COP Raises Dividend; Terminates Contract For Deepwater Drill Ship Originally Scheduled For Gulf Of Mexico -- July 16, 2015

From Seeking Alpha:

• ConocoPhillips says it will reduce future spending on deepwater drilling, due to low crude oil prices.
• COP says the most significant spending reductions will come from its program in the Gulf of Mexico, where it will terminate its contract for an Ensco deepwater drill ship which was scheduled to begin drilling later this year.
• COP says its decision to cut deepwater spending will strengthen its ability to achieve cash flow neutrality in 2017, even if lower commodity prices persist.
• However, COP raises its quarterly dividend to $0.74 from $0.73, which will cost an additional $12.3M per quarter.

From an earlier article last October:

It usually takes about six years before deep-water discoveries become commercial bounties, and during that time oil markets could take prices up or down, and technological breakthroughs could lower costs. But oil companies will still have to accomplish engineering feats to exploit the next generation of oil fields. 

Six years. We're being set up for $200-oil. I explain what I mean by this at this post.

Along that same line, Reuters/Rigzone is reporting:

Mexico auctioned only two of 14 blocks in a pivotal oil and gas tender on Wednesday, falling far short of the government's modest expectations as it begins to open up the long-nationalized industry to private investment.

Both the shallow water exploration and production contracts were awarded to the same consortium made up of Mexico's Sierra Oil & Gas, U.S. firm Talos Energy and Britain's Premier Oil.

The other 12 blocks received no bids, or none that cleared the bar set by Mexico's finance ministry. All told, it was an inauspicious start to the rollout of President Enrique Pena Nieto's signature economic reform.

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TECO shares jump; rumors of being bought; (Tampa Electric). Later, TECO confirms it is exploring a sale:

Utilities have been looking at mergers and acquisitions for growth as they grapple with tepid sales and rising costs from new regulations and the need to upgrade aging infrastructure. This week utility owner Black Hills Corp said it had agreed to buy SourceGas Holdings LLC for $1.89 billion.

Teco, which was valued at about $4.4 billion before Thursday’s move, is Florida’s third-largest investor-owned utility behind NextEra Energy Inc.’s flagship Florida Power & Light and Duke Energy Corp.’s Florida utility.

Teco’s Florida utility borders those of Duke and FP&L. Both may be suitors for Teco, along with Dominion Resources Inc., Southern Co., and perhaps CenterPoint Energy Inc.

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Speaking Of Buyouts: Goldman Has Seven Oil And Gas Buyout Targets

EOG, CLR On The List

From SeekingAlpha:

• Global oil majors have $150B of firepower than can be used for M&A and have the ability to defer another $325B in capex on marginal projects; with so much cash available for potential deals and up to 15M bbl/day of production potentially available for purchase, Goldman Sachs analyst Ruth Brooker sees a pickup in M&A activity in the oil and gas space coming soon.
• The firm thinks shale production has the potential to double by 2025, and Brooker argues majors likely will take the current opportunity to increase their exposure to U.S. shale at historically low prices.
• Goldman sees seven companies as most likely to draw buyout attention from the majors: EOG, PXD, CLR, COG, NBL, APC, RRC

I would add Oasis and maybe even Whiting, although the latter is less likely now that three years ago.

APC has a market cap of almost $40 billion and an enterprise value of over $50 billion; and, EOG has a market value of $45 billion. 

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For The Archives: Argentina

Reuters/Rigzone is reporting:

Argentina's state oil company YPF, Pan American Energy and Wintershall will invest $38 billion over 35 years in the country's vast but mostly untapped Vaca Muerta shale formation, the governor of Vaca Muerta's home province of Neuquen said on Wednesday.