Fri, Apr. 24, 2:24 PM
- Petrobras (PBR +6%) racks up a second straight day of strong gains after it released financial statements that had been delayed by the corruption scandal and on news that it will report Q1 earnings on May 15.
- Providing some short-term relief to investors, Fitch Ratings says PBR had averted the risk of an imminent credit downgrade but could still lose its investment grade over the next couple of years.
- Cowen analysts raise their price target on PBR shares to $11.50 from $9, applauding the company's "new emphasis" on de-leveraging, capital discipline and a "more shareholder friendly strategy."
- However, J.P. Morgan says it is "not very convinced" with PBR's plan and says further strength would provide an opportunity for investors to reduce risk on the bonds.
Thu, Apr. 23, 12:59 PM
- Alleged corruption at Petrobras (PBR +4.7%) was limited to three top executives and not spread throughout the company, according to a witness testifying today before a Brazilian congressional committee.
- The witness is president of an engineering company that is a supplier to PBR; Brazil’s federal prosecutors and police are alleging that PBR execs conspired with some of its suppliers to inflate the cost of contracts, and the money was then distributed among company brass and Brazilian politicians.
- The witness is cooperating with investigators, and has named three former PBR executives - Paulo Roberto Costa, Renato Duque and Pedro Barusco - as being involved in the corruption scheme.
Thu, Apr. 23, 12:34 PM
- Petrobras (PBR +3.6%) shares snap back from sharp opening losses, a day after reporting $17B in charges amid a FY 2014 loss of 21.6B reais ($7.2B), the company's largest-ever loss, in its long-delayed audited results.
- CEO Aldemir Bendine calls the graft-related losses "recoverable," and expects PBR to begin to receive part of the money back next month.
- "Considering [PricewaterhouseCoopers] signed off on these results, the market perception is that there are no more surprises ahead," says a partner at Sao Paolo investment firm Humaita in Sao Paulo.
- Another Brazilian analyst says investors will begin to focus on "excessive leverage,” lower than expected production guidance, and weak oil prices that threaten PBR's investments and planned asset sales.
- Even though PBR recently denied it is considering putting some of its prized deepwater pre-salt blocks for sale, analysts at Eurasia Group believe such a sale remains a possibility, and expects a ~25% reduction in PBR's investments plans this year.
- PBR currently has no plans to increase capital or convert debt to equity, a company exec tells investors on a phone conference; the company also says it decided not to pay a dividend on 2014 in 2015 based on the loss but could resume payouts if it gets a positive result in 2015.
Thu, Apr. 23, 9:13 AM
Wed, Apr. 15, 12:49 PM
- Petrobras (PBR +6.1%) could include stakes in some pre-salt oil fields in its planned $13.7B asset sale program aimed at reducing capital spending, according to a local newspaper report.
- PBR could include some exploration licenses that are not under production-sharing agreements and a 10% stake in the Libra field in the sale plan, the report says.
- PBR is said to have decided to hire Bank of America to find potential buyers or partners.
- Earlier: Bloomberg: Petrobras considering prized oil area in divestment plan (Apr. 10)
Wed, Apr. 15, 11:30 AM
- Petrobras (PBR +4.5%) is sharply higher after Brazilian police arrested the treasurer of the ruling Workers’ Party, bringing the country’s largest corruption scandal a step closer to Pres. Rousseff’s government.
- Joao Vaccari Neto was arrested in connection with a probe into money laundering and illegal donations to the party; he had been detained in February for questioning about donations the party received from contractors of Petrobras, which is at the center of an alleged scheme of kickbacks.
- The arrest coincides with the strongest comments yet from the leading opposition party on a possible impeachment process against Rousseff.
Tue, Apr. 14, 10:48 AM
- Petrobras (PBR +1.7%) is higher after disclosing that it plans to release its long-delayed 2014 audited earnings on April 22, which prompts BofA Merrill to upgrade shares to Buy from Neutral.
- The firm says the approval to release the results should remove a major overhang and allow the company to start reducing debt levels and restoring cash flow; the company now has the potential to show significant improvement in its financial position over the next two years, BofA says.
- In recent days, the stock has been helped by news that it may sell some of its valuable deepwater assets as part of its divestment plan as well as selling a stake in chemical maker Braskem.
Mon, Apr. 13, 1:45 PM
- A Brazilian paper reports Petrobras (NYSE:PBR) is planning to sell a stake in petrochemical maker Braskem from R$2.8B ($903M). No potential buyers have been named.
- On Friday, Bloomberg reported the Brazilian oil/gas giant is thinking of adding oil fields in its fastest-growing deepwater oil region to its divestment efforts.
Thu, Apr. 9, 3:34 PM
- Petrobras (PBR +8.2%) enjoys a lift from positive comments by Brazilian Pres. Rousseff, who says the company has purged corrupt managers and put the corruption scandal behind it.
