Mark Latham Commodity Equity Intelligence Service

Friday 16th September 2016
Background Stories on www.commodityintelligence.com

News and Views:

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    Macro

    Shipyard order books dry up


    Depressed rates result in decreased orders for new dry bulk mineral vessels in Asia.

    Shipyards will be hit by persistently low rates in the dry bulk, container and offshore markets, with this year expected to set the record for the lowest new building contracts in more than 20 years.

    The reduction in newbuild dry bulk may lift the Baltic Dry Index (BDI),

    http://www.indmin.com/Article/3585808/Shipyard-orderbooks-dry-up.html
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    China will shut small coal boilers to cut pollution but LNG oversupply will remain


    China aims to shut almost half a million small-scale coal boilers in its industrial sector by 2018, in what should have been a positive move for the liquefied natural gas (LNG) market.

    However, LNG prices will continue to struggle as massive new supplies come online in an already oversupplied market, ANZ analysts wrote in a recent report.

    The world's second-largest economy aims to cut its use of thermal coalas an energy source, in order to clean up its notoriously polluted air.

    China's annual LNG import growth is expected to increase as the country retires 400,000 small-scale coal boilers in the industrial sector by 2018, some of which will be replaced by gas boilers, ANZ said. A $3-per-mmBtu - mmBtu stands for one million British Thermal Units - reduction in China's regulated gas prices and lower domestic gas prices will also help encourage coal-to-gas switching as the East Asian giant aims to control air pollution, the house added.

    But China's LNG imports will still fall behind those of Japan and South Korea, which together account for almost half of global imports, ANZ calculated. And the forecast rise in Chinese imports will likely be offset by a bigger jump in supply.

    Natural gas prices hit their lowest level in almost two decades earlier this year, in turn hitting LNG, the super-cooled version of natural gas that's made for easier storage and shipping. Depressed oil prices - which hit prices across the commodities complex - did not help LNG prices either.

    Natural gas prices have since rebounded but the longer-term price outlook isn't positive, with global LNG supplies expected to rise 50 percent by 2020, wrote ANZ Research's strategists Daniel Hynes and Natalie Rampono

    http://www.cnbc.com/2016/09/15/china-will-shut-small-coal-boilers-to-cut-pollution-but-lng-oversupply-will-remain.html
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    India to invite mineral exploration bids from domestic and foreign agencies


    India’s Mines Ministry will soon be inviting bids for at least 20 mineral exploration blocks from domestic and international agencies to kick-start the New Mineral Exploration Policy (NMEP).

    The bidding process will mark the maiden entry of private domestic and international exploration companies under the newly unveiled NMEP.

    The 20 blocks will be the first lot from the 100 mineral blocks which have been selected for exploration by private domestic and international mineral exploration companies.

    Last month, the Central Empowered Committee under the Mines Ministry met with all stakeholders, including provincial governments, to remove roadblocks to sharing geological data with prospective bidders.

    The NMEP provides for launching mineral explorationprojects through private agencies and, subsequently, the government will auction off the identified explored mineral blocks on a revenue sharing basis if "auctionable" resourcesare discovered.

    Should exploration agencies not find auctionable resources, the policy provides for exploration investments and expenditures to be reimbursed on a normative basis.

    Mines Ministry officials pointed out that the start of bidding was significant in as much as it would be government's first step towards its purported goal of achieving 22% growth in mineral production and, in turn, ramping up the miningsector’s contribution to gross domestic production to 2% from 1% at present.

    As far as the government is concerned the Achilles Heel of Indian mining has been gross underexploration of potential mineral reserves. More so with exploration having until now been the sole domain of government agencies such asGeological Survey of India (GSI) and Mineral Exploration Corporation of India.

    An indication of tardy exploration is evident from data sourced from the Mines Ministry, which reveal that these agencies have grossly missed drilling targets during 2015/16.

    Government data show that GSI drilled 102 814 m during the year, against a target of 121 286 m for minerals such as iron-ore, manganese, rare earths and precious metals.

    According to the data, a drilling target for iron-ore of 12 500 m was set, of which only 5 150 m were completed. For base metals, only 12 022 m of drilling was completed against a target of 17 100 m. For limestone, the target was 11 200 m and 9 850 m were achieved, while for coal the target was 47 500 m and 45 149 m were achieved.

    It was also in this context and as reported by Mining Weekly Online on September 9, that besides inviting specialised domestic and foreign exploration agencies, the government was also pushing its State-owned mineral companies to transform into integrated ‘resource majors’ by undertaking mineral exploration projects.

    http://www.miningweekly.com/article/india-to-invite-mineral-exploration-bids-from-domestic-and-foreign-agencies-2016-09-15
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    Oil and Gas

    Tanker docks at Libya's Ras Lanuf oil port, Nafoura output resumes


    A tanker arrived at Libya's Ras Lanuf oil terminal on Thursday to load more than 600,000 barrels of crude, the first to dock at the terminal since at least 2014, a port official said.

    Separately, an oil official said production had restarted at the Nafoura field, which was closed in November 2015 due to force majeure at Zueitina port.

