Yesterday, 8:58 AM
- The U.A.E.'s national oil company says it is still in talks with major global oil companies about concessions at its largest fields and has not set a deadline for deciding on the awards.
- Total (NYSE:TOT) is the only company to be awarded a stake in Abu Dhabi National Oil's new venture so far, agreeing in February to pay a $2.2B signing bonus for a 10% share in the onshore concession.
- TOT, along with BP, Shell (RDS.A, RDS.B) and Exxon (NYSE:XOM) were all partners in a previous concession that operated the same onshore fields in Abu Dhabi for 75 years until it expired in January 2014; XOM balked at the new terms and decided not to seek to renew its concession.
- Abu Dhabi plans to boost capacity for producing crude oil to 3.5M bbl/day by 2017 from ~3M bbl/day currently.
Fri, Apr. 17, 5:49 PM
- Nearly 60 institutional investors ask the SEC to require oil and gas companies to publish a detail analysis of the risks of climate change to their business models, much in the way companies already disclose information on factors outside their control such as commodity and currency price swings.
- Some oil companies already provide general information about how much they could lose if climate change worsens and regulation or cultural shifts reduce consumption, but the new request seeks more details about how they reached their conclusions.
- Exxon Mobil (NYSE:XOM) said last year climate change poses little risk to its reserves but agreed to start providing some information about how it arrived at such a conclusion.
- The action comes the day after Calpers sponsored a successful shareholder resolution at BP's annual meeting that requires the company to begin stress-testing its operations against climate change risks.
Fri, Apr. 17, 2:29 PM
- Anadarko Petroleum (APC -1.4%) is considering selling its multi-billion dollar stake in Mozambique's gas reserves, with Exxon Mobil (XOM -1.5%) and Qatar Petroleum showing interest, Reuters reports.
- APC reportedly could sell up to its full 26.5% stake in Mozambique's offshore Area 1 license in the Rovuma Basin; Area 1 holds more than 75T cf of recoverable gas, enough to meet at least four years of total European gas demand.
- The last Area 1 sale - a 10% stake that went for $2.64B in 2013 to India's ONGC - was seen as overpriced, and oil and gas prices have since plunged, making it difficult to value APC's asset.
- XOM could be the front-runner after Shell dropped out following its planned merger with BG Group, which will give it access to large gas assets in neighboring Tanzania.
Wed, Apr. 15, 3:15 PM
- May crude oil futures rose 6% today to $56.25/bbl, the highest settlement of the year, enjoying a boost from a higher global oil demand forecast from the International Energy Agency and another rise in U.S. crude supplies.
- The weekly inventory report showed a lower-than-expected 1.294M-barrel build in inventories, enough to send U.S. crude oil inventories to 483.7M barrels for their highest level at this time of year in at least 80 years.
- The narrative that oil prices may have found a bottom is beginning to pick up, which is helping drive buying interest in energy stocks; among today's gainers are XOM +1.9%, CVX +1.6%, COP +1.6%, BP +1.4%, RDS.A +2.9%, HES +4.5%, SLB +2.9%, HAL +3.9%.
- ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, DBO, DWTI, ERY, DIG, DTO, DUG, USL, XES, IYE, IEO, IEZ, DNO, FENY, PXE, PXI, PXJ, OLO, SZO, RYE, FXN, TWTI, OLEM, DDG
Wed, Apr. 15, 10:45 AM
- BP (BP +0.9%) may face irate shareholders over rising executive pay during its annual meeting tomorrow after CEO Bob Dudley’s total 2014 compensation rose 4.9% to $15.4M.
- BP is not alone: Royal Dutch Shell (RDS.A, RDS.B) paid CEO Ben Van Beurden $32.2M last year, nearly 3x the amount his predecessor Peter Voser earned in 2013.
- But BP’s net income has dropped in six of the past 12 quarters and Shell’s has fallen in nine; BP’s shares have declined in four of the past five years, and Shell’s have dropped in two of the past three years and are down 5% YTD.
- Elsewhere, Rex Tillerson, CEO of Exxon Mobil (NYSE:XOM), received compensation last year valued at $33M, up 18% from $28M in 2013, and John Watson of Chevron received $26M last year, up 8.3% Y/Y.
Tue, Apr. 14, 7:31 PM
- Papua New Guinea's state oil company says it is looking to raise billions of dollars to help fund new oil and gas projects, as the country battles a drop in forecast revenue from plunging prices for energy commodities.
- The company holds a 16.6% stake in the PNG LNG project, which operator Exxon Mobil (NYSE:XOM) hopes to expand, and has rights to take up to a 20% stake in the Elk-Antelope fields, Papua's largest undeveloped gas resource and operated by Total (NYSE:TOT).
