In an interview on Breakout, Charles Nenner gave his input on the price movements of oil and natural gas, where he sees the recent roles being reversed as oil continues to drop in price while natural gas has jumped from $1.80 about a month ago to $2.70 now. Nenner was very close to calling that exact, where he saw natural gas dropping to $1.70 before it rebounded.
From the end of April, oil has plummeted over 20 percent, while natural gas has climbed over 30 percent during the same period.
Going forward, Nenner, who tracks momentum and cycles in the two industries, said he doesn't see crude stopping it decline until November, where sees it going to as low as $68 a barrel. It makes one wonder if the Obama administration isn't manipulating the markets, as it is voting time right when oil is supposed to hit that level.
It also makes one wonder why natural gas is soaring, as that will ultimately be a positive for the anemic and sometimes unethical, so-called green energy sector, as it'll make it more competitive with natural gas, which has drawn much of the shine away from those boondoggles surrounding the very expensive alternative energy sources.
For natural gas, he sees it staying weak into the latter part of July before continuing to climb in price. In other words, traders and investors still have an opportunity to get in on natural gas before it continues to climb.
If you're not buying natural gas futures, Nenner recommends Encana Corp. (NYSE: ECA) as his top stock pick in the sector. He recommends waiting until July to get into it.
Nenner doesn't see oil picking back up until November.
Encana closed at $19.40, dropping $0.82, or 4.13 percent.
Showing posts with label Natural Gas. Show all posts
Showing posts with label Natural Gas. Show all posts
Monday, June 25, 2012
Wednesday, November 3, 2010
ExxonMobil (NYSE:XOM) to Drill for Natural Gas in Germany's Rhineland
News that ExxonMobil (NYSE:XOM) and other energy companies would begin to drill for natural gas in Germany's Rhineland was met with mixed response, although opposition was from radical environment groups and politicians from the country.
Rhineland has already granted Exxon and other firms from Canada, Australia and Germany to drill in the state.
The focus of drilling will be close to the northern Münsterland region. ExxonMobil plans to start drilling in Borken, Steinfurt and Nordwalde soon. Additional regions include the northern and southern Ruhr Valley and counties in Sauerland.
A so-called energy expert for the Greens, Oliver Krischer, alledged, “We are surprised. We didn’t know a thing. The claims were staked quietly and secretly.”
The usual fears of damaging ground water from drilling for the gas has generated opposition from those living in the Münsterland region. It's unlikely it'll hinder the process for the companies.
Rhineland has already granted Exxon and other firms from Canada, Australia and Germany to drill in the state.
The focus of drilling will be close to the northern Münsterland region. ExxonMobil plans to start drilling in Borken, Steinfurt and Nordwalde soon. Additional regions include the northern and southern Ruhr Valley and counties in Sauerland.
A so-called energy expert for the Greens, Oliver Krischer, alledged, “We are surprised. We didn’t know a thing. The claims were staked quietly and secretly.”
The usual fears of damaging ground water from drilling for the gas has generated opposition from those living in the Münsterland region. It's unlikely it'll hinder the process for the companies.
Hercules Offshore (Nasdaq:HERO) International Earnings Pressuring Company
Hercules Offshore, Inc. (Nasdaq:HERO) will probably have its international earnings pressure profits going forward because of the rolling over of contract to existing market rates, according to FBR Capital.
"We are introducing our 2012 estimates (0.75), which are meaningfully lower than our 2011 estimates due to lower international earnings as contracts roll over to current market rates. We maintain our Market Perform rating as we view HERO's risk-reward profile as roughly balanced. The company has the optionality from improvement in the shallow water GOM activity and de-leveraging," said FBR.
Hercules, which offers shallow-water drilling and marine services to the oil and natural gas exploration and production industry, closed Tuesday at $2.42, gaining $0.06, or 2.54 percent. FBR has a price target of $3.50 on them.