    Libya's National Oil Corporation said on Thursday it was lifting force majeure at three ports seized days earlier by forces loyal to eastern commander Khalifa Haftar, including Ras Lanuf and Zueitina.

    http://www.reuters.com/article/libya-security-oil-ports-idUSL8N1BR1TS
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    Statoil inks small-scale LNG cooperation deal with Lithuanian duo


    Lithuanian natural gas trading companies Litgas and Lietuvos Dujų Tiekimas, both part of Lietuvos Energija, on Thursday signed an agreement with Norway’s Statoil to boost the development of the small-scale LNG market in the Baltic region.

    The deal enables “reliable and flexible wholesale LNG supplies” at Lithuania’s first LNG import terminal in Klaipeda thus contributing to the development of the small-scale LNG market in the Baltic region, Litgas said in a statement.

    Lithuania, the largest of the three Baltic nations, started importing the chilled fuel via Höegh LNG’s FSRU independence in December 2014 in order to reduce its dependence on Russian pipeline gas supplies.

    The LNG is being imported under a revised deal Litgas has with Statoil.

    “We are very glad that we have strengthened our strategic partnership with Statoil. It is a major step for Lietuvos Energija, Klaipėda’s LNG terminal and for our country. We are entering into emerging Baltic small scale LNG market and the cooperation agreement not only allows to develop a successful business, but creates a potential for Klaipėda’s LNG terminal to become a regionalsmall scale LNG supply center as well,” said Dalius Misiūnas, chairman and CEO of Lietuvos Energija.

    “Important to note that this new activity would increase the usage of the terminal which, in turn, allows to lower its operational costs,” he added.

    According to the statement, the three companies believe that this segment will continue to grow in the coming years as LNG represents the best technology for marine users to comply with Sulphur Emission Control Area (SECA) requirements and competitive supply solutions are becoming more and more available.

    “Based on the latest trends in the Baltic Sea small-scale LNG market, there is a need for a wholesale supply point of LNG for the small scale LNG market to develop here. Klaipėda’s LNG terminal is conveniently located for LNG bunkering: it is based in the center of the Baltic Sea and can be reached in a day from the central part of sea and within three days from its farthest points,” the statement said.

    The chosen business model includes LNG modulation services at the Klaipeda terminal and the natural gas grid from Litgas and LDT and wholesale supply from the LNG terminal by Statoil to clients for further redistribution to the small and medium scale segments in the Baltic region.

    http://www.lngworldnews.com/statoil-inks-small-scale-lng-cooperation-deal-with-lithuanian-duo/

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    Three firms vie for BP's China petrochemicals plant: sources


    At least three leading chemical companies are set to vie for BP's stake in Chinese petrochemicals joint venture SECCO which could fetch more than $2 billion, sources close to the process said.

    Offers for the 50 percent stake, the British oil and gas company's largest investment in China, will be submitted in the coming days, the sources said.

    SK Chemicals Co Ltd, a pharmaceutical unit of South Korea's SK Group; Austrian plastics group Borealis, owned by Abu Dhabi's sovereign wealth fund IPIC and oil and gas company OMV; and privately-owned Switzerland-based chemicals company Ineos [INGRP.UL] are set to bid for the asset, the sources said, speaking on condition of anonymity as the information isn't public.

    At least one other company is considering entering the bidding round.

    BP's partner in the joint venture, state-owned China Petroleum & Chemical Corp (Sinopec), has a right of first refusal. It has said it is discussing the conditions put forward by BP, but has made no decision.

    BP and the three potential bidders declined to comment or were not immediately available to comment.

    SECCO, a venture formed in 2001, produces ethylene and propylene, which are used to make resins, plastics and synthetic rubbers.

    BP, like other of the world's top oil companies, is in the midst of a divestment drive in order to focus its business and boost cash flow in the wake of the halving of oil prices since mid-2014. It is planning sales worth $3-$5 billion this year.

    The company has sold more than $50 billion of assets since a deadly explosion on an oil rig in the Gulf of Mexico in 2010.

    BP has sold several assets to Ineos in recent years, including the Grangemouth refinery in Scotland as part of a $9 billion sale of the olefins and refining business Innovene in 2005.

    http://www.reuters.com/article/us-bp-china-chemicals-idUSKCN11L128
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    Shell strikes deal for $80m sale of its downstream Danish assets


    Oil major Shell said it has reached an $80million deal with Dansk Olieselskab for the sale of its assets in Denmark.

    The company’s operations in the region consists of the 70 thousand barrels of oil per day producing Fredericia refinery as well as local trading and supply activities.

    The transaction also includes long-term agreements for the supply of crude oil and feedstocks to the refinery.

    Shell currently employs 240 people in Denmark.

    In a statement Shell said it would remai employed by the company as it transfers to new ownership.

    The sale is expected to complete in 2017, subject to regulatory approval.

    The move is part of wider plans by Shell to concentrate its downstream operations on areas where it can be “most competitive” and follows the sale of Shell’s marketing business to Couche-tard earlier this year.

    https://www.energyvoice.com/marketinfo/119402/shell-strikes-deal-80m-sale-downstream-danish-assets/
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    Oil producer Ophir cuts capex again amid crude slump


    Oil and natural gas producer Ophir Energy Plc cut its 2016 capital budget for the second time this year to weather a crude price slump and said it had short-listed four potential partners for the Fortuna project in Equatorial Guinea.

