Apache (NYSE:APA) Soars as BP (NYSE:BP), Mariner (NYSE:ME) Expansion Deals Near Completion

Apache Corp. (NYSE:APA) closed the part of their deal with BP (NYSE:BP) for their oil and gas assets in Egypt, while are set to also close their acquisition of Mariner Energy Inc. (NYSE:ME) once shareholders vote on Wednesday on whether or not to approve the deal, which is valued at $2.6 billion.

The overall deal with BP was for $7 billion, including a variety of assets around the world.

Talking on their earnings call Thursday, Chief Executive Officer Steven Farris said, "The most important thing we face is how we allocate the cash flow that we have. That is key to taking advantage of what we bought. I think we have a truly formidable asset base now."

Company leaders said their major focus going forward will be to integrate the recent acquisitions into the operations of the company.

Profit for the most recent quarter rose to $778.3 million, or $2.12 a share, 76 percent over the $442 million, or $1.30 a share generated last year in the same quarter.

Earnings per share, even though solid, did significantly miss analysts' expectations of $2.24 a share.

The aggressive expansion and its near completion clouded out the miss by Apache, and share price soared by $5.21, closing at $107.79, a 5.08 percent increase.

Magellan Midstream (NYSE:MMP) Gasoline and Diesel Volumes Increasing

Magellan Midstream (NYSE:MMP) performed close in line to estimates, and UBS (NYSE:UBS) maintains their "Buy" on them, saying gasoline and diesel volumes exceeded expectations.

UBS said, "Excluding non-cash items, MMP achieved 3Q10 EPU of $0.58 versus UBS’ and consensus’ $0.61/$0.55 estimates, respectively. Despite integrity testing in the ammonia pipeline costing $7.6mm (-$0.07/unit), improving gasoline and diesel volumes combined with the BP acquisition performing ahead of expectations drove distributable cash flow of $86mm, roughly inline with UBS’ $87mm estimate."

Product demand should continue to grow in going forward.

Magellan Midstream closed Wednesday at $54.39, dropping $0.19, or 0.34 percent. UBS has a price target of $61 on them, raising it from $59.

Anadarko (NYSE:APC) Building Up Strong Cash Balance, Production Guidance Down

The latest quarterly report of Anadarko Petroleum (NYSE:APC) was somewhat mixed, reflecting lower international production, but stronger production in the U.S.

Ticonderoga did say one thing they like is the way Anadarko is building up their cash balance.

"Anadarko reported its 3Q last night. The GAAP results were ($0.05)/share versus our ($0.10)/share estimate. Adjusted earnings were $0.26/share versus consensus of $0.29/share. 3Q production was 629.3 kboe/d versus our 613.5 kboe/d estimate. U.S. oil production was at the high end of company guidance, while international oil production was at the low end of guidance. 4Q production is forecast to be down 2% to 617 kboe/d based on the midpoint of guidance. Previously, we had been forecasting production to be up 1%. Most notably, U.S. gas production next quarter is forecast to be down 5.5% over 3Q," said Ticonderoga.

"We are marking our estimates to reality and incorporating 4Q guidance. Our 4Q estimate rises to ($0.23)/share from ($0.17)/share, and the full year increases to $1.06/share from $0.94/share. Most interestingly on the financial front is the fact that APC is amassing a considerable cash balance."

Anadarko closed up at $63.82, gaining $0.66, or 1.04 percent on Tuesday. Ticonderoga maintains a "Neutral" rating on them.

Noble Corporation (NYSE:NE) Has Solid Balance of Shallow, Deepwater Markets Says FBR

Liking the balanced exposure to shallow and deepwater markets, FBR Capital said they're maintaining their "Outperform" on Noble Corporation (NYSE:NE), although they're lowering the earnings per share estimates based on the Pemex contract extension.

