After a couple of recent acquisitions, Apache Corporation (NYSE:APA) has received new coverage from Credit Suisse, which started the company off with an "Outperform" rating. They also placed a price target of $120.00 on Apache.
Apache announced it will Mariner Energy for $2.7 billion, which will give them significant exposure to the deepwater Gulf of Mexico, where its presence has been minimal.
While not as important, the deal will expand an already strong position in the Permian Basin and shallow waters of the Gulf.
Devon Energy sold Apache its shallow water Gulf assets for $1 billion. That makes them the largest player in that area.
In another deal, Apache has acquired 254,000 net acres in the Anadarko Basin from Cordillera Energy Partners III LLC, for $2.85 billion.
All of this points to Apache being strongly positioned for future growth.
Showing posts with label Gulf of Mexico. Show all posts
Showing posts with label Gulf of Mexico. Show all posts
Friday, February 3, 2012
Thursday, November 4, 2010
Transocean (NYSE:RIG) Earnings Crushed on Gulf Spill Effects
Earnings for Transocean fell of the cliff to the tune of 48 percent from the same quarter last year, as effects of the BP (NYSE:BP) Gulf oil spill linger, and uncertainty over liability and when drilling in the Gulf will resume weighs on the company, as it does on all with exposure to the oil spill.
Particularly harmful was the oil moratorium, which while officially lifted, effectively remains in place because of the permitting process and time it will take to comply with new regulations put in place.
Net income for the quarter plummeted to $368 million, or $1.15 a share, down from $710 million, or $2.20 a share last year.
Revenue was also down, falling from $2.82 to $2.31 year over year.
While analysts had expected a drop in performance, it was much worse than the expected $2.47 billion in revenue and $1.36 earnings per share looked for.
Costs were a major factor, with an increase in insurance premiums, lawsuits, one-time costs, and retiring debt all taking a toll on the company's performance.
Particularly harmful was the oil moratorium, which while officially lifted, effectively remains in place because of the permitting process and time it will take to comply with new regulations put in place.
Net income for the quarter plummeted to $368 million, or $1.15 a share, down from $710 million, or $2.20 a share last year.
Revenue was also down, falling from $2.82 to $2.31 year over year.
While analysts had expected a drop in performance, it was much worse than the expected $2.47 billion in revenue and $1.36 earnings per share looked for.
Costs were a major factor, with an increase in insurance premiums, lawsuits, one-time costs, and retiring debt all taking a toll on the company's performance.
Monday, October 25, 2010
BP (NYSE:BP), Deepwater Drilling Will Remain in Gulf, and Everywhere
For those of you with any delusions about drilling for oil in the Gulf of Mexico being cut back in response to the BP (NYSE:BP) oil spill, you may as well forget that, as not only will BP remain drilling in the Gulf (unless by order from the government), but they'll continue to grow, as well as other oil companies as well.
The demand and need for oil isn't going away, and the future of oil drilling and production for the foreseeable future is in deep waters around the world.
Just in the last couple of months deal after deal has been announced for new offshore deepwater drilling projects around the world.
The fantasy of so-called "clean energy" is just that. It is so ridiculously far off as far as enough energy produced and being affordable, that if oil were to be cut back on, it would devastate the economies of the world.
Even the alleged benefit of the wind turbines are devastating to birds and bats, which are slaughtered from just one windmill graveyard than the entirety of the Gulf oil spill of BP. You don't hear much about that slaughter in the press.
Again, the costs are also enormous, as well as other clean energy sources, which will evidently be available and affordable to the elites and wealthy in the future, but not the middle class or poor, who couldn't come close to affording it.
Natural gas is extremely abundant, but at this time so inexpensive companies can't produce it at a profit. Most are gravitating themselves toward oil until that changes, which will be a long time.
Contrary to the alleged peak oil myth, there are still tons of areas around the globe that haven't even been explored for oil yet, and it's going to continue to expand and enlarge because of that strong demand.
Brazil has proven there are tens of billions of oil still locked away under the ocean, with some recent discoveries estimated to be at close to 100 billion barrels combined, and they're just getting started.
Deepwater drilling and oil demand will continue for decades and longer, and unless demand changes, nothing can be done to stop it.
The demand and need for oil isn't going away, and the future of oil drilling and production for the foreseeable future is in deep waters around the world.
Just in the last couple of months deal after deal has been announced for new offshore deepwater drilling projects around the world.
The fantasy of so-called "clean energy" is just that. It is so ridiculously far off as far as enough energy produced and being affordable, that if oil were to be cut back on, it would devastate the economies of the world.
