SECTOR COMMENTARY

Oil and gas stocks closed broadly lower, tracking broader equity indices which ended a volatile week on a down note. The integrateds were the biggest losers on the day as Chevron fell over 4% after revenues came in well short of estimates. Elsewhere in sector news, National Oilwell Varco bucked the market trend and rallied after posting strong results which were helped by strong demand for its services that prepare oil and gas wells for production.

WTI crude oil futures closed lower by $0.74 or $0.75% to $97.49, outperforming Brent crude which fell by over 1.4% as it was under pressure from worries over emerging economies turmoil and weak global stock markets. Increases in supply also pressured Brent. OPEC's oil output rose in January from December's 2-1/2-year low, due to a partial recovery in Libyan supply and higher shipments from Iraq and Iran, according to a Reuters survey. The spread between the two benchmarks fell below $9 for the first time in nearly 3 months.

Natural gas futures fell by $0.068 or 1.36% to $4.943, extending yesterday's losses after the weekly inventory report showed a slightly smaller-than-expected draw in supplies. Baker Hughes reported that U.S. gas rigs rose by two in the latest week to 358 but were still down 70 from last year.

U.S. INTEGRATEDS

• CVX reported 4Q’13 EPS of $2.57 versus Thomson Reuters I/B/E/S estimate of $2.57.

Press Release - Chevron Corporation reported earnings of $4.9 billion ($2.57 per share - diluted) for the fourth quarter 2013, compared with $7.2 billion ($3.70 per share - diluted) in the 2012 fourth quarter. Full-year 2013 earnings were $21.4 billion ($11.09 per share - diluted), down 18 percent from $26.2 billion ($13.32 per share - diluted) in 2012. Sales and other operating revenues in the fourth quarter 2013 were $54 billion, compared to $56 billion in the year-ago period.

Reuters - Exxon Mobil Corp will restart some of its units following a recent power outage, resulting in flaring at the Billings, Montana, refinery, a report on the Billings Gazette website said, quoting refinery spokesman Dan Carter.

INTERNATIONAL INTEGRATEDS

(Late Thursday) Reuters – BP Plc is dropping plans to invest in a refinery inChina, three sources with direct knowledge said, the fourth refining project in recent months to fall foul of a slowdown in growth in the world's second-largest economy.

Reuters - Russian gas exporting monopoly Gazprom has agreed in principal to cut its price for DEPA, Greece's biggest natural gas utility, a source at Gazprom said.

Reuters - Oil and natural gas output at Brazil's state-run Petroleo Brasileiro SA fell for a third month in December 2013 compared with a year earlier, with production declining also for a second straight year.

Reuters - Spain's Caixabank has written down the value of its stake inRepsol by 184 million euros ($250 million) in anticipation the oil firm will reach a compensation deal with Argentina over the seizure of its stake in energy firm YPF.

Reuters - Czech oil firm Unipetrol has completed the buyout of Royal Dutch Shell's minority stake in its refining unit Ceska Rafinerska, in the latest move to reshape an industry hit by low margins and unstable prices.

U.S. E&PS

Stifel Nicolaus upgraded EPL Oil & Gas and Newfield Exploration to ‘Buy’ from ‘Hold’ based on valuation.

Simmons & Co downgraded its rating on Murphy Oil to ‘Neutral’ from ‘Overweight’.

(Late Thursday) Press Release - Rosetta Resources Inc. reported preliminary operational results for 2013 that includes growth in excess of 30 percent for both production and proved reserves. The Company also announced plans to acquire additional Delaware Basin acreage to expand its core Reeves County position. Rosetta plans to report final 2013 financial and operational results on Monday, February 24, 2014.

CANADIAN E&PS

• COS reported 4Q’13 EPS of C$0.40 versus Thomson Reuters I/B/E/S estimate of C$0.49.

Press Release - Canacol Energy Ltd.'s subsidiary, Canacol Energy Colombia SA, has acquired a right to an 80-per-cent interest in each of the COR 4 and COR 12 exploration and production contracts located in the upper Magdalena basin of Colombia. The new contracts are located adjacent to the Corporation's existing COR 39 and COR 11 E&P contracts and are prospective for both shallow conventional oil exploration targets within the Guadalupe sandstone reservoirs, and deeper non-conventional oil exploration targets within the thick Cretaceous Villeta - La Luna shale.