- Funding an expansion of PNG LNG and any Elk-Antelope development would require the state-run firm to contribute billions of dollars in the next three years, so it makes sense for it to raise debt well before it needs the money.
- Papua New Guinea's economy grew by 8.4% last year, making it one of the fastest growing in the world, and the energy projects are seen as vital to the economy.
Tue, Apr. 14, 3:57 PM
- The Dutch government says it will implement a court order to halt production at part of the Groningen gas field - Europe's largest - amid local protests over earthquakes allegedly linked to extraction work.
- Production will be halted "for the time being" around the village of Loppersum in the northern province of Groningen, where the field is located, but the court ruling stopped short of imposing a full block on production in the gas field that complainants had sought.
- Loppersum production previously was capped at 3B cm for 2015, representing ~9% of overall output from Groningen, which is jointly managed by Royal Dutch Shell (RDS.A, RDS.B), Exxon Mobil (NYSE:XOM) and the Dutch government.
- Earlier: Dutch court refuses to halt Groningen gas production (April 1)
Tue, Apr. 14, 12:58 PM
- Canadian Oil Sands (OTCQX:COSWF +5.5%), the company with the largest stake in oil sands miner Syncrude Canada, is a prime takeover target and its most likely suitor is Imperial Oil (IMO +1.9%), the company with the second-largest stake, says FirstEnergy Capital analyst Michael Dunn.
- The analyst says his report is partly based on recent investor meetings with senior IMO execs who believe now is a good time to consider making acquisitions.
- Dunn thinks IMO would not want to pay more than a price in the low teens for COSWF, so its stock would have to fall further to make a bid attractive, and he suggests the company would not want to take on excessive debt - which could mean an equity-based offer, help from its controlling shareholder, Exxon Mobil (NYSE:XOM), or enrolling a current Syncrude partner such as Suncor (NYSE:SU).
Fri, Apr. 10, 6:27 PM
- Add Morgan Stanley to those speculating that Exxon Mobil (NYSE:XOM) could be the next oil major to pull off a big company takeover comparable to Shell’s $70B bid for BG Group.
- XOM is trading at a premium to large independent producers, has a healthier balance sheet than most, and has access to cheap debt - such as the $7B it raised earlier this year - adding to its strength a potential buyer, Stanley says.
- If it pursues a deal, XOM likely would seek a company with offshore operations rather than a U.S. shale producer, the firm says, adding that XOM seems to pursue a major deal every five years to a decade, so it could be due.
- Oppenheimer's Fadel Gheit is skeptical, saying that even though oil prices have fallen by more than half since June, oil stocks are not cheap: "Oil stocks are expensive. They’re reflecting $75/bbl. We might not see that for years.”
- Morgan Stanley agrees that price is an issue but "as the number of asset buyers exceeds sellers... we think the market is setting up for a chase.”
- Earlier: Analysts see Shell-BG deal as starting new round of energy sector mergers
Thu, Apr. 9, 7:21 PM
- Radon levels have been rising measurably in Pennsylvania since 2004, when the fracking industry began drilling natural gas wells in the state, according to a new report by the Johns Hopkins Bloomberg School of Public Health.
- The report does not pinpoint the exact cause of rising radon readings or explicitly tie it to any activity, but it says that buildings in counties where natural gas is most actively being extracted have in the past decade had much higher radon measurements than buildings in low-activity areas, where no such discrepancies were found before 2004.
- Pennsylvania has long been known to have some of the highest indoor radon levels in the U.S., but the researchers say fracking of the Marcellus shale formation could exacerbate pathways for radon to enter buildings.
- Top Marcellus Shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Thu, Apr. 9, 7:48 AM
- Exxon Mobil (NYSE:XOM) rejects a contract offer from the United Steelworkers local chapter at the company's Beaumont, Tex., refinery and renews its offer of a six-year contract, according to a union official.
- XOM wants a longer pact to avoid work stoppages if it expands the 344K bbl/day Beaumont refinery into the nation's largest, possibly reaching 850K bbl/day by the end of the decade.
- XOM has told the union its offer will remain on the table through April 19, but previous similar proposals have been rejected by the USW.
Wed, Apr. 8, 7:30 PM
- Analysts say Shell's (RDS.A, RDS.B) move to buy BG Group is telling potential acquirers that one of the biggest players is now confident enough to make a big play, and that the worst may be over in the big slide in oil and gas prices.
- The deal also may be the starting gun for a wave of M&A activity that oil industry observers have been predicting since crude prices started to slump in June.
