We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: BP, Royal Dutch Shell, Cenovus Energy, Canadian Natural Resources and Patterson-UTI Energy
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 13, 2017 – 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 includeBP plc (NYSE: (BP - Free Report) – Free Report), Royal Dutch Shell plc(NYSE: – Free Report), Cenovus Energy Inc.(NYSE: (CVE - Free Report) – Free Report), Canadian Natural Resources Ltd. (NYSE:(CNQ - Free Report) – Free Report) and Patterson-UTI Energy, Inc.(Nasdaq: PTEN– Free Report).
Oil & Gas Stock Roundup: BP’s New IPO, Shell’s Mexico Play
It was a week where oil prices ended barely higher, while natural gas futures tallied a steep loss. Moreover, with most of the refinery activity along the Gulf Coast resuming after the temporary disruption from Hurricane Harvey, gasoline futures slumped.
On the news front, European oil major BP plc (NYSE: BP– Free Report) said it would spin off its U.S. pipeline assets into a master limited partnership and take it public, while regional rival Royal Dutch Shell plc (NYSE: RDS.A– Free Report) announced the opening of its first service station in Mexico as it gets ready to pour $1 billion in the Latin American country over the next decade.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures edged up 0.4% to close at $47.48 per barrel, natural gas prices slumped 5.9% to $2.89 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Gasoline Soars Amid MPC's Drop-Down Deal, NBR's Acquisition.)
Despite a hefty inventory build, oil prices recorded their first gain in six weeks. The U.S. Energy Department's inventory release showed that crude stockpiles increased by 4.6 million barrels as Gulf refinery runs fell to record lows on shutdowns due to tropical storm Harvey.
However, this negative sentiment was more than offset by the steadily rising domestic oil demand amid the resumption of operations by Gulf Coast refineries those were shut down by Hurricane Harvey. Concerns over a potential hit to oil production from Hurricane Irma also cushioned prices.
Meanwhile, natural gas traded down sharply following an above-average increase in supplies. Worries over the fuel’s tepid demand on the back of Hurricane Irma-related power outages further pushed down natural gas prices.
Gasoline Plunges on Receding Shortage Fears
The most widely used petroleum product ended 5.7% lower on the week to $1.648 a gallon after jumping in the past couple of weeks in the aftermath of Tropical Storm Harvey knocking out refining operations in the Houston area. With most of the facilities back online and temporary shortages beginning to ease, prices at the pump are starting to fall.
Recap of the Week’s Most Important Stories
1. A wholly owned indirect subsidiary of oil giant BP plc, BP Midstream Partners LP, has commenced its plan of initial public offering (IPO) of common units, which signify limited partner interests. In this respect, BP Midstream Partners has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission ("SEC"). The news followed after the announcement BP made in July, wherein it appraised the creation and IPO of a master limited partnership (MLP).
BP Midstream Partners’ formation as a separate vehicle that would own, operate, develop and acquire pipelines and other midstream assets will help in the growth of midstream business. The IPO would be in line with BP’s strategy to develop its midstream business and at the same time boost shareholder value. Headquartered in Houston, TX, BP Midstream Partners will have offices in Chicago, IL.
Initially, ownership interests in one onshore crude oil pipeline system and one onshore refined products pipeline system are believed to form assets of BP Midstream Partners. Other properties will include an onshore diluents pipeline asset, which delivers liquids to or from the energy giant’s Whiting Refinery in Whiting, IN.
The company will also have interests in four offshore crude pipeline systems and one offshore natural gas pipeline system that links offshore production resources, located off the coast of the Gulf of Mexico, with the Gulf Coast refining and distribution hubs. (Read more BP Midstream Partners' IPO Plans for US Pipelines on Track.)
2. European oil giant Royal Dutch Shell plc recently opened its first service station in Mexico. With this latest move, the company sets foot in the Mexican retail fuel market. This is a milestone event for Shell since Mexico is the second-largest economy in Latin America and its gasoline market is the fifth-largest in the world. The development is likely to offer the company multiple growth opportunities and boost its revenues.
The company’s first gas station includes a convenience store and is located in the northwestern suburb of Mexico City. With this development, motorists in the country will now be able to avail Shell’s high-grade gasoline and diesel fuels. The convenience store which is likely to offer freshly-brewed gourmet coffee, healthy fresh food and free Wi-Fi also promises superior retail experience to customers.
Shell is touted as the largest fuel retailer in the world with over 43,000 gas stations in around 80 countries worldwide. The company will also be expanding its network of service stations in other developing economies like India, Brazil, China and Indonesia over the next decade. In Mexico, Shell intends to invest around $1 billion over the next 10 years as part of its retail expansion plans. (Read more: Shell Makes a Foray Into Mexico Retail Fuel Market.)
