Mon, May 18, 7:45 PM
- Goldman Sachs had a lot to say about all corners of the energy sector today in addition to the cut in its long-term oil price forecast, its Sell recommendations for oil majors BP, Statoil (NYSE:STO) and Chevron (NYSE:CVX), and its gloomy outlook for offshore drillers Transocean (NYSE:RIG), Diamond Offshore (NYSE:DO) and Atwood Oceanics (NYSE:ATW).
- Goldman awards a Buy rating for Exxon Mobil (NYSE:XOM), "the only U.S. or European major that can generate sufficient free cash flow to cover its dividend near $60/bbl in 2016-17"; while the firm says other oil majors will be struggling to keep the dividend flat, XOM will be in a position to increase the dividend for the next several years.
- With its expectation for long-term weakness in oil and gas prices, Goldman sees risk exposure in many names that are reliant on commodity prices, suggesting selling LINE, DPM, NGLS, while predicting PAGP and NS would benefit from a removal of the U.S. crude oil export ban.
- The firm thinks many midstream MLP names now offer attractive valuations, recommending ENB, EPD, ETE, PAA, SXL, WNRL.
- Goldman sees an upturn for frac sand provider Emerge Energy (NYSE:EMES), upgrading shares to Buy from Neutral.
- Other Buys: CLR, NFX, CQP, HEP.
- Other Sells: TRP, TCP, GPOR, MUR, GTE
Fri, May 15, 2:45 PM
- Canada says it is committing to cut greenhouse gas emissions by 30% below 2005 levels by 2030, partly by introducing new regulations on its oil and gas sector.
- Environment Minister Aglukkaq says Canada will cut its emissions to 515 metric megatons by 2030 from 726 metric megatons in 2013; earlier this week, Ontario - Canada’s most populous province - set its own 2030 target of 112 megatons, which would represent a 46% cut from 2005 levels.
- To meet the new target, Canada will develop regulations to cut methane emissions from the oil and gas sector, such as industrial leaks and gas flares, as well as new rules to control emissions from the electricity and chemical sectors, including from nitrogen fertilizers.
- Relevant tickers: SU, ENB, TRP, IMO, CNQ, CVE, TCK, TAC, OTCQB:HUSKF, OTCQX:COSWF
Wed, May 13, 9:16 AM
- Enbridge (ENB, EEP) reaches a settlement with the state of Michigan nearly five years after a broken pipeline released more than 800K gallons of oil that spoiled 40 miles of the Kalamazoo River and Talmadge Creek.
- ENB agrees to spend $75M, much of it on various projects, including a dam removal and improved access to boating and fishing on the river, and will continue to monitor the impacts of the spill on the surrounding environment.
- The improvements are on top of ENB’s costs directly related to the 2010 spill, which have been pegged at more than $1B.
Thu, May 7, 6:25 PM
- Canadian oil producers plunged for a second straight day as "all bets are off" after election results in Alberta raised concerns over the possibility of higher taxes for the companies.
- Among today's losers: SU -2.6%, OTCQB:HUSKF -5.2%, GTE -5.8%, PWE -5.7%, IMO -1%, CVE -1%, OTCQX:COSWF -3.4%, OTCPK:MEGEF -5%.
- COSWF is among the most exposed to a potential hike in royalties and stricter environmental policies, while electricity supplier TransAlta (NYSE:TAC) would suffer from the new government’s vow to shut coal plants sooner than planned, according to analysts at BMO Nesbitt Burns and RBC Dominion.
- Advice is split on owning stocks of companies that transport and process fuels in Alberta; Raymond James says stocks such as TransCanada (NYSE:TRP) and Enbridge (NYSE:ENB) are less directly exposed to reduced investment in the sector, but RBC advises to sell pipeline and midstream companies with operations in Alberta.
- Analysts also are divided about how much producers with oil refineries, such as SU and IMO, could offset losses from potentially higher royalties by boosting processing of crude in Alberta, a move pro-labor NDP has pledged to support.
Wed, May 6, 2:36 PM
- Canadian energy stocks are broadly lower after the shocking election result in Alberta raised questions about the future of the country's oil industry: SU -3.3%, ENB -2.8%, TRP -2.6%, IMO -2.3%, CNQ -2.3%, CVE -5.8%, OTCQB:HUSKF -1%, TCK -1.6%, TAC -4.1%, OTCQX:COSWF -6%.
