|Bid||0.00 x 1000|
|Ask||115.49 x 1200|
|Day's range||115.08 - 116.66|
|52-week range||100.22 - 127.34|
|Beta (3Y monthly)||0.84|
|PE ratio (TTM)||14.91|
|Earnings date||1 Nov 2019|
|Forward dividend & yield||4.76 (4.09%)|
|1y target est||137.75|
(Bloomberg) -- Crude oil gave back some of its gains after a report showed inventories rising more than 10 million barrels, dimming the market’s optimism after signs that the trade war between the U.S. and China may be nearing an end.Futures eased back to $53 a barrel after settling 1% higher. The industry-funded American Petroleum Institute reported a 10.5 million-barrel build in crude stocks, according to people familiar with the data. It would be the largest jump since February 2017 if government data confirms it Thursday. U.S. President Donald Trump said China already has started buying American agricultural products but that a formal deal probably won’t be signed until a meeting next month with Chinese President Xi Jinping.“The 10.5 million-barrel build caused the price dip,” said Gene McGillian, manager of market research at Tradition Energy. “It brought some sellers into the market. Now we need to wait to see if the EIA confirms it.”European and British negotiators appeared be nearing an accord that would pave the way for the world’s fifth-largest economy to exit the EU. In addition, a weaker U.S. dollar spurred demand for riskier assets including commodities such as oil.“The encouraging headlines surrounding the U.S.-China trade war and Brexit seem more optimistic,” said Pavel Molchanov, a Houston-based analyst at Raymond James & Associates Inc. “In that sense, it’s perfectly reasonable for oil prices to show a bit of a bounce.”West Texas Intermediate for November delivery was 16 cents higher at $52.97 a barrel on the New York Mercantile Exchange at 4:49 p.m. local time, after settling at $53.36.Brent crude for December settlement was 36 cents higher at $59.10 on the London-based ICE Futures Europe Exchange. The global benchmark settled at a premium of $5.97 to WTI for the same month.“But the main focus will still be on demand destruction despite the earlier drive higher. Even despite the drive higher. How the trade talks are going to end up and what economic data shows. Whether its going to be slowing the world economy,” McGillian said.To contact the reporters on this story: Jacquelyn Melinek in New York at firstname.lastname@example.org;Sheela Tobben in New York at email@example.comTo contact the editors responsible for this story: David Marino at firstname.lastname@example.org, Catherine TraywickFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Oil minister Timipre Sylva said Nigeria knows it cannot recover $62 billion from oil majors despite ongoing cases against the companies for money the government believes it is owed. "Nobody can bring out that kind of money," Sylva told reporters after a weekly cabinet meeting in Abuja. Nigeria has been fighting for the cash under a 1990s law that states it can revisit production-sharing contracts on oil output if crude prices exceed $20 a barrel.
(Bloomberg) -- A unit of Delek Group Ltd. is seeking alternative means of financing to complete its $2 billion acquisition of some of Chevron Corp.’s North Sea oil and gas assets after initial funding arrangements hit stumbling blocks, according to people familiar with the matter.Ithaca Energy Ltd., the U.K. arm of Israeli explorer Delek, has asked commodity-trading houses to help it fund the deal, the people said, asking not to be named because the matter is private. It has already secured a $100 million investment from Trafigura Group Ltd., which also gives the trader the right to market some of its oil and gas, and is in talks for more funds, the people said.Ithaca is counting on the purchase, agreed on in May and expected to close this quarter, to boost its output before a possible initial public offering. The company is focused on the North Sea, where large producers such as Chevron are increasingly shedding mature assets so they can redeploy capital elsewhere.“Delek is scheduled to close the Chevron deal on time in accordance with the original timetables,” the company said in a statement. “The group and Ithaca are currently continuing to negotiate with several leading marketing and trading companies and Ithaca is expected to sign a binding trade and marketing agreement in the next coming days.”Chevron declined to comment.When the sale was announced, Ithaca said it was financing the purchase with a $1.65 billion bank loan, a separate $700 million bridge loan, an equity investment by Delek and cash. JPMorgan Chase & Co. and BNP Paribas SA underwrote Ithaca’s debt financing, according to a statement. Ithaca offered $700 million of bonds in July, but only sold $500 million, according to company statements.Last month, Ithaca