ENERGY INDUSTRIES – AUSTRALIA

Gas crunch bites with price hikes

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 1 : 6-Jan-17

Manufacturers have raised concerns about imminent shortages in gas supply and their impact on prices. Mark Chellew, chairman of Manufacturing Australia, says a period of between mid-2017 and late 2018 will be particularly difficult. According to EnergyQuest, a supply shortfall will reach 172 petajoules in 2020 and 205 petajoules in 2025.

CORPORATES
MANUFACTURING AUSTRALIA LIMITED, ENERGYQUEST PTY LTD, AUSTRALIAN ENERGY MARKET OPERATOR LIMITED, VICTORIA WOOL PROCESSORS, ENERGYAUSTRALIA PTY LTD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

All options open in PRRT review

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Original article by Joanna Mather, Angela Macdonald-Smith
The Australian Financial Review – Page: 7 : 5-Jan-17

The review of the petroleum resource rent tax (PRRT), led by former Treasury official Michael Callaghan, will be dispassionate, analytical and objective. Callaghan stressed these qualities of the review in an interview given on 4 January 2017. Treasurer Scott Morrison announced the review in November 2016. Its objective is to find out why PRRT receipts declined from a peak of $A2.5 billion in 2000 to about $A900 million a year.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION LIMITED, INTERNATIONAL TRANSPORT WORKERS’ FEDERATION

Maintenance boom for resources

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Original article by Tess Ingram
The Australian Financial Review – Page: 13 & 18 : 19-Dec-16

BIS Shrapnel forecasts that Australia’s resources sector will increase expenditure on maintenance work by 52 per cent over the next five years, to $A10bn. Adrian Hart of BIS says this will include both expenditure that has been deferred and spending on new assets. He adds that there could be some consolidation in the mining services sector as a result. The oil and gas sector is expected to account for the bulk of the increased expenditure on maintenance activity.

CORPORATES
BIS SHRAPNEL PTY LTD, PROGRAMMED MAINTENANCE SERVICES LIMITED – ASX PRG, SEVEN GROUP HOLDINGS LIMITED – ASX SVW, WORLEYPARSONS LIMITED – ASX WOR, MONADELPHOUS GROUP LIMITED – ASX MND, UGL LIMITED – ASX UGL, CIMIC GROUP LIMITED – ASX CIM, RIO TINTO LIMITED – ASX RIO

Santos surprises with $1.5b capital raising

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 : 15-Dec-16

Australian-listed oil and gas producer Santos will issue new shares at $A4.06 apiece in a $A1.5bn equity raising. It will comprise a $A1.04bn institutional placement and a $A500m share purchase plan for existing shareholders. Santos had previously raised some $A3bn in late 2015. Santos recently revealed plans to shift non-core assets to a separate division in order to focus on its key projects. The group’s shares closed at $A4.41 on 14 December 2016.

CORPORATES
SANTOS LIMITED – ASX STO, DEUTSCHE BANK AG, MORGAN STANLEY AUSTRALIA LIMITED, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, JB NORTH AND COMPANY PTY LTD

Santos takes ‘sweat or exit’ action

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 18 : 9-Dec-16

Australian-listed oil and gas producer Santos aims to slash its net debt by $US1.5bn ($A2bn) by 2019 as part of a restructuring program. This will including moving non-core assets to a holding company, allowing the group to focus on five key growth assets. These include the Gladstone LNG project, its Cooper Basin gas assets and the Papua New Guinea LNG venture. Santos will also make its gas processing facilities available to rival gas producers. The non-core assets could potentially be sold in the future.

CORPORATES
SANTOS LIMITED – ASX STO, ORIGIN ENERGY LIMITED – ASX ORG, ENN HOLDINGS, AWE LIMITED – ASX AWE, AUSBIL INVESTMENT MANAGEMENT LIMITED, CLOUGH LIMITED, RBC CAPITAL MARKETS

