Chicago, IL – April 01, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Exxon Mobil Corp. (XOM-Free Report), Whiting Petroleum Corp. (WLL-Free Report), Baker Hughes (BHI-Free Report), TOTAL S.A. (TOT-Free Report) and Tesoro Corp. (TSO-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Oil & Gas Stock Roundup
It was a week where oil futures settled up on Yemen-related gains but natural gas declined amid expectations of milder temperatures. On the news front, Exxon Mobil Corp. (XOM-Free Report) began production in the Gulf of Mexico’s Hadrian South prospect, while Whiting Petroleum Corp. (WLL-Free Report) gave up on finding a buyer.
Overall, it was a mixed week for the sector. While resurgent West Texas Intermediate (WTI) crude futures climbed around 5% to close at $48.87 per barrel, natural gas prices fell 6% to $2.64 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Chesapeake Reduces Capex Budget, Halliburton Plans $10B Asset Sales)
Oil prices gained for the second week in a row on fears of growing Middle Eastern instability following the entry of Saudi Arabia and its allies into the Yemeni civil war. Investors were further encouraged by the Baker Hughes (BHI-Free Report) report that showed a drop in oil-directed rigs for the sixteenth consecutive week, indicating a brake in shale drilling activities. This is seen as a precursor to a slowdown in oil production leading to a subsequent drop in the commodity’s bloated supply level.
Natural gas, though, fared badly amid expectations of tepid heating demand with the imminent arrival of soft spring temperature.
Recap of the Week’s Most Important Stories
1. The largest U.S. energy company by market value, Exxon Mobil Corp., has commenced production at Hadrian South in deepwater Gulf of Mexico.
The company has tied back its facilities to the nearby Lucius project, thereby decreasing the requirement for additional infrastructure. This represents ExxonMobil’s deepest subsea tie-back in about a mile and a half of water. Per estimations, daily gross production from Hadrian South is expected to reach about 300 million cubic feet of gas and 3,000 barrels of liquids from two wells – Hadrian-2 and Hadrian-4.
2. Upstream energy firm Whiting Petroleum Corp. has decided not to look for buyers anymore and will instead issue shares and notes to combat its huge debt level amid unfavorable crude pricing. In particular, the company’s ill-fated acquisition of Kodiak Oil & Gas last year has been weighing on its financials. Following the announcement, the stock fell almost 20% on the NYSE on Mar 24.
Whiting Petroleum is now planning to raise funds from the equity and debt markets to finance its huge debt. The company decided to issue 35 million shares at $30 each, apart from issuing nearly $2 billion worth senior notes. (See More: Whiting Petroleum Drops Plans to Look for Buyer)
3. TOTAL S.A. (TOT-Free Report) announced that it has divested its interest in onshore Oil Mining Lease (OML) 29 to Aiteo Eastern E&P, a Nigerian company, for $569 million. Earlier, TOTAL completed divestments of OML 24 and OML 18. The sale proceeds from these three onshore Nigerian blocks exceeded $1 billion.
The company is working on its strategy to monetize non-core assets and concentrate more on its core operated developments. TOTAL generally uses the proceeds to acquire more assets, which are likely to offer more lucrative returns to the French behemoth.
4. Independent refiner Tesoro Corp. (TSO-Free Report) announced its decision to restart operations at the Martinez, CA refinery following certain agreements that it reached with the local union. Work had stopped at the refinery since Feb 1, due to a nationwide strike. Tesoro stated that as a result of the strike, operating expenses are expected to increase from that in its previous guidance. Also, capture rates are expected to fall below the historical average for its West Coast system.
Tesoro anticipates operating costs per barrel from its California refinery to range between $7.70 and $7.95. Moreover, strike at Martinez and turnaround at Anacortes and Salt Lake City are anticipated to reduce capture rates by about $1.50–$2.00 per barrel in the first quarter of the year. However, the company expects an improvement in capture rates in the second quarter on completion of planned turnaround activities. (See More: Tesoro to Restart Martinez Refinery, Prior Strike to Affect Q1)
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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EXXON MOBIL CRP (XOM): Free Stock Analysis Report
WHITING PETROLM (WLL): Free Stock Analysis Report
BAKER-HUGHES (BHI): Free Stock Analysis Report
TOTAL FINA SA (TOT): Free Stock Analysis Report
TESORO CORP (TSO): Free Stock Analysis Report
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