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Oil

Crude Slips as OPEC+ Works to Comply with Output Cuts

Oil prices slipped about 1% in the US though they mostly held onto overnight gains after OPEC+ said the producer grouping is almost fully complying with output cuts and on support from weakness in the USD which slide to its lowest level since 2018.

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SECTOR COMMENTARY

Energy stocks are lackluster in the pre-market on little news and thin volumes.  Meanwhile, broader stock futures rose after better-than-expected earnings from two retail giants, putting the S&P 500 on track to exceed its previous record close set in February before the coronavirus hit. 

Oil prices slipped about 1% in the US though they mostly held onto overnight gains after OPEC+ said the producer grouping is almost fully complying with output cuts and on support from weakness in the USD which slide to its lowest level since 2018.  Traders said that profit taking after five month highs hit in yesterday’s session was also a factor this morning ahead of the OPEC JMMC meeting and DOE weekly release tomorrow.   

U.S. natural gas futures are positive this morning and at session highs.  Warmer-than-average temperatures now expected for much of the eastern US with warmer temperatures still expected in the west.

INTERNATIONAL INTEGRATEDS          

Reuters - BP's output at its projects in Azerbaijan stood at 14 million tonnes in the first seven months of the year.

Reuters - A unit failure at Royal Dutch Shell's 404,000 barrel per day Pernis oil refinery in Rotterdam on Aug. 17 has been resolved.

Reuters - Total has halted operations at its Dan Bravo oil production platform in the Danish North Sea, the French company said on Tuesday, after Greenpeace activists climbed aboard to protest future oil and gas exploration.

U.S. E&PS  

Press Release - Abraxas Petroleum announced that its Board of Directors has determined to renew the strategic alternatives review announced last October and led by Petrie Partners, LLC.

Press Release - Antero Resources announced that, subject to market and other conditions, it intends to offer $250 million in aggregate principal amount of convertible senior notes due 2026 in a private placement to eligible purchasers. The Company also expects to grant the initial purchasers of the Notes a 30-day option to purchase up to an additional $50 million aggregate principal amount of the Notes.

(Late Monday) Press Release - Antero Resources announced that, as of 5:00 p.m., New York City time, on August 17, 2020, $191,566,000 principal amount of the Company's outstanding 5.375% Senior Notes due 2021 have been tendered and accepted for purchase pursuant to the previously announced cash tender offer on the terms and subject to the conditions set forth in the Offer to Purchase, dated as of August 11, 2020. This amount includes $18,480,000 principal amount of 2021 Notes tendered pursuant to the guaranteed delivery procedures described in the Offer to Purchase and the related notice of guaranteed delivery provided in connection with the Any and All Offer, which remain subject to the holders' performance of the delivery requirements under such procedures.

Reuters - U.S. energy major ConocoPhilips’ has offered three liquefied natural gas (LNG) cargoes loading from the Australia Pacific LNG (APLNG) plant over November and December, two industry sources said on Tuesday. 

Tudor Pickering Holt upgraded Occidental Petroleum to ‘Hold’ from ‘Sell’.

(Late Monday) Press Release - Penn Virginia announced the concurrent retirement of John A. Brooks and appointment of Darrin J. Henke as President, Chief Executive Officer and Director of the Company, effective immediately.

Press Release - Range Resources announced the commencement of cash tender offers to purchase up to $400 million aggregate principal amount of its outstanding 5.750% senior notes due 2021, 5.750% senior subordinated notes due 2021, 5.875% senior notes due 2022, 5.000% senior notes due 2022, 5.000% senior subordinated notes due 2022 and 5.000% senior notes due 2023.

Press Release - Range Resources announced that it intends, subject to market conditions, to offer $200 million aggregate principal amount of its 9.250% senior notes due 2026 in a private placement to eligible purchasers. The New Notes are being offered as additional notes to the $550 million aggregate principal amount of the 9.250% senior notes due 2026 previously issued by Range on January 24, 2020. The New Notes will have identical terms as the Initial Notes, other than the issue date, and the New Notes and the Initial Notes will be treated as a single class of securities under the indenture.