Even the alleged benefit of the wind turbines are devastating to birds and bats, which are slaughtered from just one windmill graveyard than the entirety of the Gulf oil spill of BP. You don't hear much about that slaughter in the press.
Again, the costs are also enormous, as well as other clean energy sources, which will evidently be available and affordable to the elites and wealthy in the future, but not the middle class or poor, who couldn't come close to affording it.
Natural gas is extremely abundant, but at this time so inexpensive companies can't produce it at a profit. Most are gravitating themselves toward oil until that changes, which will be a long time.
Contrary to the alleged peak oil myth, there are still tons of areas around the globe that haven't even been explored for oil yet, and it's going to continue to expand and enlarge because of that strong demand.
Brazil has proven there are tens of billions of oil still locked away under the ocean, with some recent discoveries estimated to be at close to 100 billion barrels combined, and they're just getting started.
Deepwater drilling and oil demand will continue for decades and longer, and unless demand changes, nothing can be done to stop it.
BP (NYSE:BP) Sells Gulf Assets to Japan's Marubeni
BP (NYSE:BP) to divest of non-core assets to raise capital to pay for its mounting liabilities from the Deepwater Horizon oil spill in the Gulf of Mexico.
This time the oil giant has sold four fields in deepwater areas in the Gulf of Mexico to Marubeni of Japan, for $650 million. This will bring the total amount raised through selling of assets to over $12 billion. BP wants to raise about $30 billion overall to cover itself for existing and potential liabilities.
The specific fields sold are the Merganser, Magnolia, Nansen and Zia fields, which combined produce about 15,000 barrels of oil equivalent per day of oil and gas.
Evidently, BP would have sold these assets whether or not they oil spill happened: "When BP acquired Devon's Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region," said Andy Hopwood, vice president for Strategy and Integration.
The deal is expected to close in the early part of 2011.
This time the oil giant has sold four fields in deepwater areas in the Gulf of Mexico to Marubeni of Japan, for $650 million. This will bring the total amount raised through selling of assets to over $12 billion. BP wants to raise about $30 billion overall to cover itself for existing and potential liabilities.
The specific fields sold are the Merganser, Magnolia, Nansen and Zia fields, which combined produce about 15,000 barrels of oil equivalent per day of oil and gas.
Evidently, BP would have sold these assets whether or not they oil spill happened: "When BP acquired Devon's Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region," said Andy Hopwood, vice president for Strategy and Integration.
The deal is expected to close in the early part of 2011.
BP (NYSE:BP) Needs These 5 Things to Happen to Resume Growth
Although there have been some foreign deals forged and implemented by BP (NYSE:BP), which is good news for them and their shareholders, they're still, for the most part, in a holding mold until four major things are handled and resolved.
Only one of the four things needed to be done are under the direct control of BP, and that is the divesting of parts of the company to raise capital to pay for liabilities associated with the Gulf of Mexico oil spill.
The other three things that need to happen are the completed examination of the blowout preventer, determination of whether or not they are found in gross negligence over the accident, and how much, if any, shared liability with partners they'll participate in.
The last thing, which will be mostly determined by the four mentioned above, is the reinstatement of the dividend by BP.
As far as the blowout preventer, that will probably take longer than the rest, and is just starting the process of examination. It's important in whether or not Cameron International, which developed it, will be liable for part of the costs of the spill.
In the largest liability remaining to be determined, BP is awaiting the decision on whether or not they're going to be designated as being grossly negligent in the ordeal. If they are, it could cost them over $17 billion more in fines, above and beyond all existing and future payouts.
That also is connected to the next element, which is shared liability. If they aren't found grossly negligent, their partners in the Macondo well: Anadarko (NYSE:APC) and MOEX, via their majority owned Mitsui (Nasdaq:MITSY), would have to pay out some significant capital for their part in the failure.
Selling of their assets, as mentioned, is under the control of BP, and that will give shareholders and potential investors more confidence in the company, which would ultimately be crowned with the reinstatement of their dividend, which mounting pressure is being asserted on the company to do.
If and when all these happened and/or are concluded, we'll see a much clearer picture of the future of BP, which remains tenuous at best.
Depending on the outcomes of the mentioned events that need to happen, will determine whether BP will be split up or taken over by a larger competitor, or continue on as a leaner but competitive energy firm.
Only one of the four things needed to be done are under the direct control of BP, and that is the divesting of parts of the company to raise capital to pay for liabilities associated with the Gulf of Mexico oil spill.
The other three things that need to happen are the completed examination of the blowout preventer, determination of whether or not they are found in gross negligence over the accident, and how much, if any, shared liability with partners they'll participate in.
The last thing, which will be mostly determined by the four mentioned above, is the reinstatement of the dividend by BP.