    Ophir, which has producing assets mainly in Asia, said it planned to spend $140 million to $170 million on projects this year, down from its previous estimate of $150 million to $200 million.

    Ophir initially forecast capital spending of $175 million to $225 million for the year in January.  

    A steep fall in crude prices from mid-2014 highs has forced oil producers to rein in costs and develop low-cost projects.

    Ophir said it was ready to recommence its drilling programme and expected to drill three to five operated wells in 2017-18.

    The company, which has been seeking partners to help fund the Fortuna Floating Liquefied Natural Gas (FLNG) project since oilfield services company Schlumberger walked away from a deal in June, said it had short-listed potential partners for the downstream portion of the project.

    Ophir said the upstream part of the project was "technically ready" for a final investment decision and two consortia were still bidding for an engineering contract.

    Ophir said it pretax loss from continuing operations narrowed to $69.6 million for the six months ended June 30, from $123.3 million a year earlier, helped by cost cuts. Revenue fell 39.8 percent to $52.1 million

    http://www.reuters.com/article/ophir-results-idUSL3N1BR22M
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    Offshore Drillers Brace for More Pain Even With Bottom in Sight


    Offshore oil-rig operators, grappling with the biggest industry downturn in a generation, say they finally have the bottom in sight. The problem is, they could be stuck there for a long time.

    Transocean Ltd., which owns the biggest offshore-rig fleet in the world, believes utilization for floating units will reach bottom toward the middle of next year, Chief Financial Officer Mark Mey said at a conference organized by Pareto Securities ASA in Oslo. Seadrill Ltd., which owns the third-largest fleet, said utilization could stabilize as soon as the beginning of next year, and that rental rates had already bottomed out.

    Still, it’s impossible to say when those rates, which have dropped to about $200,000 a day from highs of $650,000 in 2013 for the most sophisticated units, will recover, said Seadrill Chief Executive Officer Per Wullf and Tom Kellock, a senior consultant at IHS Markit Ltd.

    “We don’t know where demand is going, and that’s a reflection of the oil price,” Kellock said in an interview. “Rates are going to come back more slowly than oil prices because of the overhang and the degree of competition and the oversupply of rigs, which is not at this stage being tackled.”

    Offshore drillers have been pounded by the collapse in crude prices in the past two years as oil companies slashed spending to protect their cash flow and shareholder payouts. Their predicament has been exacerbated by a wave of new rigs coming into the market that were ordered when demand was strong. Rig operators have reduced costs dramatically, but still have had to cut dividends, defer delivery of vessels and suspend or scrap existing ones.

    Bottoming Out

    The number of floating rigs on contract and working is expected to fall to about 120 in the middle of 2017 from about 160 currently, Transocean’s Mey said in an interview on the sidelines of the conference. It could take as long as a year before utilization bottoms out, IHS Markit’s Kellock said. As many as 60 more floaters need to be permanently scrapped, according to both Seadrill and IHS Markit.

    While Seadrill said utilization rates will need to reach 70 percent across the industry before rates start improving, Transocean and IHS Markit estimated 85 percent. Regardless, a recovery depends on higher, more stable oil prices, Ensco Plc Chief Financial Officer Jon Baksht, said during a presentation at the conference Wednesday.

    “You’ll have flat utilization” from the beginning of next year with operators “hunting” for work, Wullf said in an interview. “Then it’s a matter of the oil price.”

    Longer Glut

    While oil has recovered from the 12-year lows it reached in January, the International Energy Agency said this week that a global glut will last longer than previously expected, persisting into late 2017 as demand growth slows and supply keeps up, driven by record output from OPEC.

    For costly ultra-deepwater rigs, utilization rates of 70 percent won’t be reached until 2018 at the earliest, said Andrew Cosgrove, an analyst at Bloomberg Intelligence. “I agree rates are definitely at or near bottom, but we’re going to be walking along the ‘bottom of the bathtub’ for a while.”

    An extended period at the bottom looks especially threatening for Seadrill, which has the industry’s heaviest debt load, with about $9 billion at the end of the second quarter. The company, controlled by billionaire John Fredriksen, is currently negotiating with its 42 banks before it can be able to include bondholders, Wullf said at the conference. The company aims to have a solution in place by early December, he said.

    http://www.bloomberg.com/news/articles/2016-09-15/offshore-drillers-brace-for-more-pain-even-with-bottom-in-sight
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    Portugal ready to take bigger LNG transportation role, official says


    Europe could reduce its dependence on Russian natural gas by as much as 30% if it used more of Portugal and Spain’s LNG import capacity, a Portuguese government official told a Washington audience.

    It would not even require more pipelines because the two countries’ terminals could store LNG and ship it by tanker to eastern Europe and other customers, Portugal’s Minister of the Sea Ana Paula Vitorino said at the Atlantic Council on Sept. 14.

    The Sines LNG terminal in southern Portugal has a deepwater port that could be a storage and reexport hub if pipelines aren’t available, she said. “This would reinforce the role of the North Atlantic as a global LNG leader.”

    Noting that Portugal and the US are long-time maritime allies, she said the southern European nation also is interested in developing its deepwater oil and gas potential, more offshore wind and wave energy, and offshore methane hydrates.

