Sep. 10, 2014, 5:32 PM
- The U.S. and EU are said to be close to imposing the toughest round of energy sanctions yet, which would hit both Russia's energy industry and companies such as Exxon Mobil (NYSE:XOM) that are working with Rosneft (OTC:RNFTF) and other state-controlled companies.
- The sanctions reportedly would ban U.S. and European companies from working with Russia on future oil exploration in the Russian Arctic, deep seas and shale rock formations; the move would go beyond previously reported proposals to widen curbs on technologies for the oil industry.
- The sanctions would not affect current oil production but could imperil the future of existing partnerships, including a deal between XOM and Rosneft to drill in the Arctic Ocean; other vulnerable oil majors would include BP, Shell (RDS.A, RDS.B), Statoil (NYSE:STO) and Total (NYSE:TOT).
Sep. 10, 2014, 3:28 PM
- Energy stocks, especially refiners, are taking a beating following the latest EIA inventory report that said gasoline stockpiles rose by 2.4M barrels last week, helping send U.S. crude oil futures to 16-month lows (-1.2% to $91.61/bbl) and Brent crude to 17-month lows (-1.1% to $98.02).
- The report is bearish given the large increases in refined product inventories; "even though the crude drawdown was close to expectations, it seemed to disappoint," Again Capital's John Kilduff says.
- The EIA report followed the agency’s updated demand growth report issued yesterday and this morning’s release of OPEC’s report on the oil market; both see lower demand growth this year and next.
- Oil majors are mostly lower: XOM -0.6%, CVX -1.4%, COP -0.3%, but BP (+2.9%) and RDS.A (+1%) are higher.
- Refiners are hit hard: VLO -3.6%, PSX -1.5%, MPC -1.9%, HFC -2.5%, TSO -2.9%, WNR -4.1%, CVI -1.6%, ALJ -1.8%, PBF -3.5%, DK -1.8%, CLMT -1.8%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, UGA, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, PXI, PXJ, DBE, FENY, UWTI, DWTI, DNO, RJN, RYE, FXN, SZO, OLO, JJE, DDG, ONG, RGRE, OLEM, TWTI, UBN
Sep. 8, 2014, 7:23 PM
- Exxon Mobil (NYSE:XOM), ConocoPhillips (NYSE:COP), BP, TransCanada (NYSE:TRP) and the state of Alaska, working together to develop a pipeline and liquefied natural gas plant, have submitted a formal request to the FERC to start an environmental review required for siting, design and permitting for construction.
- The planned 800-mile pipeline from Alaska’s North Slope to a liquefaction plant in Nikiski on the southern coast’s Cook Inlet would carry as much as 3.5B cf/day of natural gas.
- The Alaska LNG project is in the pre-engineering and design phase, which is expected to be completed by 2016 and cost ~$500M, but total investment costs could hit $45B-$65B before all is said and done.
Sep. 4, 2014, 4:56 PM
- Tanzania's government says it plans to review all contracts signed with investors in its natural gas and mining sectors, in a drive to tighten control and raise greater revenue from its expanding natural resource industry.
- The move likely will test relations between the government and multinational corporations such as Exxon Mobil (NYSE:XOM), Statoil (NYSE:STO), Eni (NYSE:E) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY), which are implementing multi-billion dollar projects to exploit gas fields in the region.
- E&P companies have discovered nearly 50T cf of natural gas in Tanzania and more than 180T cf in neighboring Mozambique.
Sep. 2, 2014, 6:36 PM
- Analysts were out with opinions on some of the oil majors, although their comments had little impact on stock prices with energy stocks broadly tumbling today and Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) among the biggest drags on the Dow.
- Oppenheimer came out in favor of CVX, reiterating its Outperform rating and raising its price target to $140 from $130 to reflect an improving operating and financial outlook; the firm was more muted on XOM, where returns are declining in part because capital spending and operating costs continue to rise, as the low-hanging fruit has been picked, and major project schedules continue to get longer, boosting unproductive capital.