"We are introducing our 2012 estimates (0.75), which are meaningfully lower than our 2011 estimates due to lower international earnings as contracts roll over to current market rates. We maintain our Market Perform rating as we view HERO's risk-reward profile as roughly balanced. The company has the optionality from improvement in the shallow water GOM activity and de-leveraging," said FBR.
Hercules, which offers shallow-water drilling and marine services to the oil and natural gas exploration and production industry, closed Tuesday at $2.42, gaining $0.06, or 2.54 percent. FBR has a price target of $3.50 on them.
Monday, November 1, 2010
LINN Energy's (Nasdaq:LINE) Hedge Strategy a Winner Says UBS (NYSE:UBS)
Citing their hedging strategy, UBS (NYSE:UBS) raised their price target on LINN Energy (Nasdaq:LINE) while maintaining their "Buy" rating on them.
"Signaling confidence in LINE’s operations and balance sheet strength as well as its ability to capitalize on growth initiatives, mgmt lifted the 3Q distribution -5%, to $0.66, its first increase since 1Q08. In addition, mgmt added to hedge positions and now estimates that -100% of planned natgas production is hedged through 2015, while planned oil production is hedged -100% through 2013 and 70% in 2014-15. We applaud the move to secure price protection and note oil hedges were added well above our forecasts. We also highlight LINE’s extensive use of put contracts," UBS said.
LINN closed Friday at $34.99, gaining $0.56, or 1.63 percent. They raised their price target from $36 to $38.
Concerning EPU for 2010, they cut that from $1.53 to $1.47.
"Signaling confidence in LINE’s operations and balance sheet strength as well as its ability to capitalize on growth initiatives, mgmt lifted the 3Q distribution -5%, to $0.66, its first increase since 1Q08. In addition, mgmt added to hedge positions and now estimates that -100% of planned natgas production is hedged through 2015, while planned oil production is hedged -100% through 2013 and 70% in 2014-15. We applaud the move to secure price protection and note oil hedges were added well above our forecasts. We also highlight LINE’s extensive use of put contracts," UBS said.
LINN closed Friday at $34.99, gaining $0.56, or 1.63 percent. They raised their price target from $36 to $38.
Concerning EPU for 2010, they cut that from $1.53 to $1.47.
Friday, October 22, 2010
BP’s (NYSE:BP) Azerbaijan Gas Venture Won't be Sanctioned by EU
Plans to sanction Iran for their ongoing pursuit of expanding their nuclear program, won't include the gas venture of BP (NYSE:BP) with Azerbaijan.
Why it's even an issue is the Iranian government has a stake in the project.
The unnamed source said the Shah Deniz gas field in Azerbaijan won't be sanctioned. An official announcement will reportedly be made on October 26.
Technology from Europe used in the project won't be allowed to be exported to Iran, according to the source.
The project is part of Europe's initiative to move away from too much reliance on natural gas supply from Russia.
Other industries being sanctioned in Iran besides energy are shipping firms and banks.
Why it's even an issue is the Iranian government has a stake in the project.
The unnamed source said the Shah Deniz gas field in Azerbaijan won't be sanctioned. An official announcement will reportedly be made on October 26.
Technology from Europe used in the project won't be allowed to be exported to Iran, according to the source.
The project is part of Europe's initiative to move away from too much reliance on natural gas supply from Russia.
Other industries being sanctioned in Iran besides energy are shipping firms and banks.
Monday, October 18, 2010
Ticonderoga Launches Coverage on Range Resources (NYSE:RRC)
Ticonderoga Securities started its coverage of Range Resources (NYSE:RRC) off with a "Buy" rating and a price target of $45, citing strong growth from Marcellus Shale and natural gas price support at current levels.
"RRC is an independent exploration and production company largely weighted toward natural gas, which accounts for 84% of its proven reserve base. While more than half of RRC’s production currently comes from the Mid-Continent/Southwest region of the U.S., the company’s reserves, growth, and upside are dominated by its activities in the Appalachian Basin and its leverage to the developing Marcellus Shale...While we have yet to identify any short-term catalyst for natural gas markets we see little downside in gas prices from here. RRC’s valuation should be viewed as an attractive entry point, especially for longer-term investors."
