Thu, Feb. 26, 2:58 PM
- North Dakota's oil producers have cut the number of active rigs in the state to just 121 from 190 a year ago, according to a new list published by the state’s Department of Mineral Resources.
- The rig count is now below the threshold of “at least 130” the DMR director had identified last month as needed to sustain output at the current level of slightly more than 1.2M bbl/day.
- Of the 121 active rigs, 115 are drilling in just four counties at the heart of the Bakken - Dunn, McKenzie, Mountrail and Williams.
- With the number of rigs in even the core areas down by 30% in just over two months, production likely will begin to plateau or fall in the coming months, Reuters' John Kemp writes.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Thu, Feb. 26, 9:41 AM
- Venezuela is requesting the annulment of a World Bank tribunal award that orders it to pay Exxon Mobil (XOM -0.8%) $1.6B in compensation for nationalizations.
- The country alleges that "the tribunal exceeded its powers, failed to state reasons on which the ICSID award was based, and departed from a fundamental rule of procedure," XOM said in its 10-K filing.
- Enforcement delays of arbitration awards grant the Venezuelan government some breathing room as it struggles with falling oil prices, arrears with private companies, debt payments, and an upcoming election campaign.
Tue, Feb. 24, 6:57 PM
- Refinery profit margins on the U.S. west coast have spiked over the past week, as a refinery explosion and a spreading strike by refinery workers has taken almost 25% of the region's gasoline-making capacity offline, Platts reports.
- Cracking margin netbacks for west coast refiners reached $31.75/bbl on Monday, up from $18.96/bbl prior to last Wednesday's explosion at Exxon Mobil's (NYSE:XOM) 149.5K bbl/day refinery in Torrance.
- Meanwhile, the strike by U.S. refinery workers that began Feb. 1 also weighs on west coast operations, with Tesoro's (NYSE:TSO) 166K bbl/day Golden Eagle refinery in Martinez, Calif., idled.
- The three west coast refineries hit by the strike all are owned by TSO; the other two are the 251K bbl/day Carson, Calif., refinery and the 120K bbl/day plant in Anacortes, Wash.
Mon, Feb. 23, 10:22 AM
- Exxon Mobil (XOM -0.8%) says it replaced 104% of its 2014 production by adding proven reserves totaling 1.5B oil equivalent barrels, of which 1.2B barrels consisted of petroleum and other liquids and 300M barrels of natural gas.
- Liquid additions during 2014 totaled more than 1.2B bbl, or 162% of production, and natural gas additions totaled ~300M boe for a 42% replacement ratio.
- At year-end 2014, proved reserves of 25.3B boe comprised of 54% liquids and 46% natural gas.
- XOM says it added more than 580M boe from U.S. oil-rich shales including the fast-growing Woodford, Permian, and Bakken; ~700M boe came from Canada.
Fri, Feb. 20, 2:50 AM
- The biggest refinery strike since 1980 continues after the United Steelworkers union instructed members to reject a seventh labor contract offered by Royal Dutch Shell (RDS.A, RDS.B).
- The proposal, the first one made by Shell since Feb. 5 on behalf of companies including Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), "fails to improve safety" in an enforceable way, the USW declared.
- Since Feb. 1 more than 5,000 USW workers have walked out of nine U.S. refineries that account for 13% of U.S. fuel capacity.
Wed, Feb. 18, 7:45 PM
- Warren Buffett's decision to dump his entire $4B stake in Exxon Mobil (NYSE:XOM) is pointing investors toward more nimble producers such as Suncor (NYSE:SU) and Phillips 66 (NYSE:PSX) that can deliver higher returns during an oil price recovery.
- J.P. Morgan is reiterating its lukewarm outlook on XOM, "which has not yet fully pulled the trigger to just run at maintenance type levels," as well as ConocoPhillips (NYSE:COP), Chevron (NYSE:CVX) and Cenovus Energy (NYSE:CVE), which the firm says are "getting quite close to their sustaining capex/free cash flow potential already."