As far as the blowout preventer, that will probably take longer than the rest, and is just starting the process of examination. It's important in whether or not Cameron International, which developed it, will be liable for part of the costs of the spill.
In the largest liability remaining to be determined, BP is awaiting the decision on whether or not they're going to be designated as being grossly negligent in the ordeal. If they are, it could cost them over $17 billion more in fines, above and beyond all existing and future payouts.
That also is connected to the next element, which is shared liability. If they aren't found grossly negligent, their partners in the Macondo well: Anadarko (NYSE:APC) and MOEX, via their majority owned Mitsui (Nasdaq:MITSY), would have to pay out some significant capital for their part in the failure.
Selling of their assets, as mentioned, is under the control of BP, and that will give shareholders and potential investors more confidence in the company, which would ultimately be crowned with the reinstatement of their dividend, which mounting pressure is being asserted on the company to do.
If and when all these happened and/or are concluded, we'll see a much clearer picture of the future of BP, which remains tenuous at best.
Depending on the outcomes of the mentioned events that need to happen, will determine whether BP will be split up or taken over by a larger competitor, or continue on as a leaner but competitive energy firm.
Friday, October 22, 2010
Will Diamond Offshore (NYSE:DO) and Noble (NYSE:NE) Halliburton (NYSE:HAL) and Weatherford (NYSE:WFT) Rebound After Moratorium Lifted?
While the earnings of oil field services like Diamond Offshore (NYSE:DO) and Noble (NYSE:NE), Halliburton (NYSE:HAL) and Weatherford (NYSE:WFT) could have been worse, overall they didn't fare too badly in light of the conditions they faced in the latest quarter.
The question is will they start to improve now that the Gulf oil moratorium has been lifted by the Obama administration.
The quick and easy answer to that is no they won't improve. At least as to how the Gulf limitations affect their businesses.
In reality, as far as effectively, the moratorium is really still in place, as the permitting process and new regulations will limit drilling and work in the Gulf for some time.
That's why Obama lifted the moratorium, as he could keep things as they are while permits and regulations force companies to take a lot of time to adjust and be approved.
So Obama can say he lifted the moratorium before the November elections, while keeping the affect of the moratorium on the companies who want to work in the Gulf.
Short-term the companies will still continue to struggle depending on their exposure to the Gulf.
The last quarter should be the same as this quarter for productivity in the Gulf of Mexico for the oil field services companies.
The question is will they start to improve now that the Gulf oil moratorium has been lifted by the Obama administration.
The quick and easy answer to that is no they won't improve. At least as to how the Gulf limitations affect their businesses.
In reality, as far as effectively, the moratorium is really still in place, as the permitting process and new regulations will limit drilling and work in the Gulf for some time.
That's why Obama lifted the moratorium, as he could keep things as they are while permits and regulations force companies to take a lot of time to adjust and be approved.
So Obama can say he lifted the moratorium before the November elections, while keeping the affect of the moratorium on the companies who want to work in the Gulf.
Short-term the companies will still continue to struggle depending on their exposure to the Gulf.
The last quarter should be the same as this quarter for productivity in the Gulf of Mexico for the oil field services companies.
Wednesday, October 20, 2010
BP (NYSE:BP) Sued by Environmental Groups Over Wildlife
Based on damage to the ecosystem of the Gulf of Mexico, and alleged harm to so-called endangered species, a number of environmental groups sued BP (NYSE:BP).
Suing the energy giant are Save the Manatee Club Inc., Gulf Restoration Network Inc. and Defenders of Wildlife.
In the lawsuit they claim BP violated the Endangered Species Act.
They want BP to be forced to restore the habits of the species, and ease the impact of the oil spill on wildlife in the region.
According to the lawsuit, there are a minimum of 27 animal species that are endangered or threatened in the region. Included among them are bird species, turtles and whales.
I wonder who's going to start suing the windmill owners who are causing extraordinary damage to birds and bats, far more in one windmill farm than the entirety of the BP oil spill did to the Gulf.
Suing the energy giant are Save the Manatee Club Inc., Gulf Restoration Network Inc. and Defenders of Wildlife.
In the lawsuit they claim BP violated the Endangered Species Act.
They want BP to be forced to restore the habits of the species, and ease the impact of the oil spill on wildlife in the region.
According to the lawsuit, there are a minimum of 27 animal species that are endangered or threatened in the region. Included among them are bird species, turtles and whales.
I wonder who's going to start suing the windmill owners who are causing extraordinary damage to birds and bats, far more in one windmill farm than the entirety of the BP oil spill did to the Gulf.
