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There are 2 articles on this stock available only to PRO subscribers.
- OGZPY confirms $1.45 billion debt payment made by Naftogaz.
- Debt payment sets stage for resumption of OGZPY Ukraine sales through winter.
- OGZPY had written off part of Naftogaz debt last quarter.
Gazprom: The Greatest Contrarian Call In The Oilpatch Today
- Check out OGIB's latest & greatest Russian o&g stock pick.
- Gazprom (OTC:OGZPY) currently trades at less than 5 times earnings-- sound too good to be true?
- It's also one of the largest producers of energy in the world and the single largest producer of natural gas on the entire planet.
Interim Ukraine Deal Should Dial Back Fears Surrounding Gazprom
- OGZPY is nearing an EU-negotiated interim deal with Ukraine, which would keep gas flowing to EU customers through winter.
- OGZPY is trading at a huge discount to its net assets, and is extremely profitable.
- Fears of sanctions on Russia harming OGZPY seem overblown, as European customers simply don't have alternative sources of gas.
- Tensions with Ukraine and new economic sanctions against Russia are leaving Gazprom struggling.
- Gazprom is already the second most indebted company in Russia; while it generated a $33 billion profit in 2013, its total debt was ~$50 billion.
- The Market Vectors Russia ETF index has dropped over 17% year-to-date--another negative sign for Gazprom's operating environment.
- We suggest investors take profits in Gazprom before news gets worse.
- Gazprom is intrinsically undervalued, even with extremely conservative assumptions.
- 5%+ stable dividend yield with a really low payout ratio.
- Current political situation creating a buying opportunity for the patient investor.
Controversial Gazprom Still Cheap, Still Risky
- Geopolitical wrangling and a warm European winter have weighed on both results and sentiment at Gazprom.
- A recently-completed agreement with China is likely just the first step in a wider focus on gas-hungry Asian markets.
- Gazprom trades at a steep discount to its European peers. Even granting that some discount is appropriate given the risks, these shares look about 20% undervalued and offer good yield.
- Gazprom and CNPC are set to sign a deal that will result in Gazprom supplying China with 38 bcm of gas annually by 2018.
- This is in addition to a 2011 deal that called for Gazprom to provide 30 bcm of gas annually by 2015.
- This will result in substantial increases to Gazprom's revenue once it takes effect.
Gazprom Looks Incredibly Undervalued Despite Sanctions On Russia
- Gazprom is by far the largest natural gas producer in the world but its market cap does not reflect this.
- The European Union is unlikely to go along with any sanctions against Gazprom as the company is responsible for 1/3 of the gas consumed by the continent.
- Gazprom's natural gas reserves are almost ten times the size of ExxonMobil's.
- Gazprom is more profitable than any American oil company despite having a lower market cap.
- Gazprom currently trades at a P/E of less than 3.
Russia's Gazprom, European Energy And U.S. Oil And Shale Gas: Shorting Russia?
- Gazprom, the Russian energy crown jewel, has seen its valuation drop considerably.
- Sanctions against Russian-linked investments must be carefully watched as they have significant valuation outcomes. Shorting Russia, so to speak, shorts many others.
- The North American energy trifecta of the U.S., Canada and Mexico need steadfast, well-conceived policies, keeping recent events in mind.
- Monitor energy plays that seek to diversify Europe's reliance on Russian oil and gas like the Eastern Mediterranean alternatives and infrastructure that links alternative routes and supply sources.
- Gazprom has substantial ties with the West.
- While depending on Europe for gas revenues, it is also diversified into refined products and sales to the Russian Federation.
- However its long-term borrowing is essentially denominated in dollars and euros.
- Competitor GDF-Suez might become a formidable competitor especially if the political problems in the Ukraine were to continue.
Gazprom Net Income Drops 37%: Should You Be Worried?
Sun, Nov. 9, 8:28 AM
- Russia and China have signed a framework agreement for another gas supply deal, just months after the two countries sealed a $400B deal for Moscow to provide 38B cubic meters (bcm) of gas to China annually for 30 years.
- The memorandum of understanding was signed between Russia's Gazprom (OTCPK:OGZPY) and state-owned China National Petroleum (NYSE:PTR).
- Under the terms of the framework agreement, CNPC will also buy a 10% in Russia's Vankorneft, a subsidiary of Russia's largest oil producer Rosneft (OTC:RNFTF).
Wed, Nov. 5, 3:28 AM
- Gazprom (OTCPK:OGZPY) says it has received $1.45B from Ukrainian energy firm Naftogaz, the first tranche of debt repayment required by an agreement that will see Moscow resume gas supplies to its ex-Soviet neighbor.
