Oil & Gas Stock Roundup: BP Out Of Alaska, Equinor Speeds Up Oil Field Start Up

It was a week where both oil and natural gas prices settled higher.

On the news front, London-based oil major BP plc (LON:BP) (NYSE:BP) farmed out of Alaska, selling its entire business to Hilcorp Energy for $5.6 billion, while Norway’s Equinor (NYSE:E) indicated an earlier-than-expected start-up of the giant Johan Sverdrup field.

Overall, it was a good week for the sector. West Texas Intermediate (WTI) crude futures rose 1.7% to close at $55.10 per barrel, while natural gas prices moved up 6.2% for the week to finish at 2.285 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: TechnipFMC's Spin-Off, Kinder Morgan (NYSE:KMI)'s Asset Sale & More )

The U.S. crude benchmark notched a gain after U.S. government data showed a crude stockpile draw twice above expectations. The decline in oil inventories was the largest in the U.S. in five weeks, and came in tandem with a fall in gasoline and distillate supplies.

Natural gas prices were up even as weekly inventory release showed a larger-than-expected increase in supplies. The commodity got a lift from possible production disruptions associated with Hurricane Dorian.

Recap of the Week’s Most Important Stories

1. BP announced that it has signed an accord with Hilcorp Energy Co. to divest all its assets in Alaska. The transaction has been valued at $5.6 billion. With the deal's closure by 2020, awaiting approvals from the state and federal bodies, BP will exit Alaskan operations after 60 long years.

Precisely, the assets to be divested entails BP’s entire upstream and midstream operations in Alaska. This includes the British energy giant’s stake in the Prudhoe Bay — the largest oil field in North America — and the Trans-Alaska Pipeline System — spreading over 800 miles and transporting oil to the Port of Valdez.

Investors should know that in the short term, BP will be getting $4 billion of the total transaction value. The company will receive the additional $1.6 billion once the buyer attains certain financial goals from this asset.

Previously, Alaska was competing with some OPEC members, when the U.S. state pumped crude volumes at a rate of two million barrels every day. However, Alaska has lost its appeal and is presently the sixth largest oil-producing state in the United States. (Read more Parsley Energy Rewards Investors With Dividend Initiation )

Price Performance

The following table shows the price movement of some the major oil and gas players over the past week and during the last 6 months.

Get The News You Want Read market moving news with a personalized feed of stocks you care about. Get The App Company	Last Week	Last 6 Months
XOM	+1.5%	-14.7%
CVX	+2.2%	-3.6%
COP	+3.5%	-25.4%
OXY	+2.6%	-35.5%
SLB	+1.2%	-28.3%
RIG	+7.1%	-47.4%
VLO	+1.5%	-8.8%
MPC	+7.5%	-20.6%

The Energy Select Sector SPDR – a popular way to track energy companies – was up 2.7% last week. The best performer was independent refining giant Marathon Petroleum (NYSE:MPC) whose stock rose 7.5%.

Longer-term, over six months, the sector tracker is down 13.7%. Offshore driller Transocean Ltd (NYSE:RIG). was the major loser during this period, experiencing a 47.4% price plunge.

What’s Next in the Energy World?

As usual, market participants will be closely tracking the regular releases i.e. the U.S. government statistics on oil and natural gas - one of the few solid indicators that comes out regularly. Energy traders will also be focusing on the Baker Hughes data on rig count.

Legalizing THIS Could Be Even Bigger than Marijuana

Americans spend an estimated $150 billion in this industry every year… more than twice as much as they spend on marijuana.

Now that 8 states have fully-legalized it (with several more states following close behind), Zacks has identified 5 stocks that could soar in response to the powerful demand. One industry insider described the future as “mind-blowing” – and early investors can still get in ahead of the surge.

Zacks Investment Research