    “There’s still a great deal of research and development needed before methane hydrates can be considered economically viable, although the Japanese have been very active in this,” Vitorino said. “It’s not an exaggeration to say that methane hydrates are seen as the kind of future resource today that shale gas was 15 years ago.”

    Developing more offshore energy—whether from traditional or renewable sources—will require dealing candidly with affected stakeholders, particularly municipalities, she said. “Many believe this kind of exploration and production can conflict with tourism and other businesses. We’re trying to explain these activities’ real impacts.”

    She said, “We’re also trying to improve our legal framework to make it more demanding. It’s the only way to assure our population that we’re doing this in the right way. We don’t have the kind of opposition you might see in other European countries because we’re moving slowly and cautiously.”

    http://www.ogj.com/articles/2016/09/portugal-ready-to-take-bigger-lng-transportation-role-official-says.html
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    ACCC chief Rod Sims exposes gas ban madness


    There is gas under virtually every Australian state and territory. It is one of the country's massive natural comparative advantages. Yet a collective madness seems to have overtaken state governments whereby much of the gas under the continent cannot be exploited amid environmental scaremongering that has conflated coal seam gas extraction through fracking with normal conventional gas drilling.

    The explosion in the development of natural gas over the past few years has put Australia on track to become the world's biggest liquefied natural gas exporter by 2017. Much of the gas has been developed offshore, but the massive increase in volume has meant that for the first time Australia is a big exporter.

    This has put strains on the local market. Domestic Australian consumers are used to gas being priced for domestic consumption only, and so are now struggling with the increased price as domestic consumption competes with demand from abroad. Overall, this is still beneficial for Australia: the increase in price will be offset by the cheaper imports we will be able to buy from the rest of the world.

    Yet this increase in price is not entirely the result of export markets or the gas-hungry Japanese energy sector after the Fukushima nuclear incident in March 2011 supercharged the demand for gas.

    Instead, it is state governments that are driving up the price for Australians, following either effective or complete bans on fracking for coal seam gas in NSW, Victoria and now the Northern Territory. It is a simple supply and demand equation: there is no new available supply to meet a massive increase in demand.

    In Victoria a permanent ban has been placed on both the extraction of coal seam gas, and extraordinarily,  conventional gas, which comes with none of the safety concerns that accompany fracking.

    Risks are manageable

    In addition, NSW has an effective ban on CSG, but as The Australian Financial Review said in August, at least NSW asked its chief scientist to assess the risks -- and found they were both manageable and likely to decrease over time. Victoria and the Northern Territory have opted for simple populism and banned exploration because a populist coalition of the environmental left and the farming right has mounted loud campaigns.

    Now Australian Competition and Consumer Commission chairman Rod Sims has raised the stakes in the debate. What Mr Sims calls a "triple whammy", has hit the gas market in eastern Australia: the introduction of LNG, the fall in oil prices and "regulatory uncertainty and exploration moratoria are significantly limiting the potential for new gas supply".

    In a speech in Darwin, Mr Sims has reinforced the fact that overall the problem with gas is a fundamental lack of supply, which, up until now, consumers in the south-east had been counting on being ameliorated by a supply of conventional gas coming from the Northern Territory.

    Yet Mr Sims said that with the NT's recent ban and the others in the south-east, "it is difficult to envisage where new gas supply will come from in the short to medium term to alleviate high gas prices looming for gas uses in the south". Mr Sims was succinct, saying the high gas prices are being driven by a lack of gas and maybe the absence of a better regulatory regimes for new pipelines

    And this costliness is a broader issue than mere heartburn for retail and industrial gas users. It complicates an already fraught landscape in the national electricity market.

    Gas-fired electricity is far cleaner than coal, yet with state-based mandated renewable energy targets (RETs) in Victoria and South Australia, the lack of new exploration means that gas cannot be part of a clean energy mix. Ironically this means that coal powered-energy may have to be maintained to provide baseload electricity when the wind does not blow in South Australia or Victoria. Alternatively, there is a very real chance the lights will go out.

    Read more: http://www.afr.com/opinion/editorials/accc-chief-rod-sims-exposes-gas-ban-madness-20160915-grgr2k#ixzz4KKxUXCIt
    Follow us: @FinancialReview on Twitter | financialreview on Facebook
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    Terminal decline and value benchmarking of mature US plays


    With the traditional US E&P farm system (smaller start-up companies executing exploration work and then selling successful de-risked operations to larger E&Ps) falling out of favour in the current low-price environment, many private equity-backed buyers have redirected their interest to longer-life, mature assets. We've modelled six mature gas plays to see which assets can offer the most upside to investors.

    This type of upstream investment opportunity is vast, with some estimates suggesting more than US$100 billion in private equity being raised specifically for energy, with nearly all of it concentrated in North America.

    One of the largest private equity-backed deals this year involved Terra Energy Partners (backed by Kayne Anderson) acquiring mature Piceance Basin gas assets from WPX for US$910 million.

    To better understand the opportunities offered by mature wells in producing plays, we benchmarked six US play datasets — aggregated from thousands of mature wells — by terminal decline rates for wells that had been online for more than 48 months. Our model also used common benchmarks fixed at 8% and 10% decline rates to show where the different plays fall.