- On Friday, Gazprom's head, Alexei Miller, said Russia would restart gas supplies to Ukraine as soon as the country repaid the first debt tranche, as well as $760M up front for November supplies.
Thu, Oct. 30, 6:42 PM
- Russia and Ukraine sign an agreement the parties say will guarantee the flow of Russian gas exports into Ukraine through the winter, following a long and bitter dispute over payments.
- European Union energy chief Guenther Oettinger, who brokered the deal, says "we can guarantee a security of supply over the winter," not only for Ukraine but also for the EU nations closest to the region that stood to suffer should the conflict in Ukraine worsen.
- ETFs: RSX, RUSL, RUSS, ERUS, RBL, RUDR
Thu, Oct. 30, 2:50 AM
- Ukraine and Russia were unsuccessful in reaching a gas agreement at their overnight talks with the EU, but another round of negotiations will take place Thursday evening, Reuters reports.
- The EU, which depends on Russia for one-third of its gas, is trying to help negotiate the payment plan, fearing disruptions to its supply.
- Alexei Miller, head of Russia's Gazprom (OTCPK:OGZPY) says the deal can be completed only after Ukraine and the EU reach an agreement on financial guarantees from Brussels to Kiev.
Tue, Oct. 21, 6:34 PM
- Russia has added new conditions to resuming gas supplies to Ukraine, disappointing those who had expected a natural gas deal to be reached today.
- Russia is now asking for evidence to be submitted that international lenders or other organizations were able to guarantee Ukraine as good for its money.
- Both countries earlier had agreed on a price for the gas, which Ukraine would pay in advance, and Ukraine also had agreed to pay back $3.1B of debt to Gazprom (OTCPK:OGZPY).
- Attention now shifts to another Brussels meeting on Oct. 29; if no deal is sealed, Europe's natural gas supply could be in jeopardy, as ~30% comes from Russia and about half of that flows through Ukraine.
Tue, Oct. 21, 10:59 AM
- Russia's Gazprom (OTCPK:OGZPY) says it has increased its investment program for this year by 220B rubles from the previous plan to 1.026T rubles ($5B).
- Gazprom, which finalized a $400B deal to ship gas to China earlier this year, says gas transportation projects include the one to export gas to Beijing, Power of Siberia, as well as South Stream to bypass Ukraine.
- Meanwhile, Russia, Ukraine and the European Commission are holding talks today trying to resolve the issue around the price Ukraine pays for Russian gas and its debt.
Tue, Oct. 21, 6:48 AM
- Russian Energy Minister Alexander Novak says he hopes to finalize a gas agreement with Ukraine during a trilateral meeting later today in Brussels, Reuters reports.
- Novak is meeting Ukrainian Energy Minister Yuri Prodan and European energy commissioner Guenther Oettinger.
- Previously: Russia, Ukraine inch closer to gas deal
Mon, Oct. 20, 3:56 AM
- Russia and Ukraine have reached a preliminary agreement on a price for winter gas supplies, easing some concerns that the countries’ dispute could disrupt supplies to Europe via Ukraine.
- Russia cut off supplies in June, demanding Ukraine pay a debt of some $5B. Lacking the funds to purchase the gas due to its recession, Ukraine has appealed to the IMF for help.
- Ukrainian President Petro Poroshenko announced that Ukraine had agreed on a price of $385 per 1,000 cubic meters of gas until the end of March.
Fri, Oct. 17, 4:40 PM
- Russian Pres. Putin says Europe should help Ukraine pay upfront for natural gas to guarantee steady winter supply; Ukraine won’t get Russian gas unless it prepays, and Europe should extend loans or aid to help it do so.
- European aid could be discussed at talks planned for next week; Ukraine has agreed to pay $3.1B of debt for past supplies by year end, which was another condition for the resumption of deliveries, Gazprom (OTCPK:OGZPY) CEO Alexei Miller said today.
- After talks today with Putin, Germany's Merkel and France's Hollande, Ukraine Pres. Poroshenko said they didn’t deliver “any practical result."
Thu, Oct. 16, 11:40 AM
- Bulgaria, Romania, Finland and Baltic countries such as Estonia and Latvia could suffer gas shortages of 40%-100%, relative to their overall gas supplies, if Russia cut off all its gas deliveries for six months, according to a report from the European Commission.
- EU's energy chief Günther Oettinger says that while he doesn't doubt Russia would meet its contractual obligations, "we also need to show [Russia] that we're prepared for a worst-case scenario."
