Credit: Shutterstock photoThursday, May 03, 2018
Sector Commentary
Energy stocks are set to open lower amid weaker commodity prices, softening stock futures, and an earnings bonanza across the sector. More than two dozen companies reported quarterly earnings after-market close yesterday and this morning across the energy and MLP sector, providing analysts and investors plenty to digest.
Crude oil futures are nominally lower as rising U.S. crude inventories and record weekly U.S. production counterbalanced with OPEC supply cuts and the potential for new U.S. sanctions against Iran. The market remains vulnerable in the short-term following yesterday's 6.2 million barrel build in weekly EIA inventories.
Natural gas futures were lower by a penny ahead of weekly EIA inventory data. Analysts expect an injection of 52 Bcf, which would mark the first build this year.
INTERNATIONAL INTEGRATEDS
Press Release - Eni announced an oil discovery on the A-2X exploration prospect located in South West Meleiha license, in the Egyptian Western Desert, some 103 Km North of the oasis of Siwa. The well is the first one drilled by Eni to explore the deep geological sequences of the Faghur Basin.
Reuters - Gazprom 's exports to countries outside the Commonwealth of Independent States in January-April were up 6.3 percent year on year.
U.S. E&PS
(Late Wednesday) Press Release - Apache reported earnings of $145 million or $0.38 per diluted common share for the first quarter of 2018. These results include a number of items outside of core earnings that are typically excluded by the investment community in their published earnings estimates. When adjusted for these and certain additional items that impact the comparability of results, Apache's first-quarter earnings were $124 million or $0.32 per share. Net cash provided by operating activities in the quarter was $615 million.
Press Release - Approach Resources reported revenues of $28.8 million, a 9% increase over the prior year quarter. Its net loss was $7.4 million or $0.08 per diluted share and adjusted net loss (non-GAAP) of $7.1 million, or $0.07 per diluted share. Approach Resources generated $13.7 million of EBITDAX (non-GAAP).
(Late Wednesday) Press Release - Cabot Oil & Gas announced that its Board of Directors declared a regular dividend of six cents ($0.06) per share on the Company's common stock. The dividend will be paid May 30, 2018 to all shareholders of record as of the close of business May 16, 2018.
(Late Wednesday) Press Release - Callon Petroleum reported quarter ended March 31, 2018 total revenue of $127.4 million and total revenue including cash-settled derivatives of $118.9 million, including the impact of an $8.5 million loss from the settlement of derivative contracts.
(Late Wednesday) Press Release - Continental Resources announced first quarter operating and financial results. The Company reported net income of $233.9 million, or $0.63 per diluted share, for the quarter ended March 31, 2018.
Press Release - Devon Energy agreed to sell half of its working interest in 116 gross undrilled locations located in Barnett Shale in Texas, the US, to DowDuPont Inc, a chemical company, for a sale consideration of approximately US$75 million. Under the terms, DowDuPont will pay the consideration to Devon Energy in a span of five years. In addition, Devon will drill and operate up to 24 wells per year, with volumes dedicated to the EnLink gathering and processing infrastructure.
Press Release - Eclipse Resources reported net loss for the first quarter of 2018 was ($2.6) million; and Adjusted EBITDAX for the first quarter of 2018 was $63.0 million.
(Late Wednesday) Press Release - Halcon Resources generated total revenues of $49.3 million for the first quarter of 2018. The Company reported a net loss available to common stockholders of $(2.6) million or a net loss per basic and diluted share of $(0.02) for the same period. After adjusting for selected items, the Company generated a net loss of $(8.7) million, or $(0.06) per diluted share for the first quarter of 2018.
Robert Baird downgraded Laredo Petroleum to 'Neutral' from 'Outperform'.
(Late Wednesday) Press Release - Laredo Petroleum announced its 2018 first-quarter results, reporting net income attributable to common stockholders of $86.5 million, or $0.36 per diluted share. Adjusted Net Income or the first quarter of 2018 was $57.6 million, or $0.24 per diluted share. Adjusted EBITDA for the first quarter of 2018 was $143.4 million.
(Late Wednesday) Press Release - Marathon Oil reported first quarter 2018 net income of $356 million, or $0.42 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $154 million, or $0.18 per diluted share. Net operating cash flow was $649 million, or $707 million before changes in working capital.
Press Release - Matador Resources reported Q1 2018 net income (GAAP basis) was $59.9 million, or $0.55 per diluted common share and Q1 2018 adjusted net income was $39.1 million, or $0.36 per diluted common share.
Press Release - Murphy Oil recorded income from continuing operations of $169 million, or $0.97 per diluted share, for the first quarter 2018. The company reported adjusted income, which excludes both the results of discontinued operations and certain other items that affect comparability of results between periods, of $40 million, or $0.23 per diluted share. The adjusted income excludes the following items: after-tax gain of $120 million associated with 2017 U.S. tax reform and a $12 million after-tax gain on foreign exchange, partially offset by a mark-to-market after-tax loss on crude oil derivative contracts of $11 million. The company returned 16 percent of operating cash flow to shareholders through dividend.
