Thu, Mar. 12, 8:43 AM
- Authorities hope to reopen the Houston Ship Channel today after a tanker carrying 216K barrels of gasoline additive MTBE collided Monday with a bulk carrier hauling steel, prompting the shutdown of a five-mile stretch of the channel.
- Exxon Mobil (NYSE:XOM) says it cut production rates at its 560K bbl/day refinery in Baytown, Tex. - the second-largest refinery in the U.S. - as crude deliveries continue to be delayed by wreckage that have partially closed the Houston Ship Channel.
- Royal Dutch Shell (RDS.A, RDS.B) says it is evaluating the closure's impact on its 327K bbl/day joint venture refinery in Deer Park; LyondellBasell (NYSE:LYB) says its 263K bbl/day plant in Houston has experienced no operational impacts.
- Enterprise Products Partners (NYSE:EPD) suspended docking operations for ships and barges at its Oiltanking Partners unit on the ship channel, applying force majeure retroactively to the shutdown on Monday.
Wed, Mar. 11, 5:41 PM
- The widening corruption probe into Petrobras (NYSE:PBR) is likely to delay by at least one year four major offshore oilfield projects, Portuguese partner Galp Energia (OTC:GLPEF) says, in a first sign of strain on foreign investors.
- Galp, which is involved in nearly 30 onshore and offshore oil and gas projects in Brazil, eyes a one-year delay in the building of production ships for the Lula Sul, Lula Norte, Lula Extremo Sul and Lula Oeste fields, which it is developing with PBR.
- The uncertainty is expected to lead to delays in the delivery of four locally-made FPSO units after contractors have either gone bankrupt or been banned from receiving money from PBR due to the corruption scandal.
- Galp's forecast comes before PBR issues its own guidance on project development in light of the investigation.
- Other major oil companies producing in Brazil include XOM, RDS.A, RDS.B, STO, CVX, BP, OTCQX:REPYY, OTCPK:REPYF, OTCPK:BRGXF, OTCQX:BRGYY.
Wed, Mar. 11, 11:59 AM
- U.S. stocks are nearing a bounce, Strategas analysts say, but there's one exception: Commodity sector stocks such as Exxon Mobil (XOM +0.3%).
- "The real bear market out there" is still in commodities and the related stocks, Strategas says, pointing out that XOM made new lows yesterday and that the energy sector is at new relative lows.
- Interest in the space is still too high - which also is reflected in fund flow data - the firm says, urging investors to avoid or sell into any rallies.
Wed, Mar. 11, 11:49 AM
- Whiting Petroleum's (NYSE:WLL) decision to put itself up for sale looks to be just the beginning of a potential wave of consolidation as $50/bbl prices undercut companies with heavy debt and high costs.
- The value of ~75 shale-focused U.S. producers based on their reserves fell by a median of 25% Y/Y by the end of 2014, according to Bloomberg, opening up new opportunities for bigger companies with a better handle on their debt.
- Smaller producers with significant debt that depend on higher prices to make money are the most likely early targets for buyers such as Exxon Mobil (NYSE:XOM) or Chevron (NYSE:CVX), companies that have bided their time for years; XOM CEO Rex Tillerson suggested last week that his company is keeping its eyes open for opportunities.
- A recent analysis by Wolfe Research found the likeliest takeover candidates among major U.S. and Canadian producers included Continental Resources (NYSE:CLR), Apache (NYSE:APA), Devon Energy (NYSE:DVN) and Anadarko Petroleum (NYSE:APC).
- WLL would be an attractive target for XOM, CVX or Hess (NYSE:HES), all of which have operations in North Dakota and would benefit from scaling up, according to a Bank of America note.
Tue, Mar. 10, 2:27 PM
- Exxon Mobil (NYSE:XOM) and Royal Dutch Shell (RDS.A, RDS.B) are likely to withstand the oil price collapse better than their rivals because they are closer to finishing expensive investment projects, according to a Reuters analysis.
- Chevron (NYSE:CVX) and Total (NYSE:TOT), on the other hand, are both in the midst of large project spending cycles and will need to tap into more debt in order to stay afloat.
- While all companies are expected to keep paying high dividends by increasing borrowing, Exxon and Shell appear to be most able to cover both spending and dividend payouts if oil prices stay at current prices, and are likely to be able to pick up bargain assets while the price collapse shakes out the sector.
- Exxon and Shell also are ahead in terms of where their cash flow breaks even: According to analysts at Jefferies, both have 2015 breakevens of $75-$80/bbl, healthier than Chevron, BP and Eni's (NYSE:E) respective breakevens of $95, $100 and $120.
