U.S. Markets closed

The Zacks Analyst Blog Highlights: Spectra Energy, Enbridge, Apache, EOG Resources and Tesoro

Zacks Equity Research

For Immediate Release

Chicago, IL – September 14, 2016 – 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 Spectra Energy Corp. (SE), Enbridge Inc. (ENB), Apache Corp. (APA), EOG Resources Inc. (EOG) and Tesoro Corp. ( TSO).

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 both oil and gas prices finished higher.

On the news front, pipeline giants Spectra Energy Corp. (SE) and Enbridge Inc. (ENB) agreed to merge in a stock-for-stock deal worth $28 billion, while energy explorer Apache Corp. (APA) announced a massive discovery in West Texas' Permian Basin.

Overall, it was a good week for the sector. West Texas Intermediate (WTI) crude futures added 3.2% to close at $45.88 per barrel, while natural gas prices edged up by a meagre 0.2% to $2.797 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: BP & CNPC Ink Shale Gas Deal, Diamond Offshore Loses Rig Contract Early .)

Oil prices moved north for the first time in 3 weeks after the U.S. Energy Department's weekly inventory release showed that crude stockpiles recorded a huge drop. As per the federal government’s EIA report, oil inventories decreased by a massive 14.51 million barrels for the week ending Sep 2, 2016 – largest in 17 years. The outsized drop resulted from a tumble in net imports as Tropical Storm Hermine moved into the Gulf of Mexico and prevented tankers from docking.

Oils-Energy Sector Price Index

Natural gas also eked out a small gain following a lower-than-expected build and predictions of strong cooling demand with forecasts of warmer temperature over the next few days.

Recap of the Week’s Most Important Stories

1. Leading midstream energy companies Spectra Energy Corp. and Enbridge Inc. have decided to merge in a $28 billion transaction with an aim to create the largest energy infrastructure company in North America. The deal will likely be closed by the first quarter of 2017. Post-merger, Enbridge shareholders will have a 57% ownership in the combined entity and Spectra Energy will have the remaining 43% interest.

The amalgamation will form one of the largest global energy infrastructure firms with the merger of the two companies’ highly complementary platforms. With a diverse base of assets that comprises crude, liquids and natural gas pipelines along with terminal and midstream operations, the merged entity will be able to reach key supply basins and markets.

The combined firm is also believed to have solid balance sheets and enough cash flow generating capacity to finance future growth projects. Moreover, the merger will combine two secured giant projects worth $20 billion and $37 billion that are under development. (Read more: Spectra Energy, Enbridge Enter into $28 Billion Merger Deal .)

2. U.S. energy explorer Apache Corp. reported that it has made a significant new discovery in the Alpine High, which is located in the southern portion of the Delaware Basin in western Texas. The find is expected to contain about three billion barrels of oil and 75 trillion cubic feet of rich gas.

The site - which cost Apache $1,300 per acre for 352,000 gross acres (307,000 contiguous net acres) is expected to generate anywhere from $8 billion to $80 billion in revenue for the company over the life of the wells.

To accelerate drilling in the discovery, Apache has raised its full-year 2016 capital budget by 11% to $2 billion. Per the company, the west Texas field has the potential to become one of the largest discoveries in a decade. (Read more: Apache Announces Discovery of New Oil Field in Texas .)

3. Oil and gas company EOG Resources Inc. (EOG) has agreed to acquire privately held Yates Petroleum Corp. in a $2.5 billion stock and cash deal. Over the years, Artesia, New Mexico-based Yates has gained a rich acreage position across the western U.S. - producing 29,600 barrels of oil equivalent per day (48% oil). EOG Resources currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

EOG Resources, on the other hand, is the largest oil producer in the Lower 48, with average net daily production of 551 thousand barrels of crude oil equivalent. The company is reputed for technological leadership in the development of unconventional resource plays.

The combination of EOG Resources’ strong technical competencies with the massive resource potential of the Yates acreage is expected to create significant value for shareholders of both companies. In particular, EOG Resources' inventory of premium drilling locations will grow by 40% as Yates immediately adds an estimated 1,740 net premium drilling locations in the Delaware Basin and Powder River Basin. (Read more: EOG Resources to Combine with Yates; Deal Valued at $2.5B .)

4. San Antonio, TX-based refiner Tesoro Corp. (TSO) announced that it has decided to purchase the Madison, WI-based renewable fuels and chemical company, Virent. The deal – whose terms were not disclosed – is intended to support the latter in bringing biofuels technology to commercial scale.

Per the agreement, Tesoro will provide resources and expertise to Virent in order to help the company scale up and commercialize its BioForming technology for the production of low carbon bio-based fuels and chemicals.

Moreover, Tesoro expects the addition of Virent will help it to lower costs in compliance with the federal renewable fuel standard and California`s low carbon fuel standard. (Read more: Tesoro Agrees to Acquire Renewable Fuels Company Virent .)

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

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
SPECTRA ENERGY (SE): Free Stock Analysis Report
 
ENBRIDGE INC (ENB): Free Stock Analysis Report
 
APACHE CORP (APA): Free Stock Analysis Report
 
EOG RES INC (EOG): Free Stock Analysis Report
 
TESORO CORP (TSO): Free Stock Analysis Report
 
To read this article on Zacks.com click here.