B07 Oil and Gas Extraction

Bleak credit outlook rating for oil and gas this quarter

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 21 : 14-Jul-16

Brent crude oil was trading at around $US48 per barrel on 13 July 2016, but ratings agency Standard & Poor’s still expects it to average $US40 for the remainder of the calendar year. Meanwhile, Lawrence Hu of S&P has identified the potential for a sustained oversupply of oil as the biggest risk for oil and gas companies in the Asia-Pacific region. Both S&P and Moody’s expect the oil price to average $US45 in 2017.

CORPORATES
STANDARD AND POOR’S CORPORATION, MOODY’S INVESTORS SERVICE INCORPORATED, SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, WOODSIDE PETROLEUM LIMITED – ASX WPL, UBS HOLDINGS PTY LTD, CITIGROUP PTY LTD

LNG exports jump despite Gorgon woes

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 13-Jul-16

New data shows that Australia’s LNG exports were 18.5 per cent higher in June 2016 than in May. The data from EnergyQuest also show that LNG production rose by more than 500,000 tonnes to 3.6 million tonnes. There were a total of 44 shipments in June, although there were no shipments from the Gorgon project due to problems with the first production train. Western Australia accounted for 27 shipments, while 22 LNG consignments departed from Queensland.

CORPORATES
ENERGYQUEST PTY LTD, CHEVRON CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, ROYAL DUTCH SHELL PLC, QUEENSLAND CURTIS LNG PTY LTD, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED

Oil Search sweetener needed for InterOil

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Original article by Angela Macdonald-Smith, Sarah Thompson
The Australian Financial Review – Page: 1 & 11 : 12-Jul-16

ExxonMobil is believed to be the unnamed company that is seeking to trump Oil Search’s $US2.2bn ($A2.9bn) takeover bid for InterOil. The target has commenced negotiations with the as-yet identified suitor, which made an initial approach in late June 2016, and is understood to have made a scrip-based offer that is 10 per cent higher than the Oil Search bid. All three players have exposure to Papua New Guinea’s LNG sector.

CORPORATES
OIL SEARCH LIMITED – ASX OSH, INTEROIL CORPORATION, EXXONMOBIL CORPORATION, CITIGROUP PTY LTD, TOTAL SA

BHP has high hopes for Trinidad oil prospects

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 20 : 29-Jun-16

BHP Billiton is optimistic that an oil well drilling program in Trinidad will yield positive results. The resources group is drilling three well in the region, with plans for another five wells later on. The Caribbean, the Gulf of Mexico and the Beagle Sub-basin off the coast of Western Australia are the focus of BHP’s oil exploration activities for the next several years. The petroleum division will account for the bulk of BHP’s exploration budget for 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP

BHP gets shale oil wells ready after price rises

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Original article by Barry FitzGerald
The Australian – Page: 21 : 23-Jun-16

BHP Billiton CEO Andrew Mackenzie has indicated that the group will commence production at some of its drilled but uncompleted shale oil wells in the US, following an upturn in the crude oil price. It is now trading at around $US50 per barrel, having reached a low of $US26 a barrel in February 2016. Mackenzie has also reiterated that BHP’s preference is to pursue growth via its existing assets rather than acquisitions.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD

LNG price pain is still to come

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 : 17-Jun-16

Oversupply in the LNG Asian market could force some of Australia’s LNG producers to reduce capacity. Fereidun Fesharaki, chairman of consultancy FGE, says prices will be under pressure. The price of LNG in north Asia has declined to about $US4.50 per million British thermal units from about $US20 in early 2014, and further declines are likely.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, FGE

InterOil AGM voting stirs deal worries

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 20 : 16-Jun-16

InterOil’s former CEO Phil Mulacek has failed in his bid for a board spill, although he received a high level of support at the takeover target’s 2016 AGM. Some 31 per cent of votes cast backed his stance, and Oil Search’s $US2.2bn takeover bid will fail if 33 per cent of InterOil shareholders vote against it on 28 July. Oil Search CEO Peter Botten intends to hold further meetings with InterOil’s shareholders in the lead-up to the vote.

CORPORATES
OIL SEARCH LIMITED – ASX OSH, INTEROIL CORPORATION, TOTAL SA, CAPITAL GROUP COMPANIES INCORPORATED, EXXONMOBIL CORPORATION

After 50 years, Exxon and BHP quietly pull plug on Bass Strait oil

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Original article by Matt Chambers
The Australian – Page: 19 & 26 : 15-Jun-16

Oil output in Bass Strait has fallen to around 40,000 barrels a day, compared with 500,000 a day when production was at its peak. ExxonMobil is believed to be seeking to offload a number of production licences in Bass Strait, which has yielded more than four billion barrels of oil for the group since it established a joint venture with BHP Billiton in the 1960s. The Bass Strait oilfields’ reserves are rapidly being exhausted, although the region holds considerable gas reserves.

CORPORATES
EXXONMOBIL CORPORATION, BHP BILLITON LIMITED – ASX BHP, SCHLUMBERGER LIMITED, CITIGROUP PTY LTD

Dissident push falters at InterOil

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Original article by Brian Robins
The Sydney Morning Herald – Page: 20 : 13-Jun-16

Takeover target InterOil has advised that its annual meeting will proceed on 14 June 2016, after a court dismissed an application by ex-CEO Phil Mulacek to have it delayed. Shareholders will vote on Mulacek’s push for a board spill. He opposes a $US2.2 billion ($A3bn) bid for the company by Australian-listed Oil Search, arguing that the offer undervalues InterOil. The majority of institutional investors are believed to support the bid.

CORPORATES
INTEROIL CORPORATION, OIL SEARCH LIMITED – ASX OSH, EXXONMOBIL CORPORATION, SUPREME COURT OF YUKON

Low prices knock sense into producers

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 27 : 10-Jun-16

There is growing recognition among Australian energy groups of the need to continue reducing costs, amid sustained weakness in the crude oil price and a growing oversupply in the LNG market. Santos CEO Kevin Gallagher has suggested greater collaboration among rival LNG groups and has raised the possibility of LNG infrastructure being owned by independent operators rather than producers. Meanwhile, Woodside Petroleum CEO Peter Coleman has acknowledged that the LNG projects in Queensland have cost much more than originally budgeted.

CORPORATES
SANTOS LIMITED – ASX STO, WOODSIDE PETROLEUM LIMITED – ASX WPL, OIL SEARCH LIMITED – ASX OSH, NOVA SYSTEMS, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION LIMITED, INTERNATIONAL ENERGY AGENCY, CLOUGH LIMITED, McKINSEY AND COMPANY, CB&I INCORPORATED, SHELL COMPANY OF AUSTRALIA LIMITED