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August 11, 2017

Andeavor Begins Construction of Conan Pipeline

Andeavor receives sufficient commitments to construct Conan pipeline system

Andeavor Begins Construction of Conan Pipeline. See Stockwinners.com Market Radar for details.

Andeavor (ANDV) announced that it received sufficient commitments from third party shippers to warrant construction of the Conan Crude Oil Gathering Pipeline system in the Delaware Basin.

The Conan Crude Oil Gathering Pipeline system will be approximately 130 miles in length and transport crude oil from origins in Lea County, New Mexico and Loving County, Texas to a terminal to be constructed in Loving County, Texas, where the gathering system interconnects with long-haul pipeline carriers.

The first phase of the Conan Crude Oil Gathering Pipeline system will provide capacity of approximately 250,000 barrels per day.

Future phases of the system may expand capacity up to 500,000 barrels per day. The system is under construction and is expected to begin commercial service in mid-2018.

The estimated capital investment for the first phase of the gathering system is approximately $225 million of which $75 million is expected to be spent in 2017.

Western Refining, Inc. (WNRL) has launched a binding open season for the proposed Conan Crude Oil Gathering Pipeline System, which will be constructed, owned and operated by the company’s subsidiary, Western Refining Conan Gathering, LLC.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

August 9, 2017

Crude Oil Higher as Inventories Fall

Crude oil is higher as inventories fall

The American Petroleum Institute (API) reported a draw of 7.839 million barrels in United States crude oil inventories, compared to analyst expectations of a draw of 2.272 million barrels for the week ending August 4.

The Energy Department will report its inventory data today at 10:30 a.m.

Gasoline inventories rose by 1.529 million barrels for the week ending August 4, compared to analyst expectations that inventories would fall by 1.5 million barrels.

Crude oil inventories in the US began its downward move in April, and have continued to fall, erasing all of the inventory that was built between January and April.

According to the API, yesterday’s build brings the total inventory for crude oil in 2017 to a net draw of 13.594 million barrels.

Distillate inventories rose by 157,000 barrels, while inventories at the Cushing, Oklahoma, site increased by 319,000 million barrels.

U.S. crude output will average 9.35 million barrels a day this year, according to the EIA’s monthly Short-Term Energy Outlook released Tuesday. That’s up from a July projection of 9.33 million. Production will average 9.91 million barrels a day next year, up from 9.9 million forecast previously.

Meanwhile, Iraq and the U.A.E. said at the Abu Dhabi meeting that OPEC’s estimates of their production — based on data from external sources — were at fault for any apparent failures to comply with output caps, according to two people familiar with the matter.

Crude prices have fluctuated around $49 a barrel this month as investors weigh rising global supply against output reductions from the Organization of Petroleum Exporting Countries and its allies. OPEC said Tuesday that Iraq, the United Arab Emirates and Kazakhstan, which have lagged behind in their pledged curbs, reaffirmed their commitment to cuts at a meeting in Abu Dhabi.

Crude oil (WTI) is up 35 cents to $49.52 pr barrel. Brent is up 36 cents to $52.50 per barrel.

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July 28, 2017

Rig Counts Rise Again!

Baker Hughes reports U.S. rig count up 8 to 958 rigs

Baker Hughes (BHGE) reports that the U.S. Rig Count is up 8 rigs from last week to 958, with oil rigs up 2 to 766 and gas rigs up 6 to 192.

The U.S. Rig Count is up 495 rigs from last year’s count of 463, with oil rigs up 392, gas rigs up 106, and miscellaneous rigs down 3 to 0.

The U.S. Offshore Rig Count is up 1 rig from last week to 24 and up 5 rigs year over year.

The Canadian Rig Count is up 14 rigs from last week to 220, with oil rigs up 11 to 129 and gas rigs up 3 to 91.

The Canadian Rig Count is up 101 rigs from last year’s count of 119, with oil rigs up 69, gas rigs up 33, and miscellaneous rigs down 1 to 0.

WTI crude edged a few cents lower after the report, and though remains less than 20 cents below its earlier trend high of $49.80.

#WTI = West Texas Intermediate

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July 14, 2017

Rig Count Unchanged!

Baker Hughes reports U.S. rig count unchanged at 952 rigs

Oil Should Rise on the News

Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count

Baker Hughes, a GE Company (BHGE) reports that the U.S. rig count is unchanged from last week at 952, with oil rigs up 2 to 765 and gas rigs down 2 to 187.