secured the $100 million equity investment from Trafigura, but the oil company still doesn’t have the $2 billion to complete the Chevron purchase, the people said. It has previously received offers of funds from other traders, including Mercuria Energy Group Ltd., and may ask for more, according to the people. It could also get additional equity by turning to its parent Delek, which is awaiting a key asset sale next month to get more cash.The Chevron fields were highly sought after when they were up for sale, with bidders including Ineos Group and Chrysaor Holdings Ltd. At the time the sale was announced, Ithaca Chief Executive Officer Les Thomas said he couldn’t “wait to get our hands on the steering wheel” of the assets. Ithaca estimated the deal would boost 2019 production 300% and result in a 150% increase in proved and probable reserves.Additional barrels could help Ithaca attract investors to an initial public offering. Delek said in May that it planned to issue shares of Ithaca in London. Last month, Delek said Ithaca may be worth $2.5 billion.\--With assistance from Yaacov Benmeleh.To contact the reporters on this story: Kelly Gilblom in London at email@example.com;Dinesh Nair in London at firstname.lastname@example.org;Andy Hoffman in Geneva at email@example.comTo contact the editors responsible for this story: James Herron at firstname.lastname@example.org, John DeaneFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Brazil's Senate passed the main text of a bill late on Tuesday defining the distribution of proceeds from a blockbuster auction of oil prospecting rights, a key milestone for the enormous offshore region known as TOR - the 'transfer-of-rights' area. The bidders who win exploration and production rights in the massive Nov. 6 auction will be obliged to pay the government a combined signing bonus of some 106.5 billion reais ($25.8 billion), making it the largest oil bidding round in history, according to Brazilian authorities. The fields are unique as Brazilian state-run oil firm Petroleo Brasileiro SA, better known as Petrobras, has already done significant exploration work in the area.
Oil markets have fallen at the start of this week as bearish fundamentals alongside economic fears force geopolitical risk to take a back seat
(Bloomberg Opinion) -- Occidental Peteroleum Corp. is offering you the chance of a lifetime: to be just like Warren Buffett.Oxy’s stock yields 7.7% and hit 7.9% at one point on Monday. That is roughly four times what the S&P 500 pays. More importantly, it is within a whisker of 8% — the yield Oxy now also pays to one Berkshire Hathaway Inc. These two things are not unrelated.Recall that Oxy won this year’s battle for Anadarko Petroleum Corp. by outbidding Chevron Corp., partly with the aid of $10 billion from Berkshire. This came with the usual payday-loan accoutrements of that high yield, a takeout premium and warrants. Buffett’s cash also helped Oxy avoid putting the deal to its own shareholders — although many appear to have voted it down anyway, in a manner of speaking:Oxy’s stint in the doghouse partly reflects fear, with oil dropping just as Oxy’s debt ballooned. For at least the next year or so, the equity story looks yoked to the twists and turns of the trade war, which is as unsettling as it sounds.More importantly, though, Oxy’s bet on Anadarko has put it at loggerheads with what investors want from oil companies these days.What do they want? Dividends. More to the point, investors have reset the parameters of what’s acceptable in terms of how oil companies apportion cash flow. Poor returns on prior investment by the industry plus concerns about a looming peak in oil demand add up to investors wanting more of that cash directed into their own pockets rather than into drilling budgets. Oil majors have adjusted accordingly:Broadly, there are three claimants on cash flow: the company (capex), creditors (interest and principal) and shareholders (dividends). The sector zeitgeist is to minimize the first two to make more room for the latter.Oxy was an exemplar of this, but the Anadarko deal has changed the equation. Even allowing for disposals announced so far and a joint-venture payment from Ecopetrol SA, pro forma net debt has virtually tripled from Oxy’s standalone level. The extra leverage will haunt Oxy if 2020 turns out to be bad for oil prices – and based on the market’s remarkably sanguine reaction to the recent attack on Saudi Arabia, it might well be.To counter this, Oxy says a round of oil-price hedging means it can cover its dividend if West Texas Intermediate crude oil averages in the low $40s per barrel next year (it’s averaged about $57 so far in 2019). By 2021, Oxy says, it could break even at $40 a barrel without hedging as various efficiencies kick in. Consensus forecasts compiled by