Anadarko Petroleum (NYSE:APC) has discovered oil at the Itauna well if offshore waters of Brazil, according to Colombian state-run oil company Ecopetrol (ECOPETROL.BO), who is a partner with Anadarko in the project.
Each company holds a 50 percent stake in the well.
This is the first major exploration find for Ecopetrol, which was in Block BM-C-29, close to Block BM-C-30, the huge Wahoo oil and gas field held by Anadarko.
While there is still a lot of drilling to do, Anadarko spokesman John Christiansen said the company was encouraged by what they've discovered so far in the Block.
Ecopetrol agreed, saying “future developments and projections will be subject to additional data to be obtained during the exploration activities carried out in the block in the following months.”
Estimates will be made at a later date.
Thursday, September 30, 2010
BP (NYSE:BP) to Get Bill Total from Gulf States
A better picture of the liabilities will be seen when the Gulf states given their bills to BP (NYSE:BP), which appears to be sometime in the near future.
Most are negotiating with BP over the final tally, but Alabama Attorney General Troy King went against the wishes of Governor Riley and sued BP. There's still a cloud hanging over his reasoning, as all other states are working with BP in an attempt to come to an agreement.
King attempted to justify his misguided actions by saying BP had a "record of not living up to their commitments." He oddly added, that if BP won't "pay Alabama what it owes, a court will force you to do it."
It's odd because the governor was making progress with BP and wasn't concerned over whether or not they'd pay. Now the state suffers from it.
Other states would prefer to go the route of making a deal with BP too, as the cost and time of going through a trial would be immense, and by time the litigation was over, the present need for the money would be gone.
But the states have said if they aren't able to reach an agreement with BP, they would go the legal route if all else failed.
BP spokesman Scott Dean said, "BP remains committed to paying all legitimate government claims. We have already made more than $1 billion in government payments."
Most are negotiating with BP over the final tally, but Alabama Attorney General Troy King went against the wishes of Governor Riley and sued BP. There's still a cloud hanging over his reasoning, as all other states are working with BP in an attempt to come to an agreement.
King attempted to justify his misguided actions by saying BP had a "record of not living up to their commitments." He oddly added, that if BP won't "pay Alabama what it owes, a court will force you to do it."
It's odd because the governor was making progress with BP and wasn't concerned over whether or not they'd pay. Now the state suffers from it.
Other states would prefer to go the route of making a deal with BP too, as the cost and time of going through a trial would be immense, and by time the litigation was over, the present need for the money would be gone.
But the states have said if they aren't able to reach an agreement with BP, they would go the legal route if all else failed.
BP spokesman Scott Dean said, "BP remains committed to paying all legitimate government claims. We have already made more than $1 billion in government payments."
Wednesday, September 29, 2010
Shell (NYSE:RDS-A) Expanding in Gulf Even in Tough Environment
Even though the BP (NYSE:BP) oil spill has created a tough environment to work in for the oil industry in the Gulf of Mexico, that isn't stopping Royal Dutch Shell Plc (NYSE:RDS-A) from focusing on significant expansion in the region.
According to Marvin Odum, who directs exploration and production at Shell in North and South America, by 2015 and further down the road, he sees the company increasing production by over 250,000 barrels of oil equivalent a day in the Gulf.
Odum said, “In the Gulf of Mexico we’ve increased our efforts in the deepwater in recent years with encouraging results. The longer-term outlook for deepwater remains positive, despite the current drilling moratorium.”
Shell CFO Simon Henry concurs with that, saying the company has six oil discoveries they made recently which could “extend production to the 250,000 barrels a day level for quite some time to come.”
The company said the oil moratorium by the Obama administration has resulted in close to 8,000 barrels of oil less in production a day.
According to Marvin Odum, who directs exploration and production at Shell in North and South America, by 2015 and further down the road, he sees the company increasing production by over 250,000 barrels of oil equivalent a day in the Gulf.
Odum said, “In the Gulf of Mexico we’ve increased our efforts in the deepwater in recent years with encouraging results. The longer-term outlook for deepwater remains positive, despite the current drilling moratorium.”
Shell CFO Simon Henry concurs with that, saying the company has six oil discoveries they made recently which could “extend production to the 250,000 barrels a day level for quite some time to come.”
The company said the oil moratorium by the Obama administration has resulted in close to 8,000 barrels of oil less in production a day.
BP's (NYSE:BP) Incoming CEO Fires Deep Water Well Executive
Andy Inglis, who was the executive in charge of deep water wells at BP (NYSE:BP), was fired by incoming CEO Bob Dudley. Inglis was over exploration and production for the oil giant.
Outgoing CEO Tony Hayward replaced Inglis on the board of TNK-BP in the early part of September, although he'll remain until October 31, according to Dudley.
The divisions Inglis oversaw will be broken up into three units.
After the firing of Inglis, Dudley announced there will be a new unit to oversee safety practices throughout the company.
Heading up the new safety unit will be Mark Bly, who was responsible for the team which did an internal investigation as to the causes of the failed Macondo well.
Dubbed the Safety & Operation Risk unit, it will be authorized to intervene in any technical activity performed by BP and its workers.
An announcement said, "It will have its own expert staff embedded in BP's operating units, including exploration projects and refineries. It will be responsible for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards."
Outgoing CEO Tony Hayward replaced Inglis on the board of TNK-BP in the early part of September, although he'll remain until October 31, according to Dudley.
The divisions Inglis oversaw will be broken up into three units.
After the firing of Inglis, Dudley announced there will be a new unit to oversee safety practices throughout the company.
Heading up the new safety unit will be Mark Bly, who was responsible for the team which did an internal investigation as to the causes of the failed Macondo well.
Dubbed the Safety & Operation Risk unit, it will be authorized to intervene in any technical activity performed by BP and its workers.
An announcement said, "It will have its own expert staff embedded in BP's operating units, including exploration projects and refineries. It will be responsible for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards."
TransAtlantic Petroleum (Amex:TAT) Placed "Under Review" by Canaccord Genuity
TransAtlantic Petroleum (Amex:TAT) has had it price target and rating placed "under Review" by Canaccord Genuity.
Canaccord said, "TransAtlantic Petroleum has provided an operational update and has filed a free writing prospectus for an equity
financing for a minimum of US $50 million up to a maximum of $100 million in gross proceeds...We are placing our recommendation and target price UNDER REVIEW pending disclosure of the specific terms of the announced equity financing."
TransAtlantic says commitments have been received from investors to acquire 30,357,143 common shares in a registered direct offering at a purchase price of $2.80/share. That would generate about $85 million, which after fees and expenses, would come to about $80.6 million.
The stock closed Tuesday at $2.81, down $0.16, or 5.39 percent.
Canaccord said, "TransAtlantic Petroleum has provided an operational update and has filed a free writing prospectus for an equity
financing for a minimum of US $50 million up to a maximum of $100 million in gross proceeds...We are placing our recommendation and target price UNDER REVIEW pending disclosure of the specific terms of the announced equity financing."
TransAtlantic says commitments have been received from investors to acquire 30,357,143 common shares in a registered direct offering at a purchase price of $2.80/share. That would generate about $85 million, which after fees and expenses, would come to about $80.6 million.
The stock closed Tuesday at $2.81, down $0.16, or 5.39 percent.
Chevron (NYSE:CVX) Boldly Files Criminal Charges Against "Activist"
It's far past time for businesses to fight back against outrageous shareholder activism, and Chevron is taking the lead by filing criminal charges against one such so-called shareholder, who only acquired shares so she would rant against the company at a shareholder meeting.
The woman arrested and charged was Antonia Juhasz who attacked the environmental record of Chevron, but further disrupted the meeting by engaging in chanting against them as well. She could get up to six months in jail.
This has rightly caused a lot of buzz and negative feedback from those who promote such things, as it raises the stakes in the game by bringing negative sanctions against these ridiculous people and their alleged causes.
By Chevron taking these steps and gauging the response, they've done the right thing. Now they need to hold to their guns and let the legal process play out, and hopefully this nut will spend some time in jail. Who knows, maybe she'll even sue those who encouraged her to do what she did.
Some attempt to say this is good for business to have fake shareholders buy up a few shares only for the purpose of ranting, as if this is going to change a business or cause them to respond to their childish and outrageous demands.
Allowing people to throw tantrums and engage in anti-social behavior so they can garner attention isn't something businesses should have to put up with, and hopefully more of them will press charges as Chevron has to see if these nuts are willing to pay the price.
To let them run loose without consequences is a big mistake, and only encourages them to go further with their attempts to sabotage meetings and disrupt business in general.
This is a good first step, and other businesses need to follow in the footsteps of Chevron, as it'll cut back on most of the tactics and out-of-control behavior these types of eco-terrorists engage in.
The woman arrested and charged was Antonia Juhasz who attacked the environmental record of Chevron, but further disrupted the meeting by engaging in chanting against them as well. She could get up to six months in jail.
This has rightly caused a lot of buzz and negative feedback from those who promote such things, as it raises the stakes in the game by bringing negative sanctions against these ridiculous people and their alleged causes.
By Chevron taking these steps and gauging the response, they've done the right thing. Now they need to hold to their guns and let the legal process play out, and hopefully this nut will spend some time in jail. Who knows, maybe she'll even sue those who encouraged her to do what she did.
Some attempt to say this is good for business to have fake shareholders buy up a few shares only for the purpose of ranting, as if this is going to change a business or cause them to respond to their childish and outrageous demands.
Allowing people to throw tantrums and engage in anti-social behavior so they can garner attention isn't something businesses should have to put up with, and hopefully more of them will press charges as Chevron has to see if these nuts are willing to pay the price.
To let them run loose without consequences is a big mistake, and only encourages them to go further with their attempts to sabotage meetings and disrupt business in general.
This is a good first step, and other businesses need to follow in the footsteps of Chevron, as it'll cut back on most of the tactics and out-of-control behavior these types of eco-terrorists engage in.
BP (NYSE:BP) Negotiating with Feds Over Oil Fines
BP (NYSE:BP) has entered into negotiations with the Obama administration over coming to some type of settlement over fines related to the Gulf of Mexico oil spill.
According to Rep. Steve Scalise, R-La., his staff got wind of the discussions when working on legislation related to the oil spill which would keep money from fines paid out by BP in the Gulf region.
Unsurprisingly, the real battle is over whether or not BP will be labeled as being grossly negligent in relationship to the spill.
The problem with that is no study, other than the one conducted by BP, has been conducted to find out the absolute reason behind the accident.
So how could the government be battling over something that there is no conclusion made yet? The only reason BP is in their sights is no company related to the spill has the capital to pay the fines other than them. Of course they also had the largest stake in the well, but that has nothing to do with culpability.
It may surprise people, but BP is in the driver's seat in regard to this issue. If the government doesn't come to an agreement with them, all BP has to do is litigate, and that would take years, essentially holding up any fines being paid out until then, and with no guarantee the government would win the case (in reference to BP being considered grossly negligent).
Just under the Clean Water Act, BP could pay out up to $21 billion. It's doubtful it will ever come to that, as that wouldn't include other fines and the money they'll have to pay out from the hundreds of lawsuits.
Even with the size of BP, they just aren't big enough to pay that kind of money out, which doesn't include the $20 billion escrow fund which has the claims part of the fund administered by Kenneth Feinberg.
There should be a settlement of some sort, but it will depend on how far the Department of Justice wants to take it. If they ask for too much, it may leave BP few options.
Again, the problem is there are no conclusions yet made as to the cause of the disaster, and until that is investigated and discovered, it's hard to see the government has to stand on; at least concerning the decision on whether or not BP was grossly negligent, which is the crux of this particular part of the fine process.
According to Rep. Steve Scalise, R-La., his staff got wind of the discussions when working on legislation related to the oil spill which would keep money from fines paid out by BP in the Gulf region.
Unsurprisingly, the real battle is over whether or not BP will be labeled as being grossly negligent in relationship to the spill.
The problem with that is no study, other than the one conducted by BP, has been conducted to find out the absolute reason behind the accident.
So how could the government be battling over something that there is no conclusion made yet? The only reason BP is in their sights is no company related to the spill has the capital to pay the fines other than them. Of course they also had the largest stake in the well, but that has nothing to do with culpability.
It may surprise people, but BP is in the driver's seat in regard to this issue. If the government doesn't come to an agreement with them, all BP has to do is litigate, and that would take years, essentially holding up any fines being paid out until then, and with no guarantee the government would win the case (in reference to BP being considered grossly negligent).
Just under the Clean Water Act, BP could pay out up to $21 billion. It's doubtful it will ever come to that, as that wouldn't include other fines and the money they'll have to pay out from the hundreds of lawsuits.
Even with the size of BP, they just aren't big enough to pay that kind of money out, which doesn't include the $20 billion escrow fund which has the claims part of the fund administered by Kenneth Feinberg.
There should be a settlement of some sort, but it will depend on how far the Department of Justice wants to take it. If they ask for too much, it may leave BP few options.
Again, the problem is there are no conclusions yet made as to the cause of the disaster, and until that is investigated and discovered, it's hard to see the government has to stand on; at least concerning the decision on whether or not BP was grossly negligent, which is the crux of this particular part of the fine process.
BP's (NYSE:BP) Money Should Go to Gulf States Says Feds
While it may seem obvious, and it is, the federal government decided to write a 130-page report on why the Gulf states should be the ones receiving the bulk of the money paid by BP (NYSE:BP) for the oil spill.
It wasn't said, but definitely implied, that there are many people and/or institutions attempting to get a share of the money even though they weren't affected.
Obvious ones are the arrogant so-called scientific institutions and universities who seem to think someone owes them this money just because they exist. Of course it's put in terms that they are the great authorities on the subject.
This of course is sure to be the case with those in health fields and economics as well, who in a time of shortages are attempting to treat BP as if they're a government which they can tap for funds.
Concerning fines associated with the Clean Water Act, which are estimated to end up anywhere from $5 billion to $20 billion, according to Rep. Steve Scalise, R-La, the law must be changed in order to keep most of that money in the Gulf region.
Lawmakers from Louisiana have already introduced bills in the House and Senate to get that part of the process moving.
It wasn't said, but definitely implied, that there are many people and/or institutions attempting to get a share of the money even though they weren't affected.
Obvious ones are the arrogant so-called scientific institutions and universities who seem to think someone owes them this money just because they exist. Of course it's put in terms that they are the great authorities on the subject.
This of course is sure to be the case with those in health fields and economics as well, who in a time of shortages are attempting to treat BP as if they're a government which they can tap for funds.
Concerning fines associated with the Clean Water Act, which are estimated to end up anywhere from $5 billion to $20 billion, according to Rep. Steve Scalise, R-La, the law must be changed in order to keep most of that money in the Gulf region.
Lawmakers from Louisiana have already introduced bills in the House and Senate to get that part of the process moving.
Tuesday, September 28, 2010
Anadarko (NYSE:APC) Liberian Drilling Should Start in December
Anadarko Petroleum Corp. (NYSE:APC) should be ready to start it first drilling at the Venus offshore oil field in December, according to the energy minister of Liberia.
Eugene Shannon, minister of land, mines and energy, said at an energy conference in Africa, "We are looking forward to December to have the first well drilled in Venus Basin by Anadarko."
In September 2009, Anadarko announced they had made a major find off the Sierra Leone coast, which had the potential to open up a gigantic oil business in West Africa.
Billions of barrels of oil could be in the region, where the consortium, led by Anadarko, and including Tullow Oil (OTC:TUWLF), among others, could tap into for years.
Eugene Shannon, minister of land, mines and energy, said at an energy conference in Africa, "We are looking forward to December to have the first well drilled in Venus Basin by Anadarko."
In September 2009, Anadarko announced they had made a major find off the Sierra Leone coast, which had the potential to open up a gigantic oil business in West Africa.
Billions of barrels of oil could be in the region, where the consortium, led by Anadarko, and including Tullow Oil (OTC:TUWLF), among others, could tap into for years.
Citigroup (NYSE:C), BNP, Barclays (NYSE:BCS), RBS (NYSE:RBS) Leading BP (NYSE:BP) $3 Billion Bond Issuance
BP Capital Markets PLC, the funding unit of BP Plc (NYSE:BP), is close to issuing about $3 billion in bonds, led by Citigroup (NYSE:C), BNP Paribas, Barclays Capital (NYSE:BCS), Royal Bank of Scotland (NYSE:RBS) and Mizuho Securities USA Inc.
The bonds will be 5- and 10-year bonds sold in U.S. dollars.
Pricing of the bonds will be somewhere in the low to mid 200 basis points range over Treasuries, with tranches split close to equal.
BP PLC, the parent company, will be guaranteeing the bonds, which are projected to be rated A2 by Moody's Investors Service (NYSE:MC) and A by Standard & Poor's.
In a filing with the Securities and Exchange Commission BP said they will use the capital to pay for existing debt and other general corporate purposes.
A spokesman for BP said the bond issuance isn't specifically related to the BP oil spill and is part of normal financial management of the company.
The bonds will be 5- and 10-year bonds sold in U.S. dollars.
Pricing of the bonds will be somewhere in the low to mid 200 basis points range over Treasuries, with tranches split close to equal.
BP PLC, the parent company, will be guaranteeing the bonds, which are projected to be rated A2 by Moody's Investors Service (NYSE:MC) and A by Standard & Poor's.
In a filing with the Securities and Exchange Commission BP said they will use the capital to pay for existing debt and other general corporate purposes.
A spokesman for BP said the bond issuance isn't specifically related to the BP oil spill and is part of normal financial management of the company.
BP's (NYSE:BP) Texas City Probation Will Remain in Place
The Department of Justice says it won't be revoking the probation of BP (NYSE:BP) in relationship to the 2005 Texas City explosion which claimed the lives of 15 workers.
In a March 2009 deal, BP said it would pay a $50 million fine over the accident and go through a 3-year probation for the violation of air pollution laws in the U.S. connected to the explosion.
Terms of the deal with the U.S. Occupational Safety and Health Administration (OSHA) were they were supposed to finish the work of installing automated safety equipment and perform a review of pressure-relief valves in the refinery.
When BP missed the deadline to complete the work OSHA notified prosecutors of the situation, and the company was fined $87 million for that and other safety problems which emerged later.
The response of the prosecutors was they “might seek revocation and/or extension of probation” until they came into compliance with the agreement.
Prosecutors, after talking to all parties involved, decided to give BP another 18 months to meet the required demands.