    Image title

    Terminal decline rates vary widely, and some assets have returns more deeply tied to rising commodity prices and reduced costs than others. In multiple cases, better management of mature wells can offer superior opportunities to undrilled gas acreage.

    Looking at remaining NPV for these mature assets, we recognize that any operator's goal is to produce greater volumes at a lower costs and possibly higher prices, so we compared the upside of our mature wells to that of wells yet to be drilled. The sensitivities we modelled included a concurrent 20% opex reduction and a price increase of 20%. In particular, ArkLaTex Basin assets showcase a lot of potential.

    http://www.woodmac.com/lp/highest-returns/mature-us-plays/?utm_source=twitter&utm_medium=social&utm_campaign=sm-buyside-usmatureplays&utm_content=o

    Attached Files
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    Noble, Marathon Said to Weigh Bids for Permian’s Silver Hill


    Noble Energy Inc. and Marathon Oil Corp. are weighing bids for Silver Hill Energy Partners, a Permian Basin explorer that could fetch more than $2 billion in a sale, according to people familiar with the matter.

    Occidental Petroleum Corp. is also considering an offer for the Dallas-based company, said the people, who asked not to be identified because the matter isn’t public. Silver Hill is working with Jefferies Group LLC to find a buyer, with bids due next week, one of the people said.

    Representatives for Jefferies, Marathon and Occidental declined to comment, while representatives for Noble Energy and Silver Hill didn’t respond to requests for comment.

    The Permian Basin -- by far the most active shale field in the U.S. by rig count -- has been a hotbed of takeover activity in recent months as explorers seek to expand in an area that is one of the few places in the U.S. where drilling remains profitable amid depressed oil prices.

    Silver Hill was started in 2011, and has since raised more than $725 million from backers including Kayne Anderson Capital Advisors and Ridgemont Equity Partners, according to its website. It controls drilling rights on more than 42,000 net acres on the western shelf of the Permian in an area known as the Delaware Basin.

    Noble Energy expanded into the Delaware last year via its $3.9 billion takeover of Rosetta Resources Inc., which controlled about 46,000 net acres in the region. Occidental is one of the largest landholders in the Permian, with 5.4 million gross acres, according to its website.

    Marathon Oil Corp. has told investors it plans to sell off non-core assets to strengthen its finances and focus on drilling in highly profitable areas, after closing an $888 million acquisition in August of Oklahoma-focused producer Payrock Energy Holdings.

    http://www.bloomberg.com/news/articles/2016-09-15/noble-marathon-said-to-weigh-bids-for-permian-s-silver-hill
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    Gas E&P Vantage Energy re-files for an estimated $600 million IPO


    Vantage Energy, an oil and gas E&P operating in the Marcellus and Barnett Shale, filed on Tuesday with the SEC to raise an estimated $600 million in an initial public offering.

    The Englewood, CA-based company was founded in 2006 and booked $90 million in sales for the 12 months ended June 30, 2016. It plans to list on the NYSE under the symbol VEI. Vantage Energy filed confidentially on May 14, 2014. Goldman Sachs, Barclays, Credit Suisse, Citi, J.P. Morgan and Wells Fargo Securities are the joint bookrunners on the deal. No pricing terms were disclosed.

    The article Gas E&P Vantage Energy re-files for an estimated $600 million IPO originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.


    Read more: http://www.nasdaq.com/article/gas-eampp-vantage-energy-re-files-for-an-estimated-600-million-ipo-cm679108#ixzz4KKEF9VlL
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    Chesapeake Energy loses appeal in $438.7 million bond dispute


    A federal appeals court on Thursday rejected Chesapeake Energy Corp's effort to avoid having to pay $438.7 million, including interest, to investors in a bond dispute.

    By a 3-0 vote, a panel of the 2nd U.S. Circuit Court of Appeals in Manhattan said the payout was justified after the natural gas company had waited too long to tell bondholders of its plan to redeem $1.3 billion of their debt six years early.

    The court agreed with bond trustee Bank of New York Mellon Corp that hedge funds and other holders of Chesapeake's 6.775 percent notes maturing in 2019 were contractually entitled to a special "make-whole" price because of the early redemption.

    "To hold otherwise would frustrate the noteholders' legitimate expectations regarding their rights," the court said.

    The May 2013 redemption was intended to help Chesapeake reduce a debt burden that the Oklahoma City-based company had accumulated under Aubrey McClendon, then its chief executive, and offset natural gas prices that had sunk to a decade low.

    "We are disappointed with the ruling and will continue to pursue our legal options," Chesapeake spokesman Gordon Pennoyer said. "We were prepared for this potential outcome and have reserved the liquidity to address it."

    The payout comprised $379.7 million of contract-based damages, plus roughly $59 million of interest. That compared with the about $100 million that Chesapeake had hoped to distribute in "restitutionary" damages.

    Bank of New York Mellon acted as trustee on behalf of investors such as Ares Management LLC, Aurelius Capital Management LP, P. Schoenfeld Asset Management LP and Taconic Capital Advisors LP.

    The bank did not immediately respond to requests for comment.

    Thursday's decision upheld a July 2015 ruling by U.S. District Judge Paul Engelmayer in Manhattan.