FBR said, "We are lowering our EPS estimates to $0.53, $4.00, and $4.95 from $0.54, $4.15, and $5.10 for 4Q10, 2011, and 2012, respectively. Our new rates reflect the recent contract extension rates that Noble Corp. has received from Pemex...We are maintaining our rating for NE based on the company's balanced exposure to the shallow and deepwater markets and attractive valuation. The company has a strong backlog and ample liquidity to grow even after adding four modern deepwater units in the Bully and Globetrotter rigs."

Noble closed Tuesday at $34.46, gaining $0.28, or 0.82 percent. FBR has a price target of $42 on the drilling service provider.

BP (NYSE:BP) Results Lag Exxon (NYSE:XOM), Marathon (NYSE:MRO), Chevron (NYSE:CVX)

While higher oil prices helped major oil companies like Exxon (NYSE:XOM), Marathon (NYSE:MRO), Chevron (NYSE:CVX) to solid quarters, although Chevron was weaker than expected, it wasn't able to help BP (NYSE:BP) overcome continuing charges related to expenses incurred from the Gulf of Mexico oil spill.

Still, it was good news for BP in that they generated a profit for the quarter soon after permanently plugging the Macondo oil well.

After taking another charge of $7.7 billion, it brings the total estimated costs of the BP oil spill to almost $40 billion, already exceeding expectations, and will surely rise more going forward.

A significant amount of the financial health of BP will relate to whether or not they're designated as being grossly negligent, which could cost them billions more if they are.

CEO Bob Dudley says he's confident that isn't going to happen.

Earnings per share for the latest quarter reached $0.59, a major improvement over the $5.42 they lost in the second quarter, but obviously falling short of the $1.60 generated last year in the same quarter before the spill.

BP (NYSE:BP) Exceeds Expectations, Earnings Reach $1.79 Billion

Although net income in the third quarter dropped about 67 percent, BP (NYSE:BP) was still able to generate earnings of $1.79 billion for the quarter. That was down from last year when they generated $5.34 billion, which was before the oil spill.

After excluding items, the oil giant had an operating profit of $5.53 billion, over an 18 percent increase from the $4.67 billion generated last year. Analysts had been looking for $4.6 billion.

BP took another pre-tax charge of $7.66 billion, bringing their total bill for the spill to $40 billion.

CEO Bob Dudley said in a statement, “This strong operating performance shows the determination of everyone at BP to move the company forward and rebuild confidence after the terrible events of the past six months.”

The additional charges were in connection to taking longer to seal the Macondo oil well in September, along with legal, cleanup and administration costs.

BP said they'll review the timing for reinstating the dividend sometime in the early part of 2011.

DTE Energy (NYSE:DTE) Trading Continues to be Major Concern Says Barclays (NYSE:BCS)

Although DTE Energy (NYSE:DTE) had a decent quarter, Barclays (NYSE:BCS) sees trading to continue to be one of their major concerns.

"DTE reported solid Q3 EPS and tightened their guidance range for 2010: DTE reported Q3'10 EPS of $0.96, in-line with the consensus estimate, and tightened their 2010 guidance range to $3.50-$3.70 from $3.45-$3.80. Rate relief at MichCon, tight cost controls at both utilities, and meaningful improvements at the P&I segment helped results, while another challenging quarter at trading was the biggest concern," said Barclays.

"We are tweaking our '10-'12 estimates to $3.62/$3.72/$3.88 from $3.67/$3.74/$3.92 and adjusting our target to $52. We are embedding $56M in earnings at P&I, flat performance at midstream, and a return to historical contributions by trading of $45M and assuming that the utilities will be able to earn their authorized 11% ROEs."

DTE closed Monday at $45.67, dropping $1.09, or 2.33 percent. Barclays increased their price target from $50 to $52, while maintaining their "Equalweight" on them.

Oceaneering International (NYSE:OII) Strongly Positioned for Deepwater Drilling says Barclays (NYSE:BCS)

Contrary to the perception created by media reports because of the BP (NYSE:BP) deepwater oil disaster, offshore drilling in deep waters remains vibrant, and is in fact growing, and Oceaneering International (NYSE:OII) is strongly positioned to profit from that reality over the next decade says Barclays (NYSE:BCS).

