B07 Oil and Gas Extraction

Exxon refines a growth story at Altona

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 13-May-16

Global energy group ExxonMobil will invest $A370m in its oil refinery in the Melbourne suburb of Altona over five years. This includes $A20m that will be spent on upgrading the plant’s daily production from 80,000 barrels to 90,000. The Altona refinery accounts for about 50 per cent of Victoria’s fuel supply, and ExxonMobil’s Andrew Warrell notes that the downturn of the Australian dollar in recent years has made the facility more competitive.

CORPORATES
EXXONMOBIL CORPORATION, BHP BILLITON LIMITED – ASX BHP, VIVA ENERGY AUSTRALIA LIMITED

Investors puzzled as AWE rejects Lone Star bid

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Original article by Matt Chambers
The Australian – Page: 18 & 31 : 12-May-16

Shares in oil and gas producer AWE Limited closed 16 per cent higher at $A0.715 on 11 May 2016, after directors spurned an unsolicited takeover approach from a US private equity firm. Lone Star has offered $A0.80 per share, valuing the bid at $A420m, but AWE has described it as "opportunistic". The board was also concerned about some of the conditions attached to the bid, including a requirement for exclusivity. AWE’s shares have traded at an average of $A0.50 for much of 2016.

CORPORATES
AWE LIMITED – ASX AWE, LONE STAR FUNDS, LONE STAR JAPAN ACQUISITIONS LIMITED, DEUTSCHE BANK AG, CREDIT SUISSE (AUSTRALIA) LIMITED, PEMBROKE RESOURCES PTY LTD, PEABODY ENERGY CORPORATION, PENGANA GLOBAL RESOURCES FUND, PENGANA CAPITAL LIMITED, CUE ENERGY RESOURCES NL – ASX CUE, ELLERSTON CAPITAL PTY LTD, PERENNIAL INVESTMENT PARTNERS LIMITED, ANTARES ENERGY LIMITED – ASX AZZ

Santos puts cost cutting before more asset sales

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Original article by Simon Evans, Angela Macdonald-Smith
The Australian Financial Review – Page: 23 & 32 : 5-May-16

Shares in Santos closed 8.7 per cent lower at $A4.20 on 4 May 2016, after the oil and gas producer’s annual meeting. Santos has shed 825 employees over the last 18 months, and CEO Kevin Gallagher has confirmed that more redundancies are on the agenda as part of the group’s cost-cutting strategy. He has also indicated that Santos may eventually divest some assets, but stressed that reducing costs and stabilising the company is the immediate priority.

CORPORATES
SANTOS LIMITED – ASX STO, HONY CAPITAL, ENN HOLDINGS, GLADSTONE LNG PTY LTD, TOTAL SA, RBC CAPITAL MARKETS

Chevron close to Gorgon LNG restart

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 2-May-16

Energy giant Chevron has advised that production at the Gordon LNG project should resume by the end of May 2016. Mechanical problems forced Chevron to shut down the Barrow Island processing plant shortly after production commenced in early March. Chevron is confident that the first LNG train will reach full production within 6-8 months. Meanwhile, Chevron still expects production at the Wheatstone project to begin in mid-2017.

CORPORATES
CHEVRON CORPORATION, GORGON PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, Z ENERGY LIMITED – ASX ZNZ

Demerger option looms for Origin

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 28 & 22 : 2-May-16

The commencement of production at the Australia Pacific LNG project means Origin Energy’s oil and gas business accounts for the biggest proportion of its operations. This will strengthen the case for those who advocate that Origin should spin off its electricity and gas retailing arm, which boasts 4.3 million customers. However, Origin has some $A9bn worth of debt, which would make a demerger difficult to pursue at present, particularly given the continued weakness of the crude oil price.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, AGL ENERGY LIMITED – ASX AGL, CREDIT SUISSE (AUSTRALIA) LIMITED, BG GROUP PLC, CONOCOPHILLIPS, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, SANTOS LIMITED – ASX STO, HONY CAPITAL, ENN HOLDINGS, SINOPEC CORPORATION, BORAL LIMITED – ASX BLD, ALLAN GRAY AUSTRALIA PTY LTD

