SECTOR COMMENTARY

The energy sector ended the day mostly lower along with the broader equity markets as investors look ahead to tomorrow’s U.S. payrolls data. E&Ps were the biggest laggards on the day highlighted by a 5% decline in shares of ConocoPhillips after the company issued a production forecast that fell short of analyst expectations.

WTI crude oil futures ended the day lower for the first time in four days, down $0.45 or 0.46% to close at $97.49, while Brent crude oil futures were higher by 0.50%, briefly reaching a three-month high during the session. The market was balancing U.S. data showing unemployment benefits claims rose more than expected last week against positive euro zone sentiment data from Wednesday and U.S. Federal Reserve comments that it would maintain its stimulus plan until the economic outlook improves substantially. "The oil complex, over the last one or two weeks, has moved back in sync with what's happening with the economy," said Dominick Chirichella, senior partner at Energy Management Institute in New York.

Natural gas futures edged out small gains closing higher by $0.004 or 0.12% to $3.339. Bearish supply data from the EIA showed that working gas in storage decreased by 194 Bcf last week, while analysts were expecting a 206 Bcf decline. Despite the data, the contracts bounced back late in the session after investors viewed the commodity as oversold. Additionally, reports found that trading on the bearish report started 400 milliseconds before the EIA data was officially released; however, regulators decided not to prosecute anyone who trades on news milliseconds before news is released irrespective of whether information was leaked.

U.S. INTEGRATEDS

• MUR reported 4Q’12 EPS of $0.84 versus Thomson Reuters I/B/E/S estimate of $1.36.
• OXY reported 4Q’12 EPS of $1.83 versus Thomson Reuters I/B/E/S estimate of $1.66

Press Release - Celtic Exploration Ltd. has been advised by ExxonMobil Canada Ltd. of the status of the review by the Minister of Industry (the "Minister") under the Investment Canada Act (the "ICA") of the proposed arrangement whereunder Celtic is to be acquired by a subsidiary of ExxonMobil Canada (the "Arrangement").

Reuters - Exxon Mobil Corp on Thursday there was no impact to production from a Wednesday malfunction at its 149,500 barrel per day (bpd) Los Angeles-area refinery in Torrance, California.

Press Release - Chevron Corporation said today that it will realign its Gas and Midstream business by consolidating the company’s supply and trading functions into a single supply and trading group within Chevron’s Gas and Midstream organization.

(Late Wednesday) Societe Generale downgraded Hess Corp to ‘Hold’ from ‘Buy’.

(Late Wednesday) UBS downgraded Hess Corp to ‘Neutral’ from ‘Buy’.

(Late Wednesday) Press Release - Murphy Oil Corporation announced today that its net income in the fourth quarter of 2012 was $158.7 million ($0.82 per diluted share) compared to a net loss of $113.9 million ($0.59 per diluted share) in the fourth quarter of 2011. Net income in the fourth quarter of 2012 was improved over the same 2011 quarter principally due to lower impairment expenses and income tax benefits associated with operating losses in two foreign countries in the current period.

Societe Generale downgraded Murphy Oil to ‘Hold’ from ‘Buy’ citing that the stock did react well to downstream and retail gasoline business restructuring and initial buyback activity.

Press Release - Occidental Petroleum Corporation announced core income of $1.5 billion ($1.83 per diluted share) for the fourth quarter of 2012, compared with $1.6 billion ($2.02 per diluted share) for the fourth quarter of 2011. In the fourth quarter of 2012, we recorded after-tax charges of $1.1 billion or $1.41 per diluted share, almost all of which was related to the impairment of gas assets in the Midcontinent. Net income for the fourth quarter of 2012 after this charge was $336 million ($0.42 per diluted share), compared with $1.6 billion ($2.01 per diluted share) for the same period of 2011.

INTERNATIONAL INTEGRATEDS

• RDS’A reported 4Q’12 CCS per ADS of $2.32.

Reuters - BP Plc said it had begun production from the PSVM development area in Block 31 offshore Angola and expects to ramp up output to around 70,000 barrels of oil per day.