No one can be exactly sure, but one possible catalyst which could drive gas prices down is the ongoing recession. If people aren't able to afford current prices or incremental increases in natural gas, they will rebel or simply not pay it. Either way it could hurt natural gas companies.
There's a reason many natural gas companies have been buying up oil assets.
Range Resources closed Friday at $37.59, gaining $0.28, or 0.75 percent.
"RRC is an independent exploration and production company largely weighted toward natural gas, which accounts for 84% of its proven reserve base. While more than half of RRC’s production currently comes from the Mid-Continent/Southwest region of the U.S., the company’s reserves, growth, and upside are dominated by its activities in the Appalachian Basin and its leverage to the developing Marcellus Shale...While we have yet to identify any short-term catalyst for natural gas markets we see little downside in gas prices from here. RRC’s valuation should be viewed as an attractive entry point, especially for longer-term investors."
No one can be exactly sure, but one possible catalyst which could drive gas prices down is the ongoing recession. If people aren't able to afford current prices or incremental increases in natural gas, they will rebel or simply not pay it. Either way it could hurt natural gas companies.
There's a reason many natural gas companies have been buying up oil assets.
Range Resources closed Friday at $37.59, gaining $0.28, or 0.75 percent.
Thursday, October 14, 2010
Will Conoco (NYSE:COP), BP (NYSE:BP) Alaskan Pipeline Go Forward?
A recent article in the Financial Times of London where Conoco's (NYSE:COP)chief executive officer Jim Mulva said the company may have to "reaccess" the Denali pipeline it is proposing to develop with partner BP (NYSE:BP).
The comment was based upon the enormous amount of natural gas reserves in the lower 48 states, which Conoco spokesman John McLemore commented on saying: "Clearly, shale gas (in the Lower 48) has changed the dynamics of natural gas in North America."
He added that there hasn't been a new review of the project launched.
This gave the idea to some that maybe the pipeline deal will be put on hold or abandoned, but McLemore said the company is continuing on with the work on the project.
Mulva did say after his comments to FT that natural gas still remains an "attractive" investment for the company, although it seems he's starting to think longer term than he was in the past.
This coming Monday McLemore said Conoco will look closely at natural gas prices over the long term, supply projections, response of the market and tax issues.
It sounds like in the shorter term things aren't looking nearly as good because of the huge supply for the pipeline, and it'll be interesting to see if that affects the timing of starting the pipeline, if it gets built at all by Conoco and BP.
Another factor is a competing proposal from Exxon Mobil (NYSE:XOM) and TransCanada to built a pipeline serving the same region.
The comment was based upon the enormous amount of natural gas reserves in the lower 48 states, which Conoco spokesman John McLemore commented on saying: "Clearly, shale gas (in the Lower 48) has changed the dynamics of natural gas in North America."
He added that there hasn't been a new review of the project launched.
This gave the idea to some that maybe the pipeline deal will be put on hold or abandoned, but McLemore said the company is continuing on with the work on the project.
Mulva did say after his comments to FT that natural gas still remains an "attractive" investment for the company, although it seems he's starting to think longer term than he was in the past.
This coming Monday McLemore said Conoco will look closely at natural gas prices over the long term, supply projections, response of the market and tax issues.
It sounds like in the shorter term things aren't looking nearly as good because of the huge supply for the pipeline, and it'll be interesting to see if that affects the timing of starting the pipeline, if it gets built at all by Conoco and BP.
Another factor is a competing proposal from Exxon Mobil (NYSE:XOM) and TransCanada to built a pipeline serving the same region.
Wednesday, October 13, 2010
Barclays (NYSE:BCS) Likes Targa Resources (Nasdaq:NGLS) Distribution Growth Outlook
Citing their sold distribution growth potential, Barclays (NYSE:BCS) reiterated their "Overweight" rating on Targa Resources (Nasdaq:NGLS).
Barclays also readjusted earnings after the recent closing of the acquisition of Vesco.