    McClendon died on March 2 when his vehicle slammed into a concrete bridge abutment in Oklahoma. A medical examiner in June ruled the fiery crash an accident.

    The case is Chesapeake Energy Corp v. Bank of New York Mellon Trust Co, 2nd U.S. Circuit Court of Appeals, No. 15-2366.

    http://www.reuters.com/article/us-chesapeake-enrgy-bankofnewyorkmellon-idUSKCN11L1UI
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    Oil Services Firm Linked to Phony Elon Musk E-Mail Starts Probe


    Quest Integrity Group LLC said it’s looking into a claim that its finance chief impersonated Elon Musk in an e-mail to get inside information on Tesla Motors Inc., while calling “absurd” the electric car maker’s allegation of an oil industry conspiracy against alternative energy firms.

    Tesla alleged in a lawsuit Wednesday that Quest executive Todd Katz used the [email protected] to try last month to prompt Tesla’s chief financial officer to give him more detailed data than the the company released in announcing its second-quarter financial results.

    The Seattle-based oil pipeline engineering and inspection firm said Thursday it had started an internal investigation in response to the complaint filed in California state court in San Jose.

    “However, it is clear that unsubstantiated allegations of an alleged conspiracy among Quest Integrity, Team Industrial Services or our major oil company clients are absurd,” the company’s general counsel, Butch Bouchard, said in an e-mail.

    Energy Efficient

    Tesla said in its complaint that the e-mail was part of an oil industry effort to undermine the push for energy efficient transportation alternatives.

    “In recent years, oil companies have spent billions of dollars on legislative efforts and campaigns aimed at blocking progress toward electric cars and other sustainable energy solutions in the United States and abroad," Tesla said.

    Tesla declined to comment on Quest Integrity’s statement.

    In its complaint, Tesla said the e-mail received Aug. 3 by its CFO, Jason Wheeler, was signed “em.” The e-mail read, “Why you so cautious w Q3/4 guidance on call. What is ur best guess as to where we actually come in on q3/4 deliverables. Honest best guess. no bs.”

    http://www.bloomberg.com/news/articles/2016-09-15/oil-services-firm-linked-to-phony-elon-musk-e-mail-starts-probe
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    Alternative Energy

    JinkoSolar Has Signed A Master Module Supply Agreement With Con Edison Development in the U.S.


    JinkoSolar Holding Co., Ltd. , a global leader in the solar photovoltaic (PV) industry, today announced that its wholly owned subsidiary, JinkoSolar (U.S.) Inc., has entered into a  Master Module Supply Agreement  with CONSOLIDATED EDISON DEVELOPMENT, INC. , a New York State-based developer, owner and operator of large-scale renewable energy projects.

    In accordance with the MSA and multiple Purchase Order issued thereunder, JinkoSolar will supply high-efficiency polycrystalline 72-cell modules, totaling approximately 560 MW in capacity, to CED through August 2017. The Company has already begun shipping modules to project sites. JinkoSolar modules will be used to power various CED projects across multiple states in the U.S.

    "We are proud to have reached another significant milestone through this supply agreement with Con Edison Development," said Nigel Cockroft, General Manager of JinkoSolar (U.S.) Inc. "JinkoSolar's strong momentum in the U.S. solar industry is a direct result of our company's dedication to reliability in both module performance and customer support."

    "JinkoSolar has a clear understanding of the energy marketplace in which we operate," said Mark Noyes, President and CEO of Con Edison Development.  "It is important that our company continuously improves solar system efficiency in order to remain competitive with other energy sources. JinkoSolar's product roadmap and operational excellence are perfect fits for our company."

    http://www.prnewswire.com/news-releases/jinkosolar-has-signed-a-master-module-supply-agreement-with-con-edison-development-in-the-us-300328589.html
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    Aqua Dynamo – An Eco-Friendly Tidal Turbine


    Nofel lzz a Canadian entrepreneur has invented a tidal turbine ‘Aqua Dynamo’ which can harness the kinetic energy found in moving bodies of water and converts tidal energy into electricity. By implementing tidal turbines could lower greenhouse gas emissions by decreasing dependence of large cities on thermal power plants. Due to all of the embedded efficiencies and the unique design, the Aqua Dynamo can generate the equivalent amount of power at a savings of 90% of current costs” says Canadian entrepreneur Nofel Izz.

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    The powerful blades of the Aqua Dynamo’s turbines are designed to be hydrodynamic. This means the turbines can harness the kinetic energy found in moving bodies of water. These turbines generate enough clean energy to power over three million homes while taking up only 200 acres or less of water space claims Aqua Dynamo website.

    The Tidal Aqua Dynamo Stream Turbines can also be called an “underwater windmill”. These Tidal Stream Turbines generate power from sea currents like wind turbines from the air but are more efficient and more cost-effective than the wind turbines and also than other tidal turbines currently in use. The major advantage these turbines have over windmill is the density of water, which is 832 times more than air and hence can produce the same electricity with 1/10 of the velocity as with a wind turbine. It is designed to incorporate a pod consisting of four blades that harness the power of tidal currents to generate electricity using axial flow turbines that drive generators via gearboxes. They use tidal movements to capture kinetic energy while the surging and ebbing of water currents to generate electricity. This is directly proportional to the amount of the cross-section of flow the system is capable of addressing.

