A look back at successes and setbacks in the energy industry.
Highs
EXXON — Exxon Mobil Corp. on Sept. 26 announced a landmark $4.5 billion sale of upstream oil and gas operations in Norway to Eni SpA subsidiary Vår Energi AS. Industry analysts said the move is expected to jump-start the oil major's plan to divest $15 billion in assets by 2021."The deal is a big step in reaching the $15 billion divestment target, but we note it is a part of a bigger effort to reshape its upstream portfolio, meaning the proceeds will fund other investments, not buybacks," Mizuho Securities USA LLC analyst Paul Sankey wrote in a Sept. 27 note to clients.
Between
MARATHON — Activist investor Elliott Management Corp. in a Sept. 25 letter to Marathon Petroleum Corp.'s board of directors called for the integrated energy company to be split into three independent businesses. Elliott, which owns about 2.5% of Marathon, said that such a move would unlock about $39 billion in value. The hedge fund said that as independent businesses, Marathon's Speedway retail segment would become the largest U.S.-listed convenience store operator, its MPLX LP master limited partnership subsidiary would be a "top-five US midstream operator by enterprise value," and the company's refining segment would be the largest independent merchant refiner in the U.S. by capacity. The Elliott plan is supported by former Andeavor board members calling for the removal of Marathon Petroleum Chairman and CEO Gary Heminger for hampering efforts to maximize shareholder value.
PG&E — PG&E Corp. and utility subsidiary Pacific Gas and Electric Co., or PG&E, announced Sept. 23 that they executed a settlement that resolves all insurance subrogation claims tied to the deadly 2017 and 2018 Northern California wildfires. The settlement was reached with entities representing about 85% of insurance subrogation claims and formalizes an $11 billion agreement in principle. Separately, the bankrupt companies blasted an alternative Chapter 11 reorganization plan submitted by Elliott Management and a group of senior debtholders as "a blatant attempt to unjustly enrich the noteholders who proposed it."
Lows
XCEL ENERGY — The Minnesota Public Utilities Commission on Sept. 27 rejected Xcel Energy Inc. subsidiary Northern States Power Co.'s acquisition of the Mankato Power Plant from Southern Power Co. Xcel Energy pitched the $650 million purchase of Mankato, capable of producing up to 760 MW of gas-fired generation, from the Southern Co. subsidiary as a key part to its transition away from coal and a benefit to consumers. Minnesota regulators said the record did not show that the purchase would be prudent and consistent with the public interest.