Press Release - Royal Dutch Shell's fourth quarter 2012 earnings, on a current cost of supplies (CCS) basis (see Note 1), were $7.3 billion compared with $6.5 billion in the same quarter a year ago. Full year 2012 CCS earnings were $27.0 billion compared with $28.6 billion in 2011. Fourth quarter 2012 CCS earnings, excluding identified items (see page 4), were $5.6 billion compared with $4.8 billion in the fourth quarter 2011, an increase of 15%. Full year 2012 CCS earnings excluding identified items were $25.1 billion compared with $24.7 billion in 2011, an increase of 2%.

Reuters - Difficulties caused by fuel subsidies, project delays and soaring costs at Brazil's state-led giant oil company Petroleo Brasileiro SA are spreading to the wider economy, undermining the company's suppliers and raising credit risks.

U.S. E&PS

• COP reported 4Q’12 EPS of $1.43 versus Thomson Reuters I/B/E/S estimate of $1.42.
• EXXI reported FY 2Q’13 EPS of $0.47 versus Thomson Reuters I/B/E/S estimate of $0.68.

Press Release - Berry Petroleum Company today reported an operations update including preliminary 2012 production and reserves data. Company production averaged 39,500 BOE/D in the fourth quarter of 2012. This was comprised of 78% oil and 22% natural gas. The Company produced an average of 36,400 BOE/D for 2012, which was comprised of 75% oil and 25% natural gas.

Reuters - Chesapeake Energy Corp, the second-largest natural gas producer in the United States, said outgoing Chief Executive Aubrey McClendon would receive about $11.7 million in cash compensation over four years.

(Late Wednesday) Press Release - ConocoPhillips today reported fourth-quarter 2012 earnings of $1.4 billion, or $1.16 per share, compared with fourth-quarter 2011 earnings of $3.4 billion, or $2.56 per share. Fourth-quarter 2011 reported earnings included downstream results prior to the separation of Phillips 66 on April 30, 2012. Excluding special items, fourth-quarter 2012 adjusted earnings were $1.8 billion, or $1.43 per share, compared with fourth-quarter 2011 adjusted earnings of $2.1 billion, or $1.55 per share. Special items for the current quarter included disposition-related impairments partially offset by tax impacts, net benefits related to legal claims and settlements, and discontinued operations.

(Late Wednesday) Press Release - For the 2013 fiscal second quarter, Energy XXI reported earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $198.8 million, compared with $225.6 million in the 2012 fiscal second quarter. Net income available for common stockholders for the 2013 fiscal second quarter was $38.5 million, or $0.47 per diluted share, on revenues of $321 million, compared with fiscal 2012 second-quarter net income available for common stockholders of $93.4 million, or $1.11 per diluted share, on revenue of $341 million.

(Late Wednesday) Press Release - McMoRan Exploration Co. today updated the status of the Davy Jones No. 1 well on South Marsh Island Block 230. As previously reported, McMoRan is developing plans at the Davy Jones No. 1 well to pump a hydraulic fracture treatment including proppant to facilitate hydrocarbon movement into the wellbore. Future plans will incorporate data gained to date at Davy Jones as well as potential core and log data from the in progress well at Lineham Creek, located onshore approximately 50 miles northwest of Davy Jones. The rig is being moved off location for several months while a large scale hydraulic fracture treatment is designed to penetrate the Wilcox reservoirs.

Northern Oil and Gas was cut to Market Perform from Outperform at BMO.

(Late Wednesday) Pioneer Natural Resources was downgraded to ‘Sell’ from ‘Hold’ at Societe Generale.

CANADIAN E&PS

• MEG-T reported 4Q’12 EPS of C$0.00 versus Thomson Reuters I/B/E/S estimate of C($0.01).

Press Release - Celtic Exploration Ltd. has been advised by ExxonMobil Canada Ltd. ("ExxonMobil Canada") of the status of the review by the Minister of Industry (the "Minister") under the Investment Canada Act (the "ICA") of the proposed arrangement whereunder Celtic is to be acquired by a subsidiary of ExxonMobil Canada (the "Arrangement").

Press Release - Gran Tierra Energy Inc, a company focused on oil exploration and production in South America, clarifies reports of a security incident in Colombia. Gran Tierra Energy confirms that three employees of contractors providing services to Gran Tierra Energy have been illegally detained by unknown individuals in the Putumayo Basin, Colombia. No employees of Gran Tierra Energy were involved in the incident.