3. Canadian oil major, Cenovus Energy Inc. (NYSE: CVE– Free Report) recently agreed to divest its heavy oil properties in Pelican Lake and other eclectic assets to Canadian Natural Resources Ltd. (NYSE: CNQ– Free Report) for C$975 million ($787 million) in cash, putting earlier speculation to rest. The deal is expected to be over by Sep 30, 2017.
Cenovus' wholly owned Pelican Lake property – which currently produce 19,600 barrels of oil equivalent (BOE) heavy oil per day – is located approximately 300 kilometers north of Edmonton.
Investors should also know that with the deal, the first of the four key asset sales, Cenovus plans to bring down its net debt to operating earnings ratio below 2 by 2019. (Read more: Cenovus to Sell Pelican Assets to Canadian Natural for C$975M.)
4. In a bid to enhance its directional drilling activities, onshore contract driller Patterson-UTI Energy, Inc. (Nasdaq: PTEN– Free Report) recently inked a deal to acquire Multi-Shot, LLC. Oilfield service company Multi-Shot operates business as MS Energy Services. Post the announcement of the deal, JPMorgan Chase & Co. upgraded Patterson-UTI from neutral to overweight. Following the developments, shares of the company rose by 6.65% to eventually close at $17 on Sep 5.
The $215 million acquisition deal will be funded by a combination of cash and stock without the assumption of any debt of MS Energy. Patterson-UTI will make cash payment of $75 million and will offer 8.8 million shares of its common stock based on the closing price of $15.94 as on Sep 1. Subject to satisfactory closing conditions and regulatory approvals, the transaction is likely to close by the fourth quarter this year.
The MS Energy buy bodes well for Patterson-UTI, given the compelling strategic rationale of the transaction. Apart from bolstering its scale and customer base, the buyout will help Patterson-UTI to enhance its presence in North American markets. MS Energy’s complimentary assets, skilled manpower and technological expertise are expected to strengthen the portfolio of Patterson-UTI, thus bolstering its future revenue growth opportunities.
MS Energy’s standout technology and proprietary design will broaden the service offerings of Patterson-UTI and position it undertake unconventional drilling operations in the North American markets. (Read more: Patterson-UTI Rallies on MS Energy Acquisition Deal.)
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: BP, Royal Dutch Shell, Cenovus Energy, Canadian Natural Resources and Patterson-UTI Energy
For Immediate Release
Chicago, IL – September 13, 2017 – 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 includeBP plc (NYSE: (BP - Free Report) – Free Report), Royal Dutch Shell plc(NYSE: – Free Report), Cenovus Energy Inc.(NYSE: (CVE - Free Report) – Free Report), Canadian Natural Resources Ltd. (NYSE:(CNQ - Free Report) – Free Report) and Patterson-UTI Energy, Inc.(Nasdaq: PTEN– 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 & Gas Stock Roundup: BP’s New IPO, Shell’s Mexico Play
It was a week where oil prices ended barely higher, while natural gas futures tallied a steep loss. Moreover, with most of the refinery activity along the Gulf Coast resuming after the temporary disruption from Hurricane Harvey, gasoline futures slumped.
On the news front, European oil major BP plc (NYSE: BP– Free Report) said it would spin off its U.S. pipeline assets into a master limited partnership and take it public, while regional rival Royal Dutch Shell plc (NYSE: RDS.A– Free Report) announced the opening of its first service station in Mexico as it gets ready to pour $1 billion in the Latin American country over the next decade.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures edged up 0.4% to close at $47.48 per barrel, natural gas prices slumped 5.9% to $2.89 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Gasoline Soars Amid MPC's Drop-Down Deal, NBR's Acquisition.)
Despite a hefty inventory build, oil prices recorded their first gain in six weeks. The U.S. Energy Department's inventory release showed that crude stockpiles increased by 4.6 million barrels as Gulf refinery runs fell to record lows on shutdowns due to tropical storm Harvey.
However, this negative sentiment was more than offset by the steadily rising domestic oil demand amid the resumption of operations by Gulf Coast refineries those were shut down by Hurricane Harvey. Concerns over a potential hit to oil production from Hurricane Irma also cushioned prices.
Meanwhile, natural gas traded down sharply following an above-average increase in supplies. Worries over the fuel’s tepid demand on the back of Hurricane Irma-related power outages further pushed down natural gas prices.
Gasoline Plunges on Receding Shortage Fears
The most widely used petroleum product ended 5.7% lower on the week to $1.648 a gallon after jumping in the past couple of weeks in the aftermath of Tropical Storm Harvey knocking out refining operations in the Houston area. With most of the facilities back online and temporary shortages beginning to ease, prices at the pump are starting to fall.
Recap of the Week’s Most Important Stories
1. A wholly owned indirect subsidiary of oil giant BP plc, BP Midstream Partners LP, has commenced its plan of initial public offering (IPO) of common units, which signify limited partner interests. In this respect, BP Midstream Partners has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission ("SEC"). The news followed after the announcement BP made in July, wherein it appraised the creation and IPO of a master limited partnership (MLP).