(Late Thursday) Press Release - Canadian Oil Sands Announces 2013 Financial Results and a $0.35 per Share Dividend. Cash flow from operations was $392 million ($0.81 per Share) in the fourth quarter of 2013 compared with cash flow from operations of $418 million ($0.86 per Share) in the same quarter of 2012. For the 2013 year, cash flow from operations totalled $1,349 million ($2.78 per Share), down 15 per cent from $1,581 million ($3.26 per Share) in 2012.

Macquarie research resumed coverage of Long Run Exploration with an ‘Outperform’ rating following the close of the bought deal.

OIL SERVICES

• NOV reported 4Q’13 EPS of $1.56 versus Thomson Reuters I/B/E/S estimate of $1.39.

Stephens upgraded C&J Energy Services to ‘Overweight’ from ‘Equal-Weight’.

Global Hunter downgraded Cameron International to ‘Neutral’ from ‘Buy’.

Press Release - National Oilwell Varco, Inc. reported that for the fourth quarter ended December 31, 2013 it earned net income of $658 million, or $1.53 per fully diluted share. Earnings improved three percent compared to the third quarter of 2013, and were down two percent compared to the fourth quarter of 2012. Excluding $16 million in pre-tax transaction charges, net income was $670 million, or $1.56 per fully diluted share, up 16 percent from the third quarter of 2013, and up five percent from the fourth quarter of 2012, excluding transaction charges from all periods.

(Late Thursday) Press Release - Tidewater Inc. announced that its Board of Directors declared on January 30, 2014, a quarterly cash dividend of $0.25 per share of common stock payable March 14, 2014, to shareholders of record on March 4, 2014.

Press Release - U.S. Silica Holdings, Inc. announced preliminary results for the fourth quarter of 2013. The Company anticipates revenue for the quarter of $149.5 million, adjusted EBITDA (non-GAAP) of $35.9 million and net income of $0.31 per basic and diluted share.

DRILLERS

Press Release - Rowan Companies plc announced that its Board of Directors has approved a quarterly cash dividend policy, with the first dividend expected to be paid in the second quarter of 2014. The Board anticipates the initial quarterly cash dividend will be $0.10 per share.

REFINERS

Imperial Capital upgraded Marathon Petroleum to ‘Outperform’ from ‘In-Line’.

Reuters - A U.S. safety agency blamed Tesoro Corp. for an explosion at a refinery in Washington state that killed seven workers in 2010, saying in a draft report released on Thursday that the company had failed to identify the damage hydrogen was causing to steel components. The seven workers were engulfed by a fireball of hydrogen and naphtha at Tesoro's Anacortes refinery in 2010 when they were checking for leaks and helping with the start-up of another, nearby heat exchanger when piping on a heat exchanger in operation suddenly failed.

Reuters - Valero Energy Corp plans to restart a hydrocracking unit and an alkylation unit on Friday after they were idled Thursday at the company's 180,000-barrel-per-day Memphis, Tennessee, refinery, according to sources familiar with operations at the refinery.

(Late Thursday) Reuters - A hydrocracking unit remained shut for repairs atValero Energy Corp's 290,000 barrel per day (bpd) Port Arthur, Texas, refinery on Thursday, according to two sources familiar with operations at the refinery.

(Late Thursday) Reuters - Valero Energy Corp reported emissions at its 225,000 barrel per day (bpd) refinery in Texas City, Texas, on Thursday, according to a notice the refinery filed with state pollution regulators.

MLPS

(Late Thursday) Press Release - Enbridge Energy Management, L.L.C.declared a distribution of $0.5435 per share payable on February 14, 2014 to shareholders of record on February 7, 2014. The distribution will be paid in the form of additional shares of Enbridge Management valued at the average closing price of the shares for the 10 trading days prior to the ex-dividend date on February 5, 2014.

(Late Thursday) Press Release - Enbridge Energy Partners, L.P. declared a cash distribution of $0.5435 per unit payable February 14, 2014 to unitholders of record on February 7, 2014.

(Late Thursday) Press Release - MarkWest Energy Partners, L.P.announced an operational update regarding the development of midstream infrastructure projects in the liquids-rich areas of the Marcellus and Utica Shales. In the last four months, MarkWest has commenced operations of seven major infrastructure projects in the Northeast including five new cryogenic processing plants totaling 1 billion cubic feet per day (Bcf/d) of capacity and two fractionation facilities totaling 98,000 barrels per day (Bbl/d) of C2+ fractionation capacity.

Credit Suisse upgraded SunCoke Energy and SunCoke Energy Partnersto ‘Outperform’ from ‘Neutral’.

Reuters - TransCanada Corp is anticipating a favorable review of the Keystone XL pipeline when the U.S. State Department issues its final environmental impact statement on the controversial project, a move expected as soon as Friday.