Debt-laden McDermott files for Chapter 11 bankruptcy protection
Oilfield services provider McDermott International Inc. filed for Chapter 11 bankruptcy protection Jan. 21 following years of financial struggle caused largely by falling oil prices and pressure on drillers to prioritize shareholder dividends over production growth. The company's troubles were exacerbated by losses from two liquified natural gas projects: the Sempra Energy-led Cameron LNG Terminal in Louisiana and the Freeport LNG Development LP facility in Texas.
States, clean power developers face tough choices in PJM market overhaul
States and utilities pursuing clean energy projects are deciding how to react to a Federal Energy Regulatory Commission order that may push vast amounts of new renewable and existing nuclear power out of the PJM Interconnection capacity market. States may help utilities pull their capacity out of PJM so states can directly procure subsidized clean energy resources themselves, but some market experts think that the prospect is "a big political bluff."
Magellan's asset sales, share buybacks set tone for capital restraint
Magellan Midstream Partners LP plans to sell three terminals outside its Gulf Coast portfolio for $250 million to Buckeye Partners LP and to repurchase up to $750 million of common units through 2022. The moves address the pressure the midstream sector has faced from investors and analysts to return cash to shareholders as oil and gas production growth decreases.
Elliott Management unveils plan to unlock $5B in value at Evergy
Elliott Management Corp. believes that Evergy Inc. should abandon its share repurchase plans and instead explore two alternative paths the activist investor claims will unlock up to $5 billion in value, according to a letter the investment firm wrote to the utility's board of directors. Elliott said it believes that this focus on core infrastructure investment will "not only provide meaningfully more value to shareholders than the current strategy to repurchase shares, but would also provide clearly superior benefits to Evergy's other stakeholders, help facilitate the company's deployment of renewables and reduce its carbon footprint."
Other energy headlines
* Jeffrey Miller, CEO of Houston-based oilfield services company Halliburton Co., said that as customer spending in North America declines again this year, the company will continue to execute its playbook to maximize returns and free cash flow. The company generated over $900 million of free cash flow for 2019, despite the problematic U.S. land market environment.
* Spanish independent renewable power producer Grupo T-Solar completed a green financing worth €567.8 million, the proceeds of which will be used to refinance 23 solar photovoltaic projects in Spain with a combined installed capacity of 127 MW.
* Many Germans now are vocally opposed to wind power, and solar power enjoys wider acceptance in Germany than it did in years past, according to Minister for Economic Affairs and Energy Peter Altmaier. The "not-in-my-backyard" opposition to wind generation has caused delays in the local permitting processes and slowed the domestic onshore fleet expansion.
All else being equal, jurisdictions in which commissioners are elected rather than appointed hold a greater degree of investor risk. Generally, energy regulatory issues are less politicized when they are not subject to debate in the context of an election. Realistically, a candidate for commissioner who is sympathetic to the utilities and/or appears to be amenable to rate increases is not likely to be popular with the voting public.
Research and data
* RRA Regulatory Focus:Nearly 1 in 5 utility regulator terms to be affected by 2020 general election
* RRA Regulatory Focus: Va. parties agree on rate change for Kentucky Utilities
Top pick of the day
Renewables handily beat oil and gas stocks in 2019
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