Each major index went in a different direction today. The Dow Jones Industrial Average ended up 21.23 points or 0.12%, the Nasdaq slid 39.66 points or 0.80%, and the S&P 500 was essentially flat. The Dow and the S&P both ended the week in positive territory, however, and are within 2% of their all-time highs, reached last May.
Michael Nagle/Bloomberg News
The Dow and S&P 500 were helped by oil, which rose Friday, along with major energy stocks. However, investors are still weighing whether or not economic growth can spur indexes past their spring 2015 highs.
Next week the Federal Reserve will hold a two-day meeting on Tuesday and Wednesday. Stifels Chief Economist Lindsey Piegza writes that without a press conference and updated data, investors will have to parse the FOMC statement alone for clues about the central banks thinking:
Top 5 Energy Stocks For 2017: Halliburton Company(HAL)
Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, completion tools and services, cementing services, and Boots & Coots. Its production enhancement services include stimulation and sand control services; completion tools and services comprise subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services; cementing services consist of bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment; and Boots & Coots include well intervention services , pressure control, equipment rental tools and services, and pipeline and process services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. Its services comprise fluid services, drilling services, drill bits, wireline and perforating services, testing and subsea services, software and asset solutions, and integrated project management and consulting services. The company serves independent, integrated, and national oil companies. Halliburton Company was founded in 1919 and is headquartered in Houston, Texas.
- [By Ben Levisohn]
FBR’s Thomas Curran and Mark Kelley contend that Halliburton (HAL) and Baker Hughes (BHI) will need General Electric’s (GE) help if their merger–blocked yesterday by the Department of Justice–is to succeed:
Confirming the past week’s media reports, the U.S. Department of Justice (DOJ) announced yesterday, April 6, that it will sue to block the Halliburton-Baker Hughes merger. Based on our initial take, the crux of the DOJ’s objection is that Halliburton’s proposal does not create an adequate replacement for Baker Hughes. In an immediate press release,Halliburton replied that the two companies will “vigorously contest” the DOJ’s case; and, as both stocks rose in an oil price surgefueled group rally, the spread actually narrowed modestly. We suspect the spread’s move from $18.17 (implied gross return of 46.2%) to $16.98 (39.7%) reflected surprise by some thatHalliburton believes it still has a case. Cognizant of the now much lower odds of closing, we still like BHI’s risk/reward here: Should the deal fail, it will benefit from the $3.5B breakup fee, with the ability to fully implement restructuring initiatives that have bee n constrained by the merger agreement ($100M in 4Q15, or 300 bps of margin) and a spreading perception that it is back in play; should the deal succeed, the stock will deliver a 40% return, all else constant, within three to four months…
Any “Hail Mary” solution still likely relies on GE Oil & Gas (GE). Based on the trail of evidence to date, we presume the “prospective buyer” that Halliburton has had “lengthy discussions” with is General Electric. We have long held that, should the deal succeed, it will be because General Electric agrees to buy most, if not all, of the assets; we believe the DOJ’s complaint reinforces this view.
Shares of Halliburton have dropped 1.2% to $36
- [By Wayne Duggan]
Gruber names Halliburton Company (NYSE: HAL) as Citi’s top pick among integrates services stocks. After Halliburton, he ranks Baker Hughes second choice, Schlumberger third and Weatherford International Plc (NYSE: WFT) fourth. The firm has Buy ratings on all four stocks.
- [By Benzinga News Desk]
Microsoft (NASDAQ: MSFT) Reports Q4 EPS $0.69 vs. Est. $0.58, Rev. $22.64B vs. Est. $22.14B
Intuitive Surgical (NASDAQ: ISRG) Reports Q2 GAAP EPS $4.71, Adj. EPS $5.62 vs $4.97 Est., Sales $670.1M vs $540.7M Est.