"We are raising our EBITDA/DCF estimates given the effects of the Vesco acquisition which closed on Sep 28. We adjust our distribution growth estimate to 3% in 2010 and maintain our distribution growth estimate of 5% from 2011-2013. Our distribution estimate implies average distribution coverage of 1.3x. We continue to believe NGLS is well positioned to show solid distribution growth driven by organic projects and 3rd party acquisitions," said Barclays.
Targo closed yesterday at $30.39, gaining $0.38, or 1.27 percent. Barclays raised their price target on natural gas and natural gas liquid services company to $31 a share.
Barclays also readjusted earnings after the recent closing of the acquisition of Vesco.
"We are raising our EBITDA/DCF estimates given the effects of the Vesco acquisition which closed on Sep 28. We adjust our distribution growth estimate to 3% in 2010 and maintain our distribution growth estimate of 5% from 2011-2013. Our distribution estimate implies average distribution coverage of 1.3x. We continue to believe NGLS is well positioned to show solid distribution growth driven by organic projects and 3rd party acquisitions," said Barclays.
Targo closed yesterday at $30.39, gaining $0.38, or 1.27 percent. Barclays raised their price target on natural gas and natural gas liquid services company to $31 a share.
Tuesday, October 12, 2010
BP (NYSE:BP) Closes Deal with Apache (NYSE:APA) for Canadian Assets
BP (NYSE:BP) and Apache Corp (NYSE:APA) have closed another part of the $7 billion deal where BP is divesting of assets in the Permian Basin, Egypt and Western Canada, this one being the Canadian assets held by the oil giant. They've already closed on the Texas Permian Basin assets.
The Canadian assets were valued at $3.25 billion, which entailed natural gas projects and some oil.
Proven oil reserves were 224 million barrels of oil equivalent, with production in the first half reaching 46,500 barrels of oil equivalent a day.
About 1.3 million net acres were part of the agreement, which included some unconventional oil and natural gas assets.
The Canadian division of Apache will take over operations on November 1.
BP is divesting of about $30 billion in assets to pay for liabilities connected to the Macondo Gulf of Mexico oil well disaster.
The Canadian assets were valued at $3.25 billion, which entailed natural gas projects and some oil.
Proven oil reserves were 224 million barrels of oil equivalent, with production in the first half reaching 46,500 barrels of oil equivalent a day.
About 1.3 million net acres were part of the agreement, which included some unconventional oil and natural gas assets.
The Canadian division of Apache will take over operations on November 1.
BP is divesting of about $30 billion in assets to pay for liabilities connected to the Macondo Gulf of Mexico oil well disaster.
Thursday, October 7, 2010
BP (NYSE:BP) Lands Gas Exploration Deal in Caspian Sea
BP (NYSE:BP) landed a deal with Azerbaijan today to explore an develop a huge natural gas field in the Caspian Sea. The further reinforces their role as the top player in the country.
The agreement is connected to the Shafag-Asiman, and is for a period of 30 years. It's the first deal for newly installed BP CEO Bob Dudley, who replaced Tony Hayward at the helm.
SOCAR and BP said together in a statement that "they had signed a new production sharing agreement on joint exploration and development of the Shafag-Asiman structure in the Azerbaijan sector of the Caspian Sea."
The Shafag-Asiman natural gas field has never been explored before, and entails approximately 440 square miles, and is located in depths of 2,145 to 2,640 feet.
BP and SOCAR will be 50-50 partners in the deal, with BP running the operation.
Bob Dudley said, "This is an important day for Azerbaijan and BP as it marks the beginning of our bilateral cooperation in exploration and development of a new offshore block.
"With SOCAR and our partners, BP has helped to establish Azerbaijan as a world-scale oil and gas producer, and I believe the significant remaining potential will continue to make it relevant for decades to come."
Exploration is expected to last about 4 years, but could be extended another three years per the deal if needed.
The agreement is connected to the Shafag-Asiman, and is for a period of 30 years. It's the first deal for newly installed BP CEO Bob Dudley, who replaced Tony Hayward at the helm.
