Sat, Jun. 6, 10:54 PM
- Earthquakes that have rocked the Dallas-Fort Worth area are putting two major oil and gas producers on the spot, as Exxon Mobil's (NYSE:XOM) XTO Energy subsidiary and EOG Resources (NYSE:EOG) face scrutiny from Texas regulators in their use of injection wells to dispose of wastewater from fracking operations.
- The state’s energy regulator, the Railroad Commission of Texas, is set to begin a series of hearings in Austin this week to assess the role of oil companies in causing the quakes in north Texas in the vicinity of the Barnett Shale, WSJ reports.
- The increased scrutiny comes six months after the commission changed well permitting rules so it can modify, suspend or end disposal well approval if scientific data shows the well is contributing to earthquakes, or is likely to do so.
Fri, Jun. 5, 4:54 PM
- New Jersey residents are closer to finding out whether a court will accept Gov. Christie's $225M proposed settlement in a lawsuit to hold Exxon Mobil (NYSE:XOM) responsible for environmental damage in the state, as today marked the end of a 60-day public comment period on the deal.
- The proposal has touched off a public feud between the Christie administration and Democrats who control the state legislature and are urging the court to reject the settlement and set damages at ~$2.5B.
- The state's Department of Environmental Protection says a larger than usual ~8,800 comments have been filed.
Fri, Jun. 5, 11:49 AM
- Analysts say yesterday's release of a landmark EPA study that found fracking had no widespread impact on drinking water makes it less likely that the Obama administration or Congress will strip a 2005 exemption of fracking from drinking water laws and that the EPA will move to tighten rules on disclosure of the chemicals used and limits on the methane emitted.
- "The EPA fracking study does not appear likely to spur additional federal water regulation beyond initiatives that are already in process," ClearView Energy Partners analyst Kevin Book writes.
- That’s seen as good news for companies such as Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB), the largest oil services companies, as well as producers such as Exxon Mobil (NYSE:XOM) and Chesapeake Energy (NYSE:CHK), as they weather lower oil and natural gas prices.
- The study "is absolutely consistent with all the previous studies that show that effective well containment practices make hydraulic fracturing a very safe practice,” XOM said after the report's release.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Wed, Jun. 3, 6:57 PM
- Exxon Mobil (NYSE:XOM) is at a crossroads, FT's Ed Crooks, writes: Is XOM content to accept its fate as a stable giant that has given up on long-term revenue growth, curbing capital spending and returning cash to investors whenever possible, or should it attempt to break out by making a large acquisition?
- In the 15 years since XOM bought Mobil, the company has returned $342B to investors in dividends and buybacks, but its oil and gas production is lower now than it was immediately after the purchase.
- If XOM seeks stronger growth, an acquisition is the only choice, says RBC analyst Brad Heffern, but he says the problem is that all the financially weak companies XOM might be able to buy at attractive valuations do not have the kind of world-class assets it wants, and the strong companies that do have the assets are priced at valuations that would make it hard for a deal to work.
- Crooks considers Anadarko Petroleum (NYSE:APC), with its excellent assets in the Gulf of Mexico, U.S. shales and in Africa, including a large presence in gas discoveries, as the best fit out of many potential acquisition candidates.
Wed, Jun. 3, 5:25 PM
- Chevron (NYSE:CVX) CEO John Watson forcefully rejects calls by European oil majors to introduce a price for carbon emissions, saying the region instead should speed up shale gas development and stop closing down nuclear power plants.
- In blunt remarks at the OPEC seminar in Vienna, Watson laid bare the rift between U.S. and European fossil fuel producers over how to deal with rising pressure to tackle climate change, saying that a pricing system on carbon emissions is unworkable.
- On this week's letter from Europe's six top oil and gas companies to the U.N. urging governments around the world to introduce a pricing system for carbon emissions, Watson says, "We did not sign that letter, and we don't intend to... We need to make sure we develop the natural gas resources that we have, here in Europe - although Europe is choosing not to develop its resources."
- CVX and Exxon (NYSE:XOM), the two largest U.S. oil producers, both declined to join European efforts to forge a common industry stance on climate change.
Tue, Jun. 2, 7:17 PM
- Claims that Iran could increase overseas crude sales by 1M bbl/day soon after sanctions are lifted are "an illusion,” but the country could boost its oil exports by 400K bbl/day in the first months, according to Iranian economist and managing partner of management consultant Atieh International, Bijan Khajehpour.