- "Energy is such a critical issue to Alberta, I’m really not that concerned," ENB CEO Al Monaco says, but investors and analysts disagree.
- "It’s completely devastating" for energy companies and investors, saysCanoe Financial's Rafi Tahmazian of stated plans by the newly elected government to raise corporate taxes, review the government’s take of energy revenue, scale back advocacy for pipelines and phase out coal power more quickly.
- “If you are invested in energy stocks, you should be concerned,” says AltaCorp’s Jeremy McCrea, noting that drillers already face higher costs to extract oil and gas in Alberta than in many jurisdictions, so an increase in royalties would make the province even less competitive.
Wed, May 6, 7:38 AM
- In a stunning election result, voters in Canada's energy-rich Alberta province swept aside the four-decade hold on power by the ruling Progressive Conservative Party and elected an New Democratic Party majority government that wants to raise corporate taxes and increase oil and gas royalties.
- NDP leader Rachel Notley - who has vowed to raise the corporate tax rate to 12% at a time energy companies are reeling from layoffs and project cancellations amid weaker oil prices - is expected to succeed Jim Prentice as Alberta’s premier.
- Notley has said she would not lobby for the proposed Keystone XL pipeline to link Alberta’s oil deposits to refineries in Texas, and that she is against the Northern Gateway pipeline from Alberta to the British Columbia coast.
- She also has promised another review of oil royalties at a time other oil producing areas around the world that are also struggling with low oil prices are expected to make their terms more appealing.
- Relevant tickers: ENB, SU, TRP, IMO, CNQ, CVE, OTCQB:HUSKF, OTCQX:COSWF, XOM, BP, RDS.A, RDS.B
Wed, May 6, 7:08 AM
Tue, May 5, 5:30 PM
- ANSS, ARQL, ATHM, AVA, AYR, BAM, BUD, CEQP, CHH, CHK, CKSW, CLH, CMLP, CRNT, CRZO, CSTE, DAVE, DDD, DNR, EE, EGAN, ENB, EXK, GDP, GLOG, HAIN, HCLP, HFC, HSC, HSNI, HTA, IMN, INFI, KELYA, LAMR, LG, LINC, MEMP, MPO, MSI, MWE, NOR, NXTM, OXY, PERI, PGNX, POWR, RDC, RHP, SBGI, SCMP, SE, SNH, SODA, STRA, SUP, SWC, TMHC, TRXC, VG, VOYA, VSI, WCG, WD, WEN, WIX, WMC, WPX, XLS, XRAY
Tue, May 5, 8:25 AM
- The discount for heavy Western Canadian Select crude vs. West Texas Intermediate shrank to the lowest since 2012, as a new pipeline started and production sites were shut for maintenance.
- WCS strengthened as Enbridge (NYSE:ENB) said it filled a new 570K bbl/day pipeline last month and MEG Energy (OTCPK:MEGEF) was said to plan maintenance at its 210K bbl/day Christina Lake oil sands site.
- The ENB line will raise the amount of crude that can be shipped from Edmonton, in northern Alberta, to the storage terminals in Hardisty, in southern Alberta, where on the supply side, MEG’s work at Christina Lake is said to be scheduled for this quarter.
Fri, May 1, 7:20 PM
- Despite Pres. Obama's refusal to grant a permit for the northern cross-border leg of the Keystone XL pipeline (NYSE:TRP), "just as water will find its way through any crack in a foundation," Canada’s oil keeps streaming its way to Texas’ Gulf refineries, Financial Post's Claudia Cattaneo writes.
- While Keystone’s approval has sat stalled for six years, other pipelines have been built or expanded to ease bottlenecks: TRP's southern leg of Keystone XL and its Marketlink project from Cushing to Port Arthur, Enbridge (NYSE:ENB) and Enterprise Products' (NYSE:EPD) Seaway pipeline from Cushing to Freeport, and there's heavy oil coming by train and barge - it takes longer, costs more and is less efficient, but it's coming nevertheless.
- Even a prolonged slump in oil prices is not likely to stop Canada’s rush to the Texas coast: Both Imperial Oil (NYSEMKT:IMO) and Suncor (NYSE:SU) said this week their Q1 oil sands production levels are up 11% Y/Y, with IMO soon doubling production at the Kearl oil sands mine and new production beginning at its Nabiye operation.
Tue, Apr. 21, 5:58 PM
- BP is seeking buyers for as much as $2B of U.S. pipelines and storage terminals, Bloomberg reports.
