Crude Set for Third Consecutive Weekly Gain on Vaccine Optimism
SECTOR COMMENTARY
Energy stocks are poised for a mixed to higher start, backed by moderate gains in the underlying commodities while U.S. stock index futures are roughly flat as fresh COVID-19 lock down restrictions across the nation raise concerns about a recovery. Also weighing on sentiment was a disagreement between the Treasury Department and the Federal Reserve over the continuation of funding for some of the emergency programs implemented during the recession.
Oil prices are up slightly and are on track for a third consecutive weekly rise, buoyed by successful COVID-19 vaccine trials, while renewed lockdowns in several countries to limit the spread of the virus capped gains. "Concerns about demand, which have been weighing on prices since the spring, are now giving way to hopes of economic recovery, thanks in part to the imminent rollout of vaccines ..." Commerzbank said. Prices also found support on expectations that OPEC+ will delay a planned production increase when the group meets on November 30th.
Natural gas futures are up 3% but down 10.9% on the week as warmer weather and production now firmly above 90 Bcf/d which offsets LNG feedgas flows holding at record highs.
U.S. E&PS
Stifel downgraded Concho Resources and WPX Energy to Hold from Buy.
Laredo Petroleum announced the appointment of Jarvis Hollingsworth and Lori Lancaster to the Company’s Board of Directors. Their appointments as independent directors are effective November 19, 2020.
Susquehanna upgraded Occidental Petroleum to Positive from Neutral.
Pioneer Natural Resources announced that its Board of Directors declared a quarterly cash dividend of $0.55 per share on Pioneer’s outstanding common stock. The dividend is payable January 14, 2021, to stockholders of record at the close of business on December 31, 2020.
Stifel upgraded SM Energy to Buy from Hold.
Talos Energy announced that it is the apparent high bidder on two deepwater blocks in the recent Outer Continental Shelf Federal Lease Sale 256, held on November 18, 2020. Talos placed a sole bid on Viosca Knoll 1000 as well as a joint bid with an affiliate of bp on Green Canyon 866. When approved, the blocks will provide an additional 11,520 gross acres for future exploration acquired at an average cost of less than $300 per gross acre.
OILFIELD SERVICES
Fluor Corporation announced that Stork, part of Fluor’s Diversified Services segment, was awarded a framework agreement for inspection quality assurance services by Sellafield Limited for its nuclear site in the United Kingdom. Fluor will book the contract value in the fourth quarter of 2020.
DRILLERS
Helmerich & Payne reported a net loss of $59 million, or $(0.55) per diluted share, from operating revenues of $208 million for the quarter ended September 30, 2020, compared to a net loss of $46 million, or $(0.43) per diluted share, on revenues of $317 million for the quarter ended June 30, 2020. The net losses per diluted share for the fourth and third quarters of fiscal year 2020 include $0.19 and $(0.09) of after-tax gains and losses, respectively, comprised of select items.
MLPS & PIPELINES
AltaGas announced its intention to redeem – in accordance with the terms of the Cumulative Redeemable 5-Year Minimum Rate Reset Preferred Shares, Series I as set out in the Company's articles – all of its 8,000,000 issued and outstanding Series I Shares on December 31, 2020 for a redemption price equal to $25.00 per Series I Share, together with all accrued and unpaid dividends to, but excluding, the Redemption Date, less any tax required to be deducted or withheld by the Company.
Gibson Energy announced its intention to redeem the entire $99.3 million of principal amount currently outstanding of its 5.25% convertible unsecured subordinated debentures due July 15, 2021.
Targa Resources Partners LP, a subsidiary of Targa Resources Corp. announced that it intends to redeem all $125 million of its 5,000,000 issued and outstanding 9.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units.
MARKET COMMENTARY
Futures tracking the S&P 500 and the Dow dipped as rising coronavirus cases and fading stimulus hopes threatened to further hamper economic recovery. European shares were higher, supported by gains in commodity and retail stocks. Asian equities ended on a mixed note. The dollar edged up against a basket of currencies, while spot gold was slightly lower. Oil prices gained, buoyed by successful COVID-19 vaccine trials.
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.
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