This Oil Stock Completed a Pivotal Year but Expects 2018 to Be Even Better

Marathon Oil Corporation (NYSE: MRO) recently put the wraps on a transformational year by delivering strong fourth-quarter results. Consequently, the company has the wind at its back in 2018. That was apparent in the comments of CEO Lee Tillman on the company's accompanying conference call, where he ran through last year's highlights as well as why 2018 promises to be even better. Last year was a pivotal one for Marathon Tillman led off his comments on the call by saying that: 2017 was truly a pivotal year in our ongoing transformation to a U.S. resource play-focused independent E&P. We made progress across every element of our playbook: balance sheet, cost structure, portfolio. And we achieved high return growth within cash flows at moderate oil pricing. What was most impressive about the company's performance is that it "balanced our 2017 CapEx and dividend with cash flows...while [oil] averaged just above $50" a barrel. Further, the CEO noted that it achieved that aim while production came in "near the top end of our total company production guidance, driven by a strong 31% exit rate from our U.S. resource plays." Image source: Getty Images. Not only did the company operate extremely well, but it did so while ending "2017 with a stronger balance sheet" by reducing debt by $1.75 billion, which will save it $115 million in annualized interest expense. That was just one of the many costs the company drove down in the past year, which helped lower its oil price break-even level and set it up for continued success in the coming years. We expect more of the same in 2018 Tillman anticipates that the company will build on its success from last year, noting that "our 2018 capital allocation philosophy is fully consistent with how we managed the business in 2017." Like last year, the company plans to "deliver a returns-focused program that balances cash flow with our capex and dividend." In fact, the company can achieve its plan to spend $2.3 Continue Reading

Graphic Products Creates Resources for Oil and Gas Industries

BEAVERTON, OR – One of the most dangerous job sectors in the United States has one of the most thorough safety programs: the oil and gas industry. Graphic Products knows it's essential for safety managers and supervisors to have the resources they need for optimal safety operations. It is this industry need that inspired the release of several new resources tailored specifically to the oil and gas industry. Deliverables include an in-depth best practices guide, infographic, and a safety tips article. Best practice tips are made clear and simple to achieve in Graphic Products’ free guide to signage for oil and gas industry safety. This guide quickly explains key ideas for safety labeling and signage for the oil and gas industry. Review regulations and standards, understand the top five hazards faced by oil and gas employees, and learn how effective safety labels and signs can help to address those hazards. “I oversee a large part of the operations for safety,” said Ryan Gnyp, an oil industry safety manager. “Most of my job is day-to-day safety of the crew to make sure they have what they need to follow policies and make sure proper procedures are put in place.” Gnyp stressed the important role of signs, labels, and other visual communication in the oil and gas industry. Learn about the background and future of the oil and gas industry, statistics, and safety best practices in a free oil and gas industry infographic. This visual provides compelling information to share with oil and gas teams and is a useful training resource to spread awareness on a variety of industry topics. Apply simple tips and strategies to improve worker safety on oil and gas projects with the Graphic Products article 10 Tips for Oil and Gas Industry Workers. These tips help reinforce the importance of the re-evaluation of safety programs and behavior to more effectively address worker safety issues, which in turn help reduce the rate of Continue Reading

117 years ago: The Spindletop Hill gusher blew up Texas’ oil craze in Beaumont

Today other energy sources are available, but oil remains in demand. By Heather Leighton Updated 11:45 am, Wednesday, January 10, 2018 window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-5', placement: 'Interstitial Gallery Thumbnails 5', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-10', placement: 'Interstitial Gallery Thumbnails 10', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-15', placement: 'Interstitial Gallery Thumbnails 15', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-20', placement: 'Interstitial Gallery Thumbnails 20', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-25', placement: 'Interstitial Gallery Thumbnails 25', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-30', placement: 'Interstitial Gallery Thumbnails 30', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-35', placement: 'Interstitial Gallery Thumbnails 35', target_type: 'mix' }); _taboola.push({flush: true}); window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-40', Continue Reading