- In the last two weeks, BP sent offering materials to potential buyers of two batches of assets - its interest in four pipelines and a gas plant along the Gulf of Mexico, and 15 storage terminals in the Midwest and on the East Coast - according to the report.
- BP is said to be looking to sell stakes in three Gulf of Mexico assets it co-owns with Enterprise Products Partners (NYSE:EPD) - the Wilprise and Tri-States Pipelines and the Pascagoula Gas Processing Plant - as well as stakes in the Destin and Okeanos Gas pipelines, which it co-owns with Enbridge (NYSE:ENB).
Mon, Apr. 20, 12:21 PM
- Enbridge (NYSE:ENB) wants to build the 730-mile Northern Gateway pipeline to ship Canadian oil to west coast port, but the chief of a reserve for indigenous people is promising to block the project running alongside the reserve’s territory.
- The pipeline is meant to help ship oil to Asia, but the Tl’azt’en nation and other indigenous communities have been emboldened by a recent Supreme Court of Canada decision on aboriginal land rights to fight a project they say risks damaging their environment and culture.
- Aboriginal groups and environmental protesters also have challenged an expansion of Kinder Morgan’s (NYSE:KMI) Trans Mountain pipeline outside Vancouver, as well as TransCanada's (NYSE:TRP) proposed Energy East pipeline that would ship crude from Alberta to the Atlantic.
Thu, Apr. 9, 12:43 PM
- Canada must stop inter-provincial bickering and political indecision to ensure major energy projects get done before global markets move on to other suppliers, Bank of Nova Scotia CEO Brian Porter says, calling Canada's inability to deliver energy to world markets "detrimental" to the country’s economy.
- TransCanada's (NYSE:TRP) Energy East project to transport oil to the Atlantic coast and Enbridge's (NYSE:ENB) Northern Gateway pipeline that would transport Alberta oil to the Pacific coast for shipment to Asia would create tens of thousands of jobs with economic benefits spread across Canada, Porter says.
- Meanwhile, Shell's (RDS.A, RDS.B) proposed combination with BG Group (OTCPK:BRGXF, OTCQX:BRGYY) likely will result in one fewer liquefied natural gas project being built on the British Columbia coast between Shell's LNG Canada and BG's Prince Rupert LNG.
Thu, Mar. 26, 2:36 PM
- Canada's government says it will give the National Energy Board until next year to deliver up-to-date guidelines for oil pipeline companies to improve safety and protect the environment.
- The instructions coincide with several major pipeline expansion projects proposed in Canada by companies such as Kinder Morgan (NYSE:KMI), Enbridge (NYSE:ENB) and TransCanada (NYSE:TRP).
- The Conservative government has promoted expansion of the oil and gas industry, pledging to make the country an "energy superpower."
- Meanwhile, the NEB reportedly is investigating up to a dozen new allegations of natural gas pipeline safety code violations at TRP, which would mark the second time in recent years the regulator has probed safety practices at TRP following complaints by a whistleblower.
Wed, Mar. 25, 11:36 AM
- MKM Partners chief market technician Jonathan Krinsky offers his picks and pans in the world of energy MLPs, based mostly on relative strength compared to the sector’s benchmark Alerian MLP Index, which has slumped for the past six months.
- Krinsky's Buy recommendations: ALDW, BPL, CPLP, ENB, ETE, KMI, PAGP, SEMG.
- However, he tags CNP, NRP, SDLP and TOO with Sell ratings.
- ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY, AMU, YMLI, MLPJ, ZMLP, ENFR, AMZA, ATMP, MLPW, MLPC, IMLP, OSMS, YGRO, MLPO
Tue, Mar. 17, 10:58 AM
- The Keystone pipeline disappointment is hardly a death knell for TransCanada (NYSE:TRP), as the company remains one of the top holdings in Skip Aylesworth’s Hennessy Gas Utility fund, which climbed 21% last year as distribution gains trumped price drops.
- TRP is "a fine, healthy company and, yes, this is a hiccup, and they would love to see Keystone happen, but it is just a part of their business," Aylesworth tells Barron's.
- Of one Aylesworth's favorite energy investments actually is Berkshire Hathaway (BRK.A, BRK.B), which is heavily involved in the distribution of natural gas and owner of Burlington Northern, which is exploring using natural gas to fuel long-distance freight trains.
- Other favorites: ENB, WMB, LNG, NJR, KMI, SE
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