- Morgan Stanley wrote favorably about Total (NYSE:TOT) and Shell (RDS.A, RDS.B), which the firm says offer particularly attractive combinations of free cash flow growth and dividend yield, while offering a pessimistic view of XOM and BP, seeing little reason to expect capex to come down for both, thus leading to more lackluster free cash flow prospects.
Sep. 2, 2014, 3:25 PM
- The energy sector (XLE -1.3%) is lit up bright red this session as WTI crude oil for October delivery dives 3% to $93.04 per barrel, within a dollar or so of 2014's low price. Also headed south is natural gas, -4.1% to $3.89 per MBtu.
- USO -3%, UNG -4.5%
- The Dow (DIA -0.2%) is the weakest of the major averages, with Dow components Chevron (CVX -1.5%) and Exxon (XOM -1.1%) among the index's worst performers.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, IEO, GASX, PXE, PXJ, FENY, RYE, FXN, DDG
Aug. 30, 2014, 6:48 PM
- "Most of the reason that banks are underearning relative to their historical norms ... is economic and not regulatory," says Richard Pzena (NYSE:PZN), who remains bullish on the TBTFs. Low interest rates, weak trading, and "government persecution" are the three factors, and - should these normalize - earnings could nearly double at Bank of America (NYSE:BAC) and Citigroup (NYSE:C), though JPMorgan's (NYSE:JPM) boost would be more modest. Goldman Sachs (NYSE:GS) is another favorite.
- Broad financial ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
- Another cheap sector is energy, says Pzena, and based on relative valuation against the broader market - whether price-to-book or price-to-earnings - the major integrated oil companies are selling near all-time lows.
- What the market is missing, says Pzena, is the nature of oil investment. The old days saw capital spending one year, and boosted volume the next. Projects nowadays are far larger and require several years of spending before returns roll in. "We think those big new projects are going to perform and produce decent returns." HIs favorites: BP, RDS.A, RDS.B, XOM, TOT.
- Broad energy ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, PXJ, FENY, RYE, FXN, DDG
Aug. 28, 2014, 10:58 AM
- The Marcellus region is now the world's biggest natural gas shale play, and there’s still $90B to be made by tapping the area’s reserves, according to a study by Wood Mackenzie.
- The energy consultant predicts that the top 20 operators in the Marcellus will earn nearly $86B over the life of the play after the costs of reaching the reserves; for comparison, it estimates ~$118B to be made by extracting the resources in North Dakota’s Bakken region, but most production there is higher-priced oil.
- Major Marcellus shale producers include CHK, RRC, RDS.A, RDS.B, TLM, APC, ATLS, COG, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Aug. 27, 2014, 9:19 AM
- BG Group (OTCPK:BRGXF, OTCQX:BRGYY) says it has produced higher than expected flows of gas from a test well off the coast of Tanzania, boosting the financial viability of its planned liquefied natural gas export terminal in the country.
- Test flows at BG's Mzia-3 well off the southern part of Tanzania's coast reached a maximum rate of 101M cf/day, nearly double the flow rate measured at Mzia-2 last year.
- BG and partners Statoil (NYSE:STO), Exxon Mobil (NYSE:XOM) and Ophir Energy plan to build a two-train LNG export terminal, with operations expected to start in the early 2020s and a final investment decision set for 2016.
Aug. 26, 2014, 5:09 PM| 2 Comments
Aug. 25, 2014, 2:01 PM
- Sales growth by the key candy, mints, and gum category grew 2.6% last year, according to data from Nielsen.
- The category is a margin-booster for most retail chains.
- Convenience stores (OTCPK:ANCUF, PTRY, MPC, KR, XOM) saw the most CMG growth at 3.3% to $5.48B - followed by food stores at 2.6%, mass market retailers at 1.5%, and drugstores at 0.5%.
