Fri, Sep. 18, 9:47 AM
- BP (BP -2.3%) is expected to continue as operator of the ACG oil field complex after the current production-sharing deal expires, according to Azerbaijan state oil company Socar.
- The comments signal a thawing in BP’s relations with the Azeri government, after the president three years ago blamed an unexpected decline in oil output from the ACG fields on “grave mistakes” by BP.
- BP gets ~5% of its oil output from Azerbaijan; others in the ACG development group include Chevron (CVX -2.6%), Exxon (XOM -2.7%) and Statoil (STO -2.4%).
Thu, Sep. 17, 5:55 PM
- Exxon Mobil (NYSE:XOM) faces more delays in ramping up production at its Torrance, Calif., refinery following an acid leak and ongoing issues in negotiations with state regulators.
- In deciding to delay the refinery ramp for the third time with no new date set yet, the South Coast Air Quality Management District said today's scheduled hearing was postponed until XOM “can agree to terms and conditions ensuring that sufficient safeguards are in place to protect the public’s health.”
- Also, two California Democrats in the U.S. House have written to the U.S. Chemical Safety Board asking for a Sept. 6 acid leak at the refinery to be included in the broader investigation of XOM’s operations.
- Meanwhile, California continues to suffer the highest gasoline prices in the U.S. behind Alaska, partly because of supply shortage due to the Torrance refinery outage.
- Earlier: Exxon poised to raise output at Torrance refinery (Sept. 11)
Thu, Sep. 17, 3:18 PM
- J.P. Morgan analysts met with Exxon Mobil’s (XOM +0.7%) VP of investors relations and liked what they heard, but not enough to change their Neutral rating even as the stock could represent an attractive opportunity for energy investors with a longer-term view.
- XOM expects to be one of the few companies that can counter-cyclically invest to improve through-the-cycle returns, but the firm remains cautious around supply resilience, suggesting the current cycle could take some time - say, more akin to the1980s rather than 2008-09.
- JPM sees 2016 as a telling year for the industry, with many hedge programs rolling off for E&Ps, testing the financial capacity of many in the industry and opening the door for a round of strategic M&A, in which it would expect XOM to be active but patient.
Thu, Sep. 17, 10:40 AM
- SNC-Lavalin (OTCPK:SNCAF) says its Kentz group has been awarded a contract by Exxon Mobil (NYSE:XOM) to design and build an new oil processing facility in Iraq.
- The size of the contract is not disclosed, but Dundee Capital analysts estimate it could be worth ~$500M to SNC, which would represent 11.4% of SNC’s $4.4B oil and gas backlog at the end of Q2.
- The firm says the contract underlines SNC’s ability to source oil and gas work globally, something it believes investors do not fully appreciate.
Wed, Sep. 16, 12:59 PM
- Integrated oil companies will see a huge collective negative cash flow position this year and next, with capex set to be cut further as oil prices struggle to a minimal increase in 2016, according to a Moody's forecast.
- Despite cost cuts, Moody’s still expects the industry to face a 20% contraction in 2015 free cash flows to a negative position of nearly $80B in 2015, as the ratings agency’s outlook for the global integrated oil and gas industry remains negative into next year.
- Moody’s expects the industry’s total debt load will increase, with cash balances declining as companies sell assets to cover dividends and capital spending, although most companies have resisted dividend cuts so far.
- Relevant tickers: XOM, CVX, BP, RDS.A, RDS.B, TOT, STO
Wed, Sep. 16, 10:45 AM
- Exxon Mobil (XOM +1.5%) says it has started production at its new Erha North project offshore Nigeria five months ahead of schedule and $400M under budget.
- The deepwater project includes seven wells, with expected peak production of 65K bbl/day of oil, and will be tied to an existing Erha North floating production, storage and offloading vessel, helping reduce infrastructure.
- XOM also affirms its forecast for 2% production growth in 2015 to 4.1M boe/day, driven by 7% liquids growth.
