| | | AR, BTU, CAM, CNX, COP, EPD, OGZPY, HES, IMO.TO, Indian Natural Gas, LYB, NES1V.HE, NOV, OXY,
PRE.TO, Propane and the Polar Vortex, PSX, RDSa.L, RRMS, US EIA Petroleum Statistics, VLO, XOM
Antero Resources (AR)
Initial 2014 Guidance Issued; Raising Estimates, Reiterate Buy
30 January 2014 ¦ 9 pages ir.citi.com
Peabody Energy (BTU)
Managing Spending and Hoping for a Met Rebound
30 January 2014 ¦ 12 pages ir.citi.com
After adjusting our model for 4Q results and guidance, we are lowering our 2014
EBITDA estimate to $1,049 mln and EPS estimate to $0.05. The change
primarily reflects a sharper drop in Illinois Basin contract pricing and lingering
ramp-up issues at North Goonyella. Despite lower EBITDA, we expect BTU to
generate positive free cash of $101 mln in a difficult pricing environment, which is
sufficient to fund annual dividend obligations of $92 mln.
Cameron International Corporation (CAM)
High Order Rate, Buyback Activity Are Steps in Right Direction
30 January 2014 ¦ 22 pages ir.citi.com
We remain on the sidelines with a Neutral rating but view the better-than-
expected earnings and guidance as constructive. CAM still faces challenges
against an industry backdrop likely to deliver lower levels of new jackup and
floater orders and a potential slowdown in subsea. Still, the absence of
significant setbacks in righting the drilling business after its prior missteps is
encouraging.
CONSOL Energy (CNX)
Emphasis on 30% E&P Growth; Possible MLP or Sale of Midstream Assets
2 February 2014 ¦ 11 pages ir.citi.com
ConocoPhillips (COP)
EPS Beat; Strong Reserve Replacement; Expect Flat ROCE
30 January 2014 ¦ 10 pages ir.citi.com
Enterprise Products Partners LP (EPD)
Strong Finish to 2013, Well Positioned for Another Good Year
30 January 2014 ¦ 11 pages ir.citi.com
EPD reported a strong finish to 2013 with Q4 segment gross margin of $1.29 bil,
about 7.7% ahead of our est. Higher-than-expected results from the ‘NGL
Pipelines & Services’ and ‘Petrochemical and Refinery Product Services’ more
than offset the weakness in the Onshore Nat gas segment. We continue to view
EPD as a core MLP holding with ideally positioned assets, attractive growth,
strong coverage, no IDRs and an investment grade B/S. We are increasing TP to
$74.00.
Gazprom (OGZPY)
Alert: January European exports again strong despite weather;
European customers want more price cuts, but leverage limited
31 January 2014 ¦ 8 pages ir.citi.com
Gazprom’s exports to Europe in January continued to run strong in spite of warm
weather. Elsewhere, news stories are indicating that Gazprom’s European
customers are again striving to extract discounts from the company on its
contract gas prices. We think their scope for gains, however, is limited due to: a)
a lack of non-Gazprom gas; and b) a Gazprom price that is already very
competitive with European spot pricing.
Hess Corp (HES)
Restructuring Continues; Bakken Production Up; Reserve Life Up
29 January 2014 ¦ 9 pages ir.citi.com
Imperial Oil Limited (IMO.TO)
EPS Beat on Refining & Marketing; Dividend Raised by 8%
30 January 2014 ¦ 9 pages ir.citi.com
Indian Natural Gas
Leg up for City Gas; Gain for IGL...but Pain for GAIL?
3 February 2014 ¦ 5 pages ir.citi.com
The gov’t has announced that 100% of the gas requirement for city gas
distributors supplying gas to the CNG & dom PNG segments will now be met
from domestically produced gas (against 80% stipulated in Nov’13 govt order).
The incremental quantum of gas required for this reallocation will be
proportionately sourced from the dom gas allocation of non-sensitive sectors
(petchem, refineries, steel, etc). While IGL stands to be a major beneficiary,
impact on GAIL's earnings remains an imponderable.