BP Midstream Partners’ formation as a separate vehicle that would own, operate, develop and acquire pipelines and other midstream assets will help in the growth of midstream business. The IPO would be in line with BP’s strategy to develop its midstream business and at the same time boost shareholder value. Headquartered in Houston, TX, BP Midstream Partners will have offices in Chicago, IL.
Initially, ownership interests in one onshore crude oil pipeline system and one onshore refined products pipeline system are believed to form assets of BP Midstream Partners. Other properties will include an onshore diluents pipeline asset, which delivers liquids to or from the energy giant’s Whiting Refinery in Whiting, IN.
The company will also have interests in four offshore crude pipeline systems and one offshore natural gas pipeline system that links offshore production resources, located off the coast of the Gulf of Mexico, with the Gulf Coast refining and distribution hubs. (Read more BP Midstream Partners' IPO Plans for US Pipelines on Track.)
2. European oil giant Royal Dutch Shell plc recently opened its first service station in Mexico. With this latest move, the company sets foot in the Mexican retail fuel market. This is a milestone event for Shell since Mexico is the second-largest economy in Latin America and its gasoline market is the fifth-largest in the world. The development is likely to offer the company multiple growth opportunities and boost its revenues.
The company’s first gas station includes a convenience store and is located in the northwestern suburb of Mexico City. With this development, motorists in the country will now be able to avail Shell’s high-grade gasoline and diesel fuels. The convenience store which is likely to offer freshly-brewed gourmet coffee, healthy fresh food and free Wi-Fi also promises superior retail experience to customers.
Shell is touted as the largest fuel retailer in the world with over 43,000 gas stations in around 80 countries worldwide. The company will also be expanding its network of service stations in other developing economies like India, Brazil, China and Indonesia over the next decade. In Mexico, Shell intends to invest around $1 billion over the next 10 years as part of its retail expansion plans. (Read more: Shell Makes a Foray Into Mexico Retail Fuel Market.)
3. Canadian oil major, Cenovus Energy Inc. (NYSE: CVE– Free Report) recently agreed to divest its heavy oil properties in Pelican Lake and other eclectic assets to Canadian Natural Resources Ltd. (NYSE: CNQ– Free Report) for C$975 million ($787 million) in cash, putting earlier speculation to rest. The deal is expected to be over by Sep 30, 2017.
Cenovus' wholly owned Pelican Lake property – which currently produce 19,600 barrels of oil equivalent (BOE) heavy oil per day – is located approximately 300 kilometers north of Edmonton.
The deal is in line with Cenovus' strategy of divesting C$5 billion to back up the C$16.8 billion acquisition of Foster Creek Christina Lake assets from ConocoPhillips in March 2017. The Zacks Rank #3 (Hold) company plans to use the cash to partially pay down the $3.6 billion bridge loan facility that was part of the ConocoPhillips deal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors should also know that with the deal, the first of the four key asset sales, Cenovus plans to bring down its net debt to operating earnings ratio below 2 by 2019. (Read more: Cenovus to Sell Pelican Assets to Canadian Natural for C$975M.)
4. In a bid to enhance its directional drilling activities, onshore contract driller Patterson-UTI Energy, Inc. (Nasdaq: PTEN– Free Report) recently inked a deal to acquire Multi-Shot, LLC. Oilfield service company Multi-Shot operates business as MS Energy Services. Post the announcement of the deal, JPMorgan Chase & Co. upgraded Patterson-UTI from neutral to overweight. Following the developments, shares of the company rose by 6.65% to eventually close at $17 on Sep 5.
The $215 million acquisition deal will be funded by a combination of cash and stock without the assumption of any debt of MS Energy. Patterson-UTI will make cash payment of $75 million and will offer 8.8 million shares of its common stock based on the closing price of $15.94 as on Sep 1. Subject to satisfactory closing conditions and regulatory approvals, the transaction is likely to close by the fourth quarter this year.
The MS Energy buy bodes well for Patterson-UTI, given the compelling strategic rationale of the transaction. Apart from bolstering its scale and customer base, the buyout will help Patterson-UTI to enhance its presence in North American markets. MS Energy’s complimentary assets, skilled manpower and technological expertise are expected to strengthen the portfolio of Patterson-UTI, thus bolstering its future revenue growth opportunities.
MS Energy’s standout technology and proprietary design will broaden the service offerings of Patterson-UTI and position it undertake unconventional drilling operations in the North American markets. (Read more: Patterson-UTI Rallies on MS Energy Acquisition Deal.)
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Get the full Report on BP - FREE
Get the full Report on RDS.A - FREE
Get the full Report on CVE - FREE
Get the full Report on CNQ - FREE
Get the full Report on PTEN - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com/
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.