Halliburton (NYSE: HAL) Q2 EPS ($0.14) vs ($0.19) est, Revenue $3.84B vs $3.75B est
Morgan Stanley (NYSE: MS) Q2 EPS $0.75 vs $0.59 est, Revenue $8.9B vs $8.3B est
- [By Ben Levisohn]
Evercore ISI’s James West and team explain whyHalliburton (HAL) remains their “North American Winner” among oil-field-services stocks:
A Structural Favorite. Halliburton remains one of our favorite stocks in the group and the management team’s relentless pursuit of efficiency and aggressive positioning for the upcycle will likely make the stock one of the top performers in the OFS space. Within the diversified peer group, we believe Halliburtonis best positioned to benefit from the unfolding increase in oilfield services activity in North America, as it remains markedly more levered to North America compared to its competitors. Once the recovery (which is already in a nascent stage) further takes hold, NAM activity will react the quickest and the strongest, which should allow Halliburtonto see higher company-wide revenue growth and margin expansion than its peers. Internationally, and following Baker Hughes’ (BHI) decision to exit some international markets and product lines, we expect the international dominance of Halliburtonand Schlumberger (SLB) (which allowed for +20% margins pre-20 09) to return, with Halliburtonas the primary beneficiary of market share gains and better pricing. In anticipation of the upturn, the company continues to execute and gain market share through the downturn. We see a path to $4.00+ in EPS and a $60+ stock price in the not too distant future.
Shares ofHalliburton have dropped 2.9% to $42.79 at 1:55 p.m. today, while Schlumberger has fallen 2.3% to $78.79, and Baker Hughes has declined 1.7% to $49.14.
Top 5 Energy Stocks For 2017: Icahn Enterprises L.P.(IEP)
Icahn Enterprises L.P., through its subsidiaries, operates in investment, automotive, energy, metals, railcar, gaming, food packaging, real estate, and home fashion businesses in the United States, Germany, and Internationally. Its Investment segment operates various private investment funds. The companys Automotive segment supplies a range of components, accessories, and systems to the automotive, small engine, heavy-duty, marine, railroad, agricultural, off-road, aerospace and energy, industrial, and transport markets; and distributes automotive parts. Its Energy segment refines and markets transportation fuels; and manufactures nitrogen fertilizer. The companys Metals segment collects and processes industrial and obsolete scrap metal into reusable forms; and operates steel products business. Its Railcar segment manufactures and sells railcars, custom and standard designed railcar components, and other industrial product s; and provides railcar repair services, as well as leases railcars. The companys Gaming segment owns and operates casino gaming properties, including 8 casino facilities with 8,035 slot machines, 304 table games, and 5,525 hotel rooms. Its Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings for the processed meat and poultry industry. The companys Real Estate segment is involved in the rental of real estate properties; construction and sale of single-family and multi-family homes, lots in subdivisions and planned communities, and raw land for residential development; and golf and resort operations. Its Home Fashion segment sources, designs, manufactures, distributes, markets, and sells home fashion consumer products, such as bed, bath, basic bedding, and other textile products. Icahn Enterprises G.P. Inc. serves as the general partner of the company. Icahn Enterprises L.P. was founded in 1987 and is headquartered in New York, New York.
- [By Robert Rapier]
CVR Partners’ fertilizer plant is located in Coffeyville, Kansas, adjacent to the refinery owned by CVR Refining (NYSE: CVRR). CVR Energy (NYSE: CVI), majority-owned by Carl Icahn via Icahn Enterprises (NYSE: IEP), is the general partner and owns most of the units for both CVR Partners and CVR Refining.
