It was a week where oil prices ended higher after dipping below the $40-a-barrel mark but natural gas futures slumped to their lowest levels in almost a month.

On the news front, Marathon Petroleum Corp. MPC boosted the cash portion of its offer for MarkWest Energy Partners L.P. MWE for the second time, while Transocean Inc. RIG announced its intent to delist from the Swiss exchange.     

Overall, it was a mixed week for the sector. West Texas Intermediate (WTI) crude futures rallied 2.1% to close at $41.90 per barrel, while natural gas prices tumbled 9.2% to $2.15 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Cameron, National Oilwell to Cut Staff as Energy Layoffs Continue.)

Oil prices gained after Baker Hughes rig count data showed a drop in oil-directed rigs, indicating a break in shale drilling activities.

Natural gas though fell sharply after stockpiles held in underground storage reached 4 trillion cubic feet for the first time ever.

Recap of the Week’s Most Important Stories

1.    Independent oil refiner and marketer Marathon Petroleum. has announced further increase in the cash that it will be paying for the MPLX L.P. MPLX-MarkWest Energy Partners merger.

Interestingly, the company had announced an increase in the cash consideration just a week ago. Marathon had raised the amount of cash payable per unit to MarkWest unitholders from $3.37 (in the original merger agreement) to $5.21.

Marathon has now agreed to increase this cash portion to $6.20 per unit. The company further added that this is the best and the final offer for MarkWest unitholders. The partnership’s stakeholders will receive a total cash consideration of $1.28 billion and 1.09 MPLX units for each MarkWest unit they hold. This amounts to a total consideration of about $51.74 per MarkWest unit according to the closing price on Nov 16. (See More: Marathon Funds Higher for MPLX-MarkWest Deal, Again.)

2.    Offshore drilling services provider Transocean Inc. announced plans to delist from the Swiss stock exchange in a bid to cut costs. The rig supplier expects to get consent from the authorities before the end of 2015 with full delisting likely during the first quarter of 2016. Transocean, which shifted its headquarters to Switzerland in 2008 and debuted on Zurich’s SIX Exchange in 2010, will continue to be incorporated in the country.

However, the company maintained that its domestic shares will continue to be listed and traded on the New York Stock Exchange. Transocean cited the expense and effort associated with multiple listing locations as reasons for the delisting move. As it is, the company is struggling with receding order levels. The ongoing slump in commodity prices has curtailed energy drilling and equipment demand, thereby affecting Transocean’s revenues, earnings and cash flow.

3.    Canada’s largest energy firm Suncor Energy Inc. SU provided its production outlook and capital expenditure guidance for 2016.

The company expects 2016 capital spending in the range of C$6.7 billion to C$7.3 billion. Of this, the company will use C$5.85–C$6.3 billion for the upstream segment, C$800–C$900 million for the downstream segment and the remaining for corporate spending.

Suncor also anticipates average per day production of 525,000–565,000 barrels of oil equivalent. Of this, 400–425 thousand barrels per day (bbl/d) are expected to be contributed by the Oil Sands segment. About 30–35 thousand bbl/d will likely be derived from the Syncrude segment, while the remaining will come from the company’s exploration and production activities. (See More: Suncor Energy Provides 2016 Capex, Production Outlook.)

4.    British energy major BP plc BP intends to sale its petrochemicals complex in Decatur, AL and is exploring options for the same. This is part of the company’s restructuring initiative for its petrochemicals business. The Alabama plant, which spans across 1,000 acres, is capable of producing one million tons per year of PTA. The facility also manufactures paraxylene (PX), a raw material for PTA production.

Per the company, the plant producing purified terephthalic acid (PTA) – a vital raw material in the manufacture of polyester and also used in flat screen televisions as well as high-strength tire cords – does not suit its strategy of concentrating on world-scale, low-cost facilities any more. (See More: BP to Sell its Alabama Petrochemica Facility, Seeks Buyers.)

5.    Independent refiner Tesoro Corp. TSO has agreed to purchase certain marketing and logistics assets in Alaska's Anchorage and Fairbanks from Wichita, Kansas-based Flint Hills Resources for an undisclosed amount. The transaction – expected to close within 2 months – will help Tesoro expand its footprint in Alaska.

The to-be-bought properties include wholesale fuel marketing contracts in Alaska, a terminal in Anchorage with 580,000 barrels of storage also having a truck rack, and rail loading capability. Tesoro will also gain an airport terminal in Fairbanks, together with a multiyear agreement at Flint Hill’s North Pole terminal south of Fairbanks.

Price Performance

The following table shows the price movement of the major oil and gas players over the past week and during the last 6 months.

Over the course of last week, ‘The Energy Select Sector SPDR’ suffered a loss of 1.17% as investors witnessed a bout of selling in major companies. The worst performer was offshore drilling powerhouse Transocean Ltd. whose stock shed 3.3%.

Longer-term, over the last 6 months, ‘The Energy Select Sector SPDR’ lost 16% of its value. Transocean was again the main laggard, as it witnessed a 27.7% price decline. However, downstream operator Tesoro Corp. was able to buck the trend and was the chief beneficiary on the bourses with its shares advancing 32.5% during this period.

What’s Next in the Energy World?

Apart from the usual releases in this week – the U.S. government data on oil and natural gas – market participants will be closely tracking a series of crucial economic reports, including those on home sales, durable orders, personal spending as well as vital data on GDP.

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