B07 Oil and Gas Extraction

Energy M&A on rise as new players emerge

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 24 : 3-Mar-16

Herbert Smith Freehills partner Rob Merrick says expectations that the downturn in the crude oil price will be sustained may prompt consolidation in the global oil and gas industry. Many Australian-listed energy groups announced asset writedowns during the February 2016 reporting season, but Merrick says they are at less risk of being forced sellers of assets than their overseas peers. The law firm says private equity firms, pension funds and infrastructure funds may actively pursue oil and gas industry acquisitions.

CORPORATES
HERBERT SMITH FREEHILLS PTY LTD, ROYAL DUTCH SHELL PLC, BG GROUP PLC, WOODSIDE PETROLEUM LIMITED – ASX WPL, SENEX ENERGY LIMITED – ASX SXY, SANTOS LIMITED – ASX STO, MITSUI AND COMPANY LIMITED, APACHE CORPORATION, FIRST OIL EXPRO LIMITED, THE BLACKSTONE GROUP LP, THE CARLYLE GROUP, OAKTREE CAPITAL MANAGEMENT LLC, NATIONAL GRID TRANSCO

Origin Energy strikes China LNG deal

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 18 : 2-Mar-16

Australian-listed Origin Energy has secured a preliminary agreement to supply 500,000 tonnes of LNG each year to the trading arm of China-based ENN Energy Holdings. The proposed five-year deal is the first that Origin has negotiated in its own right, rather than as part of the Australia Pacific LNG venture. Michael Dargue of Citigroup has questioned whether it is an appropriate time for Origin to become an LNG trader due to the potential risks.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, ENN ENERGY HOLDINGS LIMITED, AUSTRALIA PACIFIC LNG LIMITED, CITIGROUP PTY LTD, SINOPEC CORPORATION, KANSAI ELECTRIC POWER COMPANY INCORPORATED

Oil price slump rattles energy bosses

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 23 : 26-Feb-16

Australian-listed oil and gas groups have been hard hit by the downturn in the crude oil price, and the majority have scaled back their short- and long-term oil price assumptions. Meanwhile, Fitch Ratings has slashed its 2016 "base case" price for Brent crude oil from $US45 a barrel to $US35, while its "stress case" forecast is just $US25 a barrel. There is general consensus in the industry that crude oil’s current price of around $US30 a barrel is unsustainable.

CORPORATES
FITCH RATINGS LIMITEDINTERNATIONAL ENERGY AGENCYBHP BILLITON LIMITED – ASX BHPWOODSIDE PETROLEUM LIMITED – ASX WPLSANTOS LIMITED – ASX STO

Caltex retains M&A firepower with modest buyback

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Original article by Brian Robins
The Australian Financial Review – Page: 15 : 24-Feb-16

Caltex Australia has posted a net profit of $A522m for calendar 2015, compared with $A20m in 2014. Underlying earnings on a replacement cost operating profit basis increased from $A795m to $A977m. However, the downturn in the crude oil price impacted on revenue, which fell from $A23.9bn previously to $A20bn. Shareholders will receive a final dividend of $A0.70 per share and a full-year payout of $A1.17, while Caltex will repurchase $A270m worth of its shares.

CORPORATES
CALTEX AUSTRALIA LIMITED – ASX CTX, CAR NEXT DOOR PTY LTD

Origin shareholders hit with dividend cut

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 21 : 19-Feb-16

Shares in Origin Energy closed 8.7 per cent higher at $A4.23 on 18 February 2016, despite posting a 2015-16 interim loss of $A254m. The result was marred by a sharp decline in the crude oil price, which has impacted on Origin’s LNG project in Queensland. Origin’s underlying profit for the half-year fell from $A346m to $A254m. Shareholders will receive an interim dividend of $A0.10 per share, compared with $A0.25 previously.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, CONTACT ENERGY LIMITED – ASX CEN, JP MORGAN AUSTRALIA LIMITED, CITIGROUP PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD, STANDARD AND POOR’S CORPORATION

Oil rout hinders Browse outlook

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Original article by Matt Chambers
The Australian – Page: 19 & 20 : 18-Feb-16

