JPMorgan in awkward place in Essar Energy buyout 21 Feb 2014 The investment bank led the troubled Indian group’s London IPO, and remains a house broker. So it’s far from ideal that JPMorgan is now advising independent directors on a potential buyout by the majority owners. Board members urgently need a fresh outside perspective.
Oxy’s restructuring plan just California dreamin’ 18 Feb 2014 The oil and gas giant says it will spin off operations in the Golden State. That will raise cash and remove a lagging unit, but loading it with debt may deter buyers. Selling valuable chemical and pipeline assets instead could streamline the company and boost investor returns.
Hamm is latest case study in U.S. oil sector murk 11 Feb 2014 The Continental boss has overseen a sevenfold rise in its shares since 2007. But like some less successful energy patch CEOs, he has done oil deals on the side. A shareholder lawsuit isn’t really the point. It’s inviting trouble for Hamm to trade with the firm he runs.
Tech isn’t the only threat to Exxon’s S&P standing 10 Feb 2014 For the first time in a decade the oil giant isn’t one of the two largest U.S. firms. Google is now second only to Apple. But it’s not just the rise of technology that has eclipsed Exxon. Soaring capex and flat oil prices mean it may have to get used to even lower rankings.
Petrobras risks becoming Latin America’s Gazprom 6 Feb 2014 Brazil’s petro-giant increasingly resembles Russia’s gas monopoly as state meddling and rampant spending destroy value and crowd out more productive investment. Petrobras shares have fallen so low it’s like 2007’s “gift from God” never arrived. It’s not too late to change course.
BP starts to shine next to Shell 4 Feb 2014 It’s all relative: BP’s profit fell almost a third in the fourth quarter, but it was no worse than expected. Russia and mounting Gulf of Mexico spill costs make its earnings hard to predict. But, unlike Shell, it has set more concrete targets to back up its promises.
Chevron looking cheap despite its big spending 31 Jan 2014 The oil giant’s Q4 profit slumped 32 pct as it splurged on capex at a pace that put bigger rivals to shame. The emphasis on mega-projects that have yet to produce is worrisome. But steely-nerved investors should eventually be rewarded with an output growth rate twice Exxon’s.
Exxon outlays should pump up 2014 after down year 30 Jan 2014 The oil giant’s quarterly profit slid 16 pct to $8.4 bln due to sluggish oil and gas production and record capital spending. But output should pick up as mega-projects stop guzzling funds and go online. With cash beginning to flow, investors can look forward to brighter times.
Forget WTI – Louisiana crude is the new spread bet 29 Jan 2014 With U.S. output surging, West Texas Intermediate oil costs less than global Brent crude by about $11 a barrel at present. Louisiana Light Sweet, though, still trades nearer the world price. With no sign of American production growth slowing, that discount will soon widen.
SolarCity’s newest bright idea shines only so much 23 Jan 2014 A plan by Elon Musk’s panel installer to let individuals finance its projects looks smart. It could reduce SolarCity’s costs while using collateral that’s generally safer than houses. Unless the company can increase customers 12-fold by 2018, though, its shares remain pricey.
Fracking’s big benefit may be steadier oil prices 21 Jan 2014 Despite a price slide since the year-end, crude volatility is at 20-year lows. One explanation is the U.S.-centric shale boom. There’s more oil around, and drillers can respond more quickly to price moves. A damper on price swings should help companies and governments plan ahead.
Shell’s profit warning shows way for new CEO 17 Jan 2014 The oil and gas major blamed refining woes and high exploration costs for its fourth-quarter profit miss. It comes on top of a string of disappointing results. The worry now is that Shell won’t generate enough cash to hit its targets. The group’s new boss has his work cut out.
Gas deal means Brazil can also be seen from Alaska 16 Jan 2014 Sarah Palin’s gubernatorial successor has signed a deal for the state to take an equity stake in a $45 bln LNG project. The Last Frontier seems the last place likely to get entangled Latam-style with Exxon, BP and others. Oil production is falling, though, leaving fewer options.
Coal typifies China’s reform: it’s hard and dirty 14 Jan 2014 For all the concern about smog, China is adding more new coal-mining capacity each year than its total imports. Hopes that coal use is nearing its peak rest on heroic assumptions about clean, slower growth. But history and short-term economics are hard to ignore.
Amec engineers $3.2 bln strategic shift 13 Jan 2014 The UK engineer is set to buy U.S.-listed rival Foster Wheeler. The structure is solid: a slim 12.8 percent premium, decent cost cuts, and payment half in stock to keep debt down. Investors just need to be satisfied that a big push into downstream energy makes sense.
Schwarzman solar push may bring Musk back to earth 9 Jan 2014 Wunderkind CEO Elon Musk’s money-losing SolarCity needs to hold off competitors to justify its $6 bln valuation. Yet rival solar panel installer Vivint, owned by Stephen Schwarzman’s Blackstone, is a faster-growing number two. Low barriers to entry make SolarCity vulnerable.
Hard to find phoenix in ashes of Batista’s empire 6 Jan 2014 Despite the real assets buried under the collapsed EBX Group, the flagship oil explorer will emerge from bankruptcy with poor growth prospects. Investors already have priced in big things for the port and electricity arms. And too much depends on a resurgent Brazilian economy.
U.S. utilities face German-style solar burn 3 Jan 2014 Solar power accounts for just 1 pct of U.S. electricity production, against 10 pct in Germany. But generators stateside are already feeling the heat and pushing for levies on solar panels. They’re keen to avoid the scorched profit seen at traditional Teutonic utilities like E.ON.
Rail crash shows why Dakota oil boom hard to match 3 Jan 2014 With no casualties, the fiery derailment of a crude-laden train will soon fade from view. But North Dakota’s mix of huge reserves and low population is rare. The Bakken shale’s sevenfold output surge since 2007 isn’t easily reproducible in places where people actually live.
Oil’s new age of plenty challenges old assumptions 27 Dec 2013 Cheap shale, cheaper renewables, and increasing efficiency are creating a glut of non-OPEC crude, and bringing forward the peak of fossil fuel demand. Even if energy prices don’t fall sharply, there will be more volatility in oil prices, energy investments and geopolitics.