Oil prices sink along with global equity markets, as WTI hits 14-month low
Today's energy market summary:
WTI dropped below US$50 for the first time since October 2017, while Brent ended the day below US$60.
Edmonton Condensate (C5+) was the only gainer in energy commodities, rising 8.5% as the discount to WTI narrowed by US$5, to about US$3/bbl.
US natural gas prices (Henry Hub) continue to correct, falling another 8% on Monday.
Today's equity market action:
The sell-off continues in North American markets, with the Dow Jones Industrial logging another 500+ point decline (-2.1%). Despite falling bond yields, the Dow Utilities was the worst performer, declining 3.4%.
Canadian energy stocks lost an average of 2.5%, while US counterparts declined almost 2%. Producers were the worst hit on Monday, with many, many names hitting fresh multi-year lows on both sides of the border.
Today’s 2019 guidance updates:
Baytex Energy (BTE.TO -7.2%) has approved a 2019 capital budget of $550 to $650 million, with production expected to average 93,000 to 97,000 boe/day, weighted 83% liquids. Next year's capex spending is subject to cash flow and assumes a WTI price of US$52.
Gran Tierra (GTE.TO -2.9%) says Q4 production is currently tracking at a record high of 38,220 boe/day, up 11% from the same quarter last year. Next year's output is expected to average between 40,000 to 42,000 boe/day. The company has set a 2019 capital budget of $350 to $370 million.
Painted Pony Energy (PONY.TO -7.0%) has approved a 2019 capital budget of $95 to $110 million, which is expected to be fully funded from operating cash flow. Next year's production is forecasted to average between 324 and 336 MMcfe/day, weighted 9% liquids.
Today's M&A activity:
TransCanada (TRP.TO -2.3%) has agreed to sell its Coolidge Generating Station to a subsidiary of Southwest Generation for US$465 million. The 575 MW natural gas-fired power facility is located in Coolidge, Arizona. TransCanada also filed for a mixed-shelf offering of US$2 billion in common and preferred shares.
Enbridge (ENB -2.0%) has closed on the purchase of Spectra Energy Partners (SEP n/c). Effective Monday, SEP shares will be delisted from the NYSE.
Eni (E -1.0%) has sold a 35% stake in Block 24 offshore Mexico to Qatar Petroleum. Eni retains a 65% stake and will continue to operate the field. Financial terms of the deal were not disclosed.
According to Bloomberg, Royal Dutch Shell (RDS.A -0.9%) is now the frontrunner in talks to buy privately-held Endeavor Energy, who owns drilling rights to 300,000 acres of mostly undeveloped land in the Permian Basin. ExxonMobil (XOM -2.0%), Chevron (CVX -1.2%) and ConocoPhillips (COP -2.2%) have reportedly lost interest in the deal, said to be worth about US$8 billion.
Switzerland-based Weatherford International (WFT -12.5%) announced the sale of its surface data logging business to Excellence Logging for $50 million in cash. Net proceeds will be use to reduce debt. The company has also been warned it will be delisted from the NYSE if share prices do not return above US$1/share in the next 6 months. WFT shares ended Monday at US$0.38.
Today's other notable energy news:
Kinder Morgan (KMI -2.0%) says it will move forward with its Roanoke Expansion on the Plantation Pipe Line, adding 21,000 bbl/day of additional refined product transport capacity from Louisiana and Mississippi into the state of Virginia. Pending all regulatory approvals, the expansion is expected to be in service by the spring of 2020.
Following in the footsteps of ExxonMobil (XOM -2.0%) last week, BP (BP -0.7%) announced the signing of several MOUs with Angola's Sonangol for exploration and production sharing, the extension of a production licence and an agreement to progress on the development of an offshore deepwater block.
Eni (E -1.0%) announced a positive final investment decision to develop the Merakes Project, located offshore the Indonesian province of East Kalimantan. Gas production will be shipped out of the Bontang LNG facility.
