Financial Times - Nov. 12
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch for the accuracy of these reports. Companies will admit that the UK made a legal mistake in issuing oil and gas licenses. Shell, Ithaca, and Equinor, a Norwegian oil company, are all set to admit that the UK government committed a mistake by granting them licenses for two new major offshore developments. This is the beginning of an important case for future fossil-fuel projects. Ken Griffin's Citadel hedge fund has hired Nabeel Bhanji…
Seadrill CEO: Seadrill is looking to acquire assets and engage in M&A.
Seadrill, an offshore drilling contractor, is looking to merge with other companies or buy more assets. John Fredriksen, a Norwegian billionaire, lost control of his company, which was once the largest drilling company in the world by market capital, to creditors after two debt restructurings. Seadrill, a New York-listed company that is now leaner and smaller, wants to purchase distressed assets or players who have "distressed" balance sheets. CEO Simon Johnson said this at an investor conference held in Norway. He said, "We won't do anything crazy. We have proven our discipline." The amount of cash on the balance sheet that the company has…
Japan's Seven & i to Buy Marathon Petroleum's Speedway Gas Stations for $21B
The Japanese owner of 7-Eleven convenience stores has agreed to buy Marathon Petroleum Corp's Speedway gas stations for $21 billion, brushing aside coronavirus concerns to return to the table five months after initially balking at the deal.The acquisition is one of the biggest this year, suggesting the pandemic, while forcing many companies to focus on protecting balance sheets instead of expansion, has not killed off global dealmaking altogether.The move will help Seven & i Holdings Co Ltd shift focus beyond Japan, where its stores and supermarkets face a shrinking population…
New CEO for Marathon After Hedge Fund Campaign
Marathon Petroleum Corp chief Gary Heminger will leave the company next year after almost a decade in charge, launching sweeping changes demanded by investors at the biggest U.S. refiner including the spinoff of its Speedway retail arm.The departure is a victory for activists Elliott Management, DE Shaw and others who had sought the changes following the 2018 acquisition of rival Andeavor.That $23 billion deal gave Marathon a coast-to-coast refining network but delivered results that disappointed and its shares fell to a two-year low this year.Marathon said Chief Executive Officer Heminger would retire next year when his current term ends.
BP Pays $10.5 bln for BHP Shale Assets
BP Plc has agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion, expanding the British oil major's footprint in some of the nation's most productive oil basins in its biggest deal in nearly 20 years.The acquisition of about 500,000 producing acres marks a turning point for BP since the Deepwater Horizon rig disaster in the Gulf of Mexico in 2010, for which the company is still paying off more than $65 billion in penalties and clean-up costs."This is a transformational acquisition for our (onshore U.S.) business…
Sempra Energy to Shed U.S. Storage, Renewable Assets
U.S. utility Sempra Energy said on Thursday it plans to sell some of its natural gas storage and renewable energy assets and expects to record a charge between $1.47 billion and $1.55 billion during the second quarter. Earlier this month, activist investors Elliott Management and Bluescape Resources Co, who have a combined stake of 4.9 percent in Sempra, pushed for a board shakeup and strategic review at the company. The activist investors presented the company with a plan to sell its international business lines and split into two companies through a tax-free spinoff - one focused on utilities and the other on natural gas infrastructure.
Hess Warns Focus on Returns Now Will Hurt US Shale Long-term
Investor pressure on oil producers to focus more attention on shareholder returns and less on output will drive down vital industry investment in the long term, a leading U.S. shale executive said on Thursday.Shareholders have been pushing for more dividends and buybacks from U.S. shale companies, whose heavy investment in production has helped the United States overtake Saudi Arabia to become the world's second biggest oil producer after Russia."Investor sentiment in the last year has really, markedly changed. I'd say it's gone from, 'drill, baby, drill…
Elliott Management Supports Hess Buyback
Elliott Management pulled back from efforts to call for substantial changes at oil company Hess Corp on Thursday on the eve of the deadline to nominate directors for the company's board. Elliott said it supported Hess's $1 billion share buyback program announced earlier Thursday and the company's planned operating review. Elliott, the activist hedge fund led by billionaire Paul Singer, previously called for changes at Hess Corp in a heated 2013 proxy fight. At that time Hess conceded to an agreement that added three Elliott appointees to the board. Reporting By Jessica Resnick-Ault
Bankrupt Breitburn Rebuffs $1.8 bln Bid
U.S. oil and gas producer Breitburn Energy Partners LP, which has been in bankruptcy since 2016, does not plan to pursue an unsolicited $1.8 billion cash offer from Lime Rock Resources, according to court filings. The offer from Houston-based Lime Rock, which invests in oil-and-gas properties, surfaced last month as Breitburn was awaiting a ruling on its bankruptcy reorganization plan. The confirmation hearing ended in January after a bitter valuation battle between Breitburn and its shareholders who argued it undervalued the company. In a filing with U.S.
Hess Posts 13th Straight Quarterly Loss; Shares Dive
U.S. oil and gas producer Hess Corp posted its 13th straight quarterly loss on Monday as ballooning expenses offset rising crude prices, sending shares down nearly 5 percent. Hess last month began cutting roughly 13 percent of its workforce and streamlining operations, steps it said should help it start to save $150 million annually. For the fourth quarter, Hess posted a loss of $2.68 billion, or $8.57 per share, compared with a loss of $4.89 billion, or $15.65 per share, in the year-ago period. The year-earlier quarter included a $3.75 billion charge on deferred tax assets. Excluding one-time items, Hess lost $1.01 per share in the fourth quarter.
