| | | CHK, Eurasia Drilling, HP, KAR.AX, PACD, WPL.AX,
Russian Oil Majors
The Car of the Future – LatAm Insights,
European Refiners Bi-Monthly,
Electric Utilities Sector Bi-Weekly,
Citi Power, Gas & Utilities Conference,
Commodity Price Deck for Utility Equities
Chesapeake Energy Corp (CHK)
Analyst Meeting Highlights Solid Portfolio Teed Up For Growth;
Reiterate Buy Rating and $35 Price Target
19 May 2014 ¦ 22 pages ir.citi.com
Transition Takes Big Step Forward... – Concurrent with its analyst meeting on
Friday, management announced that it will 1) spin off its oil field services
company to CHK shareholders (we value COO at ~$1.50/share net in our $38
NAV), 2) divest its interest in CHK Cleveland Tonkawa, L.L.C. (CHKCT), 3) sell
additional non-core assets (~2% of current production) for $225mm net, and 4)
sell non-producing acreage for $290mm. These deals will eliminate ~$3.0bn of
debt/preferred along with ~$945mm in future obligations (ORRI and VPP
payments).
Robert S Morris | Chingiz Gadimov
Eurasia Drilling (EDCLq.L)
Further rebound in April drilling, Buy reiterated
16 May 2014 ¦ 7 pages ir.citi.com
Operational statistics just posted on Eurasia Drilling’s web site showed further
volume rebound in April, following the sharp recovery in March. Although we
remain concerned about the long-term growth prospects of the company, we
consider EDCL an attractive value play at current levels. Trading just 10% above
the worst-case valuation scenario of $25/share, which is unlikely in our view, the
current share price still does not fully reflect the arguably improved operating
performance. Buy rating reiterated.
Helmerich & Payne (HP)
Alert: Citi Global Energy & Utilities Conference Highlights
16 May 2014 ¦ 7 pages ir.citi.com
Karoon Gas Australia Limited (KAR.AX)
Carnarvon Farm Down a Nice Little Deal although Funding Issues Remain;
Buy on Deep Value
19 May 2014 ¦ 7 pages ir.citi.com
Karoon has announced that it will farm down 50% of its Carnarvon Basin permit
WA-482-P to Apache, who will also assume operatorship. In return, Apache will
cover 90% of well costs for an exploration well drilled in 1HCY15, with Apache
carry capped at US$63m, and pay Karoon US$9.04m as reimbursement for
seismic costs. Karoon remains in trading halt awaiting disclosure of their funding
position.
This is a good deal for Karoon considering it is unlikley to have to fund any of the
well above the US$9.04m it receives from Apache.
Funding issues persist for Karoon for their other committments, such as drilling in
the Browse Basin. We expect KAR will announce ~US$200m equity raising next
week given a deal has not been reached to farm down assets in Browse, Brazil
or Peru.
Maintain Buy on deep value, TP A$5.88/shr or A$4.70/shr after accounting for
dilution due to expected equity raising.
Pacific Drilling (PACD)
Strategy Works Through the Cycle
19 May 2014 sendspace.com
Woodside Petroleum Ltd (WPL.AX)
Outcrops Unlikely to Rock the Browse Boat
19 May 2014 ¦ 10 pages ir.citi.com
Geoscience Australia recently disclosed to the Western Australian Government
that they had confirmed that rocky outcrops were discovered in the reefs
overlying Woodside's Torosa gas field. The implications are that part of the water
in the Torosa license area may be reclassified as state water and hence Torosa
would be subject to a state royalty. We agree with media speculation that up to
65% of the resource will be rezoned under certain scenarios although the actual
impact to our risked DCF in this scenario is only A$0.17/shr. We do not currently
include it in our valuation. There has been speculation that the increased
leverage from a greater WA Govt share would provide the negotiating power to
influence the project which would detract from its economics, such as
development at JPP. We disagree, noting that Colin Barnett stated at APPEA
that he conceded this would not be the case.
Russian Oil Majors
Show me the money
We initiate coverage of the five Russian oil majors, focusing on cash flow and its uses:
20 May 2014 sendspace.com
The Car of the Future – LatAm Insights
Read-through for Alfa & Tupy from Citi GPS Report
15 May 2014 ¦ 15 pages ir.citi.com
Our global team of analysts have published a thematic report titeld The Car of
The Future. The report evaluates the global technologies that will shape
tomorrow’s cars—how their built, powered, equipped and serviced. In this note
we provide excerpts from the report relevant for our LatAm coverage; such as 1)
Lightweighting– relevant for Alfa's aluminum engine blocks/autoparts; 30% of
Alfa's sales 2) Investing in Propulsion– relevant for Tupy's high-performance
diesel engine blocks (20% of sales)
European Refiners Bi-Monthly
Fast and Furious
19 May 2014 sendspace.com
Electric Utilities Sector Bi-Weekly
Tracking Changes in Power, Spreads and Commodities
18 May 2014 ¦ 55 pages ir.citi.com
Citi Power, Gas & Utilities Conference
Key Takeaways From Our 9th Annual Boston Conference
18 May 2014 ¦ 16 pages ir.citi.com
We hosted 22 companies (out of 92) through various 1 on 1s, panel discussions
and corporate dinners during the utilities portion of Citi’s Global Power and Gas
Conference in Boston. Below are our key takeaways.
Commodity Price Deck for Utility Equities
5-14-2014 Forward Prices for Utility Equity Modeling & Analysis
16 May 2014 ¦ 7 pages ir.citi.com |
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