Aug. 22, 2014, 7:23 AM
- OMV (OTC:OMVJF) is now the latest energy group to withdraw its staff from Iraqi Kurdistan, as violence continues to escalate in the region.
- "We were able to book a gas find in Kurdistan but are not active at the moment. All the staff that were there have left," says CEO Gerhard Roiss. "We are also waiting and seeing (what happens) south of Crimea, where we had plans together with Exxon (NYSE:XOM)."
Aug. 18, 2014, 3:25 PM
- Valero Energy (VLO +2.3%) has dropped 3% during the past three months and has underperformed its closest peers Marathon Petroleum (MPC +1.6%) and Phillips 66 (PSX +2.1%), but Morgan Stanley’s Evan Calio and Manav Gupta think it’s time for a turnaround.
- While MPC, PSX and Exxon Mobil (XOM +0.2%) have major planned turnaround scheduled for Q4, VLO will be operating at a meaningfully higher utilization rate and is best positioned to capture any widening Gulf Coast differentials resulting from high turnaround activity, the analysts say.
- In addition to VLO's Q4 earnings revision upside, the firm estimate VLO has $800M in MLP-able EBITDA, including organic growth projects, which can be dropped into Valero Energy Partners (VLP +0.7%) in the foreseeable future.
Aug. 15, 2014, 12:35 PM
- ConocoPhillips (NYSE:COP) and Royal Dutch Shell (RDS.A, RDS.B) are among global oil companies needing crude prices in excess of $150/bbl to turn a profit from Canada’s oil sands, according to a study from a London-based environmental advocacy group.
- The projects most at-risk from lower prices are COP's Foster Creek and Shell’s Carmon Creek oil sands developments in Alberta that respectively need $159/bbl and $157/bbl oil to be profitable, Carbon Tracker says.
- The joint COP-Total (NYSE:TOT) Surmont oil sands project requires $156/bbl, while Exxon Mobil's (NYSE:XOM) Aspen and Kearl developments in the same part of Canada need $147 and $134 crude, respectively, to make economic sense, the study finds.
Aug. 14, 2014, 7:15 PM
- The U.S. Energy Department has finalized its plan to revamp the process for approving liquefied natural gas exports, largely codifying a process first proposed in May.
- Beginning immediately, the DoE will only issue final rulings on whether exports are in the public interest after the FERC has completed an environmental review of the project.
- The benefits of the change extend unevenly to the dozens of companies now vying to export U.S. natural gas, and some in the industry say the new process will exacerbate permitting delays for most companies.
- The biggest winner under the new approach is Cheniere Energy (NYSEMKT:LNG), which already had gained FERC approval but faced a nearly two-year wait for the required Energy Department review of its proposed Sabine Pass expansion; it now moves to the front of the line to get a permit from the DoE.
- Another winner is Exxon's (NYSE:XOM) Golden Pass project in southeast Texas, which also was far down the Energy Department’s list, even though it was well into the FERC review.
- The new policy will not affect companies that already have received conditional approvals, such as Dominion's (NYSE:D) Cove Point project, Sempra's (NYSE:SRE) Cameron LNG project and Leucadia National's (NYSE:LUK) Oregon LNG project.
Aug. 14, 2014, 1:01 PM
- The dollar store group (DLTR, FDO, DG, BIG) and select grocery store chains (KR, SWY, SVU) are slight out-performers on the day after Wal-Mart's (WMT +0.1%) Q2 report indicates it lost some market share in the U.S.
- Edward D. Jones analyst Brian Yarborough attributes the limp sales growth for Wal-Mart in the U.S. to the retailer's inability to nab the quick "milk and bread" runs by consumers due to the massive size of its stores.
- That line of thought is consistent with the stronger growth numbers put up lately by convenience store operators such as Circle K (OTCPK:ANCUF), 7-11, Pantry (NASDAQ:PTRY), BP Connect (NYSE:BP), On the Run (NYSE:XOM), Speedway America (NYSE:MPC), Kwik Shop (NYSE:KR), and Qwiktrip.
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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