Hess Corp Posts Q4 Loss on Rising Costs
Hess Corp posted its 13th straight quarterly loss on Monday as the oil and gas producer struggled to rein in expenses. The company's shares were down 2.7 percent at $46.51 in light premarket trading. Hess has slashed jobs and sold assets as it grapples with spiraling costs and project setbacks at a time when other producers focus on capital returns in a higher oil price environment. The company, which is locked in a battle with activist investor Elliott Management Corp, said total costs and expenses surged 22 percent to $3.78 billion in the reported quarter. Total revenue fell 6.5 percent to $1.30 billion in the quarter ended Dec.
BHP Profit Surges, but Looks to Exit U.S. Shale
Underlying net profit jumps to $6.7 bln from $1.2 bln. BHP Billiton, the world's largest miner, reported a surge in underlying full-year profits on Tuesday and said it would exit its underperforming U.S. shale oil and gas business, pleasing disgruntled shareholders who had called for a sale. The Anglo-Australian mining giant, which is under pressure from U.S. hedge fund Elliott Management to rethink its investment in oil and boost shareholder returns, was buoyed by a recovery in industrial commodities markets. It generated more cash than even in some years of the mining boom, slashed net debt by nearly $10 billion to $16.3 billion and tripled its final dividend to $0.43 a share.
Sempra Energy to buy Oncor for $9.45 bln
Sempra Energy said it will buy Oncor for $9.45 billion in cash after Energy Future Holdings Corp, which indirectly owns Oncor, abandoned a deal to sell the power transmission company to Warren Buffett's Berkshire Hathaway Inc. San Diego-based Sempra expects to own about 60 percent of a reorganized Energy Future after the transaction that is valued at $18.8 billion, including Dallas-based Oncor's debt, it said late on Sunday. The development represents a rare blow for Buffett, who avoids bidding wars for companies and had swooped in two months ago to buy Oncor after two previous attempts by Energy Future to sell it were blocked by Texas regulators.
Elliott Urges Energen to Explore Sale
Activist investor Elliott Management Corp is urging U.S. oil and gas producer Energen Corp, which is already under pressure from top shareholder Corvex Management, to explore a sale, the Wall Street Journal reported on Thursday. New York-based Elliott owns 4 percent to 5 percent of Energen, the Journal reported, citing people familiar with the matter. Reuters could not immediately reach Elliott for comment. Reporting by John Benny
The Energy Patch: where rights offerings are "sexy" again
Energy businesses that are trying to exit bankruptcy are finding a saviour in some of their own creditors, which have been scooping up newly issued stock from the companies at hefty discounts. More than a dozen so-called rights offerings have raised billions of dollars over the past 18 months, according to data compiled by Reuters, to help revitalize these energy companies in return for large fees and juicy investment returns. But those benefits have not been equally shared among all the creditors providing the cash. The deals are coming under increasing scrutiny by creditors and shareholders in some bankrupt companies over how to divvy the returns…
BHP Chairman Calls $20 Bln Shale Investment a Mistake
BHP Billiton's Chairman Jac Nasser said on Thursday BHP's $20 billion investment in U.S. shale oil and gas six years ago was, in hindsight, a mistake. BHP entered the shale business at the height of the fracking boom in 2011 and invested billions more developing the operations. The fall in oil prices since then has led to pre-tax writedowns of about $13 billion on the business. Activist shareholder and hedge fund Elliott Management, holding 4.1 percent of BHP's London-listed shares, has been trying to gain support from other shareholders to persuade BHP to sell the shale oil and gas business.
Elliott Presses BHP to Shed Petroleum
BHP petroleum business has value of more than $20 billion. Activist investor Elliott Management raised the pressure for strategic changes at BHP on Tuesday, calling for an independent review of the mining giant's petroleum business. Elliott, which has built up a 4.1 percent stake in BHP's London-listed arm and is urging changes to boost shareholder value, said there were clear signs the market was receptive to a new strategy for BHP. "There is extremely broad and deep-rooted support for pro-active steps to be taken by management to achieve an optimal value outcome for BHP's petroleum business following a formal open review," it said in a letter to management.
Some BHP Shareholders Want Firm to Shed Shale
BHP Billiton is facing pressure from two activist shareholders over its $20 billion splurge on U.S. shale oil and gas fields, but may resist calls to dump the business just as oil prices are sliding. Investors grumble that while BHP Billiton is a good operator in deepwater oil and gas, its shale business, first acquired in 2011, has been a capital drain and shareholders would be better off with a sale. But now may not be the right time. BHP says it sees petroleum as a core business, including most of the shale operations. "The risk is doing it for the wrong reasons - because people are telling you do it - and getting out quickly. We're at $40 oil.
Elliott to Court BHP's Australian Shareholders
Elliott to meet BHP shareholders in Australia; focus on U.S. oil division. Elliott Management will meet with BHP Billiton's Australian shareholders this week as the activist investor pushes for strategic changes at the world's biggest miner, two sources familiar with the matter said on Monday. The sources, who could not be named because they were not authorised to speak publicly about the issue, told Reuters that Elliott was seeking feedback from other investors about its proposed overhaul of BHP. Elliott's U.S. office did not immediately respond to a request for comment outside regular business hours.
Marathon Petroleum Beats Street as Pipeline Unit Delivers
Marathon Petroleum Corp reported a surprise quarterly profit on Thursday as the refiner earned more from its pipelines and storages business. Income from the company's midstream business rose 63.5 percent to $309 million in the first quarter ended March 31. The company also said it earned more from its stakes in new and existing pipeline and marine operations. Operating loss in its refining and marketing segment narrowed as margins rose 18 percent to $11.65 per barrel. Brokerage Barclays had estimated refining margins of $10.30 per barrel. Marathon, whose operations are primarily in the U.S.