Top 5 Japanese Stocks To Watch Right Now: Resolute Energy Corporation(REN )
Resolute Energy Corporation, incorporated on July 28, 2009, is an independent oil and gas company. The Company is engaged in the exploitation, development, exploration for and acquisition of oil and gas properties. The Company’s asset base consists primarily of properties in Aneth Field located in the Paradox Basin in southeast Utah (the Aneth Field Properties or Aneth Field), the Permian Basin in Texas and southeast New Mexico (the Permian Properties or Permian Basin Properties), and the Powder River and Big Horn Basins in Wyoming (the Wyoming Properties). As of December 31, 2014, its oil sales comprised approximately 89% of revenue, and its estimated net proved reserves were approximately 74.2 million barrels of oil equivalent, of which approximately 56% and 45% were proved developed reserves and proved developed producing reserves (PDP), respectively. Approximately 86% of its estimated net proved reserves were oil and approximately 92% were oil and natural gas liquids ( NGL). The Company has an interest in gas gathering and compression facilities located within and adjacent to its Aneth Field Properties. Collectively called the Aneth Gas Processing Plant, the facility consists of an active gas compression operation operated by it and a dismantled gas processing facility.
Aneth Field Properties
Aneth Field, an oil field in southeast Utah, holds 73% of the Company’s net proved reserves as of December 31, 2014, and accounted for 49% of its production during 2014, averaging 6,287 equivalent barrels of oil per day, of which 98% was oil. The Company owns working interests in, and is the operator of, three federal production units covering approximately 43,000 gross acres, which constitute the Aneth Field Properties. These are the Aneth Unit, the McElmo Creek Unit and the Ratherford Unit, in which the Company owns working interests of 62%, 67.5% and 59%, respectively, as of December 31, 2014. The Company had interests in and operated 388 gross (246 net) producing wells and 333 gro! ss (210 net) active water and carbon dioxide injection wells. Aneth Field covers a single geologic structure with production coming from the Pennsylvanian age Desert Creek formation.
Within Aneth Field, as of December 31, 2014, the Company had estimated net proved reserves of 30.3 million barrels of oil equivalent. Of these reserves, 27.6 million barrels of oil equivalent are attributable to recoveries associated with expansions, extensions and processing of the tertiary recovery carbon dioxide floods. Within the Ratherford Unit, the Company has two carbon dioxide flood projects, one targeting both the Desert Creek I and II zones and a second targeting primarily the Desert Creek I zone. Carbon dioxide is available from McElmo Dome, the carbon dioxide source in the United States. Aneth Field is connected directly to McElmo Dome through a 28 mile pipeline that the Company operates and in which the Company owns a 68% interest.
Oil production from its A neth Field is characterized as a light and sweet crude oil. The field is connected by pipeline to a refinery located near Gallup, New Mexico that is owned and operated by Western Refining Southwest, Inc., a subsidiary of Western Refining Inc. (Western). On December 31, 2014, the Company entered into an amendment to the purchase agreement with Western. There are two types of gas production in Aneth Field, saleable gas and gas that is contaminated by Carbon dioxide. The contaminated gas stream, which is rich in valuable NGL and gas, is compressed and re-injected into the reservoir.
As of December 31, 2014, the Company had interests in 36,500 gross (25,000 net) acres in the Permian Basin of Texas and southeast New Mexico. Its position is divided between three principal project areas: the Delaware Basin project area in Reeves County, the Midland Basin project area in Howard, Martin, Midland and Ector counties and the Northwest Shelf p roject area located in the Denton, Gladiola and Knowles fiel! ds in the! Northwest Shelf area in Lea County, New Mexico. Approximately 14.1 million barrels of oil equivalent of proved reserves are associated with these assets as of December 31, 2014. During 2014, the Company completed 15 gross (7.9 net) wells in the Permian Properties and had 234 gross (197 net) producing wells. As of December 31, 2014, the Company was in the process of drilling one gross (0.7 net) well and had two gross (1.2 net) wells awaiting completion operations. During 2014, average net daily production from the Permian Properties was 4,656 barrel of oil equivalent and was 80% liquids. In January and February 2015, the Company completed three horizontal wells.