There has been a plethora of deepwater deals cut in the midst of the BP disaster, underscoring the demand for oil which won't be hindered by any type of accident, even one as large as BP's.

Barclays said, "We believe that Oceaneering International is well positioned to benefit from the secular growth in deep-water drilling and subsea completions that we forecast over the coming decade. Given its unique franchise and long-term visibility in its markets, we believe Oceaneering should trade at a meaningful premium to the oil service group."

"We are increasing our earnings per share estimates for 2011 and 2012 to $3.80 and $4.40 from $3.45 and $4.05. The company's guidance for 2011 is $3.45 to $3.75."

Oceaneering International soared on Monday, closing at $63.77, gaining $1.90, or 3.07 percent. Barclays raised their price target on Oceaneering from $58 to $70. They maintain an "Overweight" on them.

BP (NYSE:BP) Shares Should Trade Active Today

BP's (NYSE:BP) shares are expected to trade active today in anticipation and response to their latest quarterly report.

There are no expectations of surprises from BP, which should remain suppressed from the ongoing uncertainty of its overall liability in the Gulf of Mexico oil spill.

Analysts on average are looking for about $1.51 earnings per share, with a range of $1.44 to $1.59 per share from several analysts.

BP closed Monday at $40.77, losing $0.03, or 0.07 percent.

Morgan Stanley (NYSE:MS) Lowers Chevron's (NYSE:CVX) Earnings Estimate

Chevron (NYSE:CVX) had its earnings estimate lowered by Morgan Stanley (NYSE:MS) in 2010, although Morgan did maintain their "Overweight" rating on the giant energy company.

For fiscal 2010, earnings per share were downwardly adjusted from $9.53 to $9.29, and for fiscal 2011, earnings were upwardly adjusted from $9.60 to $9.72.

Chevron was trading at just above level at 1:40 PM EDT, rising to $82.76, gaining $0.16, or 0.19 percent.

BP's (NYSE:BP) Earnings Should Mirror Last Year

Earnings for the quarter by BP (NYSE:BP), expected to be released November 2, on average look to come in at close to where they did last year, when they were $1.50 a share.

Analysts have a $0.15 spread on the earnings, coming in as low as $1.44 share to as high as $1.59 a share. If it meets somewhere in the middle, it'll be very close to last year's performance. Not bad considering the challenges they face.

Consensus this quarter is at $1.51 a share on revenue of $72.46 billion.

Shareholders have been pressing new CEO Bob Dudley and the board of directors to reinstate the dividend.

Southwestern Energy (NYSE:SWN) Capex Expected to Plunge

Citing low natural gas prices and dropping three rigs, UBS (NYSE:UBS) has slashed their price target on Southwestern Energy (NYSE:SWN).

"We believe the combo of SWN dropping 3 rigs and low gas prices is a signal it will reduce 2011 capex vs 2010. Thus, we lowered our ‘10 capex by - $100 MM to $2.0 bn, and 2011-12 capex by - $400 MM/year to $1.9 bn & $2.3 bn, respectively. As a result, we reduced our production growth forecast to 23% and 25% in 2011-‘12, (vs. - 30% per annum previously) and lowered our 2011-2012 EPS/CFPS to $2.15/$5.50 and $3.10/$7.45 from $2.20/
$5.70 and $3.25/$7.95, respectively," said UBS.

Southwestern closed on Friday at $33.84, gaining $0.20, or 0.59 percent. UBS lowered their price target on them from $56 to $45.

Nabors Industries (NYSE:NBR) Lowers Internationa Guidance, Higher Taxes Remain Concern

Citing lower international guidance from Nabors Industries (NYSE:NBR), UBS (NYSE:UBS) said they're maintaining their "Neutral" rating on the company.

