Posts Tagged ‘oil’

ConocoPhillips (COP) splits into two firms, shares grow

Thursday, July 14th, 2011

ConocoPhillips (NYSE: COP) shares gained 5% to $78.14, after the oil company said it would divide into two separate publicly traded companies. Volume for the stock was 17.6 million shares, or better than twice its full-day average volume.

A news release out July 14 noted that ConocoPhillips’ board of directors has approved pursuing the separation of the company’s Refining & Marketing and Exploration & Production businesses into two stand-alone, publicly traded corporations via a tax-free spin of the refining and marketing business to ConocoPhillips shareholders.

As a separate company, the release continues, the Refining and Marketing business of ConocoPhillips will be a leading pure-play independent refiner with a competitive and diverse set of assets. In addition to executing the company’s initiatives to improve downstream returns through portfolio rationalization and other operating efficiencies, the new downstream company will be able to further position its portfolio by pursuing transactions and investments across the value chain.

The release then quoted Conoco CEO Jim Mulva as saying, “Consistent with our strategy to create industry-leading shareholder value, we have concluded that two independent companies focused on their respective industries will be better positioned to pursue their individually focused business strategies.

Mulva concluded, “Both companies will continue to benefit from the size and scale of their significant high-quality asset bases and free cash flow generation, allowing them to invest and create shareholder value in a changing environment.”

Buzz Stock of the Day- Trico Marine Services (TRMA)

Thursday, April 2nd, 2009

According to a recent study, daily offshore oil & gas production, which currently stands about 43 million barrels of oil equivalent (BOE), is forecast to grow to 53 million barrels of BOE in 2010. That growth should drive the industry annual expenditure from $193 billion in 2006 to $248 billion in 2010.

“What’s more, considerable growth is forecast for all forms of deep water production facilities, but especially floating production systems and subsea production and processing hardware. Subsea systems are also expected to attract an increasingly larger part of the shallow water offshore spend as marginal development programmes escalate,” the report stated.

That’s where our Buzz Stock of the Day– Trico Marine Services, Inc. (Nasdaq: TRMA) comes in.

The Woodlands, TX-based company. through its subsidiaries, provides subsea and marine support vessels to the offshore oil and gas industry. It operates in three segments: Subsea Services, Subsea Trenching and Protection, and Towing and Supply.

The Subsea Services segment provides technology oriented subsea services, including inspection, maintenance, and repair services; survey and light construction support; decommissioning; onshore engineering work; post processing of survey data; and associated reporting. The Subsea Trenching and Protection segment offers subsea trenching and protection services for the burial of subsea transmission systems. This segment’s customers are primarily within the offshore oil and gas, power (electricity transmission systems), telecommunications (intercontinental and regional systems), and military industries.

In early February the company announced new contract awards and extensions valued at around $80 million. All of the contracts were with Trico Marine’s subsea services company, DeapOcean AS, or its subsea protection company, CTC Marine. In fact, about three-quarters of Trico Marine’s business in Q4 came from its subsea business.

“Our fourth quarter EPS met expectations but the more important point is that 2008 marked the transformation of Trico from an OSV operator to an international subsea services provider with our acquisitions of DeepOcean and CTC Marine,” said Trico Marine’s chairman and chief executive, Joseph Compofelice.

In a conference call with analysts, the company stated its CTC division is likely to do well and meet expectations throughout 2009 largely because of Trico Marine’s strategy to geographically expand CTC’s footprint into stronger markets including South East Asia and Mexico, and generate a larger portion of business from military contracts.

As of Dec. 2008, Trico Marine had $95 million in cash and $712 million in net debt. During the fourth quarter of 2008, the Company converted $22 million of convertible debt into equity and drew down $30 million under its credit facilities.

Most recently, Trico rejected the board nominations of two executives from Kistefos AG, a Norweigan private equity company that holds about 22 percent of Trico’s outstanding stock. In a response to one of the two executives, Trico stated that if the nominations were approved, Kistefos would have 29 percent control of the board, exceeding the 25 percent or less mandated by the Jones Act, the U.S. federal statute that regulates maritime commerce in U.S. waters between U.S. ports. Trico also said it will disregard the nominations if they are made at its upcoming annual meeting.

Join the discussion on Trico Marine Services on the company’s official Buzz Stock thread.

Energy Buzz Stocks- JCI, ACI, CVA

Friday, January 16th, 2009

In no particular order:

1. Coal makes a comeback: Formed from the compressed plant matter trapped under rocks and dirt for millions of years, coal accounted for about 27 percent of the world’s energy consumption, and is expected to increase by 2.6 percent every year until 2015. It’s cheap, and a lot more available in countries with voracious appetites for energylike the U.S., India, and China. Kiplinger recently published an article hailing coal as the “new black gold,” that will be touted as a “homegrown solution to ease U.S. reliance on oil imports, which now account for nearly two-thirds of daily usage.” Coal-to-fuel technologies are all but here, and it’s only a matter of time before the treehuggers get on the coal bandwagon, as well.

2. Russia gets the cold shoulder from the EU: About 39 percent of the European Union’s natural gas imports come from Russia. The demand for natural gas is expected to increase about 1 percent per-year for OECD countries, and 2.3% for non-OECD countries. Russia knows that it can call the shots when it comes to price from western and central European countries, once business from China picks up. Expect the EU to continue to launch new initiatives aimed at reducing its dependent on Russia including pipelines, and LNG re-gasification terminals to serve as a more reliable substitute for future natural gas supplies.

3. Oil prices stabilize within a narrow band by the end of the year: High oil prices that were buoyed for so long by bottlenecks, a bigger appetite, and speculation, has resulted in lower demand in OECD countries, especially the United States. Market researcher, Global Information, Inc., recently issued a statement predicting lower prices in the short-term, and further efforts by OPEC, which accounts for roughly 40% of the total oil production, to further try and control supply and reduce production.

Here are a few Energy Buzz Stocks we’re keeping an eye on:

Johnson Controls (JCI)
: This clean energy company just signed a joint venture with Saft to produce batteries for hybrid and electric vehicles. Known for its energy saving technology, which has applications in everything from the automotive to the industrial sector, JCI could be a big winner in the coming year.

Arch Coal (NYSE: ACI) – The stock has been crushed lately, and trades near its 52-week low. The company’s Q3 profit tripled over last year, and management was bullish on the long-term fundamental strength of the coal market. Recently trading for about $16.50 a share, ACI seems like a great opportunity at this price.

Covanta Holdings (NYSE: CVA)– Do you remember how the Flux Capacitor worked after Doc Brown flew back to 1985 from the future? Well, the future is here. This company can burn garbage instead of fossil fuels to produce electricity–clean electricity. Their waste-to-energy technology reduces greenhouse gases, lowers the risk of groundwater contamination, and reduces dependence on fossil fuels. Every year, Covanta converts 16 million tons of waste into 8 million megawatt hours of clean, renewable electricity. The company has had quarterly earnings growth of about 29 percent, and has more than $169 million of cash on hand.