Bloomberg show Oxy generating just over $3 billion of free cash flow in 2020 versus a pro forma dividend payment (assuming it stays flat) of just over $2.8 billion.The caveat to this resilience case is that it would mean Oxy cutting back on capex to “maintenance” levels, implying little or no growth. Oxy raised its guidance for third-quarter production by 3% on Tuesday morning, which is positive. But if weak oil prices portend a flat line for the next year or so, then investors’ demand for that high dividend yield wouldn’t be going anywhere.The added fixed costs of higher interest payments and the Berkshire dividend have made Oxy more of a levered play on oil prices at a time when the latter look lifeless. Oxy’s most recent earnings presentation emphasized billions of excess cash (and growth) in 2021 if oil averages $60 or $70 a barrel. In the meantime, though, a big chunk of any value from the Anadarko deal accrues to Buffett. Of the $2 billion of annual pre-tax cost savings (“synergies”) from the deal, $800 million goes post-tax to servicing those preferreds. Indeed, factor in the warrants and take-out premium, plus the $1 billion break-up fee paid to Chevron — along with some other assumptions (1) — and while Oxy’s legacy shareholders get 50% of the net present value of the synergies, Berkshire takes 40%.(2)Oxy expects another $1.5 billion of capex synergies from the Anadarko deal, although this figure came with lower growth guidance so the actual gain in value is less clear, especially if the budget gets slashed toward maintenance levels in the near term.An earnings call is due in three weeks, and Oxy will need to double down on the reassurance it gave in early August. Progress on disposals to cut debt would help. An obvious choice is the stake in Western Gas Partners LP inherited from Anadarko. But this hasn’t materialized yet, and the value of the common units held in Western Gas has dropped by $1.9 billion since the bidding for Anadarko got underway in April. Absent that, details on alternative candidates are needed.Perhaps more importantly, Oxy must make a robust case for synergies coming through sooner rather than later. The current narrative of resilience and leverage to higher oil prices offers some defense against worries about the dividend’s sustainability. However, the oil-price option gets little traction in the current environment where investors are focused on cash today rather than theoretical windfalls tomorrow. Having tilted the cash flow math toward interest and those Buffett payments, Oxy is in a race to show something tangible for its own shareholders coming through from this deal. Looking at that dividend yield, they require some convincing.(1) Assumespreferreds are redeemed for 105% of face value on the 10th anniversary of the deal and all dividends have been paid in full with no accruals. Warrants valued at $542 million using the Bloomberg options calculator as of August 9, 2019 (day of Anadarko acquisition's completion) and assumed to convert to a pro forma stake in Oxy of 8.1%. Tax rate of 21% and cash flows discounted at 10%.(2) Anadarko's legacy shareholders get just under 10%.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
ExxonMobil and Chevron are expected to post dull numbers in the third quarter. They're scheduled to report their third-quarter earnings on November 1.
Every investor in Chevron Corporation (NYSE:CVX) should be aware of the most powerful shareholder groups. Institutions...
Oil prices rose on Friday on the back of some positive noises coming out of the trade war negotiations and reports that an Iranian oil tanker had been attacked
France's Total SA , the big winner in a Brazilian auction of offshore oil concessions on Thursday, said it will not participate in a bigger auction scheduled for Nov. 6 of the so-called Transfer of Rights area in Brazil's pre-salt region. The company's chief executive officer, Patrick Pouyanné, said in a statement that was because the competitive bidding rounds were for non-operating stakes. A consortium led by Total won the exploration and production rights for an offshore block near the pre-salt region on Thursday, agreeing to pay the government a signing bonus of 4 billion reais ($978 million).
Let's see if Chevron Corporation (CVX) stock is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks.
Nigeria is seeking $62 billion from oil companies under regulations that allow the government to revisit revenue-sharing deals on petroleum sales if crude prices exceed $20 a barrel, the attorney general told Reuters on Thursday. The government in Africa's largest oil exporter relies on oil for some 90% of foreign exchange. Oil prices rose to more than $100 a barrel in 2014 before a sharp drop that triggered a 2016 recession in Nigeria, leaving the government struggling to fund its budgets.
