Tue, Mar. 17, 7:12 PM
- Most of the top 15 shale oil producers in the U.S. are heavily concentrated in basins expected by NavPort to be severely affected by the decline in prices, with one major exception: ConocoPhillips (NYSE:COP).
- COP has the lowest well completion concentration in basins expected to suffer the greatest production cuts this year, implying less disruption than other shale competitors, according to NavPort, which collates oil well and rig data using regulatory reports.
- All 14 of the other top producers tracked by NavPort have at least two-thirds of well completion concentrated in the basins rated with "strong" or "severe" exposure: CHK, APC, EOG, DVN, SWN, MRO, APA, SD, XOM, CLR, PXD, NBL, BHP, WLL.
- Operators concentrated in basins that have been less severely affected - such as the Woodford, Utica and Haynesville basins - should enjoy more production than their peers through a higher volume of well completions, NavPort says.
- The study sees the Mississippi Lime, Granite Wash, Bakken and Permian basins suffering at least a 40% Y/Y reduction in drilling.
Mon, Mar. 16, 6:45 PM
- Exxon Mobil (NYSE:XOM) CEO Rex Tillerson is visiting Moscow this week for meetings with Russian oil producer Rosneft (OTC:RNFTF) and government officials despite talk of further sanctions on Russian companies and individuals, Bloomberg reports.
- The visit would coincide with the March 18 anniversary of Russia’s annexation of Crimea, which started the political crisis with the U.S. and Europe.
- XOM boosted its Russian holdings to 63.7M acres in 2014 from 11.4M at the end of 2013, a position that now dwarfs the 14.6M acres of rights it holds in the U.S.
Fri, Mar. 13, 3:58 PM
- Whiting Petroleum (WLL +3.1%) spikes on a Bloomberg report suggesting Exxon Mobil (XOM -0.2%) could be interested in the company; trading is now halted for volatility.
- Continental Resources (CLR -4.8%), Hess (HES +0.4%) and Statoil (STO +1.4%) also are reportedly looking at WLL, according to the report, and WLL has set up a data room for potential buyers to evaluate the company’s financial information and asked them to submit bids next week.
- WLL is the largest producer in North Dakota’s Bakken Shale, and the four rumored suitors already are among the 10 largest holders of acreage in the play.
- WLL had been down all day on an earlier report that it was considering selling off pieces rather than the whole company.
Fri, Mar. 13, 9:19 AM
- Exxon Mobil (NYSE:XOM) releases a statement suggesting ways the U.S. government should adjust its energy policies, including allowing U.S. exports of oil and natural gas, approving the Keystone XL pipeline, and making the regulatory process less burdensome and more transparent.
- "The energy industry has been an economic engine for the entire nation at a time of recession, slow growth, and falling labor participation rates,” CEO Rex Tillerson says.
- Also, several CEOs of U.S. drilling companies, including ConocoPhillips' (NYSE:COP) Ryan Lance, Marathon Oil's (NYSE:MRO) Lee Tillman, Chesapeake Energy's (NYSE:CHK) Doug Lawler and Occidental Petroleum's (NYSE:OXY) Steve Chazen, reportedly were in D.C. this week trying to persuade White House officials and lawmakers to lift the 40-year ban on U.S. oil exports.
Thu, Mar. 12, 6:32 PM
- North Dakota says production of crude oil from the Bakken Shale fell in January from all-time highs the previous month, slipping 3.3% 1.19M bbl/day from a record 1.23M bbl/day in December, according to a new report from the state's department of mineral resources.
- As prices for Bakken sweet crude fell to a six-year low of an average of $31.41/bbl in January, down from $40.74 December, the number of completions of previously drilled wells fell sharply to 47 from 183 in the prior month.
- The number of active rigs used to drill new wells in North Dakota sank to 111 as of today, the fewest since April 2010 and about half the peak of 218 rigs in May 2012; the state's mineral resources director predicts a bottom 100 rigs, noting that 115 active rigs are needed to maintain stable production.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Thu, Mar. 12, 2:29 PM
- Exxon Mobil (XOM +0.2%) says it has restarted drilling operations at Point Thomson on Alaska's North Slope with expectations that natural gas condensate production will start in 2016.
- XOM expects the $2.6B project to produce up to 10K bbl/day of natural gas condensate and 200M cf/day of natural gas.
- XOM says the Point Tomson reservoir holds ~8T cf of natural gas and associated condensate, which represents 25%of known gas resources on the North Slope and could be used to partially underpin the proposed Alaska LNG project.
Thu, Mar. 12, 10:47 AM
- The three biggest oil traders in the world are BP, Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT), and they make lots of money from oil crashes, according to a Bloomberg report.
- The trio’s sway in commodities trading is set to pay off this year as the crude oil bear market allows traders to generate higher returns by storing cheap oil today to sell at higher prices later and using lower prices to make more bets with the same capital.
- "Volatility has increased dramatically over the last three or four months,” says the head of Shell’s trading business. “Parts of the business that are volatility driven are probably doing pretty well.”
- The European oil majors do not disclose full financial results from their trading desks, but in Q1 2009 during the last major bear market, BP said it made $500M above its normal level of profits from trading, meaning that trading accounted for at least 20% of BP’s adjusted income of $2.38B that quarter.
- Oil trading could provide BP, Shell and Total with an edge over U.S. rivals Exxon (NYSE:XOM) and Chevron (NYSE:CVX), which sell their own production but largely eschew pure trading as a means of generating profits.
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.
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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