TSX energy ekes out second day of gains despite weakness in broader markets
Today's energy market summary:
US equity markets posted another day of heavy losses, as several mega-cap names missed the mark on third quarter earnings. Losses were across all sectors. The US energy sector fell 0.8%, with declines seen in all subsectors.
The TSX was relatively unscathed on Friday, as gains in energy and materials stocks offset losses in all other sectors. The Canadian energy sector posted a 0.4% increase for the day, with all subsectors posting small gains.
Schlumberger (SLB -0.8%) continues to sink lower, now down over 13% in October. TransCanada (TRP.TO -0.6%) and Inter Pipeline (IPL.TO +0.8%) hit new 12-month lows during the day.
Today's notable market movers:
AltaGas Canada (ACI.TO +0.3%) completed its IPO this week, with 16.5 million shares listed on the TSX at $14.50 a share. Parent-company AltaGas (ALA.TO -2.3%) retains a 45% interest in its Canadian power subsidiary. AltaGas Canada may also seek to issue another 2,475,000 shares in the next 30 days, which would boost total proceeds to $275 million.
Enbridge (ENB.TO +0.4%) continues to progress on the start-up of its US$2.6 billion Nexus natural gas pipeline, which runs from Ohio to Michigan. US federal regulators (FERC) approved the start of a compressor station in Ohio this week, but put a second station on hold pending site restoration.
Phillips 66 Partners (PSXP -1.0%) announced plans to expand capacity on its Gray Oaks crude pipeline to 900,000 bbl/day, thanks to strong demand for crude deliveries from the Permian to the Gulf Coast.
Cheniere Energy (LNG -1.1%) is asking FERC for permission to start work on its US$1 billion Midship natural gas pipeline in Oklahoma. The 234-mile pipeline will deliver 1.44 Bcf/day of gas from the Anadarko basin to existing pipelines in Oklahoma, for both domestic consumption and LNG export. The project is expected to be completed early next year.
Today's notable third quarter earnings:
Phillips 66 (PSX +1.0%) reported third quarter revenues of US$30.6 billion, up 17% y/y. Adjusted earnings rose 70% to US$1.46 billion. Net income from its midstream business rose 19% y/y, while the chemicals division saw a 20% drop in profits due to high feedstock costs. Income from PSX's core refining business rose 3%, as higher crack spreads in its Central Corridor offset lower margins in the Gulf Coast and West Coast. The company says its refineries in the Midwest and Rocky Mountains regions ran at 108% of capacity in order to capitalize on the wide WTI-WCS differential.
PSX subsidiary Phillips 66 Partners (PSXP -1.0%) reported record earnings of US$217 million in Q3, up 17% y/y. The company also boosted its dividend by 5.3%.
Natural gas producer Cabot Oil and Gas (COG +7.1%) posted Q3 revenues of US$545 million, up 41% y/y, bringing net profits to US$122 million. Production rose 10% y/y to 2.03 Bcfe/day. Output is expected to grow 20% to 25% next year. COG also boosted its dividend by 17%, the third increase in the past 18 months.
National Oilwell Varco (NOV -3.0%) posted third quarter revenues of US$2.15 billion, up 17% y/y, while net income improved to US$1 million, versus a US$26 million loss for the same time last year. The company expects higher demand for its services in 2019 as the industry works through "near-term logistical challenges" in US shale basins and more offshore projects are sanctioned.
French oil major Total (TOT -0.6%) posted third quarter revenues of US$54.7 billion, up 27% y/y. Production rose 8.6% to 2.8 million boe/day, thanks mostly to start-ups in Angola, Australia and Russia. The company expects 2018 production to grow about 8%, and 6 to 7% over the next two years. Total raised its dividend 3.2% and says it expects to boost payouts by 10% over the next three years, while still continuing its share buyback program.
|CURRENCIES & YIELDS|
|Imperial Oil||IMO||41.50||▼-0.7||33.43||44.91||85||D W|
|Husky Energy||HSE||18.69||▼-0.7||15.09||22.99||51||D W|
|Pembina Pipeline||PPL||43.31||▼-1.1||37.60||47.84||85||D W|
|Inter Pipeline||IPL||21.84||▲0.8||21.30||27.92||55||D W|
|Gibson Energy||GEI||20.98||▲0.5||15.68||23.04||97||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||36.91||▲1.0||36.00||49.08||15||D W|
|Cenovus Energy||CVE||11.12||▲0.2||9.03||14.84||24||D W|
|Seven Generations||VII||13.83||▼-3.0||13.51||21.25||13||D W|
|Pason Systems||PSI||19.98||▲1.5||16.05||22.10||92||D W|
|Mullen Group||MTL||13.97||▼-0.4||13.87||17.12||35||D W|
|Secure Energy||SES||8.27||▲1.6||6.98||9.82||88||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||42.48||▼-0.8||24.97||47.45||98||D W|
|Exxon Mobil||XOM||77.53||▼-1.0||72.16||89.30||60||D W|
|Kinder Morgan||KMI||16.59||▲0.1||14.69||19.83||61||D W|
|Williams Co||WMB||24.32||▼-2.8||24.00||33.67||32||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||106.56||▼-0.5||95.74||133.53||31||D W|
|Occidental Petroleum||OXY||67.91||▼-1.1||62.47||87.67||27||D W|
|Anadarko Petroleum||APC||58.84||▼-1.3||46.75||76.70||31||D W|
|Concho Resources||CXO||135.18||▼-0.9||123.63||163.11||34↓||D W|
|Ntl-Oilwell Varco||NOV||35.89||▼-3.0||31.47||49.08||25↓||D W|
|Baker Hughes||BHGE||27.36||▼-0.7||25.53||37.76||11||D W|
|Phillips 66||PSX||99.45||▲1.0||89.14||123.97||37||D W|
|Valero Energy||VLO||85.79||▼-1.8||75.84||126.98||7||D W|
|Marathon Petroleum||MPC||68.86||▼-1.6||55.87||88.45||39||D W|
Calfrac Well Services (CFW.TO): Upgraded from Market Perform to Outperform at BMO.
Mullen Group (MTL.TO): Upgraded from Buy to Strong Buy at Industrial Alliance.
Surge Energy (SGY.TO): Upgraded from Underperform to Outperform at National Bank.
Precision Drilling (PD.TO): Upgraded from Underperform to Sector Perform at Scotiabank.
Altagas (ALA.TO): Downgraded from Outperform to Neutral at CIBC.
EQT (EQT): Downgraded from Outperform to Market Perform at BMO.
UPDATED: DAILY (END-OF-DAY)
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