SOCAR and BP said together in a statement that "they had signed a new production sharing agreement on joint exploration and development of the Shafag-Asiman structure in the Azerbaijan sector of the Caspian Sea."
The Shafag-Asiman natural gas field has never been explored before, and entails approximately 440 square miles, and is located in depths of 2,145 to 2,640 feet.
BP and SOCAR will be 50-50 partners in the deal, with BP running the operation.
Bob Dudley said, "This is an important day for Azerbaijan and BP as it marks the beginning of our bilateral cooperation in exploration and development of a new offshore block.
"With SOCAR and our partners, BP has helped to establish Azerbaijan as a world-scale oil and gas producer, and I believe the significant remaining potential will continue to make it relevant for decades to come."
Exploration is expected to last about 4 years, but could be extended another three years per the deal if needed.
Canaccord Maintains "Hold" on Enbridge (NYSE:ENB) After Investor Day
Canaccord Genuity visited Enbridge Inc. (NYSE:ENB) for their annual investors day, and said afterward maintains a "Hold" on the company.
Canaccord said, "Enbridge hosted its annual 'Enbridge Day' in Toronto, updating the investment community on current and future initiatives and its financial outlook. The company is comfortable with its targeted 10% annual EPS growth through 2014 and 18% cash flow growth for the same period. In addition to current liquids transportation initiatives, ENB identified various platforms to fuel future growth (midstream, a re-entry into international investments, natural gas generation and electricity transmission) to give it - $30 billion of development opportunities. We continue to be impressed by the company’s ability to find new projects, and maintain our HOLD.
"While there may be some risk Enbridge could experience reduced earnings
and/or cash flow from the NEB’s final Alberta Clipper decision, our target
price reflects full earnings and cash flow."
The company closed Wednesday at $53.91, up slight to $0.02, or 0.04 percent. Canaccord has a price target of C$55 on them. In Toronto they closed at $54.50.
Canaccord said, "Enbridge hosted its annual 'Enbridge Day' in Toronto, updating the investment community on current and future initiatives and its financial outlook. The company is comfortable with its targeted 10% annual EPS growth through 2014 and 18% cash flow growth for the same period. In addition to current liquids transportation initiatives, ENB identified various platforms to fuel future growth (midstream, a re-entry into international investments, natural gas generation and electricity transmission) to give it - $30 billion of development opportunities. We continue to be impressed by the company’s ability to find new projects, and maintain our HOLD.
"While there may be some risk Enbridge could experience reduced earnings
and/or cash flow from the NEB’s final Alberta Clipper decision, our target
price reflects full earnings and cash flow."
The company closed Wednesday at $53.91, up slight to $0.02, or 0.04 percent. Canaccord has a price target of C$55 on them. In Toronto they closed at $54.50.
BP (NYSE:BP) Close to Signing Azerbaijan Gas Exploration Deal
BP PLC (NYSE:BP) is reportedly close to signing a deal with Socar, the Azerbaijan state oil company, to explore and develop Shafag-Asiman, a natural-gas field located in the Caspian Sea.
Estimated gas reserves in the field are about 17 trillion cubic feet, said Socar. If the estimates are correct, that would be close to the size of the huge Shah Deniz gas field, which is operated by BP.
The terms of the deal are a 50-50 sharing of production revenue.
BP has a large presence in the Caspian sea, including the Azeri-Chirag-Gunashli oilfield, along with the Baku-Tbilisi-Ceyhan pipeline, which transports Azeri oil to the Mediterranean coast of Turkey.
Even though BP has a tattered reputation in the U.S., it continues to be able to make huge deals outside the country, giving confidence for investors who have stuck with the company, and will benefit as the share price of BP gradually goes up.
Estimated gas reserves in the field are about 17 trillion cubic feet, said Socar. If the estimates are correct, that would be close to the size of the huge Shah Deniz gas field, which is operated by BP.
The terms of the deal are a 50-50 sharing of production revenue.