Gulf Tourism Rebounds after BP (NYSE:BP) Oil Spill
Contrary to some presumptive media reports, many areas in the Gulf region didn't suffer a tourism disaster as a result of the Gulf of Mexico oil spill, in some cases because of marketing money provided by BP (NYSE:BP), as in Florida, tourism was up.
One of the major attractions in the region, New Orleans, said they had their best year since Katrina.
When asked about areas in Florida, reports the St. Petersburg Times said a number of respondents believed the beaches were still stained by oil, when in many cases no oil came anywhere near them.
The conclusion by some was they would probably go somewhere else for their next vacation. But April and June, across the overall state, Florida tourism was up by 3.4 percent.
There will always be mixed responses like this concerning disasters, but the reality is many areas are doing very well, no matter what responses are, and it remains to be seen if people even think much about BP and oil when making vacation plans next year.
One of the major attractions in the region, New Orleans, said they had their best year since Katrina.
When asked about areas in Florida, reports the St. Petersburg Times said a number of respondents believed the beaches were still stained by oil, when in many cases no oil came anywhere near them.
The conclusion by some was they would probably go somewhere else for their next vacation. But April and June, across the overall state, Florida tourism was up by 3.4 percent.
There will always be mixed responses like this concerning disasters, but the reality is many areas are doing very well, no matter what responses are, and it remains to be seen if people even think much about BP and oil when making vacation plans next year.
Judge Martin Feldman Throws Out New Government Deepwater Drilling Regulations
U.S. District Judge Martin Feldman is the judge who rejected the first attempt by the Obama administration to impose a moratorium on deepwater drilling in the Gulf of Mexico after the BP (NYSE:BP) oil spill, and he again chastised the administration by throwing out the new regulations accompanying the moratorium, which weren't addressed in the original moratorium case.
Feldman based his ruling on the administration not giving oil and gas companies notice and a chance to make comments on the 10 new rules.
“NTL-05 imposes additional duties on operators and lessees. Notice and comment were required by law. The government did not comply and the NTL-05 is of no lawful force or effect,” said Feldman.
While the second moratorium was recently lifted, the Interior Department rules known as NTL-05 remained in force, that is until the judge threw them out.
On November 3 a lawsuit which challenged the moratorium will be considered for whether or not it will be allowed to go forward. The government has asked for it to be dismissed.
Feldman based his ruling on the administration not giving oil and gas companies notice and a chance to make comments on the 10 new rules.
“NTL-05 imposes additional duties on operators and lessees. Notice and comment were required by law. The government did not comply and the NTL-05 is of no lawful force or effect,” said Feldman.
While the second moratorium was recently lifted, the Interior Department rules known as NTL-05 remained in force, that is until the judge threw them out.
On November 3 a lawsuit which challenged the moratorium will be considered for whether or not it will be allowed to go forward. The government has asked for it to be dismissed.
Citigroup (NYSE:C) Keeps Halliburton (NYSE:HAL) as Top Pick in Diversified Service Companies
Even though Halliburton Company (NYSE:HAL) took a big hit after reporting its most recent quarterly results, Citigroup (NYSE:C) said the drop in price of 5 percent wasn't justified.
“Completions intensity trends remain strong in North America, volume (and eventually pricing gains) internationally should materialize in 2011, and drill bits should start turning again next year in the Gulf of Mexico. The stock still looks cheap at its 2011 EV/EBITDA of 6.5x compared to 9.1x, 7.5x, and 6.6x for SLB, WFT, and BHI, respectively,” Citigroup wrote in a note.
So with the fundamentals still in place, Citigroup said, “We have raised our price target to $47 from $42 solely on our higher estimates and HAL remains our top pick among the ‘big four' diversified service companies.”
Halliburton took more damage Tuesday, closing at $33.18, down $0.91, or 2.67 percent.
“Completions intensity trends remain strong in North America, volume (and eventually pricing gains) internationally should materialize in 2011, and drill bits should start turning again next year in the Gulf of Mexico. The stock still looks cheap at its 2011 EV/EBITDA of 6.5x compared to 9.1x, 7.5x, and 6.6x for SLB, WFT, and BHI, respectively,” Citigroup wrote in a note.
So with the fundamentals still in place, Citigroup said, “We have raised our price target to $47 from $42 solely on our higher estimates and HAL remains our top pick among the ‘big four' diversified service companies.”
Halliburton took more damage Tuesday, closing at $33.18, down $0.91, or 2.67 percent.
Tuesday, October 19, 2010
BP (NYSE:BP) CEO Bob Dudley Implements Modest Changes
In the aftermath of the disastrous BP (NYSE:BP) oil spill, many have been waiting to see what new CEO Bob Dudley would do at the top concerning removing executives and putting new ones in place.