    The exclusive aqua dynamic blade shape, along with its blade design, characterized by mini hydrofoils, increases the efficiency of this invention and increases the efficiency of the spinning blades, as per their website.

    http://renewableenergy.com/blog/2016/09/15/aqua-dynamo-an-eco-friendly-tidal-turbine/?utm_source=twitterfeed&utm_medium=twitter

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    Agriculture

    Farmers must have choice post Bayer-Monsanto merger - EU's Vestager


    European Union anti-trust chief Margrethe Vestager said on Thursday that farmers must continue to have a choice when buying seeds and pesticides after the merger between Bayer and Monsanto.

    The German drug and crop chemical maker on Wednesday clinched a $66 billion takeover of U.S. seeds company Monsanto.

    Vestager added that the agriculture market was already very concentrated with a small number of global players dominating the industry.

    http://www.reuters.com/article/monsanto-ma-bayer-eu-idUSL8N1BR3XH
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    Monetary Lunacy: The ECB Could End Up Funding Bayer's Purchase Of Monsanto


    One month ago, we were surprised to report that the junk bond issued by French telecom company Numericable would, after its 100%+ upsizing, become the largest high yield bond on record. As we explained this was a direct consequence of the unprecedented intervention by the ECB in the European bond market unveiled one month prior, which courtesy of Mario Draghi's backstop to all non-financial corporate bond issuance, had made a virtual certainty that the European bond corporate market was the next bubble as there was effectively no longer any risk in holding not only investment grade, but also junk paper, now that starved for yield investors would flood into anything that carried even a modest yield premium.

    Today we find an even more striking example of just how broken the global bond market has become thanks to the ECB because as Reuters writes, Bayer could receive financing from none other than the European Central Bank to help fund its takeover of the world's largest seed company, US-based Monsanto, according to the terms of the ECB's bond-buying program.

    As reported yesterday, Monsanto turned down Bayer's $62 billion bid on Tuesday, but said it was open to further negotiations. Bayer, which many were surprised by its eagerness to pursue a quasi-hostile offer, promptly agreed to get more actively involved in the negotiation process. Now we know why: the cost of debt would be funded by none other than the European Central Bank.

    As we documented back in March when describing the terms of the ECB's CSPP, or corporate bond buying program, the ECB can buy bonds issued by companies that are based in the euro area, have an investment-grade rating and are not banks, provided that they are denominated in euros and meet certain technical requirements. The purpose for which the bonds are issued is not among the criteria set by the ECB, which will start buying corporate bonds on the market and directly from issuers next month.

    It now appears the "use of funds" may be M&A, and even LBOs.

    http://www.zerohedge.com/news/2016-05-25/monetary-lunacy-ecb-could-end-funding-bayers-purchase-monsanto
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    Precious Metals

    Barrick Gold Corporation: Temporary Suspension of Operations at Veladero Mine


    Barrick Gold Corporation today reported that the Government of San Juan province, Argentina has announced a temporary suspension of operations at the Veladero mine pending further inspections of the mine's heap leach area. The company will work with provincial authorities to confirm the integrity and safety of the heap leach facility as quickly as possible, beginning today.

    The safety of people and the environment remains Barrick's top priority at Veladero. On September 8, 2016 a pipe carrying process solution in the heap leach area was damaged when it was struck by a large block of ice that had rolled down the heap leach valley slope. A small quantity of solution left the leach pad as a result. No solution from this damaged pipe reached any water diversion channels or watercourses and the impacted area in the leach valley has now been remediated. The incident did not pose any threat to the health of employees, communities or the environment.

    Environmental monitoring of surface and sub-surface water has been intensified and no anomalies have been detected.

    At this time, we do not anticipate any material impact to Veladero's 2016 operating guidance.

    http://finance.yahoo.com/news/barrick-gold-corporation-temporary-suspension-114951338.html
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    Base Metals

    Lundin gets second bid extension on Freeport Congo mine stake


    Canadian base metals miner Lundin Mining Corp has won a two week extension until Sept. 29 to bid on Freeport-McMoRan Inc's stake in the Tenke Fungurume copper and cobalt mine, Lundin said in a statement on Thursday.

    Lundin, previously granted an extension to Sept. 15, said it continues to review, with legal and financial advisors, its ownership in the Democratic Republic of Congo mine, one of the world's largest copper deposits.

    The Toronto-based company would not comment on why it needs more time, but director of business valuations and investor relations Mark Turner repeated that Lundin has credible interest from multiple parties on a number of scenarios.

    Lundin, which primarily produces copper, nickel and zinc, has a 24 percent share of Tenke, while Freeport holds 56 percent and Congo's state miner Gecamines has the remaining 20 percent.

    Phoenix-based Freeport, which has been selling assets to cut its large debt load, agreed in May to sell its Tenke stake to China Molybdenum (CMOC) for $2.65 billion.

    Under a 'right of first offer', Lundin can supplant any bids for the mine by matching them. It can also decide to sell its stake or do nothing and allow the China Moly deal to proceed.

    Lundin, which has hired Bank of Montreal to help it consider options, told Reuters in June that it was weighing interest from multiple parties.

