|Bid||67.34 x 1100|
|Ask||67.60 x 3200|
|Day's range||67.03 - 69.53|
|52-week range||64.65 - 87.36|
|Beta (3Y monthly)||1.17|
|PE ratio (TTM)||16.26|
|Forward dividend & yield||3.48 (5.00%)|
|1y target est||N/A|
Equinor will get a 2.33 billion Norwegian crowns ($260 million) subsidy for its planned construction of floating wind turbines that will supply power to North Sea oil platforms, Norwegian state investment agency Enova said on Thursday. Part of a strategy to curb greenhouse gas emissions, the project could reduce Norway's emissions of carbon dioxide by more than 200,000 tonnes per year, Equinor said last year.
(Bloomberg Opinion) -- By all accounts, it was supposed to be a sleepy August for the U.S. corporate bond market. Three weeks ago, the thinking went something like this: Sure, the Federal Reserve would cut its benchmark lending rate on July 31, in what Chair Jerome Powell would call a “mid-cycle adjustment.” But Treasuries were already pricing in such a move on the short end. Further out on the curve, the 30-year yield was about 2.6%, still more than 50 basis points away from its all-time low. Ten-year yields were about 2%, which seemed like a comfortable range for both buyers and sellers. For company finance officers, it had the makings of a sellers’ market but one that would be around once summer drew to a close.Then things got crazy. The 30-year yield lurched lower by 8 basis points on Aug. 1, then 13 basis points on Aug. 5, then another 13 basis points on Aug. 12. After a one-day reprieve near its all-time low of 2.0882%, it cruised through that level, tumbling to as low as 1.914%. The rally was so intense that the U.S. Treasury Department made an unusual, unscheduled announcement that it was again exploring issuing 50- or 100-year bonds. Companies clearly felt they couldn’t afford to pass up this opportunity. In the first full week of August, CVS Health Corp., Humana Inc. and Welltower Inc. headlined $35 billion of debt sales among investment-grade firms, easily surpassing estimates. Then in the week through Aug. 16, more than $22 billion went through, including a rarely seen offering from Exxon Mobil to the tune of $7 billion. Market watchers expected that would just about wrap things up until after Labor Day on Sept. 2.Some finance officers had other ideas. 3M Co. borrowed $3.25 billion on Monday to help finance its acquisition of medical-products maker Acelity Inc. In total, issuers sold $6.65 billion of investment-grade debt on Aug. 19, already topping some predictions for $5 billion this week. Then on Tuesday, Bank of New York Mellon Corp. priced $1 billion at the lower end of its expected yield range, along with a handful of other borrowers with multimillion-dollar deals.All this is to say, companies are simple: They see staggering low yields, and they issue bonds. Investors, for their part, can’t get enough of them. The Bloomberg Barclays U.S. Corporate Bond Index has returned 13.3% so far in 2019. Over the past 12 months, the index is up 12.5%, compared with just 1.5% for the S&P 500 Index. The average spread on corporate bonds has widened to 122 basis points, from 107 basis points at the end of July, but that’s just because they couldn’t keep up with the relentless rally in Treasuries, not because of a lack of buyers. If Bank of America Corp. strategists led by Hans Mikkelsen are correct, the demand in credit markets has lasting power. They say the $16 trillion of negative-yielding debt globally has left investors — and particularly those outside the U.S. — with few alternatives besides purchasing companies’ debt. “There is a wall of new money being forced into the global corporate bond market,” they wrote on Aug. 16. “Given the near extinction of non-USD IG yield, foreign investors are forced to take more risk.”Of course, buying investment-grade bonds hardly qualifies as a speculative endeavor. Exxon Mobil, in fact, has the same credit rating as the U.S. government from both Moody’s Investors Service and S&P Global Ratings. On the other hand, Bloomberg News’s Jeannine Amodeo and Davide Scigliuzzo reported this week that three leveraged-loan sales that had been languishing in the U.S. market for weeks were pulled as investors sought higher-quality assets. Vewd Software became the fourth on Tuesday, scrapping a $125 million term loan due to market conditions. Leveraged loans, it should be noted, are floating-rate securities and so face weaker demand when the Fed appears poised to cut rates, as it does now. But for large, highly rated companies, their behavior in recent weeks is exactly what should be expected. Exxon Mobil issued 30-year bonds to yield 3.095%. In November, five-year Treasuries offered the same amount. 3M, rated a few steps below triple-A, priced 30-year debt to yield 3.37%, less than the going rate on long Treasury bonds just nine months ago. No matter how you slice it, they’re getting borrowing costs that seemed unthinkable around this time last year.Interestingly, these low yields should be encouraging governments to borrow more, too. I wrote last week that the bond markets were begging for infrastructure spending. However, it seems neither Germany nor the U.S. has any appetite for that sort of initiative. The German government is reportedly preparing fiscal stimulus that could be triggered by a deep recession, while President Donald Trump hasn’t ruled out a payroll tax cut to stave off any economic weakness.It’s certainly possible that U.S. yields will only fall further from here, and other companies can also borrow or refinance at rock-bottom interest rates. But the move in global bond markets in recent weeks could was extreme, to say the least. The weak demand for Germany’s 30-year bond auction on Wednesday, which offered a coupon of 0% at a yield of -0.11%, suggests there are at least some lines that investors won’t cross.For prudent companies, it was well worth delaying summer vacations to get their deals done.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
A unit of ExxonMobil (XOM) inks a deal to employ a bunker tanker in Singapore for delivering marine fuel with minimal sulphur content to seafaring vessels.
