Credit: Shutterstock photoThursday, April 26, 2018
Sector Commentary
Energy stocks are set to move higher this morning, lifted by several factors, including oil prices testing four year highs last reached on Monday, higher index futures, and a slew of earnings releases across the energy landscape.
Oil rose on Thursday, supported by expectations of renewed U.S. sanctions on Iran, declining output in Venezuela and continuing strong demand. Oil prices have risen by 15 percent in the last four weeks, driven by expectations that the United States will reimpose sanctions on Iran, a major oil producer and OPEC member. French President Emmanuel Macron said on Wednesday he expected U.S. President Donald Trump to pull out of a deal with Iran reached in 2015 in which the Islamic Republic suspended its nuclear program in return for Western powers lifting crippling sanctions.
U.S. natural gas futures held near a six-week high ahead of EIA weekly inventory data expected to show an unprecedented third stockpile withdrawal in April that would cut overall inventories to about 29 percent below normal for this time of year. Utilities have never pulled gas out of storage for three weeks in April, the usual start of the industry's injection season, at least according to federal energy data going back to 1994.
U.S. INTEGRATEDS
Press Release - The Board of Directors of Chevron declared a quarterly dividend of one dollar and twelve cents ($1.12) per share, payable June 11, 2018, to all holders of common stock as shown on the transfer records of the Corporation at the close of business May 18, 2018.
INTERNATIONAL INTEGRATEDS
Press Release - BP announced that it has appointed Helge Lund to succeed Carl-Henric Svanberg as chairman of BP.
Press Release - The Board of Royal Dutch Shell announced an interim dividend in respect of the first quarter of 2018 of US$0.47 per A ordinary share and B ordinary share, equal to the US dollar dividend for the same quarter last year.
Press Release - Royal Dutch Shell reported cash flow from operating activities for the first quarter 2018 of $9.4 billion, which included negative working capital movements of $0.9 billion, compared with $9.5 billion in the first quarter 2017, which included negative working capital movements of $1.6 billion. Total dividends distributed to shareholders in the quarter were $4.0 billion.
Press Release - In accordance with the Total 's Board of Directors decision on February 7, 2018 regarding the shareholder return policy from 2018-20, the first 2018 interim dividend is set at 0.64 euro per share. This interim dividend is increased by 3.2% compared to the three 2017 interim dividends and the final dividend. The ex-dividend date is set for September 25, 2018.
Reuters - Total reported a consensus-beating rise in net adjusted profit during the first three months of the year, with Total adding it would surpass its production target for 2018. Total produced 2.703 million barrels of oil equivalent per day in the first quarter, driven by ramp-ups and new acquisitions, up more than 5 percent compared to the same period in 2017, and above analysts' estimates of 2.663 million boe/d. It was the company's highest output ever recorded in a quarter, surpassing a previous record of 2.66 million boe/d in 2003. Net adjusted profit came in at $2.9 billion, beating analysts' forecast of $2.77 billion in the quarter.
Press Release - Oryx Petroleum, through its wholly-owned subsidiary, entered into a farm-out agreement to sell a 30% interest in the Haute Mer B deep water exploration license located in Brazzaville, Congo, to a subsidiary of Total SA , for a consideration of up to US$13.3 million.
Press Release - PTT Exploration and Production Public and Total E&P Thailand SAS, a subsidiary of Total SA , intend to acquire certain additional interest in the Bongkot gas field located in the gulf of Thailand, in an auction held by the Government of Thailand.
CANADIAN INTEGRATEDS
(Late Wednesday) Press Release - Cenovus Energy welcomes Harold N. Kvisle and Keith A. MacPhail as new members of its Board of Directors. The company would like to extend its sincere thanks and best wishes to Ian W. Delaney, who has retired from the Board of Directors. Mr. Delaney has been a Director since Cenovus's inception in 2009.
(Late Wednesday) Press Release - Husky Energy generated funds from operations of $895 million in the first quarter, leading to free cash flow of $218 million. Net earnings were $248 million, up 250 percent compared to $71 million in the same period a year ago. The Board of Directors has approved a quarterly dividend of $0.075 per common share for the three-month period ended March 31, 2018. The dividend will be payable on July 3, 2018 to shareholders of record at the close of business on June 4, 2018.