Press Release - MEG Energy Corp. today reported fourth quarter and full-year 2012 operational and financial results. MEG recorded a net loss of $18.7 million ($0.09 per share, diluted) for the fourth quarter of 2012 compared to net income of $91.1 million ($0.46 per share, diluted) in the fourth quarter of 2011. Fourth quarter 2012 results included a net foreign exchange loss of $21.1 million, primarily arising from the translation of MEG's U.S. dollar denominated debt and U.S. dollar cash and cash equivalents. For the comparable period in 2011, there was a net foreign exchange gain of $33.7 million.

OIL SERVICES

• CAM reported 4Q’12 EPS of $0.95 versus Thomson Reuters I/B/E/S estimate of $0.95.
• CLB reported 4Q’12 EPS of $1.17 versus Thomson Reuters I/B/E/S estimate of $1.12.

Press Release - Cameron reported earnings per share for the fourth quarter of 2012 of $0.95 excluding charges. This compares to earnings per share for the fourth quarter of 2011 of $0.77 excluding charges. After-tax charges for the fourth quarter of 2012 were $0.07 per share. After-tax charges for the fourth quarter 2011 were $0.37 per share primarily related to the Deepwater Horizon matter. The Company reported GAAP net income of $218.3 million for the fourth quarter of 2012, or $0.88 per diluted share. Earnings per diluted share increased 120 percent compared to the fourth quarter 2011 earnings of $0.40 per diluted share. For the year the Company reported GAAP net income of $750.5 million, or $3.02 per diluted share. Earnings per diluted share increased 44 percent compared to full year 2011 earnings of $2.09 per diluted share.

Reuters - Core Laboratories reported Q4 EPS of $1.17, $0.04 better than the analyst estimate of $1.13. Revenue for the quarter came in at $254.46 million versus the consensus estimate of $246.49 million.

Reuters - Schlumberger Ltd, the world's largest oilfield services company, said on Thursday it would wind down operations in Iran this year after booking $208 million in net income there in 2012.

DRILLERS

• ATW reported 4Q’12 EPS of $1.10 versus Thomson Reuters I/B/E/S estimate of $0.92.
• HP reported 1Q’13 EPS of $1.40 versus Thomson Reuters I/B/E/S estimate of $1.29.

(Late Wednesday) Press Release - ATWOOD OCEANICS, INC. announced today that the Company earned net income of $72.8 million or $1.10 per diluted share, on revenues of $245.1 million for the quarter ended December 31, 2012 compared to net income of $95.5 million or $1.45 per diluted share on revenues of $252.5 million for the quarter ended September 30, 2012 and compared to net income of $65.5 million or $1.00 per diluted share, on revenues of $184.7 million for the quarter ended December 31, 2011.

Press Release - Helmerich & Payne, Inc. reported record income from continuing operations of $159,611,000 ($1.48 per diluted share) from operating revenues of $844,572,000 for the first quarter of fiscal 2013, compared to income from continuing operations of $144,297,000 ($1.32 per diluted share) from operating revenues of $732,588,000 during the first fiscal quarter of 2012, and income from continuing operations of $149,606,000 ($1.39 per diluted share) from operating revenues of $829,447,000 during the fourth fiscal quarter of 2012.

MLPS

Press Release - Enterprise Products Partners L.P. today announced its financial results for the three months and year ended December 31, 2012. For the year ended 2012, Enterprise reported records for each of the following: net income of $2.4 billion; earnings per unit of $2.71 on a fully diluted basis; gross operating margin of $4.4 billion; and distributable cash flow of $4.1 billion, which included $1.2 billion of cash proceeds from sales of assets.

Reuters - Enterprise Products Partners LP expects a new oil pipeline connecting the recently expanded Seaway Pipeline to Houston refineries to be completed in the second half of the year, company officials said on Thursday.

Press Release - Williams Partners L.P. delivered a record amount of natural gas on its Transco interstate gas pipeline to meet demand driven by last week’s bitter cold weather in markets on the U.S. Eastern Seaboard.