In a March 2009 deal, BP said it would pay a $50 million fine over the accident and go through a 3-year probation for the violation of air pollution laws in the U.S. connected to the explosion.
Terms of the deal with the U.S. Occupational Safety and Health Administration (OSHA) were they were supposed to finish the work of installing automated safety equipment and perform a review of pressure-relief valves in the refinery.
When BP missed the deadline to complete the work OSHA notified prosecutors of the situation, and the company was fined $87 million for that and other safety problems which emerged later.
The response of the prosecutors was they “might seek revocation and/or extension of probation” until they came into compliance with the agreement.
Prosecutors, after talking to all parties involved, decided to give BP another 18 months to meet the required demands.
BP's (NYSE:BP) Don Suttles Sees Offshore Drilling Returning in Stages
The oil moratorium and new regulations imposed on the offshore oil industry by the Obama administration will probably result in a slow restart of drilling once the moratorium is lifted, according to BP's (NYSE:BP) chief operating officer Don Suttles.
Suttles said concerning interim regulations, that "Certain equipment, certain wells, certain rigs are going to find it easier to meet those requirements," adding that will probably ultimately lead to a "phased restart" of offshore drilling in the Gulf of Mexico.
William Reilly, a co-chair of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, said when asked about the speed with which drilling will resume and the moratorium lifted, that he and co-Chair Bob Graham "have both raised a number of questions" concerning "just how much one needs to do" to increase the quality of oversight of the 33 oil rigs remaining in the Gulf.
"It's not entirely clear what remains to be done," Reilly said.
In other words, this is an over-response, not matter how it's spun. What more can be done than to ensure equipment is working properly and workers are trained to do their jobs well, and there is testing and follow up to verify it?
While Reilly didn't say it, he does seem to be frustrated over attempting to make something perfect in a world where perfection is impossible.
Suttles said concerning interim regulations, that "Certain equipment, certain wells, certain rigs are going to find it easier to meet those requirements," adding that will probably ultimately lead to a "phased restart" of offshore drilling in the Gulf of Mexico.
William Reilly, a co-chair of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, said when asked about the speed with which drilling will resume and the moratorium lifted, that he and co-Chair Bob Graham "have both raised a number of questions" concerning "just how much one needs to do" to increase the quality of oversight of the 33 oil rigs remaining in the Gulf.
"It's not entirely clear what remains to be done," Reilly said.
In other words, this is an over-response, not matter how it's spun. What more can be done than to ensure equipment is working properly and workers are trained to do their jobs well, and there is testing and follow up to verify it?
While Reilly didn't say it, he does seem to be frustrated over attempting to make something perfect in a world where perfection is impossible.
Citigroup (NYSE:C), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS) Make Little on Petrobras (NYSE:PBR) Fees
Petrobras (NYSE:PBR) has been in the news recently because of its enormous equity offering of $67 billion in common and preferred shares of the company, generating massive media coverage because it's one of the largest equity deals in history.
Global bookrunners like Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) didn't fare as well though, as the fees from the deal won't do much to add to the bottom line of the company.
Fees for the overall deal came to only $147.2 million, a little over 0.20 percent of the deal.
Similar to other deals, the low fees were spun as irrelevant in relationship to the knowledge the participating banks would receive, and marketed as steps to numerous other deals in the near future.
Banco Bradesco of Brazil was the lead manager for the offering, with Grupo Santander of Spain and Banco Itau of Brazil also participating.
Global bookrunners like Citigroup (NYSE:C), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) didn't fare as well though, as the fees from the deal won't do much to add to the bottom line of the company.
Fees for the overall deal came to only $147.2 million, a little over 0.20 percent of the deal.
Similar to other deals, the low fees were spun as irrelevant in relationship to the knowledge the participating banks would receive, and marketed as steps to numerous other deals in the near future.
Banco Bradesco of Brazil was the lead manager for the offering, with Grupo Santander of Spain and Banco Itau of Brazil also participating.
Barclays (NYSE:BCS) Reiterates "Overweight" on EOG (NYSE:EOG)
Barclays said it it reiterating its "Overweight" on EOG Resources (NYSE:EOG), citing "superior cash flow."
"Recent concerns have focused on capital spending, a lack of hedges and well performance rather than the strong cash flow growth that should drive performance. Superior cash flow growth should drive the shares higher. We expect cash flow to nearly double by 2012 vs. 2010 levels. This growth should far exceed peers' 30%," Barclays said.
EOG, which explores for, develops and produces crude oil and natural gas, closed Monday at $91.25, down $0.86, or 0.93 percent.
Barclays has a hefty price target of $155 on the energy company.
"Recent concerns have focused on capital spending, a lack of hedges and well performance rather than the strong cash flow growth that should drive performance. Superior cash flow growth should drive the shares higher. We expect cash flow to nearly double by 2012 vs. 2010 levels. This growth should far exceed peers' 30%," Barclays said.
EOG, which explores for, develops and produces crude oil and natural gas, closed Monday at $91.25, down $0.86, or 0.93 percent.
Barclays has a hefty price target of $155 on the energy company.
Monday, September 27, 2010
Exxon (NYSE:XOM), Shell (NYSE:RDS-A) Increasing Drilling at Qurna
ExxonMobil (NYSE:XOM) and Royal Dutch Shell (NYSE:RDS-A), partners in the West Qurna Phase One field in Iraq, said they're going to increase the amount of drilling in the project by over twice as much as they are now in order to attain the production goals of the venture, according to ExxonMobil Iraq Vice President James Adams..
The goal is to produce 2.325 million barrels of oil daily. That could even result in close to three times the existing 370 wells in the Qurna field.
For the rest of 2010, Adams said only a handful of wells will be able to be drilled, as they are still investigating and evaluating Qurna.
Daily production at the field at this time is 200,000 to 250,000 barrels a day. Earlier in the year Adams said the goal of the venture in the short term is to increase production by 10 percent at the end of the first quarter of next year.
The West Qurna Phase One project has an estimated 8.7 billion barrels in it.
The goal is to produce 2.325 million barrels of oil daily. That could even result in close to three times the existing 370 wells in the Qurna field.
For the rest of 2010, Adams said only a handful of wells will be able to be drilled, as they are still investigating and evaluating Qurna.
Daily production at the field at this time is 200,000 to 250,000 barrels a day. Earlier in the year Adams said the goal of the venture in the short term is to increase production by 10 percent at the end of the first quarter of next year.
The West Qurna Phase One project has an estimated 8.7 billion barrels in it.
Moody's (NYSE:MCO) Says BP (NYSE:BP) Credit Swaps Trading at Investment Grade
According to the market research arm of Moody’s Investors Service (NYSE:MCO), BP (NYSE:BP) credit default swaps are trading at investment-grade levels.
BP debt protected by credit default for a five year period dropped 3.4 basis points to 188.5 shortly after 11:00 AM EDT in New York, according to CMA, a provider of data for the industry. CMA data reveal the CDS contracts have dropped 681 basis points since June 16.
Trading levels imply the company is trading at a rating of Baa3, while Moody's has a rating of A2 on the debt, four levels about the implied rating.
Baa3 is the lowest rung of the investment-grade rating system of Moody's.
BP debt protected by credit default for a five year period dropped 3.4 basis points to 188.5 shortly after 11:00 AM EDT in New York, according to CMA, a provider of data for the industry. CMA data reveal the CDS contracts have dropped 681 basis points since June 16.
Trading levels imply the company is trading at a rating of Baa3, while Moody's has a rating of A2 on the debt, four levels about the implied rating.
Baa3 is the lowest rung of the investment-grade rating system of Moody's.
Halliburton (NYSE:HAL) Says BP (NYSE:BP) Wrong on Cement Work
With billions at stake, determining the fault of companies like BP (NYSE:BP) and Halliburton (NYSE:HAL) will have a dramatic effect on the health of the companies.
BP has blamed Halliburton concerning its cement work, saying the correct amount of hydrogen wasn't included in the cement mix. Halliburton responded by saying it was the design of the oil well itself that caused the problem.
Halliburton's vice president of cementing, Thomas Roth, said BP didn't test the actual cement used in the well, but rather a cement recipe the cement job used as a guide was was what was tested. He added they also used a different manufacturing technique than Halliburton uses when they tested the mix.
Roth also countered at a National Academies hearing in Washington that it was “BP’s well design and operational decisions compromised well integrity,” not the cement mix.
The question arose as to why Roth and Halliburton didn't stop the process if they knew the well design was faulty.
Roth responded by saying they “didn’t see it to be an unsafe operation as it was being executed.”
In an internal investigation, BP has mostly placed the blame of the failed oil well on other companies, including Halliburton and rig owner Transocean (NYSE:RIG).
BP has blamed Halliburton concerning its cement work, saying the correct amount of hydrogen wasn't included in the cement mix. Halliburton responded by saying it was the design of the oil well itself that caused the problem.
Halliburton's vice president of cementing, Thomas Roth, said BP didn't test the actual cement used in the well, but rather a cement recipe the cement job used as a guide was was what was tested. He added they also used a different manufacturing technique than Halliburton uses when they tested the mix.
Roth also countered at a National Academies hearing in Washington that it was “BP’s well design and operational decisions compromised well integrity,” not the cement mix.
The question arose as to why Roth and Halliburton didn't stop the process if they knew the well design was faulty.
Roth responded by saying they “didn’t see it to be an unsafe operation as it was being executed.”
In an internal investigation, BP has mostly placed the blame of the failed oil well on other companies, including Halliburton and rig owner Transocean (NYSE:RIG).
Chevron (NYSE:CVX), Shell (NYSE:RDS-A), Maersk Experiencing Lower September Production
Production in the Danish North Sea will be down for Chevron (NYSE:CVX), Shell (NYSE:RDS-A) and Maersk in September, as maintenance on the oil field continues for the second month in a row.
Consequently, production capacity will be below usual levels because of the ongoing work on a separator container. The water separator is being worked on to prolong the life of the field, as the aging field has an increasing ratio of water to oil and gas.
From September 1 through September 22, Halfdan has produced from 20,000 to 25,000 less barrels a day than normal.
The Dansk Undergrunds Consortium was formed in 1962, with Shell owning 46 percent, Maersk 39 percent, and Chevron 15 percent.
Through August the group has produced 51.3 million barrels of oil.
Consequently, production capacity will be below usual levels because of the ongoing work on a separator container. The water separator is being worked on to prolong the life of the field, as the aging field has an increasing ratio of water to oil and gas.
From September 1 through September 22, Halfdan has produced from 20,000 to 25,000 less barrels a day than normal.
The Dansk Undergrunds Consortium was formed in 1962, with Shell owning 46 percent, Maersk 39 percent, and Chevron 15 percent.
Through August the group has produced 51.3 million barrels of oil.
Halliburton (NYSE:HAL) Acquires Permedia Research Group
Halliburton (NYSE:HAL) announced it has acquired Permedia Research Group, which is based in Ottawa, Canada.
Gene Minnich, vice-president of the Halliburton division said, "The Permedia acquisition builds on our strategy to deliver integrated and differentiated basin-to-reservoir scale solutions and will provide our customers with a better understanding of hydrocarbon generation, migration and trapping mechanisms.
"Combined with Halliburton's leadership in deepwater exploration and unconventional resource plays, Permedia's tools and expertise will enable customers to dramatically improve their understanding of hydrocarbon potential and ultimately enhance their exploration and production success."
What Permedia specifically does is simulate the flows of petroleum in basins, while isolating the different types existing in them.
Permedia will get enhanced ability in exploration modelling as well as carbon dioxide sequestering.
Terms of the deal weren't released.
Gene Minnich, vice-president of the Halliburton division said, "The Permedia acquisition builds on our strategy to deliver integrated and differentiated basin-to-reservoir scale solutions and will provide our customers with a better understanding of hydrocarbon generation, migration and trapping mechanisms.
"Combined with Halliburton's leadership in deepwater exploration and unconventional resource plays, Permedia's tools and expertise will enable customers to dramatically improve their understanding of hydrocarbon potential and ultimately enhance their exploration and production success."
What Permedia specifically does is simulate the flows of petroleum in basins, while isolating the different types existing in them.
Permedia will get enhanced ability in exploration modelling as well as carbon dioxide sequestering.
Terms of the deal weren't released.
BP (NYSE:BP) Denies Texas City Refinery Leaking Gas
BP (NYSE:BP) had denied a claim by a Houston lawyer Tony Buzbee that a unit at its Texas City refinery is leaking gas. They claim the assertions by the lawyer that it represents an "extreme hazard" are inaccurate, although they didn't deny refinery's Pipestill 3A unit was leaking.
A letter from a lawyer to the company demanded they shut down the unit, or he'll petition a court to force them to do it.
BP noted the lawyer also sent out a press release at the same time contacting them.
"There is no need for Mr. Buzbee to be involved in this matter and no need for him to go to court," BP spokesman Michael Marr said in an e-mail to the Houston Chronicle. "Galveston County citizens and community leaders should be skeptical of claims by a lawyer with a presumed financial motive to make them. The fact that Mr. Buzbee sent his letter to the press at the same time as he sent it to BP suggests that publicity may be another goal."
Marr added that BP has contacted numerous government agencies about the equipment mentioned by Buzbee, including the the Texas attorney general, U.S. Environmental Protection Agency, the Galveston County district attorney, the county health district, the Texas Commission on Environmental Quality and the U.S. Occupational Safety and Health Administration.
Consequently, BP said it's none of Buzbee's business.
A letter from a lawyer to the company demanded they shut down the unit, or he'll petition a court to force them to do it.
BP noted the lawyer also sent out a press release at the same time contacting them.
"There is no need for Mr. Buzbee to be involved in this matter and no need for him to go to court," BP spokesman Michael Marr said in an e-mail to the Houston Chronicle. "Galveston County citizens and community leaders should be skeptical of claims by a lawyer with a presumed financial motive to make them. The fact that Mr. Buzbee sent his letter to the press at the same time as he sent it to BP suggests that publicity may be another goal."
Marr added that BP has contacted numerous government agencies about the equipment mentioned by Buzbee, including the the Texas attorney general, U.S. Environmental Protection Agency, the Galveston County district attorney, the county health district, the Texas Commission on Environmental Quality and the U.S. Occupational Safety and Health Administration.
Consequently, BP said it's none of Buzbee's business.
Is Missing BP (NYSE:BP) Oil Really a Mystery?
The assertions by some "independent" scientists that there is all sorts of BP (NYSE:BP) oil in the Gulf of Mexico has continued to be unproven, and the longer it is searched for the more it looks like it may have been asserted from fear and disbelief over the ability of the Gulf of Mexico to heal itself, than from any type of science.
Bordering on science fiction is the alleged 22-mile-long underwater oil plume "found" by the Woods Hole Oceanographic Institution in Massachusetts, but reported two months after the supposed finding, and that only after a report released by the National Oceanic and Atmospheric Administration, which stated about 75 percent of the oil at that time had either been cleaned by the Gulf itself, mostly through evaporation and oil-eating microbes, or to a small degree, the skimming boats.
That didn't fit the narrative wanted by activist scientists and those looking to get a piece of the research pie, and so they continue to make other assertions that have yet to be confirmed. That's why I mentioned fear above, as they fear not getting the millions that inevitably comes from companies in these types of accidents.
The latest assertion is there has been a bunch of oil found on the floor of the ocean, supposedly from the BP oil spill.
But my question is why should NOAA go out and search for every story about hidden oil lingering somewhere in the Gulf using taxpayer dollars.
NOAA is now going off to find oil based on findings of University of Georgia biologist Samantha Joye, who asserts she has found oil on the ocean floor that appears to be from the BP oil well. Supposedly it's about 16 nautical miles from the well.
Joye asserts the oil looks like it settled in a way that would appear to make it look like it came from the well rather than the millions of gallons of oil which naturally leak into the Gulf every year.
It's not that there couldn't be oil, but what's happening here is efforts by institutions and individual scientists to make a name for themselves by finding something that contradicts government studies. That could set them up for life.
That's not to say there may not be some oil out in the Gulf somewhere, but so far original findings of NOAA that the Gulf is rapidly cleaning itself up has been confirmed by followup studies.
Scientists with agendas just don't want to hear that, and their refusal to believe it even in light of prove shows they have an agenda beyond finding the truth about the oil.
The agenda is about garnering funds by making a name for themselves. The Woods Hole Oceanographic Institution has already lost a lot of credibility from their claims, and those who continue to try to contradict the oil findings better be doing it based on real data found, rather than fictitious gigantic plumes or other science fiction stories.
Bordering on science fiction is the alleged 22-mile-long underwater oil plume "found" by the Woods Hole Oceanographic Institution in Massachusetts, but reported two months after the supposed finding, and that only after a report released by the National Oceanic and Atmospheric Administration, which stated about 75 percent of the oil at that time had either been cleaned by the Gulf itself, mostly through evaporation and oil-eating microbes, or to a small degree, the skimming boats.
That didn't fit the narrative wanted by activist scientists and those looking to get a piece of the research pie, and so they continue to make other assertions that have yet to be confirmed. That's why I mentioned fear above, as they fear not getting the millions that inevitably comes from companies in these types of accidents.
The latest assertion is there has been a bunch of oil found on the floor of the ocean, supposedly from the BP oil spill.
But my question is why should NOAA go out and search for every story about hidden oil lingering somewhere in the Gulf using taxpayer dollars.
NOAA is now going off to find oil based on findings of University of Georgia biologist Samantha Joye, who asserts she has found oil on the ocean floor that appears to be from the BP oil well. Supposedly it's about 16 nautical miles from the well.
Joye asserts the oil looks like it settled in a way that would appear to make it look like it came from the well rather than the millions of gallons of oil which naturally leak into the Gulf every year.
It's not that there couldn't be oil, but what's happening here is efforts by institutions and individual scientists to make a name for themselves by finding something that contradicts government studies. That could set them up for life.
That's not to say there may not be some oil out in the Gulf somewhere, but so far original findings of NOAA that the Gulf is rapidly cleaning itself up has been confirmed by followup studies.
Scientists with agendas just don't want to hear that, and their refusal to believe it even in light of prove shows they have an agenda beyond finding the truth about the oil.
The agenda is about garnering funds by making a name for themselves. The Woods Hole Oceanographic Institution has already lost a lot of credibility from their claims, and those who continue to try to contradict the oil findings better be doing it based on real data found, rather than fictitious gigantic plumes or other science fiction stories.
