Energy Biz Review: McDermott SHOOTS THE MOON, Royal Dutch Shell’s BILLIONS
Royal Dutch Shell (NYSE:RDSA) (NYSE:RDSB) intends to spend as much as $12 billion for the development of Indonesia’s Masela block, says the country’s energy minister, who added that Shell “asked for an accelerated plan of development” and that production in the block might begin by 2019.
Investing Insights: Gold Closes Below $1,600 on Bernanke’s Comments.
Shares of the oil and gas engineering firm McDermott (NYSE:MDR) shoot the moon on word that CEO Stephen Johnson and four other executives have bought its stocks heavily. Johnson says that he purchased 102,368 shares at an average of $9.64, and the others snapped up a total of 175,000 shares, worth some $2.6 million. Progress towards reinforcing the firm’s backlog, which is thought to be below $1 billion for 2013, might be the reason for the insider purchases, but Paul Ausick is dubious, commenting that if oil prices fall much further, any profits will be swamped by production costs, which implies “less cash flow and less capital investment”.
Tullow (TUWLF.PK) and partner Anadarko (NYSE:APC) discover oil at their Paon-1X exploration well off Ivory Coast, which extends finds made in Ghana. The former reports that its drilling encountered 31 meters of net oil in a gross interval of 74 meters of turbidite sands, and that data implies that the well is a continuous hydrocarbon column of light oil.
Falling crude prices and lower domestic gasoline consumption might be causing Phillips 66 (PSX) to rethink divesting its 247,000 barrels per day refinery in Belle Chasse, La., as the changes in the market are reducing the number of potential buyers. However, lower crude prices could make refining into a more promising activity, and Phillips might think that it can find an export market by the end of summer for its refinery products, which would make the asset worth keeping.
Don’t Miss: Can Halliburton Make Investors HAPPY Again?
Want news like this in real-time so you can get an edge? Click here for Wall St. Cheat Sheet Pro.