This Is the Best Big Oil Stock to Buy in 2018

It wasn't that long ago that an investment in oil and gas felt like throwing cash into a burning pit. Lower oil prices wiped out hundreds of billions of dollars in market value in a matter of 18 months. Several one-trick ponies in the industry, among them offshore rig owners and independent oil and gas producers, collapsed under the weight of their debt loads. Even the titans of the industry -- the integrated majors -- got walloped. Today, the industry is looking to be in much better shape. Companies have found ways to cut costs and turn a profit with oil prices at much lower levels than they were three to four years ago. It also helps that oil prices are still creeping upward. Image source: Getty Images. For investors looking for an opportunity in this still beaten-up sector, Big Oil is an excellent place to turn. These giants not only withstood the blow of low prices but also reoriented their businesses to be much more profitable entities. Despite what some might think, not all Big Oil companies are created equal. So let's dive into this sector to see which of these companies is the best stock to buy in 2018. Whom are we talking about, anyway? Most of the integrated oil and gas companies are incredibly recognizable brands in the U.S. -- ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), Royal Dutch Shell (NYSE: RDS-A) (NYSE: RDS-B), BP (NYSE: BP). Others, including Total (NYSE: TOT) and Statoil (NYSE: STO), are much more recognizable in Europe. To look at these companies holistically, you need to look at the typical metrics -- margin, cash flow, returns, valuation, and so on -- but also their investment plans, because the energy landscape is changing under our feet. So here's a look at all of these things and how the stocks compare with each other as a potential investment. What's eating margin and returns? Company Gross Margin (Current) Gross Margin (10-Year Avg.) EBITDA Margin (Current) EBITDA Margin (10-Year Avg.) Net Income Margin (Current) Net Continue Reading

Without fanfare, oil companies just received a tax break on New Year’s Day

An oil drilling rig is seen off the Pacific coastline. (Eugene Garcia/European Pressphoto Agency/Shutterstock) Congressional Republicans allowed a tax on oil companies that generated hundreds of millions of dollars annually for federal oil-spill response efforts to expire this week — a move that amounts to another corporate break in the wake of lawmakers’ sweeping tax overhaul late last month. The tax on companies selling oil in the United States generated an average of $500 million in federal revenue per year, according to the Government Accountability Office. The money, collected through a 9 cents-per-barrel tax on domestic crude oil and imported crude oil and petroleum products, constituted the main source of revenue for the Oil Spill Liability Trust Fund. The fund has at least $5.75 billion in reserve. Intended to help the government respond quickly to accidents on land or offshore, it was established in 1986 but only got a stable source of funding in the wake of the 1989 Exxon Valdez spill. The tax, which expired Sunday, had lapsed before but was renewed under the bipartisan 2005 Energy Policy Act. Federal officials recently had debated whether it should be expanded to apply to oil sands products. Although GOP leaders opted not to renew the tax in December, they are considering reinstating it retroactively in an “extenders” bill that would revive several recently expired taxes. Industry officials noted that the U.S. Coast Guard or the National Oceanic and Atmospheric Administration could always ask Congress to reimpose it if either felt it was needed. A White House official did not respond to a request for comment Thursday. Environmentalists called the tax lapse another industry victory under President Trump at the expense of people and wildlife located near sites susceptible to spills. “We see it as illustrative of the way in which Trump and the GOP continue to push giveaways for corporate polluters Continue Reading

