The Zacks Analyst Blog Highlights: BP, Halliburton, Royal Dutch Shell, Encana and Weatherford International

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Sep 10, 2014, 09:30 ET

CHICAGO, Sept. 10, 2014 /PRNewswire/ -- 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 the BP plc (NYSE:BP-Free Report), Halliburton Co. (NYSE:HAL-Free Report), Royal Dutch Shell plc (NYSE:RDS.A-Free Report), Encana Corp. (NYSE:ECA-Free Report) and Weatherford International plc (NYSE:WFT-Free Report).

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

The past week was all about the 2010 Macondo oil spill verdicts, wherein BP plc (NYSE:BP-Free Report) was found culpable for the disaster but Halliburton Co. (NYSE:HAL-Free Report) escaped with a $1.1 billion fine.

Overall, it was a bad week for the sector. West Texas Intermediate (WTI) crude futures declined for the ninth time in 11 weeks – this time by 2.8% – to close at $93.29 per barrel. Meanwhile, natural gas prices shed 0.7% over the period and ended the week at around $3.79 per million Btu (MMBtu). (See last 'Oil & Gas Stock Roundup' here: New Discoveries for Shell, Quicksilver.)

Oil prices slumped below $95 a barrel again on weaker-than-expected U.S. employment data and easing geopolitical tension. The negative sentiment was further compounded by a bearish inventory data that fueled demand worries.

Natural gas also edged down, as it had to deal with another above-average supply increase. The commodity was also pulled down by expectations of tepid electric power demand with forecasts of cooler weather across most parts of the U.S.

Recap of the Week's Most Important Stories

1. Oil giant BP is likely to suffer billions of dollars in civil penalties due to misconduct and gross negligence that led to the worst offshore oil spill in U.S. history, as per a ruling by a federal judge on Thursday. BP had continuously maintained that a strong ruling over America's biggest offshore oil accident could be evaded. The oil firm had agreed to pay $4 billion in criminal fines. However, U.S. district judge Carl Barbier's verdict that BP had been reckless as well as negligent dragged down the stock price around 6%. The long-awaited judgment from the New Orleans court wiped off over 5 billion pounds off its stock market value although BP pledged to instigate an appeal. (Read More: BP's New Fine from Deepwater Horizon Spill Hits Shares.)

2. Oilfield services behemoth Halliburton has agreed to shell out approximately $1.1 billion as settlement fees for its involvement in the 2010 Macondo oil spill incident. The agreement is likely to clear most of Halliburton's liability in the incident, while removing the financial overhang from the stock. However, the payment – which will go into a trust in three installments over the next two-year period – still needs to be approved by the United States District Court for the Eastern District of Louisiana. (Read More: Halliburton Agrees on $1.1B Macondo Settlement.)

3. Royal Dutch Shell plc (NYSE:RDS.A-Free Report), leading European oil major, declared that it has commenced the production of oil and natural gas from its Cardamom field, located at a water depth of more than 2,700 feet in the U.S. Gulf of Mexico. The Cardamom field – discovered in 2010 – has a capacity to produce at a rate of roughly 50,000 barrels of oil equivalent a day. Cardamom is the second most important deep water oil and gas project that Shell has started operating in the U.S. Gulf this year. The first major start-up was the Mars B deepwater development in the same region, where Shell started production in Feb 2014. Shell has 100% ownership in the Cardamom project.

4. Natural gas exploration and production company Encana Corp. (NYSE:ECA-Free Report) announced that it has signed a deal with a syndicate of underwriters to sell its stake in PrairieSky Royalty Ltd., the company that Encana had spun-off in May. The underwriters, who would in turn offer the shares to investors, would buy Encana's remaining 54% stake in PrairieSky, representing 70.2 million common shares, at C$36.50 per share. Encana is expected to receive C$2.6 billion from the transaction. The offered price is over 30% higher than the initial public offering (IPO) price of C$28 per share.

5. Weatherford International plc (NYSE:WFT-Free Report), the Swiss provider of equipment for the oil and gas industry, announced the divestment of its pipeline and specialty services business to larger rival Baker Hughes Inc. The sale is part of Weatherford's previously announced plan to divest its non-core businesses. The divestiture has added $241 million in cash to the company's kitty and $9 million in retained working capital. Weatherford International would mainly use the proceeds from the transaction to pay down outstanding debt. (Read More: Weatherford Divests Pipeline and Specialty Services Business.)

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