Wed, Sep. 16, 10:17 AM
- Nigeria’s state oil company says it plans to renegotiate production sharing agreements with oil majors including Royal Dutch Shell (RDS.A, RDS.B), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM) and Eni (NYSE:E), as the country has been hit hard by the plunge in global oil prices.
- "Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,’’ says Ibe Kachikwu, the new head of the Nigerian National Petroleum Corp.
- Nigeria is Africa's top producer of crude oil and gets 70% of its government revenues from oil.
Mon, Sep. 14, 7:50 AM
- As anticipated, Oil Search (OTCPK:OISHF) has rejected Woodside Petroleum’s (OTCPK:WOPEF, OTCPK:WOPEY) $8.1B takeover bid, as anticipated, saying the proposal undervalues its liquefied natural gas expansion plans in Papua New Guinea.
- Woodside may make a higher bid and needs to offer ~A$8.50/share to succeed, according to Sanford C. Bernstein analysts, after offering the equivalent of A$7.65/share.
- Exxon Mobil (NYSE:XOM) have been speculated as potential counter-bidders.
Sat, Sep. 12, 10:50 AM
- A self-proclaimed "kid in a candy store" in 2011, Lowes (NYSE:L) CIO Joe Rosenberg isn't as excited now as he was then, but he remains a long-term bull and sees a few particular pockets of value.
- Source: Barron's
- On oil, either OPEC and non-OPEC countries reach an agreement to cut production and the price spikes upward, or there isn't an agreement and the price collapses - wiping out a lot of production. Either way, the price moves higher, says Rosenberg, and energy stocks (XLE, OIH) have likely bottomed.
- Rosenberg doesn't think the dividend gets cut at Chevron (NYSE:CVX), noting board members like John Stumpf were buyers of the stock at much higher levels. "The probability of them then agreeing to a dividend cut seems somewhat remote." A similar case can be made for Shell (RDS.A, RDS.B) or ExxonMobile (NYSE:XOM).
- Catalysts for Johnson & Johnson (NYSE:JNJ) include a breakup into three companies, and better capital allocation - notably, getting far more aggressive with share repurchases. "JNJ could raise $50B in the bond market in a heartbeat and use that money to buy back stock." Don't rule out an activist investor if management doesn't get with it.
- Ford (NYSE:F) and General Motors (NYSE:GM) are "incredibly cheap," says Rosenberg. The strong sales pace is sustainable because the average age of cars on the road in the U.S. is about 11 years - they need to be replaced. "The stocks are discounting a very bearish scenario."
Fri, Sep. 11, 7:58 AM
- Exxon Mobil's (NYSE:XOM) plan to increase production at its Torrance, Calif., refinery appears on track for approval, according to the LA Times.
- XOM is now scheduled to meet the South Coast Air Quality Management District next Thursday, seeking permission to use an old pollution control system to replace one destroyed in an explosion at the Torrance plant in February.
- If approval comes after next week's hearing, the refinery could raise production by the end of September or early October.
- Increasing production at the Torrance plant, which provides 10% of the state's capacity and 20% in southern California, is considered the key to lowering gasoline prices in the Los Angeles area.
Wed, Sep. 9, 6:55 PM
- The selloff in megacap oil stocks such as Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), Occidental Petroleum (NYSE:OXY) and ConocoPhillips (NYSE:COP) still has not “placed them in value territory," Credit Suisse analyst Edward Westlake says.
- But CVX looks like the most interesting of the four, Westlake says, as it will have an increased share of long lived cash flows to support the 5.6% dividend yield once Gorgon and Wheatstone are on stream; he also likes CVX's "enviable position" in the Permian, some giant discoveries in the Gulf of Mexico and a profitable expansion of Tengiz.
- XOM is well run with an excellent balance sheet and lower cost of capital, but is not immune from a collapse in revenues, according to Westlake.