Ten companies on Thursday agreed to pay more than $2 billion for the exploration and production rights in 12 offshore oil blocks in Brazil, in what could be a promising sign for even bigger upcoming oil auctions. The most heavily sought after areas in the Thursday auction directly border Brazil's so-called pre-salt area, a coveted zone in which billions of barrels of oil are trapped under a thick layer of salt beneath the ocean floor. The biggest move came from a France's Total SA, which, in a consortium with Malaysia's Petronas and Qatar Petroleum, dropped 4.029 billion reais for one block abutting the pre-salt area.
The federal government's EIA report revealed that crude inventories rose by 2.9 million barrels, compared to the 2.4 million barrels increase that energy analysts had expected.
(Bloomberg) -- Chevron Corp. may be based in California, but Chief Executive Officer Mike Wirth had little praise for the state as he lauded the Texas business environment during an event in Houston on Wednesday.The Chevron boss hailed Texas’s resource base, its skilled workforce and overall business environment while criticizing policies back in the Golden State in a wide-ranging fireside chat at a gathering organized by the Greater Houston Partnership. He also committed Chevron to reducing flaring and methane emissions in the Permian Basin and vowed to increase diversity among the company’s senior leaders.“The policies in California have become pretty restrictive on a lot of business fronts, not just the environment,” Wirth said. “I don’t know there’s a better place in the world for us to do business than” Texas and the Gulf Coast.Chevron’s headquarters are in San Ramon, less than an hour’s drive from San Francisco, where its earliest predecessor, Pacific Coast Oil Co., was founded 140 years ago. Yet the company’s largest office is in Houston and a growing portion of its business is either located in, or controlled by, Texas. Almost 20% of Chevron’s year’s capital spending is allocated to the Permian Basin, the country’s largest oil patch.“The challenge for Texas is to continue to be a leader in energy development and set the standards high for the environment,” Wirth said.The state’s oil boom has attracted criticism from environmentalists for releasing greenhouse gases into the atmosphere at an alarming rate. Flaring and venting, or releasing methane into the atmosphere, has surged in the Permian Basin over the past decade as excess gas is produced as a waste product of oil. As much as 650 million cubic feet of gas is currently emitted in this way, triple the level of two years ago, due in part to a lack of pipelines, according to research firm Rystad Energy.Chevron has committed to zero routine flaring in the Permian, a goal that’s only achievable because of the slow, methodical way the oil giant entered the basin, Wirth said. “As we were going slow we were laying in place the foundation for gathering in the field, for transportation of all the commodities,” he said.Another key goal of his tenure is to improve diversity, especially increase the number of women in senior leadership positions, Wirth said. “We don’t get the best of the workforce if we only have a portion of the population to draw upon,” he said. Improving the environment for women and minorities is the “easiest business case to make,” he added.Chevron has begun hosting a series of workshops called Lean In Circles to discuss how the corporation can become more inclusive. The goal is for employees “to talk about things they don’t normally talk about at work,” Wirth said.Back in California, it’s not just the state’s energy policies that are bugging Wirth. About half a million homes and businesses in the north of the state lost power Wednesday as utility giant PG&E Corp. carried out a planned blackout. Wirth’s house was affected.“My home in California is without power today because the utility company hasn’t focused on the fundamentals,” he said, emphasizing the importance of a strong safety culture.The CEO’s comments prompted a suggestion from his interviewer at the event, Bobby Tudor, the founder of Houston-based investment bank Tudor Pickering Holt & Co. “If California ever decides they don’t want one of the world’s great oil companies, we will take you in Houston,” Tudor quipped.To contact the reporter on this story: Kevin Crowley in Houston at email@example.comTo contact the editors responsible for this story: Simon Casey at firstname.lastname@example.org, Carlos Caminada, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Hungarian energy firm MOL is in talks to acquire Chevron's stake in a giant oilfield in Azerbaijan for more than $2 billion, according to three banking and industry sources involved in the process. Both Chevron and its larger U.S. rival Exxon Mobil are seeking to sell their stakes in the BP-operated Azeri-Chirag-Gunashli (ACG) field in the Caspian Sea. This marks the retreat of the U.S. majors from the central Asian state after 25 years as they refocus on domestic production.