Broader indexes and energy equities closed the Thursday, April 6, trading session in the positive side of the ledger, fueled by a rally in coal and midstream shares and higher oil prices. The price for U.S. West Texas Intermediate crude climbed 1.08% to $51.70 per barrel, and Brent crude edged up 0.97% to $54.89 per barrel.
The SNL Energy Index rose 0.47% to end the session at 294.32. The Dow Jones Industrial Average added 0.07% to close at 20,662.95, and the S&P 500 grew 0.19% to finish at 2,357.49.
8point3 Energy Partners LP plummeted 7.99% on heavy volume to settle at $12.15, after Wells Fargo Securities LLC downgraded the partnership's shares to "market perform" from "outperform," and lowered its 12- to 18-month valuation range to $11 to $12 per share, from $16 to $17 per share.
The move was prompted by First Solar Inc.'s announcement the previous day that it has initiated a strategic review of its 28% interest in the joint yieldco, to result in a sale or a possible change in sponsorship of 8point3. As a joint-owner holding a 36.5% stake in 8point3, SunPower Corp. is also considering its strategic position and did not reject the possibility it could become the only sponsor after the review.
First Solar also announced that the 179-MW Switch Station project is now up for a potential third-party sale and that it sent 8point3 a formal offer for the 280-MW California Flats and 40-MW Cuyama Valley solar projects in California, both projects included in the right-of-first-offer portfolio.
First Solar added 0.13% in brisk trading to close at $26.61, and SunPower picked up 0.65% on thin volume to finish at $6.22. The SNL Merchant Generator Index ticked up 0.22% to close at 85.16.
Shares of Sempra Energy climbed 0.28% on strong volume to end at $109.75. LNG market analysts gave positive reviews to Sempra after executives announced that the company anticipates $11 billion in cash flow from the Cameron LNG project, after debt service but before taxes, which will kick in around 2024.
"Sempra's strong cash flow supports the targeted 8-9% annual dividend growth target through 2019, and we see a potential for a step change in the dividend once the Cameron LNG export project is online," Morgan Stanley said.
Sunoco LP leaped 20.24% on about 13 times the normal volume to close the trading day at $28.69, after striking a $3.3 billion deal to sell a majority of its convenience stores to 7-Eleven Inc. Sunoco's deal with 7-Eleven includes the sale of about 1,110 convenience stores in 19 geographic regions, primarily along the East Coast and in Texas, as well as associated trademarks and intellectual property of the Laredo Taco Co. and Stripes. The partnership is also entering an agreement with a 7-Eleven subsidiary for a 15-year, take-or-pay contract to supply about 2.2 billion gallons of fuel annually.
Sunoco LP executives said that the deal is a step toward decreasing debt and defining its relationship to Energy Transfer Equity LP and Energy Transfer Partners LP. "Our plan is to be the finished-petroleum-product arm of the Energy Transfer family," Sunoco President and CEO Robert Owens said during a conference call.
Energy Transfer Equity advanced 1.78% in active trading to $19.43, and Energy Transfer Partners added 0.50% in above-average trading to end the day at $36.49.
Memorial Production Partners will not be listing its units on Nasdaq after it emerges from bankruptcy, opting instead to trade in an over-the-counter market. The note holders supporting the partnership's reorganization plan said they prefer the emerging company to apply for trading and quotation on the OTCQB market. The application is due for completion in the second quarter. Memorial Production Partners declined 4.00% in light trading to close at 14 cents.
The SNL Midstream Energy Index moved up 1.31% to 124.13, and the SNL Master Limited Partnership Index edged 1.23% higher to close at 318.50.
In coal terrain, Peabody Energy Corp. is touting the findings of a third-party study suggesting the Navajo power plant can continue to be competitive with natural gas and other coal plants through 2040. Peabody retreated 1.61% to close at $27.55.
Among other coal shares, Arch Coal Inc. gained 3.46% in light trading to close at $74.69, CNX Coal Resources LP gained 3.40% on slim volume to close at $16.75, and Alliance Holdings GP LP rose 3.25% in active trading to end the session at $29.21. The SNL Coal Index spiked 2.28% to close at 73.00.
NYMEX May natural gas futures extended early gains to a high of $3.337/MMBtu following the midmorning release of U.S. Energy Information Administration storage data that outlined a smaller-than-anticipated injection into the natural gas supply in the week to March 31. The contract pulled back heading into the settle and finished the day 6.5 cents higher on the session at $3.331/MMBtu.
Market prices and index values are current as of the time of publication and are subject to change.