This Week in Oil & Gas - 2/7/2016
Schlumber-Cameron merger receives green light from EU
SLB and CAM have received unconditional approval from the European Commission to proceed with their proposed merger following a Phase 1 review. Antitrust clearances have been obtained in Canada, Brazil, Russia, and Mexico. China began its process on February 4th but will be delayed due to Chinese New Years. Deal is expected to close at end of February or beginning of March 2016.
Cheap gasoline = $10 Fee
Citing cheap gasoline prices, President Obama proposes a $10/bbl fee on oil companies. The administration claims the fee could bring in up to $32 billion in new federal revenue per year and would be allocated to highway infrastructure and research for cleaner vehicles as part of President Obama's 21st Century Clean Transportation System.
Rig Equipment giant National Oilwell Varco reports net loss of $1.5 Billion
NOV released Q4 2015 earnings results which missed analysts expectations by a wide margin. The fiscal Q4 15 adj. net EPS for NOV were $0.23. This was 47% lower than the consensus sell-side analysts' EPS estimate of $0.44.
The $1.5 Billion loss was a result of $1.6 billion pre-tax goodwill and other intangible asset write-downs and $139 million pre-tax restructuring and other charges (NOV Earnings).
Shell's Q4 2015 earnings beat estimates
Revenues surpassed Wall Street estimates by 17%. Shell reported EPS t $0.3 however, when adjusted to CCS EII (current cost of supplies excluding identified items), EPS stood at $0.58 vs. estimated EPS of $0.56, just exceeding analysts' estimates.
For full year 2015, Shell's revenues stood at $265 billion, surpassing estimates by 4% however, 2015 revenues were 37% lower than 2014 (Shell Earnings).
BG Group earnings fall sharply ahead of merger with Shell
Earnings for 2015 fell 58% to $1.7bn (£1.2bn) as the company was weighed down by the slump in world oil and gas prices. For Q4 2015 earnings were 54% lower at $423m (£291m). Chief Executive Helge Lund said the group's performance was in line with or ahead of expectations.
On the other hand, BG confirmed it produced more than expected last year at 704,000 barrels of oil equivalent per day, beating its 2015 production target due to ramp-up in output from fields in Australia, Brazil and Norway (Sky News).
BP Q4 2015 earnings fall 91%
Net Income for BP fell 91% with profits falling to $196 million, compared with $2.2 billion in the year-ago quarter. Full year 2015 profits amounted to $5.9 billion, down from $12.1 billion from the previous year which equates to a 51% drop. The lower earnings were primarily attributed to low crude and gas prices.
The company also announced plans to cut up to 3,000 jobs in its product and services arm by the end of 2017, in addition to 4,000 jobs in its exploration and production arm this year (BP Earnings).
Total inks agreement to supply LNG to China
Total signed a binding agreement with China's privately run ENN LNG Trading for the delivery of 0.5 million tonnes per year of liquefied natural gas (LNG) for a period of 10 years (OGFJ).
Peregrine Midstream Partners and Assoc. files chapter 11
Natural-gas company Peregrine Midstream Partners LLC filed for chapter 11 protection a few months before a new facility was set to be completed. This points to signs that the previously thought of immune midstream companies are not immune to financial troubles as a result of the drop in crude and gas prices.
SK Innovation reports Asian refining margins to remain strong
South Korea's SK Innovation Co Ltd said on Wednesday that Asian refining margins will remain stable as strong demand for gasoline and naphtha offset a weaker diesel market amid low crude oil prices. Overall sentiment is positive and 2016 margins are expected to remain healthy.
Iran sending crude to Europe to regain market share
Refiners have chartered tankers that will deliver about 136,000 barrels a day of Iranian crude to Europe, equivalent to almost a quarter of the Middle Eastern nation's shipments to the region before sanctions were imposed.
Spanish refiner Compania Espanola de Petroleos, France's Total SA and Russia's Lukoil PJSC have all provisionally booked cargoes of Iranian crude to sail from Kharg Island to European ports.
Europe excluding Turkey imported 550,000 barrels a day of Iranian crude before the sanctions were imposed, according to data compiled by Petromatrix. Flows are likely to rise to 300,000 barrels a day (Downstream Today).
Graph of the Week
credit default swap Spread on Murphy Oil Bonds, the sectors worst performer (Oilpro)