Chevron (NYSE:CVX) Shows How to Fight Eco-terrorists Like Greenpeace
Companies should take a page from the book of Chevron (NYSE:CVX) who battle the controversial so-called environmental group Greenpeace and won, sending them packing from their outrageous and illegal actions of taking over a drilling ship by attaching a "survival pod" to an anchor.
The warring activist faction was ordered by a judge to leave the drilling ship or face fines and/or incarceration. The little cowards are running, whining as they run with their tales between their legs.
Chevron recently said, "This kind of action is foolhardy and demonstrates that Greenpeace is willing to put its volunteers at risk to carry out such reckless publicity stunts and we are concerned for the safety of those involved."
This is of course a marketing tool for people like this who don't have honest jobs, and use the circumstance to call attention to themselves in order to raise funding for their endless and dangerous stunts.
Responding to the court order, Greenpeace representatives noted they couldn't stay doing what they were doing because it would allow Chevron to receive a lot of the money donated to them from supporters.
That's what you do with these types of people and eco-terrorist organizations: threaten to bleed them dry. They do more harm to people because of the added cost of doing business from their ludicrous actions and lawsuits.
If businesses would be more aggressive in these matters, they would find these losers backing way off just calling names form the sidelines.
The warring activist faction was ordered by a judge to leave the drilling ship or face fines and/or incarceration. The little cowards are running, whining as they run with their tales between their legs.
Chevron recently said, "This kind of action is foolhardy and demonstrates that Greenpeace is willing to put its volunteers at risk to carry out such reckless publicity stunts and we are concerned for the safety of those involved."
This is of course a marketing tool for people like this who don't have honest jobs, and use the circumstance to call attention to themselves in order to raise funding for their endless and dangerous stunts.
Responding to the court order, Greenpeace representatives noted they couldn't stay doing what they were doing because it would allow Chevron to receive a lot of the money donated to them from supporters.
That's what you do with these types of people and eco-terrorist organizations: threaten to bleed them dry. They do more harm to people because of the added cost of doing business from their ludicrous actions and lawsuits.
If businesses would be more aggressive in these matters, they would find these losers backing way off just calling names form the sidelines.
JPMorgan (NYSE:JPM) Sees $90 Oil by End of 2010
JPMorgan (NYSE:JPM) said the price of oil by the end of 2010 should reach close to $90 a barrel.
Data perceived as positive for the economy is partly driving the outlook, but probably the weak U.S. dollar is the main catalyst, as the commitment by the Federal Reserve to interfere in the economy if it remains weak a a major driver as well, which is part of the loss of value of the dollar.
One possible thing that could derail the higher price is if consumers continue to hold back on traveling and spending, which could cause demand to go down and inventories to go up, which could push oil prices down to lower levels than expected.
For Friday, in afternoon trade West Texas Intermediate crude for November contracts was up to $76.35 a barrel, gaining $1.17 on the New York Mercantile Exchange.
Data perceived as positive for the economy is partly driving the outlook, but probably the weak U.S. dollar is the main catalyst, as the commitment by the Federal Reserve to interfere in the economy if it remains weak a a major driver as well, which is part of the loss of value of the dollar.
One possible thing that could derail the higher price is if consumers continue to hold back on traveling and spending, which could cause demand to go down and inventories to go up, which could push oil prices down to lower levels than expected.
For Friday, in afternoon trade West Texas Intermediate crude for November contracts was up to $76.35 a barrel, gaining $1.17 on the New York Mercantile Exchange.
Friday, September 24, 2010
BP (NYSE:BP) Loan Could be Boosted to $2.25 Billion
A $2 billion loan sought by BP (NYSE:BP) could be increased to $2.25 billion, as the deal, back by Azerbaijan oil sales, drew more demand than expected.
The 15-plus banks part of the deal offered to lend more than the amount sought by BP.
Revenue from the Azeri-Chirag- Deepwater Gunashli field in the waters of Azerbaijan is the collateral for the loan.
BP is borrowing another $3 billion using collateral from their operations in Angola. That deal will remain as it is, and won't be bumped up.
The loans are for five years, and BP will pay 250 basis points over the London interbank offered rate in the first year, 300 after the second year, and 325 after three years.
The 15-plus banks part of the deal offered to lend more than the amount sought by BP.
Revenue from the Azeri-Chirag- Deepwater Gunashli field in the waters of Azerbaijan is the collateral for the loan.
BP is borrowing another $3 billion using collateral from their operations in Angola. That deal will remain as it is, and won't be bumped up.
The loans are for five years, and BP will pay 250 basis points over the London interbank offered rate in the first year, 300 after the second year, and 325 after three years.
BP (NYSE:BP) Research Funds Fought Over by Scientists Who Think They're Entitled to it
In a pathetic display of arrogance and greed, scientists from outside the Gulf states belief they should be recipients of part of the $500 million research money given by BP (NYSE:BP) to study the effects of the Gulf oil spill.
We've said at Dripping Oil from the beginning that many of the statements and assertions made by "independent" scientists was for the purpose of somehow getting their hands on money from the BP accident.
Some poor scientists are worried they're going to be overlooked because the money will largely dispensed to scientists located in the Gulf community.
Hilariously called critics, they are supposedly fearful scientist with "distinguished" oceanographic organizations who won't be included. Guess what, not everybody gets invited to the party.
Amazingly, some have even labeled the Woods Hole Oceanographic Institution as distinguished, after their assertion there was a giant oil plume blog floating around in the Gulf, even though attempts to find the fictitious oil monster has been met with failure.
Another organization named was the Scripps Institution of Oceanography in California. It's like these elitist, arrogant people think they're smarter and more special than the poor Gulf state scientists.
They really don't care about the scientists per se, but the money their institutions will get as a result of them being named to the studies.
Not a person doesn't know this has always been about money, and even money given by BP to certain Berkley departments is being fought over internally because someone else didn't get it.
Research departments across America are short of funds, and this is an attempt to steal funds from the Gulf states to give the liberal, elitist universities - who are located among two of the most socialist states in America - money after they're own state budgets are a disaster because of their ant-business legislation and endless entitlement programs.
BP is expected to sign a deal which wold give preference to scientific institutions in the Gulf states. Good for them. Let the money stay where it's needed, not in the hands of whining people who continue to believe they are entitled to anything someone else gets.
We've said at Dripping Oil from the beginning that many of the statements and assertions made by "independent" scientists was for the purpose of somehow getting their hands on money from the BP accident.
Some poor scientists are worried they're going to be overlooked because the money will largely dispensed to scientists located in the Gulf community.
Hilariously called critics, they are supposedly fearful scientist with "distinguished" oceanographic organizations who won't be included. Guess what, not everybody gets invited to the party.
Amazingly, some have even labeled the Woods Hole Oceanographic Institution as distinguished, after their assertion there was a giant oil plume blog floating around in the Gulf, even though attempts to find the fictitious oil monster has been met with failure.
Another organization named was the Scripps Institution of Oceanography in California. It's like these elitist, arrogant people think they're smarter and more special than the poor Gulf state scientists.
They really don't care about the scientists per se, but the money their institutions will get as a result of them being named to the studies.
Not a person doesn't know this has always been about money, and even money given by BP to certain Berkley departments is being fought over internally because someone else didn't get it.
Research departments across America are short of funds, and this is an attempt to steal funds from the Gulf states to give the liberal, elitist universities - who are located among two of the most socialist states in America - money after they're own state budgets are a disaster because of their ant-business legislation and endless entitlement programs.
BP is expected to sign a deal which wold give preference to scientific institutions in the Gulf states. Good for them. Let the money stay where it's needed, not in the hands of whining people who continue to believe they are entitled to anything someone else gets.
Dynegy (NYSE:DYN) Downgraded by JP Morgan (NYSE:JPM)
JP Morgan (NYSE:JPM) downgraded Dynegy (NYSE:DYN) from "Overweight" to "Neutral," while lowering the price target on the company from $10 to $5.
After a 40-day period of seeking an alternative to the bid from The Blackstone Group (NYSE:BX), Dynegy, while receiving some interest, didn't end up with any other bids.
Dynegy stated, “Despite this solicitation of interest, Dynegy did not receive any acquisition proposals.”
They said eight parties gained access to private company information in order to make an informed decision, but they evidently didn't like what they saw.
A shareholder meeting of Dynegy on November 17 is set, where the merger with Blackstone will be approved. The deal should close in near the end of November.
After a 40-day period of seeking an alternative to the bid from The Blackstone Group (NYSE:BX), Dynegy, while receiving some interest, didn't end up with any other bids.
Dynegy stated, “Despite this solicitation of interest, Dynegy did not receive any acquisition proposals.”
They said eight parties gained access to private company information in order to make an informed decision, but they evidently didn't like what they saw.
A shareholder meeting of Dynegy on November 17 is set, where the merger with Blackstone will be approved. The deal should close in near the end of November.
Global Hunter Initates Coverage on Callon Petroleum (NYSE:CPE)
Global Hunter said it has initiated coverage on Callon Petroleum (NYSE:CPE), starting them off with a "Buy" rating, citing their move away from exposure to the Gulf of Mexico.
"Callon Petroleum Company refocused its exploration and production efforts onshore in the Permian Basin and North Louisiana, away from its historical focus in the Gulf of Mexico," said Global.
Callon closed Thursday at $3.81, gaining $0.06, or 1.60 percent.
Global has a price target of $7.30 on the oil company.
"Callon Petroleum Company refocused its exploration and production efforts onshore in the Permian Basin and North Louisiana, away from its historical focus in the Gulf of Mexico," said Global.
Callon closed Thursday at $3.81, gaining $0.06, or 1.60 percent.
Global has a price target of $7.30 on the oil company.
Patterson-UTI (Nasdaq:PTEN) Upgraded by Raymond James (NYSE:RJF)
Raymond James (NYSE:RJF) upgraded Patterson-UTI Energy (Nasdaq:PTEN) from "Outperform" to "Strong Buy," increasing their price target from $20 to $22.
Patterson-UTI, among onshore drillers, is among the favorites of a number of commentators and analysts, as Jefferies also upgraded the stock earlier in September.
Because operators released land rigs during the recession to safe capital, Patterson was significantly weakened. Now almost all the market share they lost at that time has been regained.
Since August 25 when the stock stood at $13.90, it has made a nice upward move, although it is still almost level with the $16.23 it was at on July 30.
Patterson closed Thursday at $16.45, gaining $0.05, or 0.30 percent. Volume was almost identical to the 3-month daily average.
Patterson-UTI, among onshore drillers, is among the favorites of a number of commentators and analysts, as Jefferies also upgraded the stock earlier in September.
Because operators released land rigs during the recession to safe capital, Patterson was significantly weakened. Now almost all the market share they lost at that time has been regained.
Since August 25 when the stock stood at $13.90, it has made a nice upward move, although it is still almost level with the $16.23 it was at on July 30.
Patterson closed Thursday at $16.45, gaining $0.05, or 0.30 percent. Volume was almost identical to the 3-month daily average.
BP (NYSE:BP) Oil Spill 500,000 Less Barrels than Government Figures
Results of an independent study of how much oil was spilled by BP (NYSE:BP) into the Gulf came up about 500,000 barrels less than the government estimate of 4.9 million barrels. The new study asserted about 4.4 million barrels were released from the oil well.
The team published the results in the journal "Science," and said the new oil estimate came from watching the video of the oil escaping from the Gulf bottom.
Team leader Timothy Crone, from Columbia University's Lamont-Doherty Earth Observatory, and a marine geophysicist, pushed for the release of high resolution video from the cameras of BP, saying the raw footage from poorer resolution couldn't accurately measure the oil flow.
With availability of only some short high resolution video, the findings in this case do generate questions as to how accurate they are.
Researchers admitted, "We clearly acknowledge the limits of our technique; we're unlikely to ever know the exact figure."
Even though the figures were 500,000 barrels less than the government estimate, some are already suggesting it could be viewed as another situation of the government spinning the numbers.
Who cares? There are those who have already entered the conspiracy theory zone, and until they get the numbers that fit their desired narrative, nothing will be believed.
The Gulf cleaning up the oil naturally so quickly leaves it even harder to get an estimate. With the government figures saying almost 75 percent of the oil had left the Gulf (and that was a while ago), there is no way to confirm if measurements are accurate.
We will never know, and other than how much BP may have to pay in fines, it's largely irrelevant. It's more important to get it cleaned up than obsess with the accuracy of how many barrels spilled into the Gulf.
This seems to be scientists and university departments attempting to create a situation where they can attempt to get funding for their departments and pet projects.
The team published the results in the journal "Science," and said the new oil estimate came from watching the video of the oil escaping from the Gulf bottom.
Team leader Timothy Crone, from Columbia University's Lamont-Doherty Earth Observatory, and a marine geophysicist, pushed for the release of high resolution video from the cameras of BP, saying the raw footage from poorer resolution couldn't accurately measure the oil flow.
With availability of only some short high resolution video, the findings in this case do generate questions as to how accurate they are.
Researchers admitted, "We clearly acknowledge the limits of our technique; we're unlikely to ever know the exact figure."
Even though the figures were 500,000 barrels less than the government estimate, some are already suggesting it could be viewed as another situation of the government spinning the numbers.
Who cares? There are those who have already entered the conspiracy theory zone, and until they get the numbers that fit their desired narrative, nothing will be believed.
The Gulf cleaning up the oil naturally so quickly leaves it even harder to get an estimate. With the government figures saying almost 75 percent of the oil had left the Gulf (and that was a while ago), there is no way to confirm if measurements are accurate.
We will never know, and other than how much BP may have to pay in fines, it's largely irrelevant. It's more important to get it cleaned up than obsess with the accuracy of how many barrels spilled into the Gulf.
This seems to be scientists and university departments attempting to create a situation where they can attempt to get funding for their departments and pet projects.
Thursday, September 23, 2010
BP (NYSE:BP) HOlds Safety Review at Texas City Plant
After two workers were burned from the release of steam at the troubled Texas City plant of BP (NYSE:BP), safety reviews have been and are being conducted in response to the accident.
This is the same plant which had an explosion in 2005 which killed 15 people and left over 170 injured. It's also the plant which is being investigated for benzene release at this time and is being sued in a class action.
The majority of workers at the plant spent most the of Wednesday work day in safety meetings, according to BP spokesman Michael Marr. In spite of the accident, no units at the facility were shut down, added Marr.
One of the injured reportedly had 30 percent of his body covered in burns, and was transported to a regional hospital in Galveston.
Reviews are part of BP's response to increase safety at the plant after the 2005 explosion, deaths and injuries.
This is the same plant which had an explosion in 2005 which killed 15 people and left over 170 injured. It's also the plant which is being investigated for benzene release at this time and is being sued in a class action.
The majority of workers at the plant spent most the of Wednesday work day in safety meetings, according to BP spokesman Michael Marr. In spite of the accident, no units at the facility were shut down, added Marr.
One of the injured reportedly had 30 percent of his body covered in burns, and was transported to a regional hospital in Galveston.
Reviews are part of BP's response to increase safety at the plant after the 2005 explosion, deaths and injuries.
Wetlands Foundation wants BP (NYSE:BP) Fines Money
An organization called America’s Wetlands Foundation has called for the their organization to receive 80 percent of the money BP (NYSE:BP) will pay in fines from the Gulf oil spill.
In a report named “Secure Gulf Project,” the activist group also said they want the federal revenue sharing scheduled to being in 2017 to be moved up to 2011, which would be used to finance projects to conserve restore the coasts.
They also called for a big government oversight authority to oversee the process.
with the amount of fines BP are expected to pay estimated to be a minimum of $5 billion, I'm sure this activist group would love to get there hands on that, along with an unknown amount of taxpayer dollars.
The truth is the Gulf states have made decisions for decades on pursuing energy projects off their coast, now they want to abuse this situation to restore their coasts by using BP and taxpayer money.
Restoration of the coasts as needed in accordance with BP's part it in has nothing to do with restoring the coasts from decades of wear and decisions by residents and politicians in the area.
Over the last five years, Louisiana alone has lost up to 250,000 acres of coastland.
Democrat Sen. Mary Landrieu, D-La., said the oil leak by BP has called attention to the need of coastal restoration, but that has been known for a long time, and as mentioned, has largely happened based upon decisions to pursue the energy markets through offshore drilling.
They should use their own taxes from the drilling to fund restoration, not the taxpayers from everywhere else.
And as far as the America’s Wetlands Foundation, who are they to demand money from anybody, and there should be a thorough vetting process for any non-profit organization seeking funds in connection to the oil spill, as there are so many agendas out there with groups like this, they could use the money to promote parts of those agendas most of us wouldn't approve of.
In a report named “Secure Gulf Project,” the activist group also said they want the federal revenue sharing scheduled to being in 2017 to be moved up to 2011, which would be used to finance projects to conserve restore the coasts.
They also called for a big government oversight authority to oversee the process.
with the amount of fines BP are expected to pay estimated to be a minimum of $5 billion, I'm sure this activist group would love to get there hands on that, along with an unknown amount of taxpayer dollars.
The truth is the Gulf states have made decisions for decades on pursuing energy projects off their coast, now they want to abuse this situation to restore their coasts by using BP and taxpayer money.
Restoration of the coasts as needed in accordance with BP's part it in has nothing to do with restoring the coasts from decades of wear and decisions by residents and politicians in the area.
Over the last five years, Louisiana alone has lost up to 250,000 acres of coastland.
Democrat Sen. Mary Landrieu, D-La., said the oil leak by BP has called attention to the need of coastal restoration, but that has been known for a long time, and as mentioned, has largely happened based upon decisions to pursue the energy markets through offshore drilling.
They should use their own taxes from the drilling to fund restoration, not the taxpayers from everywhere else.
And as far as the America’s Wetlands Foundation, who are they to demand money from anybody, and there should be a thorough vetting process for any non-profit organization seeking funds in connection to the oil spill, as there are so many agendas out there with groups like this, they could use the money to promote parts of those agendas most of us wouldn't approve of.
Exxon (NYSE:XOM), Forest Oil (NYSE:FST) Downgraded by Howard Weil, Hess (NYSE:HES) Upgraded
Howard Weil sent a couple of mixed signals with the oil sector, downgrading ExxonMobil (NYSE:XOM) and Forest Oil (NYSE:FST), while upgrading Hess Corp. (NYSE:HES).
Exxon was downgraded from "Focus Stock" to "Market Outperform" with the price target lowered from $81 to $77.
The oil giant closed at $61.45, providing an approximate 25 percent upside for the stock.