The Delaware Basin project area includes approximately 21,200 gross (13,200 net) acres. The primary objective in this area is the Wolfcamp formation. Within the Wolfcamp formation, the Company has focused primarily on the Wolfcamp A and B subzones. Within its project area, other operators are also develo ping the Wolfcamp C and D subzones, as well as the third Bone Spring formation. Based on drilling activity to date, approximately 40% of the acreage is held by production. Approximately 5.4 million barrels of oil equivalent of proved reserves are associated with these assets as of December 31, 2014. The Midland Basin project area includes approximately 10,000 gross (7,800 net) acres. Approximately 7.2 million barrels of oil equivalent of proved reserves were associated with these assets as of December 31, 2014. Within this inventory, 114 wells are located in its core operated Gardendale area in Midland and Ector counties based on 80- to 120-acre spacing and three zones. Its acreage in this area is held by production. In Gardendale the Company has primarily focused on the Wolfcamp B subzone. Other operators in the area are developing the lower and middle Spraberry, as well as the Wolfcamp A and C subzones.
The Company owns assets in Lea County, New Mexico, in Den ton, Gladiola and South Knowles fields, which are convention! al oil fi! elds that produce from fractured carbonate reservoirs and cover 4,700 gross acres in which the Company holds an approximate 85% working interest, all held by production. Its interest in Denton Field consists of 2,900 gross acres, all of which are held by production. Approximately 1.0 million barrels of oil equivalent of proved reserves are associated with its Denton Field interests. The Company is the operator of the Lea County assets.
Hilight Field is located in the Powder River Basin in Campbell County, Wyoming, and consists of the Central Hilight Unit, the Grady Unit and the Jayson Unit. The Company has a 98.5% working interest in the Central Hilight Unit, an 82.5% working interest in the Grady Unit and an 82.7% working interest in the Jayson Unit. The Central Hilight, Grady and Jayson units and adjacent leasehold cover an area of almost 51,600 gross (47,400 net) acres. As of December 31, 2014, there were 151 gross (143.5 net) producing vertical wells and six gross (5.6 net) horizontal wells. Gross cumulative production through December 31, 2014, from its three operated units was 68.4 million barrels of oil and 168 billion cubic feet of gas. During 2014, production from Hilight Field averaged 1,770 barrels of oil equivalent per day and was 29% oil. The Company drilled two additional wells in the Turner formation. In the Big Horn Basin, the Company owns leases covering approximately 34,700 net acres.
- [By Lisa Levin]
Shares of Resolute Energy Corp (NYSE: REN) got a boost, shooting up 22 percent to $3.61 as the company agreed to sell Permain Basin mid-stream assets.
- [By Lisa Levin]
Resolute Energy Corp (NYSE: REN) shares were also up, gaining 47 percent to $5.59. Wunderlich upgraded the rating on Resolute Energy from Hold to Buy, while raising the price target from $4 to $8. Northland Securities also upgraded the stock from Market Perform to Outperform.
Top 5 Energy Stocks For 2017: Helix Energy Solutions Group, Inc.(HLX)
Helix Energy Solutions Group, Inc., together with its subsidiaries, provides specialty services to the offshore energy industry primarily in the Gulf of Mexico, North Sea, the Asia Pacific, and West Africa regions. It operates through three segments: Well Intervention, Robotics, and Production Facilities. The company engineers, manages, and conducts well construction, intervention, and abandonment operations in water depths ranging from 200 to 10,000 feet; and operates remotely operated vehicles (ROVs), trenchers, and ROVDrills for offshore construction, maintenance, and well intervention services. It also offers Well intervention; intervention engineering; production enhancement; inspection, repair and maintenance of production structures, trees, jumpers, risers, pipelines and subsea equipment; and life of field support. In addition, the company provides reclamation and remediation services; well plugging and abandonment serv ices; pipeline abandonment services; and site inspections. Further, it engages in the installation of subsea pipelines, flowlines, control umbilicals, manifold assemblies, and risers; burial of pipelines; installation and tie-in of riser and manifold assembly; commissioning, testing, and inspection; and cable and umbilical lay and connection. Additionally, the company offers oil and natural gas processing services to oil and natural gas companies; and fast response system services. It serves independent oil and gas producers and suppliers, pipeline transmission companies, alternative energy companies, and offshore engineering and construction firms. The company was formerly known as Cal Dive International, Inc. and changed its name to Helix Energy Solutions Group, Inc. in March 2006. Helix Energy Solutions Group, Inc. was incorporated in 1979 and is headquartered in Houston, Texas.
