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• EIA Natural Gas Inventory: +49 Bcf vs. +51 Bcf consensus, +52 Bcf last week.
• Futures +2.7% to $2.321
The New York attorney general's office, which told Peabody Energy (BTU -1.7%) this week to disclose more details about potential financial risks from climate change regulations, is now considering whether the tactic could be applied to companies beyond the energy sector, Reuters reports.
Looking forward to seeing addition progress.
If it follows pattern last few months there is likely an opportunity to trade. It has been very much in sync with commodity prices. A substantial shift in long term trend of commodities will impact but not sure the timing will be impactful short term. I would also caution watching cash flow, hedges and debt service if you are taking any longer term outlook.
Unless I missed something it is just typical board of directors annual appointments and related matters.
I agree with your perspective. Coal is and has been under fire. I have a very hard time looking at a value proposition here absent several substantial factors. There is likely trading opportunities but like anything it requires a lot of due diligence and paying attention. Thanks again for your comments.
A lot of consolidation coming and this company has a good portfolio. It all depends on how they manage in the current climate, specifically cash flow and debt service.
With Keystone XL nixed by Pres. Obama, the Canadian energy industry - and its opponents - are turning their attention to the three pipelines proposed to carry oil sands volumes from Alberta to Canada’s Pacific and Atlantic coasts and avoid crossing into the U.S.
Alberta believes Kinder Morgan’s (NYSE:KMI) Trans Mountain expansion to the Pacific and TransCanada’s (NYSE:TRP) Energy East line to the Atlantic have the best chances for success, while Enbridge’s (NYSE:ENB) Northern Gateway is seen as less likely because of strident local opposition.
ENB also has been waiting since 2012 for a U.S. decision on a permit to nearly double the capacity of its Alberta Clipper cross-border pipeline, but the company notes the existing line is already fully operating and was permitted in 2009.
Analysts say the Keystone denial will embolden opponents, making all pipelines more difficult to build, and is a blow not just to Canadian companies but to U.S. pipeline firms such as Plains All American (PAA, PAGP) and Energy Transfer (ETE, ETP, SXL) that already are delaying projects (I, II) in response to lower oil prices and tougher environmental reviews.
Meanwhile, a major beneficiary could be Venezuela, who produces heavy crude similar to Canada’s oil sands and whose economy relies largely on shipping it to the same U.S. Gulf coast refineries that Keystone was meant to supply.
Keystone killing adds to cloudy outlook for pipeline companies
http://www.seekingalpha.com/news/2909456
That may be, I'm not entirely sure why they wouldn't have gone with what was cheaper anyways but if it was for safety reasons it doesn't sound like cutting costs there would be a good idea..
Pleased to hear my friend.
Smart move in my opinion.
I agree with your comments. As commodity price begins upcycle this is a company worth owning in my opinion.
Thank you much for sharing.
I can't see any substantial movements from here until commodity prices begin trending forward.
Entergy (NYSE:ETR): Q3 EPS of $1.90 misses by $0.10.
Dominion Resources (NYSE:D): Q3 EPS of $1.03 misses by $0.03.
Diamond Offshore (NYSE:DO) +4.6% premarket on news that Petrobras (NYSE:PBR) terminated contracts for two of its drilling rigs ahead of schedule in return for extending the contract on another rig by 875 days.
While ending contracts on the Alliance and Clipper ahead of schedule, DO says it extended the contract on the Ocean Courage in Brazil at a $380K dayrate, representing revenue backlog of $333M, and will extend the contract into mid-2020.
DO also books a one-year contract on the Ocean Guardian in the U.K. North Sea at $220K/day, starting in March 2016.
Diamond Offshore (NYSE:DO) +4.6% premarket on news that Petrobras (NYSE:PBR) terminated contracts for two of its drilling rigs ahead of schedule in return for extending the contract on another rig by 875 days.
While ending contracts on the Alliance and Clipper ahead of schedule, DO says it extended the contract on the Ocean Courage in Brazil at a $380K dayrate, representing revenue backlog of $333M, and will extend the contract into mid-2020.
DO also books a one-year contract on the Ocean Guardian in the U.K. North Sea at $220K/day, starting in March 2016.
I'm with you in that!
Chevron (NYSE:CVX): Q3 EPS of $1.09 beats by $0.33.
Revenue of $34.3B (-37.3% Y/Y) beats by $4.54B.
Pinnacle West Capital (NYSE:PNW): Q3 EPS of $2.30 misses by $0.02.
Revenue of $1.2B (+2.6% Y/Y) in-line.
Cheniere Energy (NYSEMKT:LNG): Q3 EPS of -$1.31 misses by $0.83.
Revenue of $66.1M (-1.1% Y/Y) misses by $2.45M.
Cheniere Energy (NYSEMKT:CQH): Q3 EPS of $0.02 in-line.
Revenue of $5.08M (flat Y/Y) misses by $0.28M.
TransAlta (NYSE:TAC): Q3 EPS of -$0.12 misses by $0.16.
Revenue of $641M (+0.3% Y/Y) misses by $14.25M.