The government of Oman has signed two oil and gas exploration agreements with Occidental Petroleum (OXY -1.5%). The company has agreed to spend US$14 million over the next three years.
|CURRENCIES & YIELDS|
|Suncor Energy||SU||39.09||▼-1.3||38.92||55.47||21||D W|
|Imperial Oil||IMO||35.10||▲0.9||33.43||44.91||26||D W|
|Husky Energy||HSE||14.75||▼-4.0||14.62||22.99||17||D W|
|Pembina Pipeline||PPL||42.93||▼-2.2||37.60||47.84||69||D W|
|Inter Pipeline||IPL||19.80||▼-2.3||19.67||27.60||28||D W|
|Gibson Energy||GEI||18.77||▼-3.1||15.68||23.32||74||D W|
|LARGE CAP E&P|
|Cdn Natural Res||CNQ||33.15||▼-3.3||32.08||49.08||24||D W|
|Cenovus Energy||CVE||9.85||▼-4.0||9.03||14.84||25||D W|
|Vermilion Energy||VET||28.00||▼-3.2||27.97||50.46||9||D W|
|Pason Systems||PSI||18.59||▲0.1||16.05||24.57||44||D W|
|Mullen Group||MTL||12.02||▼-2.2||11.93||16.93||26||D W|
|Secure Energy||SES||7.14||▼-1.1||6.72||9.82||49||D W|
|REFINING & MARKETING|
|Parkland Fuel||PKI||34.05||▼-5.9||26.34||47.45||62||D W|
|Exxon Mobil||XOM||74.04||▼-2.1||72.16||89.30||55||D W|
|Kinder Morgan||KMI||15.84||▼-2.0||14.69||19.83||53||D W|
|Williams Co||WMB||22.98||▼-2.0||22.78||33.67||37||D W|
|LARGE CAP E&P|
|EOG Resources||EOG||96.21||▼-3.8||95.46||133.53||30||D W|
|Occidental Petro||OXY||64.11||▼-1.5||62.47||87.67||27||D W|
|Anadarko Petro||APC||49.58||▼-2.7||47.39||76.70||16||D W|
|Concho Res||CXO||109.78||▼-4.6||109.18||163.11||16||D W|
|Ntl-Oilwell Varco||NOV||26.35||▼-1.2||26.26||49.08||2||D W|
|Baker Hughes||BHGE||21.62||▲0.8||20.81||37.76||7||D W|
|Marathon Petro||MPC||58.84||▼-1.7||58.13||88.45||22||D W|
|Phillips 66||PSX||85.86||▼-1.1||84.87||123.97||20||D W|
|Valero Energy||VLO||72.58||▼-1.0||71.25||126.98||5||D W|
Crestwood Equity Partners (CEQP): Upgraded from Neutral to Buy at Goldman Sachs.
Superior Plus (SPB.TO): Upgraded from Sector Perform to Outperform at RBC.
UPDATED: DAILY (END-OF-DAY)
• OIL PRICES REFLECT NEAR MONTH CONTRACT FROM THE NYMEX/CME GROUP
• EQUITY PRICES PROVIDED BY NYSE & TMX GROUP
• CHARTPACKS COURTESY STOCKCHARTS.COM (DIVIDEND ADJUSTED)
• OIL PRICES, FUTURES AND DIFFERENTIALS IN USD/BBL
• C5+ = EDMONTON CONDENSATE
• FUTURES CURVES SHOW PRICES FOR NEAR-MONTH CONTRACT (C1) AND NEXT 5-MONTHS (C2-C6)
• TSX SHARE PRICES IN CAD; S&P 500 PRICES IN USD
• ADR: AMERICAN DEPOSITORY RECEIPTS LISTED ON NYSE IN USD
• SHARE PRICE CHANGES (INCL. NEW HIGHS & LOWS) EXCLUDE DIVIDENDS
• BASED ON STOCKCHARTS TECHNICAL RANK (SCTR)
• REFLECTS RELATIVE STRENGTH AMONG OTHER ENERGY STOCKS (PERCENTILE RANKING)
• RISING RANK (↑) REFLECTS INCREASING RELATIVE STRENGTH
• FALLING RANK (↓) REFLECTS DECREASING RELATIVE STRENGTH.