- COP's cash flow will benefit from new projects, cost cutting and shale growth over the next few years, but its $3.6B/year dividend outlay may be better off redeployed into its low cost shale portfolio, the analyst says.
Wed, Sep. 9, 11:47 AM
- Exxon Mobil (NYSE:XOM) is maintained with a Perform rating at Oppenheimer, but “barring a major acquisition, we don’t see any near-term catalyst that would lift performance above the S&P 500's,” analyst Fadel Gheit writes.
- The analyst explains that 48% of XOM’s Q2 earnings came from upstream operations, 31% from downstream and 21% from chemicals, and that North America upstream losses are expected to continue in Q3 in the U.S. and beyond 2016 in Canada.
- XOM's share repurchase program is not safe on current spending levels” Gheit adds, citing the company’s size, growing production and challenging reserves position.
Wed, Sep. 9, 9:53 AM
- Oil Search (OTCPK:OISHF) will reject a demand by suitor Woodside Petroleum (OTCPK:WOPEF, OTCPK:WOPEY) to hold exclusive talks as part of its A$11.6B takeover offer, potentially paving the way for Exxon Mobil (XOM +1.5%) to emerge as a rival bidder, Sydney Morning Herald reports.
- XOM is the operator and largest shareholder in Oil Search's Papua New Guinea liquefied natural gas project, and is said to have held an informal meeting with Oil Search CEO Peter Botten in the country yesterday.
- Macquarie analysts believe that XOM, as operator of PNG LNG, is unlikely to make any due diligence process easy for Woodside given sensitivities around early work it is performing on the P'nyang and Elk-Antelope gas fields; Bernstein's Neil Beveridge expects upward revisions to Woodside's offer for Oil Search and counter bids possibly from XOM, "who would be the most likely competitor."
Sat, Sep. 5, 8:25 AM
- ConocoPhillips (NYSE:COP) says it could support a United Nations climate change agreement if it met its own policy principles, including creating a "level playing field" among energy sources and between countries, and avoiding technology mandates.
- COP's partial endorsement comes as pressure grows on U.S. oil majors to join European peers including Shell (RDS.A, RDS.B), BP, Total (NYSE:TOT) and Statoil (NYSE:STO) who backed UN climate negotiations and a global carbon pricing system to reduce carbon emissions.
- COP and U.S. peers such as Exxon (NYSE:XOM) and Chevron (NYSE:CVX) face competing demands from green and investor activist groups as well as industry lobby groups worried that a UN deal will call for a total phase-out of fossil fuels.
Wed, Sep. 2, 7:07 PM
- Exxon Mobil (NYSE:XOM) could outperform the market during the next 12 months thanks to a dividend yield that’s nearly twice as high as the S&P 500′s, Barclays Paul Cheng says.
- XOM’s relative yield has jumped to a recent high of 180% from 127% and compared to the 25-year average of 138%, Cheng calculates, adding that when XOM's relative yield exceeds 170%, it outperformed the S&P 500 in the subsequent one-, three- and 12-month periods by respective averages of 1.8%, 3.9% and 6.8%.
- Although Cheng thinks the energy sector’s downside risk relative to the market may be limited from current levels and that XOM may have reached near-term lows, he maintain an Underweight rating on the stock and sees better risk-reward opportunities in Suncor Energy (NYSE:SU), Imperial Oil (NYSEMKT:IMO) and ConocoPhillips (NYSE:COP).
Wed, Sep. 2, 12:33 PM
- A Dutch court rules that Royal Dutch Shell (RDS.A, RDS.B) and Exxon Mobil (NYSE:XOM) must compensate homeowners for a drop in house prices caused by earthquakes linked to production at the Groningen gas field.
- The ruling specifies that homeowners do not have do demonstrate their property has suffered physical damage, but only that its value has been affected by its location in the quake area.
- The ruling could open the door to a wave of compensation claims against the companies, which operate the field through a joint venture which so far has set aside €1.2B ($1.4B) in part to compensate homeowners for damages to their property.
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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