Oil and Gas Eye Q2 2014

Main Market oil and gas movers

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Cairn Energy’s share price performed best among FTSE 350 oil and gas companies, rising 21% over Q2. In its interim management statement released in May, Cairn said it had reached a key milestone for the Kraken and Catcher fields in the North Sea. BNP Paribas has agreed to fully underwrite a debt facility to part fund the development of these assets.

EnQuest’s share price rose 16% over Q2. In June, it said it is expanding its footprint in Malaysia by buying ExxonMobil’s interest in the Seligi oil field and the PM8 Production Sharing Contract. Earlier in the quarter it said it had increased its offering of senior unsecured notes due 2022.

The price of Royal Dutch Shell’s London-listed shares increased 14% over Q2. In June, it further reduced its shareholding in Woodside Petroleum with the sale of shares representing 19% of Woodside’s issued share capital. Shell also announced the sale of some of its Eagle Ford shale acreage in Q2.

Tullow Oil also divested some non-core assets, including the sale of interests in two gas fields in the Southern North Sea. It experienced mixed exploration results over Q2, with disappointments in Ethiopia, Mauritania and Norway, but success in Kenya with the Twiga-2 exploratory sidetrack and the Ekunyuk-1 well. Its share price ended Q2 up 13%.

In June, Premier Oil announced the appointment of its Finance Director, Tony Durrant, as its new CEO. Premier enjoyed some exploration success over Q2, with an oil discovery in Indonesia and a gas discovery in Pakistan. It also made progress on its strategy to divest non-core assets, selling interests in fields in Norway and the UK North Sea. Premier’s share price ended Q2 up 15%.

In April, Premier Oil rejected Ophir Energy’s proposal to merge the two businesses, and Ophir has confirmed it is no longer considering making an offer for Premier.

Ophir was the only FTSE 350 oil and gas company to register a fall in share price over Q2. In June, it said the Okala-1 well offshore Gabon, in which it has a 50% operated interest, had not found significant hydrocarbons. The completion of drilling operations on this well marked the end of Ophir's 2014 exploration campaign in Gabon. Its share price ended Q2 down 9%.

Corporate deal activity in Q2 was not confined to the junior market.

In April, Energy Investments Global Ltd, a wholly owned subsidiary of Qatari-owned Al Mirqab Capital SPC, said it had reached agreement on the terms of a recommended cash offer for Heritage Oil. The deal values Heritage’s issued ordinary share capital at around £924 million.


Share price movements of FTSE 350 Oil and Gas Producers over Q2 2014

EY - Share price movements of FTSE 350 Oil and Gas Producers over Q2 2014

Source: Thomson Reuters Datastream