U.S. E&PS
(Late Wednesday) Press Release - Antero Resources reported first quarter net income of $15 million, or $0.05 per diluted share, compared to net income of $268 million, or $0.85 per diluted share, in the prior year period. First quarter adjusted net income was $141 million, or $0.44 per diluted share, compared to $56 million, or $0.18 per diluted share, in the prior year period. First quarter Stand-Alone adjusted net income was $136 million compared to $52 million in the prior year period. Adjusted EBITDAX was $551 million, compared to $365 million in the prior year period, and Stand-Alone adjusted EBITDAX was $488 million, compared to $321 million in the prior year period.
Imperial Capital started Bonanza Creek Energy at 'Outperform'.
Press Release - Comstock Resources , announced that it has withdrawn the previously announced offers to purchase any and all of its outstanding Senior Secured Toggle Notes due 2020, 7.75% Convertible Secured PIK Notes due 2019 and 9.5% Convertible Secured PIK Notes due 2020
Press Release - Comstock Resources announced that the Company is in negotiation with Dallas businessman and owner of the Dallas Cowboys Football Club Ltd., Jerry Jones, to make a substantial investment in the Company. Under a letter of intent entered into by the Company and Arkoma Drilling L.P. and Williston Drilling, L.P., Comstock will acquire interests in certain oil and gas properties located in North Dakota in exchange for common stock in the Company. Comstock is acquiring the properties for $620 million.
Press Release - ConocoPhillips reported first-quarter 2018 earnings of $0.9 billion, or $0.75 per share, compared with first-quarter 2017 earnings of $0.6 billion, or $0.47 per share. Excluding special items, first-quarter 2018 adjusted earnings were $1.1 billion, or $0.96 per share, compared with a first-quarter 2017 adjusted loss of $0.2 billion, or ($0.14) per share. It also increased quarterly dividend by 7.5 percent.
Press Release - PDVSA to pay ConocoPhillips $2.04 billion for early dissolution of two joint ventures for producing oil in the OPEC-member country.
(Late Wednesday) Press Release - The Board of Directors of EOG Resources declared a dividend of $0.185 per share on EOG's Common Stock, payable July 31, 2018, to stockholders of record as of July 17, 2018. The indicated annual rate is $0.74.
Press Release - EQM's acquisition of EQT Corp retained midstream assets and Gulfport Energy's 25% ownership in the Strike Force Gathering System for $1.69 billion. EQT will receive $1.15 billion in cash and 5.9 million EQM common units and Gulfport Energy will receive $175 million in cash.
Press Release - Net loss attributable to EQT Corp for the first quarter 2018 was impacted by an impairment charge of $2.3 billion associated with the Huron and Permian Plays; increases in other operating costs; lower gains on derivatives not designated as hedges; and higher interest expense, which more than offset higher revenue from an 88% increase in sales volume, lower corporate income taxes, and higher pipeline and net marketing services revenue. Adjusted net income attributable to EQT increased 253% for the first quarter 2018, excluding the impairment charge, non-cash derivative gains, and approximately $35.7 million of transaction-related expenses.
Press Release - Gulfport Energy announced that it has entered into a definitive agreement for EQT Midstream Partners to acquire Gulfport's 25% equity interest in Strike Force Midstream LLC.
Press Release - HessCorp announced that its subsidiary, Hess Guyana Exploration Limited, had reached agreement with Esso Exploration and Production Guyana to acquire a 15 percent participating interest in the Kaieteur Block, offshore Guyana. The Cooperative Republic of Guyana has provided Hess and ExxonMobil an instrument detailing the transfer of interest, which has been completed.
KLR Group downgraded Hess Corp to 'Hold' from 'Buy'.
(Late Wednesday) Press Release - Jagged Peak Energy LLC, a wholly owned subsidiary of Jagged Peak EnergyInc ., announced the pricing of its previously announced private offering of senior unsecured notes due 2026, which was upsized to $500 million in aggregate principal amount from the originally proposed $400 million offering. The 2026 Notes, which priced at par, will mature on May 1, 2026, and will pay interest at an annual rate of 5.875%. The 2026 Notes will be guaranteed on a senior unsecured basis by the Company.
Press Release - QEP Resources r eported a net loss of $53.6 million, or $0.22 per diluted share, for the first quarter 2018 compared with net income of $76.9 million, or $0.32 per diluted share, for the first quarter 2017. Net income or loss includes non-cash gains and losses associated with the change in the fair value of derivative instruments, gains and losses from asset sales, asset impairments and certain other items. Excluding these items, the Company's first quarter 2018 adjusted net loss was $47.9 million, or $0.20 per diluted share, compared with adjusted net loss of $34.5 million, or $0.14 per diluted share, for the first quarter 2017.