Mon, Mar. 9, 3:35 PM
- Analysts are mostly positive on Whiting Petroleum (WLL +10.8%) after WSJ's report that the company is looking to sell itself, particularly seeking out Statoil (STO -1.7%) to make a bid.
- WLL is a prime takeover candidate, given its attempt to sell itself in 2012, BofA Merrill says as it maintains its Buy rating and $45 price target, adding that the scale of WLL's assets has increased significantly because of its Kodiak acquisition and could attract large energy companies with strong balance sheets such as Exxon (NYSE:XOM), Chevron (NYSE:CVX) and Hess (NYSE:HES).
- WLL could get a strong price because of its rich assets in the Bakken Shale; on the other hand, investors have become particularly concerned about E&P companies that are heavily focused on a single region, as WLL is in the Bakken.
- UBS analyst Betty Jiang points out some hurdles to a potential deal, including a wide price differential between buyers and sellers, and potential acquirers' apparent preference for buying land in areas that are cheaper than the Bakken.
Mon, Mar. 9, 2:24 PM
- Goldman Sachs says it has been too bearish on crude oil and also on Exxon Mobil (XOM -0.3%), issuing a Buy recommendation with a $97 price target on the stock and saying XOM is the only oil super major that will generate positive free cash flow in 2016 and will have the cash the make acquisitions going forward.
- Goldman argues the industry is moving into a new phase in the investment cycle, from capital expenditures to project launches, and that XOM is most likely to have positive free cash flow; the firm sees several projects coming into service in 2015-16 - including Kearl, Cold Lake, Upper Zakum 750 and Banyu Urip, driving lower capex - and thus expects XOM to maintain the lowest free cash flow breakeven point after its dividend among the oil majors at only $61/bbl in 2016 vs. 2012-14 average levels of $99/bbl.
- Goldman also sees XOM raising its dividend by 6% each year on average through 2017 and buy back ~$1B worth of shares each quarter.
- The firm is less enamored with Chevron (CVX +0.9%) and ConocoPhillips (COP -0.7%), offering only Neutral outlooks on those shares; CVX needs Brent crude to trade at ~$84/bbl this year to cover its dividend before any asset sales, the highest among U.S. super majors, Goldman says.
Thu, Mar. 5, 5:54 PM
- Guyana's government says Exxon Mobil (NYSE:XOM) will start exploration drilling at the Stabroek Block off its coast, in a move that could inflame a long-running dispute with neighboring Venezuela.
- Officials say the country's president met XOM representative in the capital this week and the company's exploration rig ship is now in position at the concession area.
- The waters lie off a border region claimed by Venezuela in a territorial controversy dating back more than a century.
Thu, Mar. 5, 2:14 PM
- New Jersey officially announces a $225M settlement with Exxon Mobil (XOM -0.3%) that state officials say is the largest environmental settlement in state history, but it is criticized for totaling a mere fraction of the nearly $9B initially sought.
- The state AG's office says the settlement over refinery sites in Linden and Bayonne is separate from XOM's obligation to clean up the sites at its own expense.
- A NYT story yesterday suggested that the state's 11-year battle for damages resulted in the settlement only when Gov. Christie's chief counsel became involved.
- The decision to settle for "roughly three cents on the dollar" after years of litigation is an "embarrassment," writes Bradley Campbell, commissioner of the state's Department of Environmental Protection when the case was filed in 2004.
- Legislators and environmentalists are calling for investigations and rejection of the deal.
Thu, Mar. 5, 11:28 AM
- Exxon Mobil (XOM -0.5%), with $17.9B in free cash flow to end 2014, is under much less pressure to cut spending than smaller rivals, which are coming under varying degrees of financial strain amid lower oil prices; 2015 capex is being cut by 12%, a striking display of stability when compared to 30%-40% capex cuts generally announced by small and midsized E&P companies.
- CEO Rex Tillerson says being able to keep spending at rates that others can't provides XOM "a whole lot of different kinds of opportunities” in two main areas: cutting costs and acquiring assets.
- On acquisitions, Tillerson’s comment that “there really is no limitation on what we might be interested in or considering" in terms of possible deals suggests he is prepared to be ambitious.
- While a rumored bid for BP is not impossible, most analysts are doubtful due to the political sensitivities of such a deal and uncertainty about liabilities from the 2010 Gulf of Mexico oil spill; Wolfe Research's Paul Sankey thinks XOM is most interested in a U.S.-focused midsized oil company, with “key potential targets” including HES, CLR, DVN, APA and APC.
Wed, Mar. 4, 6:08 PM
- A New York district court has rejected Venezuela's bid to reduce interest on a $1.6B award that an international tribunal had ordered it to pay Exxon Mobil (NYSE:XOM) as compensation for nationalizations.
