Wednesday, October 22, 2014

Why Exxon Mobil's Exit From California Could Be Great for Investors

This article was originally published by TheStreet, and also appeared on Yahoo Finance, on September 24, 2014.
By Sarfaraz A. Khan 
NEW YORK (TheStreet) -- Exxon Mobil (XOM) is reportedly preparing to sell its only oil refinery in California, following similar divestitures by BP (BP) and Royal Dutch Shell (RDS.A)  , and that's good news for investors of the Irving, Texas-based energy major.
That's because Exxon Mobil's plant was a "disadvantaged refinery" for the company, due to its small size and lack of petro-chemical integration or lubricants production, Oppenheimer senior analyst Fadel Gheit told TheStreet in an email. Gheit explained that "it doesn't fit [with] Exxon Mobil's downstream strategy, which is focused on larger, more complex integrated refineries with crude flexibility and petrochemical manufacturing."

Total's Turnaround Hits A Speed Bump

This article was originally published by Seeking Alpha on September 22, 2014.

By Sarfaraz A. Khan

Summary: French oil major Total has recently updated its cash flow and production outlook through 2017, which wasn't encouraging. The company's turnaround has been hit by project delays and asset sales. Is it time to give up on this company?

Continental Resources: Sell-On-The-News Or Buy-On-The-Dip?

This article was originally published by Seeking Alpha on September 22, 2014.

By Sarfaraz A. Khan

Summary: The shares of Continental Resources slumped last week.The company announced an uptake in drilling costs, cut the top end of its production guidance.The increase in its core Bakken reserve base was also not that great. That said, Continental Resources is not the same E&P company as two years ago.

It's Not Peabody Energy's Fault

This article was originally published by Seeking Alpha on September 22, 2014

By Sarfaraz A. Khan

Summary: Peabody Energy’s shares have dropped to 52-week lows. Several analysts have recently downgraded the stock, citing identical reasons. Are there any signs of improvements in market conditions?

Tuesday, October 14, 2014

Vanguard Natural Resources' Long-Term Bet on Natural-Gas Prices

This article was originally published by TheStreet, and also appeared on Yahoo! Finance, on September  19, 2014. 
NEW YORK (TheStreet) -- Vanguard Natural Resources (VNR)  has struggled to increase the amount of cash it can distribute to its investors, but the natural-gas producer is hoping that two major acquisitions it has announced during the last two months will help mend that problem.
This year, in the first six months of operations, Vanguard's distributable cash flow fell by 2% to $88 million from the same period a year ago, largely because of declining prices for natural-gas liquids, or NGLs. Meanwhile, the company's distribution coverage ratio for the first two quarters of this year has been less than 1, meaning that the company has paid out more cash than it has generated as distributable cash flow.

How to Position for a Turnaround at Oil Servicer McDermott

This article was originally published by TheStreet on September 18, 2014. 
NEW YORK (TheStreet) -- Houston-based oil and gas services company McDermott International (MDR) has struggled with losses on projects, but a turnaround -- and a profitable backlog -- looks to be on track.
In the first six months of operations this year, the oil and gas equipment and services company has reported operating losses of $13.5 million. Moreover, during the second quarter's conference call, the company predicted another round of operating losses in the second half of this year. For the year to date, McDermott's shares have fallen by just shy of 30%, closing at $6.40 on Wednesday and up to $6.45 as of Thursday at 11 a.m.

Wednesday, October 1, 2014

Cameco Corp.: A Reliable Play On Uranium Recovery

This article was originally published by Seeking Alpha on September 17, 2014

Summary: The recent bullish trends in the uranium market are led by supply-side issues. The demand side is also looking interesting. Is It time to reconsider some well known uranium stocks, particularly Cameco and Denison Mines?

More than three years ago, the tsunami in Japan which led towards the Fukushima nuclear disaster triggered a collapse of the uranium prices, falling from a peak of $65 per pound in early 2011 to less than $30 per pound over the last four months ending August. However, since the end of last month, the commodity's prices, for October delivery, have recovered to more than $33 per pound.

Supply-side issues

The improvement in prices was largely due to supply-side issues. Due to the slump in prices, Uranium producers from all around the world started cutting back on their production. Moreover, the Ukraine conflict and the subsequent sanctions on Russia, which provides a significant portion of uranium enrichment services to companies all around the world, could also hit uranium supplies.

