For Immediate Release
Chicago, IL – November 18, 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 National Oilwell Varco Inc. (NOV), Cameron International Corp. (CAM), Encana Corp. (ECA), BP plc (BP) and Petrobras (PBR).
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Here are highlights from Tuesday’s Analyst Blog:
Oil & Gas Stock Roundup
It was a week where oil prices dropped towards the $40-a-barrel level, while natural gas futures also edged down after supplies reached all-time highs.
On the news front, energy sector layoffs piled up as National Oilwell Varco Inc. (NOV) and Cameron International Corp. (CAM) announced job cuts.
Overall, it was a bearish week for the sector. West Texas Intermediate (WTI) crude futures slumped 8% to close at $40.74 per barrel, while natural gas prices edged down 0.4% to $2.36 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Crude Revisits Sub-$45, Canadian Natural Sells Royalty Assets.)
Oil prices fell to their fourth loss in 5 weeks, the backdrop being bearish comments from International Energy Agency (IEA) that sees global oil demand growth to fall from its 5-year high in 2016. Oil was also undone by the Baker Hughes report that showed a rise in oil-directed rigs, the first time in 11 weeks.
Natural gas also fell slightly amid record supplies in the face of limited demand. Even an in-line inventory report and favorable weather forecast could not save the commodity.
Recap of the Week’s Most Important Stories
1. Oilfield service providers National Oilwell Varco and Cameron International are set to cut jobs in Texas, as they focus on controlling costs amid plummeting oil prices. As crude gets deeply entrenched into a bearish territory and revolves around the $45-a-barrel level, the top energy companies have cut spending (particularly on the costly upstream projects) on the back of lower profit margins. This, in turn, means lesser projects coming online for oil services firms like Cameron and National Oilwell.
National Oilwell Varco – the largest U.S. oilfield equipment maker – has decided to eliminate about 120 employees as it permanently closes a plant in San Angelo early next year. On the other hand, Cameron International plans to shed 75 jobs at its Houston facility on Thomas Road.
2. Calgary, Alberta-based oil and gas explorer Encana Corp. (ECA) reported better-than-expected third-quarter 2015 results on improved crude output. The bottom line, however, compared unfavorably with the year-ago quarter due to lower natural gas volumes and plunging commodity prices.
In the third quarter, natural gas production declined more than 30% year over year to 1,547 million cubic feet per day. Encana's realized natural gas prices were $3.71 per thousand cubic feet, lower than the year-ago quarter level of $4.03.
The company's oil and liquids production surged 35% year over year to 140,400 barrels per day on strong contribution from the Montney, Duvernay, Eagle Ford and Permian shale plays. Encana sold oil at $49.38 per barrel, significantly down from $90.22 per barrel during third-quarter 2014. (See More: Encana's Q3 Loss Narrower than Expected, 2015 View Stays.)
3. British energy major BP plc (BP) is required to make amendments to its exploration plan for tapping oil in an unexplored frontier off the coast of southern Australia before regulators approve its drilling program. The program is projected to cost over A$1 billion ($710 million).
Per the National Offshore Petroleum Safety and Environmental Management Authority (“NOPSEMA”), BP’s plan “does not yet meet the criteria for acceptance under the environment regulations.” However, the company has been allowed to resubmit its proposal.
BP intends to drill in the Great Australian Bight, which according to the company, is among the last big unexplored basins in the world. However, various environmental groups are apprehensive about a potential accident more than five years after the company’s Gulf of Mexico oil spill incident. Therefore, these groups have strongly opposed BP’s recent exploration proposal. In May 2015, BP had announced its intention to commence drilling in Oct 2016.
4. Brazil's state-run energy giant Petroleo Brasileiro S.A., or Petrobras (PBR) announced third-quarter loss of $1,062 million, narrower than the $2,150 million loss incurred in the year-earlier quarter. Loss per ADR came in at 18 cents (1 ADR = 2 shares), compared with the year-ago loss of 32 cents. An increase in diesel and gasoline prices propped up the refining unit and led to the improved performance. However, the struggling oil producer’s performance could not match the Zacks Consensus Estimate of 5 cents profit amid the worldwide crude price plunge.
The Rio de Janeiro-headquartered company’s total oil and gas production during the third quarter reached 2,800 thousand oil-equivalent barrels per day (MBOE/d), up from 2,746 MBOE/d in the same period of 2014. (See More: Petrobras Q3 Loss Narrows but Results Miss Estimates.)
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NATL OILWELL VR (NOV): Free Stock Analysis Report
CAMERON INTL (CAM): Free Stock Analysis Report
ENCANA CORP (ECA): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
PETROBRAS-ADR C (PBR): Free Stock Analysis Report
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