Energy Sector Review: Baker Hughes Waning, Diamond Offshore Deal

YPF SA (NYSE:YPF): Argentina’s government is not seeking to nationalize YPF (NYSE:YPF) but does want the company to boost its production, according to Cabinet Chief Juan Manuel Abal Medina, reported Bloomberg, citing his statements in an interview with Radio Continental. Following the interview, shares of YPF are up 16% to $31.82 in pre-market trading.

The shares closed at $29.72, up $2.28, or 8.31%, on the day. Its market capitalization is $11.69 billion.

Hercules Offshore, Inc. (NASDAQ:HERO): Diamond Offshore (NYSE:DO) announced the execution of a definitive agreement to sell its subsidiary’s jack-up drilling rig, Ocean Columbia, to a subsidiary of Hercules Offshore (NASDAQ:HERO) for a sale price of $40M in cash. The transaction is expected to close in May, subject to customary closing conditions. After the transaction closes, employees currently working on the rig will have opportunities to remain with Diamond Offshore, where they may be reassigned within the fleet. Additionally, its current newbuild projects, three ultra-deepwater drillships and a deepwater semisubmersible rig, will create significant employment opportunities as the rigs are delivered from the shipyards in 2013 and 2014.

The shares closed at $5.38, up $0.3, or 5.91%, on the day. Its market capitalization is $743.30 million.

Baker Hughes Incorporated (NYSE:BHI), Basic Energy Services (NYSE:BAS), Halliburton Company (NYSE:HAL): Baker Hughes (NYSE:BHI), which provides products to energy exploration companies, announced this morning that it expects its Q1 pre-tax operating profit to decline compared with the previous quarter. Moreover, the company anticipates that its North American operating profit before tax margin will drop to 13.2%-14.2% compared to 18.7% in Q4. The operating profit before tax margin for international operations will fall to 12.2%-13.2% versus 15.6% in Q4, Baker Hughes forecast. The shift away from natural gas drilling is negatively impacting the company’s pressure pumping products, explained Baker. International trends are being negatively affected by seasonality, weather, and project delays in Latin America, added Baker Hughes, which said it expects to adjust the capital expenditures for its pressure pumping products to align more closely to current market conditions. In early trading, Baker Hughes dropped $1.88, or 3.93%, to $45.94. Other providers of energy exploration equipment also retreated, with Halliburton (NYSE:HAL) sliding 1.96% to $34.08, Basic Energy (NYSE:BAS) retreating 4.70% to $17.24, C&J Energy (NYSE:CJES) giving back 2.99% to $18.20, Patterson-UTI (NASDAQ:PTEN) falling 2.67% to $17.66, RPC (NYSE:RES) falling 2.50% to $10.15, and Superior Energy (NYSE:SPN) losing 2.95% to $26.95.

BHI shares closed at $45.04, down $2.78, or 5.81%, on the day. Its market capitalization is $19.71 billion. BAS shares closed at $17.04, down $1.05, or 5.8%, on the day. Its market capitalization is $726.47 million. HAL shares closed at $34.13, down $0.63, or 1.81%, on the day. Its market capitalization is $31.50 billion.

Exxon Mobil Corporation (NYSE:XOM): ExxonMobil (NYSE:XOM), BP (NYSE:BP), and ConocoPhillips (NYSE:COP) are considering a $40B project to export liquefied natural gas from Alaska to Asia and the companies and Alaskan authorities hope to reach a deal next week to settle a long-running lease dispute at Point Thomson, according to Financial Times, citing sources.

The shares closed at $86.01, down $0.59, or 0.68%, on the day. Its market capitalization is $405.38 billion.

Chevron Corporation (NYSE:CVX): A spokesman for the federal prosecutors’ office in Rio de Janeiro said criminal charges against executives from Chevron (NYSE:CVX) and Transocean (NYSE:RIG) “most likely” will be put before courts there today, according to The Associated Press. A judge will then decide if the executives will face trial, which could be a lengthy process given the nature of the case and Brazil’s legal system, the report noted.

The shares closed at $107.91, down $1.17, or 1.07%, on the day. Its market capitalization is $213.33 billion.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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