Oil & Gas Stock Roundup: Elliott's QEP Bid, Transocean's Contract Win & More

It was a week where oil prices rallied but natural gas futures took a hit.

On the news front, activist firm Elliott Management proposed buying QEP Resources Inc (NYSE:QEP). (NYSE:E) for about $2 billion, while offshore driller Transocean Ltd. (NYSE:RIG) announced it has been awarded a five-year contract for an ultra-deepwater drillship by Chevron (NYSE:CVX) .

Overall, it was a mixed week for the sector. While West Texas Intermediate crude futures gained 5.8% to close at $47.96 per barrel, natural gas prices plunged some 7.8% to $3.044 per million Btu (MMBtu).

The U.S. crude benchmark booked its first weekly gain of the past four weeks after the Energy Department's inventory release showed that stockpiles remained essentially unchanged. While large build in product inventories (gasoline and distillate) played spoilsport, it was more than offset by bullish jobs data and optimism surrounding talks between the United States and China to resolve the trade war. Both these developments eased fears of a possible economic slowdown.

Meanwhile, natural gas prices recorded a weekly decline following a below-consensus decrease in supplies, which indicate weak demand for the heating fuel.

Recap of the Week’s Most Important Stories

1. QEP Resources rallied 40.3% post an acquisition proposal from shareholder Elliott Management Corp. Elliott, which owns a 5% stake in the company, has expressed plans of taking over all outstanding shares of the upstream energy player for a consideration of $8.75 a share, which is at 44% premium to the stock’s closing price on Jan 4.

Elliott added that its intent to acquire QEP Resources is dependent on the completion of the company’s Haynesville assets divestment. On Nov 19, Zacks Rank #3 (Hold) QEP Resources signed an agreement to offload Haynesville shale play-based natural gas and oil producing acres and supportive gathering properties for $735 million. The sale of its Haynesville operations reflects QEP Resources’ aim to become a Permian pure-play operator.

You can see Williams Receives FERC Nod to Gulf Connector Expansion )

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.

Company	Last Week	Last 6 Months
Get The News You Want Read market moving news with a personalized feed of stocks you care about. Get The App XOM	+4.4%	-13.7%
CVX	+2%	-10.9%
COP	+3.4%	-11.5%
OXY	+4.5%	-24.4%
SLB	+6.8%	-42.2%
RIG	+8.7%	-39.8%
VLO	+4.8%	-29.5%
MPC	+5.9%	-13.3%

In line with the week’s bullish oil market sentiment, the Energy Select Sector SPDR – a popular way to track energy companies – generated a +4.9% return last week. The best performer was offshore driller Transocean, whose stock jumped 8.7%.

Longer-term, over six months, the sector tracker is down 20.9%. Oilfield service major Schlumberger (NYSE:SLB) was the major loser during this period, experiencing a 42.2% price decline.

What’s Next in the Energy World?

In this week, 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.

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