SECTOR COMMENTARY

Oil and gas stocks fell along with the broader markets as investors continued a retreat from riskier assets sparked by an emerging-markets selloff and as the Federal Reserve said it would cut back further on its stimulus efforts. Services and drillers posted the biggest losses while refiners outperformed the group today on releases of positive earnings.

WTI crude oil slipped $0.05 or 0.05% to $97.36 after government data showed a hefty build in crude inventories, but losses were curtailed by a larger-than-expected stocks draw in distillates, the third in as many weeks, spurred by severely cold weather. U.S. oil stocks rose by 6.4 million barrels, including a 237,000-barrel build at Cushing, Oklahoma, where the U.S. oil futures benchmark contract is priced, data from the EIA showed. Brent crude oil rose moderately, supported by Middle East supply concerns. Spillover attacks from the civil war in Syria have hindered development of Iraq's gas and oil reserves and a major pipeline to the Mediterranean has been blown up dozens of times, Iraq's top energy official said on Tuesday. Heating oil rose over 2% as temperatures in the U.S. Midwest and heavily populated Northeast have hovered at or below the freezing mark for several weeks, driving up demand for heating fuels.

Henry Hub futures soared $0.524 or 10.41% to close at $5.557, the biggest daily gain in 18 months, as volatility continued to rock the market ahead of the February contract expiration. March futures also rose more than 10 percent, but remained below February a further sign that February futures were in high demand by traders covering short positions, said Dominick Chirichella, an analyst at Energy Management Institute. Storage withdrawals for the week ended Jan. 24 are expected to be between 220 billion and 280 billion cubic feet, according to analysts polled by Reuters.

U.S. INTEGRATEDS

• HES reported 4Q’13 EPS of $0.96 versus Thomson Reuters I/B/E/S estimate of $1.08.

Press Release - Hess Corporation reported net income of $1,925 million for the quarter ended December 31, 2013. Adjusted earnings, which excludes items affecting comparability, were $319 million or $0.96 per common share compared with $409 million or $1.20 per share in the prior year quarter, reflecting a decrease of $97 million in adjusted downstream earnings, partially offset by a $5 million increase in adjusted Exploration and Production earnings.

Press Release - Hess Corporation announced today that it has entered into an agreement to sell approximately 74,000 acres of its dry gas acreage in the Utica Shale to an undisclosed third party for a consideration of $924 million.

INTERNATIONAL INTEGRATEDS

Reuters - BP said on Wednesday it had extracted first oil at the rate of 6,000 barrels per day at its offshore West Chirag platform in Azerbaijan.

Reuters - Spanish oil company Repsol said on Wednesday that nine of the 23 wells it drilled in 2013 produced oil, implying an exploration success rate of 39 percent.

Reuters - British oil firm Royal Dutch Shell said on Wednesday it had agreed to sell a 23 percent stake in a Brazilian oil project to Qatar Petroleum International for $1 billion.

U.S. E&PS

KLR Group downgraded Cabot Oil & Gas Corp. to ‘Accumulate’ from ‘Buy.’

Credit Suisse upgraded Carrizo Oil & Gas, Inc. to ‘Neutral’ from ‘Underperform.’

(Late Tuesday) Press Release - Cobalt International Energy, Inc.announced the resignation of Kenneth A. Pontarelli and Peter R. Coneway from its Board of Directors, each effective today.

Reuters - A subsidiary of ConocoPhillips has requested authorization to export for a two-year period liquefied natural gas (LNG) from Alaska to countries that do not have free trade agreements with the United States, according to a filing from the U.S. Department of Energy.

Topeka upgraded PDC Energy Inc. to ‘Buy’ from ‘Neutral.’

KLR Group downgraded Range Resources Corp. to ‘Reduce’ from ‘Hold.’

CANADIAN E&PS

Press Release - Pacific Rubiales Energy Corp. today announced an update on the purchases of its common shares pursuant to the normal course issuer bid previously announced on April 29, 2013. Under the NCIB, the Company has purchased for cancellation a total of 3,986,800 commons shares at an average purchase price of $17.98.

OIL SERVICES

Societe Generale upgraded Cameron International Corp. to ‘Buy’ from ‘Hold.’

Griffin Securities initiated coverage of Halliburton andSchlumberger with ‘Buy’ ratings.

DRILLERS

• RES reported 4Q’13 EPS of $0.17 versus Thomson Reuters I/B/E/S estimate of $0.23.

Press Release - Nabors Industries Ltd. announced today plans to appoint Mr. William Restrepo as Chief Financial Officer (CFO) following his upcoming departure from Pacific Drilling S.A.

