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Oil and gas companies have closed or winding down many US Gulf operations ahead of a very late in the year Hurricane Ida. The weekend reports had this one dissipating then the reports early this morning had this making landfall as a tropical storm with [a possibility of it being hurricane. This morning Ida became a tropical storm again at the National Hurricane Center. In order to not have to out-guess ahead of time which companies will be least or most impacted had this been a full hurricane at the time it met rigs and the coast, we looked at the Oil Services HOLDRs (NYSE: OIH), the United States Oil (NYSE: USO) ETF and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) reactions based upon the supply data. While the infrastructure is now not as likely to be hit as hard and while a tropical storm is far less of a threat than a hurricane, NYMEX WTI Crude is actually still up $1.78 at $79.21 as of 10:13 AM EST.
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Posts for Ticker ‘RDS’
Ida: The Hurricaneless Hurricane (OIH, USO, OIL, MUR, MRO, RDS, CVX, XOM)
Canadian Gas Pipeline Challenges Alaska Route (XOM, COP, RDS, TRP)
The Canadian government is reported to have offered financial support to the Mackenzie Valley gas pipeline project. Imperial Oil, a wholly-owned subsidiary of Exxon Mobil Corporation (NYSE:XOM), leads the project, which includes ConocoPhillips Corporation, Royal Dutch Shell plc (NYSE:RDS.A-B), and TransCanada Corporation (NYSE:TRP) through TransCanada’s investment in the Aboriginal Pipeline Group.
Will Big Oil Go Shopping? (XOM, CVX, RDS, BP, COP, APA, DVN, APC)
Yesterday’s story about Venezuela opening the bidding for its oil resources raised an interesting question. What are the chances that Exxon Mobil Corporation (NYSE:XOM), with nearly $40 billion in cash at the end of the third quarter or Chevron Corporation (NYSE:CVX) with about $11 billion will acquire new assets or purchase smaller companies? Royal Dutch Shell plc (NYSE:RDS.A-B) is sitting on nearly $8 billion in cash, and BP plc (NYSE:BP) holds more than $6 billion. If you have listened to what Big Oil operators have been saying, you can assume that there is at least some interest in them looking at opportunistic acquisitions of companies, units, or reserve assets.
ConocoPhillips Corporation (NYSE:COP), though its market cap is near $75 billion, held more than $1 billion in cash at the end of the third quarter. Another substantial E&P player, Apache Corporation (NYSE:APA), has about $1.7 billion in cash and short-term equivalents. Devon Energy Corporation (NYSE:DVN) has about $1.3 billion, and Anadarko Petroleum Corporation (NYSE:APC) has nearly $2 billion.
What energy companies have right now that other industries might not have is at least a perceived ease of access or at least somewhat easier access to capital vie debt or equity sales.
When Will The Rest Of Ford’s (F) Board Leave?
Most corporations have bylaws about how many board members they must have. The federal government requires that boards of directors keep enough outside members to maintain independent audit and compensation committees.
Ford (F) may have some trouble with these rules and regulations. Yesterday, two of its most prominent board members left: John R.H. Bond and Jorma Ollila. Bond is chairman of Vodafone (VOD). Ollila is chairman of Nokia (NOK) and Royal Dutch Shell (RDS). Neither is exactly at retirement age. Their departure follows that of the Ford CFO by less than a week.
Are Refiners Coming Back? (VLO, MRO, TSO, RDS, XOM)
Oil refiners have had a very tough year. Since January, Marathon’s (NYSE:MRO) stock is off nearly 30%, Valero (NYSE:VLO) has plunged more than 50%, and Tesoro (NYSE:TSO) is off more than 60%. All got a bit of a boost yesterday as a result of the approaching hurricane and refinery shutdowns caused by the storm. Valero’s Port Arthur refinery (325,000 b/d), Shell’s (NYSE:RDS.A/RDS.B) Motiva refinery in Port Arthur (285,000 b/d), and Exxon’s (NYSE:XOM) Beaumont refinery (349,000 b/d) plan to shutter operations today. But the outlook could be stronger and longer term than that.
The Energy Information Agency’s weekly status report showed that commercial stocks of crude oil are down 6.7% from the same time last year, and 1.9% from a week earlier. Total gasoline inventories are also lower than last year by 3.5%. Refinery utilization was down to 78.3%.
Will Gustav Raise or Lower Crude Prices? (XOM, RIG, RDS, COP, CVX)
Hurricanes Katrina and Rita in 2005 forced a halt to about 25% of US oil and natural gas production. Now Tropical Storm Gustav, which is predicted to gain hurricane status by the weekend, is drawing a bead on Gulf of Mexico production facilities and crude oil prices are beginning to rise as companies shut down operations and evacuate workers.
Exxon Mobil (NYSE:XOM) has not yet begun to evacuate workers from its offshore platforms, but has begun planning a staged evacuation as Gustav gets closer. Transocean (NYSE:RIG) has already brought about 400 workers ashore and plans to move its remaining eight semi-submersibles, with 1,500 more employees on board, out of harm’s way. Royal Dutch Shell (NYSE:RDS.A/RDS.B) has already evacuated 750 workers from Gulf platforms and plans to withdraw the rest today. ConocoPhillips (NYSE:COP) has already shut-in its only Gulf platform, and Chevron (NYSE:CVX) has begun evacuating workers for some of its platforms. Plans are also being made to close down the 57 onshore refineries along the Gulf coasts of Texas and Louisiana.