- Venezuela had sought revisions or an outright annulment to the decision by the International Centre for Settlement of Investment Disputes.
- The cash-strapped country is facing at least 20 major arbitration awards, most stemming from nationalizations during Hugo Chavez's time as president.
Wed, Mar. 4, 2:22 PM
- "People kinda need to settle in for a while,” CEO Rex Tillerson said at Exxon Mobil’s (XOM -0.5%) annual investor conference in New York today, expecting crude oil prices to remain low for at least the next two years because of ample global supplies and relatively weak economic growth.
- "There’s a lot of supply out there, and I don’t see a particularly healthy economy," the CEO says.
- In outlining its business plans through 2017, XOM assumes a price of $55/bbl, $5 below where Brent crude is trading today and about half of what Brent averaged between 2011 and the middle of last year.
- Tillerson says XOM projects that will add production through 2017 are basically fully funded, but beyond that some investment decisions may be delayed if low prices persist.
- XOM says the startup of Hadrian South in the U.S. Gulf of Mexico, the expansion of the Kearl oil sands project in Canada and deepwater expansion projects in Nigeria and Angola will add to production this year.
- XOM also aims to squeeze out more oil and gas while keeping its budget in check, and the CEO says one way it will do this is by negotiating better terms for itself, telling analysts that it expects lower contractor fees from oil services firms.
Wed, Mar. 4, 11:22 AM
- Kinder Morgan (KMI -0.6%) wants to drill through Burnaby Mountain in British Columbia to reach an oil-loading ship terminal, but WSJ reports that it is facing more challenges than the mountain itself, as it also is battling resistance from Vancouver officials and protestors opposed to fossil fuel development.
- Burnaby Mountain has become a symbolic battlefield in a much larger debate about energy resources in North America, opponents and supporters of the pipeline plan say.
- Canadian oil producers are counting on KMI’s $4.3B proposal to triple the capacity of the existing Trans Mountain pipeline, which connects Alberta’s oil sands to a Pacific coast terminal, as the fate of the Keystone XL pipeline remains in limbo.
- More than a dozen oil companies have binding deals for up to 20 years with the pipeline, including Exxon (NYSE:XOM) affiliate Imperial Oil (NYSEMKT:IMO), Cenovus Energy (NYSE:CVE) and Canadian Natural Resources (NYSE:CNQ), who view the project as a vital link to new markets in Asia.
Wed, Mar. 4, 9:14 AM
- Exxon Mobil (NYSE:XOM) says in its analyst day presentation that its free cash flow grew to $17.9B in 2014, up from $10.6B in 2013, and that 2014 capex came in $1.3B below plan at $38.5B.
- XOM says it achieved its upstream production target of 4M boe/day and expects 2% output growth in 2015 to 4.1M boe/day, driven by a 7% increase in liquids, and says it is on track to deliver 4.3M boe/day in 2017 as accretive new volumes more than offset declines; says it improved profitability in 2014 by $1.44/bbl.
- XOM says it has 16 projects online, adding more than 550K boe/day working interest capacity, and sees bringing another 16 projects online by 2017.
- Reaffirms expectations for 2015 capex of $34B (earlier), 11% less than 2014, and expects capex to average less than $34B/year in 2016 and 2017.
- XOM +0.2% premarket.
Tue, Mar. 3, 12:48 PM
- Exxon Mobil (XOM -0.3%) was forced to shut down a Russian Arctic drilling project by U.S. and European Union sanctions, it is taking the long view and staking claims to areas that could yield tens of billions of barrels in coming decades.
- XOM boosted its Russian holdings to 63.7M acres in 2014 from 11.4M at the end of 2014, dwarfing the 14.6M acres of rights it holds in the U.S., which until last year was its largest exploration prospect.
- The bet on Russia follows a string of drilling failures elsewhere and spending cuts that will likely be addressed in CEO Rex Tillerson’s investor meeting tomorrow.
- Worldwide, XOM’s exploration failure rate worsened last year to 39% from 33% in 2013, and had dry holes in two-thirds of the regions in which it operates; also, its costs to extract a barrel of crude from the ground rose 9.3% to a global average of $12.55.
Tue, Mar. 3, 11:38 AM
- Exxon Mobil (XOM -0.9%) plans to sell as much as $7B of bonds in what would be its largest ever debt deal and the biggest energy-related offering since the plunge in crude prices, Bloomberg reports.
- XOM may issue the securities in as many as eight parts, with the longest maturity portion in 30-year notes that are expected to yield ~90 bps more than comparable Treasury notes, according to the report.
- XOM last issued bonds a year ago, when it sold $5.5B in its biggest offering to date and its first deal since 1993.
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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