Press Release - PDC Energy reported net loss for the first quarter of 2018 of $13.1 million, or $0.20 per diluted share, compared to net income of $46.1 million, or $0.70 per diluted share, for the comparable 2017 period. Adjusted net income in the first quarter was $3.0 million, or $0.05 per diluted share in 2018 compared to an adjusted net loss of $4.1 million, or $0.06 per diluted share in 2017.
Press Release - RSP Permian reported that for the quarter ended March 31, 2018, total revenues, excluding the revenue impact from realized derivative instruments, were $276.3 million, a 63% increase over the prior year quarter of $169.9 million. Adjusted total revenues, including the net cash from derivative instruments, were $262.6 million, a 57% increase from the prior year quarter of $167.1 million. Net income for the first quarter of 2018 was $89.6 million, or $0.57 per diluted share, while net income for the prior year quarter was $38.9 million, or $0.26 per diluted share.
(Late Wednesday) Press Release - W&T Offshore reported net income for the first quarter of 2018 of $27.6 million, or $0.19 per common share. Excluding special items, our adjusted net income was $28.0 million, or $0.19 per share. Adjusted EBITDA for the first quarter of 2018 was $77.2 million and our Adjusted EBITDA margin was 57.5% compared to Adjusted EBITDA of $65.2 million and an Adjusted EBITDA margin of 52.4% for the first quarter of 2017.
Press Release - Williams reported first-quarter 2018 Adjusted EBITDA of $1.135 billion, a $10 million decrease from first-quarter 2017. It added that unaudited first-quarter 2018 net income attributable to Williams was $152 million, a decrease of $221 million from first-quarter 2017. Effective with the first quarter of 2018, Williams increased its regular dividend from $0.30 per share to $0.34 per share. (2) WMB cash available for dividends and other uses / WMB dividends paid.
Press Release - WPX Energy reported an unaudited first-quarter 2018 net loss from continuing operations available to common shareholders of $30 million, or a loss of $0.07 per share on a diluted basis. The loss was driven by $69 million of net losses associated with its hedge book resulting from higher forward oil prices . The adjusted net loss from continuing operations in first-quarter 2018 was $22 million, or a loss of $0.06 per share.
CANADIAN E&PS
(Late Tuesday) Press Release - ARC Resources delivered strong financial performance in the first quarter of 2018, recording net income of $54.9 million ($0.16 per share) and funds from operations of $201.0 million ($0.57 per share). First quarter 2018 funds from operations decreased 10 per cent, on a per share basis, relative to the fourth quarter of 2017 as strengthened commodity prices in the period were offset by slightly lower production levels and reduced gains on ARC's risk management contracts. ARC declared dividends totaling $53.1 million ($0.15 per share) for the three months ended March 31, 2018. The Board of Directors has confirmed a dividend of $0.05 per share for April 2018, payable on May 15, 2018, and has conditionally declared a monthly dividend of $0.05 per share for May 2018 through July 2018
Press Release- Canadian Natural Resources reported net earnings of $583 million were realized in Q1/18, an increase of 47% over Q4/17 levels, and adjusted net earnings of $885 million were achieved, a 57% increase from Q4/17 levels. The company generated significant funds flow from operations of $2,323 million in Q1/18, comparable to $2,307 million in Q4/17 and an increase of $684 million over $1,639 million in Q1/17. As previously announced, the Company increased its quarterly dividend by 22% to $0.335 per common share.
Press Release - Crescent Point Energy generated funds flow from operations totaled $428.9 million, or $0.78 per share diluted, based on an operating netback of $34.49 per boe or funds flow from operations of $26.71 per boe. The Company's payout ratio in the quarter, based on cash dividends paid of $0.09 per share, was 12 percent.
Press Release - Enerplus reported first quarter 2018 adjusted funds flow of $155.2 million.
(Late Tuesday) Press Release - Whitecap Resources generated funds flow for the quarter of $166.5 million ($0.40 per share) compared to $124.6 million ($0.34 per share) in Q1/17, an increase of 34% (18% per share). The Board of Directors approved a 5% increase to the monthly dividend to $0.027 per share ($0.324 per share annualized) from $0.0257 per share ($0.3084 per share annualized) effective for the June 2018 dividend.
OIL SERVICES
Press Release - Fairmount Santrol Holdings reported first quarter 2018 net income of $28.9 million, or $0.13 per diluted share, compared with net income of $19.9 million, or $0.09 per diluted share, in the fourth quarter of 2017. Net income for first-quarter 2018 included pre-tax merger related expenses of $3.3 million. Net loss for first-quarter 2017 was $11.6 million, or $(0.05) per diluted share.
(Late Wednesday) Press Release - Hornbeck Offshore Services recorded a net loss for the first quarter of 2018 of $(38.7) million, or $(1.04) per diluted share, compared to a net loss of $(27.9) million, or $(0.76) per diluted share, for the first quarter of 2017; and net income of $93.8 million, or $2.48 per diluted share, for the fourth quarter of 2017.
(Late Wednesday) Press Release - ION Geophysical announced acquisition began on a new 2D multi-client program offshore Ghana in partnership with Geoex and Ghana Geophysical. ION and its partners will acquire up to 7,200 km of data in advance of the license round anticipated in late 2018 to help refine understanding of the hydrocarbon potential of the area.
