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.
Ghana spoils good thing with poor policies 7 Feb 2014 When oil arrived, Ghana’s socialist government ramped up spending and subsidies and ran big budget deficits. Now growth has stalled and the government is installing FX controls. It needs to move in exactly the opposite direction, toward an affordable and more modest state.
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.
BG makes a habit of disappointing investors 27 Jan 2014 The UK gas company’s shares fell 15 pct after it predicted lower production this year and the next due to problems in Egypt and America. BG has traditionally enjoyed a premium valuation for its growth. But it clearly faces the same output and cost pressures as its peers.
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.
Supreme Court’s iffy economics cheat investors 15 Jan 2014 The top U.S. tribunal assumes prices of listed shares reflect all public data - even lies. That allows owners of widely traded stock to sue en masse for fraud but cuts out others. A Halliburton lawsuit gives the justices a chance to rethink the rules and focus on duped investors.
U.S. natural gas price finally reaches safety zone 15 Jan 2014 At near $4.50 per mln Btu, drillers can turn a profit on gas after several painful years. Cold weather has helped push up the price, but with demand rising it’s more than a blip. Meanwhile, production costs have come down. The likes of Exxon and Chesapeake can breathe easier.
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.
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.
Ukraine’s Russian lifeline means European pain 18 Dec 2013 Vladimir Putin has agreed to buy $15 billion worth of Ukrainian bonds and to sell gas to Kiev at a discount. The deal gives relief to Russia’s troubled neighbour but costs Moscow little and buys valuable influence. Pro-EU demonstrators in Kiev and other cites won’t go home soon.
Shale energy deficit will hit Europe hard 17 Dec 2013 American companies have a big advantage over European counterparts: abundant, cheap gas. Fracking is more difficult in Europe and requires a step-change in public perception. Cheaper energy could provide the old continent with the fillip it needs. But it’s a pipedream.
McClendon IPO plan is echo of bad old Chesapeake 16 Dec 2013 He lost his job as CEO of the energy firm over spending and conflicts. A new $2 bln venture would allow him to cherry-pick assets ahead of his investors and reward him generously. Despite McClendon’s knack for buying oil and gas properties, investor skepticism is in order.