UBS said, "We are raising our 2011 EPS estimate by 11% to $1.70 from $1.53 reflecting 25% accretion from the Superior deal. However, the increase was partially offset by lower international guidance and higher taxes...We
continue our Neutral rating on Nabors. The company will benefit from its 20% exposure to pressure pumping near-term, as well as the ultimate sale of its E&P businesses. However, we believe there is risk for a flat to declining North American rig count in 2011 and prefer to sit on the sidelines until we begin to see the rig count roll over."

Nabors closed Thursday at $20.30, losing $0.22, or 1.07 percent. UBS increased their price target on the land drilling contractor from $19 to $22.

Whiting Petroleum (NYSE:WLL) Outperforms on Lower Costs

Whiting Petroleum (NYSE:WLL) had a solid quarter based on getting operational costs under control, leading them to beat expectations for earnings per share.

Ticonderoga Securities said, "WLL reported its 3Q last night. Earnings were $0.05 ahead of our $1.27 estimate, driven largely by better than expected costs. Production was in line with our estimate...Based on company guidance, we are raising our 4Q EPS estimate to $1.71 from $1.50, which brings our 2010 full-year estimate to $5.51, up from $5.27. We also revised our 2011 EPS estimate to $7.63 from $6.72.

"We reiterate our rating on the stock due to valuation. Our NAV remains unchanged at $116/share. Currently, the stock trades at 86% of our NAV versus 76% for our coverage universe."

Ticonderoga maintains their "Neutral" on Whiting.

Whiting closed at $98.53, losing $1.48, or 1.48 percent. They have a market cap of just above $5 billion.

Hercules Offshore (Nasdaq:HERO) EPS Estimates Lowered for 2011

Hercules Offshore, Inc. (Nasdaq:HERO) faces a number of challenges going forward, even though their third-quarter results beat expectations, although they were fairly low to begin with.

Global Hunter said, "HERO reported a 3Q EPS (loss) of ($0.13), ahead of our expectations of ($0.20) and consensus at ($0.17). With revenue largely in line ($168MM vs $170MM exp), HERO beat our expectations on costs ($124MM vs $129MM exp), as well as D&A and tax benefit. However, near-term concerns loom given the potential for a covenant breach, a US jackup slowdown with low/mid $3 gas and lower international dayrates. We are trimming our 2011 EPS estimate to ($0.40) from a ($0.28) and lowering our price target to $3.10. Given meaningful upside still, we reiterate our rating."

Global maintained their "Buy" on Hercules, although lowering their price target from $3.60 to $3.10. The oil and gas services company closed at $2.31, dropping $0.07, or 2.94 percent.

Citigroup (NYSE:C) Sees Strong Headwinds for Hercules Offshore (NASDAQ:HERO)

It appears that Hercules Offshore Inc. (NASDAQ:HERO) will continue to struggle, as Citigroup (NYSE:C) said there are some major headwinds the company faces which will be difficult to overcome until the price of natural gas increases.

Citigroup said they're maintaining their "Hold-Speculative" rating on the company as a result.

“Our $2.40 EV/EBITDA derivation applies a 6.0x EV/EBITDA multiple to our forward-12-month EBITDA of $161 million. The multiple is below the 10.2x peak HERO multiple reached in the most recent downturn and is well above the 1.6x trough reached at the peak of the last upturn. The multiple is based on historical analysis of HERO and relative market multiples and is within the 2.9x–15.6x historical range where the average of offshore driller stocks traded over the past ten years. The median group EV/EBITDA multiple was 7.9x in the most recent cycle,” said Citi.

Citigroup lowered the price target of Hercules significantly, from $3.60 to $2.40. Hercules was at $2.43 a share as of 12:19 PM EDT, gaining $0.05, or 2.10 percent.

BP's (NYSE:BP) TNK-BP Profits Drop 14 Percent

TNK-BP, the joint venture between BP (NYSE:BP) and Russian billionaires, had its profits fall by 14 percent in the third quarter, according to their latest report.