The U.S. Rig Count is up 505 rigs from last year’s count of 447, with oil rigs up 408, gas rigs up 98, and miscellaneous rigs down 1 to 0.

The U.S. Offshore Rig Count is unchanged from last week at 21 and down 1 rig year over year.

The Canadian Rig Count is up 16 rigs from last week to 191, with oil rigs up 1 to 106 and gas rigs up 15 to 85.

The Canadian Rig Count is up 96 rigs from last year’s count of 95, with oil rigs up 62, gas rigs up 35, and miscellaneous rigs down 1 to 0.

Note that Baker-Hughes was recently purchased GE. Also note that stock symbol has changed to BHGE.

Class A common stock of Baker Hughes, a GE company began trading on the New York Stock Exchange under the symbol BHGE on July 5, 2017. Shares of common stock of Baker Hughes Inc. (BHI) stopped trading on July 3rd.

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The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

July 11, 2017

Ensco Awarded three Six-Year Contracts

Ensco awarded three drillship contracts offshore West Africa

Ensco (ESV) announced that it has been awarded three drillship contracts offshore West Africa, representing an aggregate three years of contracted term and more than six additional years of options.

ENSCO DS-4 is expected to commence a two-year contract with Chevron (CVX) offshore Nigeria in August 2017. The contract also includes a priced customer option for one additional year of work.

Ensco recently reactivated the rig following a period during which the rig was preservation stacked in Tenerife and reactivation expenses are expected to total $28M. In addition, $15M of capital upgrades were added to the rig and are anticipated to benefit the asset over its remaining useful life.

ENSCO DS-10 is scheduled to commence work with Shell (RDS.A, RDS.B) offshore Nigeria in first quarter 2018. The contract duration is for one year and includes five one-year priced customer options. As a result of winning this contract, the rig’s delivery is expected to be accelerated into third quarter 2017 from first quarter 2019.

ENSCO DS-10 will then undergo a period of acceptance testing before mobilizing to Nigeria to begin its maiden contract. Remaining capital expenditures associated with the rig are expected to total approximately $190M inclusive of a final milestone payment to the shipyard, an upgrade to add a second seven-ram blowout preventer, acceptance testing, capitalized interest and mobilization.

#ENSCO DS-7 is contracted to Total (TOT) until November 2017.

As a result of these new contracts, contract drilling expense for second quarter 2017 is expected to be approximately $282M after adjusting for a $10M settlement of a previously disclosed legal contingency, slightly higher than the prior guidance of $270M-$280M, or $292M on an unadjusted basis.

Anticipated capital expenditures are now expected to total approximately $350M for the nine month period from second quarter 2017 through fourth quarter 2017.

This capital expenditure estimate includes approximately $240M for new rig construction, inclusive of approximately $29M of capitalized interest, and approximately $110M for rig enhancements and minor upgrades and improvements.

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July 10, 2017July 10, 2017

International Oil Rig Count Rises

Baker Hughes Announces June International Rig Count of 960, up 3

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Baker Hughes (BHI) reports that the international rig count for June 2017 was 960, up 3 from the 957 counted in May 2017, and up 33 from the 927 counted in June 2016.

The international offshore rig count for June 2017 was 197, down 5 from the 202 counted in May 2017, and down 26 from the 223 counted in June 2016.

The average U.S. rig count for June 2017 was 931, up 38 from the 893 counted in May 2017, and up 514 from the 417 counted in June 2016.

The average Canadian rig count for June 2017 was 150, up 65 from the 85 counted in May 2017, and up 87 from the 63 counted in June 2016.

The worldwide rig count for June 2017 was 2,041, up 106 from the 1,935 counted in May 2017, and up 634 from the 1,407 counted in June 2016.

The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry.

The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.

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June 23, 2017June 25, 2017

Rigs Counts Continue to Rise

Baker Hughes reports U.S. rig count up 8 to 941 rigs

This marks the 23rd straight week of increases

Baker Hughes (BHI) reports that the U.S. rig count is up 8 rigs from last week to 941, with oil rigs up 11 to 758, gas rigs down 3 to 183.

The U.S. Rig Count is up 520 rigs from last year’s count of 421, with oil rigs up 428, gas rigs up 93, and miscellaneous rigs down 1 to 0.

The U.S. Offshore Rig Count is unchanged from last week at 22 and up 1 rig year over year.

