What’s Behind The Drop In Renewable Spending?

A marked decline in spending on renewable energy projects during the first half of the year has suggested that wind and solar have yet to become fully competitive with fossil fuel power generation despite the wealth of reports saying they already are cheaper in some parts of the world. BloombergNEF reports that spending on renewable projects between January and June totaled US$117.6 billion, which was 14 percent less than a year earlier and the lowest amount for a comparable period since 2013. The decline was evident in all key renewables markets,…

Source: Oilprice.com

Small Crude Draw Can’t Stop Oil From Plunging

The American Petroleum Institute (API) reported a small crude oil inventory draw of 1.401 million barrels for the week ending July 11, compared to analyst expectations of a 2.69-million barrel draw. The inventory draw this week is disappointing after last week’s large draw of 8.129 million barrels, according to the API. A day later, the EIA had estimated an even bigger inventory drawdown of  9.5 million barrels. After a string of inventory draws, the net build is now just 12.16 million barrels for the 29-week reporting period so far…

Source: Oilprice.com

Tesla Claims Secret Project Has Fallen Into Chinese Rival’s Hands

Tesla and Apple both suspect that their self-driving car technology has been stolen by engineers who went over to a Chinese competitor. That’s a very time-sensitive claim, with intellectual property theft being a central issue in President Donald Trump’s intense trade war against China. The electric carmaker filed a lawsuit against XMotors.ai, the U.S. research arm of China-based Xpeng, and included a subpoena for Apple to cooperate in the suit. Tesla accused an engineer who worked on its Autopilot system of stealing thousands of highly…

Source: Oilprice.com

New York Blower Introduces Mobile App To Access On-Demand Fan Information

Willowbrook, IL, — The New York Blower Company, a leading manufacturer of premium-quality fans and blowers for the industrial marketplace, has introduced the New York Blower (nyb) mobile app to help nyb fan users find information about their fans and order replacement parts. Using the app, customers can access fan information on-demand, calculate changes in operating conditions and connect with their…

Turkey Won’t Back Down From Cyprus Oil Drilling Despite EU Sanctions

The Turkish Foreign Affair Ministry on Tuesday rejected the notion of European Union sanctions on Turkey over its drilling for gas in disputed eastern Mediterranean waters, pledging instead to send yet another ship to the area. During their meeting in Brussels on Monday, European Union foreign ministers approved a new batch of sanctions against Turkey. In their statement, they said that in light of Turkey's “continued and new illegal drilling activities,” the EU was suspending talks on an air transport agreement and would call on the…

Source: Oilprice.com

Oil stocks fall after U.S.-Iran talks progress

(Updates) ** Shares of most oil companies fall as easing tensions between the U.S. and Iran pressure crude prices ** President Donald Trump says on Tuesday progress has been made with Iran and that he was not looking for regime change ** Benchmark Brent crude futures fell 2.5% to $64.81/barrel, while U.S. light crude slipped [Read more]

Source: BOE Report

Stocks fall, U.S. yields rise on retail sales data

A gauge of global equities fell on Tuesday and U.S. Treasury yields climbed as a stronger-than-anticipated report on retail sales raised the possibility the Federal Reserve could move towards a less dovish stance. U.S. retail sales rose 0.4% in June, as households stepped up purchases of motor vehicles and a variety of other goods. The [Read more]

Source: BOE Report

Oil Falls Back As Iran Risk Factor Fades

Oil prices started the week slightly higher, but fell on Tuesday after U.S. Secretary of State Pompeo said that Washington is ready to negotiate the Iran missile program Chart of the Week Argentina’s natural gas production from shale has climbed significantly in the last few years, driven by increased drilling in the Vaca Muerta shale. Production from the Vaca Muerta surpassed 1 billion cubic feet per day (Bcf/d) at the end of 2018. Higher production has allowed Argentina to resume gas exports. Argentina’s first LNG shipment departed…

Source: Oilprice.com

Major Energy Firms Could Vie For Brazil’s Opening Natural Gas Sector

Major energy firms could be interested in buying stakes in Brazilian state-held natural gas distribution companies as Brazil is looking to open the sector to more competition, experts have told Reuters. According to experts and analysts who spoke to Reuters, Brazil’s plan could lead to a wave of privatizations in the natural gas sector. Some major energy firms, including France’s Engie, Spain’s Repsol and Naturgy Energy, Portugal’s GALP, and Brazil’s Cosan SA could be interested in taking stakes in the natural gas…

Source: Oilprice.com

The Scary Truth About Canada’s Energy Security

While Canadian oil producers are scrambling to sell their oil at a fair price due to a pipeline shortage to take away the crude to foreign markets, Canada’s own domestic oil supply could be threatened due to court decisions and heightened tension in the Middle East. Canada, the world’s fourth largest oil producer, may not be as energy secure as its producer status would otherwise suggest, Peter Tertzakian, Executive Director of the ARC Energy Research Institute in Calgary, Alberta, writes in Financial Post.  That’s because…

Source: Oilprice.com

Callon Buys Carrizo Oil & Gas in an All-stock Deal Valued at $3.2 Billion

Callon Petroleum has agreed to acquire Carrizo Oil & Gas for $3.2 billion, with shareholders of Carrizo set to receive 2.05 shares of Callon for each share they hold. That represents $13.12 per Carrizo share based on Callon’s closing common stock price on July 12 and a 25 percent premium to Carrizo’s prior day closing price. Pro-forma, Callon shareholders will own 54 percent of the combined company and 46 percent will be held by former Carrizo owners.

“This deal checks a lot of the boxes on what seems to make sense for corporate-level E&P M&A,” said Drillinginfo M&A analyst Andrew Dittmar. “You have two small-to-midsize companies active in the Delaware Basin combining to build economies of scale, reduce G&A expenses, and hopefully accelerate the move to positive free cash flow.”

With the all-stock consideration, Callon is building scale while preserving cash on the balance sheet for development and avoiding having to attempt raising additional capital from a frozen Wall Street. It can also leverage the slightly higher valuation its stock carries over Carrizo. While not exactly a “merger-of-equals” they are similar sized companies and the post-deal shareholder split will be a relatively even with 54 percent buyer, 46 percent seller.

From a valuation perspective, the acquisition looks very reasonable. A 25 percent premium to a prior close is a moderate premium for a public E&P buyout. After adjusting for the value of Carrizo’s existing production and Eagle Ford acreage, Callon is acquiring the Permian leasehold at a bit under $20,000 per acre. That compares favorably to the $30,000 per acre or more seen in other public E&P buyouts in the Permian.

“If there is anything slightly surprising about this deal, it would be that Callon is willing to pick up the Eagle Ford assets of Carrizo and lose its status as a Permian pure-play which the market seems to favor,”  said Dittmar. “With more mature wells, the Eagle Ford assets do provide some stability to the combined company’s production base and supply much-needed cash flow, but we wouldn’t be that surprised to see Callon look to monetize these assets and return its focus exclusively to the Permian provided they can find a buyer in this market willing to pay a fair price.”

There continues to be a strong case for further consolidation among the shale drillers, especially in the Permian. Other companies will be closely monitoring how the market takes this deal and how badly Callon is beat up for announcing an acquisition in the current low-growth Wall Street mood. The market is already taking what would be expected to be the initial reaction and selling Callon off to the tune of ~15 percent. We will have to wait a bit and when the dust clears see what the longer-term implications are for its stock. Check back on our blog for more details and commentary from our expert M&A analysts as we follow this deal and others.

The post Callon Buys Carrizo Oil & Gas in an All-stock Deal Valued at $3.2 Billion appeared first on Drillinginfo.