Tuesday, September 16, 2014

Why Halliburton's Settlement Is Great News for Shareholders

This article was originally published by TheStreet on September 03, 2014.
By Safaraz A. Khan
NEW YORK (TheStreet) -- Halliburton's  (HAL_)  announcement Tuesday that it has reached a $1.1 billion agreement to settle most claims related to its role in the 2010 Deepwater Horizon oil rig explosion could prove to be a buying opportunity for long-term investors.

That would be welcome news, as the company's shares have fallen by nearly 5% since the beginning of July on the back of the slump in oil prices. So far this year, Halliburton's shares have risen by about 33%, closing at $67.49 on Tuesday.

The settlement was a positive development, as it removes the uncertainty related to spill claims and allows the company to focus on its domestic and international businesses.

How U.S. Silica Got on Target to Double Its Earnings by 2016

This article was originally published by TheStreet on September 2, 2014.
By Sarfaraz A. Khan
NEW YORK ( TheStreet) -- U.S. Silica (SLCA) makes sand, a commodity which you might think is abundantly available virtually everywhere -- but this is not just any sand. This company is the biggest local producer of commercial silica sand, a special type used in drilling for shale oil and gas.
Silica sand, which is already in short supply, is used by energy companies as a cheaper alternative to expensive ceramics such as those produced by CARBO Ceramics (CRR) . Other companies such as Emerge Energy Services (EMES) and Hi-Crush Partners (HCLP)   are also producing this sand.

China Mobile Eyes Long-Term Growth, But It Comes With A Cost

This article was first published by Seeking Alpha on September 1, 2014

By Sarfaraz A. Khan. Research Asst. Sumaiya Amin
Summary: China Mobile has recently reported its half-yearly results. The company’s revenues climbed but income dropped on higher costs. China Mobile’s profits could continue to remain under pressure this year. It’s long term outlook, however, is what investors should focus on.

China Mobile (NYSE:CHL), the biggest player in China's enormous telecom market, with the largest subscriber base in the world, could continue to struggle with profits this year. But the company is eyeing a brighter future in the long term.

The recent earnings release has shown a drop in profits, but the company is growing where it matters most, data services.

Earlier this month China Mobile released its half-yearly results in which operating revenues increased by 7.1% in H1-2014 from a year ago to $52.8 billion, driven by a 4.7% increase in revenues from telecommunication services, to $48.5 billion. The improvement was due to a 27.81% increase in data services revenues which offset the 53% drop in voice services revenues. The data services unit was buoyed by 52% higher wireless data traffic revenues, which now represent a little less than a quarter of China Mobile's core telecommunication services.

Clearly, the relatively newer data services business has been driving China Mobile's growth. On the flip side, with a shift toward wireless data traffic, the company's traditional business has come under pressure. During the first half of this year, the voice service revenues dropped by read full article at Seeking Alpha

Wednesday, September 10, 2014

Chevron, Schlumberger the Early-Bird Winners of Mexico’s Oil Reforms

This article was first published by TheStreet on August 30, 2014
Thanks to landmark oil industry reforms, Mexico is gearing up to explore its undeveloped deepwater oil reserves, which could hold roughly twice as much oil as the nation's existing proven reserves.
This could open doors to new business opportunities for Chevron (CVX_) and Schlumberger (SLB_) which could become the earliest and the biggest beneficiaries of the oil reforms.
Since 1938, Mexico's oil and gas reserves have been off-limits to foreign companies. However, earlier this month Mexico's President Enrique Pena Nieto signed into law changes that end the 75-year-old monopoly of the government-owned energy behemoth Pemex on the country's enormous 13.5 billion barrels of oil reserves while opening up the nation's energy sector to foreign investors.