- Returning to higher, pre-sanctions crude production levels will take ~18 months, Khajehpour says, because of the time lag for sanctions relief to be implemented and for Iran to restore its production capacity, but that means Iran could be exporting 2.5M bbl/day by early 2017.
- Iran has ~20M barrels of crude stored on tankers that it has been unable to sell due to sanctions that went into effect in mid-2012, which would allow it to rapidly add to its exports.
- Meanwhile, Iran is said to be prepared to offer much better commercial terms to foreign companies prepared to invest to help revitalize its ailing oil industry than offered during the last market opening nearly two decades ago.
- Iran is likely to test the appetite of foreign oil groups this week during a conference before the OPEC meeting in Vienna attended by the heads of oil majors Exxon (NYSE:XOM), Shell (RDS.A, RDS.B), Chevron (NYSE:CVX), BP and Total (NYSE:TOT).
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Tue, Jun. 2, 3:22 PM
- Exxon Mobil (XOM +0.1%) says it will ask Santa Barbara County, Calif., for permission to temporarily transport its crude oil in trucks after a pipeline it was using ruptured two weeks ago, spilling more than 100K gallons of oil off the coast.
- XOM says the pipeline, owned by Plains All American Pipeline (PAA +1.5%), pumped ~30K bbl/day of crude oil from its Las Flores Canyon facility to a pumping station in Gaviota, where the crude then continued on to refineries inland.
- PAA says the pipeline has been out of service since the spill and that no timeline for restarting the pipeline has been set as federal regulators investigate the cause of the spill.
Tue, Jun. 2, 11:30 AM
- Exxon Mobil (NYSE:XOM) CEO Rex Tillerson calls on European governments to open up access for companies to use fracking to extract natural gas resources.
- Speaking at the World Energy Conference in Paris, Tillerson said demand for natural gas is expected to grow substantially over the coming decades, and allowing energy companies to use hydraulic fracturing to drill would bring benefits to both Europe and global markets.
- The CEO noted that U.S. natural gas production has increased by 60B cf/day to ~75B cf/day since 1990 while emissions of both carbon dioxide and methane have declined over the period, and "we can do the same in Europe."
- Governments have a “special role” to play in facilitating energy development, Tillerson said, because "only governments provide access."
Mon, Jun. 1, 3:49 PM
- Exxon Mobil (XOM -0.1%) says it received authorization from the U.S. Energy Department to export liquefied natural gas to non-free trade agreement countries from its proposed Alaska LNG terminal.
- The project includes a liquefaction facility, an 800-mile pipeline, up to eight natural gas compression stations and at least five take-off points for in-state gas delivery, as well as a gas treatment plant on Alaska's North Slope, where XOM already has operations at Prudhoe Bay and Point Tomson.
- Other participants in the Alaska LNG project include BP, TransCanada (NYSE:TRP) and ConocoPhillips (NYSE:COP).
Mon, Jun. 1, 2:46 PM
- Canadian oil industry executives say the new plan by Alberta's premier to boost job creation by increasing oil refining and processing in the province instead of elsewhere is an unrealistic "dream" because costs and infrastructure needed for such facilities make it difficult to achieve.
- "There are huge hurdles," a Canadian Natural Resources (NYSE:CNQ) VP said at an RBC Capital conference in New York, such as the fact that U.S. refineries are already set up to handle the heavy crude that Alberta produces: “The best economic solution is to get that crude to these facilities,” said an exec at Imperial Oil (NYSEMKT:IMO), the Canadian company majority owned by Exxon (NYSE:XOM).
- Building a refinery in Alberta would have cost Husky Energy (OTCPK:HUSKF) double what it ended up paying for stakes in existing facilities in Ohio, according to the company's COO.
- The focus on creating jobs should not trump economics, Suncor (NYSE:SU) CFO Alister Cowan told the conference.
Fri, May 29, 5:25 PM
- Natural gas production in the Marcellus shale, which has grown over the past decade from near zero to ~20% of U.S. output, may decline for the first time if prices in the basin remain low for much longer, the U.S. Energy Information Administration says.
- "Relatively low gas prices, combined with low oil prices, have slowed drilling in the Marcellus so production from new wells is only offsetting the decline in old wells," EIA says, expecting Marcellus output to remain flat through 2018 before declining ~1%/year during 2019-25.
- Recent data indicates a potential slowdown: The number of rigs in the area has dwindled to its lowest since 2011, and drillers including Chesapeake Energy (NYSE:CHK) and Cabot Oil & Gas (NYSE:COG) have temporarily shut in some production due to weak regional prices.
