Oxy Plans to Sell Parts of Anadarko
Occidental Petroleum snatched up some of the richest shale oilfields in Texas when it beat out rival Chevron Corp in a bidding war to acquire Anadarko Petroleum.It also quadrupled its debt - to $40 billion - at a time when investors are calling for spending cuts and higher dividends.That means the acquisition's success will depend on how quickly Occidental can sell off some of Anadarko's assets and focus on optimizing and integrating the assets it keeps - especially prime U.S. shale fields.Shedding debt will require selling assets when deals have been sluggish, said bankers and merger specialists.
'We Are the Rightful Owners' of Anadarko -Oxy CEO
Occidental Petroleum Chief Executive Vicki Hollub on Friday touted her $38 billion deal for Anadarko Petroleum Corp and defended the pricey terms she negotiated in a 90-minute session with billionaire investor Warren Buffett to secure the deal without seeking shareholder approval.Hollub, 59, beat out larger rival Chevron Corp with a long-shot bid that some Occidental investors called risky because it saddles Occidental with $46 billion in new debt. By deftly lining up allies and cash, she put together a strategy that on Thursday prompted Chevron to withdraw."We can operate this better than anybody else.
Oxy Shareholders Criticize Anadarko Bid
Several major Occidental Petroleum Corp shareholders have voiced opposition to the oil company's $38 billion bid for rival Anadarko Petroleum Corp that now includes a pricey financing deal with billionaire Warren Buffett.Occidental and Chevron Corp are battling for Anadarko and its holdings of nearly a quarter million acres in the Permian Basin, the top U.S. shale field, where low-cost production has helped turn the United States into the world's top oil producer at 12.3 million barrels per day.
Moody's Says Global Oil and Gas Heads into 2019 on Steady Footing
The global Oil and natural gas prices will be volatile, but also range-bound in 2019, Moody's Investors Service says in its annual report outlining key credit themes in oil and gas for the year ahead.While the recent announcement that OPEC and Russia will cut production helps alleviate concerns about oversupply, the pivotal questions in the coming year are whether OPEC and Russia will maintain their production discipline and what might happen in June, when the current agreement expires.Moody's expects the medium-term price band for West Texas Intermediate (WTI) crude…
Wind Farms Boost Tax Base for Local US Governments
Wind farms have boosted local tax bases and generated new revenue as they expand across the United States, especially for rural areas, Moody's Investors Service said in a report on Monday."What we're seeing is wind farms generate new operating revenues, lower the tax burden for local residents," Moody's analyst Frank Mamo told Reuters. "In many cases, local governments are using this new money to address what was a growing backlog of deferred capital expenditures."In Adair County, Iowa, construction of 10 new wind farms has grown the tax base nearly 30 percent over the last decade…
More Competitive US O&G Lending Drives Down Pricing
A renewed willingness to lend to US oil and gas companies, as oil prices stabilize well above lows, is driving down pricing for borrowers after two straight years of steep increases. The volume of credit lines provided to exploration and production companies, using their oil and gas reserves as collateral, so far this year has already topped full-year 2016, although it is a shadow of the 2014-2015 tallies reached before oil and gas prices tanked, according to Thomson Reuters LPC. While some banks have left the industry…
Four Years after Rescue, U.S. Refinery in Crisis
A deal struck in 2012 to save the U.S. East Coast's oldest and largest refinery seemed to have all of the right elements for success: private investors, big oil and taxpayer funding, and the promise of a private-public partnership that would help job growth and consumers. Four years after private equity firm Carlyle Group and a partner purchased Philadelphia Energy Solutions, the refinery faces another existential crisis. A sharp decline in the price of oil sourced in North Dakota has hammered profits across the sector with layoffs mounting.
Petrobras Tests Investor Sentiment with $6.75 Bln Bond Sale
State-controlled Petróleo Brasileiro SA raised $6.75 billion on Tuesday through a sale of five- and 10-year dollar-denominated bonds, in a closely watched return to global capital markets after the suspension of Brazilian President Dilma Rousseff. The bond sale is the first by any Brazilian company since last June and the first to test investor sentiment toward Brazil since Rousseff was removed from office last week to face an impeachment trial. Petrobras, as the company is known, also announced a plan to repurchase up to $3 billion of bonds maturing in 2018 and debt bearing interest of 8.375 percent.
Pemex Posts Narrower First Quarter Loss
Mexican national oil company Pemex on Thursday reported a 62 billion peso ($3.6 billion) loss in the first quarter, less than last year as a lower tax burden helped offset a slump in crude prices. It marked Pemex's 14th consecutive quarterly loss, though it was 38 percent smaller than the 100.5 billion peso loss the company posted in the same quarter a year earlier. The company paid 27 billion pesos less in taxes compared to last year during the quarter. Revenue in the January-March period was 225 billion pesos…
Struggling U.S. O&G Companies Eye Rare Financing Deals
Some cash-strapped U.S. oil and gas companies are considering creating an unusual layer of debt as a way of surviving the rout in oil and gas prices, according to restructuring advisors. Chesapeake Energy Corp for example is considering the strategy to swap some of its roughly $9 billion debt. Severely distressed companies may issue so-called 1.5 lien debt, sandwiched between the first and second liens, to raise new capital. Investors with a stomach for risk would get a better yield than for the top debt, and have a stronger claim than junior creditors if the company filed for bankruptcy.