Press Release - Northern Oil and Gas announced that it entered into a definitive agreement to acquire producing assets and acreage in the core of the Williston Basin in North Dakota for total consideration of $40 million in cash and 6 million shares of Northern common stock. The company anticipates the acquisition will close in approximately 40 days, and will have an effective date of January 1, 2018.
(Late Wednesday) Press Release - Range Resources reported non-GAAP revenues for first quarter 2018 totaled $766 million, an increase of 26% compared to first quarter 2017 and cash flow from operations before changes in working capital, a non-GAAP measure, was $323 million, compared to $258 million in first quarter 2017. Adjusted net income comparable to analysts' estimates, a non-GAAP measure, was $113 million ($0.46 per diluted share), compared to $61 million ($0.25 per diluted share) in the prior-year quarter, an increase of 85%.
OIL SERVICES
Press Release - CARBO Ceramics reported revenues for the first quarter of $49.4 million increased 42%, or $14.7 million compared to revenue of $34.7 million in the same period of 2017. Operating loss for the first quarter of 2018 improved to $20.2 million as compared to $30.3 million in the same period of 2017, primarily due to increased sales combined with a reduction in certain fixed structural costs, and a decrease in slowing and idling expenses. Approximately two thirds of the $9.7 million of slowing and idling expenses is non-cash related.
(Late Wednesday) Press Release - Core Laboratories reported that continuing operations resulted in first quarter 2018 revenue was $170,000,000, up over 8% year-over-year, with operating income of $32,300,000, up almost 40% year-over-year, and earnings per diluted share increased 32% to $0.54, all in accordance with U.S. generally accepted accounting principles. EPS, ex-items, a non-GAAP financial measure, increased 39% year-over-year to $0.57. On 17 April 2018, the Board announced a quarterly cash dividend of $0.55 per share of common stock, payable in the second quarter of 2018.
Raymond James upgraded Helix Energy Solutions Group to 'Outperform' from 'Market Perform'.
(Late Wednesday) Press Release - Oceaneering International reported a net loss of $49.1 million, or $(0.50) per share, on revenue of $416 million for the three months ended March 31, 2018. Excluding the impacts of $9.0 million of adjustments, comprised of foreign currency exchange losses and tax adjustments related to discrete tax items, adjusted net loss was $40.2 million, or $(0.41) per share.
(Late Wednesday) Press Release - Oil States International reported a net loss for the first quarter 2018 of $3.5 million, or $0.06 per diluted share, which included pre-tax transaction-related charges of $2.6 million and $0.8 million pre-tax of severance charges. During the first quarter of 2018, the Company generated revenues of $253.6 million and Adjusted Consolidated EBITDA of $32.3 million.
Press Release - Patterson-UTI Energy reported financial results for the three months ended March 31, 2018. The Company reported a net loss of $34.4 million, or $0.16 per share, for the first quarter of 2018, compared to a net loss of $63.5 million, or $0.40 per share, for the quarter ended March 31, 2017. Revenues for the first quarter of 2018 were $809 million, compared to $305 million for the first quarter of 2017. The Company declared a quarterly dividend on its common stock of $0.04 per share, to be paid on June 21, 2018, to holders of record as of June 7, 2018.
Press Release - Petroleum Geo-Services reported revenues of $201.3 million and EBIT loss of $7.3 million, according to IFRS. Its cash flow from operations of $73.4 million, compared to $30.0 million in Q1 2017.
(Late Wednesday) Press Release - For the quarter ended March 31, 2018, net income from continuing operations attributable to SEACOR Holdings was $0.6 million ($0.04 per diluted share) after incurring net mark-to-market losses of $3.0 million ($0.17 per diluted share) related to the Company's investment in 5.2 million shares of Dorian LPG Ltd. and taking a $0.9 million ($0.05 per diluted share) reserve against a claim receivable.
(Late Wednesday) Press Release - Western Energy Services reported first quarter operating revenue decreased by $5.2 million to $73.0 million in 2018 as compared to $78.2 million in 2017, after normalizing for $6.4 million of shortfall commitment revenue recognized in the first quarter of 2017, operating revenue in the first quarter of 2018 improved by $1.2 million. Its first quarter adjusted EBITDA decreased by $3.5 million to $15.1 million in 2018 as compared to $18.6 million in the first quarter of 2017. However, after normalizing for the $6.4 million in shortfall commitment revenue recognized in the first quarter of 2017, Adjusted EBITDA improved by $2.9 million, as compared to the same period in the prior year.