So far there has been somewhat of a modest response from Dudley, who has, for the most part, kept people in place, other than Exploration and Production head Andy Inglis.
Of course Dudley replaced former CEO Tony Hayward, but that wasn't his decision.
Many were hoping for a big shakeup at the top, but only time will tell if Dudley's strategy is the best one.
It appears he believes changing the company culture to being more safety focused is more important than simply getting rid of people.
Also it seems he is changing things incrementally rather than respond to the media uproar and emotion stirred from the oil spill coverage. That could be a smart move on his part, as keeping people in place that know the industry and who will respond to change is as good as getting rid of them and replacing them with people who they don't know and could be unresponsive as well.
In other words, Dudley seems to be trying to keep the company from entering into complete chaos, and permeating them with a culture of safety for the existing people at the company.
One thing he did do was to tie in safety to employee compensation for this quarter as the company revamps its overall pay structure for the long term.
The bottom line is it'll be considered a success only if BP's safety record improves. Period! If it doesn't, not only will other heads fall, but quite possibly Dudley's as well.
So far there has been somewhat of a modest response from Dudley, who has, for the most part, kept people in place, other than Exploration and Production head Andy Inglis.
Of course Dudley replaced former CEO Tony Hayward, but that wasn't his decision.
Many were hoping for a big shakeup at the top, but only time will tell if Dudley's strategy is the best one.
It appears he believes changing the company culture to being more safety focused is more important than simply getting rid of people.
Also it seems he is changing things incrementally rather than respond to the media uproar and emotion stirred from the oil spill coverage. That could be a smart move on his part, as keeping people in place that know the industry and who will respond to change is as good as getting rid of them and replacing them with people who they don't know and could be unresponsive as well.
In other words, Dudley seems to be trying to keep the company from entering into complete chaos, and permeating them with a culture of safety for the existing people at the company.
One thing he did do was to tie in safety to employee compensation for this quarter as the company revamps its overall pay structure for the long term.
The bottom line is it'll be considered a success only if BP's safety record improves. Period! If it doesn't, not only will other heads fall, but quite possibly Dudley's as well.
Transocean (NYSE:RIG): Light at the End of the Tunnel?
Based on a couple of assumptions, Natixis Bleichroeder said Transocean (NYSE:RIG) may be out of the woods, upgrading the company to "Buy."
"In our previous update for Transocean, we had assumed lower dayrates for deepwater rigs drilling in the U.S. Gulf of Mexico based on uncertainties surrounding the Macondo incident. With the end of the deepwater moratorium, renegotiations on most contract disputes, and lack of successful force majeure proceedings, we believe that most contracts will be honored at their original contracted dayrates. Assuming BP (NYSE:BP)honors its contractual indemnity with RIG, and based on Transocean's history as a premiere offshore driller, we believe that RIG is likely “out of the woods,” said Natixis
The market seemed to agree with them Monday, as Transocean closed at $68.38, gaining $1.30, or 1.94 percent. Volume for the day was 5,242,999, down from the 3-month daily average of 8,361,270.
"In our previous update for Transocean, we had assumed lower dayrates for deepwater rigs drilling in the U.S. Gulf of Mexico based on uncertainties surrounding the Macondo incident. With the end of the deepwater moratorium, renegotiations on most contract disputes, and lack of successful force majeure proceedings, we believe that most contracts will be honored at their original contracted dayrates. Assuming BP (NYSE:BP)honors its contractual indemnity with RIG, and based on Transocean's history as a premiere offshore driller, we believe that RIG is likely “out of the woods,” said Natixis
The market seemed to agree with them Monday, as Transocean closed at $68.38, gaining $1.30, or 1.94 percent. Volume for the day was 5,242,999, down from the 3-month daily average of 8,361,270.
BP (NYSE:BP) Hands Off Babysitting Chavez to Russians
While the divestiture of BP (NYSE:BP) assets in Venezuela are part of the strategy of the oil giant to raise $30 billion to pay for mounting liabilities from the Gulf of Mexico oil spill from the explosion aboard the Deepwater Horizon oil rig, a secondary benefit comes with it: No longer having to deal with the volatile and unpredictable Hugo Chavez.
Even though BP is a 50-50 partner in TNK-BP, their joint venture with a group of Russian billionaires, they'll retain benefits of the assets, but not have to deal with, for the most part, the operational headaches that come with doing business in Venezuela.
That doesn't include the $1.8 billion BP raised from the deal to serve its liability goals.
Another nice benefit in this is if the business in Venezuela is taken over or fails for some reason, BP already enjoys the $1.8 billion that came with the deal, putting them ahead of the game.