Forest Oil was downgraded from "Market Outperform" to "Market Perform," with the price target lowered from $39 to $34. Forest closed Wednesday at $29.22, down $0.29, or 0.98 percent.
Hess on the other hand was upgraded from "Market Perform" to "Market Outperform. The price target on Hess was downwardly revised from $78 to $73.
Hess closed at $65.40, gaining $0.25, or 0.46 percent.
Exxon was downgraded from "Focus Stock" to "Market Outperform" with the price target lowered from $81 to $77.
The oil giant closed at $61.45, providing an approximate 25 percent upside for the stock.
Forest Oil was downgraded from "Market Outperform" to "Market Perform," with the price target lowered from $39 to $34. Forest closed Wednesday at $29.22, down $0.29, or 0.98 percent.
Hess on the other hand was upgraded from "Market Perform" to "Market Outperform. The price target on Hess was downwardly revised from $78 to $73.
Hess closed at $65.40, gaining $0.25, or 0.46 percent.
Comstock Resources (NYSE:CRK) Has "Market Perform" Maintained by FBR Capital
FBR Capital says it is maintaining their "Market Perform" on Comstock Resources, Inc. (NYSE:CRK).
"Our recent conversations with management suggest a willingness to slow down Haynesville activity to live within/close to cash flows. Also, a growing high condensate area focused Eagle Ford acreage position allows for improving flexibility in capital allocation. We are fans of the steps being undertaken, which signify a focus on returns, preservation of balance sheet strength, and gas price rebound optionality...However, we await a better entry point...," said FBR.
Comstock closed Wednesday at $21, gaining $0.21, or 1.01 percent.
FBR has a price target on the company of $25.
"Our recent conversations with management suggest a willingness to slow down Haynesville activity to live within/close to cash flows. Also, a growing high condensate area focused Eagle Ford acreage position allows for improving flexibility in capital allocation. We are fans of the steps being undertaken, which signify a focus on returns, preservation of balance sheet strength, and gas price rebound optionality...However, we await a better entry point...," said FBR.
Comstock closed Wednesday at $21, gaining $0.21, or 1.01 percent.
FBR has a price target on the company of $25.
BP (NYSE:BP) Oil Spill Response Cut in Half by Government
Government workers now responding to the BP (NYSE:BP) Gulf oil spill have been cut almost in half, dropping from 48,000 right before the temporary cap sealed the well on July 15, now standing at close to 25,000.
With the command center in New Orleans the long-term station to oversee the operations, former centers in Mobile, Alambama and Houma, Louisiana have been shut down, with workers to be consolidated in the Big Easy.
Replacing government point man Thad Allen at the command center will be Coast Guard Rear Admiral Paul Zukunft.
Approximately 600 miles of coastline in the region are allegedly still affected by the oil spill, said Zukunft.
With the command center in New Orleans the long-term station to oversee the operations, former centers in Mobile, Alambama and Houma, Louisiana have been shut down, with workers to be consolidated in the Big Easy.
Replacing government point man Thad Allen at the command center will be Coast Guard Rear Admiral Paul Zukunft.
Approximately 600 miles of coastline in the region are allegedly still affected by the oil spill, said Zukunft.
Morgan Stanley (NYSE:MS) Acquires Forties Crude from Trafigura, Shell (NYSE:RDS-A), BP (NYSE:BP) Also Buy North Sea Grade
Morgan Stanley (NYSE:MS) acquired Forties cargo from Trafigura Beheer BV, the third acquisition they made of the North Sea grade this week.
The latest acquisition by Morgan Stanley was for October 11 to October 14, paying a premium of 10 cents over Dated Brent, according to the financial institution.
For BP, their acquisition was from Royal Dutch Shell Plc (NYSE:RDS-A) for October 7 to October 9 loading. They paid close to 30 cents above Dated Brent, which was 19 cents below the cash cost of North Sea oil.
Shell purchased Forties from Total SA (NYSE:TOT) for October 4 to October 6, paying 20 cents above Dated Brent, according to the two companies.
The November settlement for Brent crude traded at $77.65 a barrel, while the December contract traded at $77.97, generating a contango of 32 cents between the two contracts. Both were in reference to the London-based ICE Futures Europe exchange.
The latest acquisition by Morgan Stanley was for October 11 to October 14, paying a premium of 10 cents over Dated Brent, according to the financial institution.
For BP, their acquisition was from Royal Dutch Shell Plc (NYSE:RDS-A) for October 7 to October 9 loading. They paid close to 30 cents above Dated Brent, which was 19 cents below the cash cost of North Sea oil.
Shell purchased Forties from Total SA (NYSE:TOT) for October 4 to October 6, paying 20 cents above Dated Brent, according to the two companies.
The November settlement for Brent crude traded at $77.65 a barrel, while the December contract traded at $77.97, generating a contango of 32 cents between the two contracts. Both were in reference to the London-based ICE Futures Europe exchange.
Wednesday, September 22, 2010
Exxon (NYSE:XOM), Chevron (NYSE:CVX), BP (NYSE:BP), Conoco (NYSE:COP) On High Oil Supplies
Oil inventories increased by about one million barrels last weak, pushing the share prices of majors like Exxon (NYSE:XOM), Chevron (NYSE:CVX), BP (NYSE:BP), Conoco (NYSE:COP) all down on the day, although Exxon rebounded some as the day went on.
The big blow was analysts had been looking for a drop in oil inventory of about 1.5 million barrels, creating the 2.5 million oil barrel miss.
For indices tracking the energy sector, the NYSE Arca Oil Index (AMEX:XOI) fell $7.04 to 1,001.85, a drop of 0.70 percent; the Amex Natural Gas Index gained $0.70, or 0.14 percent, rising to $513.77 at 3:41 PM EDT; while the Philadelphia Oil Service Index dropped slightly to $189.62 as of 3:43 PM EDT.
BP was at $38.18, falling $0.41, or 1.06 percent at 3:31 PM EDT; Conoco fell to $56.09, losing $0.43, or 0.76 percent at 3:34 PM EDT; Exxon rose slightly to $61.59, gaining $0.05, or 0.08 percent at 3:44 PM EDT, and Chevron fell to $79.34, dropping $0.41, or 0.51 percent as of 3:45 PM EDT
The big blow was analysts had been looking for a drop in oil inventory of about 1.5 million barrels, creating the 2.5 million oil barrel miss.
For indices tracking the energy sector, the NYSE Arca Oil Index (AMEX:XOI) fell $7.04 to 1,001.85, a drop of 0.70 percent; the Amex Natural Gas Index gained $0.70, or 0.14 percent, rising to $513.77 at 3:41 PM EDT; while the Philadelphia Oil Service Index dropped slightly to $189.62 as of 3:43 PM EDT.
BP was at $38.18, falling $0.41, or 1.06 percent at 3:31 PM EDT; Conoco fell to $56.09, losing $0.43, or 0.76 percent at 3:34 PM EDT; Exxon rose slightly to $61.59, gaining $0.05, or 0.08 percent at 3:44 PM EDT, and Chevron fell to $79.34, dropping $0.41, or 0.51 percent as of 3:45 PM EDT
Two BP (NYSE:BP) Workers Burned at Texas City Refinery
A pair of BP (NYSE:BP) workers from the Texas City refinery suffered burns while working at the facility.
While working on a crude unit at the refinery, they were burned by steam, one with up to 30 percent of his body burned. He was transported to a burn unit at a Galveston hospital, while the other was taken to a local hospital.
According to Texas City Fire Chief Brud Gorman, the most injured worker suffered burns to his left arm and leg, as well as to his torso.
The Texas City refinery continues to be one of the more difficult challenges for BP, as they lost 15 workers in an explosion in 2005, which also hurt 180 other workers.
They also are now under investigation concerning the alleged release of poisonous chemicals into the area, including benzene. That has resulted in a class action lawsuit against the company.
While working on a crude unit at the refinery, they were burned by steam, one with up to 30 percent of his body burned. He was transported to a burn unit at a Galveston hospital, while the other was taken to a local hospital.
According to Texas City Fire Chief Brud Gorman, the most injured worker suffered burns to his left arm and leg, as well as to his torso.
The Texas City refinery continues to be one of the more difficult challenges for BP, as they lost 15 workers in an explosion in 2005, which also hurt 180 other workers.
They also are now under investigation concerning the alleged release of poisonous chemicals into the area, including benzene. That has resulted in a class action lawsuit against the company.
No BP (NYSE:BP) Oil Plume Says Government
The alleged gigantic oil plume asserted to roam the Gulf by Woods Hole Oceanographic Institution in Massachusetts has never been proven, and the National Oceanic and Atmospheric Administration (NOAA) said they aren't able to find any such thing beneath the Gulf waters.
As a matter of fact, according to NOAA scientist Sam Walker, "We are continuing to find lower and lower concentrations," confirming the original story the majority of the oil was gone from the Gulf through a variety of means, including oil-eating microbes.
The government report stated almost 75 percent of the oil had disappeared, primarily through natural means, although a small portion was attributed to oil skimming vessels. Evaporation also played a large part in the Gulf cleaning itself up.
The Woods Hole Oceanographic Institution for some unknown reason didn't even make their assertions until after the government report, which was about two months after they allegedly found the giant oil plume monster.
Some so-called scientists just don't like the fact that the Gulf can largely clean itself, as it doesn't fit their narrative, and it doesn't bring in research money.
As a matter of fact, according to NOAA scientist Sam Walker, "We are continuing to find lower and lower concentrations," confirming the original story the majority of the oil was gone from the Gulf through a variety of means, including oil-eating microbes.
The government report stated almost 75 percent of the oil had disappeared, primarily through natural means, although a small portion was attributed to oil skimming vessels. Evaporation also played a large part in the Gulf cleaning itself up.
The Woods Hole Oceanographic Institution for some unknown reason didn't even make their assertions until after the government report, which was about two months after they allegedly found the giant oil plume monster.
Some so-called scientists just don't like the fact that the Gulf can largely clean itself, as it doesn't fit their narrative, and it doesn't bring in research money.
Advantage Oil (NYSE:AAV) Downgraded by TD Newcrest
Advantage Oil & Gas Ltd. (NYSE:AAV) was downgraded by TD Newcrest from "Action List Buy" to "Buy," with a price target of $8 on the company.
As with many companies with significant exposure to natural gas, concerns over prices going forward were the major reason for the downgrade.
"Although we have maintained our PT, we have reduced our rating to BUY to reflect our reduced forecast for natural gas prices. We are mindful of the high future development capital in the company’s 2009 year-end reserve report and the impact lower gas prices may have on Advantage’s implied growth timeline," said TD.
TD did note in spite of that, "the company will be complete its Glacier gas plant in Q2/11, which is doubling in size to 100 mmcf/d. Development of its Glacier Montney gas play remains on track."
Advantage closed Tuesday at $6.23, dropping $0.05, or 0.80 percent.
As with many companies with significant exposure to natural gas, concerns over prices going forward were the major reason for the downgrade.
"Although we have maintained our PT, we have reduced our rating to BUY to reflect our reduced forecast for natural gas prices. We are mindful of the high future development capital in the company’s 2009 year-end reserve report and the impact lower gas prices may have on Advantage’s implied growth timeline," said TD.
TD did note in spite of that, "the company will be complete its Glacier gas plant in Q2/11, which is doubling in size to 100 mmcf/d. Development of its Glacier Montney gas play remains on track."
Advantage closed Tuesday at $6.23, dropping $0.05, or 0.80 percent.
BP (NYSE:BP) Rig Worker Fund Not Drawing Many People
The $100 million fund set up by BP (NYSE:BP) to pay for workers out of a job because of the Obama Gulf oil moratorium has drawn relatively few respondents, as only about 356 workers have applied for grants.
It seems the reasoning behind it is it's either not known too much, as there hasn't been much media coverage, or the possibility most employers have retained their workers despite the moratorium.
Expectations were as many as 9,000 people would seek the grants, which are offered in a range of $3,000 to $30,000.
Now the charity will move to the next stage and will offer support workers of the industry to apply for the grants. Those serving the sector, like supply boats, will be able to receive grants now.
BP finally permanently plugged the oil well after temporarily stopping the oil leak in July.
It seems the reasoning behind it is it's either not known too much, as there hasn't been much media coverage, or the possibility most employers have retained their workers despite the moratorium.
Expectations were as many as 9,000 people would seek the grants, which are offered in a range of $3,000 to $30,000.
Now the charity will move to the next stage and will offer support workers of the industry to apply for the grants. Those serving the sector, like supply boats, will be able to receive grants now.
BP finally permanently plugged the oil well after temporarily stopping the oil leak in July.
Penn West (NYSE:PWE) Upgraded by TD Newcrest
Penn West Energy Trust (NYSE:PWE) was upgraded from "Buy" to "Action List Buy" by TD Newcrest.
"PWT will focus on light oil development in 2010 and 2011 using horizontal drilling and multi-stage fraccing. With industry average industry average capital efficiency results (an improvement from the past) our analysis shows the trust able to show modest growth in our analysis. Recent Joint Venture announcements should also help improve weak historical capital efficiencies as will the increased focus on horizontal drilling," said TD.
TD has a price target of $24 on the energy trust, which closed Tuesday at $19.16, gaining $0.14, or 0.74 percent.
Penn West is an open-end investment trust, which engages in buying, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and assets.
"PWT will focus on light oil development in 2010 and 2011 using horizontal drilling and multi-stage fraccing. With industry average industry average capital efficiency results (an improvement from the past) our analysis shows the trust able to show modest growth in our analysis. Recent Joint Venture announcements should also help improve weak historical capital efficiencies as will the increased focus on horizontal drilling," said TD.
TD has a price target of $24 on the energy trust, which closed Tuesday at $19.16, gaining $0.14, or 0.74 percent.
Penn West is an open-end investment trust, which engages in buying, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and assets.
Tuesday, September 21, 2010
BP (NYSE:BP) Fund Administrator Feinberg Says Cleanup Wages Won't be Deducted
Kenneth Feinberg, administrator of the BP (NYSE:BP) compensation fund, said he'll waive the previous requirement for those making claims to the fund of deducting wages earned from BP by helping with the oil spill cleanup.
This has been a point of contention for some time, and it seemed at the beginning there would be no concession at all, but the growing antagonism toward Feinberg and the slow pace of the fund may have had a part in Feinberg's decision.
According to Feinberg, fisherman will be specifically helped by the decision, who helped with the cleanup when they weren't able to fish.
So far the fund has paid out over $240 million on 68,000 claims.
This has been a point of contention for some time, and it seemed at the beginning there would be no concession at all, but the growing antagonism toward Feinberg and the slow pace of the fund may have had a part in Feinberg's decision.
According to Feinberg, fisherman will be specifically helped by the decision, who helped with the cleanup when they weren't able to fish.
So far the fund has paid out over $240 million on 68,000 claims.
BP (NYSE:BP) Joins Exxon (NYSE:XOM), Shell (NYSE:RDS-A), Conoco (NYSE:COP) and Chevron (NYSE:CVX) Response Group
It took them awhile, but they've finally done it, BP (NYSE:BP) said it will become part of the oil spill rapid response group which already includes Exxon Mobil (NYSE:XOM), Royal Dutch Shell (NYSE:RDS-A), ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX).
The group is called the Marine Well Containment Co., and will be operated by Exxon Mobil.
BP said their technical people and underwater well containment equipment will be made available to the group.
The companies said in the past they're going to spend about $1 billion to train teams and make equipment to respond to any possible future oil spill.
Last week they started promoting their work, which will have the equipment on standby in case they're needed.
The group is called the Marine Well Containment Co., and will be operated by Exxon Mobil.
BP said their technical people and underwater well containment equipment will be made available to the group.
The companies said in the past they're going to spend about $1 billion to train teams and make equipment to respond to any possible future oil spill.
Last week they started promoting their work, which will have the equipment on standby in case they're needed.
FBR Capital Adds Pioneer (NYSE:PXD) to 'Top Pick' List; Drop Devon (NYSE:DVN)
FBR Capital reiterated its "Outperform" rating on Pioneer Natural Resources NYSE:PXD), adds to 'Top Picks' list, while dropping Devon Energy (NYSE:DVN) from the list.
"We are adding Pioneer Natural to our Top Picks list based on our expectations of a higher-than-guided production growth rate and recent operational change-driven material improvements in returns from its core Spraberry asset...We note that we are concurrently removing Devon Energy from our Top Picks list. We maintain an Outperform rating on Devon Energy shares, but are of the opinion that nearer-term risk/reward is better with Pioneer," said FBR.
Pioneer closed Monday at $66.89, up $1.51, or 2.31 percent. Devon closed at $62.93, gaining $0.96, or 1.55 percent.
"We are adding Pioneer Natural to our Top Picks list based on our expectations of a higher-than-guided production growth rate and recent operational change-driven material improvements in returns from its core Spraberry asset...We note that we are concurrently removing Devon Energy from our Top Picks list. We maintain an Outperform rating on Devon Energy shares, but are of the opinion that nearer-term risk/reward is better with Pioneer," said FBR.
Pioneer closed Monday at $66.89, up $1.51, or 2.31 percent. Devon closed at $62.93, gaining $0.96, or 1.55 percent.
Barclays (NYSE:BCS) Response to 'U.S. Oil Services & Drilling: 2010 CEO Energy Conference'
Barclays (NYSE:BCS) said the companies presenting at the 2010 Barclays Capital CEO Energy Conference were overall positive.
They said, "Presenting companies at the 2010 Barclays Capital CEO Energy Conference were generally optimistic. The international E&P spending recovery has begun and appears poised to accelerate into 2011. North America was most often predicted to flatten. The view on the offshore markets was mixed with optimism expressed for ultra-deepwater and premium jackup demand, while the mid-water and commodity jackup markets are likely to remain under pressure. The outlook on the Gulf of Mexico was clearly one of caution."
Barclays went on to describe what they were looking for in companies and specific companies they liked:
"We continue to emphasize companies with leverage to major secular growth themes in the industry. Our top picks are Weatherford (NYSE:WFT), Schlumberger (NYSE:SLB), Cameron International (NYSE:CAM), National Oilwell Varco (NYSE:NOV), Dresser-Rand Group (NYSE:DRC), SeaDrill Limited (NYSE:SDRL) and Pride International (NYSE:PDE)."