BP has a large presence in the Caspian sea, including the Azeri-Chirag-Gunashli oilfield, along with the Baku-Tbilisi-Ceyhan pipeline, which transports Azeri oil to the Mediterranean coast of Turkey.
Even though BP has a tattered reputation in the U.S., it continues to be able to make huge deals outside the country, giving confidence for investors who have stuck with the company, and will benefit as the share price of BP gradually goes up.
Tuesday, October 5, 2010
BP (NYSE:BP), Conoco (NYSE:COP) Denali Joint Venture Receives Bids
Bids to transport natural gas down the proposed natural gas pipeline from Alaska to major American markets from the BP (NYSE:BP), Conoco (NYSE:COP) joint venture called Denali, have been coming in said the energy companies.
A 90-day period where natural gas producers could bid for space on the pipeline to be built just ended. The pipeline hasn't been built yet, although the overall process has been underway for some time.
Bud Fackrell, Denali's president, said in a statement, "After two years of work, more than 700,000 man-hours and more than $150 million of private investment, I can report that Denali has received bids for significant capacity from potential shippers."
"As expected, the bids include conditions, some of which are outside of Denali's control. We will carefully evaluate these bids and their conditions and continue confidential negotiations with potential shippers in an effort to reach binding agreements," added Fackrell.
Market conditions have changed since the joint venture was put together, as enormous reserves of shale natural gas have been found in the lower 48, and that has companies concerned over how competitive natural gas from the Alaska North Slope will be, which is affecting the negotiations and bids.
Plans by Denali are to develop a pipeline about 1,700 miles long which would go through Alaska to Alberta, Canada. It would also include a huge gas treatment facility at Prudhoe Bay.
The pipeline would be able to transport about 4.5 billion cubic feet a day.
Cost to build the pipeline by Denali are estimated at $35 billion.
Approximately 35 trillion cubic feet of proven natural gas reserves are located on the Alaskan North Slope.
A 90-day period where natural gas producers could bid for space on the pipeline to be built just ended. The pipeline hasn't been built yet, although the overall process has been underway for some time.
Bud Fackrell, Denali's president, said in a statement, "After two years of work, more than 700,000 man-hours and more than $150 million of private investment, I can report that Denali has received bids for significant capacity from potential shippers."
"As expected, the bids include conditions, some of which are outside of Denali's control. We will carefully evaluate these bids and their conditions and continue confidential negotiations with potential shippers in an effort to reach binding agreements," added Fackrell.
Market conditions have changed since the joint venture was put together, as enormous reserves of shale natural gas have been found in the lower 48, and that has companies concerned over how competitive natural gas from the Alaska North Slope will be, which is affecting the negotiations and bids.
Plans by Denali are to develop a pipeline about 1,700 miles long which would go through Alaska to Alberta, Canada. It would also include a huge gas treatment facility at Prudhoe Bay.
The pipeline would be able to transport about 4.5 billion cubic feet a day.
Cost to build the pipeline by Denali are estimated at $35 billion.
Approximately 35 trillion cubic feet of proven natural gas reserves are located on the Alaskan North Slope.
Tuesday, September 28, 2010
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.
Friday, September 24, 2010
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.
Friday, September 17, 2010
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.
Wednesday, September 15, 2010
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.
Saturday, September 11, 2010
San Bruno Gas Explosion Damage Estimated at "Tens of Millions"
Based on estimates made from descriptions in the aftermath of the San Bruno Pacific Gas & Electric Co. (NYSE:PCG) natural gas explosion, it is estimated caused could rise into the "tens of millions," according to Robert Hartwig, the president of the Insurance Information Institute
So far about 38 homes were destroyed, and up to 132 more damaged; seven of them very badly.
The analysis from Hartwig came from descriptions offered by emergency responders.
Insurance adjusters have reportedly been sent to the scene of the explosion to investigate and confirm the extent of the damage.
So far about 38 homes were destroyed, and up to 132 more damaged; seven of them very badly.
The analysis from Hartwig came from descriptions offered by emergency responders.