Net profit for the quarter ending September 30 was $1.45 billion, down from the $1.68 billion generated last year. The drop was largely based on the profits garnered from the sale of their oil services unit last year.

Revenue for TNK-BP did increase to $11.40 billion, a boost of 11 percent.

Earnings were $2.56 before interest, taxes, depreciation and amortization, and operating cash flow came in at $3.01 billion.

The company pointed to lower natural gas production as the major reason for the drop in profits, but Chief Financial Officer Jonathan Muir said the oil production at the West Siberian fields was also down by 3.5 percent, and that will probably continue on throughout 2011, Muir added.

Precision Drilling (NYSE:PDS) Outlook Positive Says Canaccord

After reporting their quarterly results, Precision Drilling (NYSE:PDS) maintained their "Buy" rating from Canaccord Genuity.

Rob McNally, Executive Vice President and Chief Financial Officer, said on the conference call:

"Precision had a very solid quarter. We reported net earnings of $61 million or $0.21 per diluted share on revenues of $359 million for the third quarter. These results do include an $18 million foreign exchange gain which equates to about $0.05 per share relating to our debt being primarily US dollar denominated.

"Our Q3 2010 EBITDA was $113 million, which represents a 31% increase over the $86 million achieved in the third quarter of 2009. The improved third quarter results primarily reflect increased utilization. Activity levels have increased meaningfully with the continuation of positive momentum building from the beginning of the year."

Canaccord said, "We reiterate our rating and target price (based on 6.0x 2011E EV/EBITDA) following PD’s in-line Q3 results; our thesis remains intact as the company has a large mix of high-performance rigs and enjoys geographic diversity across North America. The company also continues to benefit from increasing oil and liquids-rich drilling, pricing traction starting to take in Canada, and moving forward with its new build programs."

Precision closed Friday at $7.76, gaining $0.21, or 2.78 percent. Canaccord has a price target of C$10 on them.

Wells Fargo (NYSE:WFC) Says Whiting Petroleum (NYSE:WLL) Reaches Upside Limits

Whiting Petroleum (NYSE:WLL) was downgraded by Wells Fargo (NYSE:WFC), citing most of the upside is priced into the share price. They were downgraded from "Outperform" to "Market Perform."

Wells said, "With success at Sanish and now initial success at Lewis and Clark, WLL has executed and erased Bakken inventory concerns. Given, YTD outperformance, much of the upside is already priced into shares, in our opinion and we believe risk/reward is now neutral."

The valuation range was also lowered from $105-$110 to $100-$110.

Whiting closed Friday at $100.97, dropping $0.51, or 0.50 percent.

Citigroup (NYSE:C) Sees AmeriGas (NYSE:APU) Tops for Distribution Growth in Sector

Citigroup Inc. (NYSE:C) said they believe AmeriGas Partners, LP (NYSE:APU) should be the leader in distribution growth in the sector going forward. They maintain a "Hold" rating on the propane company.

Citigroup's John K. Tysseland said, "We are maintaining our Hold...rating for APU based on valuation, but believe the partnership is likely to have the best distribution growth in the sector and continues to be an active consolidator. We would consider buying APU, all things being equal, on a significant pullback in the unit price. We are increasing our target price to $49 from $40."

Concerning earnings projections for 2010-2011, AmeriGas said in a press release, "The Partnership expects to report net income attributable to AmeriGas Partners of approximately $165 million for its fiscal year ended September 30, 2010. Adjusted earnings before interest expense, income taxes, depreciation and amortization excluding the impacts of a previously reported $12.2 million loss related to the termination of interest rate protection agreements and an additional $7.0 million litigation reserve recorded during the fiscal year 2010 fourth quarter (Adjusted EBITDA), are expected to be approximately $340 million for fiscal 2010."

AmeriGas closed Thursday at $46.56, gaining $0.02, or 0.04 percent.