They said, "Presenting companies at the 2010 Barclays Capital CEO Energy Conference were generally optimistic. The international E&P spending recovery has begun and appears poised to accelerate into 2011. North America was most often predicted to flatten. The view on the offshore markets was mixed with optimism expressed for ultra-deepwater and premium jackup demand, while the mid-water and commodity jackup markets are likely to remain under pressure. The outlook on the Gulf of Mexico was clearly one of caution."
Barclays went on to describe what they were looking for in companies and specific companies they liked:
"We continue to emphasize companies with leverage to major secular growth themes in the industry. Our top picks are Weatherford (NYSE:WFT), Schlumberger (NYSE:SLB), Cameron International (NYSE:CAM), National Oilwell Varco (NYSE:NOV), Dresser-Rand Group (NYSE:DRC), SeaDrill Limited (NYSE:SDRL) and Pride International (NYSE:PDE)."
Jefferies Raises Sempra Energy (NYSE:SRE) Price Target, Fitch Wary
News of the sale of RBS Sempra Commodities energy solutions division to Noble Gas and Power Corp. brought mixed reactions, with Jefferies increasing the price target on Sempra Energy (NYSE:SRE) and while Fitch said they're maintaining a negative watch.
Jefferies said the reason they raised the price target from $59.50 to $60, was "We find SRE shares undervalued based on P/E valuation.
The sale of Sempra's remaining interest in the RBS Sempra Commodities JV should allow for a higher multiple on a reduced earnings level due to relatively less risk associated with Sempra's other business units."
They reiterated their "Buy" rating on Sempra Energy as well.
Fitch said they're keeping a negative watch on Sempra for the same reasons Jefferies raised the price target, but their concern is what Sempra will do with the capital.
While they say there could be a downgrade ahead, Fitch said they'll wait for the sale of Sempra's North American wholesale power and natural gas unit before making a decision.
Fitch said the wholesale power and natural gas division could fetch from $640 million to $740 million.
Jefferies said the reason they raised the price target from $59.50 to $60, was "We find SRE shares undervalued based on P/E valuation.
The sale of Sempra's remaining interest in the RBS Sempra Commodities JV should allow for a higher multiple on a reduced earnings level due to relatively less risk associated with Sempra's other business units."
They reiterated their "Buy" rating on Sempra Energy as well.
Fitch said they're keeping a negative watch on Sempra for the same reasons Jefferies raised the price target, but their concern is what Sempra will do with the capital.
While they say there could be a downgrade ahead, Fitch said they'll wait for the sale of Sempra's North American wholesale power and natural gas unit before making a decision.
Fitch said the wholesale power and natural gas division could fetch from $640 million to $740 million.
Louisiana Holding BP (NYSE:BP) to Promises
While there's not really any reason at this time to think it, some people are getting nervous now that BP (NYSE:BP) has permanently plugged the oil well, thinking they may cut and run in spite of past promises.
Louisiana, which seems to be the most fearful and paranoid throughout the ordeal, of the Gulf states, let it be known there is still a lot of work to be done in the area.
BP has said from the beginning that they're going to clean up the area, and it isn't clear what prompted Louisiana Wildlife and Fisheries Secretary Bob Barham and Governor Bobby Jindal to imply BP wasn't going to do it.
Barham said, "Just because the well is plugged does not mean this event, the final chapter, has been closed."
Jindal has said until the coast of Louisiana is restored to pre-spill conditions, BP will have a job to do and pay for.
Louisiana, which seems to be the most fearful and paranoid throughout the ordeal, of the Gulf states, let it be known there is still a lot of work to be done in the area.
BP has said from the beginning that they're going to clean up the area, and it isn't clear what prompted Louisiana Wildlife and Fisheries Secretary Bob Barham and Governor Bobby Jindal to imply BP wasn't going to do it.
Barham said, "Just because the well is plugged does not mean this event, the final chapter, has been closed."
Jindal has said until the coast of Louisiana is restored to pre-spill conditions, BP will have a job to do and pay for.
BP (NYSE:BP) Joint Venture Battling for Major Russian Oil Fields
Via their joint venture with OAO Lukoil, TNK-BP, BP (NYSE:BP) is vying for rights to develop the Trebs and Titov oil fields, with the deadline to apply being on Monday the 20th.
The two oil fields are the largest undistributed oil fields in Russia.
Citigroup (NYSE:C) analysts recently said, “As Rosneft’s stellar performance of the past two years was driven by successful Vankor development, we believe that the company that ultimately wins the auction has good chances of being re-rated by the market. The auction will be a litmus test to reveal the sector winner.”
TNK-BP is hungry for this deal, as it would make them the second-largest oil producer in Russia.
This would be a great deal for BP as well, as TNK-BP generates close to 25 percent of production and 20 percent of reserves for the company. They produce about 1.7 million barrels of oil a day.
Opening bid for the assets is $587 million, which is expected to increase significantly because of the competitors wanting them, including, along with TNK-BP: OAO Gazprom, OAO Bashneft and India-based ONGC.
The two oil fields are the largest undistributed oil fields in Russia.
Citigroup (NYSE:C) analysts recently said, “As Rosneft’s stellar performance of the past two years was driven by successful Vankor development, we believe that the company that ultimately wins the auction has good chances of being re-rated by the market. The auction will be a litmus test to reveal the sector winner.”
TNK-BP is hungry for this deal, as it would make them the second-largest oil producer in Russia.
This would be a great deal for BP as well, as TNK-BP generates close to 25 percent of production and 20 percent of reserves for the company. They produce about 1.7 million barrels of oil a day.
Opening bid for the assets is $587 million, which is expected to increase significantly because of the competitors wanting them, including, along with TNK-BP: OAO Gazprom, OAO Bashneft and India-based ONGC.
Beyond BP (NYSE:BP) Oil Spill, Kevin Costner Lays Out His Future Disaster Plan
Kevin Costner, who co-founded 'Ocean Therapy,' who developed a centrifuge system to separate oil and water which was deployed in helping to clean up the Gulf of Mexico, has now proposed a disaster plan for possible future oil spills in the Gulf.
The actor has been peddling his proposal to Gulf governors, members of Congress, and most recently to the Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich.
Costner's suggestion is to create what he called "coastal response facilities," which would be placed in several strategic cities on the Gulf coast, including Corpus Christi, Texas; Gulfport, Miss.; Pensacola, Fla., or Mobile, Ala.; Key West, Fla, and Port Fourchon and Lake Charles,
Costs to implement the plan would be about $895 million, and would entail a scattered fleet of 190 vessels which would be prepared for future accidents.
Oil giants Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP) and Shell (NYSE:RDS-A) earlier in the year said they wanted to put together a rapid-response system, which would focus primarily making a better-designed blowout preventer which would to capture the oil better if there were a disaster.
Coster's plan focuses instead on oil which has reached the surface. That of course coincides with the types of equipment his company uses, which cleans the oil from the surface.
The actor has been peddling his proposal to Gulf governors, members of Congress, and most recently to the Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich.
Costner's suggestion is to create what he called "coastal response facilities," which would be placed in several strategic cities on the Gulf coast, including Corpus Christi, Texas; Gulfport, Miss.; Pensacola, Fla., or Mobile, Ala.; Key West, Fla, and Port Fourchon and Lake Charles,
Costs to implement the plan would be about $895 million, and would entail a scattered fleet of 190 vessels which would be prepared for future accidents.
Oil giants Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP) and Shell (NYSE:RDS-A) earlier in the year said they wanted to put together a rapid-response system, which would focus primarily making a better-designed blowout preventer which would to capture the oil better if there were a disaster.
Coster's plan focuses instead on oil which has reached the surface. That of course coincides with the types of equipment his company uses, which cleans the oil from the surface.
Monday, September 20, 2010
BP (NYSE:BP) Oil Well Declared Officially Dead, Most Oil Gone
BP (NYSE:BP) had an important but muted victory this weekend, as if finally and officially permanently sealed the stricken oil well, closing one chapter of the saga.
The vast majority of the oil which leaked from the well is gone, according to government officials, but some still remains, and it's uncertain as to what extent it's doing damage to the region.
Some scientists have made attempts to say there is a lot more oil left than the government asserts, but their arguments are extremely weak, and evidence small and unconvincing.
These scientists have agendas, and that is to obtain more research money for their university departments. Saying there is more oil than there is, attempts to generate the idea in the public mind that there is more research needed.
So far BP has spend close to $9.5 billion on cleanup, and is paying out another $20 billion via a compensation fund administered by Kenneth Feinberg.
They're also selling up to $30 billion in assets in order to pay for legal claims and other fines they may have to face.
The vast majority of the oil which leaked from the well is gone, according to government officials, but some still remains, and it's uncertain as to what extent it's doing damage to the region.
Some scientists have made attempts to say there is a lot more oil left than the government asserts, but their arguments are extremely weak, and evidence small and unconvincing.
These scientists have agendas, and that is to obtain more research money for their university departments. Saying there is more oil than there is, attempts to generate the idea in the public mind that there is more research needed.
So far BP has spend close to $9.5 billion on cleanup, and is paying out another $20 billion via a compensation fund administered by Kenneth Feinberg.
They're also selling up to $30 billion in assets in order to pay for legal claims and other fines they may have to face.
Conoco (NYSE:COP), Exxon (NYSE:XOM) Earnings Cut by Credit Suisse (NYSE:CS)
Credit Suisse (NYSE:CS) slashed earnings estimates on a number of oil and gas producers, basing their decision on lower price expectations for oil and gas in 2011.
For the overall average price of oil, Credit Suisse is looking at $72.50 a barrel next year. For gas, CS sees the price in a range dropping from their prior $6.50 down to $5.25 per million BTUs. Long term they see the top number remaining viable.
For ConocoPhillips (NYSE:COP), earnings per share was downwardly revised from $6.57 to $5.36, while Exxon was cut from $6.29 to $5.47 for 2011.
Some companies they like, especially because of new exploration projects, are Hess (NYSE:HES), Bunge Limited (NYSE:BG) and Marathon Oil (NYSE:MRO). The idea is this will help them stand out from their competitors.
Another idea from Credit Suisse is the large oil companies need to increase their dividends in order to attract more investors, as it would confirm management is confident about the future cash flows.
For the overall average price of oil, Credit Suisse is looking at $72.50 a barrel next year. For gas, CS sees the price in a range dropping from their prior $6.50 down to $5.25 per million BTUs. Long term they see the top number remaining viable.
For ConocoPhillips (NYSE:COP), earnings per share was downwardly revised from $6.57 to $5.36, while Exxon was cut from $6.29 to $5.47 for 2011.
Some companies they like, especially because of new exploration projects, are Hess (NYSE:HES), Bunge Limited (NYSE:BG) and Marathon Oil (NYSE:MRO). The idea is this will help them stand out from their competitors.
Another idea from Credit Suisse is the large oil companies need to increase their dividends in order to attract more investors, as it would confirm management is confident about the future cash flows.
Moody's (NYSE:MCO) Maintaining BP's (NYSE:BP) Rating
Moody's (NYSE:MCO) they have no further downgrades for oil giant BP's (NYSE:BP) credit rating, adding they continue to see the outlook for the company as stable.
The company said, "Today's (Friday) rating action concludes the review for possible downgrade of BP's ratings that Moody's initiated on 3 June."
With the oil well permanently plugged, and the liabilities becoming a little clearer and able to be somewhat estimated, the current A2 credit rating will stay in place "under a range of likely outcomes for the ultimate total costs resulting from the oil spill," said Moody's.
That's not to say there won't be future credit pressures as the costs from claims and lawsuits mount up for BP, but the downgrading of several notches has included those factors in those actions Moody's took recently.
In other words, there could be more downgrades in the future, but in the short term the credit rating should remain where it is for the company.
The company said, "Today's (Friday) rating action concludes the review for possible downgrade of BP's ratings that Moody's initiated on 3 June."
With the oil well permanently plugged, and the liabilities becoming a little clearer and able to be somewhat estimated, the current A2 credit rating will stay in place "under a range of likely outcomes for the ultimate total costs resulting from the oil spill," said Moody's.
That's not to say there won't be future credit pressures as the costs from claims and lawsuits mount up for BP, but the downgrading of several notches has included those factors in those actions Moody's took recently.
In other words, there could be more downgrades in the future, but in the short term the credit rating should remain where it is for the company.
Chesapeake (NYSE:CHK) Must Inspect 171 Marcellus wells After Methane Leak
A methane leak in six wells of Chesapeake Energy Corp. (NYSE:CHK) has resulted in them being ordered to inspect 171 natural gas wells in Pennsylvania's Marcellus Shale.
Reports were received by Pennsylvania's Department of Environmental Protection over what was described as "bubbling water" on the Susquehanna River in northern part of the state.
Chesapeake believes it is methane gas from six wells about two or three miles from the area it was seen.
DEP Secretary John Hanger said in a statement, "Ventilation systems have been installed at six private water wells. Water has been provided to the three affected homes, and Chesapeake is evaluating and remediating each of its well bores within a four-and-a-half-mile radius of the gas migration, which is essential."
The reason for the order to examine 171 in the region were because the same well casing procedures were used on all of them.
Wells casings are used as a barrier to rock formations in order maintain the integrity of the well. They are placed in a well bore for that purpose.
Chesapeake recently had its price target cut by Credit Suisse (NYSE:CS) because of weak natural gas prices.
Reports were received by Pennsylvania's Department of Environmental Protection over what was described as "bubbling water" on the Susquehanna River in northern part of the state.
Chesapeake believes it is methane gas from six wells about two or three miles from the area it was seen.
DEP Secretary John Hanger said in a statement, "Ventilation systems have been installed at six private water wells. Water has been provided to the three affected homes, and Chesapeake is evaluating and remediating each of its well bores within a four-and-a-half-mile radius of the gas migration, which is essential."
The reason for the order to examine 171 in the region were because the same well casing procedures were used on all of them.
Wells casings are used as a barrier to rock formations in order maintain the integrity of the well. They are placed in a well bore for that purpose.
Chesapeake recently had its price target cut by Credit Suisse (NYSE:CS) because of weak natural gas prices.
Will BP (NYSE:BP) Oil Well Be Used Again?
Although BP (NYSE:BP) has stated its plans are to leave the unpopular oil well plugged and as it is, it's highly unlikely as time goes on that it will remain that was, as too much oil and gas would be available for sell.
This doesn't mean BP would tap into it themselves, even after years and other things are on the minds of people. But it wouldn't be surprising at all to see them sell the asset one day, and with the two relief wells already drilled, it would take just a few added steps to get the oil and gas flowing again.
Some believe the well and general area contain even more oil and gas, making it a waste to leave sitting there.
At one time BP had estimated there were 50 million barrels of oil in the well, with far below that being lost even at the higher government estimates.
Even though BP has said they won't access the well again, they did leave the possibility and probability they'll drill in the same block again; a nine-square-mile area.
If BP did decide to sell the block at some time, estimates are the value of the oil alone would be worth about $3.5 billion, and they could probably sell it for somewhere between $1 to $2 billion.
Either way, it would be surprising if this were to happen any time soon, but it would also be surprising if the block isn't drilled again some time in the distant future.
This doesn't mean BP would tap into it themselves, even after years and other things are on the minds of people. But it wouldn't be surprising at all to see them sell the asset one day, and with the two relief wells already drilled, it would take just a few added steps to get the oil and gas flowing again.
Some believe the well and general area contain even more oil and gas, making it a waste to leave sitting there.
At one time BP had estimated there were 50 million barrels of oil in the well, with far below that being lost even at the higher government estimates.
Even though BP has said they won't access the well again, they did leave the possibility and probability they'll drill in the same block again; a nine-square-mile area.
If BP did decide to sell the block at some time, estimates are the value of the oil alone would be worth about $3.5 billion, and they could probably sell it for somewhere between $1 to $2 billion.
Either way, it would be surprising if this were to happen any time soon, but it would also be surprising if the block isn't drilled again some time in the distant future.
EOG (NYSE:EOG) Upgraded by Credit Suisse (NYSE:CS)
Credit Suisse took the scalpel to a bunch of energy stocks on Friday, slashing a number of them, especially concerning their price targets, including EOG Resources (NYSE:EOG).
EOG was upgraded from "Underperform" to "Neutral," while their price target was cut from $106 to $97.
"Near-term gas markets are likely to remain weak on persistently high supply," Credit Suisse stated.
They see natural gas prices about 13 percent less than their previous estimate, dropping to $5.25 per million metric British thermal units in 2011. Long term they see natural gas prices hitting $6.50.
Like other analysts, Credit Suisse likes energy companies with more exposure to oil. Analysts wrote, "We see a better opportunity today in companies that produce mostly gas, but are drilling few gas wells because they have the liquids-prone assets in place to exploit."
EOG was upgraded for that reason, as the brokerage sees them positioned strongly for growth because of their oil shale holdings.
Other natural gas players have been making oil deals as well for the same reason.
EOG was upgraded from "Underperform" to "Neutral," while their price target was cut from $106 to $97.
"Near-term gas markets are likely to remain weak on persistently high supply," Credit Suisse stated.
They see natural gas prices about 13 percent less than their previous estimate, dropping to $5.25 per million metric British thermal units in 2011. Long term they see natural gas prices hitting $6.50.
Like other analysts, Credit Suisse likes energy companies with more exposure to oil. Analysts wrote, "We see a better opportunity today in companies that produce mostly gas, but are drilling few gas wells because they have the liquids-prone assets in place to exploit."
EOG was upgraded for that reason, as the brokerage sees them positioned strongly for growth because of their oil shale holdings.
Other natural gas players have been making oil deals as well for the same reason.
BP (NYSE:BP) Well Finally Put to Rest
If stopping the oil from leaking with a cap could be called the wake, then the permanent sealing of the BP (NYSE:BP) oil well could be called its funeral; at least in reference to it being in danger of leaking again.
The final batch of cement for the "bottom kill" set on Saturday, which prepared the way for a pressure and weight test, which confirmed the well was permanently sealed.
The cap was placed on the well in July and more cement injected into the top of the well as an extra safety measure in August.
Cement was injected into the well through a relief well in this final step.
Questions on whether or not the block the well is located in will be drilled again by BP, and whether or not the may sell the plugged well to another operator to extract the approximate 46 million barrels of oil remaining, as well as the gas.
BP has said they won't be using the well again, although they left the option open they may drill into the block again.
The final batch of cement for the "bottom kill" set on Saturday, which prepared the way for a pressure and weight test, which confirmed the well was permanently sealed.
The cap was placed on the well in July and more cement injected into the top of the well as an extra safety measure in August.
Cement was injected into the well through a relief well in this final step.