(Late Wednesday) Press Release - ION Geophysical reported revenues of $33.5 million in the first quarter 2018, a 3% increase compared to revenues of $32.6 million one year ago. ION's net loss was $18.4 million, or $(1.44) per share, compared to a net loss of $23.3 million, or $(1.98) per share in the first quarter 2017.
Press Release - Patterson-UTI Energy reported that for the month of April 2018, the Company had an average of 173 drilling rigs operating.
DRILLERS
(Late Wednesday) Press Release - Noble Corp reported a net loss attributable to the Company for the three months ended March 31, 2018 (first quarter) of $142 million, or $0.58 per diluted share, on revenues of $235 million. Results in the quarter included an after-tax loss totaling $7 million, or $0.03 per diluted share, resulting from the early retirement of debt. Excluding the loss from the early retirement of debt, the net loss attributable to the Company for the first quarter would have been $135 million, or $0.55 per diluted share.
REFINERS
Jefferies upgraded Andeavor and Marathon Petroleum to 'Buy' from 'Hold'.
(Late Wednesday) Press Release - CVR Energy announced that Tracy Jackson has been named executive vice president and chief financial officer. Jackson also will serve as executive vice president and chief financial officer for the general partner of CVR Energy's petroleum subsidiary, CVR Refining, and for the general partner of its nitrogen fertilizer subsidiary, CVR Partners. Jackson's appointments will become effective May 4, 2018.
(Late Wednesday) Press Release - CVR Energy announced that Matt Bley has been named chief accounting officer and corporate controller. Bley also will serve as chief accounting officer and corporate controller for the general partner of CVR Energy's petroleum subsidiary, CVR Refining, and for the general partner of its nitrogen fertilizer subsidiary, CVR Partners. Bley's appointments will become effective May 4, 2018.
Press Release - PBF Energy reported first quarter 2018 income from operations of $95.7 million as compared to income from operations of $0.8 million for the first quarter of 2017. Excluding special items, first quarter 2018 income from operations was $8.0 million as compared to income from operations of $16.8 million for the first quarter of 2017. The company announced today that it will pay a quarterly dividend of $0.30 per share of Class A common stock on May 30, 2018, to holders of record as of May 15, 2018.
MLPS & PIPELINES
(Late Wednesday) Press Release - CVR Energy announced that Tracy Jackson has been named executive vice president and chief financial officer. Jackson also will serve as executive vice president and chief financial officer for the general partner of CVR Energy's petroleum subsidiary, CVR Refining , and for the general partner of its nitrogen fertilizer subsidiary, CVR Partners. Jackson's appointments will become effective May 4, 2018.
(Late Wednesday) Press Release - CVR Energy announced that Matt Bley has been named chief accounting officer and corporate controller. Bley also will serve as chief accounting officer and corporate controller for the general partner of CVR Energy's petroleum subsidiary, CVR Refining , and for the general partner of its nitrogen fertilizer subsidiary, CVR Partners. Bley's appointments will become effective May 4, 2018.
Press Release - Enterprise Products Partners , Midcoast Operating, Western Gas Partners and DCP Midstream announced a binding open season for additional capacity on the Texas Express Pipeline, which transports mixed natural gas liquids from Skellytown, Texas in Carson County to the NGL fractionation and storage complex in Mont Belvieu, Texas. Subject to customer commitments during the open season, the partners expect to expand Texas Express by approximately 90,000 barrels per day
Press Release - LINN Energy reported strong balance sheet with no debt and a first quarter ending cash balance of approximately $227 million Returned more than $600 million of capital to LINN shareholders through share repurchases.
Press Release - Williams Partners reported unaudited first-quarter 2018 net income attributable to controlling interests of $360 million, a $274 million decrease from first-quarter 2017. The company added that its first-quarter 2018 adjusted EBITDA of $1.122 billion, a $5 million increase over first-quarter 2017. For first-quarter 2018, Williams Partners generated $784 million in distributable cash flow (DCF) attributable to partnership operations, compared with $752 million in DCF attributable to partnership operations for first-quarter 2017.
Press Release - Targa Resources reported earnings before interest, income taxes, depreciation and amortization, and other non-cash items of $306.6 million for the first quarter of 2018 compared to $276.7 million for the first quarter of 2017. On April s18, 2018, TRC declared a quarterly dividend of $0.91 per share of its common stock for the three months ended March 31, 2018, or $3.64 per share on an annualized basis.
Press Release - Kirby Corp announced the signing of an agreement to acquire Targa Resources ' inland marine tank barge business for approximately $69.3 million in cash. The purchase will be financed through additional borrowings.
MARKET COMMENTARY
U.S. stock futures were marginally lower as worries over global trade tensions weighed. The negative mood also hurt Asian equities. European shares fell, dragged by a rebound in the euro and a series of disappointing earnings reports. Gold prices gained after the U.S. central bank reassured investors that increases to interest rates would be gradual. The dollar was steady against a basket of currencies. After-market earnings from CBS and economic data will be in investors' focus.
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.
