Monday, December 20, 2010

Energy XXI (Nasdaq:EXXI) Closes Exxon (NYSE:XOM) Deal

Energy XXI (EXXI) announced they have closed the deal with ExxonMobil (NYSE:XOM), where the acquired natural gas and shallow water shelf oil in the Gulf of Mexico from them.

They said in a press release:

"Pro forma for the acquisition, estimated proved plus probable reserves increase 72 percent to 158.1 million BOE from 92.1 million BOE at the company's June 30, 2010 fiscal year end. Production increases to approximately 46,000 BOE per day, up more than 77 percent from the 25,900 BOE per day average in the most recent fiscal quarter ended Sept. 30, 2010.

The transaction was funded through a combination of cash on hand, borrowings against the company's $700 million corporate revolver, as amended, and proceeds from the previously disclosed private placement by the company's operating subsidiary, Energy XXI Gulf Coast, Inc., of $750 million of 9.25% senior unsecured notes due 2017, which closed earlier today. Actual funding requirements at closing totaled $1.01 billion, including the 10 percent deposit that had been placed in escrow. The purchase remains subject to post-closing adjustments to reflect actual operating results since the effective date of Dec. 1, 2010."

Energy XXI closed Friday at $27.08, up $0.66, or 2.50 percent. Exxon closed at $72.17, down $0.05, or 0.07 percent.

Xcel Energy (NYSE:XEL) Files for Gas Rate Increase

Xcel Energy Inc. (NYSE:XEL) announced it has filed for permission to raise gas rates in Colorado by 3 percent, equal to about a $27.5 million increase.

If the rate request is approved, small business and residential customers will have their bills increase by 3 percent rate mentioned above.

Reasons for the request, according to Excel, are to recover investments made to maintain and operate pipeline systems in Colorado, as well as to help with the other expenses and investments they've made since 2006, the last time the rates were raised.

Assuming an increase, natural gas prices for residential customers would rise by about $1.83 a month, bring the average cost to $55.34. For small business customers the rate would rise on average by $6.90 an month, bringing the total to about $220.43 a month.

If approved, the natural gas rate increase would be implemented in August 2011.

DA Davidson just started covering Xcel, and started them off with a "Neutral" rating and a price target of $24.

Thursday, December 9, 2010

MarkWest (NYSE:MWE) Potential Distribution Growth from 5-7 Percent

Even though MarkWest Energy (NYSE:MWE) hasn't grown distribution since 2008, Barclays (NYSE:BCS) sees them growing at a 5-7 percent rate over the next three years, generating a return of 12 to 14 percent.

Barclays said, "MWE reported strong Q3 results above our estimates and raised guidance for 2010. MWE also established 2011 DCF guidance that implies 1.4x coverage based on current distribution. While MWE has not raised distribution since 3Q 2008, we believe MWE has the potential to grow distribution by 5-7% per year in the next three years, resulting in 12-14% total return prospects. We believe this level of growth can be attained organically given its organic expansion plan in the Marcellus and current cost of capital of around - 7.5% which is amongst the lowest in the group given no IDR burden. Assuming 6x return on projects can lead to - 9% accretion."

Barclays maintains an "Overweight" on MarkWest Energy, which closed Wednesday at $40.99, down $0.48, or 1.16 percent. They raised their price target on them from $36 to $43.

Wednesday, December 8, 2010

El Paso Pipeline (NYSE:EPB) EPS Estimates Upped on Recent Transactions

El Paso Pipeline (NYSE:EPB) had its EPS estimates raised by Barclays (NYSE:BCS) on the recent completion of acquisitions of Southern LNG Company and Elba Express Company.

Barclays said, "We are updating our earnings estimates and distribution outlook in conjunction with our recent revisions to our EP forecast. Our new model reflects the recent transaction in which EPB acquired the remaining 49% interests in both Southern LNG Company and Elba Express Company as well as an additional 15% interest in Southern Natural Gas from EP....FY11 EPS lowered from $1.98 to $1.96 and FY12 raised from $2.18 to $2.49."

El Paso was trading at $32.80, down $0.20, or 0.61 percent, as of 1:28 PM EST. The price target on the company was raised from $36 to $36 by Barclays.

Monday, December 6, 2010

ExxonMobil (NYSE:XOM) Blocked in Oil Terminal Sale

ExxonMobil (NYSE:XOM) has again been blocked by the Australian Competition & Consumer Commission over its attempt to sell their share in a fuel terminal located at the port of Gladstone in Queensland.

The regulator said, "The ACCC's preliminary view is that the proposed acquisition is likely to substantially lessen competition in the market for the supply of import-capable petrol and diesel terminal services in the Gladstone region."

Specified was the effect it may have on independent fuel suppliers who could be hindered from entering the region if the deal is allowed to go through.

ExxonMobil was attempting to sell their share in the venture to Caltex Australia.

Wednesday, December 1, 2010

BP (NYSE:BP) Oil Spill Results in 7-Year Ban on Eastern Gulf

News has leaked that Obama will impose and/or continue a 7-year ban on drilling in the eastern part of the Gulf of Mexico in response to the BP (NYSE:BP) oil spill.

The announcement should officially come from Ken Salazar sometime soon.

This is a continuation of the assault upon drilling for oil of the coast of the United States, and in essence keeping the oil moratorium going, even though it has allegedly been lifted.

The fact that there are no permits being allowed shows the ban is effectively still in place, even though it has "officially" been lifted.