Global oil demand to exceed expectations in 2017, says IEA; OPEC cuts supply

Global oil demand is set to accelerate faster than anticipated this year, according to the International Energy Agency (IEA), which has revised up its 2017 growth estimates. Strong second-quarter demand has buoyed oil markets, which have been struggling to rebalance as a supply glut has weighed heavily on prices, the IEA said in its September report released Wednesday. Demand grew by 2.3 million barrels per day (mb/d), or 2.4 percent, in the second quarter of 2017, prompting the Paris-based organization to increase its growth estimate for the year to 1.6 mb/d, or 1.7 percent. For 2018, the IEA is predicting growth of 1.4 mb/d, or 1.4 percent. The revision marks an uptick from its August forecasts as the IEA grows more confident that shifting fundamentals are enabling demand to catch up with supply. In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July's 1.4 mb/d forecast. Neil Atkinson, head the IEA's oil industry and markets division, told CNBC that "pretty robust" demand indicated that a rebalancing of the market is "underway." It comes as global oil supplies fell in August due to both multilateral measures aimed at stemming excess stock and unplanned outages. OPEC output fell in August for the first time in five months, after turmoil in Libya disrupted flows and other member countries reduced production. Compliance levels in August hit 82 percent compared with 75 percent. The data will buoy signatories who implemented the deal in January in a bid to boost oil prices but have since struggled to cap supply amid increased output Continue Reading

Analysis: Why Saudi Arabia should fear U.S. oil dominance

One of the more important recent developments in global energy is the resurgence of U.S. energy production, thanks in large part to the shale revolution.Now, after half a century as a net importer, the U.S. is poised in the coming decade to become a net exporter, as imports from historic sources decline and demand for U.S. energy products abroad grows.According to the IEA’s World Energy Outlook, the U.S. is set to be a dominant force in energy production for the foreseeable future, as the surge from shale triggers the biggest boom in production in more than 50 years.By 2025, increases in U.S. gas and oil production will turn the country into a net exporter of fossil fuels for the first time since 1948. The U.S. will remain the “undisputed leader” in oil and gas markets “for decades to come,” according to the IEA.This prediction is derived in part from the IEA’s calculation of the recoverable reserves in the U.S., particularly shale, which the agency increased by about 30 percent to 105 billion barrels.As analysts have noted, the IEA prediction means ‘lower for longer’ prices, as U.S. production exceeds expectations and meets most new global demand. In total, the U.S. will add more new output than Saudi Arabia during that country’s expansion in production between 1966 and 1981. This will likely keep prices depressed. More: World oil outlook: OPEC concedes that U.S. shale won’t die More: $43 billion China-Alaska energy deal looks shaky More: Is U.S. biofuel in jeopardy? Rising exports in natural gas, particularly LNG, will allow the U.S. to become a net exporter by the mid-2020s, surpassing Qatar to become the world’s biggest LNG supplier. Oil exports will exceed imports by 2027; the U.S. government has predicted 2026.Demand for U.S. oil that is light on sulfur — and thus cleaner — will increase as countries attempt to cut back on emissions, combat air Continue Reading

Most ‘competitive’ oil in the world befuddles analysts

U.S. oil exports hit record highs last week, doubling over the course of a week as the Gulf Coast clears out product backed up because of Hurricane Harvey. The high level of crude exports won’t last forever, but there appears to be a little more life left in the export boom.The surge in exports led net import totals to plunge to levels never seen in EIA data dating back to 2001. Over the last few years, weekly net imports tend to fluctuate between 6 and 8 million barrels per day (MB/D). But September was a highly unusual month. Net imports fell to 5.7 MB/D in the week ending on September 8 before recovering a bit mid-month. By Sept. 29, however, net imports plunged to 5.2 MB/D, the lowest weekly total on record.As mentioned, those low import figures were the direct result of an explosion in crude exports. After the U.S. crude oil export ban was lifted at the end of 2015, exports edged up gradually, before really taking off earlier this year. Over the summer, the U.S. saw weekly exports top 1 MB/D in some of the stronger weeks, but more often than not, hovered just below that threshold in an average week.Hurricane Harvey upended this dynamic. The refining outages led to a piling up of crude oil – oil drillers mostly kept producing but the massive refining complexes along the Gulf Coast couldn’t process all the crude for about two weeks, with some disruptions still lingering. The pent-up supply was always going to lead to a one-off export spree once the refining outages cleared. More: Study: Tax breaks are only thing making $50 oil profitable in the U.S. More: Analysis: The trillion-dollar market that stopped chasing profits More: Who is winning the crude oil market share war in China? But the pricing differential between Brent and WTI has super-charged exports. The disparity between the two benchmarks pretty much vanished when the U.S. began exporting nearly two years ago, but widened sharply after Harvey, due to the Continue Reading

