The Zacks Analyst Blog Highlights: Linn Energy, Chevron, Devon Energy, Petrobras and Occidental Petroleum

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Oct 08, 2014, 09:30 ET

CHICAGO, Oct. 8, 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 Linn Energy LLC (Nasdaq:LINE-Free Report), Chevron Corp. (NYSE:CVX-Free Report), Devon Energy Corp. (NYSE:DVN-Free Report), Petrobras (NYSE:PBR-Free Report) and Occidental Petroleum Corp. (NYSE:OXY-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

It was a week where Linn Energy LLC (Nasdaq:LINE-Free Report) struck twin deals to raise $2.3 billion from asset sales and Chevron Corp. (NYSE:CVX-Free Report) decided to offload its 30% stake in a Canadian play.

Overall, it was a mixed week for the sector. West Texas Intermediate (WTI) crude futures declined by nearly 4% – the third decrease in 4 weeks – to close at $89.74 per barrel. Natural gas prices, however, inched up 0.2% to $4 per million Btu (MMBtu). (See last 'Oil & Gas Stock Roundup' here: Encana Bets on Oil, To Buy Athlon Energy for $7.1B.)

Oil prices fell below $90 to their lowest level since Apr 2013 on plentiful supplies and lackluster demand. Moreover, a stronger dollar made the greenback-priced crude dearer for investors holding foreign currency. The negative sentiment was partially offset by the strong jobs report.

Natural gas fared better, shrugging off another above-average supply increase. The commodity was buoyed by expectations of strong heating demand with forecasts of cold early-winter weather across northeastern U.S.

Recap of the Week's Most Important Stories

1. Upstream energy firm Linn Energy LLC has entered into two separate deals to sell its $2.3 billion worth oil and gas resources in Texas and Oklahoma. The proceeds will likely be used to pay back the debt that Linn Energy took to finance the natural gas rich asset it purchased from Devon Energy Corp. (NYSE:DVN-Free Report). The first agreement will see Linn Energy sell all its holdings in the Granite Wash and Cleveland plays to private equity firm EnerVest Ltd. for $1.95 billion. In the other transaction, Linn Energy is disposing part of its resources in the Midland Basin to Fleur de Lis Energy LLC – another private energy firm – for $350 million. (Read More: Linn Energy to Fund Devon Buyout with $2.3B Asset Sale.)

2. San Ramon, CA-based energy giant Chevron Corp.'s Canadian affiliate has entered into an agreement with KUFPEC Canada Inc. to sell 30% of its stake in Duvernay shale play, located in west-central Alberta. The transaction is valued at $1.5 billion and will expectedly close in Nov 2014. Chevron still remains the operator of the assets with 70% interest. This agreement has led to creation of a joint venture partnership, in which both the parties will work toward development of the 330,000 net acres in the Kaybob area in the play.

3. The U.S.-listed shares of Brazilian state-run energy giant Petrobras (NYSE:PBR-Free Report) jumped 13% yesterday following a favorable outcome from the first round of voting in the Brazilian presidential elections. Incumbent Dilma Rousseff, whose price control measures have hurt Petrobras' revenues and earnings, was expected to have majority of the votes. However, challenger Aecio Neves also received substantial votes in the first round of the polls and is seen gaining popularity. The stock price increased on anticipation of a favorable outcome in the final round of the election on Oct 26. The stock was also helped by the announcement of a gas discovery in the Espírito Santo Basin.

4. Argentine energy explorer Pluspetrol Resources Corp. has agreed to acquire Tulsa-based Apco Oil & Gas International Inc. for $427 million in cash. The transaction has been okayed by Apco's board but awaits regulatory and shareholder approval. Under the terms of the agreement, Apco shareholders will receive $14.50 in cash for each stock they hold. This cash offer values Apco shares at a 15% premium to the pre-announcement closing price. Importantly, the deal has been approved by Apco's majority owner, WPX Energy Inc.

5. Los Angeles-based energy explorer Occidental Petroleum Corp.'s (NYSE:OXY-Free Report) board of directors have approved the spin-off of the company's Californian oil and natural gas business to create an independent entity called California Resources Corp. (California Resources). The transaction is likely to happen on Nov 30, 2014, through the distribution of around 80.1% of the outstanding shares of California Resources to shareholders of Occidental Petroleum common stock. The new company will trade on the New York Stock Exchange under the symbol 'CRC' beginning Dec 1, 2014. Additionally, Occidental's board authorized the repurchase of an additional 60 million shares to 76 million.

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

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