- For starters, BG's U.S. shale assets likely will become candidates for divestiture after the Shell deal closes; in buying BG, Shell has made the choice to double-down on global liquefied natural gas and de-emphasize U.S. shale.
- Among the biggest players, Exxon (NYSE:XOM) and BP could contemplate deals - perhaps even with each other, as has been speculated, since BP ranks among the cheapest major producers relative to estimated profit.
- BG itself could whet the appetite of XOM's Rex Tillerson, who recently said there was "no limitation" to what he might buy - but he will be especially selective after getting burned by 2010's XTO purchase.
- Companies with prime acreage in oil-rich shale fields in Texas, North Dakota and Colorado have become a lot cheaper in recent months; Anadarko (NYSE:APC), Cabot Oil & Gas (NYSE:COG), Pioneer Natural Resources (NYSE:PXD), Occidental (NYSE:OXY), Continental Resources (NYSE:CLR), Concho Resources (NYSE:CXO) and Tullow Oil (OTCPK:TUWLF) are among those at topping analysts’ lists.
- Galp Energia (OTC:GLPEF) may draw interest from buyers because, like BG, it offers access to oil assets in Brazil.
Wed, Apr. 8, 3:21 PM
- Royal Dutch Shell (RDS.A, RDS.B) will become a dominant player in the liquefied natural gas market through its acquisition of BG Group, selling ~50M tons/year of LNG by the end of the decade vs. less than 25M tons/year by Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), Shell CFO Simon Henry says.
- The deal will increase Shell’s LNG sales by 32% immediately and 80% by 2018, accounting for ~15% of the world’s traded LNG, according to Henry.
- The deal gives Shell access to BG’s Australian project to produce 8.5M tons/year of LNG from coal-seam gas; the first unit at the site already is producing and a second will start later this year, BG Chairman Andrew Gould says.
- The acquisition also gives Shell assets in Tanzania, where some of the world’s biggest gas discoveries have been made; BG has a 60% interest in three offshore blocks and may help develop an LNG plant there to export gas to Asia and Europe.
- In the LNG market “size really matters and the size underlines delivery potential,” Shell CEO Ben Van Beurden says. "This is about scale.”
Wed, Apr. 8, 2:37 PM
- The price tag for cleaning up two petroleum refineries in northern New Jersey may wind up costing Exxon Mobil (XOM -1.6%) much more than the $225M settlement brokered by Gov. Christie's administration, but it could be years until it is clear how much the company will pay.
- The cleanup costs are at the center of a fierce debate between the Christie administration and the Democrat-led legislature, which faults the settlement at a fraction of the $8.9B in damages that had been determined in court documents; the administration counters that there is no cap on the cost of cleaning up the site, which XOM must pay for.
- The state's Department of Environmental Regulations says it will not have a firm number on costs until more investigations and a feasibility analysis is undertaken and a remedy is selected, adding that even then the costs are not frozen as circumstances can change.
Wed, Apr. 8, 9:18 AM
- Exxon Mobil (NYSE:XOM) reportedly has returned four oil and gas blocks to Indonesia's government after exploration studies found reserves were not economical for it to extract.
- The blocks returned were the Cendrawasih block in Papua, the Gunting block in East Java and the Surumana and Mandar blocks in the Makassar Strait.
- Separately, Niko Resources (OTCPK:NKRSF) will return six blocks to the government after Indonesia's oil and gas regulator said its exploration contracts would not be extended.
Wed, Apr. 8, 7:59 AM
- Analysts at Jefferies now expect Royal Dutch Shell (RDS.A, RDS.B) to surpass Exxon Mobil (NYSE:XOM) as the world's largest publicly traded oil and gas producer by 2018, with output of 4.2M boe/day, following Shell's $69.6B deal to buy BG Group.
- But XOM has long been rumored as a potential bidder for BG, and Financial Times points out that it now has both the motive and the opportunity, raising the possibility that it could try to outbid Shell for BG.
- Like Shell, XOM is struggling to grow and will find it easier to raise production by dealmaking than by drilling; XOM’s output was ~4.3M boe/day in 2001 and 4M last year.
- With its greater size, low debt and AAA credit rating, XOM could muster a larger cash component in any offer than Shell’s 28% of its total offer of ₤13.50/share; however, hostile deals are very rare in the oil and gas industry.
- Whether or not BG is the perfect fit for XOM, Paul Sankey of Wolfe Research has suggested other midsized E&P specialists could prove tempting, including Hess (NYSE:HES), Continental Resources (NYSE:CLR), Devon Energy (NYSE:DVN), Apache (NYSE:APA) and Anadarko Petroleum (NYSE:APC).
XOM vs. ETF Alternatives
Exxon Mobil Corporation is engaged in energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products.
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