- Not everyone is so down on the supermajors; BlackRock favors the group because of their strong balance sheets, high dividends and integrated business models, and Ed Yardeni notes that the stocks remain attractive for income-oriented accounts.
Wed, Feb. 18, 6:26 PM
- California's workplace safety agency has ordered the shutdown of the 100K bbl/day central gasoline producing unit at Exxon Mobil's (NYSE:XOM) Torrance refinery, which was heavily damaged today after an explosion and fire, until its investigation is complete.
- The agency says the shutdown of the unit could last up to six months, which pushed up spot prices for California gasoline today by nearly $0.12 to $2.01; oil analyst Tom Kloza thinks local retail gas prices in the area could rise to as much as $3.25/gallon by April from a recent average in California of ~$2.80.
- XOM shares tumbled 2.2% in today's trade; Tesoro (NYSE:TSO), which has three California refineries and may benefit from the XOM incident, rose 4.6%.
Wed, Feb. 18, 1:22 PM| 9 Comments
Wed, Feb. 18, 11:27 AM
- WSJ’s report that China’s government is considering merging some of its big oil companies has caught the attention of Asia’s energy analysts, but Jefferies analysts doubt that the leadership actually will pull the trigger, saying the merger talk is "more brainstorming and thinking outside the box rather than feasible proposals.”
- The firm notes that CNPC (NYSE:PTR) already is plenty big enough to compete with Exxon Mobil (NYSE:XOM): It is bigger than XOM on an asset basis, production at the group level exceeded XOM in 2013, and the value of CNPC's proved reserves at year-end 2013 likely exceeded XOM's by ~50%.
- Jefferies also notes that Sinopec’s (NYSE:SNP) production and value of in-ground reserves exceeds that of ConocoPhillips (NYSE:COP).
- A merger between Cnooc (NYSE:CEO) and SinoChem could make sense, as it would create a fully integrated, 1M bbl/day company spanning upstream and downstream operations.
- WSJ's Liam Denning writes that any such merger would be a step backward because smaller companies offer a better chance for growth, and supermajors such as XOM and COP mostly have struggled to increase their production.
Wed, Feb. 18, 10:34 AM
- Exxon Mobil (XOM -1.7%) is well positioned to pick up assets in Australia amid the sharp drop in energy prices, including assets that could be bolted on to existing operations, says Richard Owen, the chairman of XOM's Australian business.
- Meanwhile, XOM continues to assess whether to develop deeper gas fields in the Bass Strait of the country's south coast, where future gas reservoirs are more expensive to develop since they are smaller, deeper and have higher levels of impurities.
Tue, Feb. 17, 5:11 PM
- Warren Buffett added to his IBM bet amid the IT giant's Q4 selloff: Berkshire Hathaway (BRK.A, BRK.B) owned 77M IBM shares at the end of Q4, up from 70.5M at the end of Q3. (13F filing)
- Berkshire also upped its stake in Suncor (NYSE:SU) by nearly 4M shares to 22.4M as oil prices plunged. However, the firm dumped the 41M-share stake in Exxon Mobil (NYSE:XOM) it held at the end of Q3, and its 5M-share stake in ConocoPhillips (NYSE:COP). Its 449K-share stake in Express Scripts (NASDAQ:ESRX) was also liquidated.
- A new 8.4M-share stake was taken in Restaurant Brands (QSR - rose 8.7% today following earnings), and a 4.7M-share stake in 21st Century Fox (NASDAQ:FOXA). Existing stakes in GM, DirecTV, MasterCard, and Visa were moderately upped (among others), and stakes in Bank of New York and National Oilwell moderately lowered.
- Berkshire owned 17.1M Deere (NYSE:DE) shares at the end of Q4, up from 7.6M at the end of Q3 (the Q3 stake was kept confidential). Deere is up 1.6% AH.
- Overall, Buffett's firm created or expanded positions in 15 companies, and cut or liquidated positions in 5.