Press Release - Southwestern Energy announced that it is commencing, subject to market conditions, a registered underwritten public offering of $350 million aggregate principal amount of senior notes due 2028.

OILFIELD SERVICES 

Press Release - Wilks Brothers, LLC responds to the August 17, 2020 announcement of Calfrac Well Services that the Company's special committee of directors determined that Wilks' proposed alternative recapitalization transaction is not a "Superior Proposal" as defined in the support agreements for the management-led recapitalization transaction, and that the Company will continue to seek approval for the Initial Management Transaction at meetings of noteholders and shareholders to held on September 17, 2020.

Press Release - Fluor announced that its joint venture with Daewoo Engineering & Construction and Hyundai Heavy Industries has successfully achieved final provisional turnover of the facilities for Kuwait National Petroleum Company’s (KNPC) Mina Abdullah Package 2 (MAB2) Clean Fuels Project in southern Kuwait.

Press Release - PTTEP awarded Halliburton a contract to design and implement a series of digital transformation projects as part of PTTEP’s Advanced Production Excellence (APEX) Initiative. APEX will improve operational efficiency and production in four offshore fields: Arthit, Greater Bongkot South, Greater Bongkot North and the Myanmar Zawtika Field.

Press Release - Natural Gas Services Group announced financial results for the three and six months ended June 30, 2020. Total revenue for the three months ended June 30, 2020 decreased to $17.4 million from $19.9 million for the three months ended June 30, 2019. This decrease was primarily due to a drop in sales revenue (65.5% decrease) resulting from reduced compressor sales offset by increased rental revenue. Rental revenue increased 11.5% to $15.1 million in the second quarter of 2020 from $13.6 million in the second quarter of 2019 due to a greater number of large horsepower units being rented.  Total revenue decreased 2.7% to $17.4 million in the second quarter of 2020 compared to $17.9 million in the first quarter of 2020 primarily due to a 6.0% decrease in rental revenue that was partially offset by a 38.5% increase in sales revenue. Operating loss for the three months ended June 30, 2020 was $148,000 compared to operating income of $302,000 for the three months ended June 30, 2019. This increase in operating loss was mainly due to lower sales revenue, lower sales margins and higher depreciation expense partially offset by higher rental revenues and improved rental margins. Operating loss in the second quarter of 2020 decreased to $148,000 compared to an operating loss of $273,000 during the first quarter of 2020. 

DRILLERS 

Citi downgraded Nabors Industries to ‘Sell’ from ‘Neutral’.

MLPS & PIPELINES   

(Late Monday) Press Release - Enbridge announced that none of its outstanding Cumulative Redeemable Preference Shares, Series 15 (Series 15 Shares) will be converted into Cumulative Redeemable Preference Shares, Series 16 of Enbridge (Series 16 Shares) on September 1, 2020. After taking into account all conversion notices received from holders of its outstanding Series 15 Shares by the August 17, 2020 deadline for the conversion of the Series 15 Shares into Series 16 Shares, less than the 1,000,000 Series 15 Shares required to give effect to conversions into Series 16 Shares were tendered for conversion.

(Late Monday) Press Release - Targa Resources Partners, a subsidiary of Targa Resources announced today that its previously announced cash tender offer to purchase any and all of its 6.750% senior notes due 2024 expired at 5:00 p.m., New York City time, on August 17, 2020. As of the Expiration Time, $262,131,000 aggregate principal amount of the 2024 Notes (45.2%) were validly tendered, which excludes $14,143,000 aggregate principal amount of the 2024 Notes that remain subject to guaranteed delivery procedures.

MARKET COMMENTARY

U.S. stock index futures edged up, extending gains from the previous session, helped by a tech-fuelled rally, with Walmart's and Home Depot's better-than-expected earnings setting an optimistic tone for other retailers. European shares rose, helped by gains in travel and leisure stocks, while Japanese shares dropped as political uncertainties around the world sapped investors' risk appetite. Gold prices surpassed the $2,000-mark, while the dollar weakened on concerns over a deadlock on further U.S. fiscal stimulus. Oil prices edged down.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP

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.

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