For Immediate Release
Chicago, IL – August 24, 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 Exxon Mobil Corp (NYSE:XOM). (XOM), Chevron Corp. (NYSE:CVX) (CVX), Hess Corp (NYSE:HES). (HES), Continental Resources Inc. ( CLR) and Valero Energy Corp (NYSE:VLO). (VLO).
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Here are highlights from Tuesday’s Analyst Blog:
Oil & Gas Stock Roundup
It was a week which saw oil prices rise to their highest level since Jun 22. But natural gas futures barely moved.
On the news front, oil giants Exxon Mobil Corp. (XOM ), Chevron Corp. (CVX) and Hess Corp. (HES) have joined forces to bid for deepwater drilling rights in Mexico.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures jumped 9.1% to close at $48.52 per barrel, natural gas prices remained essentially unmoved to end the week at $2.584 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Petrobras Q2 Earnings Plummet, Suncor Buys North Sea Project Stake .)
Oil prices logged its largest weekly gain in five months on expectations of a production freeze from the 14-member OPEC bloc and Russia. Things further brightened with the release of U.S. Energy Department's report showing big drawdowns in domestic crude and gasoline stocks. A weaker dollar – that made the greenback-priced crude cheap for investors holding foreign currency – provided further support.
Oils-Energy Sector Price Index
Natural gas, on the other hand, could not make much headway and stayed flat despite a smaller-than-expected storage addition. This is because with inventories still 14% above the 5-year average for this time of year, the market remains oversupplied.
Recap of the Week’s Most Important Stories
1. Oil majors Exxon Mobil Corp., Chevron Corp. and Hess Corp. have joined forces to bid for rights to explore for crude in Mexico’s deepwater oil areas, per sources with direct knowledge of the plans.
According to the sources, the companies have reached a Joint Operating Agreement that facilitates the consortium to bid for oil production in the 10 areas that will be auctioned on Dec 5. A Joint Operating Agreement is a contract that ascertains the role and obligation of each participant as well as designates the company that will act as the operator of a production area in case it is awarded in the auction.
This is the first time since 1938 that foreign crude producers have been allowed to operate in Mexico after the country approved final legislation with respect to the same in 2014. This is an attempt to reverse an 11-year decline in production in the nation. Mexico expects to raise $44 billion through its first-ever sale of deepwater drilling rights in the Gulf of Mexico. (Read more: Exxon Mobil, Hess & Chevron Team Up for Mexican Oil Auction .)
2. Oklahoma-based upstream energy player Continental Resources Inc. ( CLR) declared a definitive purchase and sale agreement with an undisclosed buyer to divest non-strategic assets in Montana and North Dakota. The transaction is valued at $222 million but its completion is dependent on certain adjustments and customary closing conditions.
The to-be-sold properties include 68,000 net acres of leasehold located in western Williams County, ND along with 12,000 leasehold acres in Roosevelt County, MT. It is to be noted that those resources have a production capacity of 2,800 barrels of oil equivalent every day.
Harold Hamm, Chairman and Chief Executive Officer of the company revealed that the proceeds will likely help to lower debt and thereby strengthen balance sheet. Most importantly, the divestiture marks the company’s third non-strategic property sale this year which helped to draw more than $600 million in proceeds. (Read more: Continental Resources to Divest Non-Strategic Assets Again .)
3. Downstream operator Valero Energy Corp.’s (VLO) board of directors has approved its partnership – Valero Energy Partners L.P. – to acquire the Meraux and Three Rivers Terminal Services Business from one of the company’s subsidiaries. The transaction is valued at about $325 million and is expected to close on Sep 1.
Per estimations, the business to be purchased by the partnership will contribute about $25 million of net income and about $39 million of earnings before interest, taxes, depreciation, and amortization (EBITDA) within the first year of operation.
The proposed acquisition comprises terminals that support Valero’s Meraux and Three Rivers refineries. The Meraux assets include 24 tanks with a storage capacity of 3.9 million barrels for crude oil, intermediates, and refined petroleum products. The Three Rivers assets consist of 62 tanks with a storage capacity of 2.25 million barrels for crude oil, intermediates, and refined petroleum products.
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EXXON MOBIL CRP (XOM): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
CONTL RESOURCES (CLR): Free Stock Analysis Report
VALERO ENERGY (VLO): Free Stock Analysis Report
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