Tuesday, January 15, 2013

Energy Stocks: Energy stocks mixed; Transocean ends lower (MarketWatch)

By Claudia Assis, MarketWatch

SAN FRANCISCO (MarketWatch) ? Energy stocks were mixed on Monday, with Transocean Ltd. ending the day in the red after rallying more than 3% as it revealed billionaire investor Carl Icahn took a position in the company.

Transocean /quotes/zigman/531240/quotes/nls/rig RIG -0.30% ?said Icahn has acquired a 1.56% stake in the company and is seeking regulatory approval for more voting shares. Shares ended 0.3% lower after hitting $56.34 earlier Monday, their highest since April.

Response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon in 2010.

Icahn is known for his shareholder activism. Last year he acquired large stakes in natural-gas producer Chesapeake Energy Corp. /quotes/zigman/126832/quotes/nls/chk CHK +0.41% , among other firms, and pushed hard for management changes.

Earlier this month, Transocean agreed to a $1.4 billion settlement with the government stemming from its role in the Deepwater Horizon rig explosion and well spill. The company owned the rig, which drilled BP PLC?s Macondo well and exploded in April 2010, killing 11 workers. The gushing well fouled Gulf waters with millions of gallons of oil for months.

One could argue Transocean was a better investment a year ago, before gaining traction on the settlement and making strides in other areas, analysts at Simmons and Co. said in a note to clients Monday.

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There remains, however, ?one glaring catalyst that perhaps most likely explains Mr. Icahn?s attraction and that, we surmise, is the prospect of extracting or perhaps accelerating a cash distribution yield out of [Transocean] now that the Macondo overhang has been substantially mitigated,? they said.

The analysts added Transocean had about $14 billion in debt and $6 billion in cash on the books, and after the settlement and a five-year payment schedule with the Justice Department it has ?ample flexibility? to draw back to a targeted cash balance around $1.5 billion.

Meanwhile, coal producer Consol Energy Inc. /quotes/zigman/190880/quotes/nls/cnx CNX -0.93% ?shares declined 0.9%. The coal producer announced a 2013 capital investment budget between $1.29 billion and $1.5 billion, investing more of its money in its natural-gas businesses.

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The company also disclosed an asset-sales program between $455 million and $640 million.

Consol expects to invest $410 million to $520 million in its coal operations, and $835 million to $935 million in its gas operations.

U.S. coal producers have struggled in recent years as cheaper and plentiful natural gas sap demand for coal, with some shifting to natural gas.

Shares of Hess Corp. /quotes/zigman/417764/quotes/nls/hes HES +0.30% ?rose 0.3%. Analysts at Credit Suisse upgraded Hess to neutral from underperform on Monday.

Big Oil shares were mixed on Monday. Exxon Mobil Corp. /quotes/zigman/203975/quotes/nls/xom XOM -0.03% ?shares were flat, while smaller rivals Chevron Corp. /quotes/zigman/289939/quotes/nls/cvx CVX +1.00% ?and ConocoPhillips /quotes/zigman/294662/quotes/nls/cop COP +0.34% ?advanced 1% and 0.3%, respectively.

The SPDR Energy Select Sector exchange-traded fund /quotes/zigman/246199/quotes/nls/xle XLE +0.01% , which focuses on energy names, advanced less than 0.1%. Crude-oil futures turned higher on Monday, with the February contract /quotes/zigman/2291766 CLG3 -0.03% ?settling at $94.14 a barrel on the New York Mercantile Exchange, up 58 cents, or 0.6%, on the day.

/quotes/zigman/531240/quotes/nls/rig

US : U.S.: NYSE

Volume: 11.83M

Jan. 14, 2013 4:00p

Rev. per Employee

$522,353

/quotes/zigman/126832/quotes/nls/chk

US : U.S.: NYSE

Volume: 9.63M

Jan. 14, 2013 4:01p

Rev. per Employee

$783,889

/quotes/zigman/190880/quotes/nls/cnx

US : U.S.: NYSE

Volume: 2.53M

Jan. 14, 2013 4:00p

Rev. per Employee

$594,850

/quotes/zigman/417764/quotes/nls/hes

US : U.S.: NYSE

Volume: 2.82M

Jan. 14, 2013 4:00p

/quotes/zigman/203975/quotes/nls/xom

US : U.S.: NYSE

Volume: 9.42M

Jan. 14, 2013 4:00p

Market Cap

$408.56 billion

/quotes/zigman/289939/quotes/nls/cvx

US : U.S.: NYSE

Volume: 6.26M

Jan. 14, 2013 4:00p

Market Cap

$218.68 billion

/quotes/zigman/294662/quotes/nls/cop

US : U.S.: NYSE

Volume: 4.13M

Jan. 14, 2013 4:00p

/quotes/zigman/246199/quotes/nls/xle

US : U.S.: NYSE Arca

Volume: 7.31M

Jan. 14, 2013 4:00p

/quotes/zigman/2291766

US : U.S.: Nymex

Volume: 1,093

Jan. 14, 2013 7:07p

Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW.

Source: http://www.marketwatch.com/news/story.asp?guid=%7B1651CA12-5E60-11E2-AD22-002128040CF6%7D&siteid=rss&rss=1

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