Finally, last month, Cameco Corp. (NYSE:CCJ), the largest U.S. listed uranium miner shut down its flagship McArthur River mine, the biggest in the world, due to a labor dispute which acted as a major catalyst behind the improvement in uranium prices. On Friday, the company signed a tentative agreement with the worker's union, ending the 17-day strike.

The industry could witness additional closures in the coming months due to the pricing pressure. Analysts at Macquarie have forecast a 6% drop in production from mines in the current year. Read full article at Seeking Alpha.

Statoil, The Cheapest Oil Major, Is Looking Super Attractive

This article was originally published by Seeking Alpha on September 16, 2014. 

Summary: Statoil has just sold another asset for $1.3 billion. The company has built significant positions in three major U.S. shale plays. Statoil’s real strength, however, lies somewhere else.

The Norwegian energy major Statoil (NYSE:STO) has recently announced another major asset sale; and that is great news for investors.

On Friday, Statoil announced the sale of some of its domestic assets to Wintershall AG for $1.3 billion as the former gears up to spend billions on its future projects. Statoil has been bolstering its balance sheet over the last four years by selling its non-core assets valued at $20 billion. The asset sales will allow Statoil to tap into its massive portfolio of projects in Norway and international markets and allow the company to cut its capital expenditure by $1.8 billion through the end of the decade.

Onshore U.S. Assets

Over the years, Statoil has amassed attractive positions in three of the leading onshore U.S. shale fields. The company owns more than 600,000 net acres at Marcellus in West Virginia and Pennsylvania, around 290,000 net acres in the Bakken formation in North Dakota and 59,000 net acres in Eagle Ford in Texas. In the previous quarter, Statoil produced around 121,900 barrels of oil equivalents per day, or boepd, from Marcellus, 50,200 boepd from Bakken and 37,700 boepd from Eagle Ford.

Since 2010, Marcellus has been making the biggest contribution to the company's production from onshore U.S, and this trend will likely continue in the future. Additionally, the company's onshore U.S. operations ... read full article at Seeking Alpha.

Monday, September 29, 2014

Here's How Occidental Petroleum Is Finally Remaking Its Business

This article was originally published by TheStreet, and also appeared on Yahoo! Finance, on September 15, 2014. 

By Sarfaraz A. Khan
NEW YORK (TheStreet) -- Occidental Petroleum  (OXY_) is well on its way towards transforming from a major international energy company into a Texas-focused oil and gas producer.
In the previous quarter, Occidental Petroleum's domestic oil and gas production increased by 3% from the same period a year ago to 464,000 barrels of oil equivalents per day. But the company is focused on increasing production, doubling the number of rigs at its core Permian Basin positions in Texas by 2016. 

Sempra Energy Poised To Deliver Double-Digit EPS Growth Over The Long Term

This article was originally published by Seeking Alpha on September 12, 2014.

Summary: Sempra Energy’s Cameron LNG export project has finally received a green signal from regulators. The company could start exporting LNG as soon as 2018. The company could post solid earnings growth over the next several years, and it won’t come just from LNG exports.

Slowly but surely, the United States is moving towards exporting liquefied natural gas as the country eyes a greater share of the global LNG trade. The federal government has recently approved Sempra Energy's Cameron LNG export facility. So far, the government has approved LNG exports of up to 4.5 billion cubic feet per day by giving licenses to two major projects.

"Major Regulatory Hurdle"

On Wednesday, Sempra Energy's proposed Cameron LNG project finally received the green signal from the Department of Energy, allowing the company to export 1.7 billion cubic feet of gas daily to countries that do not have a free trade agreement with the U.S. The company has been targeting customers in Asia and Europe. Until now, Cheniere Energy's Sabine Pass project was the only facility to receive these approvals.

The Energy Department has recently overhauled the procedure required to obtain a gas export license. Under the new rules, energy companies are now required to obtain Federal Energy Regulatory Commission's (FERC) approval before filing an application with the energy department. Sempra Energy, however, was one of the few companies that already had a construction license from FERC.

Several other projects that already have FERC's approval, such as the Freeport LNG .. read full article at Seeking Alpha