THURSDAY, SEPTEMBER 20, 2012
SECTOR COMMENTARY
The energy sector ended slightly higher, while the broader equity markets were mixed after a late surge that pushed the DJIA into the black. Energy subsectors were mixed as well, with integrateds and refiners contributing to the overall sector gains. Multiple integrated names traded on higher than average volumes as investors may be looking for safer plays within the energy space.
October U.S. crude oil futures slipped slightly lower on their last day of trading to close down $0.11 or 0.12% to $91.87 while the more heavily traded November contract settling relatively flat $0.12 or 0.1% higher to $92.42 a barrel. U.S. crude lagged its British counterpart with Brent up over 2% on the day. U.S. crude prices had fallen to a six-week low earlier in the session but were lifted later in the day after official data showed that manufacturing activity in the Philadelphia-region improved more than expected in September. Oil prices have been under heavy selling pressure in recent sessions amid signs that top oil exporter Saudi Arabia was pumping more oil.
Natural gas futures held onto gains to close up $0.035 or 1.27% to $2.797 after the EIA showed that U.S. gas supplies rose broadly in line with market expectations last week. Working gas in storage was 3,496 Bcf as of Friday, September 14, 2012, according to EIA estimates, which represents a net increase of 67Bcf from the previous week vs. analyst estimates of a 64 Bcf increase.
U.S. INTEGRATEDS
Press Release - Exxon Mobil Corporation today announced an agreement that will significantly increase its production acreage in the prolific Bakken oil shale region in the U.S. states of North Dakota and Montana. ExxonMobil and its subsidiary, XTO Energy, signed an exchange agreement with Denbury Onshore, LLC, a subsidiary of Denbury Resources Inc., to acquire 100 percent of Denbury’s Bakken shale assets, which consist of approximately 196,000 net acres in North Dakota and Montana, with expected production in the second half of 2012 of more than 15,000 oil equivalent barrels per day.
Reuters - U.S. oil major Exxon Mobil Corporation will return two out of its six shale gas concessions in Poland to the country's Environment Ministry after test wells failed to justify further exploration, the company's spokesman in Poland told Reuters.
INTERNATIONAL INTEGRATEDS
Reuters - Oil trader Vitol and Italian oil group Eni said on Thursday they had made an oil discovery in offshore Ghana, increasing the potential of one of Africa's newest oil producers. In a statement Eni said that during the production test the well produced about 5,000 high quality barrels of oil per day.
Reuters - Italian oil and gas group Eni said on Thursday it lost a gas price dispute with Dutch supplier GasTerra in arbitration that will hit net profit in the third quarter by 604 million euros.
Reuters - British utility Centrica on Thursday signed a 2.4 billion cubic metre, three-year gas supply deal with the UK arm of Russian export monopoly Gazprom it said in a statement.
CANADIAN INTEGRATEDS
JPMorgan upgraded Husky Energy to ‘Neutral’ from ‘Sell.’
U.S. E&PS
Press Release - Approach Resources Inc. today announced that it has priced its previously announced underwritten public offering of 5,000,000 shares of common stock at a price to the public of $30.50 per share.
Capital One South Coast lowered Carrizo Oil and Gas to ‘Neutral’ from ‘Add.’
Press Release - Exxon Mobil Corporation today announced an agreement that will significantly increase its production acreage in the prolific Bakken oil shale region in the U.S. states of North Dakota and Montana. ExxonMobil and its subsidiary, XTO Energy, signed an exchange agreement with Denbury Onshore, LLC, a subsidiary of Denbury Resources Inc., to acquire 100 percent of Denbury’s Bakken shale assets, which consist of approximately 196,000 net acres in North Dakota and Montana, with expected production in the second half of 2012 of more than 15,000 oil equivalent barrels per day.
CANADIAN E&PS
Reuters - Canacol Energy Ltd announced 98% increase in proved reserves and deemed volumes and replaces 200% of 2P reserves for fiscal year ended June 30, 2012.
Reuters - Nexen Inc shareholders overwhelmingly approved the oil producer's takeover by China's CNOOC Ltd on Thursday but the stock weakened as public opposition to a state-owned enterprise absorbing $15.1 billion of Canadian-owned assets appeared to grow.
OIL SERVICES
S&P Capital IQ cut Baker Hughes to ‘Hold’ from ‘Buy,’ cut Halliburton to ‘Hold’ from ‘Buy,’ and cut Schlumberger to ‘Hold’ from ‘Strong Buy.’
Wunderlich initiated coverage of TETRA Technologies Inc with a ‘Buy,’ Patterson UTI Energy with a ‘Buy,’ Basic Energy Services with a ‘Hold’ and Key Energy Services Inc with a ‘Hold.’
REFINERS
Reuters - Marathon Petroleum Corp entered into a revolving credit agreement. Credit agreement provides for a new $2.0 billion unsecured five-year revolving credit facility.
Reuters - Valero Energy Corp will carry out planned maintenance on a flare gas recovery system at its 156,000-barrels-per-day McKee refinery in Sunray, Texas, on Thursday, according to a filing with state pollution regulators.
MLPS
Press Release - Cheniere Energy Partners, L.P. announced today that it is launching an offering for 8,000,000 of its common units representing limited partner interests in an underwritten public offering pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission.
Press Release - Enterprise Products Partners L.P. today announced that its management will recommend to the board of directors of its general partner increases in its cash distributions with respect to the third and fourth quarters of 2012, which would result in increases of 6.1 percent and 6.5 percent, respectively, compared to the cash distributions paid with respect to the third and fourth quarters of 2011.
MARKET COMMENTARY
The S&P 500 finished marginally lower, but was able to rebound from most of the day's losses, a sign that investor sentiment remains generally positive despite several weak manufacturing surveys from around the world.
TOP NEWS
U.S. manufacturing suffered its weakest quarter in three years and conditions at European businesses worsened, surveys showed, while China's economy continued to lose momentum.
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