Shell to axe jobs as cost cuts hit home

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Original article by Paul Garvey
The Australian – Page: 19 & 20 : 27-Apr-16

Oil and gas giant Royal Dutch Shell is believed to be planning to retrench up to 250 employees across Australia as part of a global cost-cutting strategy. Shell recently advised its Australian staff of the proposed job cuts but has not quantified the number that will be lost. Many Shell Australia employees will also be required to re-apply for their jobs. Shell spokesman Paul Zennaro says projects such as the Prelude floating LNG venture and the expansion of the group’s LNG project in Queensland will eventually create jobs.

CORPORATES
ROYAL DUTCH SHELL PLC, SHELL COMPANY OF AUSTRALIA LIMITED, BG GROUP PLC, QUEENSLAND GAS COMPANY LIMITED, CHEVRON CORPORATION, GORGON PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, ORIGIN ENERGY LIMITED – ASX ORG, SANTOS LIMITED – ASX STO

Energy giants target Bight’s $100bn prize

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Original article by Matt Chambers
The Australian – Page: 17 & 18 : 26-Apr-16

Wood Mackenzie has estimated that the Great Australian Bight could yield about 1.9 billion barrels of oil equivalent. However, Andrew Harwood of Wood Mackenzie notes that the downturn in the crude oil price has prompted many resources groups to shun frontier drilling. Nevertheless, BP and Chevron are among the oil producers that are seeking to undertake exploration programs in the Great Australian Bight.

CORPORATES
WOOD MACKENZIE, BP PLC, CHEVRON CORPORATION, SANTOS LIMITED – ASX STO, STATOIL AS, BHP BILLITON LIMITED – ASX BHP, WOODSIDE PETROLEUM LIMITED – ASX WPL, GREENPEACE, CONSERVATION COUNCIL OF SOUTH AUSTRALIA INCORPORATED, INTERNATIONAL FUND FOR ANIMAL WELFARE, THE WILDERNESS SOCIETY

Woodside, Origin under ratings pressure after Fitch downgrades

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 27 : 26-Apr-16

Fitch Ratings has downgraded the credit ratings outlook of both Woodside Petroleum and Origin Energy from "stable" to negative. The two groups currently boast credit ratings of "BBB+" and "BBB" respectively. Fitch expects further volatility in the crude oil price and says it is unlikely to rebound for some time. However, Bernstein Research is upbeat about the outlook for the oil price.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, ORIGIN ENERGY LIMITED – ASX ORG, FITCH RATINGS LIMITED, BERNSTEIN INVESTMENT RESEARCH AND MANAGEMENT, AUSTRALIA PACIFIC LNG LIMITED

Falling oil price puts squeeze on Woodside

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Original article by Paul Garvey
The Australian – Page: 21 : 21-Apr-16

Woodside Petroleum has reported sales revenue of $US982m ($A1.26bn) for the March 2016 quarter, which is 30 per cent lower than the same period in 2015. The group has been hit by the downturn in the crude oil price, while production was 4.8 per cent lower than the December 2015 quarter at 23.7 million barrels of oil equivalent. Production was affected by scheduled maintenance at the North West Shelf project and the end of production at the group’s Balnaves oilfield.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, APACHE ENERGY LIMITED, UBS HOLDINGS PTY LTD

Drones, digital tech offer savings for oil firms

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 26 : 15-Apr-16

Unscheduled downtime at LNG projects is estimated to cost about $US11m per day, according to General Electric. Lorenzo Simonelli, the CEO of the conglomerate’s GE Oil & Gas division, says technology can be utilised to minimise such disruptions. This could include the use of drones to monitor the condition of offshore oil or gas platforms and detect leaks, and the use of predictive analysis to determine the likelihood that oil and gas equipment will break down.

CORPORATES
GENERAL ELECTRIC COMPANY, GE OIL AND GAS, CONOCOPHILLIPS, SIEMENS AG, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, WOODSIDE PETROLEUM LIMITED – ASX WPL