For Immediate Release
Chicago, IL – November 30, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ExxonMobil Corp. (NYSE:(XOM - Free Report) –Free Report),BP plc (NYSE:(BP - Free Report) –Free Report),Transocean Ltd. (NYSE:(RIG - Free Report) –Free Report),Transocean Partners LLC (NYSE:(RIGP - Free Report) –Free Report) and Suncor Energy Inc. (NYSE:(SU - Free Report) – Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Oil and Gas Stock Roundup: XOM, BP, RIG, SU
It was a week where both oil and gas prices ended with gains.
On the news front, ExxonMobil Corp. (NYSE:(XOM - Free Report) – Free Report) started drilling a deepwater exploration well offshore of Liberia, while BP plc (NYSE:(BP - Free Report) – Free Report) has agreed to buy a 10% interest in Egypt's Shorouk concession.
Overall, it was another good week for the sector. West Texas Intermediate (WTI) crude futures edged up 0.5% to close at $45.93 per barrel, while natural gas prices rallied 8.5% to $3.085 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Acquisition News from Sunoco Logistics, Tesoro and More .)
Oil prices inched up marginally as traders adopted a "wait and see" attitude ahead of OPEC’s Vienna meeting on Nov 30 with mixed signals on whether the cartel members will agree to rein in output as part of the plan reached in Sep. The commodity was also bolstered by the U.S. Energy Department's weekly inventory release, which showed an unexpected decline in crude stockpiles.
However, to a large extent, the bullish sentiment was offset by data from Baker Hughes showing another rise in the domestic oil rig count and pointing to the resurgence in shale drilling activities.
Oils-Energy Sector Price Index
Meanwhile, natural gas also turned sharply higher following the season’s first withdrawal and forecasts of colder weather that translates into strong demand for the heating fuel.
Recap of the Week’s Most Important Stories
1. World’s largest publicly traded oil company ExxonMobil Corp. recently announced that it has commenced drilling operations on the Mesurado-1 exploration well, offshore Liberia.
Originally, the drilling operations were scheduled for 2014. However, the Ebola outbreak compelled the international oil & gas exploration and development company to defer its drilling plans. Now that the disease has been contained, ExxonMobil declared its intention to continue with its drilling plans off Liberia in October this year.
The well is the first one to be operated by ExxonMobil offshore Liberia and targets oil in Late Cretacous sands. Located about 50 miles offshore Liberia on Block LB-13, the well lies in about 2500 meters of water. The well will also provide calibration for seismic response, which can be used to appraise other leads on the block. (Read more: ExxonMobil Sets Foot in Liberia, Drills First Well .)
2. British energy giant BP plc recently announced its decision to acquire 10% stake from Eni SpA in the Shorouk concession, offshore Egypt, for a total consideration of $375 million.
The Shorouk concession offshore Egypt also contains the super-giant Zohr gas field. On completion, BP will compensate Eni for BP’s share of past expenditure. Per the agreement, BP has an option to buy another 5% interest in the concession under the same terms, before the next year ends.
Discovered by Eni in Aug 2015, the Zohr field is located in the Mediterranean Sea, about 190 kilometers north of Port Said in water depth of about 1,500 meters. To date, six wells have been drilled successfully. It is considered to be the largest gas discovery in the Mediterranean. Eni estimates the Zohr field to hold total gas resources of about 30 trillion cubic feet of gas in place. The first phase of development of Zohr is being sped up and first gas is anticipated in late 2017. (Read more: BP to Purchase 10% Stake in Shorouk Concession from Eni .)
3. Offshore drilling giant Transocean Ltd. (NYSE:(RIG - Free Report) –Free Report) and its partnershipTransocean Partners LLC (NYSE:(RIGP - Free Report) – Free Report) jointly announced the increase of shareholding by the former to 1.2 shares from 1.1427 shares – the consideration for its pending merger of each common unit of the latter that it does not already own.
Transocean made this announcement post the failure to receive 50.1% shareholder votes necessary for the merger to close. The company aims to issue around 23.8 million shares for the deal to complete.
For the merger to take place, approval from the holders of Transocean Partners` common units is required. Shareholders of Transocean have voted for roughly 21.3 million common units in support of the transaction. However, a vote in favor of the deal by nearly 9.9 million of 19.7 million common units not held by Transocean is still needed for the deal to close. The transaction is expected to close by next month, subject to customary closing conditions. (Read more: Transocean Raises Acquisition Offer for Transocean Partners .)
4. Canada’s largest energy firm, Suncor Energy Inc. (NYSE:(SU - Free Report) – Free Report) recently provided the production outlook and capital expenditure guidance for 2017. The company expects capital spending between C$4.8 billion and C$5.2 billion and average production in the range of 680,000–720,000 barrels of oil equivalent per day (boed). This means that the company expects production to rise by more than 13% next year and spending to fall by more than C$1 billion. Suncor Energy currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Of the total capital expenditure, the company will use C$4.1–C$4.5 billion for the upstream segment, C$625–C$675 million for the downstream segment and the remaining for corporate purposes. About 40% of next year’s capital spending has been allocated for growth projects, mostly in the upstream segment
Regarding production, 420–450 thousand barrels per day (bbl/d) are expected to be contributed by the Oil Sands segment. About 150–165 thousand bbl/d will likely be derived from the Syncrude segment, while the remaining will come from the company’s exploration and production activities. (Read more: Suncor Energy Provides 2017 Capex, Production Outlook .)
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