Questions on whether or not the block the well is located in will be drilled again by BP, and whether or not the may sell the plugged well to another operator to extract the approximate 46 million barrels of oil remaining, as well as the gas.
BP has said they won't be using the well again, although they left the option open they may drill into the block again.
Friday, September 17, 2010
Enbridge (NYSE:ENB) Reopens Pipeline
After finding a leak on September in one of their pipelines and ultimately having to shut it down, Enbridge Energy Partners (NYSE:ENB) announced today it has now been reopened, again transporting crude oil from Canada to Illinois refineries.
The pipeline, which at full capacity can move up to 670,000 barrels of oil daily, reportedly provides close to 70 percent of the capacity for Chicago-area refineries.
Gas prices soared by as much as 15 cents a gallon in response to the shutting down of the pipeline.
The leak happened in the Chicago suburb of Romeoville, releasing about 6,100 barrels into the area before shutting it down.
The pipeline, which at full capacity can move up to 670,000 barrels of oil daily, reportedly provides close to 70 percent of the capacity for Chicago-area refineries.
Gas prices soared by as much as 15 cents a gallon in response to the shutting down of the pipeline.
The leak happened in the Chicago suburb of Romeoville, releasing about 6,100 barrels into the area before shutting it down.
Bp (NYSE:BP), Obama Connection Comment Results in TV Anchor Being Fired
TV anchorman Doug McKelway was fired for his comments concerning the connection between Barack Obama and BP (NYSE:BP). McKelway said Obama had received the largest BP campaign contribution in history, $77,051.
The story centered around a small demonstration on Capital Hill, which McKelway was covering. He noted it was a representation of "far-left environmental groups," adding it could "be a risky strategy because the one man who has more campaign contributions from BP than anybody else in history is now sitting in the Oval Office, President Barack Obama, who accepted $77,051 in campaign contributions from BP."
News director and general manager, Bill Lord, didn't like McKelway talking about Obama that way, or about Democrats in general, noting the cap-and-trade bill would increase everyone's utility bills, and Democrats wouldn't pass it before November elections.
Lord confronted McKelway about the broadcast, and after a yelling match, he was put on indefinite suspension in the latter part of July.
Incredibly, McKelway was fired by WJLA-TV, citing citing insubordination and misconduct.
The story centered around a small demonstration on Capital Hill, which McKelway was covering. He noted it was a representation of "far-left environmental groups," adding it could "be a risky strategy because the one man who has more campaign contributions from BP than anybody else in history is now sitting in the Oval Office, President Barack Obama, who accepted $77,051 in campaign contributions from BP."
News director and general manager, Bill Lord, didn't like McKelway talking about Obama that way, or about Democrats in general, noting the cap-and-trade bill would increase everyone's utility bills, and Democrats wouldn't pass it before November elections.
Lord confronted McKelway about the broadcast, and after a yelling match, he was put on indefinite suspension in the latter part of July.
Incredibly, McKelway was fired by WJLA-TV, citing citing insubordination and misconduct.
Fed Moratorium Study Blasted by Critics
The federal government released a so-called report Thursday saying the oil moratorium put in place in the Gulf of Mexico in response to the BP (NYSE:BP) oil spill isn't causing as much economic damage as originally thought.
The government says the moratorium has only caused the temporary loss of 8,000 to 12,000 jobs in the Gulf region, and about $1.8 billion less in spending.
Allegedly on 2,000 oil rig workers have been out of work during the six-month ban, and the other job losses from the Obama administration came from business serving the industry, such as suppliers.
Critics of the ban, which is just about everybody in the Gulf states, say the oil drilling ban has been devastating to the Gulf economy. They have estimated that as many as 50,000 workers would be affected by the ban.
The first estimate from the Interior Department was for 23,000 workers to be out of work from the moratorium.
I wonder if they're taking into account the four oil rigs already gone or leaving the area, with oil companies saying more will leave in the near future.
Those are thousands of jobs that will never return to the region.
The government says the moratorium has only caused the temporary loss of 8,000 to 12,000 jobs in the Gulf region, and about $1.8 billion less in spending.
Allegedly on 2,000 oil rig workers have been out of work during the six-month ban, and the other job losses from the Obama administration came from business serving the industry, such as suppliers.
Critics of the ban, which is just about everybody in the Gulf states, say the oil drilling ban has been devastating to the Gulf economy. They have estimated that as many as 50,000 workers would be affected by the ban.
The first estimate from the Interior Department was for 23,000 workers to be out of work from the moratorium.
I wonder if they're taking into account the four oil rigs already gone or leaving the area, with oil companies saying more will leave in the near future.
Those are thousands of jobs that will never return to the region.
BP (NYSE:BP) Acquires More Singapore Cargo
BP (NYSE:BP) has been to single largest buyer of ultra-low sulfur grade in Singapore in 2010, and they've reportedly acquired another cargo today.
The oil giant bought 150,000 barrels of gasoil from Vitol Group, which contained 10 parts per million of sulfur, or 0.001 percent, according to traders.
BP paid $1.60 a barrel over quoted prices for the 0.5 percent sulfur grade as well. They paid that same amount in a deal on Thursday.
The total acquisition by BP in 2010 has been 7.06 million barrels, with 470,000 already in September.
The oil giant bought 150,000 barrels of gasoil from Vitol Group, which contained 10 parts per million of sulfur, or 0.001 percent, according to traders.
BP paid $1.60 a barrel over quoted prices for the 0.5 percent sulfur grade as well. They paid that same amount in a deal on Thursday.
The total acquisition by BP in 2010 has been 7.06 million barrels, with 470,000 already in September.
Magnum Hunter (AMEX:MHR), DCP (NYSE:DPM) in Natural Gas Joint Venture
Magnum Hunter Resources Corporation (AMEX:MHR) and DCP Midstream Partners, LP (NYSE:DPM) announced they're forming a natural gas joint venture in Ohio and West Virginia.
Each company will hold a 50 percent stake in the new company named Gathering JV.
To get the project going they're going to spend a combined $35 million, with DCP contributing $22.5 million and Magnum the other $12.5 million.
At closing DCP will also pay Magnum another $5 million for specific rights of way which are provided by Magnum, but beyond the original scope of the investment.
Each company will hold a 50 percent stake in the new company named Gathering JV.
To get the project going they're going to spend a combined $35 million, with DCP contributing $22.5 million and Magnum the other $12.5 million.
At closing DCP will also pay Magnum another $5 million for specific rights of way which are provided by Magnum, but beyond the original scope of the investment.
Judge Barbier Denies Fast-track BP (NYSE:BP) Trials
In a push to get speedier trials, plaintiffs in lawsuits against BP (NYSE:BP) asked Judge Carl Barbier to fast-track the trials. This was especially true of those who had injuries or loved ones killed from the accident.
While the judge said he sympathized with those requesting the speedier trials, he said expectation were unrealistic concerning how fast the claims could be tried.
The judge did encourage all the parties filing lawsuits to take into consideration settling with the defendants, or otherwise attempting mediation.
If those choices aren't made, it'll probably be many years before all of this is resolved for everyone involved.
While the judge said he sympathized with those requesting the speedier trials, he said expectation were unrealistic concerning how fast the claims could be tried.
The judge did encourage all the parties filing lawsuits to take into consideration settling with the defendants, or otherwise attempting mediation.
If those choices aren't made, it'll probably be many years before all of this is resolved for everyone involved.
Clean Harbors (NYSE:CLH) Raises Guidance From BP (NYSE:BP) Spill Cleanup
The full-year guidance of Clean Harbors Inc. (NYSE:CLH) has been raised because of the business generated from cleaning up the BP (NYSE:BP) oil spill.
Alan S. McKim, Chairman and Chief Executive Officer of Clean Harbors said, "Our overall business continues to perform well and we are on track to meet our expectations for 2010. In addition to the Gulf region clean-up, this quarter we participated in other emergency response related events including the oil spill in the Kalamazoo River area of Michigan. At the peak level this quarter, we had approximately 500 response-related personnel in Michigan along with a broad array of specialized equipment."
The guidance range for sales in 2010 increased from $1.6 billion to $1.65 billion to $1.63 billion to $1.68 billion.
Clean Harbors also raised its EBITDA from $270 million to $280 million up to $278 million to $288 million.
Capital expenditures will also rise from previous guidance of the mid-$80 million range too close to $100 million.
Alan S. McKim, Chairman and Chief Executive Officer of Clean Harbors said, "Our overall business continues to perform well and we are on track to meet our expectations for 2010. In addition to the Gulf region clean-up, this quarter we participated in other emergency response related events including the oil spill in the Kalamazoo River area of Michigan. At the peak level this quarter, we had approximately 500 response-related personnel in Michigan along with a broad array of specialized equipment."
The guidance range for sales in 2010 increased from $1.6 billion to $1.65 billion to $1.63 billion to $1.68 billion.
Clean Harbors also raised its EBITDA from $270 million to $280 million up to $278 million to $288 million.
Capital expenditures will also rise from previous guidance of the mid-$80 million range too close to $100 million.
Judge Extends BP (NYSE:BP) Lawsuit Claims Until April 2011
A battle over time has been engaged in the hundreds of lawsuits filed against BP (NYSE:BP) and other companies related to the Gulf oil spill, and the judge has issued several decisions in response to it.
Judge Carl Barbier, the judge overseeing the cases, said as far as the time-frame to file lawsuits against the defendants, plaintiffs will be given until April 20, 2011. That's exactly a year since the explosion on the Deepwater Horizon oil rig which led to 11 deaths and oil spilling into the Gulf.
As far as the limitation of liability in connection to Transocean (NYSE:RIG), a trial date has been set for October 2011 do deal with that issue.
Lawyers for the plaintiffs have been pushing for things to go quicker, while BP and others have said they need more time to produce evidence. The judge in that area has sided with the defendants, saying they need a realistic amount of time to mount a defense.
Over the issue of whether or not plaintiffs should be required to go through the $20 billion compensation fund set up by BP to see if they qualify before being allowed to file a lawsuit, the judge hasn't made a ruling on that yet.
Judge Carl Barbier, the judge overseeing the cases, said as far as the time-frame to file lawsuits against the defendants, plaintiffs will be given until April 20, 2011. That's exactly a year since the explosion on the Deepwater Horizon oil rig which led to 11 deaths and oil spilling into the Gulf.
As far as the limitation of liability in connection to Transocean (NYSE:RIG), a trial date has been set for October 2011 do deal with that issue.
Lawyers for the plaintiffs have been pushing for things to go quicker, while BP and others have said they need more time to produce evidence. The judge in that area has sided with the defendants, saying they need a realistic amount of time to mount a defense.
Over the issue of whether or not plaintiffs should be required to go through the $20 billion compensation fund set up by BP to see if they qualify before being allowed to file a lawsuit, the judge hasn't made a ruling on that yet.
BP (NYSE:BP) Says "No" to Paying Alabama Claim
At one time BP (NYSE:BP) had been ready to work with Alabama and their claims against the company from the Gulf of Mexico oil spill, and from the time Alabama Attorney General Troy King decided to file a lawsuit against the oil giant, they've pulled back on advice of legal counsel, as the matter suddenly became complicated.
Officials from BP said the lawsuit filed by King was definitely part of the reason for deciding not to make payments.
Alabama Governor Bob Riley blasted King for the lawsuit, saying, "If that lawsuit hadn't paralyzed our negotiations, we wouldn't have to make these additional cuts to education funding."
King lashed back at Riley, asserting, "...it is time for him to get out of the way and let us do our job. It is obvious that BP is not dealing in good faith and is using every excuse possible to keep from paying its obligations both to the individuals and businesses with claims as well as to the state."
That's an odd comment by King when he seems to be the one that got in the way of negotiations, which were in fact proceeding to an agreeable resolution before he filed his lawsuit against BP.
Riley ended up cutting 2 percent from the school budget on the news, although it affected only potential repairs and supplies.
Officials from BP said the lawsuit filed by King was definitely part of the reason for deciding not to make payments.
Alabama Governor Bob Riley blasted King for the lawsuit, saying, "If that lawsuit hadn't paralyzed our negotiations, we wouldn't have to make these additional cuts to education funding."
King lashed back at Riley, asserting, "...it is time for him to get out of the way and let us do our job. It is obvious that BP is not dealing in good faith and is using every excuse possible to keep from paying its obligations both to the individuals and businesses with claims as well as to the state."
That's an odd comment by King when he seems to be the one that got in the way of negotiations, which were in fact proceeding to an agreeable resolution before he filed his lawsuit against BP.
Riley ended up cutting 2 percent from the school budget on the news, although it affected only potential repairs and supplies.
Exxon (NYSE:XOM) Affected by Enbridge (NYSE:ENB) Pipeline Stoppage
Exxon Mobil Corp. (NYSE:XOM) said through a spokesman that the shut down of the oil pipeline of Enbridge (NYSE:ENB) has affected their operations.
Specifically impacted by the oil leak was Exxon's Joliet, Illinois refinery, which produces 238,600 barrels a day.
While there are challenges to solve the problem, Exxon spokesman Kevin Allexon said the refinery "continues to operate and we've made alternative crude supply arrangements. We expect to meet our contractual commitments for transportation fuels."
Exxon closed Thursday at $60.97, dropping $0.03, or 0.05 percent.
Specifically impacted by the oil leak was Exxon's Joliet, Illinois refinery, which produces 238,600 barrels a day.
While there are challenges to solve the problem, Exxon spokesman Kevin Allexon said the refinery "continues to operate and we've made alternative crude supply arrangements. We expect to meet our contractual commitments for transportation fuels."
Exxon closed Thursday at $60.97, dropping $0.03, or 0.05 percent.
Thursday, September 16, 2010
Wells Fargo (NYSE:WFC) Raises Halliburton (NYSE:HAL) Earnings, Valuation
Wells Fargo (NYSE:WFC) increased its valuation and earnings outlook on Halliburton (NYSE:HAL) today, while maintaining their "Outperform" on them.
"We are increasing our 3Q10 estimate of recurring net income to $0.62 per share from $0.54 per share due to higher North American profit guidance offered by the company at an investor presentation. We are increasing our 2010 and 2011 estimates to $2.05 and $2.69, respectively, from $1.91 and $2.45," said Wells.
A price target range was increased from $35-37 to $37-39.
This seems to imply they don't think there will be huge liabilities for Halliburton resulting from the BP oil spill.
"We are increasing our 3Q10 estimate of recurring net income to $0.62 per share from $0.54 per share due to higher North American profit guidance offered by the company at an investor presentation. We are increasing our 2010 and 2011 estimates to $2.05 and $2.69, respectively, from $1.91 and $2.45," said Wells.
A price target range was increased from $35-37 to $37-39.
This seems to imply they don't think there will be huge liabilities for Halliburton resulting from the BP oil spill.
Louisiana Wants Another $75 Million from BP (NYSE:BP)
BP (NYSE:BP) is being asked to pay another $75 million from Louisiana for their tourism industry. BP has already paid out $15 billion to that end.
Louisiana Lt. Gov. Scott Angelle wrote in a letter to BP's general manager of governmental and public affairs, Larry Thomas, saying after a perception study, it was found that the state was still being "constrained by negative national perception."
The perception he was talking about was in relationship to tourism and seafood from the state as it is allegedly perceived to be affected by the oil spill in the Gulf.
Angelle claims the two brands are "inextricably linked," and so both need to be mitigated.
These so-called negative perceptions need to more money to battle, according to Angelle.
Louisiana Lt. Gov. Scott Angelle wrote in a letter to BP's general manager of governmental and public affairs, Larry Thomas, saying after a perception study, it was found that the state was still being "constrained by negative national perception."
The perception he was talking about was in relationship to tourism and seafood from the state as it is allegedly perceived to be affected by the oil spill in the Gulf.
Angelle claims the two brands are "inextricably linked," and so both need to be mitigated.
These so-called negative perceptions need to more money to battle, according to Angelle.
Mexican States Sue BP (NYSE:BP) Over Oil Spill
The Mexican states of Veracruz, Quintana Roo and Tamaulipas have filed a lawsuit against BP (NYSE:BP) over the Gulf of Mexico oil spill, alleging losses from the disaster.
All the states have coasts on the Gulf of Mexico.
According to attorney Enrique Serna, "The three states have accrued a good amount of damages as a result of the spill." There are expectations the damages will continue to grow, added Serna.
Other companies connected to the oil spill who were also sued by the three Mexican states are Halliburton (NYSE:HAL), Transocean (NYSE:RIG) and Cameron International Corp. (NYSE:CAM).
Serna strangely said that the so-called and unproven underwater oil "plume" will eventually reach Mexico's fishing waters as cold fronts move into the area.
The fictitious plume is just that, and hasn't been found, and was only asserted to exist by some so-called scientist two months before they reported it.
Somehow it mysteriously disappeared and is nowhere to be found, even though it was alleged to be gigantic.
To base part of his case on that is pretty thin and weak, and hopefully will be thrown out by the judge.
All the states have coasts on the Gulf of Mexico.
According to attorney Enrique Serna, "The three states have accrued a good amount of damages as a result of the spill." There are expectations the damages will continue to grow, added Serna.
Other companies connected to the oil spill who were also sued by the three Mexican states are Halliburton (NYSE:HAL), Transocean (NYSE:RIG) and Cameron International Corp. (NYSE:CAM).
Serna strangely said that the so-called and unproven underwater oil "plume" will eventually reach Mexico's fishing waters as cold fronts move into the area.
The fictitious plume is just that, and hasn't been found, and was only asserted to exist by some so-called scientist two months before they reported it.
Somehow it mysteriously disappeared and is nowhere to be found, even though it was alleged to be gigantic.
To base part of his case on that is pretty thin and weak, and hopefully will be thrown out by the judge.
Transocean (NYSE:RIG) Seeking to Limit BP (NYSE:BP) Oil Spill Liability
The trial to decide on whether or not Transocean (NYSE:RIG) will be allowed to limit its liability in relationship to the BP (NYSE:BP) oil spill could start in September 2011.
Transocean asserts that under maritime law its financial liability in the case should be capped at $26.7 million. The parameters of the law are exposure is limited to the value of the cargo of the ship and the ship's value itself.
There are other cases as well which will be ultimately be considered test cases, with eight possible suits being designated as such in relationship to the maritime law mentioned above, the Oil Pollution Act, and a wrongful death claim.
Which cases will be designated at trial cases will be decided by plaintiffs' lawyers.
