Oil & Gas

Corona Capital: Gaming M&A, Beauty’s bold face

9 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Consolidation in video games reaches the next level as Sweden’s MTG buys Hutch Games for $375 million; and Spanish cosmetics, fashion and perfume group Puig predicts revenue will double by 2023.

Activist minnow needs bigger fish to fry Exxon

7 Dec 2020

The $176 bln oil major has rarely listened to past investor pleas, so demands from a $40 mln stakeholder seems a non-starter. Yet its recent record of capital destruction may be enough for bigger funds to join in. Taking on the oil giant is a way to justify ESG lip service, too.

Eni’s UK wind farm tilt is cheap for a reason

4 Dec 2020

The Italian oil major is paying utility SSE and Norway’s Equinor just over 3 mln pounds per megawatt for a 20% stake in the first two phases of the Dogger Bank project. It’s cheaper than past offshore developments. That’s mainly because new farms don’t carry such big subsidies.

Corona Capital: Chevron, Boeing, OPEC, Orange

3 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Chevron cuts spending, prudently; Boeing orders are a solid step; OPEC makes up its mind; and Orange’s Belgian deal has some juice.

Corona Capital: Bitcoin, Lonely Planet

1 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Bitcoin hit a record, buoyed by inflationary fears, new fans and plain old speculation. Meanwhile Lonely Planet has found a new owner, as it wrestles with an anything-but-lonely market for travel information.

Oil’s latest boost has longer-term thrust

25 Nov 2020

Multiple Covid-19 vaccines have lifted crude prices to March levels on hopes of an economic recovery. Producers may now pump like crazy, but renewed declines look less likely. Meanwhile, Big Oil’s virus-driven cuts to new supply should prop up prices further down the line.

Corona Capital: Warren Buffett, Burger boost

9 Nov 2020

Concise views on the pandemic’s corporate and financial fallout: Rising share prices take the sting out of Berkshire Hathaway’s Covid-19 profit hit; and McDonald’s reports a good quarter for American nugget-lovers.

Aramco’s mighty value reflects mini investor base

3 Nov 2020

Shares in the $1.8 trln Saudi oil giant are flat since January, while those of western rivals like BP have halved. Aramco’s solid and more-secure dividend explains some of the difference. But a tiny free float comprised of investors who are less likely to sell helps, too.

Exxon is shrinking in all the wrong places

30 Oct 2020

The $137 bln oil giant is laying off staff and posting losses. It continues to bleed money, and over the past decade spent $15 bln more on its dividend and capex than cash generated by its business. As its earnings get smaller, its balance sheet gets weaker.

Corona Capital: Utah Jazz, Comcast, Kraft

29 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: Utah Jazz’s owners sign off with a respectable return; Comcast shoots the light out on broadband; and Kraft rides the stay-at-home wave.

BP’s investment case falls between two stools

27 Oct 2020

The $54 bln oil major’s shares have sunk further than peers in recent months. Boss Bernard Looney won’t mind if his renewable energy shift leads oil bulls to prefer Exxon Mobil. He might get more bothered if investors find rival Total’s green transition more compelling.

Nigeria unrest throws petrol on economic bonfire

23 Oct 2020

The army is offering to deploy to quell protests against police brutality. That would fan tensions, the last thing the country needs. Africa’s biggest economy is on the ropes due to Covid-19 and low oil prices. Trouble in the oil-producing Niger Delta would bring it to its knees.

Shale M&A conflicts aren’t just all in the family

20 Oct 2020

A deal between two Texas drillers – involving a father and son – may be in the works. It looks like a bailout of sorts, so convincing outsiders of a fair deal will be hard. Other conflicts in shale M&A, like executive pay, loom large. Texas may be big, but the oil club is small.

Texas shale deal starts a sprint to nowhere

19 Oct 2020

ConocoPhillips is scooping up Concho for $10 bln after the oil price rout cut its stock nearly in half. Cost cuts are in theory worth three times the premium. But drillers consistently burn cash. Consolidation helps, but oil’s dimming future means they are racing against time.

Aramco pipeline spinoff plan is born of necessity

14 Oct 2020

The $1.9 trln oil giant is echoing Abu Dhabi-based peer ADNOC by discussing a part-sale of its distribution network with BlackRock and others. Aramco’s foreign investors’ dividend is safe. But financing state payouts and other activities requires the $10 bln it could raise.

Corona Capital: Oil, Delta, Hunger

13 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: OPEC and the International Energy Agency issue forecasts that bode ill for crude demand; the U.S. airline steers through turbulence; and a food crisis is exacerbating problems facing the most vulnerable in society.

Fantasy M&A’s latest contender: Buffett buys Exxon

8 Oct 2020

The Sage of Omaha has $120 bln to deploy on a big deal. After halving in value this year Exxon Mobil is worth only a bit more. If Buffett was interested, the oil titan might value relative anonymity in the Berkshire Hathaway empire to increasing heat from ESG-minded investors.

Big Oil’s green rush needn’t inflate a big bubble

6 Oct 2020

Total has joined BP in promising more investment in renewable energy. The risk is that deep-pocketed interlopers push up prices of wind farms and solar parks, eroding returns. Luckily for transitioning oil majors, the scale of new capacity needed to replace fossil fuels is vast.

North Sea drillers find mutually acceptable Plan B

6 Oct 2020

Private equity-owned Chrysaor and listed Premier Oil are uniting in a $7 bln merger. Ideally, the former would have gone public via an IPO, not a reverse takeover, and the latter’s creditors would have avoided a haircut. But the oil price rout left both with second-best choices.

Utility mega-deal may create wrong kind of sparks

30 Sep 2020

NextEra’s tilt at rival Duke could create a $200 bln giant, spanning clean-energy generation and lighting homes across the American south. NextEra’s juiced-up shares give it a currency. But the need to please watchdogs suggests a deal has to be harmonious, and probably expensive.