- An inability to move all the gas out of the Marcellus region has depressed prices there compared with the Gulf coast benchmark, the Henry Hub in Louisiana, making it less attractive for local producers to drill more.
- Other top Marcellus producers include RRC, RDS.A, RDS.B, TLM, APC, ATLS, CVX, CNX, EQT, EOG, XOM, WPX, XCO, CRZO, SWN, AR.
Fri, May 29, 10:36 AM
- Exxon Mobil’s (NYSE:XOM) liquidity rating was downgraded this week from "strong” to “adequate” by Standard & Poor’s, in the latest sign of the massive impact of lower oil prices on the energy industry.
- S&P did not strip away XOM’s coveted AAA credit rating - in fact, the ratings agency affirmed the rating and called it “stable” - but the loss of the "strong" liquidity rating is an indication that while XOM is still flush with cash, it is no longer quite as strong as before.
- Specifically, S&P noted that XOM is on the hook for $59.3B in projected capital spending in 2015, current debt maturities and upcoming dividends and stock buybacks, while the company has $90.5B in cash and short-term investments, untapped credit lines and expected cash from operations this year and next.
Wed, May 27, 6:39 PM
- Chevron (NYSE:CVX) shareholders vote to give large investors the power to nominate directors to the company’s board, with 55% of votes cast favoring a proposal to give shareholders proxy access rights.
- The vote is not binding and CVX had opposed the proposal, warning it could create “significant risk" for investors, but CEO John Watson says the board will “consider the final voting results carefully, including the vote on proxy access and the thoughtful stockholder discussions on that issue."
- Supporters of the proposal think it would encourage CVX’s directors to address the long-term risks to the company’s business posed by climate change.
- The rule would allow investors who have owned 3% or more of CVX’s shares for at least three years to nominate directors for up to a quarter of the current board’s seats.
- A similar resolution came close to passing today at Exxon Mobil's (NYSE:XOM) annual meeting, where a proxy access proposal was supported by 49.4% of the shares voted.
Wed, May 27, 12:19 PM
- Proposals for Exxon Mobil (XOM -0.1%) and Chevron (CVX +0.3%) to nominate directors with climate change expertise, set greenhouse gas targets and compile reports on minimizing fracking risks are among resolutions being voted on today as the two biggest U.S. oil companies hold their shareholder meetings.
- Climate proposals regularly surface at oil company annual meetings, but today will mark the first time shareholders at XOM will vote on adding an independent climate expert to the board; the measure also will be considered at CVX's meeting after being rejected by an average of 77% of votes cast in previous years.
- The companies oppose all the measures, and none are expected to pass; support for a resolution urging XOM to set goals for cutting greenhouse gases may even decline from last year's 20%, thanks to an about-face by investor advisory service ISS that supported the proposal last year but this year has urged a no vote after saying XOM already discloses sufficient emissions data.
Wed, May 27, 11:40 AM
- Total (TOT +1.6%) says it has achieved the milestone of producing a cumulative 2B barrels of oil from its deepwater offshore Block 17 site off the coast of Angola, making the site its most prolific with production of more than 700K bbl/day; to add perspective, all of Britain produces ~800K bbl/day of oil.
- TOT operates Block 17 with a 40% interest, alongside Statoil (NYSE:STO) with 23.33%, Exxon (NYSE:XOM) 20% and BP 16.67%.
- Apart from Block 17, TOT owns a 30% stake in the Kaombo development, which holds ~650M barrels of total reserves with an anticipated total production capacity of 230K bbl/day.
Tue, May 26, 10:33 AM
- Mexico's government has approved 19 companies and seven groups to bid on 14 shallow-water exploration blocks as it prepares to allow private producers to drill in its waters for the first time in more than 75 years.
- Exxon Mobil (XOM -0.8%), Chevron (CVX -1.1%) and Pacific Rubiales Energy (OTCPK:PEGFF -3%) were among the companies that Mexico’s oil regulator cleared to develop ~80K bb/day of crude in the Gulf of Mexico.
- Royal Dutch Shell (RDS.A, RDS.B) and Petrobras (NYSE:PBR) began the process of pre-qualification but ultimately decided to stop and will not participate as bidders in the first phase of the first round.
- In addition to the 14 shallow-water blocks for the scheduled July 15 auction, Mexico also will auction nine other shallow-water blocks in the Gulf of Mexico in September and 26 onshore blocks in December.
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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