Editor’s Note: Related Tickers: SandRidge Energy Inc. (NYSE:SD), Exxon Mobil Corporation (NYSE:XOM), Chesapeake Energy Corporation (NYSE:CHK), Transocean LTD (NYSE:RIG)
ANALYSIS – TPG-Axon won’t find quick fixes for SandRidge (Reuters)
Hedge fund TPG-Axon Capital has won nearly half the seats on SandRidge Energy Inc. (NYSE:SD)’s board but faces an uphill battle to reverse the oil and gas company’s slumping stock price. SandRidge shares have tumbled 20 percent this year to around $5 on disappointing forecasts for its wells in Oklahoma and Kansas, as well as investor uncertainty over its strategic direction. While natural gas prices have risen from last year’s 10-year lows, they remain depressed, adding pressure to SandRidge Energy Inc. (NYSE:SD) and peers like Chesapeake Energy Corp and Hess Corp to cut costs and improve well efficiency.
Exxon Mobil Corporation (NYSE:XOM) has now confirmed that on Tuesday, the Pegasus pipeline that has been out of service since it spilled thousands of barrels of oil into Mayflower, Arkansas in March spilled some more into a yard in Missouri. In the town of Doniphan about 190 miles north of Mayflower, a resident reported seeing some oil and dead vegetation in the yard. Though small in scope, perhaps as little as 42 gallons, the spill is a reminder that oil is messy, tar sands oil particularly so, and transporting it across the country is extremely risky. More pressing is the missing oil in Mayflower from the spill last month. The Sierra Club requested the accident incident report, which said that 3,000 barrels of oil (some 126,000 gallons) have not been recovered no matter how energetic Exxon Mobil Corporation (NYSE:XOM)’s response was.
Chesapeake pumping more oil (The Steubenville Herald-Star)
Chesapeake Energy Corporation (NYSE:CHK)’s Shawn Couch Well in Ohio County yielded daily averages of 505 barrels of oil and 290 barrels of natural gas liquids during the first three months of this year. “We are capitalizing on pad drilling efficiencies wherever possible and leveraging our substantial investments in roads, well pads, gathering lines and compression and processing facilities,” said Chesapeake’s Acting Chief Executive Officer Steven Dixon in announcing his company’s earnings report this week. The Oklahoma City-based driller, long-known as a natural gas producer, continues its shift toward developing crude oil and NGL, as company-wide oil production jumped 56 percent from last year to an average of 103,000 barrels per day. This helped Chesapeake earn $1.134 billion during the first quarter of 2013, an increase of 35 percent compared to the same period in 2012.
Transocean Releases Presentation Refuting Carl Icahn’s Inaccurate and Misleading Statements (Marketwire)
Transocean LTD (NYSE:RIG) today released a presentation to its shareholders addressing assertions made by Carl Icahn, including claims that Transocean believes to be inaccurate and misleading. Furthermore, the company believes Mr. Icahn’s proposals are misguided and highlight his poor understanding of the cyclical and capital-intensive nature of the offshore drilling industry. In addition to refuting Mr. Icahn’s claims, the presentation provides compelling support for the company’s highly qualified slate of Director nominees and reiterates that the Board’s proposed $2.24 per share dividend will maximize value creation for our shareholders.
SandRidge changes plans for new buildings (NewsOK.com)
SandRidge Energy Inc. (NYSE:SD) is halting expansion of its campus and converting two buildings under construction — the Braniff Building and the 120 Robert S. Kerr building — into leasable office space. Both buildings originally were intended to accommodate SandRidge Energy Inc. (NYSE:SD) as it was on track to employ 1,500 people. But with a cutback in spending taking place after a proxy fight waged with investor group TPG-Axon, the company has sold off its…
…holdings in the Permian Basin and is under direction to trim building, promotion and salary costs. “We have had a lot of recent developments,” said Greg Dewey, vice president of community relations and communications. “With the divesting of the Permian, which was a third of the company, it made sense to make this decision.”
Jessica Heeringa reward fund gets $15,000 donation from Exxon Mobil Corp. to Norton Shores Police Department (MLive.com)
Exxon Mobil Corporation (NYSE:XOM) has contributed $15,000 to the Jessica Heeringa reward fund, Norton Shores Police Chief Daniel Shaw said. The Norton Shores Police Department received the money Thursday, May 2, from the oil corporation, Shaw said. It will be delivered to Muskegon County Silent Observer, boosting the reward fund to more than $16,000. Money in the fund, being held by the Community Foundation for Muskegon County, will be used as a reward for information leading to the recovery of Heeringa and conviction of those involved in what police officials believe to be an abduction. Heeringa, 25, disappeared shortly after 11 p.m. April 26 from the Exxon Mobil Corporation (NYSE:XOM) gas station at 1196 E. Sternberg Road. Police believe she was abducted by a man driving a silver or gray minivan.
Chesapeake Energy Corporation (CHK), And Discussions Of The Utica Shale (Insider Monkey)
I don’t think it’d be a stretch to say that the oil and gas industry had big hopes for the Utica, a vast shale rock formation in the Appalachian Basin that stretches as far eastward as New York, though most drilling activity to date has been concentrated in Ohio. Chesapeake Energy Corporation (NYSE:CHK)’s former CEO Aubrey McClendon even called the Utica “the biggest thing to hit Ohio since the plow.” Not surprisingly, some of the play’s biggest leasehold owners are putting their acreage up for sale. Chesapeake Energy Corporation, the play’s largest leasehold owner, recently put 94,200 acres up for sale. Though the company, which discovered the Utica in 2010, was initially extremely optimistic about the play’s potential, it has since scaled back its expectations about how much oil the play might contain.
A Look At Transocean’s North Sea Operations (Seeking Alpha)
The North Sea faces extremely harsh weather conditions and oil and gas are located at great depths below the ocean floor, necessitating the use of specialized offshore drilling technologies. It is the single largest market for mid-water floaters which operate at water depths of under 4,500 feet. Out of Transocean LTD (NYSE:RIG)’s total fleet of 82 rigs, 15 of the rigs are contracted in the North Sea. Moreover, 6 out of 7 of Transocean’s harsh environment floaters are located in the region, contracted at average daily rates of around $470,000.
16 Oil and Gas Stocks to Sell Now (Investorplace.com)
This week, the overall grades of 16 Oil and Gas stocks are lower, according to the Portfolio Grader database. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”). This week, SandRidge Energy Inc. (NYSE:SD) rating worsens to an F from the company’s D rating a week ago. SandRidge Energy explores and produces natural gas and crude oil. The stock receives F’s in Earnings Growth, Earnings Momentum, and Equity. Cash Flow and Margin Growth also get F’s. As of May 3, 2013, 13.2% of outstanding SandRidge Energy Inc. (NYSE:SD) shares were held short.
Exxon readies pipeline repair in Missouri (iStockAnalyst)
Federal approval was given for Exxon Mobil Corporation (NYSE:XOM) to repair part of the Pegasus oil pipeline that leaked about a barrel of oil in Missouri, the company said. Exxon acknowledged about 42 gallons of oil spilled from the Pegasus pipeline in Doniphan, Mo., near the border with Arkansas. Exxon said that it expected to have the pipeline repaired by the weekend and have the site refilled with new soil following approval from the Pipeline Hazardous Materials Safety Administration. Exxon Mobil Corporation (NYSE:XOM) said it was working with federal authorities to investigate the cause of the incident on the pipeline, which was built in the 1940s.