Don't Give Up on Energy XXI, Just Wait for That Turnaround

This article was originally published by TheStreet on August 30, 2014. 
Shares of Energy XXI (EXXI_) , commonly known as EXXI, have fallen by nearly 40% this year, currently trading at $16.50. But that is no reason to sell this stock, even with the company suffering a lack of revenue growth over the last two years. 
Why? Because EXXI, a small energy company focused on producing oil from the shallower waters of the U.S. Gulf of Mexico Shelf, has forecast a revival in its latest quarterly results on the back of the $2.3 billion acquisition of its peer EPL Oil & Gas (EPL_) . After completion of the acquisition in June, EXXI became the biggest publicly traded independent operator at the Gulf of Mexico Shelf.
That means EXXI could also become a takeover target of a bigger oil company looking to expand its position in the Gulf of Mexico. There are several oil majors operating in this area includingExxon Mobil (XOM_) , Chevron (CVX_) , Royal Dutch Shell (RDS.A_) and BP (BP_) . While most of the majors are largely focused on exploiting the deepwater areas, with advancements in exploration and production technologies, such as higher quality seismic analysis and horizontal drilling, the big boys of the industry might consider revisiting the shallower waters.

Friday, September 5, 2014

WPX Energy: Watch Out For This Turnaround Stock

This article was first published by Seeking Alpha on August 30, 2014.

By Sarfaraz A. Khan

Summary: WPX Energy is a natural gas -focused E&P company. The company has not reported any meaningful increase in total production and has struggled with profitability. That said, WPX Energy could change its fortune in the near future.

WPX Energy (NYSE:WPX) has struggled with profitability and production growth on the back of a tough pricing environment in the natural gas market. But this could change in the future on the back of increasing oil production in the near term and higher gas production in the long term.

WPX Energy is an independent natural gas focused exploration and production company formed about two years ago from a spinoff of the pipeline operator Williams Cos (NYSE:WMB). Since its birth, the natural gas prices have improved from less than $3/MBtu in early 2012 to nearly $4/MBtu in mid-2014 but have largely remained below $5/MBtu since 2011.

WPX Energy has significant operations at Colorado's Piceance Basin, North Dakota's Williston Basin in the larger Bakken formation and New Mexico's San Juan Basin.

No Production Growth

WPX Energy has not reported any meaningful increase in production over the last several quarters. Since the beginning of 2013, the company's total output has hovered between 1,230 mmcfe/d and 1,268 mmcfe/d.

WPX Energy's gas production has fallen from 1,007 mmcf/d in Q2-2013 to 965 mmcf/d in Q2-2014. However, the company's gas production from Piceance Basin has been largely flat from last year. Amid the weak pricing environment in the natural gas market, WPX Energy has turned towards oil. … read full article at Seeking Alpha

DCP Midstream Partners: This Dropdown-Powered Growth Story Deserves Your Attention

This article was originally published by Seeking Alpha on August 27, 2014

Summary: DCP Midstream Partners is backed by a joint venture of Spectra Energy and Phillips 66. DCP Midstream Partners' latest quarterly results came in well below analysts’ estimates. However, there are several factors at work that will continue to support DCP Midstream Partners' growth in the coming years.

DCP Midstream Partners (NYSE:DPM) is a nine-year-old master limited partnership formed by DCP Midstream LLC and operates mainly in Midcontinent, Eagle Ford, DJ Basin and the Permian Basin. The partnership comes with an enviable track record of increasing its distributions for 15 consecutive quarters, and it might continue going this way.

Who is DCP Midstream?

DCP Midstream LLC is a 50-50 joint venture between Spectra Energy (NYSE:SE) and Phillips 66 (NYSE:PSX). With processing volumes of 8.5 million BTU of gas per day and NGL production of 450,000 barrels per day, DCP Midstream LLC is the biggest natural gas processor and the leading producer of natural gas liquids in the U.S. The company owns 20.6% limited partner interest and 2.1% general partner interest in the MLP.

DCP Midstream Partners, on the other hand, operates in three segments: natural gas services in which the company provides various services such as gathering, processing and transportation of natural gas and fractionating NGLs, NGL logistics and wholesale propane logistics segments.

The natural gas services segment forms the backbone of the partnership's operations. In the previous quarter, DCP Midstream Partners generated more than 90% of its revenues from natural gas services, nearly 7% from … read full article at Seeking Alpha