Overall it's a smart deal for them.
Even though BP is a 50-50 partner in TNK-BP, their joint venture with a group of Russian billionaires, they'll retain benefits of the assets, but not have to deal with, for the most part, the operational headaches that come with doing business in Venezuela.
That doesn't include the $1.8 billion BP raised from the deal to serve its liability goals.
Another nice benefit in this is if the business in Venezuela is taken over or fails for some reason, BP already enjoys the $1.8 billion that came with the deal, putting them ahead of the game.
Overall it's a smart deal for them.
Monday, October 18, 2010
BP (NYSE:BP) Getting Sued by School Boards
It's no surprise to see school boards entering into the attempt to extract funds from BP (NYSE:BP) over the alleged effect on them from the oil spill in the Gulf of Mexico.
Some in the media are clueless or choose to ignore the depth of the ways many people or institutions may go to get some of the billions in funds made available for legitimate victims of the spill.
In this case, school districts in the Florida counties of Escambia and Santa Rosa are beginning the process of determining whether or not to sue BP over lost tax revenue.
Most of that is based on the alleged loss of tax revenue from the lower value of homes, and also from the loss of sales tax revenue.
I wonder how the distinction would be made between losses incurred from the mortgage debacle and recession and value allegedly lost from the oil spill? Other than Texas, beach areas in Florida were reportedly the least affected by the oil spill.
We at Dripping Oil have said for some time that the BP oil fund was going to be targeted in this way, as many have the same mindset they have concerning the government, that it is there for them to use and abuse in order to fund their pet projects or agendas.
In this case it's unsurprising to see government entities attempt to use BP as a source to replace lost tax revenue.
Interestingly, both these school districts seem to be saying they're not affected at all at this time, but might be, so they should look into initiating lawsuits.
Escambia Superintendent Malcolm Thomas said, "We anticipate decline in sales tax revenue for the school district, and property value — school taxes — that will impact potential revenue we will have for future school years."
One Santa Rosa, School Board member, Ed Gray, was a little more realistic, saying, "If we've been damaged, we ought to go after it. If not, we shouldn't waste a lot of people's time."
If either district chooses to pursue this, it would be done on a contingency basis.
Some in the media are clueless or choose to ignore the depth of the ways many people or institutions may go to get some of the billions in funds made available for legitimate victims of the spill.
In this case, school districts in the Florida counties of Escambia and Santa Rosa are beginning the process of determining whether or not to sue BP over lost tax revenue.
Most of that is based on the alleged loss of tax revenue from the lower value of homes, and also from the loss of sales tax revenue.
I wonder how the distinction would be made between losses incurred from the mortgage debacle and recession and value allegedly lost from the oil spill? Other than Texas, beach areas in Florida were reportedly the least affected by the oil spill.
We at Dripping Oil have said for some time that the BP oil fund was going to be targeted in this way, as many have the same mindset they have concerning the government, that it is there for them to use and abuse in order to fund their pet projects or agendas.
In this case it's unsurprising to see government entities attempt to use BP as a source to replace lost tax revenue.
Interestingly, both these school districts seem to be saying they're not affected at all at this time, but might be, so they should look into initiating lawsuits.
Escambia Superintendent Malcolm Thomas said, "We anticipate decline in sales tax revenue for the school district, and property value — school taxes — that will impact potential revenue we will have for future school years."
One Santa Rosa, School Board member, Ed Gray, was a little more realistic, saying, "If we've been damaged, we ought to go after it. If not, we shouldn't waste a lot of people's time."
If either district chooses to pursue this, it would be done on a contingency basis.
Friday, October 15, 2010
BP's (NYSE:BP) Assets in Venezuela Will be Acquired by TNK-BP
A deal to acquire the Venezuelan assets of BP (NYSE:BP) by TNK-BP, a joint venture between them and a group of Russian billionaires, has been confirmed today by the energy ministers of both countries.
The memorandum was signed between the two nations when Hugo Chavez visited Russia.
Terms of the deal weren't revealed (although in the past it was estimated to be valued at about $1 billion) but the specific assets were, as German Khan, one of the wealthy Russian's with a stake in the venture revealed, include the acquisition of three oil fields: "16.7 percent of Petromanagas, 40 percent of Petroperija and 26.6 percent of Bouqeron," said Khan.
TNK-BP's goal is to expand outside of Russia and ultimately become the largest independent producer based in the country.
BP is selling the asset as part of their goal to raise $30 billion to pay for unfolding liabilities related to the Gulf of Mexico oil spill.
The memorandum was signed between the two nations when Hugo Chavez visited Russia.