LyondellBasell Industries (LYB)
Something for Everyone; Reiterate Buy on Top Pick
2 February 2014 ¦ 9 pages ir.citi.com
We remain buyers due to: 1) an attractive FCF profile (total of ~$7B of FCF after
dividends from 2014-16) underpinned by self-funding brownfield expansions; 2)
accelerating share buybacks and balance sheet optionality to take on more debt;
3) a gradually improving global ethylene cycle; and 4) improving refining
profitability, which should gain momentum as additional crude oil supply reaches
the US Gulf Coast. We raise estimates for 2014-16 and increase our target to
$95.
Neste Oil (NES1V.HE)
Profitability to Decline in 4Q13E; Outlook Remains Challenged
30 January 2014 ¦ 9 pages ir.citi.com
National Oilwell Varco Inc (NOV)
Outlook Supports Greater Conviction in Offshore and Land
2 February 2014 ¦ 16 pages ir.citi.com
Revenues and orders in Rig Technology gives credence to the view that NOV still
has significant market opportunities despite recent investor concerns. NOV is
also projecting a far more bullish view on the end markets than most of its peers.
In particular, NOV has expressed greater confidence in the potential long-term
order rate for deepwater and jackup rigs, the growing requirements for floating
production infrastructure, and the increasing trend toward international shale
development.
Occidental Petroleum Corp (OXY)
California Spin; ROCE Expected to Rise; Capex Higher
31 January 2014 ¦ 10 pages ir.citi.com
Pacific Rubiales (PRE.TO)
Trading at a discount to P2 reserves –Maintain Buy
30 January 2014 ¦ 10 pages ir.citi.com
Sell-off prices in worst-case scenario, but we still see upside — After the sell-off
the PRE’s stock trades at a 4% discount to our C$18.00/share value estimate for
its P2 reserves, excluding upside from operational improvements and exploration
finds. We reduce our target to C$24.00/share from C$24.60/shr and maintain a
Buy.
Propane and the Polar Vortex
Margins Under Pressure as Propane Demand Strains Supply
Master Limited Partnerships
30 January 2014 ¦ 30 pages ir.citi.com
Phillips 66 (PSX)
EPS Miss on Turnarounds and Lower Marketing Margins
29 January 2014 ¦ 10 pages ir.citi.com
Royal Dutch Shell (RDSa.L)
New ‘Target Light’ Strategy; Earnings Strategy
31 January 2014 ¦ 14 pages ir.citi.com
Shell’s new CEO Ben van Beurden has acknowledged the problems of Shell’s
former strategy, and has set out a new one, notable by its absence of any
financial targets. New goals to improve returns and cash flow look achievable,
but near-term, the earnings and cash flow profiles look light versus market
expectations; we lower 2014/15E EPS by 6%, which takes us some 22% below
consensus. We just question the valuation multiple that investors are now willing
to place on a post-2015 turnaround.
Rose Rock Midstream, LP (RRMS)
Painting an Even Rosier Picture: Increased Ownership in White
Cliffs and Additional Drop-downs Drive Further Growth; Buy
30 January 2014 ¦ 15 pages ir.citi.com
In mid-December, RRMS completed the acquisition of an additional 33.3%
interest in SemCrude Pipeline, L.L.C. from its parent SemGroup Corporation for
$273 mil. SemCrude Pipeline owns a 51% interest in the White Cliffs Pipeline,
and thus the drop-down brings Rose Rock’s total ownership in White Cliffs to
34%.
US EIA Petroleum Statistics
29 January 2014 ¦ 27 pages ir.citi.com
Crude imports rebound to seemingly sticky 8-m b/d level for now;
product demand looking robust helped by cold weather
Valero Energy Corp (VLO)
EPS at the High End of Interim Guidance; Reiterate Buy
29 January 2014 ¦ 10 pages ir.citi.com
Exxon Mobil Corp (XOM)
Asset Sales Imply Higher Upstream Costs
31 January 2014 ¦ 9 pages ir.citi.com |
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