(Bloomberg) -- The Total SA-led liquefied natural gas joint venture in Papua New Guinea is seeking to finish a new round of negotiations with the government by the end of August, while insisting that the original agreement signed with the state in April is fair and equitable to both sides.Oil Search Ltd., a junior partner in the Papua LNG project, said Tuesday it was important for the discussions to be concluded before the expiration of contract bids for front-end engineering. The validity of those bids “can be pushed out a little” but are set to expire in early September, Managing Director Peter Botten said on a conference call.The project has been in limbo since a new government, led by Prime Minister James Marape, swept to power in May pledging to get better resource deals for the country, including a $13 billion plan to expand LNG exports. Total last week rejected a request to renegotiate the Papua LNG agreement, which was proposed during talks in Singapore, according to a person with knowledge of the discussion.The Papua joint venture is competing with a wave of LNG projects around the world which are hoping to come on stream in time to meet an expected supply deficit from the mid 2020s.How Exxon’s Big Gas Plan Stirred Up Papua New Guinea: QuickTake“Activity in the sector is building and under those circumstances if you’re delayed for any length of time you’re likely to see further inflation into the cost you might incur,” Botten said in an interview.Finalization of the Papua LNG deal is necessary before talks can resume on an agreement for the related Exxon Mobil Corp.-led P’nyang project, and only once that’s concluded can both expansion projects to progress to front-end engineering and design work, Oil Search said. Further meetings between the joint venture and government representative were planned for later in the week with both sides working toward finalizing the agreement, Botten said.“The Papua LNG joint venture believes the existing terms and agreement, which were entered into in good faith, are appropriate, fair and reasonable,” Botten said in a statement earlier Tuesday to accompany the group’s first-half results. Oil Search has seen its shares fall sharply on the risk of delays to its projects in PNG amid the political uncertainty.Papua New Guinea has had a strong record for project development in the resources sector, Botten said, but he also cautioned the government. “Reviewing things can be acceptable, but it also does send shivers down investors’ spines,” he said.(Updates with Oil Search comment in fifth paragraph.)To contact the reporter on this story: James Thornhill in Sydney at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, Aaron ClarkFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
LONDON/DUBAI, Aug 20 (Reuters) - Saudi Aramco's biggest asset could also be a liability. In the three years since Saudi Crown Prince Mohammed Bin Salman first proposed a stock market listing, climate change and new green technologies are putting some investors, particularly in Europe and the United States, off the oil and gas sector. Aramco, for its part, argues oil and gas will remain at the heart of the energy mix for decades, saying renewables and nuclear cannot meet rising global demand, and that its crude production has lower greenhouse gas emissions than its rivals.
