (NYSE:STO) and others.
Mon, Jan. 5, 9:10 AM
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