- [By Lisa Levin]
On Friday, energy shares gained by 2.70 percent. Meanwhile, top gainers in the sector included Denbury Resources Inc. (NYSE: DNR), up 14 percent, and Helix Energy Solutions Group Inc (NYSE: HLX), up 16 percent.
Top 5 Energy Stocks For 2017: Apache Corporation(APA)
Apache Corporation, together with its subsidiaries, engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids. The company has exploration and production interests in the Gulf of Mexico, the Gulf Coast, east Texas, the Permian basin, the Anadarko basin, and the Western Sedimentary basin of Canada; and onshore Egypt, offshore Western Australia, offshore the United Kingdom in the North Sea, and onshore Argentina, as well as on the Chilean side of the island of Tierra del Fuego. Apache Corporation sells its natural gas to local distribution companies, utilities, end-users, integrated oil and gas companies, and marketers; and crude oil to integrated oil companies, marketing and transportation companies, and refiners. As of December 31, 2009, it had total estimated proved reserves of 1,067 million barrels of crude oil, condensate, and natural gas liquids, as well as 7.8 trillion cubic feet of natural gas. The company was founded in 1954 and is based in Houston, Texas.
- [By Jon C. Ogg]
Apache Corp. (NYSE: APA) was downgraded to Neutral from Buy at UBS.
Apple Inc. (NASDAQ: AAPL) was downgraded to Neutral from Buy by Bank of America’s Merrill Lynch. Credit Suisse also downgraded Apple to Neutral from Outperform with a $525 price target. Canaccord Genuity reiterated its Buy rating and raised its price target on Apple to $550 from $530. UBS downgraded Apple to Neutral from Buy.
- [By Ben Levisohn]
If you’re an oil explorer, you’re probably trying to avoid offshore right now. It’s expensive to reach, and, with oil still trading below $50, difficult to make profitable. That’s one reason companies have been touting big discoveries and buys onshore–see Apache’s (APA) big announcement from last week for one example. Yet here’s Anadarko Petroleum (APC) spending $2 billion to buy Freeport-McMoRan’s (FCX) Gulf of Mexico assets. What gives? UBS analyst William Featherston and team explain:
- [By Shauna O’Brien]
On Wednesday, oil and gas company Apache Corporation (APA) announced that it has agreed to sell some of its gas producing properties in Canada for $112 million.
The company will sell its Hatton, St. Lina, Marten Hills, Snipe Lake, Valhalla and a part of its Hawkeye properties. These properties are primarily located in Saskatchewan and Alberta and total approximatly 4,000 operating wells and 1,300 non-operating wells. The average daily production for these locations is about 38 million cubic feet of natural gas and 750 barrels of oil.
The sales will be made in two separate deals. Both of these deals are expected to close in the fourth quarter.
Apache shares were mostly flat during pre-market trading Wednesday. The stock is up 12% YTD.
- [By Matt Egan]
Before Tuesday, Big Oil’s credit ratings had been left largely intact by S&P. But with oil sinking back to $30 a barrel, the ratings firm took action by downgrading Chevron (CVX), EOG Resources (EOG), Apache (APA), Devon Energy (DVN), Hess (HES), Marathon Oil (MRO), Murphy Oil (MUR), Continental Resources (CLR) and Southwestern Energy (SWN).