Aussie gas spurs Shell’s $12bn hit

Original article by Perry Williams
The Australian – Page: 13 & 19 : 1-Jul-20

Macquarie expects more companies in Australia’s energy sector to announce writedowns in the second half of 2020, in the wake of the sharp fall in the crude oil price. Global energy giant Shell has advised of impairment charges of up to $US22bn; this includes a writedown of between $US8bn and $US9bn on its gas business, primarily due to its gas projects in Australia. The price of Brent crude is trading at around $US40 a barrel, and Macquarie notes that Australian energy producers typically use a price of $US70 to $US75 a barrel for impairment testing purposes.

CORPORATES
ROYAL DUTCH SHELL PLC, SHELL COMPANY OF AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG

Oil crash threatens to sink industry

Original article by Perry Williams
The Australian – Page: 13 & 20 : 23-Apr-20

Shares in Australian oil and gas producers were sold down on 22 April, as the global oil glut and falling demand continued to weigh on the crude oil price. The price of Brent crude oil reached a low of US15.98 a barrel, and Citigroup expects it to fall below $US10. The firm expects Brent to average $US17 a barrel during the June quarter. Coal-seam gas industry executive Richard Cottee says a significant production cut may be needed to boost the crude oil price.

CORPORATES
CITIGROUP PTY LTD

Energy companies face huge asset writedowns

Original article by Perry Williams
The Australian – Page: 13 & 14 : 20-Apr-20

The price of Brent crude oil is trading at around $US28 a barrel. Energy industry sources have warned that Australian oil and gas producers may have to announce significant full or half-year impairment charges if the oil price remains subdued for the remainder of 2020. Allan Gray Australia Simon Mawhinney says $U30 a barrel is not sustainable for the industry. Futures market pricing suggests that the long-run oil price may average $US44 a barrel until 2023.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, BEACH ENERGY LIMITED – ASX BPT, ALLAN GRAY AUSTRALIA PTY LTD

Australian fuel supplies in the crosshairs

Original article by Patrick Commins
The Australian – Page: 18 : 9-Jan-20

Elizabeth Buchanan from the Department of Defence’s Australian War College says the oil price would be the "first casualty" if the US were to retaliate after Iran’s missile strikes on its bases in Iraq. She says Iran would be likely to use oil as a weapon against the US and its allies, warning that the latter are likely to be hardest hit as the US is now largely oil self-sufficient. Buchanan warns that Australia is particularly vulnerable given that most of its liquid fuel is imported and the nation has no emergency fuel stocks.

CORPORATES
AUSTRALIA. DEPT OF DEFENCE. AUSTRALIAN WAR COLLEGE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY, INTERNATIONAL ENERGY AGENCY

Investors ride out Iran’s missile attacks

Original article by David Rogers
The Australian – Page: 13 & 18 : 9-Jan-20

The price of Brent crude oil has peaked at a four-month high in response to Iran’s missile attacks, while the spot gold price reached an 11-year high. The Australian dollar fell to a three-week low, but the local sharemarket closed only slightly down after clawing back initial losses. Kyle Rodda of IG Markets has downplayed the prospect of a US-Iran war, noting that this would not be in the strategic interests of either country. AMP Capital’s Shane Oliver warns that geopolitical risk will remain an issue in 2020.

CORPORATES
IG MARKETS LIMITED, AMP CAPITAL INVESTORS LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Energy stocks crunched as oil price slides

Original article by Paul Garvey
The Australian – Page: 13 : 20-Dec-18

The price of Brent crude oil has shed about 34 per cent since October, with shares in Australia’s three biggest oil producers falling by more than 20 per cent over the same period. London Capital Group’s Jasper Lawler says the downturn in oil prices will result in "significant" deflationary pressure. However, airlines, mining companies and motorists are set to benefit from the sustained fall in the oil price, while US Bank Wealth Management’s Rob Haworth says OPEC’s recent cut in oil production may not be sufficient to offset weakening global demand and rising US shale output.

CORPORATES
LONDON CAPITAL GROUP, US BANK WEALTH MANAGEMENT, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, WORLEYPARSONS LIMITED – ASX WOR, QANTAS AIRWAYS LIMITED – ASX QAN, INTERNATIONAL ENERGY AGENCY

Oil price slide rings global alarm bells

Original article by Sarah Turner
The Australian Financial Review – Page: 13 & 16 : 27-Nov-18

The latest fall in crude oil prices has weighed on Australian oil stocks and heightened concerns about the outlook for the global economy. The price of West Texas Intermediate has fallen by 34 per cent since peaking at $US76.41 a barrel in early October, closing 7.7 per cent lower at $US50.42/barrel on 23 November. Brent crude in turn fell 6.1 per cent to $US58.80, extending its loss since early October to 31.9 per cent. Martijn Rats of Morgan Stanley says there is a good chance that OPEC will respond with further production cuts.

CORPORATES
MORGAN STANLEY AND COMPANY INCORPORATED, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, VERTIUM ASSET MANAGEMENT, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Santos buckles up for a wild ride in volatile oil market

Original article by Perry Williams
The Australian – Page: 19 & 29 : 16-Nov-18

Crude oil is trading at around $US56 a barrel, having peaked at $US81 in early October. Santos CEO Kevin Gallagher expects the recent price volality to continue in the near-term, although he is confident that the Adelaide-based oil and gas producer can ride it out. Meanwhile, Santos is hopeful that its new exploration joint venture with Shell in Queensland will yield new a source of gas supply for the east coast.

CORPORATES
SANTOS LIMITED – ASX STO, ROYAL DUTCH SHELL PLC, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

How a $US1 move is making millions for Australian miners

Original article by Stephen Bartholomeusz
The Age – Page: 21 : 11-Oct-18

A rally in the price of iron ore, crude oil and metallurgical coal in the last month has in turn sparked a rise in the share prices of BHP Billiton and Rio Tinto. It is estimated that BHP’s EBITDA rises or falls by about $US227m for every $US1 movement in the iron ore price. The steel input is currently trading above $US70 per tonne, compared with BHP’s average realised price of $US56.71/tonne in 2017-18. Likewise, every $US1 per barrel change in the price of crude oil has a $US43m impact on BHP’s EBITDA.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, FORTESCUE METALS GROUP LIMITED – ASX FMG, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Too early to say goodbye to tough times

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