Nigeria’s oil mess hides solid African growth bet 8 Feb 2013 The state oil company is fighting the government, and production has stagnated. But at long last Nigeria’s non-oil economy, led by telecoms and construction and perhaps worth $200 bln, is growing fast enough to compensate, and then some. It’s a frontier market worth a close look.
Law of haste makes waste should govern M&A suits 7 Feb 2013 Delaware judges often warn attorneys to do their homework before suing. Now one group of legal eagles is being grounded for doing just that. This undermines efforts to curb deal litigation. Courts are right to want to punish a rush to the courthouse. But they must be consistent.
Chesapeake may have shot itself in foot on CEO pay 6 Feb 2013 Departing boss Aubrey McClendon is getting a $47 mln golden handshake. But the under-fire executive is retiring. That should allow the gas driller to claw back up to $30 mln rather than lavishing more largesse on McClendon. That gives investors a good case to sue.
Big majors yet to master oil game’s new landscape 5 Feb 2013 In spite of record Brent prices in 2012, the industry’s results are unimpressive. A foggy production outlook shows oil majors are struggling to make ever more complicated projects work. Better cashflows should materialise in the future, but for now low valuations look justified.
Petrobras proving better at finance than oil 5 Feb 2013 Brazil’s state oil giant generated a 53 pct gain in quarterly profit by selling government bonds. The company’s costs are soaring, production is falling and debt is growing. Financial dealings couldn’t preserve the dividend - and suggest Petrobras is running short of ideas.
Apple and Exxon may not be so different, after all 4 Feb 2013 The tech and oil giants share more than nearly identical U.S. market-leading values of about $400 bln. Both are threatened by shrinking margins and a struggle to replace their precious wares. Exxon has survived four times longer than Apple, but appears to be just as vulnerable.
2012 may be as good as it gets for Exxon 1 Feb 2013 The oil giant pumped out a near-record profit and its best earnings per share ever. But Exxon, like Chevron, is spending huge sums – almost $40 bln last year - to find and extract reserves. Holding output steady is tough enough. Unless oil prices jump, Exxon may have peaked.
Record crude not enough to fuel oil giants’ profit 31 Jan 2013 ConocoPhillips and Occidental both reported 2012 core profit down more than 15 pct from 2011. That’s despite a record price for Brent crude of $112 a barrel during the year. High production costs are a worry for investors and suggest the floor under oil prices is rising.
Shell shows the flip side of shale nirvana 31 Jan 2013 Full-year results show the oil major broadly on track to meet medium-term production targets and grow cash flows. But its North American business remains a drag, as the lack of export capacity holds down prices. Shell is a relative loser from the much-hyped shale revolution.
Eni shares blame for Saipem fiasco 30 Jan 2013 A shock profit warning from Eni’s 43 pct-owned oil services unit is the latest sign that the Italian oil major wasn’t keeping proper tabs on an important business. Eni doesn’t control Saipem outright, but consolidates its results. It should exercise more than distant oversight.
Cut-price Canada crude makes producers look cheap 29 Jan 2013 At $64 a barrel, the nation’s oil is the cheapest on the planet. A lack of pipelines, exacerbated by delays to Keystone XL and a drought along the Mississippi, is the cause. But the sell-off in shares of the likes of Canadian Natural Resources looks overdone.
Activist exposes Hess as latest governance villain 29 Jan 2013 Hedge fund Elliott reckons the U.S. oil company could be worth more than double its current $20 bln-plus value. But as at other energy groups, like Chesapeake and SandRidge, a too-cozy board has brought waste and strategic blunders. New broom directors would help change that.
Hess needs more than standard activist fare 28 Jan 2013 The $21 bln U.S. oil group is selling terminals and closing its last refinery just as activist hedge fund Elliott Associates is showing interest. Hess is already becoming a purer explorer. Closing the valuation gap with peers requires more than spinoffs or financial engineering.
Davos desperately seeking the next Internet 24 Jan 2013 Delegates at this year’s World Economic Forum want solid reasons to be bullish. And so the U.S. shale gas revolution has taken on an undeserved status as a Web-like catalyst for global change. In the echo chamber of Davos, semi-logical conclusions quickly become common wisdom.
Big Oil and MLPs on verge of beautiful friendship 23 Jan 2013 The likes of BP own mature wells that often don’t generate a decent return. Until now they had few options for offloading them. But the emergence of tax-exempt partnerships that pump oil and gas provides buyers that can pay top dollar and extract fat returns for investors.
Big Oil will struggle to buy more security 21 Jan 2013 The deadly attack on a BP and Statoil-operated gas field in Algeria underscores oil majors’ impotence. The companies would happily throw money at the problem, but corporate cash cannot buy safety. Tackling militant threats is an issue for governments, no matter how ill-equipped.
McMoRan flop makes Freeport bid more like bailout 18 Jan 2013 The U.S. explorer is bleeding cash after plowing $1 bln into a failing deep gas well. That makes the 74 pct premium offered by miner Freeport, whose chairman also runs McMoRan, look even richer - especially with gas cheap and abundant. Freeport’s shareholders are the losers.
Gazprom bid for Greek gas puts EU in a bind 15 Jan 2013 Brussels might not like that Gazprom and a little-known Russian power group are lead contenders in a Greek gas privatisation. But with Grexit fears lurking, it’s no wonder the sale hasn’t attracted more buyers. An unusual example of self-defeating policies at work.
Governance fixes don’t let Chesapeake CEO off hook 9 Jan 2013 New directors are cutting back outsized pay and perks at the U.S. gas driller. But cleaning house is separate from holding boss Aubrey McClendon to account for dodgy personal dealings. The only credible result of a lengthy board probe into conflicts of interest would be his exit.
Chesapeake sets unlikely governance reform example 8 Jan 2013 The U.S. gas firm’s revamped board slashed CEO Aubrey McClendon’s bonus to zero and reined in other perks. They’re overdue steps for Chesapeake, which has a long way to go to restore credibility. Still, there’s hope for similarly abused shareholders elsewhere in the oil industry.