OT:Could Exxon buy BP? Oil giant says it's alert to potential opportunities

[JMISASANO]

As I stated in a thread with Scottsdale, this supply glut is only good for Big Oil M&A opportunities. Well, it looks like maybe not all Big Oil is even happy with this oil supply glut. BP post gulf disaster is exposed now?

It's all about market share as pointed out by the Saudis.

ExxonMobil to acquire BP assets / market share? Don't even know what to say here.

Halliburton to acquire Baker Hughes assets / market share? Yes

I'd keep an eye on GE Oil & Gas to make a move on some services (Weatherford) or manufacturing group to continue their footprint on the industry.

Exxon Mobil Corp. (NYSE: XOM) remains open to M&A possibilities as speculation runs rampant that the Irving, Texas-based oil giant could acquire London-based BP PLC (NYSE: BP).

In its earnings call Monday, Exxon officials addressed the likelihood of major acquisitions in 2015.

"We stay very alert to value propositions," said Jeff Woodbury, vice president of investor relations. "We'll pursue only those acquisitions that we think have ultimate strategic value and will benefit our long-term reserves. We're really looking for something that upgrades our portfolio and adds to our potential."

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Exxon reported earnings of $6.6 billion in the fourth quarter, down 21 percent, or $1.8 billion, from the same period in the 2013.[/B]

BP releases its earnings on Feb. 3, and there's growing concern about the company's stock performance, the Economist reported. Fallout from the 2010 Deepwater Horizon accident still haunts Britain's third largest company. The Economist goes on to suggest that Exxon would be a good fit to buy BP.

Both Exxon and BP have a significant presence in Houston. The former is building a 385-acre campus north of the city to consolidate at least 10,000 employees, and the later has its U.S. headquarters in the Energy Corridor.
There's an M&A feeding frenzy going on now with larger companies swallowing smaller ones l eft and right. Look at Energy Transfer Partners ' $18 billion grab of Regency Energy Partners last month as an example.[/B]

Bud Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University, said mega-M&A deals are bound to happen with the current low-price environment putting the squeeze on the energy sector.


He said he wouldn't be surprised if Exxon did buy up BP.

Here's more from Exxon's earnings call:


Spot prices for West Texas Intermediate dropped $35 in the fourth quarter. Earnings fell $1.3 billion because of lower commodity prices but it's partially offset by other factors within the integrated downstream businesses, such as refineries or chemical plants.

Exxon produced 4 million barrels of oil equivalent, or BOE, per day in 2014. BOE looks at the combination of crude oil, natural gas and natural gas liquids as one energy source.

In the fourth quarter when oil prices collapsed, production dropped 162,000 BOE per day, or 3.8 percent, from the fourth quarter in 2013. Liquids alone fell by 53,000 barrels per day.

Annual capital expenditures are down $4 billion from 2013 and fell $1.3 billion from projected 2014 guidance. Exxon would not provide any guidance for 2015 capital expenditures. The company will expand on its 2015 plans at the analyst meeting at the New York Stock Exchange on March 4.

Exxon has 44 drilling rigs going after liquids in unconventional plays, especially the Bakken Shale in North Dakota, the Woodford Shale in Oklahoma and the Permian Basin in West Texas. The three plays combined will produce 220,000 barrels of gross liquids per day.

Will Exxon start laying down rigs, as Baker Hughes reports is becoming widespread throughout the country? Exxon has about 100 rigs operating worldwide, with 60 percent of those in the United States, Woodbury said.Exxon actually had more rigs operating in the fourth quarter than it did in the third quarter. When asked whether that will continue in 2015, Woodbury said they will take a "very measured" approach and "don't want to out-run their headlights."

Exxon and its partners, Suncor Energy Inc. and ConocoPhillips Canada Resources Corp., were the highest bidders on three new offshore drilling blocks in the North Atlantic Ocean off Newfoundland.