- A more likely scenario is that Ukraine, which is the main transit route for Russian gas to Europe, would cease to pass on that gas if it faced major shortages itself.
- The EU received 39% of its gas imports from Russia's Gazprom (OTCPK:OGZPY) last year, about half of which was transported by pipelines through Ukraine.
Wed, Oct. 15, 12:09 PM
- During a three-day visit to Moscow that ended yesterday, China and Russia signed 38 new deals, including a big expansion in Russian gas sales to China; Russian Pres. Putin sealed a $400B gas contract with China in May, but the fresh deal reportedly would double that (OTCPK:OGZPY).
- New projects include a reported $10B Chinese commitment to upgrade Russia's railroads, a "strategic partnership" between Russia's Rosneft (OTC:RNFTF) and China's CNPC (NYSE:PTR), joint development of a long-haul passenger jet, and a deal to open a yuan-ruble swap line worth $24B in an apparent bid to reduce dependence on the U.S. dollar.
- It's a golden opportunity for China to leverage Russia's political problems with the West and nail down long-term oil and gas contracts at bargain prices, experts say.
- ETFs: FXI, RSX, PGJ, RUSL, GXC, YINN, FXP, RUSS, ERUS, YANG, CHIX, MCHI, XPP, RBL, YAO, YXI, CHXF, FCA, CHIE, CN, RUDR
Tue, Oct. 14, 7:56 AM
- Gazprom (OTCPK:OGZPY) says Q2 earnings rose 13% Y/Y on higher sales and prices, but missed analyst estimates after increasing a provision to cover Ukraine’s non-payment of debt for fuel supplies.
- Gazprom reports net income of 228B rubles ($5.63B) from 202B rubles a year earlier as sales of oil products rose, but analyst consensus was ~266B; Q2 revenue rose 19% to 1.32T rubles.
- The company added 144.5B rubles to a provision for doubtful trade accounts receivable, primarily from Ukraine.
- Profit for H1 slipped 23% to 450.6B rubles, but revenue rose by 7% to 1.59T rubles, as foreign volumes and prices rose.
Fri, Oct. 10, 3:16 PM
- Gazprom (OTCPK:OGZPY) says it could shelve its Vladivostok liquefied natural gas project, opting instead to supply more gas to China by pipeline.
- The project, which had been scheduled to start production in 2018 with capacity of 10M metric tons/year of LNG, would be the first major Russian energy project to be publicly canceled since the U.S. and Europe targeted the country’s energy industry with sanctions.
- Analysts say the plant may appear less attractive given expectations of a glut of LNG as projects in Australia and Indonesia start production and U.S. exports of shale gas ramp up.
Thu, Oct. 9, 10:59 AM
- Argentina's YPF (YPF -2.7%) says it has not struck a natural gas production deal with Russia's Gazprom (OTCPK:OGZPY) despite an earlier statement from the industry ministry that it had.
- YPF says that while it has conducted meetings with Gazprom officials to analyze various possibilities for business and collaboration, neither a confidential deal nor agreement memorandum has been signed.
- The ministry had said it received assurances from Gazprom's Alexei Miller in a meeting this week that a "confidential" $1B agreement had been reached with YPF to explore for and produce gas in Argentina.
Thu, Oct. 9, 9:19 AM
- China National Petroleum (NYSE:PTR) has gained government approval for the design of the Chinese section of the giant gas pipeline from western Siberia to China that is expected to ship $400B worth of Russian natural gas to China.
- Construction of the Chinese section will start in H1 2015 and is expected to be completed in 2018, CNPC says.
- The 2,500 mile pipeline, being built by Gazprom (OTCPK:OGZPY), forms a key part of Russia's energy strategy, symbolizing the country's attempts to wean itself off dependence on European markets that account for most of its exports.
Thu, Oct. 9, 9:08 AM
- BASF's (OTCQX:BASFY) Wintershall oil and gas unit says a major deal with Gazprom (OTCPK:OGZPY) to take over its German gas trading and storage remains on track for completion this fall.
- Comments by Gazprom CEO Alexei Miller that some projects dealing with end users in Europe "could undergo certain changes" led to speculation the deal's terms could be altered.
- Both parties have seen delays to the execution of the deal this year, citing legal reasons; now there is the context of rising tension between Russia and its western European business partners over Ukraine.
OGZPY vs. ETF Alternatives
Gazprom extracts, transports, stores and sells natural gas. The company is the successor to the State-owned company. Gazprom owns and operates Russia's Unified Gas Supply System. The company has a monopoly in supplying gas in the Russian Federation, and exports natural gas to Western Europe.
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