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Energy company ConocoPhillips said on Monday it had agreed to sell most of its Australian assets to rival Santos Ltd for $1.39 billion, with the deal expected to close in the first quarter of 2020. The U.S. company said it was selling its stakes in the Darwin LNG plant, which it built, the Bayu-Undan field which feeds the plant, the Barossa-Caldita field which may supply the LNG plant in future, and its Poseidon gas asset.
Australian oil and gas producer Santos Ltd on Monday said it would acquire the northern Australia business of ConocoPhillips, the world's largest independent oil and gas producer, for $1.39 billion. ConocoPhillips' northern Australia business has operating interests in the "long-life low cost gas assets" Darwin LNG, Bayu-Undan, Barossa and Poseidon, Santos said. "Santos intends to manage gearing within our stated operating range and is targeting to selldown equity in Darwin LNG and Barossa to 40-50% in order to create alignment between joint venture participants," the company said in a statement.
ConocoPhillips' northern Australia business has operating interests in the "long-life low cost gas assets" Darwin LNG, Bayu-Undan, Barossa and Poseidon, Santos said. The deal consideration has an additional A$75 million ($50.93 million) payment contingent on final investment decision (FID) on the Barossa asset, which is expected by early 2020. "Santos intends to manage gearing within our stated operating range and is targeting to selldown equity in Darwin LNG and Barossa to 40-50% in order to create alignment between joint venture participants," the company said in a statement.
Every investor in Chevron Corporation (NYSE:CVX) should be aware of the most powerful shareholder groups. Institutions...
(Bloomberg Opinion) -- America’s second shale boom is running out of steam. But don’t panic just yet, a third one may be coming over the horizon.The U.S. Energy Information Administration published its latest short-term energy outlook last week and has cut its forecast of oil production by the end of 2020 for the fourth straight month. It now expects American output to rise by just 370,000 barrels a day over the course of next year. That will be the slowest growth in four years and is yet another indicator that the latest period of rapid shale expansion is faltering.The number of rigs drilling for oil in the U.S. has fallen in each of the last 10 months, dropping by a total of 20% since November. And productivity gains are waning. Drilling in the Permian, the most prolific of the shale basins, fell by 11% in the nine months to August, according to the EIA.The development of the U.S. shale patch is a bit like that of a person. During the first growth spurt in the four years to 2014 the industry was in the toddler phase. Everything was new and exciting, the toddlers stuck their fingers (or in this case their drill bits) into everything, just to see what would happen, and they pushed the boundaries in every direction. The toddler developed quickly, but the outside world taught it a hard lesson with a crash in the oil price in 2014.The second boom from 2016 has been more like the adolescent phase. After picking themselves up and learning to live in their changed world, the young adults developed their muscles and concentrated only on the things that interested them (the sweet spots in the shale deposits) to the exclusion of everything else. This focus has brought bigger output gains than the first boom. In the three years between December 2016 and December 2019 output is expected to have increased by 4.2 million barrels a day, compared with 3.9 million barrels a day between December 2010 and December 2014.The biggest challenges of the second shale boom have been identifying and exploiting those sweet spots, consolidating acreage to enable the use of longer wells, and building infrastructure to move the gas and liquids to markets (including overseas).But with a WTI oil price of about $50 a barrel, some in the shale patch are struggling. Shale companies are being forced to produce more to service their high debts, but they aren’t making any surplus profit to cut their borrowing or pay shareholders. Now those investors are starting to demand more of a return.With the crude price seemingly stuck close to where it is — despite the tensions in the Persian Gulf region which flared up again on Friday — the next round of discussions between the shale producers and their lenders could be difficult. Some mergers may follow.Yet fans of U.S. oil shouldn’t be disconsolate. The end of the second shale boom will usher in a third: the period of young adulthood. This will bring a range of new skills, but production will grow at a more measured pace.This third boom will be driven by the international oil majors and will be characterized by a focus on better extraction, rather than rapid output growth. The application of enhanced oil recovery techniques, consolidation of ownership, automation of drilling, and rationalizing of supply chains will increase the volume of oil extracted over the lifetime of a well and reduce costs. But it won’t deliver the same pace of growth as seen recently.The recovery rate of oil from shale deposits is typically about 5%-10%, but ConocoPhillips has pushed recovery as high as 20% in some parts of the Eagle Ford shale play in Texas, and it could reach 40% under the right circumstances. The upside to the lifetime recovery rate from Eagle Ford would be huge, potentially extending higher production rates for longer.The third shale boom is coming. Just don’t expect it to look like the first two.To contact the author of this story: Julian Lee at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The former chartered accountant recoils at the moniker “New King of the North Sea” but the company he founded in 2007 has gone from relative anonymity to the top ranks of producers in the UK region at breakneck speed. “Staff and contractors now are about 1,800,” Mr Kirk said.
Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ complex research processes to determine the best stocks to invest in. A particularly […]
Oil prices rose on Friday on the back of some positive noises coming out of the trade war negotiations and reports that an Iranian oil tanker had been attacked
HOUSTON/NEW YORK/LONDON (Reuters) - Rates to charter oil tankers from the Arab Gulf, United Kingdom and the U.S. Gulf Coast to Asia surged to fresh highs on Friday as global oil traders grappled with a tanker shortage in the aftermath of U.S. sanctions on units of Chinese giant COSCO. Occidental Petroleum Corp tentatively chartered a supertanker to ship U.S. crude from the U.S. Gulf Coast to Asia for a record $15.8 million this week, three sources said on Friday. Royal Dutch Shell chartered the Suezmax vessel Amoureux this week for $9.2 million to ship crude from Teesport, U.K. to Dalian, China in early November, according to a shipping source and Refinitiv Eikon data.
DOW UPDATE The Dow Jones Industrial Average is rallying Friday afternoon with shares of Dow Inc. and Caterpillar leading the way for the blue-chip average. The Dow (DJIA) is trading 371 points (1.4%) higher, as shares of Dow Inc.
Amazon (AMZN) launches two new devices, namely Kindle Kids Edition and Fire HD 10 Kids Edition to gain traction from kids as well as parents.
Chevron (CVX) is set to relinquish its interest in the giant Azerbaijan oilfield to MOL for a consideration of more than $2 billion.
DOW UPDATE Behind positive momentum for shares of Dow Inc. and Caterpillar, the Dow Jones Industrial Average is rallying Friday morning. The Dow (DJIA) was most recently trading 441 points, or 1.7%, higher, as shares of Dow Inc.
We at Insider Monkey have gone over 730 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of June 28th. In this article, we look at what those funds think of Garmin Ltd. (NASDAQ:GRMN) based on that data. […]
Keurig (KDP) gains from acquisition and partnership strategy as well as efforts to launch innovative products and enhance supply-chain facilities. This should support growth.
DOW UPDATE Behind strong returns for shares of Caterpillar and Dow Inc., the Dow Jones Industrial Average is rallying Friday morning. Shares of Caterpillar (CAT) and Dow Inc. (DOW) are contributing to the blue-chip gauge's intraday rally, as the Dow (DJIA) was most recently trading 366 points, or 1.