The Arkutun-Dagi offshore drilling rig reached its target depth in December and started initial production in January. It will be capable of producing 90,000 barrels per day and will join two adjacent fields that will produce a combined 200,000 barrels per day.

http://www.bizjournals.com/houston/news/2015/02/02/could-exxon-buy-bp-oil-giant-says-its-alert-to.html








This post was edited on 2/5 10:00 AM by JMISASANO

 

[JMISASANO]

In other news...

What's that now + - 45,000 oil services jobs between HAL, SLB, BHI and now WFT?

"Oilfield giant to cut up to 8,000 jobs, mostly in the U.S."

Feb 5, 2015, 8:54am CST


Bernard Duroc-Danner, CEO of Weatherford International Ltd., is working on cutting out unprofitable assets from the company.


Jordan Blum


Houston Business Journal


Financially struggling Weatherford International PLC (NYSE: WFT) will cut up to 8,000 jobs in the first half of 2015, most of which will come in the U.S.

Weatherford, which eliminated nearly 7,000 jobs globally just last year, is using the oil downturn to refocus away from North America and toward the Eastern Hemisphere for its oilfield services business.[/B]

The services giant is Houston-operated, although formally domiciled in Ireland, so the Houston region can continue to expect more Weatherford job losses.

"It's partly correcting, if you will, sins of the past and partly the (oil) downturn," said Weatherford Chairman, President and CEO Bernard Duroc-Danner in a conference call .

Weatherford is quickly cutting 5,000 jobs in the first quarter and up to another 3,000 in a second phase through both voluntary and involuntary processes, Duroc-Danner said.

The company also is slicing its 2015 capital expenditures by 38 percent from $1.45 billion to $900 million.
Stay up to date on Texas energy news with the Energy Inc. news ticker, bringing you by-the-minute coverage from the Texas Business Journals.



This post was edited on 2/5 11:18 AM by JMISASANO

 

[Senior Sooner]

Gee, JM...and I thought you were just another purty face...

 

[WhyNotaSooner]

I remember when Hydril was Hydril well before GE bought them out. Gosh, I even remember when Gray Tool Co. was a privately held company and was eventually swallowed up by Combustion Engineering. Like all other sectors, Energy just continues to shift around as the market and it's share dictates.

 

[Soonerheart]

Oklahoma will be lucky to avoid being on the wrong side of
the coming M&A activity….




This usually means local job losses with OU fans involved, but
also losses of donations to such things as OU sports.

 

[sybarite]

Better start looking for a new way to support OU athletics. I will project, but I won't debate: there will be no privately--owned, privately-regulated energy companies in 2050. International requirements for energy and water will demand too much cooperation. You can debate it. I won't.

 

[Drewcristo78]

 

[JMISASANO]

The ending line should read welcome to what's contributing to this supply glut.


Energy chart of the day: America's shale oil revolution will reverse a 40-year decline in crude oil output in just 5.5 years[/B]

This afternoon, the Energy Information Administration released updated energy production data and new forecast projections in its monthly Short-Term Energy Outlook. Here are some highlights:


1. In April, U.S. total crude oil production averaged 8.3 million barrels per day (bpd), which is the highest domestic oil production in any month since March 1988, more than 26 years ago.


2 Based on actual US oil production data through April, and Energy Information Administration forecasts for US oil production through 2015 (averaging 8.5 million bpd in 2014 and 9.2 million bpd in 2015) the chart above shows that the US is on track to produce almost 10 million barrels of oil per day by the end of next year.[/B]

If the EIA forecast is correct, US daily oil production by next December will almost reach the previous all-time record level of daily domestic crude oil production of 10.04 million barrels set back in November of 1970 (see chart). From the 1970 production peak, US crude production gradually fell over the next forty years and was down to only 5.3 million bpd in July 2010.[/B] In just the last three and-one-half years, thanks to America's amazing shale revolution, crude oil output is back up to 8.3 million bpd and back to 1988 production levels. By the end of next year, domestic crude oil production will be approaching 10 million bpd again and back to the 1970 peak level of output.


