Fuel for Thought
WEEKLY ANALYSIS - Independent Refiners/Integrated Oil & Gas
Benchmarks aren't all they're cracked up to be - 8 pages
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A Transport-Eye View on Coal
Steam Coal Dead Til 2010 (or Longer);
But Met Coal Should Rebound
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Excerpts from Credit Suisse Global Oil Daily
RESEARCH - DOE Inventory Data - Large surprise crude draw - Mark Flannery +
¦ The DOE just reported: 1) A surprise 8.4 MMB crude draw vs. expectations of a 1.2 MMB crude build. 2) A
larger-than-expected 2.2 MMB gasoline draw vs. expectations of a 1.0 MMB gasoline draw. 3) A surprise 0.7
MMB distillate draw vs. expectations of a 0.7 MMB distillate build. 4) Refinery utilization increased by 0.52% to
84.0%, as compared to the forecast of a 0.10% increase
¦ Conclusion: After two weeks of crude inventory builds, inventories drew by 8.4 MMB, largely due to lower import levels
which were down 14.9% w-o-w. Refinery runs were also higher on a w-o-w basis (utilization up 0.5% to 84.0%).
Apparent gasoline demand was off 2.3% y-o-y for this week or down 3.4% y-o-y on a 4-week average basis while
apparent distillate demand was off 15.2% y-o-y for the week or 20.7% on a 4-week average. However, on a w-o-w
basis, apparent gasoline and distillate demand improved by 2.8% and 8.4% respectively. Demand for Total oil
products improved by 3.1% w-o-w to 19.3 MMBD but is down 6.1% y-o-y on a 4-week average basis.
Note published 19th August 2009
RESEARCH - ENSCO International (ESV) - August Fleet Notes: Signs of Jackup Life - Arun Jayaram +
¦ August Fleet Notes: ESV’s August fleet notes were mixed. Despite a new commitment on a previously idle jackup in
Southeast Asia and some backlog build elsewhere, 3 additional jackups went idle. As a result, we reduced our 2009
and 2010 EPS estimates to $5.51/$4.07 from $5.57/$4.10. We reiterate our Neutral rating and 12-month target price of
$39, which is at parity with our DCF model.
¦ 3 incremental rigs go idle, but a few new commitments: 16 of ESV’s 43 jackups in its worldwide fleet are now idle, up
from 13 rigs last month as 2 more rigs went idle in the U.S. GOM and an additional jackup rolled off contract without
follow-on work offshore Tunisia. That said, the idle ENSCO 51 jackup in SE Asia will be returning to work next month
at a dayrate of $85K for ~8-months. In addition, ESV was able to secure additional backlog in the Middle East and the
North Sea through option exercises and contract extensions.
¦ Preference for deepwater over jackups continues: Given the onslaught of uncontracted jackup capacity additions in the
back half of 2009 (16 rigs) and 2010 (25 rigs), we continue to favor more floater and diversified stories such as
Transocean (RIG) and Noble (NE). That said, we believe ESV is well positioned long-term given its high quality
jackup fleet, rising leverage to the deepwater owing to its 7-rig newbuild program expected to be completed by year-
end 2012, and history of strong execution, particularly on costs.
¦ Valuation: ESV trades at 8.9x and 6.3x our 2010 EPS and CFPS estimates, representing slight premiums to the
offshore peers at 8.6x and 5.2x times, respectively.
Note published 19th August 2009
NEWS - Noble Energy (NBL) - Israel’s Delek group plans to invest $218 million for 2% stake in Noble Energy
According to Reuters, Israel’s Delek Group plans to invest $218 million for 2% stake in Noble Energy, which will be
funded by a three year non-recourse loan of $120 million obtained from a foreign bank, valid till May 31, 2012, with a
lien on the shares to be purchased.
Noble Energy owns 36% of the Tamar drilling site, which lies about 90 kilometers off the northern Israeli port of Haifa,
whose reserves potential are estimated to be 207 billion cubic metres of natural gas.
Source: © 2009 Reuters Limited
NEWS - FMC Technologies, Inc. (FTI) - Supply of subsea separation system for Marlim field, Campos basin
FMC has secured a $90 million contract from Petrobras for supply of subsea separation system and pumping system
for the Marlin field in the Campos basin, offshore Brazil.
The subsea separation module will separate heavy oil, gas, sand and water at a water depth of approximately 2,950
feet (900 meters). The system will apply FMC's separation and sand management technologies, utilizing a novel pipe
separator design, licensed and developed in cooperation with StatoilHydro. It will also be the first separation system
to include subsea reinjection of water into a reservoir to boost production.
Tore Halvorsen, FMC's Senior Vice President of Global Subsea Production Systems stated that “Marlim is the fifth
field in the world that will utilize FMC's subsea separation technologies,” and added "The project will enable a broader
application of our separation technologies for future subsea processing opportunities. We look forward to supporting
Petrobras in the development of this exciting project."
Source: Rigzone.com |
