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The Zacks Analyst Blog Highlights: Noble Energy, Rosetta Resources, Royal Dutch Shell, Apache, Pioneer Natural Resources and Marathon Oil - Press Releases

For Immediate Release

Chicago, IL – May 13, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include theNoble Energy Inc. (NBL),Rosetta Resources Inc. (ROSE), Royal Dutch Shell plc (RDS.A), Apache Corp. (APA), Pioneer Natural Resources Co. (PXD) and Marathon Oil Corp. ( MRO).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

Oil & Gas Stock Roundup

It was a week where oil prices reached their highest level of the year and natural gas rallied to a seven-week high. On the news front, the top story came from Noble Energy Inc.’s (NBL) acquisition of Rosetta Resources Inc. (ROSE) for $2.1 billion.

Overall, it was a bullish week for the sector. While resurgent West Texas Intermediate (WTI) crude futures inched up 0.4% to close at $59.39 per barrel, natural gas prices jumped 5.3% to $2.88 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Integrated Business Model Saves Exxon, Chevron .)

Oil prices gained for the seventh time in past 8 weeks, encouraged by the U.S. Energy Department's latest inventory release that showed a surprise decline in crude stockpiles, the first such occurrence in 17 weeks. The report further revealed that supplies at the Cushing, Oklahoma storage hub fell for the second successive week.

These are seen as a precursor to a slowdown in oil production leading to a subsequent drop in the commodity’s bloated supply level. Things were further helped by the Baker Hughes report that showed another drop in oil-directed rigs – the 22nd in succession – indicating a brake in shale drilling activities.

Natural gas fared even better amid predictions of robust cooling demand with forecasts of warmer-than-average temperature in the Midwest and Northeast regions of the U.S.

Recap of the Week’s Most Important Stories

1. U.S. oil and gas group Noble Energy Inc. has agreed to acquire smaller rival Rosetta Resources Inc. for about $2.1 billion in stock. The transaction – that would also see Noble take on Rosetta’s debt of $1.8 billion – has been okayed by the boards of both companies but awaits regulatory and shareholder approval. Under the terms of the agreement, Rosetta shareholders will receive 0.542 shares of Noble for each share they hold. This values Rosetta shares at $25.26 apiece, a 30% premium to the pre-announcement closing price.

The deal, should it go through, will mark Noble’s entry into the Eagle Ford Shale and Permian Bain in Texas – both being among the country's most productive shale fields. The to-be-acquired assets have the potential to churn out about 1 billion barrels of oil equivalent and are expected to raise Noble’s output by 21%.

2. European oil major Royal Dutch Shell plc (RDS.A) has received a conditional approval from the U.S. Interior Department to restart drilling activities in the Arctic Ocean this year after it was forced to halt operations in 2012.

With the permission, Shell has crossed the biggest remaining barrier to go ahead with oil and gas exploration and production activities in the isolated waters. Investors must note that the approval is conditional as Shell must procure further authorization from the state of Alaska and the federal government, before starting operations this summer.

In Shell’s revised drilling plan, six prospective wells are lined up at 40 meters below the water, in the Chukchi Sea, off Alaska’s Arctic coast. For the exploratory activities, the integrated energy player will use two drilling rigs.

3. U.S. energy firm Apache Corp. (APA) reported narrower-than-expected first quarter loss, reflecting strong North American liquids production. The production of oil and natural gas (excluding divested assets) averaged 478,270 oil-equivalent barrels per day (BOE/d), up 10% year over year. However, the company’s performance deteriorated from the year-ago adjusted profit amid a plunge in oil prices.

Importantly, Apache decided to slash its rig count as it focuses on controlling costs amid plummeting crude realizations. But what is encouraging is the fact that North American onshore volumes have improved despite significantly lower well completions. As part of its portfolio rebalancing initiative, the oil and gas explorer recently sold its remaining Australian production business for $2.1 billion in cash. (See More: Apache Posts Narrower than Expected Q1 Loss on Volume Gains )

4. Irving, TX-based Pioneer Natural Resources Co. (PXD) also fell prey to the weak crude pricing environment, as the company swung to a loss. However, the independent oil and gas company’s strong production growth helped it minimize the damage.

Looking to stem the rot from plunging oil prices, Pioneer has reiterated its 2015 capital budget at $1.85 billion, down 45% from last year’s level. Of this, the company has planned drilling capex of $1.6 billion and capital for development of the Spraberry/Wolfcamp water infrastructure and vertical integration of $0.25 billion. (See More: Pioneer Reports Q1 Loss, Down Y/Y on Low Realization )

5. Houston, TX-based leading upstream energy firm Marathon Oil Corp. ( MRO) also posted narrower-than-expected first quarter loss, thanks to higher production from the U.S. resource plays and cost-control initiatives. But again, the bottom line deteriorated considerably from the year ago period amid a freefall in oil prices.

Marathon Oil reported North American production available for sale of 283,000 oil-equivalent barrels per day (BOE/d), up from 213,000 BOE/d in the first quarter of 2014. The company also announced that it has further trimmed its capital spending to $3,300 million in 2015 as it focuses on controlling costs amid plummeting oil prices. (See More: Marathon Oil Q1 Loss Narrower than Expected, Revenues Miss )

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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NOBLE ENERGY (NBL): Free Stock Analysis Report
 
ROSETTA RESRCS (ROSE): Free Stock Analysis Report
 
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
 
APACHE CORP (APA): Free Stock Analysis Report
 
PIONEER NAT RES (PXD): Free Stock Analysis Report
 
MARATHON OIL CP (MRO): Free Stock Analysis Report
 
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