| | | BHP Billiton Ltd (BHP.AX), Peabody Energy (BTU), FMC Technologies, Inc. (FTI),
Gazprom (GAZP.MM), Hercules Offshore (HERO), Rosneft (ROSNq.L)m
Talisman Energy Inc. (TLM)
BHP Billiton Ltd (BHP.AX)
FY14 Production Strong but Impairments, FY15 Guidance Mixed
23 July 2014 ¦ 11 pages ir.citi.com
FY14 production was a strong result driven by iron ore and petroleum exceeding
guidance, but US$0.9-1.3b in EBIT charges for impairments, site rehabilitation
and closure & redundancy costs has driven a 5% earnings downgrade. FY15
production guidance ahead for iron ore, but lower for petroleum and thermal coal.
BHP is Neutral rated with an unchanged A$38/share target price.
Clarke Wilkins | Trent Allen | Matthew Schembri | Sam Heithersay
Peabody Energy (BTU)
Making Progress on Costs, Lower Estimates on Tax, Buy
22 July 2014 ¦ 10 pages ir.citi.com
FMC Technologies, Inc. (FTI)
Confidence Counts; TP to $72
Strong Beat. 23 July 2014 sendspace.com
Gazprom (GAZP.MM)
Government to consider giving independent gas producers access to Chinese pipe exports
22 July 2014 ¦ 7 pages ir.citi.com
Vedomosti reports this morning that President Putin has ordered the government
to investigate the possibility of allowing independent gas producers in East
Siberia access to Gazprom's transport infrastructure in order to export gas to
China. Per unnamed government sources quoted in the report, a direct
revocation of Gazprom's legal monopoly on pipeline exports is unlikely and a
requirement of Gazprom to buy independents' gas at the wellhead at export
netback prices for Chinese exports is more realistic. The initiative is likely to have
a negative impact on Gazprom's stock in the immediate future, as this could
threaten to dilute the positive impact of the company's recently agreed Chinese
contract. Added to the recent apparent retreat of Russia's Ministry of Finance on
demanding a further dividend increase from state-owned companies, this could
constitute two blows against Gazprom bulls in recent weeks.
Ronald Paul Smith | Alexander Bespalov, CFA
Hercules Offshore (HERO)
Near Term Challenges Across the Board
23 July 2014 sendspace.com
Rosneft (ROSNq.L)
2Q14 Preview - strong results expected
24 July 2014 sendspace.com
Talisman Energy Inc. (TLM)
Funding Gap Makes Corporate Sale Difficult
23 July 2014 sendspace.com
Our Take: Bottom line, we do not think a companywide sale is likely to occur
here given the funding gap that still exists within TLM. We further postulate
that it would make very little sense at this juncture for TLM to part ways with
certain core cash generative assets in North America and Asia Pacific while
keeping more capital intensive non-core assets such as in the North Sea as
this would further exacerbate the existing funding gap. We note the North
Sea and Kurdistan alone represent ~30% of TLM's capex. Net of dividends,
we forecast a funding shortfall of over ~US$1 billion this year and next which
will require asset sales or further debt to balance cash inflows/outflows.
Management is targeting to reduce D/CF further with any sale proceeds. |
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