Terms of the deal weren't revealed (although in the past it was estimated to be valued at about $1 billion) but the specific assets were, as German Khan, one of the wealthy Russian's with a stake in the venture revealed, include the acquisition of three oil fields: "16.7 percent of Petromanagas, 40 percent of Petroperija and 26.6 percent of Bouqeron," said Khan.
TNK-BP's goal is to expand outside of Russia and ultimately become the largest independent producer based in the country.
BP is selling the asset as part of their goal to raise $30 billion to pay for unfolding liabilities related to the Gulf of Mexico oil spill.
Superior Energy (NYSE:SPN) Gets "Buy" Ratings on New Jefferies' Coverage
Superior Energy Services (NYSE:SPN) received a "Buy" rating from Jefferies as they initiated coverage on them, citing diversification of revenue streams away from the Gulf of Mexico.
"SPN is very well positioned to continue to diversify its revenue stream away from the Gulf by leveraging its products and services in key international markets, and benefiting from higher well complexity in the U.S. land market. We see earnings upside and likely multiple expansion over the next few years," said Jefferies.
Superior closed Thursday at $26.79, dropping $0.07, or 0.26 percent.
Jefferies started them off with a price target of $34.
"SPN is very well positioned to continue to diversify its revenue stream away from the Gulf by leveraging its products and services in key international markets, and benefiting from higher well complexity in the U.S. land market. We see earnings upside and likely multiple expansion over the next few years," said Jefferies.
Superior closed Thursday at $26.79, dropping $0.07, or 0.26 percent.
Jefferies started them off with a price target of $34.
BP (NYSE:BP) Asked To Pay Millions More For Florida Tourism
BP (NYSE:BP) has already paid out millions to Florida for its tourism industry after the Gulf of Mexico oil spill, to deal with the misperceptions the beaches in the state were filled with oil.
That worked during the oil spill successfully, as tourism did very well over the duration of the oil spill in Florida. Now the state is asserting wrong perceptions still remain, and BP should pay to have that removed through advertising campaigns.
The problem is it's quite possible this is a recessionary slowdown and not related to BP at all.
Allegedly some surveys have potential tourists saying they still believe the Florida beaches are filled with oil, but the question that should be asked is whether or not they were going to vacation there in the first place as colder weather hits the nation.
As far as next summer, to ask those making vacation decisions on whether or not they'll come there next year doesn't make much sense. After nine months or so, most would have to think the beaches are are clean of debris and oil.
Either way, Florida has asked for another payment of $75 million to use for their advertising budget. I think this time around BP should say no, as they're increasingly being tapped to pay for budget shortfalls that are result of the ongoing recession and not necessarily the oil spill.
That worked during the oil spill successfully, as tourism did very well over the duration of the oil spill in Florida. Now the state is asserting wrong perceptions still remain, and BP should pay to have that removed through advertising campaigns.
The problem is it's quite possible this is a recessionary slowdown and not related to BP at all.
Allegedly some surveys have potential tourists saying they still believe the Florida beaches are filled with oil, but the question that should be asked is whether or not they were going to vacation there in the first place as colder weather hits the nation.
As far as next summer, to ask those making vacation decisions on whether or not they'll come there next year doesn't make much sense. After nine months or so, most would have to think the beaches are are clean of debris and oil.
Either way, Florida has asked for another payment of $75 million to use for their advertising budget. I think this time around BP should say no, as they're increasingly being tapped to pay for budget shortfalls that are result of the ongoing recession and not necessarily the oil spill.
Thursday, October 14, 2010
BP (NYSE:BP): Will They Get New Gulf Oil Leases?
In somewhat of a "duh" comment, the White House oil spill commission said in response to the BP (NYSE:BP) oil spill, that the decision on which companies are rewarded with Gulf oil permits should be based on the amount of drilling experience they have and their safety record in implementing their tasks.
Did they come up with this idea all by themselves?
The commission concluded that the government should focus on "linking a specific site with the safety risks it imposes and who we are going to give the responsibility of exploring and extracting from that site."
Incredibly, this is the conclusion the committee formed to give guidance for offshore drilling in the future.
Of course the point is we didn't need a commission to be appointed to tell us what we already know. How hard is it to figure out inspections need to be made, companies need to improve safety procedures, and those that don't won't be allowed to drill in Gulf waters.
Now the question is whether or not BP will be awarded with new permits if they apply for them. They'll probably wait a little more until news coverage is down more and the public really loses interest. The elections would be a good time for that, as more important matters will be being dealt with at that time, and not many would be interested in the aftermath of the BP incident.