Analysts cool on Origin’s petroleum plan

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 8-Dec-16

Ben Wilson of RBC Capital Markets has questioned Origin Energy’s lack of information regarding the proposal to spin off its conventional oil and gas assets. However, he notes that the partial demerger will reduce Origin’s debt and the company’s complexity, and adds that Origin could eventually also offload its stake in the Australia Pacific LNG project. Mark Samter of Credit Suisse says the demerger has merits, but he believes that Origin should have pursued a trade sale rather than an IPO.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, RBC CAPITAL MARKETS, CREDIT SUISSE (AUSTRALIA) LIMITED, AUSTRALIA PACIFIC LNG LIMITED, JP MORGAN AUSTRALIA LIMITED, BEACH ENERGY LIMITED – ASX BPT, CITIGROUP PTY LTD

Origin Energy spins off oil and gas business

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 20 : 7-Dec-16

Australian-listed Origin Energy has revealed plans for a partial demerger in 2017, with its conventional oil and gas assets to be held by a separately listed company. However, Origin will retain its stake in the Australia Pacific LNG project in Queensland, while it will not hold a stake in the new company. Origin CEO Frank Calabria says an IPO was deemed to offer the best value, although he adds that the group would be open to an offer that represented better value than a float. JP Morgan estimates that the assets that will be spun off are worth around $A1.8bn.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, JP MORGAN AUSTRALIA LIMITED, SANDON CAPITAL INVESTMENTS LIMITED – ASX SNC, TATTS GROUP LIMITED – ASX TTS, ILUKA RESOURCES LIMITED – ASX ILU, MACQUARIE CAPITAL PTY LTD, UBS HOLDINGS PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD, AGL ENERGY LIMITED – ASX AGL, BEACH ENERGY LIMITED – ASX BPT, STANDARD AND POOR’S FINANCIAL SERVICES LLC, MOODY’S INVESTORS SERVICE INCORPORATED

DUET investors buoyed by CKI’s $7.3b offer

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 11 & 24 : 6-Dec-16

Shares in DUET Group closed at $2.74 on 5 December 2016, after reaching an intra-day high of $A2.82. Hong Kong-based Cheung Kong Infrastructure has proposed to pay $A3 per share for the energy infrastructure group, whose assets include the Dampier-Bunbury gas pipeline in Western Australia. However, DUET has noted that the offer is unsolicited and not binding, and there is no certainty that CKI will make a formal bid. Mark Busuttil of JP Morgan says the offer represents full value and a rival bid is unlikely.

CORPORATES
DUET GROUP – ASX DUE, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, JP MORGAN AUSTRALIA LIMITED, RARE INFRASTRUCTURE, ARGO INVESTMENTS LIMITED – ASX ARG, UNISUPER LIMITED, RBC CAPITAL MARKETS, 4D INFRASTRUCTURE PTY LTD, CITIGROUP PTY LTD, AUSGRID PTY LTD, STATE GRID CORPORATION OF CHINA, AUSTRALIA. DEPT OF THE TREASURY

Producers spot better returns

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Original article by Matt Chambers
The Australian – Page: 21 : 6-Dec-16

Data from EnergyQuest shows that the spot price of gas in Adelaide rose to nearly $A10 per gigajoule in the September 2016 quarter, while the spot price in Sydney and Brisbane also rose. In contrast, the LNG netback price at the Wallumbilla processing hub in Queensland fell to around $A6 per gigajoule. EnergyQuest expects LNG producers to capitalise on the rise in gas prices by redirecting more of their output to the domestic market.

CORPORATES
ENERGYQUEST PTY LTD, QUEENSLAND CURTIS LNG PTY LTD, ROYAL DUTCH SHELL PLC

Too early to say goodbye to tough times

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 20 : 2-Dec-16

AWE Limited CEO David Biggs says that oil and producers are unlikely to increase their capital investment until the longer-term impact of OPEC’s production cuts on the crude oil price is known. He believes that a sustained price above $US60 per barrel will be needed for oil companies to commit to increased spending. Beach Energy director Jim McKerlie agrees that the OPEC deal will not be a "gamechanger" for oil and gas producers.

CORPORATES
AWE LIMITED – ASX AWE, BEACH ENERGY LIMITED – ASX BPT, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, HORIZON OIL LIMITED – ASX HZN, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, WORLEYPARSONS LIMITED – ASX WOR, WOODSIDE PETROLEUM LIMITED – ASX WPL, FAR LIMITED – ASX FAR, RBC CAPITAL MARKETS