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Oil & Gas Atlas
Equities take a hit even as oil prices
continue to rise
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: +0.1%
⇒ S&P 500 E&P Index: -4.5%
⇒ Oil Service Sector Index: -3.1%
⇒ UK FTSE Oil & Gas Producers Index: -3.5%
⇒ Asia Pacific Oil & Gas Producers Index: +1.6%
Weekly Market Recap
Crude prices once again surged to new post-recession highs. The WTI price at
market close on Friday was US$109.48, while Brent was at US$123.43. NYMEX
prices also saw a bump, up US$0.17 WoW to US$4.21/mmbtu. Last week’s DOE
report showed that crude inventories rose again, up 1.6mmbbl to 359.3mmbbl;
however, both gasoline and distillate inventories dropped, down 7.0mmbbl and
2.7mmbbl respectively. The EIA reported a build of 28bcf in natural gas inventories
last week. Total gas in storage is at 1.607tcf, 1% higher than the 5-year average.
In Canada this week: Husky Energy announced that their Lloydminster upgrader has
resumed normal operations following a fire at the facility on 2 February, and is now
operating at between 75% and 85% of capacity. Nexen Inc. announced that it has
launched the tender process for its Golden Eagle project in the UK North Sea.
Canadian Natural Resources shares were down 8% this week, which we attribute to
concerns heading into earnings season on the fallout from the Horizon fire.
We initiated on Secure Energy Services (SES CN; OP; $7.50 target) this week.
Secure is a pure-play oilfield services company that focuses on solids and fluids
disposal and treatment in the WCSB.
In Europe, the French Prime Minister announced on Wednesday that all permits
granted to explore shale fields in France would be cancelled, dealing a blow to
companies operating in the region, such as Total, Hess, and Vermillion.
Among the European Integrated stocks, BP once again dominated the headlines. On
Thursday, the company announced it had agreed to extend the deadline of the share
swap with Rosneft to 16 May. We continue to view BP as a deep value stock trading
on less than 5.0x 2012 earnings – a full two multiple point discount to its peer
group. On the E&Ps, following our Poland Gas Tour, we reaffirmed our positive
view on unconventional gas plays highlighting Aurelian Oil & Gas, BNK Petroleum,
FX Energy and San Leon. The trip to Poland also served to highlight
the commitment of the Polish government to encourage investment into the sector
and the increasing footprint of oilfield service companies in the country. However, it
should be noted that geological de-risking in Poland is still at an early stage.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oil & Gas Atlas
Equities take a hit even as oil prices
continue to rise
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: +0.1%
⇒ S&P 500 E&P Index: -4.5%
⇒ Oil Service Sector Index: -3.1%
⇒ UK FTSE Oil & Gas Producers Index: -3.5%
⇒ Asia Pacific Oil & Gas Producers Index: +1.6%
Weekly Market Recap
Crude prices once again surged to new post-recession highs. The WTI price at
market close on Friday was US$109.48, while Brent was at US$123.43. NYMEX
prices also saw a bump, up US$0.17 WoW to US$4.21/mmbtu. Last week’s DOE
report showed that crude inventories rose again, up 1.6mmbbl to 359.3mmbbl;
however, both gasoline and distillate inventories dropped, down 7.0mmbbl and
2.7mmbbl respectively. The EIA reported a build of 28bcf in natural gas inventories
last week. Total gas in storage is at 1.607tcf, 1% higher than the 5-year average.
In Canada this week: Husky Energy announced that their Lloydminster upgrader has
resumed normal operations following a fire at the facility on 2 February, and is now
operating at between 75% and 85% of capacity. Nexen Inc. announced that it has
launched the tender process for its Golden Eagle project in the UK North Sea.
Canadian Natural Resources shares were down 8% this week, which we attribute to
concerns heading into earnings season on the fallout from the Horizon fire.
We initiated on Secure Energy Services (SES CN; OP; $7.50 target) this week.
Secure is a pure-play oilfield services company that focuses on solids and fluids
disposal and treatment in the WCSB.
In Europe, the French Prime Minister announced on Wednesday that all permits
granted to explore shale fields in France would be cancelled, dealing a blow to
companies operating in the region, such as Total, Hess, and Vermillion.
Among the European Integrated stocks, BP once again dominated the headlines. On
Thursday, the company announced it had agreed to extend the deadline of the share
swap with Rosneft to 16 May. We continue to view BP as a deep value stock trading
on less than 5.0x 2012 earnings – a full two multiple point discount to its peer
group. On the E&Ps, following our Poland Gas Tour, we reaffirmed our positive
view on unconventional gas plays highlighting Aurelian Oil & Gas, BNK Petroleum,
FX Energy and San Leon. The trip to Poland also served to highlight
the commitment of the Polish government to encourage investment into the sector
and the increasing footprint of oilfield service companies in the country. However, it
should be noted that geological de-risking in Poland is still at an early stage.
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