Valero Jumps Over Lowered Hurdles (VLO, BP, RDS, COP)
Valero Energy Corp. (NYSE:VLO) has reported 2008 first quarter income of $261 million, or $0.48 EPS, compared with income of $1.1 billion and $1.77 EPS for the first quarter of 2007. After VLO’s March 24th earnings warning, analyst estimates had dropped to $0.29 EPS. Operating revenue for the quarter totaled $27.95 billion, well above estimates of $18.23 billion.
Valero attributed the drop to lower margins for refined products due to higher feedstock costs coupled with lower prices. According to the announcement, the cost for a barrel of WTI rose about $40/barrel, while the wholesale price of gasoline rose by only $34/barrel, a 59% drop in margin. Operating expenses also increased and refinery throughput decreased by about $138,000 b/d.
As we’ve already noted today, both BP plc (NYSE: BP) and Shell (NYSE: RDS) have reported big earnings and revenue increases for the first quarter of 2008. These increases did not come from the companies’ refining operations. Earnings in Shell’s Oil Products segment, which includes refining, are off 20% from a year ago; after adjusting for one-time gains and losses, BP’s refining segment earnings are off by 61%. Last week, ConocoPhillips (NYSE: COP) reported refining earnings were off by 54%. As with Valero, lower refining margin gets the blame.
And there’s no question that refining margins are lower than in the past two years. But look at VLO’s west coast operations as an example of what’s happening. West coast crude is virtually all from Alaska’s North Slope. VLO reported a cost of $96.62/b for crude and a margin of $7.89/b. That’s about 8.2%, which is historically the average margin for refining operations. The fat profits of the past two years have raised expectations for refining margins. This quarter brings a dose of reality.
The company’s stock is trading up about 1.4% at $53.70 before market open this morning; its 52-week trading range is $44.94 to $78.68.
Paul Ausick
April 29, 2008
Top 10 Pre-Market Analyst Calls (MT, T, CRA, ELC, WFR, MSFT, OVTI, RDS, TEN, TXT)
These are not the only upgrades and downgrades on stocks this morning, but these are the main ones that 247WallSt.com is focusing on in early pre-market hours:
- Arcelor Mittal (NYSE: MT) raised to Buy from Hold at Deutsche Bank; also raised to Buy from Hold at Citigroup.
- AT&T (NYSE: T) downgraded to Buy from Hold at Citigroup.
- Celera (NYSE: CRA) downgraded to Neutral at Piper Jaffray.
- Emulex (NYSE: ELX) raised to Outperform at FBR.
- MEMC (NYSE: WFR) raised to Buy from Neutral at Piper Jaffray.
- Microsoft (NASDAQ: MSFT) estimates raised and target raised to $42 at Goldman Sachs.
- OmniVision Tech (NASDAQ: OVTI) raised to Outperform from Neutral at Baird.
- Royal Dutch Shell (NYSE: RDS-A) downgraded to Underweight from Neutral at JPMorgan.
- Tenneco Inc. (NYSE: TEN) raised to Outperform at Bear Stearns.
- Textron (NYSE: TXT) raised to Buy from Hold at Citigroup.
Jon C. Ogg
January 25, 2008
The Business Day In Global Warming (WMI, AMSC, BP, RDS, COST, ENCS)
Waste Management, Inc. (NYSE: WMI) announced a major national initiative to expand its roster of landfill gas to energy (LFGTE) facilities. The program will result in the creation of an additional 60 renewable energy facilities across the country — including the potential of two additional facilities in South Carolina — over the next five years.
New Poll Finds Most Favor Nuclear Energy To Meet NJ’s Rapidly Increasing Electric Demand
American Superconductor Corporation (NASDAQ: AMSC), a leading energy technologies company, today introduced a Static VAR Compensator (“SVC”) product line. AMSC also announced that it has received its first transmission-level SVC order from Bonneville Power Administration (BPA), operator of 75 percent of the high voltage transmission grid in the Pacific Northwest.
Costco (NASDAQ:COST) and PermaCity team to deliver 2.4 Megawatts of Solar Electric Power to La Habra, Westlake Village, Simi Valley and Culver City Costco Warehouses.
Encore Energy Systems, Inc. (OTC: ENCS) issued a stockholder update: Jack Tarry, CEO said: "We remain on a rapid and strong path of growth and expansion. We will continue updating stockholder on our progress. We have many exciting developments to report in the coming days and weeks. This update further demonstrates our ability to set goals and deliver accordingly." This sounds more like noise rather than news.
BP (NYSE:BP) and the Massachusetts Institute of Technology (MIT) announced a major research partnership around energy conversion technologies. The program will explore the conversion of low-value carbon feedstocks such as petcoke and coal to high-value products such as electricity, liquid fuels and chemicals while minimizing carbon dioxide emissions.
Baard Energy, L.L.C. has acquired a technology license from Shell U.S. Clean Coal Energy Inc., part of Royal Dutch Shell (NYSE:RDS), to use its Coal Gasification Process in the gasification portion of its proposed $5 billion coal-to-liquid fuel (CTL) project located in Columbiana County, Ohio. The project will produce over 50,000 barrels per day of jet and diesel fuel, and other liquid products from coal and biomass feedstock.
Green Private Equity Fund, With A Hockey Twist
Jon C. Ogg
September 25, 2007
As a reminder, whether you prefer the term "Global Warming" or"Climate Change" is not the issue as far as 24/7 Wall St. covers it.Green business has become big business, and this affects many publiccompanies today.
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