The amazing turnaround in domestic crude oil production since the summer of 2010, thanks to the revolutionary drilling technologies that allowed America's petropreneurs to access unconventional oil trapped in shale formations deep below the ground, is a true free market triumph and a testament to the deep pools of ingenuity, innovation and entrepreneurship that exist in the US. The projected complete reversal in just five and-one-half years of a forty-year steady decline in domestic oil output supports my claim that America's Shale Revolution is the most remarkable economic success story in at least a generation, and maybe in all of US history.


Welcome to The Great American Energy Boom. Carpe oleum!

This post was edited on 2/5 7:15 PM by JMISASANO

 

[Soonerheart]

Originally posted by sybarite:
Better start looking for a new way to support OU athletics. I will project,

.. I have long projected the need for OU to diversify its money
support but the problem is there are very few other opportunities. Most of the
other support is confined to the OU related medical community….





Most of the billionaires in Oklahoma don't appear to have a passionate
interest in OU football or else they don't care enough to know what is needed
at OU in today's recruiting environment.




Major OU booster should establish an endowment fund that operates
totally independently of the university. People could contribute during good
times...


The money would not be as restricted as OU's investment's in
its foundation and probably able to earn a much higher rate of return.

 

[WhyNotaSooner]

Well played.

Originally posted by Drewcristo78:

 

[JMISASANO]

Non-Opec oil output growth to slow in 2015 amid price rout[/B]
Anjli Raval, Oil and Gas Correspondent[/B]


Oil production growth from countries outside Opec will be lower than expected this year as the price rout hits North American output and spurs spending cuts by the world's biggest energy companies, the producers' cartel said in its monthly report on Thursday.

Although non-Opec supply grew more than expected at about 1.98m barrels a day last year as a result of higher production in the US and Russia, for 2015 it is projected to grow by 1.28m b/d, a downward revision of 80,000 b/d from previous estimates.[/B]


"The main factors for the lower growth prediction in 2015 are lower oil price expectations, the declining number of active rigs in north America, the decrease in drilling permits in the US and the reduction in international oil companies' 2015 spending plans," Opec said.

Opec crude production in 2014 fell slightly to just over 30m b/d from 30.2m b/d in 2013[/B], based on estimates from secondary sources such as oil analysts. Saudi Arabia, the cartel's largest producer and leader, told Opec it produced 9.63m b/d in December, up 20,000 b/d from November.

The November decision by the cartel to hold its output target at 30m barrels a day - rather than cut production to shore up prices - was aimed at curbing growth in US shale oil and other high-cost production, such as from Canada, that has been eroding Opec's market share.

Saudi Arabia and its Gulf allies have in recent weeks reaffirmed the cartel's stance, blaming non-Opec producers for a supply glut that has led to the sharp fall in oil prices which are hovering at below $50 a barrel. All the while demand remains weak.[/B]

The steep drop in prices is a threat to US output from shale fields and stripper wells, Opec said, which trimmed its forecast for this year by 100,000 b/d. Canadian unconventional oil production is also in danger.[/B]


Russia's production outlook remains uncertain given the "impact of sanctions, low prices and no large projects expected to come online", Opec said. North Sea oil output is also vulnerable.[/B]

"These monthly revisions are a taste of things to come," said Michael Wittner, oil analyst at Société Générale.

"Although cutbacks from big oil companies are important, it is the US shale slowdown that we're looking out for; how much small and mid-cap companies in the US cut back on drilling and how this leads to a meaningful cut to production. We're not seeing this yet, so it's still going to take some time before the market is balanced," he added.

The producer group expects global demand to rise by 1.15m b/d next year, or 30,000 b/d more than previously thought, reaching 92.3m b/d as a result of upward revisions to data for the US and Asia.

Even so, demand for Opec crude will drop to 28.8m b/d in 2015, down about 100,000 b/d from its previous expectation, which was already marking its lowest level in more than a decade. The 2015 figure is more than 1m b/d less than it is currently producing.[/B]



This post was edited on 2/6 6:21 AM by JMISASANO

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