Insurance adjusters have reportedly been sent to the scene of the explosion to investigate and confirm the extent of the damage.
Wednesday, September 8, 2010
Citigroup (NYSE:C), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), UBS (NYSE:UBS), Barclays (NYSE:BCS) Initiate Coverage on Chesapeake (NYSE:CHKM)
It has been awhile since I've seen this many companies initiate coverage on a company at one time, but Citigroup (NYSE:C), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), UBS (NYSE:UBS) and Barclays (NYSE:BCS) have all started covering Chesapeake Midstream Partners, L.P (NYSE:CHKM).
UBS and Citigroup were the most upbeat on Chesapeake, starting them off at a "Buy." UBS wasn't as positive on its price target for the company, setting it at $25.50, while Citigroup is looking for $28.50.
Goldman Sachs and Bank of America, via Merrill Lynch, placed a "Neutral" rating on Chesapeake. Goldman has a price target of $25 on them.
Barclays rates the company at "Overweight," with a price target of $26.
Every financial institution liked the way the revenue for the company is structured, based on contracted fees over a period of 10 years.
That means there is little risk or downside to changing commodity or natural gas prices, as the fees aren't primarily based on price but on the service offered, which is transporting gas from the well head to the pipeline of the company they're doing business with.
Along with Chesapeake Energy (NYSE:CHK), the other major customer of Chesapeake Midstream is Total (NYSE:TOT).
There is a minimum volume agreement in place over a ten-year period, which will increase on an annual basis through 2018.
Chesapeake Midstream is a venture between Global Infrastructure Partners LP and Chesapeake Energy.
UBS and Citigroup were the most upbeat on Chesapeake, starting them off at a "Buy." UBS wasn't as positive on its price target for the company, setting it at $25.50, while Citigroup is looking for $28.50.
Goldman Sachs and Bank of America, via Merrill Lynch, placed a "Neutral" rating on Chesapeake. Goldman has a price target of $25 on them.
Barclays rates the company at "Overweight," with a price target of $26.
Every financial institution liked the way the revenue for the company is structured, based on contracted fees over a period of 10 years.
That means there is little risk or downside to changing commodity or natural gas prices, as the fees aren't primarily based on price but on the service offered, which is transporting gas from the well head to the pipeline of the company they're doing business with.
Along with Chesapeake Energy (NYSE:CHK), the other major customer of Chesapeake Midstream is Total (NYSE:TOT).
There is a minimum volume agreement in place over a ten-year period, which will increase on an annual basis through 2018.
Chesapeake Midstream is a venture between Global Infrastructure Partners LP and Chesapeake Energy.
Friday, August 13, 2010
Anadarko (NYSE:APC) Relinquishes 61 Alaskan Leases
Anadarko Petroleum Corporation (NYSE:APC) has relinquished 61 Alaskan leases, which together add up to 296,375 acres.
The reason Anadarko let them go is it was improbable they would be able to begin exploration on the land before the leases ran out.
Even though the region was thought to have potential for natural gas, Anadarko had already drilled four exploration wells in the Gubik region, which is approximately 60 miles north of the land they relinquished.
The Gubic area has proven gas reserves, and so is the primary focus of Anadarko in that part of the state.
The Gubic region also has much better terrain to work with, and as mentioned, more proven possibility concerning gas.
Leases from the U.S. Bureau of Land Management, which is located in the National Petroleum Reserve-Alaska, have been retained by the company.
The reason Anadarko let them go is it was improbable they would be able to begin exploration on the land before the leases ran out.
Even though the region was thought to have potential for natural gas, Anadarko had already drilled four exploration wells in the Gubik region, which is approximately 60 miles north of the land they relinquished.
The Gubic area has proven gas reserves, and so is the primary focus of Anadarko in that part of the state.
The Gubic region also has much better terrain to work with, and as mentioned, more proven possibility concerning gas.
Leases from the U.S. Bureau of Land Management, which is located in the National Petroleum Reserve-Alaska, have been retained by the company.
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