SECTOR COMMENTARY

The energy sector ended the day mixed, in line with the broader equity indices with E&Ps and drillers trailing the group while refiners heavily outpaced on improving spreads. A lack of major sector news today and mixed economic reports showing a slowdown in growth in the U.S. services sector and a rebound in new orders for factory goods gave little direction for investors to continue bidding up stocks.

WTI crude oil futures ended the day sharply lower for the fifth straight session, down $2.01 or 2.11% at $93.43, underperforming its UK counterpart which edged higher in late afternoon trading, up roughly 0.15%. Expectations that crude oil inventories likely rose last week after a near-record five-weeks of declines weighed on WTI today, heightening concerns of ample domestic supplies. Brent seesawed throughout the session as traders weighed reports of production resuming at a Libyan oilfield against new threats to shipments from a port controlled by protesters.

Natural gas futures edged out a slight gain on the day, closing higher by $0.002 or 0.05% at $4.306. Traders weighed extreme near term cold weather forecasts against expectations of warming weather later in the month.

U.S. INTEGRATEDS

Reuters - Exxon Mobil Corp said that there has been minimal impact to production from the hydrogen unit trip which led to flaring at its 560,500 barrel-per-day Baytown, Texas facility on Friday.

(Sunday) Reuters - Exxon Mobil Corp reported a release of 6300 lbs of flammable vapor from a Safety valve at its 503,000 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery, according to a filing with regulators.

Mizuho Securities downgraded Hess Corp to ‘Neutral‘ from ‘Buy’ based on valuation.

INTERNATIONAL INTEGRATEDS

Reuters - Pakistan's Petroleum Minister Shahid Khaqqan Abbasi and Eni'sChief Executive Paolo Scaroni met to discuss the activities of the Italian oil and gas major in the country, Eni said.

Reuters - Workers at a Petrobras refinery near Rio de Janeiro warned the state-owned oil company in October that a key unit, now shut after aSaturday fire, was "dangerously" above capacity, union officials told Reuters.

(Sunday) Reuters - A fire late Saturday at a refinery run by Brazil'sPetrobras cut gasoline and diesel output from one of the state-run oil company's key production facilities, a situation likely to boost money-losing fuel imports, the refinery's union said.

Raymond James upgraded Royal Dutch Shell to ‘Outperform’ from ‘Market Perform’.

Raymond James downgraded Repsol to ‘Market Perform’ from ‘Outperform’.

Reuters - Norwegian energy firm Statoil's shut its Snoehvit liquefied natural gas plant on Sunday following a gas leak and expects the plant to resume production "fairly soon", a spokesman said.

U.S. E&PS

Press Release - Lone Star Value Management, LLC (together with its affiliates and director nominees, "Lone Star Value," "we" or "our") is a significant shareholder in Callon Petroleum Company with ownership of 6.4% of CPE. Lone Star Value urges the board of directors of CPE (the "Board") to refrain from any further dilution of shareholder value through capital markets issuances, cease all acquisition activity outside the Permian Basin and immediately commence a process to explore and evaluate all strategic alternatives available to CPE, including a sale of the Company, with a goal of maximizing shareholder value.

Raymond James upgraded ConocoPhillips to ‘Market Perform’ from ‘Underperform’.

Guggenheim Securities downgraded Devon Energy and Energy XXI to ‘Neutral’ from ‘Buy’.

Press Release - Endeavour International Corporation announced an update on the current production from the first well (W1) at the Rochelle field and the timing of the start-up of the second production well (E2). Current gross production from the W1 well is 65 – 70 million cubic feet of gas per day with an additional 2,500 – 3,000 barrels of oil equivalent per day ("boepd") of liquids production, 6,000 – 7,000 boepd net to Endeavour's working interest in the field. The first Rochelle well, W1, came on-line in October of 2013.

Press Release - EPL Oil & Gas, Inc. announced its initial 2014 capital budget and outlook for the year. The Company currently plans to spend approximately $360 million on oil-dominated, lower-risk development activities in 2014. This initial budget will primarily fund the exploitation of the shallow section within EPL's Ship Shoal, West Delta, South Timbalier, and Main Pass core field areas.

KeyBanc upgraded Goodrich Petroleum to ‘Buy’ from ‘Hold’.

Press Release - Pioneer Natural Resources filed an 8-K expecting severe weather in Spraberry/Wolfcamp to lower production below Q4 and full-year guidance.

CANADIAN E&PS

Paradigm Capital initiated coverage on Parex Resource with a ‘Buy’ rating.

OIL SERVICES

Guggenheim Securities downgraded C&J Energy Services, Core Laboratories, Halliburton, Helmerich & Payne, Patterson UTI andWeatherford International to ‘Neutral’ from ‘Buy’.

Wells Fargo upgraded Halliburton to ‘Outperform’ from ‘Market Perform’.

Press Release - PATTERSON-UTI ENERGY, INC. reported that for the month of December 2013, the Company had an average of 187 drilling rigs operating in the United States and 9 rigs in Canada. For the three months ended December 31, 2013, the Company had an average of 183 drilling rigs operating in the United States and 9 rigs in Canada.

REFINERS

Citigroup downgraded HollyFrontier to ‘Sell’ from ‘Buy’.

MLPS

Credit Suisse reinstated coverage on Energy Transfer Equity LP, Energy Transfer Partners, LP and Regency Energy Partners, LP with an ‘Outperform’ rating.

(Late Friday) Press Release - Western Gas Partners, LP announced that it has closed the issuance of 300,000 common units representing limited partner interests under the partial exercise of the 675,000 common unit over-allotment option granted to the underwriters in connection with its recent public offering of 4,500,000 common units. Aggregate net proceeds from the offering of approximately $291.9 million (including from the partial exercise of the over-allotment option and from a proportionate capital contribution by the partnership's general partner and after deducting underwriting discounts and commissions and estimated offering expenses payable by the partnership) have been used to repay all amounts outstanding under the partnership's revolving credit facility, and remaining proceeds are expected to be used for general partnership purposes, including the funding of capital expenditures.

Reuters - Williams Cos Inc's Transcontinental Gas Pipeline Co (Transco) said on Monday it would conduct maintenance associated with a small leak discovered on the offshore portion of the Southeast Louisiana Lateral natural gas pipeline.