Ur-Energy (NYSEMKT:URG): Q3 EPS of $0.00 in-line.
Revenue of $8.49M (+15.8% Y/Y) misses by $0.11M.
Barron's: Oil stocks the cheapest in almost 30 years
http://www.seekingalpha.com/news/2879626
Looking at things on a price-to-book basis, energy stocks are selling for just 55% of the broader S&P 500, according to a note this week from BAML - the lowest level since 1986. On average, energy has been 85% as expensive as the S&P.
Book values can change, but do tend to be more stable than earnings - while ExxonMobil's EPS is expected to fall 45% this year, its book value is seen slipping just 1%.
Jack Hough takes a look at three names trading at particularly large discounts:
Chevron (CVX +1.5%) sells for 1.1x book vs. a 10-year average of 1.74x. Though cash flow has turned negative, JPMorgan's Phil Gresh says the risk of a dividend cut is "near zero."
Apache (APA +1.2%) sells for 1.07x book vs. a 10-year average of 1.5x. The company has a recent market cap just under $18B, with $6.5B in available liquidity, including $3B in cash - putting it in position to buy assets on the cheap.
Devon Energy (DVN +2%) sells for 0.88x book vs. its 10-year average of 1.47x. The profits are expected to fall by more than half this year, the company is growing production and cutting well costs in key properties.
Reuters reports Canadian Natural (NYSE:CNQ) is exploring options for its royalty assets, and has held talks with the Canada Pension Plan Investment Board, the Ontario Teachers' Pension Plan, and PrairieSky Royalty.
Cenovous Energy struck a C$3.3B deal to unload its royalty lands to Ontario Teachers' earlier this year. Meanwhile, Bloomberg reported last month ConocoPhillips was near a ~$1B deal to sell Western Canadian assets to Canadian Natural and other buyers. Canadian had $16B in debt at the end of June.
Still a lot of pain ahead in oil & gas. $60-65 is needed to be able to show stability again in my opinion.
I agree with your perspective.
Thank you for he update and information.
It is very much impacted by oil prices. Right now the industry is cutting costs and capex to conserve capital but in many cases dealing with large debt burdens and maintaining cash flows. As the price begins to adjust then these companies will be positively affected.
Good question. There are still challenges here. I also believe lower fuel costs are to a certain extent competing and hurting business.
It's a tough market. Downstream players are best positioned currently but upstream players will rally hard as oil prices begin to turn. However that call is a tough one and may not occur until next year.
Very positive activity.
China is still growing although slowly. If they dip into a significant recession then yes that could delay things as it would pull down global growth as well.
The bigger shift to rebalancing will be supplies. We decline at 5% a year globally. Those reserves need replaced with new ones annually. Most new production takes years to bring online and new investment has almost come to a halt.
That is the number I've been working with as well. Projects that take years to bring online or being delayed or cancelled altogether globally. The US shale can scale up rather quickly but can only grow at about 1-2 MMBOPD at best in full swing. Globally declines are 5%. At some point there will be a shortage of supply again as the industry tries to meet the demand in my opinion.
ConocoPhillips (COP +0.2%) says it will stop searching for oil and gas in deepwater fields by 2017, and plans to sell the offshore leases it does not intend to drill, as reported by FuelFix.
COP’s exit from deepwater exploration would free up ~$800M in capital, part of the company’s plan to sell $1B-$2B/year in assets amid lower oil prices, E&P VP Matt Fox told investors in today’s earnings conference call.
"We haven’t made a commitment to exit deepwater, per se, but deepwater exploration," Fox said.
COP has said it would scale back on exploration spending, cutting its exploration spending to $1.8B of its estimated $11.5B budget.
$PACD - Pacific Drilling (PACD +11.2%) is sharply higher after announcing it had terminated a construction contract with Samsung Heavy Industries for a newbuild deepwater drillship.
PACD says Samsung failed to deliver the Pacific Zonda drillship on schedule and will seek a refund after already making ~$181M in advance payments to the South Korean shipbuilder.
The cancellation comes in the same week that Statoil blamed the delay on the start of its Mariner project in the North Sea on delays on topside delivery at the Daewoo ship yard in South Korea.
Williams Partners (WPZ +7.8%) enjoys strong gains, as growing volumes of fuel and new pipelines sparked solid Q3 results despite shut-in production and weak fuel prices.
WPZ says EBITDA grew to $1.1B at the end of Q3, compared to $907M in the same period last year, as several new pipelines and processing facilities began operating, boosting both the amount of fuels Williams handled and the fees it received.
WPZ reported $754M in Q3 distributable cash flow, vs. $367M at the same time in 2014, which means the company can pay its dividend of $0.85/unit and still have money left over, a positive change for investors from the year-ago quarter when income covered only about two-thirds of the dividend.
WPZ says it brought online the Virginia Southside lateral, a branch of the Transco line that connects to the Atlantic region, during Q3, and was able to pull early revenues from Lediy Southeast, another Transco expansion, although the full project has not yet come online.
Very interesting development.