(Bloomberg Opinion) -- There’s a Vegas-like quality to the Texas electricity market. Whereas other regions use factors like capacity payments to encourage new power plants, Texas relies on the spin of the wheel. If temperatures are hot enough, and the wind is calm enough, and enough power generators go offline unexpectedly, a scramble for power spurs prices from the usual range of $20 to $30 per megawatt-hour up to $9,000.And that’s what happened last week:Merchant generators in Texas play this slot machine, hoping for a handful of these windfalls. BloombergNEF estimates the state’s generators reaped $1.5 billion across just two days last week, equivalent to more than 10% of the money paid in the wholesale electricity market last year.The Electric Reliability Council of Texas, or Ercot, banks on such jackpots tempting developers to build more capacity. The mechanism works, more or less, but the inevitable lag between market signals and new construction can leave the power market dangerously close to shortages — and consequently the spikes. This is shown clearly in the reports Ercot publishes twice a year providing a forecast of the state’s “reserve margin,” or spare capacity. The target level is 13.75% of peak demand. Here are the forecasts for 2020 through 2023 taken from the May report over the past seven years:The latest forecasts suggest expectations are beginning to turn again. While the expected reserve margin for 2020 has shrunk further, it has expanded further out, moving back above the target level in 2021. That may prove optimistic.NRG Energy Inc., one of the biggest power generators and retailers in Texas, said on its recent earnings call that Ercot most likely overestimates new capacity and underestimates closings. As warnings go, this one is less a call to arms and more a pitch to buy; NRG’s plants should profit in a tighter, more volatile market. That said, it is safe to assume that much of the roughly 112 gigawatts of proposed projects — substantially bigger than the state’s total existing capacity — will not materialize. Less than a quarter of it had an agreement to hook plants into the grid signed at the end of July. Wind and solar projects dominate Texas’ pipeline and Greg Gordon, an analyst at Evercore ISI, typically discounts these by 35% and 75% respectively. He forecasts much tighter conditions in the medium term:In theory, this alternative view should spur new projects, especially solar farms. Hot, muggy days can mean air conditioners crank up just as the state’s formidable fleet of wind turbines slow for want of a breeze. Solar power, on the other hand, is tailor-made for those dog-day afternoons. But the state’s solar capacity of 1.9 gigawatts is low, and while there is a nominal 62 gigawatts in the works, most of it will never see the light of day. Tara Narayanan, a solar analyst for BloombergNEF, points to the impending roll-off of the investment tax credit for renewable projects as well as President Donald Trump’s tariffs on imported solar modules. Taken together, these mean the optimal window for building solar capacity approved before the end of 2019 is actually in 2022-2023, when developers can still utilize the highest tax credit while also purchasing equipment unburdened by the tariffs.(1) Ercot’s pipeline suggests perhaps 3.4 gigawatts of new solar capacity entering service by the end of next summer. Using that as a conservative estimate and plugging it into BloombergNEF’s U.S. “Power Mixer” tool, the result implies a cut to average peak summer prices in 2021 of almost $4 per megawatt-hour, knocking perhaps $270 million off fleet revenue. That’s unhelpful for merchant generators but hardly a game changer.Yet the game is changing at a broader level. Texas, like so many other power markets, is undergoing a transition. In addition to wind power, cheap shale gas pushes down on power prices while rising demand and the retirement of older thermal power plants offer support. Even if solar power has been slow to take hold, and reserve margins remain low, the Texas power market represents a gamble. After all, last week’s spike came after a months-long slump in power futures as expectations of a lucrative heat wave had declined. Similarly, while 2018’s summer was a hot one, there were no big price spikes that year. This is one reason, even with near-term reserve margins looking tight, investors have been reluctant to price that fully into generator stocks. It is also why, even with the prospect of markets remaining tight, there will be no wave of construction in big conventional plants. Solar’s quick lead times and the ability to scale up alongside demand is a structural advantage.The price volatility, and expectation of more, is spurring one important part of the market to take matters into its own hands: commercial and industrial customers. As even the likes of Exxon Mobil Corp. have discovered, a long-term renewable supply contract can deliver energy at stable prices, and the cost of such power continues to drop. Corporate power-purchase agreements signed in Texas this year are likely to surpass those for the entire U.S. just two years ago, according to BloombergNEF. Power producers in Texas should enjoy decent odds of more jackpots in the next few years, but the house is moving against them. (1) This assumes, of course, that neither the tax credit nor the tariffs are extended.To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Daniel Niemi 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.
Exxon Mobil (XOM) has witnessed a significant price decline in the past four weeks, and is seeing negative earnings estimate revisions as well.
Lower RIN costs, completion of the Alkylation project at the Krotz Springs refinery and higher crack spreads buoy Delek US Holdings' (DK) refining unit in second-quarter 2019.
Saudi Aramco, which could command a staggering valuation of $2 trillion when it makes stock market debut in 2020-2021, is the most profitable company in the world.