Chesapeake and partner wobble together 7 May 2012 The troubled gas firm needs cash. But its woes make it harder to tap one of its favorite sources, Chesapeake Midstream, a partnership it controls. Last year it bought $900 mln of its parent’s assets. Chesapeake’s governance and liquidity concerns may limit its ability to help.
India and U.S. try for uneasy alliance over Iran 7 May 2012 A visit from Hillary Clinton on the same day as a trade mission from Tehran highlights the diplomatic tightrope that New Delhi is on. While good U.S. relations are important, India’s trade deficit makes Iran’s cheap oil too attractive to pass up. A compromise looks likely.
Review: Exxon’s shareholder fetish, good and bad 4 May 2012 A single-minded devotion to shareholders has helped the oil giant earn high returns. But Steve Coll’s “Private Empire” shows how this obsession also made it easy to make some bad decisions: cozying up to nasty regimes and a crusade against global warming science.
Repsol still not a tempting takeover target 4 May 2012 The YPF fiasco has knocked a third off the Spanish oil major’s shares, sparking bid speculation. But even if rivals felt acquisitive, refining exposure and lingering YPF risks are deterrents to an offer. The new Repsol isn’t without prospects. But it’s cheap for a reason.
Earnings surge only superficial relief for Pemex 3 May 2012 A 20-fold jump in Q1 paper profit obscures the fact that little has changed at Mexico’s oil monopoly. Production continues to slide and its profit potential is crushed by the government’s tax take. Only election season talk of oil industry openness offers a glimmer of hope.
BG investors right to be nervous about cost creep 3 May 2012 Profits are up, production is the envy of peers and a $5 bln disposal plan is on track with the $1.8 bln sale of Comgas. But the dip in BG’s shares after the gas giant raised capex guidance shows that even the best aren’t immune to the spiraling cost of big petroleum projects.
Qatar’s cash cow can ride out a global gas glut 3 May 2012 The emirate’s grip on gas markets will weaken by the second half of the decade due to oversupply. That might knock some of the swagger out of the energy-dependent state. But Qatar’s low production cost, long-term contracts and significant market share should limit the fallout.
Analysts fiddle while CEO burns Chesapeake 2 May 2012 Wall Street’s finest barely acknowledged the stunning governance lapses surrounding the U.S. energy firm’s boss, Aubrey McClendon - or his contradictory answers. With shares falling, debt and costs rising and oil production forecasts dropping, investors should cut their losses.
Oil majors can only admire Colombia’s titan 1 May 2012 Ecopetrol may not be well known outside Latin America. But the state-controlled company just posted an enviable 50 pct EBITDA margin. At $135 bln, it’s now worth as much as BP. Replacing reserves won’t be easy. But such a well-run firm looks like the best oil play in the region.
Chesapeake board does too little, too late 1 May 2012 Stripping CEO Aubrey McClendon of the chairmanship and ending his personal investments in the firm’s wells are obvious, if belated, moves. But McClendon’s deal-making and borrowing have accompanied lagging returns. Shareholders deserve more radical changes in the boardroom.
Fracking shale could cause global geo-tremors 1 May 2012 Shale gas accounts for less than 1 percent of worldwide energy use at present. But fracking is a growth business, and shale oil prospects are also altering the global hydrocarbon equation. The additional supply could change the geo-political and geo-financial landscape.
Sunoco owners get rewarded for patience 30 Apr 2012 The 23 pct premium from Energy Transfer Partners doesn’t at first sight look huge. But given Sunoco’s unfinished turnaround, the $5.3 bln sale at a higher price than shareholders have seen in years is evidence of a well-timed leap onto the industry’s partnership M&A bandwagon.
Fear factor could end calm in crude market 30 Apr 2012 Oil prices have slipped and supply looks adequate, but fundamentals don’t determine the price of crude. Easy money and trader angst could easily drive prices higher again. Current worries are Iran and thin Saudi spare capacity, but there are always reasons to expect the worst.
Chesapeake tangle goes far beyond CEO 26 Apr 2012 Aubrey McClendon’s dubious dealings have the $12 bln U.S. energy giant on the back foot. But investors should also question the company’s monstrous complexity. It has convoluted off-balance sheet liabilities, hedging gains have dwarfed profit, and cash flow is steadily negative.
Exxon playing catch-up with dividend hike 26 Apr 2012 The oil giant’s 21 pct higher payout is a step in the right direction. But Exxon’s Q1 earnings miss suggests the move was partly a sop for shareholders. The company still made $9.5 bln, but weak U.S. gas prices, declining output and surging capex will keep investors on edge.
Egypt-Israel energy ties look broken 24 Apr 2012 It is hard to believe that Egypt’s termination of a long-term contract to supply gas to Israel is a pure business dispute given the odd timing of the move. In the absence of a resolution Israel faces some difficult months. That’s bad for peace but doesn’t destroy it.
Conoco’s last pre-split report better than it looks 23 Apr 2012 A decline in first-quarter profit to $2.9 bln suggests the U.S. oil giant, soon to split in two, is going out with a whimper. But underlying growth trends in chemicals and U.S. oil could boost prospects at the slimmed-down Conoco and at Phillips 66, the new standalone refiner.
Oil majors can’t afford to shun Argentina 20 Apr 2012 Beyond the YPF asset grab, Cristina Fernandez may overhaul the entire energy sector. But Argentina’s shale is too important to ignore and Big Oil knows how to navigate tricky regimes, including Venezuela’s. Even with risks higher and returns lower, the long game could pay off.
UK gas bounty will be tricky to exploit 19 Apr 2012 Geologists think the UK may hold 1,000 trillion cubic feet of shale gas - good for decades of self-sufficiency. But high extraction costs mean much of it may stay buried unless prices move sharply higher. That makes UK shale more of an insurance policy than a game-changer.
Argentina’s oil-asset grab is both normal and odd 19 Apr 2012 The decision to take control of YPF puts Argentina in the oil industry mainstream - 75 percent of global production comes from government-controlled companies. What is odd, though, is the desire to micromanage the company and the willingness to annoy the rest of the world.