Transocean asserts that under maritime law its financial liability in the case should be capped at $26.7 million. The parameters of the law are exposure is limited to the value of the cargo of the ship and the ship's value itself.
There are other cases as well which will be ultimately be considered test cases, with eight possible suits being designated as such in relationship to the maritime law mentioned above, the Oil Pollution Act, and a wrongful death claim.
Which cases will be designated at trial cases will be decided by plaintiffs' lawyers.
Lawyers Pushing for Quicker BP (NYSE:BP) Trials
In court filings today, lawyers for alleged victims of the BP (NYSE:BP) oil spill said the first test-case trials should begin in about a year.
Lawyers have been seeking quicker trials for the claimants, while BP and others like Transocean (NYSE:RIG) have wanted to wait to see what happens with the compensation fund, which claims portion is headed by Kenneth Feinberg.
U.S. District Judge Carl Barbier in New Orleans, who is presiding over the trials, was told by lawyers pretrial exchanges of information should begin in October.
BP pushed back saying in it's filing that it's premature at this time to demand early trials, saying it's "overly ambitious."
There are about 400 lawsuits related to the oil spill which Judge Barbier is overseeing.
Lawyers have been seeking quicker trials for the claimants, while BP and others like Transocean (NYSE:RIG) have wanted to wait to see what happens with the compensation fund, which claims portion is headed by Kenneth Feinberg.
U.S. District Judge Carl Barbier in New Orleans, who is presiding over the trials, was told by lawyers pretrial exchanges of information should begin in October.
BP pushed back saying in it's filing that it's premature at this time to demand early trials, saying it's "overly ambitious."
There are about 400 lawsuits related to the oil spill which Judge Barbier is overseeing.
BP (NYSE:BP) Bottom Kill Should be Completed in Four Days
Approaching the targeted intersection point on the Macondo well, which should be reached today, BP (NYSE:BP) is only several days from implementing the final procedure called a "bottom kill," which will permanently seal the oil well.
According to National Incident Commander Thad Allen, the government point man, including when the intersection is made and tests are conducted, it should be about 4 days until the job is completed.
After the testing is finished, an injection of cement and mud will be sent to the bottom of the well to block the oil and gas lying beneath it.
While this is largely a foregone conclusion, it will be good for BP and the government to finally close this chapter of the drama in order to focus on the repercussions of the oil spill, which they of course have already began to do.
According to National Incident Commander Thad Allen, the government point man, including when the intersection is made and tests are conducted, it should be about 4 days until the job is completed.
After the testing is finished, an injection of cement and mud will be sent to the bottom of the well to block the oil and gas lying beneath it.
While this is largely a foregone conclusion, it will be good for BP and the government to finally close this chapter of the drama in order to focus on the repercussions of the oil spill, which they of course have already began to do.
After BP (NYSE:BP) Spill, US Wants All Idle Gulf Wells Plugged
In what appears to be a ridiculous proposal, the interior department has ordered all idle Gulf of Mexico oil wells to be plugged, in response to the BP (NYSE:BP) oil spill.
According to offshore oil regulator Michael Bromwich, the oil infrastructure poses an environmental threat to the area, although natural release of oil in the Gulf on an annual basis is greater than that released by the BP accident.
There is also the credible belief that oil replenishes naturally, and is perpetual as far as the oil wells are concerned. If that is true, they could be plugging oil wells that could be producing wells indefinitely.
At this time there are about 3,500 non-producing wells in the Gulf of Mexico, along with about 650 oil and gas platforms not in use, which would also be required to be dismantled, although it wasn't clear what risk they pose in any way.
Parameters of the order are for wells that haven't been used in the last five years, along with their structures and pipelines.
The new regulations will be implemented in October.
According to offshore oil regulator Michael Bromwich, the oil infrastructure poses an environmental threat to the area, although natural release of oil in the Gulf on an annual basis is greater than that released by the BP accident.
There is also the credible belief that oil replenishes naturally, and is perpetual as far as the oil wells are concerned. If that is true, they could be plugging oil wells that could be producing wells indefinitely.
At this time there are about 3,500 non-producing wells in the Gulf of Mexico, along with about 650 oil and gas platforms not in use, which would also be required to be dismantled, although it wasn't clear what risk they pose in any way.
Parameters of the order are for wells that haven't been used in the last five years, along with their structures and pipelines.
The new regulations will be implemented in October.
BP (NYSE:BP) Sued Over Alleged Benzene Exposure Related to Texas City Refinery
A law firm based in Houston has sued BP (NYSE:BP) over claims they exposed people in the area to Benzene from the incident at the Texas City refinery. The firm, Vujasinovic & Beckcom, represent 120 people who've made the claims.
The incident is in connection to a malfunction of a hydrogen compressor at the ultracracker unit of the refinery.
All 120 of the plaintiffs work at the refinery or live close to it.
In a statement, Vujasinovic & Beckcom said, “As a result of this re-routing, a number of dangerous chemicals, including benzene, began releasing in to the air. These chemicals were continuously released while BP tried to fix the compressor. BP did not fix the compressor until May 16, 2010.”
The rerouting refers to flaring the gasses while they worked to fix the compressor.
Approximately 538,000 pounds of benzene was released into the air during that time, according to the complaint.
The incident is in connection to a malfunction of a hydrogen compressor at the ultracracker unit of the refinery.
All 120 of the plaintiffs work at the refinery or live close to it.
In a statement, Vujasinovic & Beckcom said, “As a result of this re-routing, a number of dangerous chemicals, including benzene, began releasing in to the air. These chemicals were continuously released while BP tried to fix the compressor. BP did not fix the compressor until May 16, 2010.”
The rerouting refers to flaring the gasses while they worked to fix the compressor.
Approximately 538,000 pounds of benzene was released into the air during that time, according to the complaint.
Another Transocean (NYSE:RIG) Oil Rig Leaving Gulf
The news gets worse in light of the misguided Obama oil moratorium which continues to crush the Gulf region, as over 20,000 workers remain out of work because of the decision, while a fourth rig is now about to leave the region permanently, with Transocean (NYSE:RIG) saying they'll be removing a second rig from the area, while Diamond Offshore Drilling Inc (NYSE:DO) has already removed two.
Diamond and Anadarko (NYSE:APC) are in a battle over a third oil rig, which Anadarko wants to cancel the contract because of the moratorium.
Transocean CEO Steven Newman said concerning Gulf drilling activity, that there will probably be no meaningful continuation until sometime in 2011.
The growing idea is the regulatory atmosphere will probably result in a much less robust Gulf drilling area, and loss of thousands of jobs on a permanent basis.
Hopefully that will change after the mid-term elections.
Diamond and Anadarko (NYSE:APC) are in a battle over a third oil rig, which Anadarko wants to cancel the contract because of the moratorium.
Transocean CEO Steven Newman said concerning Gulf drilling activity, that there will probably be no meaningful continuation until sometime in 2011.
The growing idea is the regulatory atmosphere will probably result in a much less robust Gulf drilling area, and loss of thousands of jobs on a permanent basis.
Hopefully that will change after the mid-term elections.
BP (NYSE:BP) Sets Aside $19 Billion for North Sea Investment
In a hearing with British lawmakers, among other things, outgoing BP (NYSE:BP) Chief Executive Officer Tony Hayward said over the next five years the oil giant will invest up to $19 billion in the North Sea off the coast of Britain.
The drilling of a deepwater well off the Shetland Islands is scheduled for 2011.
Questions rose to BP's commitment to the region in response to the oil spill in the Gulf of Mexico. Hayward said no investment plans by the company for the North Sea have been altered.
Hayward also estimated oil and gas production from deepwater drilling will be close to 10 million barrels a day by 2020, twice what it is today.
The drilling of a deepwater well off the Shetland Islands is scheduled for 2011.
Questions rose to BP's commitment to the region in response to the oil spill in the Gulf of Mexico. Hayward said no investment plans by the company for the North Sea have been altered.
Hayward also estimated oil and gas production from deepwater drilling will be close to 10 million barrels a day by 2020, twice what it is today.
Wednesday, September 15, 2010
Enbridge (NYSE:EEP) Given Go Ahead to Reopen Pipeline
The price of crude oil dropped today on the news Enbridge Energy Partners LP (NYSE:EEP) has been given permission to restart their pipeline which transports oil from Canada to the midwestern states of the U.S.
Sometime near the end of the week the pipeline should be operational again.
In what appears to be an overreaction concerning supply issues, prices are falling as reassurance the oil will flow has emerged.
After investigation, the government said there are no "systemic problems" with the pipeline, leading to the decision to reopen it.
Approximately 6,500 barrels of oil leaked from the pipe, which has been shut since September 9.
Sometime near the end of the week the pipeline should be operational again.
In what appears to be an overreaction concerning supply issues, prices are falling as reassurance the oil will flow has emerged.
After investigation, the government said there are no "systemic problems" with the pipeline, leading to the decision to reopen it.
Approximately 6,500 barrels of oil leaked from the pipe, which has been shut since September 9.
Barclays (NYSE:BCS) Reiterates "Equalweight" on Delek (NYSE:DK)
Barclays (NYSE:BCS) has reiterated its "Equalweight" on Delek US Holdings, Inc. (NYSE:DK).
"On 9/13, Delek released a new investor presentation in anticipation of their participation in the Barclays Capital CEO Energy and Power Conference on 9/15 and 9/16. In light of the company's longer than expected refining downtime in 3Q10 (14 days versus the previous estimate of 7 days), partially offset by a better than anticipated marketing margin, we lower our 3Q, 4Q and full year 2010 EPS estimates to -$0.06, -$0.14 and -$0.25, previously -$0.04, -$0.13 and -$0.20, respectively," said Barclays.
They kept a price target on Delek of $7 a share.
Delek, which engages in refining and marketing petroleum products in the United States, was at $6.81, dropping $0.07, or 1.02 percent, as of
1:40 PM EDT.
"On 9/13, Delek released a new investor presentation in anticipation of their participation in the Barclays Capital CEO Energy and Power Conference on 9/15 and 9/16. In light of the company's longer than expected refining downtime in 3Q10 (14 days versus the previous estimate of 7 days), partially offset by a better than anticipated marketing margin, we lower our 3Q, 4Q and full year 2010 EPS estimates to -$0.06, -$0.14 and -$0.25, previously -$0.04, -$0.13 and -$0.20, respectively," said Barclays.
They kept a price target on Delek of $7 a share.
Delek, which engages in refining and marketing petroleum products in the United States, was at $6.81, dropping $0.07, or 1.02 percent, as of
1:40 PM EDT.
BP (NYSE:BP) Dividend Wasn't Dropped because of US Influence Says Hayward
In what may of been the cause of the most intense strain between the Obama administration and the UK during the BP oil spill - the dropping of the dividend - outgoing CEO Tony Hayward was pressed by UK lawmakers if the decision to suspend the dividend came because of pressure from the U.S.
Hayward said that wasn't the case, saying the “decision to suspend the dividend was taken by the board,” adding it was “taken in the interest of preserving the financial strength of BP and in the interests of shareholders.”
It caused an outcry by shareholder in the UK, whose holdings in BP were the largest in relationship to their pensions. Just about as many in the U.S. also counted on the share value and dividends in BP, which resulted in lawsuits from some U.S. pensions.
Committee Chairman Tim Yeo said before the hearing that he wanted to find out if there was more political risk by continuing operations in the U.S. He added in a phone interview yesterday that the U.S. had partaken in a "bit of a witch hunt" toward the oil giant.
Hayward said that wasn't the case, saying the “decision to suspend the dividend was taken by the board,” adding it was “taken in the interest of preserving the financial strength of BP and in the interests of shareholders.”
It caused an outcry by shareholder in the UK, whose holdings in BP were the largest in relationship to their pensions. Just about as many in the U.S. also counted on the share value and dividends in BP, which resulted in lawsuits from some U.S. pensions.
Committee Chairman Tim Yeo said before the hearing that he wanted to find out if there was more political risk by continuing operations in the U.S. He added in a phone interview yesterday that the U.S. had partaken in a "bit of a witch hunt" toward the oil giant.
Transocean (NYSE:RIG) CEO Says BP (NYSE:BP) "Generally Correct" on Report
In somewhat of a turnaround, Transocean (NYSE:RIG) chief executive officer Steven Newman said today that he agreed with the "general conclusion" of the recently released BP (NYSE:BP) report on the series of events which ultimately led to the Deepwater Horizon oil rig explosion.
At a conference held by Barclays Capital (NYSE:BCS) in New York, Newman said, "I agree with the general conclusion of BP's report that this was a combination of events."
After the report was released, Newman said it was "self-serving" to BP, and that "BP made a series of cost-saving decisions that increased risk - in some cases, severely."
Halliburton (NYSE:HAL), which have particularly and strongly pointed out for the alleged failure of their cement work in the incident, also blasted the BP report.
BP said there were a series of eight failures which resulted in the explosion on the oil rig owned by Transocean but operated by BP.
At a conference held by Barclays Capital (NYSE:BCS) in New York, Newman said, "I agree with the general conclusion of BP's report that this was a combination of events."
After the report was released, Newman said it was "self-serving" to BP, and that "BP made a series of cost-saving decisions that increased risk - in some cases, severely."
Halliburton (NYSE:HAL), which have particularly and strongly pointed out for the alleged failure of their cement work in the incident, also blasted the BP report.
BP said there were a series of eight failures which resulted in the explosion on the oil rig owned by Transocean but operated by BP.
Forest Oil (NYSE:FST) Upgraded by Barclays (NYSE:BCS)
Barclays upgraded Forest Oil (NYSE:FST) from "Equalweight" to "Overweight," with a price target of $40 on them, up from the prior price target of $38.
Short term, if Forest continues to be successful at Granite Wash, that should increase upside production for 2010 and 2011, while ongoing success at Eagle Ford and Nikanassin would contribute to longer term growth.
"Continued success in the Granite Wash could drive some upside to our production estimates in '10 and '11. Success in the Nikanassin play in Canada and Eagle Ford Shale could have a greater impact to the growth profile in 2012 and beyond," said Barclays.
Forest closed at $29.21 Tuesday, falling $0.14, or 0.48 percent.
Short term, if Forest continues to be successful at Granite Wash, that should increase upside production for 2010 and 2011, while ongoing success at Eagle Ford and Nikanassin would contribute to longer term growth.
"Continued success in the Granite Wash could drive some upside to our production estimates in '10 and '11. Success in the Nikanassin play in Canada and Eagle Ford Shale could have a greater impact to the growth profile in 2012 and beyond," said Barclays.
Forest closed at $29.21 Tuesday, falling $0.14, or 0.48 percent.
ING Group Upgrades Total S.A. (NYSE:TOT)
ING Group upgraded Total S.A. (NYSE:TOT) from "Hold" to "Buy," citing improved volume growth and committed spending to that end.
"We see renewed interest in Total's improved (and increasingly credible) volume-growth offering near term, supported by a robust spending commitment," said ING.
The global integrated oil and gas company closed Tuesday's session at $51.09, up $0.53, or 1.05 percent.
"We see renewed interest in Total's improved (and increasingly credible) volume-growth offering near term, supported by a robust spending commitment," said ING.
The global integrated oil and gas company closed Tuesday's session at $51.09, up $0.53, or 1.05 percent.
Canaccord Reiterates "Buy" on TransGlobe (Nasdaq:TGA)
Canaccord Genuity reiterated its "Buy" on TransGlobe Energy (Nasdaq:TGA), citing several important elements to justify their ongoing confidence in the company.
"TransGlobe has no external funding requirements, a strong balance sheet and extensive resource upside potential in Egypt both through the application of fracture stimulating techniques at the company’s Arta Field and the expanding boundaries of the overall Nukhul Formation," said Canaccord.
Transglobe closed Tuesday at $7.86, down $0.05, or 0.63 percent.
Canaccord has a price target of C$10 on TransGlobe.
"TransGlobe has no external funding requirements, a strong balance sheet and extensive resource upside potential in Egypt both through the application of fracture stimulating techniques at the company’s Arta Field and the expanding boundaries of the overall Nukhul Formation," said Canaccord.
Transglobe closed Tuesday at $7.86, down $0.05, or 0.63 percent.
Canaccord has a price target of C$10 on TransGlobe.
Plains Exploration (NYSE:PXP) Upgraded by Hapoalim Securities
Hapoalim Securities upgraded Plains Exploration (NYSE:PXP) to "Buy," with a price target of $30.
"While PXP decides what to do with $1.4 billion bank credit, and $1.4 billion Cash ($2.8 billion), we believe there is an opportunity to own the stock on 2011 metrics post sale: production per debt adjusted share, cash margins, capital intensity, and EV/CF versus peers," said Hapoalim.
Most of Plains development, exploration, and production of oil and gas properties is performed in the U.S.
Plains closed Tuesday at $25.60, up $0.12, or 0.47 percent.
"While PXP decides what to do with $1.4 billion bank credit, and $1.4 billion Cash ($2.8 billion), we believe there is an opportunity to own the stock on 2011 metrics post sale: production per debt adjusted share, cash margins, capital intensity, and EV/CF versus peers," said Hapoalim.
Most of Plains development, exploration, and production of oil and gas properties is performed in the U.S.
Plains closed Tuesday at $25.60, up $0.12, or 0.47 percent.
BNP Paribas Slashes Oil Estimate to $80 a Barrel
Citing the ongoing weak economies in the West, BNP Paribas cuts its oil price estimate to $80 a barrel, down from its prior projection of $82 a barrel for 2010.
Paribas also cut its 2011 oil price target from $89 a barrel to $86 a barrel.
With oil settling at $76.80 a barrel, and nothing out there to suggest economics in the West will improve any time soon, the $80 a barrel downward revisement for 2010 may even be optimistic.
An ongoing contango situation suggests to Paribas that oil will probably be stored on tankers rather than brought to market.
Paribas also cut its 2011 oil price target from $89 a barrel to $86 a barrel.
With oil settling at $76.80 a barrel, and nothing out there to suggest economics in the West will improve any time soon, the $80 a barrel downward revisement for 2010 may even be optimistic.
An ongoing contango situation suggests to Paribas that oil will probably be stored on tankers rather than brought to market.
Shell (NYSE:RDS-A) May Invest $1 Billion Annually in China
Royal Dutch Shell (NYSE:RDS-A) CFO Simon Henry said in an interview with Bloomberg that they could invest $1 billion annually in China to get their commercial gas production operational.
Henry said, "With successful exploration, we could easily invest $1 billion a year in the following five to seven years. The geology could be as attractive as the U.S."
