CHICAGO, Dec. 11, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the ConocoPhillips (NYSE:COP-Free Report), Chevron Corp. (NYSE:CVX-Free Report), Whiting Petroleum Corp. (NYSE:WLL-Free Report), Enbridge Inc. (NYSE:ENB-Free Report) and Southwestern Energy Co. (NYSE:SWN-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Oil & Gas Stock Roundup
It was another week where oil kept sliding on oversupply fears. Thanks to this crude slump, ConocoPhillips (NYSE:COP-Free Report) set its investment budget for 2015 at $13.5 billion, down 20% from this year.
Overall, it was a pretty bad week for the sector. West Texas Intermediate (WTI) crude futures inched down 0.5% to close at $65.84 per barrel, while natural gas prices fell 7% to $3.80 per million Btu (MMBtu). (See the last 'Oil & Gas Stock Roundup' here: Crude Collapses on OPEC Status Quo, Weatherford to Sell Units.)
Oil prices continued the slide and fell to their lowest level since mid-2009. The commodity has been hammered after the decision by the international cartel of oil producers – OPEC – to maintain daily crude production level at the preset 30 million barrels, defying expectations of an output cut in response to the current supply glut. Investors were further spooked by Saudi Arabia's price cut for buyers in U.S. and Asia. Moreover, a stronger dollar has made the greenback-priced crude dearer for investors holding foreign currency.
Natural gas also fared badly, weighed down by a below-average supply decrease. The commodity was also depressed by expectations of weak heating demand across the U.S. with forecasts of mild weather in December.
Recap of the Week's Most Important Stories
1. Leading independent exploration and production company ConocoPhillips slashed its capital expenditure budget from the dystopian 2015 oil space. The tumble is expected to continue with major members of the OPEC oil cartel deciding against an oil production cut to defend their individual market shares.
Facing such dull prospects, the Houston, TX-based ConocoPhillips cut its 2015 capital budget by a fifth versus its 2014 level to $13.5 billion. The exploration and production major reduced spending on major projects alongside deferring spending on North American unconventional plays. However, the company expects production from continuing operations, excluding Libya, to grow about 3%, despite lesser investment. (See More: ConocoPhillips Slashes Budget as Oil Slump Continues.)
2. U.S. energy giant Chevron Corp. (NYSE:CVX-Free Report) declared the commencement of first oil and natural gas production from the Jack/St. Malo project located in deepwater U.S. Gulf of Mexico (GoM). The fields have an estimated production life of over 30 years and are likely to yield over 500 million oil-equivalent barrels with the available technology.
Among the largest in the region – the Jack/St. Malo developments are located at a water depth of roughly 7,000 feet in the Walker Ridge area, south of New Orleans, LA. The fields have the potential to reach production levels of 94,000 barrels of crude oil and 21 million cubic feet of natural gas per day in due course. Chevron has a 50% working interest in the Jack field and 51% in St. Malo. (See More: Chevron Announces New Production Start-up in GoM Fields.)
3. Denver, CO-based Whiting Petroleum Corp. (NYSE:WLL-Free Report) has become the largest Bakken/Three Forks producer following the acquisition of Kodiak Oil & Gas Corp. However, the deal may not give the desired result to the upstream energy firm following the recent decline in crude prices. Shares of Whiting plunged over 13% on the day.
Whiting had planned the Kodiak buyout to expand its foothold in the Bakken/Three Forks area and grow production as crude had been trading at the lucrative $100 per barrel mark. However, explorers are now cutting capex and reducing rig count as oil has fallen below $65 per barrel, making the deal less fruitful. Moreover, Whiting has assumed over $2 billion of Kodiak's debt, which might further weigh on its financials. (See More: Whiting Petroleum Buys Kodiak, Turns Top Bakken Producer.)
4. Enbridge Inc. (NYSE:ENB-Free Report) announced a 33% increase in its quarterly common share dividend as along with a Canadian restructuring plan and the corresponding new dividend payout policy range. The company also announced 2015 adjusted earnings per share guidance of C$2.05 to C$2.35.
The Canada-based company raised its quarterly common share dividend by 33% to $0.465 per share. In terms of restructuring, Enbridge plans to transfer its Canadian Liquids Pipelines business to its Canadian affiliate, Enbridge Income Fund. Finally, Enbridge also announced that it is reviewing a potential restructuring plan, which would involve the transfer of its directly held U.S. liquids pipeline assets to Enbridge Energy Partners L.P., a U.S. affiliate of Enbridge. (See More: Enbridge Raises Dividend and EPS, Announces Restructuring.)
5. Independent natural gas operator Southwestern Energy Co. (NYSE:SWN-Free Report) announced that it will purchase oil and gas assets including approximately 46,700 net acres in northeast Pennsylvania from WPX Energy Inc. for about $300 million. The acreage is currently producing approximately 50 million net cubic feet of gas per day from 63 operated horizontal wells.
Also as part of the transaction, Southwestern will assume firm transportation capacity of 260 million cubic feet of gas per day predominantly on the Millennium pipeline. The company intends to use its revolving credit facility to finance the acquisition, which is expected to close in the first quarter of 2015. (See More: Southwestern Energy to Buy WPX Energy Assets for $300M.)
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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