Anger builds as oil ooze coats fragile Gulf Coast, Louisiana wetlands

ROBERT, La. - Anger grew along the Gulf Coast as an ooze of oil washed into delicate coastal wetlands in Louisiana, with many wondering how to clean up the monthlong mess - especially now that BP's latest try to plug the blown-out well won't happen until at least Tuesday. "It's difficult to clean up when you haven't stopped the source," said Chris Roberts, a councilman for Jefferson Parish, which stretches from the New Orleans metropolitan area to the coast. "You can scrape it off the beach but it's coming right back." Roberts surveyed the oil that forced officials to close a public beach on Grand Isle, south of New Orleans, as globs of crude that resembled melted chocolate washed up. Others questioned why BP PLC was still in charge of the response. "The government should have stepped in and not just taken BP's word," declared Wayne Stone of Marathon, Fla., an avid diver who worries about the spill's effect on the ecosystem. The government is overseeing the cleanup and response, but the official responsible for the oversight said he understands the discontent. "If anybody is frustrated with this response, I would tell them their symptoms are normal, because I'm frustrated, too," said Coast Guard Commandant Thad Allen. "Nobody likes to have a feeling that you can't do something about a very big problem." As simple as it may seem, the law prevents the government from just taking over, Allen said. After the 1989 Exxon Valdez spill in Alaska, Congress dictated that oil companies be responsible for dealing with major accidents - including paying for all cleanup - with oversight by federal agencies. BP, which is in charge of the cleanup, said it will be at least Tuesday before engineers can shoot mud into the blown-out well at the bottom of the Gulf, yet another delay in the effort to stop the oil. A so-called "top kill" has been tried on land but never 5,000 feet underwater, so scientists and engineers have spent the past week preparing and taking Continue Reading

Oil spikes $25 a barrel on anxiety over US bailout

Oil prices briefly spiked more than $25 a barrel Monday, shattering the record for the biggest one-day gain as unease about the government's $700 billion bailout plan pummeled the dollar and spurred investors to buy safe-haven assets. An expiring crude contract added fuel to the frenzied rally. Light, sweet crude for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back to settle at $120.92, up $16.37. The contract expired at the end of the day, adding to the volatility as traders rushed to cover positions; the October price began accelerating sharply in the last hour of regular trading, a common occurrence when a contract is about to go off the board. Still, the rally, which shattered crude's previous one-day price jump of $10.75, set June 6, showed the intensity of emotion in the market. The Nymex temporarily halted electronic crude oil trading after prices breached the $10 daily trading limit. Trading resumed seconds later after the daily limit was increased. RELATED: FAQ: HOW PAULSON BAILOUT PLAN AFFECTS MORTGAGESRELATED: WORLD ECONOMIC POWERS PLEDGE TO STEM FINANCIAL CRISISRELATED: BUFFETT: MAKE MAYOR BLOOMBERG ECONOMIC CZARThe November crude contract, which became the front-month contract at the end of Monday's session, settled at $109.37, up $6.62, still a very sharp gain. The severity of the price move shocked veteran market participants and prompted the U.S. Commodity Futures Trading Commission to launch an investigation into whether illegal manipulation was to blame. Acting CFTC Chairman Walter Lukken said the agency's surveillance and enforcement staff was analyzing the price spike "to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain." Phil Flynn, analyst and oil trader with Alaron Trading Corp. in Chicago, said the late-session surge in oil appeared to be the result of a large investment fund Continue Reading