Press Release - RPC, Inc. announced its unaudited results for the fourth quarter and year ended December 31, 2013. For the quarter ended December 31, 2013, revenues increased 3.6 percent to $487.0 million compared to $469.9 million in the fourth quarter of 2012.

Reuters - Offshore rig operator North Atlantic Drilling, a subsidiary of Seadrill, has raised $125 million in an initial public offering ahead of its listing on the New York Stock Exchange, the company said on Wednesday.

REFINERS

• MPC reported 4Q’13 EPS of $2.10 versus Thomson Reuters I/B/E/S estimate of $1.15.

• PSX reported 4Q’13 EPS of $1.34 versus Thomson Reuters I/B/E/S estimate of $1.10.

• VLO reported 4Q’13 EPS of $1.78 versus Thomson Reuters I/B/E/S estimate of $1.66.

Press Release - Marathon Petroleum Corporation today reported 2013 fourth-quarter earnings of $626 million, or $2.07 per diluted share, compared with $755 million, or $2.24 per diluted share, in the fourth quarter of 2012.

Reuters - Marathon Petroleum Corp's 490,000-barrel-per-day (bpd) Garyville, Louisiana, refinery reported a diesel spill into the Mississippi riveron Tuesday, according to two notices the refinery filed with federal pollution regulators.

Press Release - Phillips 66, an energy manufacturing and logistics company, announces fourth-quarter earnings of $826 million, compared with earnings of $708 million in the fourth quarter of 2012. Adjusted earnings were $808 million, compared with $1.3 billion in the same period last year.

(Late Tuesday) Reuters - Phillips 66 reported unscheduled flaring at its 139,000-barrel-per-day (bpd) Los Angeles-area refinery in Wilmington, California, on Tuesday, according to a filing with state pollution regulators.

Reuters - U.S. Independent refinery Phillips 66 may add condensate splitting capacity to its infrastructure in Sweeny and Freeport Texas, Chief Executive Greg Garland told analysts on Wednesday.

Press Release - Valero Energy Corporation today reported net income attributable to Valero stockholders of $1.3 billion, or $2.38 per share, for the fourth quarter of 2013 compared to net income attributable to Valero stockholders of $1.0 billion, or $1.82 per share, for the fourth quarter of 2012.

(Late Tuesday) Reuters - Valero Energy Corp. has pushed back the start date for a planned overhaul of a gasoline unit at its 180,000 barrel per day (bpd) Memphis, Tennessee refinery by at least a month due to problems with replacement equipment, sources familiar with refinery operations said on Tuesday.

Reuters - Valero Energy Corp. reported there was an unspecified shutdown on Jan. 27 at its 85,000 barrel-per-day refinery in Ardmore, Oklahoma, according to a filing with the state environmental regulator that was made public on Wednesday.

Reuters - Valero Energy Corp. plans to run its refineries between 93 percent and 97 percent of combined total capacity of 2.7 million barrels per day (bpd) during the first quarter of 2014, company executives said during aWednesday morning conference call.

(Late Tuesday) Press Release - Western Refining, Inc. announced today that its Board of Directors has approved a cash dividend of $0.26 per share of common stock for the first quarter of 2014, a $0.04 per share increase versus the fourth quarter 2013 dividend.

MLPS

Press Release - DCP Midstream Partners, LP announced today that the board of directors of its general partner declared a quarterly cash distribution of $0.7325 per common unit for the quarter ended December 31, 2013, or $2.93 per unit on an annualized basis. This represents an increase of 1.7 percent over the last quarterly distribution of $0.72 per unit paid November 14, 2013 and a 6.2 percent increase over the $0.69 per unit distribution declared with respect to the fourth quarter of 2012.

(Late Tuesday) Press Release - Energy Transfer Equity, L.P. announced that its Board of Directors has approved a quarterly distribution increase of $0.02 per ETE common unit on a pre-split basis ($0.01 per ETE common unit on a post-split basis) for the quarter ended December 31, 2013.

Press Release - MPLX LP reported fourth-quarter net income attributable to MPLX of $20.2 million, or $0.27 per common limited partner unit. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to MPLX were $28.9 million and distributable cash flow attributable to MPLX was $28.3 million.

Press Release - Phillips 66 Partners LP announces fourth-quarter earnings of $17.0 million, resulting in $0.24 per limited partner unit. Earnings before interest, income taxes, depreciation and amortization (EBITDA) was $18.8 million and distributable cash flow was $17.8 million.