If BP can secure more leases, in the long term they probably will make the attempt. Assuming they are able to comply with the new regulations, there's nothing to keep them from going forward with it.
About 10 percent of BP's revenue comes from the U.S. market
Did they come up with this idea all by themselves?
The commission concluded that the government should focus on "linking a specific site with the safety risks it imposes and who we are going to give the responsibility of exploring and extracting from that site."
Incredibly, this is the conclusion the committee formed to give guidance for offshore drilling in the future.
Of course the point is we didn't need a commission to be appointed to tell us what we already know. How hard is it to figure out inspections need to be made, companies need to improve safety procedures, and those that don't won't be allowed to drill in Gulf waters.
Now the question is whether or not BP will be awarded with new permits if they apply for them. They'll probably wait a little more until news coverage is down more and the public really loses interest. The elections would be a good time for that, as more important matters will be being dealt with at that time, and not many would be interested in the aftermath of the BP incident.
If BP can secure more leases, in the long term they probably will make the attempt. Assuming they are able to comply with the new regulations, there's nothing to keep them from going forward with it.
About 10 percent of BP's revenue comes from the U.S. market
Wednesday, October 13, 2010
BP (NYSE:BP), Shell (NYSE:RDS-A), Noble (NYSE:NE), Seahawk (Nasdaq:HAWK) Working to Comply with Gulf Regulations
BP (NYSE:BP), Shell (NYSE:RDS-A), Noble Corp. (NYSE:NE) and Seahawk Drilling Inc. (Nasdaq:HAWK), among others, are all working to get in compliance with new government regulations in order to resume drilling in the Gulf of Mexico.
Although the oil moratorium was lifted by the Obama administration, it's largely irrelevant, and effectively still in place, as it could take companies months to before being given the go ahead to continue drilling in Gulf waters.
The permitting process is another tool the government can use to have the same affect as the oil moratorium, as they can be refused and/or delayed, keeping companies in limbo as long as they want.
This is why the Obama administration lifted the Gulf oil moratorium, as it gives the appearance of not being so stubborn while hurting the Gulf region, while still being able to control the drilling in the area, as far as keeping things on hold.
Noble Corp., Seahawk Drilling and Royal Dutch Shell have all said they're working hard to company with the new rules in order to begin drilling ASAP.
BP said they're not going to comment on its future plans in the Gulf at this time, which would entail not only drilling on its existing projects, but also possible application for exploration permits too.
Although the oil moratorium was lifted by the Obama administration, it's largely irrelevant, and effectively still in place, as it could take companies months to before being given the go ahead to continue drilling in Gulf waters.
The permitting process is another tool the government can use to have the same affect as the oil moratorium, as they can be refused and/or delayed, keeping companies in limbo as long as they want.
This is why the Obama administration lifted the Gulf oil moratorium, as it gives the appearance of not being so stubborn while hurting the Gulf region, while still being able to control the drilling in the area, as far as keeping things on hold.
Noble Corp., Seahawk Drilling and Royal Dutch Shell have all said they're working hard to company with the new rules in order to begin drilling ASAP.
BP said they're not going to comment on its future plans in the Gulf at this time, which would entail not only drilling on its existing projects, but also possible application for exploration permits too.
Tuesday, October 12, 2010
BP's (NYSE:BP) Libyan Drilling Launching in November
BP PLC (NYSE:BP) said they expect to start deepwater offshore drilling off the coast of Libya starting in November. That's about a month later than original estimates of an October launch.
According to chairman of Libya's National Oil Corp., Shokri Ghanem, the reason for the delay was extra precautions taken by BP after the Gulf of Mexico oil spill disaster.
BP will reportedly drill a minimum of five wells in the Gulf of Sirte, going deeper than the Macondo oil well in the Gulf of Mexico.
If another oil spill happened, the resources are available to deal with it if it's mid-size in Libya. Assuming a large oil spill, BP has contracted with the UK's oil response center, which is the largest in the world.
While already a major oil producer, Libya has little deepwater production going, the reason they're expanding into deeper waters. Most Libyan oil production is on land or shallow water.
According to chairman of Libya's National Oil Corp., Shokri Ghanem, the reason for the delay was extra precautions taken by BP after the Gulf of Mexico oil spill disaster.
BP will reportedly drill a minimum of five wells in the Gulf of Sirte, going deeper than the Macondo oil well in the Gulf of Mexico.
If another oil spill happened, the resources are available to deal with it if it's mid-size in Libya. Assuming a large oil spill, BP has contracted with the UK's oil response center, which is the largest in the world.
While already a major oil producer, Libya has little deepwater production going, the reason they're expanding into deeper waters. Most Libyan oil production is on land or shallow water.
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