Oil and gas producer Woodside Petroleum has slashed its full-year dividend payout after posting a 2015 net profit of $US26m, compared with $US2.41bn previously. The group’s underlying profit of $US1.126bn exceeded market forecasts, although it was 53 per cent lower than in 2014. Woodside’s full-year result was marred by factors such as a $US865m write-down and the downturn in the crude oil price. Shareholders will receive a full-year dividend of $US1.09 per share.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, ROYAL DUTCH SHELL PLC, BP PLC, MITSUBISHI CORPORATION, MITSUI AND COMPANY LIMITED, PETROCHINA COMPANY LIMITED, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, MACQUARIE GROUP LIMITED – ASX MQG, AUSTRALIA. DEPT OF THE TREASURY

Coates plans board shake-up at Santos

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Original article by Damon Kitney, Matt Chambers
The Australian – Page: 17 & 18 : 15-Feb-16

Oil and gas producer Santos has indicated that its 2015 financial results could include write-downs of up to $A3bn. Meanwhile, chairman Peter Coates has stressed the need for board renewal, noting that some directors have been on the board for a long time. However, he says there are no plans for further board changes in 2016, although there has been speculation that several could step down before the end of the year. Coates has also identified recruiting his eventual successor as a priority.

CORPORATES
SANTOS LIMITED – ASX STO, AGL ENERGY LIMITED – ASX AGL, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SCHLUMBERGER LIMITED, ASX LIMITED – ASX ASX, BLUESCOPE STEEL LIMITED – ASX BSL, ENERGYAUSTRALIA PTY LTD, COCHLEAR LIMITED – ASX COH, DEUTSCHE BANK AG, CGI GLASS LEWIS PTY LTD, STANDARD AND POOR’S CORPORATION, ORIGIN ENERGY LIMITED – ASX ORG, CONOCOPHILLIPS

IEA head warns low oil prices may threaten energy security

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 20 : 10-Feb-16

The International Energy Agency’s executive director, Fatih Birol, says investment in oil production is expected to fall by 16 per cent in 2016, following a 20 per cent downturn in 2015. He has warned that some higher-cost projects may be delayed or put on hold if the crude oil price remains at current levels. This in turn could increase reliance on oil from the Middle East, where geopolitical tensions could affect global oil supply. Birol also noted that Australia’s LNG projects will benefit global energy security in the long-term.

CORPORATES
INTERNATIONAL ENERGY AGENCY, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

High LNG exports help wipe fuel import costs

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 9 : 9-Feb-16

EnergyQuest estimates that strong growth in LNG exports reduced Australia’s petroleum deficit to about $A4m in December 2015. It was the smallest petroleum deficit since August 2010, and followed the commencement of production at the three LNG processing plants at Gladstone in Queensland. Australia’s LNG production rose by 48 per cent year-on-year in December, although the downturn in the crude oil price resulted in LNG export revenue falling by 0.5 per to $A1.575bn.

CORPORATES
ENERGYQUEST PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, CONOCOPHILLIPS, CHEVRON CORPORATION

Unlock gas reserves, states told

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Original article by Annabel Hepworth
The Australian – Page: 19 : 8-Feb-16

A report by the Office of the Chief Economist highlights the gas industry’s contribution to the Australian economy. It estimates that gas accounted for 407.6 petajoules of the manufacturing industry’s final energy consumption in 2013-14, compared with just 225.6 petajoules of electricity. It also notes that the gas industry has a workforce of about 155,000. Australian Pipelines & Gas Association CEO Cheryl Cartwright says the report demonstrates the need for a greater focus on supplying gas for domestic use rather than to export markets.

CORPORATES
AUSTRALIA. OFFICE OF THE CHIEF ECONOMIST, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, AUSTRALIAN PIPELINES AND GAS ASSOCIATION, AGL ENERGY LIMITED – ASX AGL, SANTOS LIMITED – ASX STO, NEW SOUTH WALES MINERALS COUNCIL, ENERGY USERS ASSOCIATION OF AUSTRALIA, THE AUSTRALIAN INDUSTRY GROUP