DRILLERS
Press Release - Ensco reported a loss of $0.32 per share for first quarter 2018 compared to a loss of $0.09 per share a year ago. Revenues were $417 million in first quarter 2018 compared to $471 million a year ago due to a decline in reported utilization to 54% from 58% and a decline in the average day rate to $132,000 from $156,000.
Press Release - Helmerich & Payne reported second quarter of fiscal 2018 net loss of $(0.12) per diluted share included $(0.07) in after-tax losses. On March 7, 2018, Directors of the Company declared a quarterly cash dividend of $0.70 per share on the Company's common stock payable June 1, 2018.
Press Release - Ocean Rig signed a drilling contract with Statoil Tanzania AS. In the scope of this partnership, the drilling operations are performed by the 228-meter long and 42-meter wide Ocean Rig Poseidon.
(Late Wednesday) Press Release - Ocean Rig UDW announced that its subsidiary that is party to the shipbuilding contract for the construction of its 7thgeneration newbuilding drillship the Ocean Rig Santorini reached an agreement with Samsung Heavy Industries to postpone the delivery of such newbuilding drillship to September 2019.
Press Release - Precision Drilling reported first quarter revenue of $401 million, an increase of 9% over the prior year comparative quarter and net loss of $18 million compared to a net loss of $23 million in the first quarter of 2017.
Guggenheim Securities downgraded RPC to 'Neutral' from 'Buy'.
REFINERS
Press Release - Valero Energy reported net income attributable to Valero stockholders of $469 million, or $1.09 per share, for the first quarter of 2018 compared to $305 million, or $0.68 per share, for the first quarter of 2017. Excluding the special items reflected in the accompanying earnings release tables, first quarter 2018 adjusted net income attributable to Valero stockholders was $431 million, or $1.00 per share, an increase of 47 percent in adjusted per share results compared to the first quarter of 2017.
(Late Wednesday) Reuters - Valero Energy restarted the hydrocracker at the 195,000-barrel-per-day McKee Refinery in Sunray, Texas.
MLPS & PIPELINES
Press Release - For the first quarter of 2018, NuStar Energy net income applicable to common limited partners was $107 million, or $1.15 per unit, up 178% from $38 million, or $0.49 per unit for first quarter 2017, while earnings before interest, taxes, depreciation and amortization were $250 million, up 62% from $154 million for first quarter 2017. The partnership announced first quarter 2018 Series A, Series B and Series C preferred unit distributions of $0.53125 per unit, $0.47657 per unit and $0.56250 per unit, respectively, that will be paid on June 15, 2018 to holders of record as of June 1, 2018. In addition, a first quarter 2018 common unit distribution of $0.60 per unit will be paid on May 14, 2018 to holders of record as of May 8, 2018.
Press Release - SunCoke Energy announced its first quarter distribution of $0.40 per unit, which was a reduction from the $0.5940 per unit fourth quarter distribution. Adjusted EBITDA during the first quarter 2018 increased $8.4 million to $64.0 million, primarily due to improved Domestic Coke performance as well as the absence of certain Corporate and Other costs incurred in the same prior year period. Net income attributable to SXC was $8.7 million, or $0.13 per share, for the first quarter 2018, which is $7.7 million favorable to first quarter 2017 income of $1.0 million, or $0.02 per share, driven primarily by the improved operating results described above partially offset by higher interest expense due to the 2017 debt refinancing activities.
Press Release - Valero Energy Partners reported first quarter 2018 net income of $66 million, or $0.72 per limited partner common unit, and EBITDA of $97 million. The Partnership reported net cash provided by operating activities of $86 million and distributable cash flow of $86 million. The company increased cash distribution to $0.5275 per unit, a 3.9 percent increase over the fourth quarter 2017, with a distribution coverage ratio of 1.6x.
MARKET COMMENTARY
U.S. stock futures were higher as investors assessed a raft of corporate earnings, including strong results from Facebook and Qualcomm. They will also look for results from Amazon.com and Starbucks after market close. European stocks edged higher on recovery among industrials and encouraging results, while most Asian equities rose, buoyed by tech shares. The euro edged up as traders prepared for a European Central Bank meeting. A soft dollar supported gold prices .
Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner . This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, "Nasdaq"), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