    RBC analyst Fraser Phillips said Lundin is most likely to maintain its 24-percent interest, with China Moly operating the mine. The next likely scenario is that Lundin sells its stake, but with a lower valuation than Freeport, which held a controlling interest, he wrote in a note to clients on Thursday.

    The transaction size makes a counter-bid unlikely, some analysts say. Lundin, whose shares rose 2 percent to C$5.08 on the Toronto Stock Exchange on Thursday morning, has a market capitalization of about C$3.59 billion ($2.72 billion).

    http://www.reuters.com/article/lundin-min-tenke-fungurume-idUSL2N1BR14N
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    Ravensthorpe could be expanded - EPA


    Members of the public would have until September 20 to comment on Canadian firm First Quantum’s plans to expand its Ravensthorpe operations, in Western Australia.

    The Western Australian Environmental Protection Authority this week released documents in which First Quantum applied to expand its operations by mining the Hale-Bopp and Shoemaker-Levy orebodies.

    First Quantum has also applied for a revision of the alignment of the infrastructure corridor between the Shoemaker-Levy orebody and the processing area.

    Mining operations in the propsed Hale-Bopp openpit would use the same processes as the existing operations, and ore from the pit would be transported via an existing access road to the same processing facility.

    The revised corridor between the Shoemaker-Levy orebody would be used to transport ore from this mine initially via road, and then later by conveyor, to the existing ore processing site.

    Furthermore, First Quantum was also hoping to incorporate neutralized tailings to the reject rocks used to backfill the mine pits and re-establish hill topographies.

    The expansion would mean the clearing of up to 113 ha of land within a 252 ha development envelope.

    The current Ravensthorpe operation includes a 38 000 t/y nickel plant and the project had a mine life of some 30 years.

    http://www.miningweekly.com/article/ravensthorpe-could-be-expanded---epa-2016-09-16
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    Steel, Iron Ore and Coal

    Iron-ore hits the skids as miners, banks wrangle over supply


    After a stellar run in 2016, iron-ore has hit a rough patch. The prospect of a slump below $50 a metric ton is now back in view after the longest losing streak in more than five months as investors, analysts and miners spar over the impact of additional low-cost supply.

    The raw material with 62% content delivered to Qingdao lost 5.8% in the past seven sessions to $55.97 a dry ton, according to Metal Bulletin. That’s the longest run of daily declines since March, and has pegged back this year’s gain to 28% from as much as 62% in April.

    Iron-ore has retreated in September, rekindling speculation that rising supply from mine ramp-ups and new projects may soon drag prices lower. While miners Vale and Cliffs Natural Resources contend that the impact of the new output won’t be severe as expected and see the $50 level holding, Citigroup and Westpac Banking have said that additional production will probably contribute to weaker prices.

    “Prices appear to be responding to the potential for increased supply as we move into the fourth quarter,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “The risk looks to be to the downside now. It’s certainly possible we could see prices below $50 from here.”

    WEEKLY LOSSES

    SGX AsiaClear futures in Singapore have dropped for the past five weeks in the longest run since 2014, and the forward curve shows prices back below $50 in December. Financial markets in China, including iron-ore futures in Dalian, are shut for the rest of this week for the Mid-Autumn Festival holiday.

    New supplies are coming from Australian billionaire Gina Rinehart’s Roy Hill mine in the Pilbara, as well as Vale’s giant S11D project, which is expected to ship its inaugural cargoes in January. Roy Hill Holdings CEO Barry Fitzgerald said on Wednesday that it’ll reach full capacity of 55-million tons only in early 2017 instead of late this year.

    Vale said Tuesday that while S11D has capacity to produce 90-million tons a year, constraints mean the net gain will be 75-million tons. It will take four years to reach full output, according to  Peter Poppinga, head of ferrous minerals, who expects the market to be balanced into 2017. Cliffs CEO Lourenco Goncalves has said S11D is a “replacement mine, not addition of more tons.”

    BHP'S VIEW

    Others are more bearish. BHP Billiton says prices will probably drop as the underperformance of supply this year is reversed over the next 12 to 18 months. Westpac said last month rising supply will drive prices below last year’s nadir of $38.30, while Citigroup expects an average of $45 next year.

    Exports from the top two shippers will expand faster next year than China’s imports, according to the Australian government’s latest outlook. Australia and Brazil will probably ship a combined 1.3-billion tons, 6.5% more than this year, while China’s imports will climb 0.7% to 981-million tons.

    “Iron-ore is susceptible to price weakness because the fundamentals of the sector are not compelling,” said Gavin Wendt, founding director & senior resource analyst at MineLife in Sydney.

    “Supply remains abundant and the strength of Chinese demand remains questionable.”

    http://www.miningweekly.com/article/iron-ore-hits-the-skids-as-miners-banks-wrangle-over-supply-2016-09-15
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    Vale: Fortescue blending JV talks stall


     Talks between iron ore giants Vale and Fortescue on establishing joint blending and distribution facilities in China for their product ranges have been delayed, with Vale ferrous minerals division chief Peter Poppinga telling Bloomberg that nothing would happen in 2016.

    Fortescue said negotiations on the JV plan were continuing, and it remained hopeful of concluding an agreement in months.

    http://www.miningbusiness.net/content/vale-fortescue-blending-jv-talks-stall
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