Moody's Warning Highlights Pressure on Russia
Russia needs to adapt its budget to lower oil prices, Finance Minister Anton Siluanov said on Saturday after credit rating agency Moody's Investors Service warned Moscow it might downgrade the country's sovereign debt rating further into junk territory. The agency said on Friday that it placed Russia's Ba1 debt rating on review for downgrade, pending a two-month review of the government's policies. Of the three major rating agencies, Moody's, Standard and Poor's and Fitch, only the latter keeps Russia's debt rating in an investment grade, although only a notch above junk.
Moody's Cuts Outlooks for 4 Gulf States, Lowers Bahrain to Junk
Moody's Investors Service has cut its outlook for the debt ratings of Saudi Arabia and three other Gulf states while lowering Bahrain's rating to junk, citing concern over the impact of low oil prices on their finances. Saudi Arabia's Aa3 rating was placed on review for a possible downgrade, Moody's said late on Friday, adding that it would study whether Riyadh's efforts to expand its non-oil revenues and diversify its economy were likely to work. "At around $650 billion (or roughly 95 percent of forecast 2016 gross domestic product) at the end of September 2015…
Moody's: U.S. Oil & Gas Liquidity Stress at Worst-Ever Level
U.S. oil and gas companies, struggling with a steep fall in global crude prices, faced the worst-ever conditions to get cash to run their businesses, according to a report from Moody's Investors Service. The rating agency said its "Oil & Gas Liquidity Stress Index" surged to a record high of 27.2 percent in February, surpassing a previous high of 24.5 percent touched during the last recession. "The prolonged weakness in energy sector credit conditions is driving the sustained increase in the LSI," said John Puchalla, a senior vice president at Moody's.
Polish PGNiG Ends Agreement with S&P
Polish state-run gas firm PGNiG said on Monday it terminated its agreement with rating agency Standard and Poors (S&P), which will be followed by S&P withdrawal of PGNiG's BBB- rating with stable outlook. The company said that its bonds still maintain an investment grade rating from Moody's Investors Service. PGNiG spokesman declined to provide further details when asked whether the decision is related with S&P downgrade of Poland's credit rating earlier this month. (Reporting by Agnieszka Barteczko)
Moody's to Review 120 Energy Firm Ratings
Rating agency Moody's on Friday placed large parts of the global oil and gas sector on review for a downgrade, as a crash of more than 70 percent in oil prices over the last 18 months has pulled down energy company stocks as well. The reviews affect oil and gas companies across the world, including the United States and Canada, Latin America, the Asia-Pacific region (APAC) as well as Europe, Middle East and Africa (EMEA). "Moody's Investors Service has placed the ratings of 120 oil & gas companies on review for downgrade," the rating agency said in a statement.
S&P cuts Noble Group to Junk
Standard & Poor's (S&P) cut its credit rating on Noble Group to junk on Thursday, adding to concerns about financing costs for Asia's biggest commodity trader a week after a similar downgrade by Moody's Investors Service. "We downgraded Noble because the company's liquidity is below what we expect for a strong liquidity position, despite the sale of its agricultural unit," S&P credit analyst Cindy Huang said in a statement and cut the company's rating to BB+ from BBB-. "Given the prospects for a prolonged slump in commodities prices…
Nuverra Turns to Lazard for Debt Restructuring
Nuverra Environmental Solutions Inc , a U.S. provider of environmental services to the energy sector, has been working with investment bank Lazard Ltd on restructuring its debt, according to people familiar with the matter. Nuverra has been looking at several financial restructuring options, including a potential debt exchange, the people said this week, asking not to be identified because the deliberations are confidential. Nuverra and Lazard declined to comment. Scottsdale, Arizona-based Nuverra has been weighed down by debt that totaled $520 million as of Sept. 30.
Moody's Cuts Noble's Rating to Junk
Moody's says has concerns over company's liquidity. The chief executive of embattled commodity trader Noble Group Ltd defended its financial position after what it called an "unexpected" move by Moody's Investors Service to cut its credit rating to junk status, slamming its stocks and bonds. The one-notch cut to a Ba1 rating by Moody's, which said on Tuesday it had concerns over Noble's liquidity, means financing will become more costly for Asia's biggest commodity trader, investors said. Moody's had put Noble on review for a possible downgrade in mid-November.
Oil Collapse Leads to Budget Shortfalls in US Oil States
Lower tax revenues because of job losses in energy and related sectors due to the collapse in oil prices will hit budgets of oil-producing states through the remainder of this fiscal year and next, Moody's Investors Service said on Monday. Moody's comments came after Oklahoma revised its revenue projections down last Tuesday for the remainder of the current fiscal year by $444 million, or 8 percent of the total, and by 13 percent for the next fiscal year, which starts July 1. The analysts expect to see a similar dynamic in Alaska…
Petrobras CEO Expects to Sell $20 Bln in Debt in 2016
Brazil's Petroleo Brasileiro SA plans to sell about $20 billion of debt next year to finance its 2017 needs, Aldemir Bendine, chief executive of the state-run oil company known as Petrobras, told Bloomberg News on Thursday. There is a good possibility that bonds backed by future oil exports could help meet that financing goal and find strong demand in Asia, Bloomberg reported, citing Bendine. Petrobras, though, has ruled out the use of hybrid securities in the short term, Bendine said. He adding that such bonds, which are partly guaranteed by the future sale of equity, could be sold at some later date.