Sat, Feb. 14, 8:25 AM
- Exxon (NYSE:XOM), Chevron (NYSE:CVX), Conoco (NYSE:COP) and Shell (RDS.A, RDS.B) have held steady even as the price of crude has fallen from $80/bbl to $50, which suggests little upside for the shares if oil turns up and big trouble if it doesn't, according to a weekend feature in Barron's.
- XOM and its peers are struggling to grow production, incurring heavy capital expenditures, dealing with increasingly difficult host governments, and facing a world in which energy demand is growing at about half the rate of global GDP; despite $38B in capital spending last year, XOM’s energy production fell ~2% and is projected to be unchanged this year.
- Energy stocks actually have outperformed the broader market so far this month as crude oil prices have bounced off lows, but many experts expect oil to resume its downward slide; Citigroup, for one, warns crude could dip as low as $20, which surely would spark another broad downturn for energy stocks as companies are forced to shut down wells.
- That’s the main reason analysts are calling for energy sector earnings to worsen in the coming quarters, which makes stocks that look cheap at first glance actually quite expensive and suggests they still haven’t hit bottom.
Thu, Feb. 12, 3:27 PM
- Exxon Mobil's (XOM +1.9%) push for workers at its Beaumont, Tex., refinery to sign a five-year contract, nearly twice as long as the last one, is part of an effort to avert labor stoppages during a possible expansion that could make it the largest such plant in the U.S., according to Reuters.
- XOM is said to have offered a $4,500 bonus to hourly workers represented by the United Steelworkers union, which normally only signs three-year deals in the refining industry.
- Acceptance of the proposal would leave the USW Beaumont local out of sync with the union’s current national bargaining program for refinery workers.
- As reported in July, before crude prices plunged, XOM is evaluating a five-year, multibillion-dollar expansion to lift the refinery’s processing capacity to 500K-800K bbl/day from 344K now.
Thu, Feb. 12, 2:14 PM
- If Exxon Mobil (XOM +1.6%) decides to go hunting for struggling energy peers with shrinking cash flow - as it did five years ago when it acquired XTO Resources for $25B, during an energy rout worse than today's - it would need to go big or not go at all in order to meaningfully boost its oil and gas reserves, WSJ writes as it discusses BP (BP +2.1%) as a potential takeover target.
- BP “is the obvious fit says Wolfe Research's Paul Sankey; buying BP, which is still dealing with the fallout of the 2010 Gulf of Mexico oil spill, “would close out a damaged brand at a terrific price” and bolster XOM’s capacity to find new sources of oil and gas, he says.
- Other potentially attractive targets singled out by analysts include a smaller tier of companies such as Anadarko (APC +1.9%) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY), which have discovered huge deposits of oil and gas but may lack the cash flow to develop them quickly.
Thu, Feb. 12, 11:33 AM
- Pennsylvania Gov. Tom Wolf is proposing a new 5% severance tax on natural gas extraction in the state, saying the measure could generate $1B or more.
- The measure could face some pushback in the state's Republican-controlled legislature, but some kind of fracking tax could pass, as lawmakers from both parties already have proposed taxes from 3.2% to 8%.
- Like other major natural gas producing states, Pennsylvania already has a severance tax on the value of the gas extracted at the wellhead.
- 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.
Wed, Feb. 11, 12:43 PM
- Royal Dutch Shell (RDS.A, RDS.B) and BP are resisting efforts by Abu Dhabi to get them to pay a multibillion-dollar signing-on fee for a stake in developing the emirate’s biggest onshore fields, FT reports, adding that Exxon Mobil (NYSE:XOM) already has walked away from talks.
- Abu Dhabi's state-owned oil company is said to have demanded ~$8B combined from a number of companies hoping for part of a 40% equity stake in oil reserves to be jointly developed over the next 40 years; industry insiders consider the upfront payments one of the bigger ever for an oil concession.
- Total (NYSE:TOT) last week became the first to sign a new concession with Abu Dhabi in which the company paid a ~$2B upfront fee to secure its stake, under which it will earn ~$2.85 for every barrel sold vs. $1/bbl under a previous concession.
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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