The Canadian Rig Count is up 11 rigs from last week to 170, with oil rigs up 7 to 98 and gas rigs up 4 to 72.

The Canadian Rig Count is up 94 rigs from last year’s count of 76, with oil rigs up 62, gas rigs up 33, and miscellaneous rigs down 1 to 0.

This marks the 23rd straight week of increases, and comes despite oil prices having fallen below $43 bbl this week into bear market territory.

#WTI is on track for its worst 1H since the 1990s. WTI crude prices are presently down by 20.2% on the year-to-date.

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June 21, 2017

Oil Stocks Downgraded

Oil entered the first bear market since August as concerns worsen over a global supply glut

The number of downgrades may, from a contrarian point, signal oil’s bottom

See Stockwinners to read about Energy Action

A number of oil related stocks are down this morning after brokers downgraded several oil related stocks. Oil entered the first bear market since August as concerns worsen that OPEC is failing to ease a global supply glut.

Adding to an oversupplied market are Libya, which is pumping the most in four years, and shale drillers that are staging the longest drilling ramp-up on record. Meanwhile traders are hoarding an increasing amount of oil in tankers. All that crude is hindering efforts by the Organization of Petroleum Exporting Countries and its allies to reduce stockpiles to the five-year average.

The American Petroleum Institute (API) reported a draw of 2.72 million barrels in United States crude oil inventories, compared to analyst expectations that the EIA would report a 2.0-million barrel draw for the week ending June 16. This week’s inventory draw almost completely offsets last week’s API-reported crude inventory build of 2.75 million barrels.

Gasoline inventories rose this week by 346,000 barrels, as refiners continue to take crude oil out of inventory and turn it into gasoline. Surveyed analysts were close on gasoline predictions this week, expecting a 400,000-barrel build for the fuel, but even though the API report was close to projections, the three-week rise in inventories mean that demand for the fuel is not sufficient to cut into inventories as one would expect this time of year.

The Energy Department reports its inventory data at 10:30 a.m. today. Based on the number of downgrades, it may be a bottom for oil prices!

Crude oil last traded at $43.70 per barrel.

Here is a list of oil stocks downgraded today:

Downgrades

AON	Aon plc to Neutral from Buy at Janney Capital
APA	Apache to Sell from Neutral at Seaport Global
AREX	Approach Resources to Sell from Neutral at Seaport Global
AXAS	Abraxas Petroleum to Neutral from Buy at Seaport Global
AXTA	Axalta Coating to Underperform from Buy at BofA/Merrill
BAS	Basic Energy to Neutral from Buy at Seaport Global
BBG	Bill Barrett to Sell from Neutral at Seaport Global
BHI	Baker Hughes to Neutral from Buy at Seaport Global
BP	BP to Underperform from Neutral at Macquarie
CHK	Chesapeake to Underperform from Neutral at Macquarie
CIR	CIRCOR to Sell from Neutral at Seaport Global
CLR	Continental Resources to Sell from Buy at Seaport Global
CPE	Callon Petroleum to Neutral from Buy at Seaport Global
CRZO	Carrizo Oil & Gas to Sell from Buy at Seaport Global
CRZO	Carrizo Oil & Gas to Sell from Buy at Seaport Global
CVE	Cenovus Energy to Underperform from Neutral at Macquarie
CVX	Chevron to Neutral from Outperform at Macquarie
CXO	Concho Resources to Neutral from Buy at Seaport Global
DO	Diamond Offshore to Sell from Neutral at Seaport Global
DOV	Dover to Neutral from Buy at Seaport Global
DVN	Devon Energy Neutral at Seaport Global
E	Eni SpA to Neutral from Outperform at Macquarie
ECA	Encana to Neutral from Outperform at Macquarie
ECR	Eclipse Resources to Neutral from Buy at Seaport Global
EGN	Energen to Sell from Neutral at Seaport Global
ESES	Eco-Stim Energy to Neutral from Buy at Seaport Global
ESTE	Earthstone Energy to Neutral from Buy at Seaport Global
ESV	Ensco to Sell from Neutral at Seaport Global
FI	Frank’s International to Underweight from Equal Weight at Morgan Stanley
FI	Frank’s International to Sell from Neutral at Seaport Global
GST	Gastar Exploration to Neutral from Buy at Seaport Global
HAL	Halliburton to Neutral from Buy at Seaport Global
HK	Halcon Resources to Neutral from Buy at Seaport Global
HP	Helmerich & Payne to Sell from Neutral at Seaport Global
HP	Helmerich & Payne to Underweight from Equal Weight at Morgan Stanley
ICD	Independence Contract Drilling to Equal Weight at Morgan Stanley
JONE	Jones Energy to Neutral from Buy at Seaport Global
KEG	Key Energy to Neutral from Buy at Seaport Global
LONE	Lonestar Resources to Neutral from Buy at Seaport Global
LPI	Laredo Petroleum to Neutral from Buy at Seaport Global
MRC	MRC Global to Neutral from Buy at Seaport Global
MRO	Marathon Oil to Sell from Neutral at Seaport Global
NBL	Noble Energy to Sell from Neutral at Seaport Global
NBR	Nabors Industries to Equal Weight from Overweight at Morgan Stanley
NBR	Nabors Industries to Neutral from Buy at Seaport Global
NE	Noble Corp. to Neutral from Buy at Seaport Global
NFX	Newfield Exploration to Sell from Buy at Seaport Global
OAS	Oasis Petroleum to Neutral from Buy at Seaport Global
OII	Oceaneering to Sell from Neutral at Seaport Global
OII	Oceaneering to Underweight from Equal Weight at Morgan Stanley
OIS	Oil States to Equal Weight from Overweight at Morgan Stanley
PDCE	PDC Energy to Neutral from Buy at Seaport Global
PDS	Precision Drilling to Equal Weight from Overweight at Morgan Stanley
PES	Pioneer Energy to Neutral from Buy at Seaport Global
PQ	PetroQuest to Neutral from Buy at Seaport Global
PTEN	Patterson-UTI to Neutral from Buy at Seaport Global
RDC	Rowan Companies to Sell from Neutral at Seaport Global
RDS.A	Royal Dutch Shell to Neutral from Outperform at Macquarie
REPYY	Repsol to Neutral from Outperform at Macquarie
RES	RPC, Inc. to Neutral from Buy at Seaport Global
RICE	Rice Energy to Neutral from Buy at Seaport Global
SD	SandRidge Energy to Neutral from Buy at Seaport Global
SM	SM Energy to Neutral from Buy at Seaport Global
SN	Sanchez Energy to Sell from Buy at Seaport Global
SNDE	Sundance Energy to Neutral from Buy at Seaport Global
SPN	Superior Energy to Neutral from Buy at Seaport Global
SRCI	SRC Energy to Neutral from Buy at Seaport Global
WFT	Weatherford to Neutral from Buy at Seaport Global
WLL	Whiting Petroleum to Sell from Neutral at Seaport Global
WLL	Whiting Petroleum to Neutral from Outperform at Macquarie
WPX	WPX Energy to Sell from Buy at Seaport Global
XEC	Cimarex Energy to Sell from Neutral at Seaport Global

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June 16, 2017June 16, 2017

Rig Counts Continue to Rise!

As long as rig counts continue to rise, crude will stay under pressure

Baker Hughes reports U.S. rig count up 6 to 933 rigs

Baker Hughes (BHI) reports that the U.S. rig count is up 6 rigs from last week to 933, with oil rigs up 6 to 747, gas rigs up 1 to 186, and miscellaneous rigs down 1 to 0.

The U.S. Rig Count is up 509 rigs from last year’s count of 424, with oil rigs up 410, gas rigs up 100, and miscellaneous rigs down 1.

The U.S. Offshore Rig Count is unchanged from last week at 22 and up 1 rig year over year.

The Canadian Rig Count is up 27 rigs from last week to 159, with oil rigs up 17 to 91 and gas rigs up 10 to 68.

The Canadian Rig Count is up 90 rigs from last year’s count of 69, with oil rigs up 63, gas rigs up 28, and miscellaneous rigs down 1 to 0.

STOCKS TO WATCH

The one group that should be benefit from the rig count rise would be Sand and Basic Materials. Stocks such as SLCA, SND, EMES, and HCLP should benefit from the rise, however these stocks are also near their 52-weeks low. These stocks should gradually bottom out at these levels. Other service companies such as SLB, HAL, BHI, TDW, and OII.

WTI crude prices are up 0.6% at $44.72, rebounding after declining by 4.3% over the two previous sessions. This puts in a little space from yesterday’s six-week low at $44.22.

#WTI = West Texas Intermediate

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