In the report, Henry was cited as saying earlier in the year that China's share of gas for use in the country should increase to 10 percent within the next 10 years.
Now natural gas accounts for four percent of energy consumption in the middle kingdom.
Henry said, "With successful exploration, we could easily invest $1 billion a year in the following five to seven years. The geology could be as attractive as the U.S."
In the report, Henry was cited as saying earlier in the year that China's share of gas for use in the country should increase to 10 percent within the next 10 years.
Now natural gas accounts for four percent of energy consumption in the middle kingdom.
Chevron (NYSE:CVX) Increasing Production at Frade in Brazil
Chevron (NYSE:CVX) announced it is increasing production at its Frade field off the coast of Brazil.
The oil giant will increase production to about 65,000 barrels a day at Frade, which is about 45 percent complete, with approximately another year and a half left to drill the area.
Estimates for the oil field, are recoverable reserves of up to 300 million barrels, although it could be as low as 200 million barrels.
Peak production by Chevron should eventually reach close to 90,000 barrels a day at the project.
Chevron has began production at Frade in the middle of 2009.
The oil giant will increase production to about 65,000 barrels a day at Frade, which is about 45 percent complete, with approximately another year and a half left to drill the area.
Estimates for the oil field, are recoverable reserves of up to 300 million barrels, although it could be as low as 200 million barrels.
Peak production by Chevron should eventually reach close to 90,000 barrels a day at the project.
Chevron has began production at Frade in the middle of 2009.
Anadarko (NYSE:APC) Reports Solid Potential at Owo-1 in Ghana
Anadarko Petroleum Corporation (NYSE:APC) reported results at their Owo-1 sidetrack well off the coast of Ghana.
Another 115 net feet of oil has been discovered by the company at the site, which includes high-quality oil measured at 52 net feet at the Owo-1 sidetrack well.
Concerning natural gas, about 43 feet of condensate and 20 net feet was discovered in the deeper sections of sandstone.
The overall gross oil column is 655 feet, with the net feet of high-quality oil of over 225 net feet.
Over the next five years, Anadarko said they have a proven reserve goal of above 3 billion barrels of oil equivalent (BBOE).
For 2010, they want to dig as close to they can to 30 deepwater appraisal and exploration wells.
Another 115 net feet of oil has been discovered by the company at the site, which includes high-quality oil measured at 52 net feet at the Owo-1 sidetrack well.
Concerning natural gas, about 43 feet of condensate and 20 net feet was discovered in the deeper sections of sandstone.
The overall gross oil column is 655 feet, with the net feet of high-quality oil of over 225 net feet.
Over the next five years, Anadarko said they have a proven reserve goal of above 3 billion barrels of oil equivalent (BBOE).
For 2010, they want to dig as close to they can to 30 deepwater appraisal and exploration wells.
RBC on Conoco (NYSE:COP), Marathon (NYSE:MRO) and Chevron (NYSE:CVX)
RBC Capital Markets evaluated a number of large players in the oil and gas industry, including ConocoPhillips (NYSE:COP), Chevron Corp. (NYSE:CVX) and Marathon Oil (NYSE:MRO).
In the view of RBC, the major determinant is how exposed the oil companies are to natural gas. With the weak market, the less exposed, the better.
Their two favorites were Conoco and Chevron, with Conoco rated as a "Outperform," Chevron as a "Top Pick," and Marathon rated as "Sector Perform."
The price target on Conoco is $65 a share; Chevron, $93 a share; and Marathon, $35 a share.
RBC sees Chevron outperforming Exxon (NYSE:XOM) over the next two years on earnings per barrel.
In the view of RBC, the major determinant is how exposed the oil companies are to natural gas. With the weak market, the less exposed, the better.
Their two favorites were Conoco and Chevron, with Conoco rated as a "Outperform," Chevron as a "Top Pick," and Marathon rated as "Sector Perform."
The price target on Conoco is $65 a share; Chevron, $93 a share; and Marathon, $35 a share.
RBC sees Chevron outperforming Exxon (NYSE:XOM) over the next two years on earnings per barrel.
Tuesday, September 14, 2010
Exxon (NYSE:XOM) Downgraded by RBC Capital
RBC Capital Markets downgraded Exxon Mobil Corp. (NYSE:XOM), saying their exposure to the weak natural gas market makes them vulnerable.
This was a reference to the acquisition of XTO Energy in the early part of 2010, which resulted in Exxon becoming the largest natural gas company in the United States.
Natural gas companies have been attempting to diversify by acquiring oil assets because of the expectations the abundant supply of natural gas will keep the price of the energy source down.
RBC said the weak price of natural gas will damage the earnings of Exxon, along with their market valuation. They lowered the price target for the next 12 months from $76 a share to $70 a share, while downgrading them from "Outperform" to "Sector Perform."
This was a reference to the acquisition of XTO Energy in the early part of 2010, which resulted in Exxon becoming the largest natural gas company in the United States.
Natural gas companies have been attempting to diversify by acquiring oil assets because of the expectations the abundant supply of natural gas will keep the price of the energy source down.
RBC said the weak price of natural gas will damage the earnings of Exxon, along with their market valuation. They lowered the price target for the next 12 months from $76 a share to $70 a share, while downgrading them from "Outperform" to "Sector Perform."
Moody's (NYSE:MCO): PG&E (NYSE:PCG) Credit Remains Intact After Explosion
Moody's Investors Service (NYSE:MCO) said the natural gas pipeline explosion in San Bruno won't have an affect on the credit rating of Pacific Gas & Electric Co. (NYSE:PCG).
It is thought the $992 million in insurance PG&E has will be adequate to cover the expenses, even with the relatively small $10 million deductible.
Last week, Standard & Poor's said they have PG&E rating on review for a potential downgrade, although it's unsure what they're seeing which would justify that, at least in the short term.
Moody's said they are maintaining a "Baa1" senior unsecured debt rating on PG&E and an "A3" senior unsecured debt rating on the subsidiary of the energy company.
The outlook by Moody's for PG&E and its subsidiary remains "Stable."
It is thought the $992 million in insurance PG&E has will be adequate to cover the expenses, even with the relatively small $10 million deductible.
Last week, Standard & Poor's said they have PG&E rating on review for a potential downgrade, although it's unsure what they're seeing which would justify that, at least in the short term.
Moody's said they are maintaining a "Baa1" senior unsecured debt rating on PG&E and an "A3" senior unsecured debt rating on the subsidiary of the energy company.
The outlook by Moody's for PG&E and its subsidiary remains "Stable."
PG&E (NYSE:PCG) Offers $50,000 to San Bruno Victims, Some Return to Homes
Homeowners who still had homes and were able to return to them, can receive up to an initial $50,000 from Pacific Gas & Electric Co. (NYSE:PCG), who owned the pipeline which exploded, killing seven people, with six still unaccounted for.
It wasn't clear whether those with demolished homes were given the same amount of money at this time.
The $50,000 comes with no strings attached, and won't have to be paid by those receiving it.
Those receiving the money are not being asked to sign off on not suing PG&E in the future either.
PG&E has also paid $3 million to the city of San Bruno to help cover the costs related to the damage from the explosion.
It wasn't clear whether those with demolished homes were given the same amount of money at this time.
The $50,000 comes with no strings attached, and won't have to be paid by those receiving it.
Those receiving the money are not being asked to sign off on not suing PG&E in the future either.
PG&E has also paid $3 million to the city of San Bruno to help cover the costs related to the damage from the explosion.
BP (NYSE:BP) to be Sued by Justice Department
In a court filing on Monday, the Justice Department said they will probably sue BP (NYSE:BP) for damages related to the Gulf of Mexico oil spill from the Deepwater Horizon.
The filing was with the U.S. District Court in New Orleans, Louisiana.
If they proceed, claims against BP would be based on the Clean Water Act and the Oil Pollution Act,
The Oil Pollution Act was put in place after the oil spill from the Exxon-Valdez (NYSE:XOM).
It wasn't clear if they're going to wait to see if BP will be tagged with a "gross negligence" label, which would significantly increase the potential penalties.
The filing was with the U.S. District Court in New Orleans, Louisiana.
If they proceed, claims against BP would be based on the Clean Water Act and the Oil Pollution Act,
The Oil Pollution Act was put in place after the oil spill from the Exxon-Valdez (NYSE:XOM).
It wasn't clear if they're going to wait to see if BP will be tagged with a "gross negligence" label, which would significantly increase the potential penalties.
BP (NYSE:BP), Halliburton (NYSE:HAL), Transocean (NYSE:RIG) Say Gulf Victims Have No Right to Sue Yet
In a filing with the court, BP (NYSE:BP), Halliburton (NYSE:HAL) and Transocean (NYSE:RIG) say the numerous individuals and businesses may not have the right to sue the companies yet over the Gulf oil spill.
According to the court papers, BP and the others said they believe the alleged victims should have to take their claims to the $20 billion compensation fund before bringing a lawsuit against them.
Obviously the strategy of the oil companies is to push the lawsuits toward the escrow fund to deal with the matter in order to decrease the growing number of them.
Most of the types of lawsuits they're talking about are those where claims of economic losses are involved, especially workers and businesses.
The fund, administered by Kenneth Feinberg, would have 90 days to accept or reject a claim, which at that time the claimants could proceed with a lawsuit.
With things moving into the discovery stage and requests for documents and electronic communications being made, the oil companies said the question of the right to sue needs to be decided before they provide all the documentation to plaintiffs.
While the elimination of lawsuits looks like it's in the best interests of the oil companies, in truth, when you consider the fees by lawyers and amount of time it takes for many of these lawsuits to be played out, most of the alleged victims would be far better off taking the money from the escrow fund if they qualify, rather than pursuing lawsuits.
According to the court papers, BP and the others said they believe the alleged victims should have to take their claims to the $20 billion compensation fund before bringing a lawsuit against them.
Obviously the strategy of the oil companies is to push the lawsuits toward the escrow fund to deal with the matter in order to decrease the growing number of them.
Most of the types of lawsuits they're talking about are those where claims of economic losses are involved, especially workers and businesses.
The fund, administered by Kenneth Feinberg, would have 90 days to accept or reject a claim, which at that time the claimants could proceed with a lawsuit.
With things moving into the discovery stage and requests for documents and electronic communications being made, the oil companies said the question of the right to sue needs to be decided before they provide all the documentation to plaintiffs.
While the elimination of lawsuits looks like it's in the best interests of the oil companies, in truth, when you consider the fees by lawyers and amount of time it takes for many of these lawsuits to be played out, most of the alleged victims would be far better off taking the money from the escrow fund if they qualify, rather than pursuing lawsuits.
Shallow Water Moratorium after BP (NYSE:BP) Oil Spill? May as Well be!
As the United States continues to flounder economically, new rules for shallow water drilling from the BP (NYSE:BP) disaster have close to the same consequences as if there was an oil moratorium in place, as it continues to be in deeper Gulf waters by the order of the Obama administration, which is wreaking economic havoc in the Gulf states struggling to recover.
Since June 8, only 5 of the 13 drilling permits applied for have been approved.
The problem is the new regulations in place which will allegedly make it safer to drill in shallow waters, even though government inspectors had cleared every oil rig in the Gulf with the exception of two, as being safe to operate.
According to Jim Noe, Executive Director of the Shallow Water Energy Security Coalition, regulators need to differentiate between the development of shallow water drilling and deepwater drilling.
He said, "BOEM must recognize that it cannot continue to shove a square peg into a round hole by treating all offshore drilling operations the same, disregarding history and geological facts."
Noe is referring to using a tiered review process for the industry based on risks associated with the depths being drilled in.
He added, of the 46 available shallow water rigs, 15 of them have now been idled, in addition to the idled deepwater rigs.
Just the deepwater moratorium alone is causing the loss of over 20,000 jobs, according to most state authorities in the region.
Since June 8, only 5 of the 13 drilling permits applied for have been approved.
The problem is the new regulations in place which will allegedly make it safer to drill in shallow waters, even though government inspectors had cleared every oil rig in the Gulf with the exception of two, as being safe to operate.
According to Jim Noe, Executive Director of the Shallow Water Energy Security Coalition, regulators need to differentiate between the development of shallow water drilling and deepwater drilling.
He said, "BOEM must recognize that it cannot continue to shove a square peg into a round hole by treating all offshore drilling operations the same, disregarding history and geological facts."
Noe is referring to using a tiered review process for the industry based on risks associated with the depths being drilled in.
He added, of the 46 available shallow water rigs, 15 of them have now been idled, in addition to the idled deepwater rigs.
Just the deepwater moratorium alone is causing the loss of over 20,000 jobs, according to most state authorities in the region.
Exxon (NYSE:XOM), BP (NYSE:BP), Chevron (NYSE:CVX) Major Part of $700 Billion American Refining Industry
The combination of approximately 90 petroleum refining companies in the U.S. generate about $700 billion in revenue, include majors like Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM) and BP (NYSE:BP).
Close to 60 percent of all refining capacity in the U.S. is held by the eight largest refiners, according to a report from Research and Markets.
The annual revenue generated by the industry is volatile, and dependent on the average price of oil throughout the year.
Surprisingly, location is a big factor in the competitiveness of smaller refiners, who can are able to go head to head with their larger competitors if they are run well and are in the right markets.
Specialty products is also a key element of the success of the smaller refiners.
Operational costs are relatively low because of the industry being largely automated, with annual revenue for each worker coming in at over $7 million.
Larger operations can and do compete on scale, although operational costs are important, as in all businesses.
Close to 60 percent of all refining capacity in the U.S. is held by the eight largest refiners, according to a report from Research and Markets.
The annual revenue generated by the industry is volatile, and dependent on the average price of oil throughout the year.
Surprisingly, location is a big factor in the competitiveness of smaller refiners, who can are able to go head to head with their larger competitors if they are run well and are in the right markets.
Specialty products is also a key element of the success of the smaller refiners.
Operational costs are relatively low because of the industry being largely automated, with annual revenue for each worker coming in at over $7 million.
Larger operations can and do compete on scale, although operational costs are important, as in all businesses.
BP (NYSE:BP) Wins Trademark Battle with Enercon
Energol, a trademark held by BP (NYSE:BP), was the winner in an ongoing battle between German-based Enercon GmbH, a wind-turbine manufacturer, who sought to have their name used across the European Union.
BP had the Energol name trademarked before Enercon, and won the right to continue using the name in the EU.
The European General Court concluded, “There is nothing to cast doubt on the conclusion that there is a likelihood of confusion between the marks,” dismissing the challenge from Enercon.
Enercon wanted the right to brand the name on products like fuels, industrial oils and paints.
BP fought the initiative based on its previous trademark.
BP had the Energol name trademarked before Enercon, and won the right to continue using the name in the EU.
The European General Court concluded, “There is nothing to cast doubt on the conclusion that there is a likelihood of confusion between the marks,” dismissing the challenge from Enercon.
Enercon wanted the right to brand the name on products like fuels, industrial oils and paints.
BP fought the initiative based on its previous trademark.
BP's (NYSE:BP) Bizarre Claims Czar Going to Cave in to Criticism?
It's one thing to attempt to improve the process to pay out claims to alleged victims of the BP (NYSE:BP) oil spill, it's another thing to pay compensation to people for money they've already received, which is what government claims czar Kenneth Feinberg is taking "under advisement."
This is the problem when someone from the government is appointed to oversee money.
The problem centers around claimants who say the money they were paid while working cleaning up the Gulf for BP shouldn't be subtracted from the claims they are seeking.
Feinberg responded, "I'm taking it under advisement. The last time I said, no way, I'm deducting it. Now, it's open for discussion."
It doesn't matter what the actual damage was to the claimants, since when do people get paid for work by a company and then not have it subtracted from claims? It's outrageous.
In other words, when they were getting paid to work, they weren't suffering from being victims of the situation. why would BP have to pay them, or why would Feinberg even say he's going to take it under advisement.
This isn't his money. And while he has authority to pay out legitimate claims, it's improbable he has a right to make these types of decisions, even though he seems to say he does.
Problems with the BP compensation fund aren't whether or not BP is going to have to pay without subtracting money they've already paid, the problem is the process is taking too slow, and alleged discrepancies in what is perceived as similar circumstances are what are making people the most angry.
What about the victims who didn't work for BP and are going to receive the same as those who did work for BP under similar circumstances. How could Feinberg justify paying more to those who already got paid and received compensation?
Hopefully Feinberg won't cave on this, and will hold to his guns. People aren't victims while they were getting paid. Any payment already made should be subtracted from the claims being made.
If they aren't, it's doubtful it would be even legal. That would be like someone getting paid to work, but then collecting unemployment at the same time, while others on unemployment only get the unemployment. This doesn't make any sense, and doing it to placate those attempting to game the system shouldn't be allowed, no matter how hard they scream.
They're playing the victim card too far here, as they weren't victims while they were getting paid to work. How hard is that to understand?
This is the problem when someone from the government is appointed to oversee money.
The problem centers around claimants who say the money they were paid while working cleaning up the Gulf for BP shouldn't be subtracted from the claims they are seeking.
Feinberg responded, "I'm taking it under advisement. The last time I said, no way, I'm deducting it. Now, it's open for discussion."
It doesn't matter what the actual damage was to the claimants, since when do people get paid for work by a company and then not have it subtracted from claims? It's outrageous.
In other words, when they were getting paid to work, they weren't suffering from being victims of the situation. why would BP have to pay them, or why would Feinberg even say he's going to take it under advisement.
This isn't his money. And while he has authority to pay out legitimate claims, it's improbable he has a right to make these types of decisions, even though he seems to say he does.
Problems with the BP compensation fund aren't whether or not BP is going to have to pay without subtracting money they've already paid, the problem is the process is taking too slow, and alleged discrepancies in what is perceived as similar circumstances are what are making people the most angry.
What about the victims who didn't work for BP and are going to receive the same as those who did work for BP under similar circumstances. How could Feinberg justify paying more to those who already got paid and received compensation?
Hopefully Feinberg won't cave on this, and will hold to his guns. People aren't victims while they were getting paid. Any payment already made should be subtracted from the claims being made.
If they aren't, it's doubtful it would be even legal. That would be like someone getting paid to work, but then collecting unemployment at the same time, while others on unemployment only get the unemployment. This doesn't make any sense, and doing it to placate those attempting to game the system shouldn't be allowed, no matter how hard they scream.
They're playing the victim card too far here, as they weren't victims while they were getting paid to work. How hard is that to understand?
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