- Rousseff has denied knowledge of the graft that occurred while she was PBR's chairman during 2003-10, and says the company has "cleaned up what it had to clean up."
- The president also notes that PBR is posting record production of 700K bbl/day of oil from the subsalt region being tapped offshore.
- Separately, the company says it does not yet have a date to publish audited results from Q3 and Q4 2014, which have been delayed due to the scandal; J.P. Morgan analysts said earlier this week that earnings could be issued later this month.
Wed, Apr. 8, 9:12 AM
Mon, Apr. 6, 10:54 AM
- Sweden's $30B AP1 pension fund says it plans to take direct legal action against Petrobras (PBR +3.4%), suing the Brazilian company separately from an existing class action lawsuit following revelations of a multibillion-dollar corruption scandal.
- In the past two weeks, Dimensional Fund Advisors and six NYC pension funds also opted out of the class action to sue PBR.
- The investor suits, filed in the New York court system, claim PBR misstated the value of its assets and made misleading statements about its anti-corruption policies and internal financial reporting controls, thus the company's stock was consequently sold at artificially inflated prices.
Thu, Apr. 2, 11:57 AM
- Petrobras' (PBR +5.6%) employee pension fund lost more than 6B reais ($1.9B) last year, widening from 2.4B reais in 2013, Bloomberg reports, citing a source with direct access to the fund’s preliminary results.
- The fund's results were negative in 2013 for the first time since 2008 and were affected by a poor performance in stocks and fixed-income investments; it accumulated 308% profitability in the past 10 years, above an internal target of 241%.
- The Petrobras fund is Brazil's second biggest pension fund with more than 72B reais under management in 2013, and had 158K participants at year-end 2013.
Wed, Apr. 1, 2:25 PM
- Petrobras (PBR +7%) and other Brazilian stocks post strong gains in reaction to Pres. Rousseff's declaration that her government will do whatever it takes for the country to meet its fiscal target this year.
- Rousseff says PBR may release its audited results by the end of the month, and issues a strong denial that she knew about the bribery that has shaken the company she chaired during 2003-10.
- Also: PBR.A +6.5%, EBR +6.6% EBR.B +9%, ELP +6%, CIG +4.9%, CPL +3%, SBS +4.9%, BSBR +5%, BBD +4.5%, ITUB +3.9%; however, with continued negative headlines on iron ore prices, VALE -1.9%.
- ETFs: EWZ, BRF, BRXX, EWZS, BRZU, BRAQ, BZQ, BRAZ, BRAF, UBR, DBBR, FBZ
Wed, Apr. 1, 10:49 AM
- Petrobras (PBR +6%) board member Silvio Sinedino points to potential conflicts of interest on the company's next board, citing the nomination of Vale (NYSE:VALE) CEO Murilo Ferreira as chairman and the selection of the president of Brazil's BNDES development bank, Luciano Coutinho, as interim chairman.
- Vale is Brazil's largest diesel consumer and pays PBR ~1B reais/year ($300M) to fuel its mines and railways, while PBR buys raw materials from Vale for its fertilizer plants.
- Sinedino, who represents PBR workers' interests on the board and is one of three members not appointed by the government, also says PBR will not sell its fuel distribution unit as part of its ongoing $13.7B asset sale plan.
Wed, Apr. 1, 9:38 AM
- Petrobras (PBR +4.2%) signs a contract to obtain financing worth $3.5B from China Development Bank as part of a cooperation agreement covering 2015 and 2016.
- PBR’s new financial director, Ivan Monteiro, signed the loan agreement during a visit to China this week, and outlined plans to tap the facility again in the near future.
- The highly indebted oil producer is turning to China for funding as Brazil's corruption scandal keeps it out of international bond markets.
Mon, Mar. 30, 3:58 PM
- Exxon Mobil (XOM +2.4%) says it began production at its Hadrian South gas development in the deepwater Gulf of Mexico with facilities tied back to the nearby Lucius project, reducing additional infrastructure requirements.
- XOM expects daily gross production from Hadrian South, its deepest subsea tie-back in nearly a mile and a half of water, to reach ~300M cf of gas and 3K barrels of liquids from two wells.
- Hadrian South is a subsea production system with flowlines connected to the Anadarko-operated Lucius truss spar, which started production in January.
- With the startup of Hadrian South and Lucius, XOM's total Gulf of Mexico net production capacity has increased by more than 45K boe/day.
- XOM holds a 46.7% interest in Hadrian South, with partners Petrobras (NYSE:PBR) at 23.3% and Eni (NYSE:E) holding a 30% stake; XOM owns a 23.3% interest in Lucius.
PBR vs. ETF Alternatives
Petroleo Brasileiro SA Petrobras operates as an integrated oil & gas company in Brazil. Its business is structured into segments such as Exploration & Production; Refining, Transportation & Marketing; Distribution; Gas & Power; Biofuel; & International.
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