In this part, we’ll look at the top percentage gainers from the oil and gas production (or upstream) sector in the US for the week starting November 20, 2017. To compile the list of top upstream gainers, we have used only oil and gas producers with market capitalizations of greater than $100 million and an average trading volume last week above 100,000 shares.
Tellurian rises sharply this week
In the week starting November 20, 2017, Tellurian (TELL) rose from last week’s close of $11.73 to $12.66 on November 22, an increase of almost 8%. In the last four trading sessions, Tellurian rose every day on trading volume heavier than its 30-day average. The ~19% rise in Tellurian since last Friday can be attributed to the closure of its acquisition of the Haynesville acreage, production assets, and midstream assets.
Last Thursday, on November 16, TELL announced the closure of its previously announced agreement with Rockcliff Energy Operating to acquire natural gas producing assets and undeveloped acreage for $85.1 million. These assets are located in northern Louisiana and include ~4 MMcf (million cubic feet) per day of natural gas production, ~1.3 Tcf (trillion cubic feet) of natural gas resources, and 138 drilling locations.
In regards to the acquisition, Meg Gentle, president and CEO of Tellurian, said, “Acquisition of natural gas producing acreage in the core of the Haynesville provides the foundation for a growing portfolio of assets that we expect can produce LNG for a cost of $3.00 per MMBtu, FOB U.S. Gulf Coast, when Driftwood LNG begins operations in 2022.”
Moving up: QEP, SD, REN, CPE
Other upstream stocks making it to the list of top gainers this week are QEP Resources (QEP), SandRidge Energy (SD), Resolute Energy (REN), and Callon Petroleum (CPE). These stocks rose 6.6%, 5.6%, 4.8%, and 4.6%, respectively.
On November 15, 2017, SandRidge Energy (SD) announced the acquisition of Bonanza Creek Energy (BCEI) in a cash and stock transaction valued at $36 per share. With the help of this acquisition, SandRidge Energy will add 67,000 contiguous net acres in the Denver-Julesburg Basin.
These stocks also managed to beat the SPDR S&P Oil and Gas Exploration & Production ETF (XOP), which represents an index of stocks across the energy industry. XOP is up by 0.83% in the current week. In comparison, the SPDR Dow Jones Industrial Average ETF (DIA) is up by 0.76% in the current week.
Next, we will look at the upstream stocks that are trending down in the current week.
In the week starting November 20, 2017, Tetra Technologies (TTI) rose the most among oilfield services stocks last week.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.