Last Week In The Energy Sector

By Eric Fox | September 11, 2012 AAA

Halliburton (NYSE:HAL) is still bearish in its business in North America, disappointing investors who were hoping for good news from this leading oil services company. The bad news was delivered by management at the Barclays CEO Energy-Power conference last week in New York City.

Discount Brokers Comparison: Your one-stop shop for finding the perfect broker for your investments.

North American Outlook
Halliburton said that North American revenues for the current quarter might be down sequentially by a mid-single digit percentage from the second quarter of 2012. The previous guidance called for flat revenue in the third quarter of 2012. The company said that margins in North America for the third quarter of 2012 will be down from 250 to 300 basis points, due to lower demand and pricing.

Carbon Capture
Royal Dutch Shell (NYSE:RDS.A, NYSE:RDS.B) is doing its part to help with the problem of climate change and announced plans to build the first carbon capture and storage project to control carbon emissions.

Royal Dutch Shell will build the Quest Project in western Canada; this facility will be used to control emissions generated by mining oil sands in that area. The project is expected to be in operation in 2015 and store one million metric tons of carbon dioxide per year. Chevron Corporation (NYSE:CVX) and Marathon Oil (NYSE:MRO) are also involved with the Quest Project.

SEE: A Guide To Investing In Oil Markets

New Route
TransCanada Corporation (NYSE:TRP) is still working to get the Keystone XL crude oil pipeline approved and has resubmitted the required environmental report with the Nebraska Department of Environmental Quality. The Supplemental Environmental Report outlines the impact on the environment for the alternative route that the company is proposing to avoid a large water aquifer in the Sandhills region of Nebraska.

Arctic Exploration
Exxon Mobil (NYSE:XOM) is partnering with Rosneft to explore and develop oil and gas resources in the Russian Arctic and is ahead of schedule, with the company planning to start drilling in the Kara Sea area in 2014 or 2015. The company is one of many major oil and gas operators that are starting to explore in this final frontier.

SEE: Oil And Gas Industry Primer

Pioneer Natural Resources (NYSE:PXD) is bailing on the Barnett Shale in the Fort Worth Basin in Texas and is shopping these properties around to interested parties. The company said that the sale will allow the company to redirect capital to higher return plays including the Spraberry, Wolfcamp and Eagle Ford Shale. Pioneer Natural Resources' position includes 155,000 gross acres and production of 7,000 barrels oil equivalent per day, and the company hopes to complete the sale by the end of the first quarter of 2013.

Chesapeake Energy (NYSE:CHK) is ahead of schedule on the company's program to divest non-core oil and gas assets. The company will have nearly $12 billion in assets sales completed by the end of the third quarter of 2012, and has raised its full year goal from $13 billion to $14 billion, according to Rig Zone magazine.

Chesapeake Energy is also contemplating between $4.25 billion and $5 billion in asset sales in 2013. The company plans to use the proceeds to pay down its debt and fund the its large exploration and development program.

New Finds
Apache Corporation (NYSE:APA) proved that there is life outside shale plays and reported a successful well in the United Kingdom area of the North Sea. The company said that the Beryl Bravo B73y well produced 8,161 barrels of oil and 5.9 million cubic feet of gas per day.

Apache Corporation reported a similar discovery it the Beryl Field in May 2012 with the B72 well, which produced 11,600 barrels of oil and 13 million cubic feet of gas per day.

The Bottom Line
Halliburton reminded investors last week that the North American drilling cycle is still at risk, and those active in the energy sector must decide whether this is only a temporary pause in the multiyear up cycle or the beginning of the end.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

comments powered by Disqus
Related Analysis
  1. India Remains An Emerging Market Bright Spot
    Stock Analysis

    India Remains An Emerging Market Bright Spot

  2. Still More Gains Ahead For Semiconductor Makers
    Stock Analysis

    Still More Gains Ahead For Semiconductor Makers

  3. Unconventional Drilling Still Has Room To Boom
    Stock Analysis

    Unconventional Drilling Still Has Room To Boom

  4. The Best Way To Invest In The Hottest New Energy Export In America
    Stock Analysis

    The Best Way To Invest In The Hottest New Energy Export In America

  5. Finding An Alternative With Currency ETFs
    Stock Analysis

    Finding An Alternative With Currency ETFs

Trading Center