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Trade war hurts utility sales; Exxon reaffirms focus on output hike, sales


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Trade war hurts utility sales; Exxon reaffirms focus on output hike, sales

Top News

Global trade war hurts sales as utilities focus on core growth strategies

While American Electric Power Co. Inc. and Southern Co. highlighted concerns about the impact of the global trade war and tariffs on industrial sales, company-specific capital and growth plans have so far dominated the bulk of second-quarter earnings calls.

Permit upheld for Transco's Atlantic Sunrise expansion, but judge blasts FERC

The U.S. Appeals Court for the District of Columbia Circuit backed the Federal Energy Regulatory Commission's decision to grant a certificate to Williams Cos. Inc. subsidiary Transcontinental Gas Pipe Line Co. LLC for its 1.7-Bcf/d Atlantic Sunrise natural gas pipeline project, but one judge said the FERC process for treating landowner petitions "is not right."

Nearly 9% of 2018 coal deliveries went to power plants with retirement plans

Coal producers' struggles will only increase in the years ahead as nearly 9% of coal deliveries last year were made to plants that will be retired by 2032.

Exxon reaffirms focus on output hike, asset sales to sustain earnings growth

Despite taking an income hit in its downstream and chemical units in the second quarter, oil supermajor Exxon Mobil Corp. still plans to ramp up spending, as it works to hike upstream output and sell off $15 billion in assets by 2021 to sustain earnings growth, executives said during the company's Aug. 2 earnings conference call.


"The wind industry is going to install a record amount [of capacity] in 2020, and I'm lowering my forecast for margins," said Antonio Carrillo, president and CEO of wind tower manufacturer Arcosa Inc., on the Dallas manufacturer's second-quarter earnings call. Arcosa has joined in an anti-dumping petition to the U.S. Department of Commerce, seeking relief from what it calls unfair pricing by overseas competitors.


* Vistra Energy Corp.'s sliding share price in the second quarter of 2019 was driven by various factors, including weather, commodity prices and nuclear subsidies, President and CEO Curt Morgan said on an Aug. 2 earnings call that broached the question of whether the independent power producer may ultimately be taken private.

* FERC Commissioner Cheryl LaFleur told Bloomberg News in an interview that the Trump administration is still pushing for a plan to support financially struggling coal-fired plants. LaFleur, a Democratic commissioner, is set to leave the agency at the end of this month, which would give Republicans a 2-1 majority under Chairman Neil Chatterjee.

* JEA formally launched the solicitation process for proposals for strategic alternatives to eliminate constraints to the Florida municipal utility's growth.

* Diamond State Generation Partners paid a penalty of $40,000 along with $5,454 in cost recovery to the Delaware Department of Natural Resources and Environmental Control for violating the state's air quality regulations. The company operates the Red Lion fuel-cell facility in the state.

* A recent Office of the U.S. Trade Representative decision to grant so-called bifacial solar panels an exemption from President Donald Trump's tariffs on imported photovoltaic cells and modules runs counter to the president's trade policies by reopening the floodgates to inexpensive foreign-made products and jeopardizes domestic manufacturers, First Solar Inc. CEO Mark Widmar said Aug. 1.

* Tesla Inc. is shuffling the management of its energy business, Bloomberg News reported, citing people familiar with the matter. Kunal Girotra will assume "greater responsibility" for the business.

* Talen Energy Corp. told Montana lawmakers that the company is struggling to keep employees and find cheap coal for the Colstrip plant, The Billings (Mont.) Gazette reported. The company plans to retire Colstrip units 1 and 2 in December, about 30 months before a legally mandated deadline.

Natural gas

* Northern Natural Gas Co. criticized FERC for not halting a Natural Gas Act Section 5 rate proceeding and instead moving on with an order that accepted and suspended certain tariff records and set a hearing and technical conference.

* The Virginia Department of Environmental Quality issued a stop work order on an approximately two-mile section of the Mountain Valley Pipeline, after determining that substantial adverse impact to water quality is likely to occur.

* Sempra Energy executives expected substantial completion "in the next day or so" on the first natural gas liquefaction train of its Cameron LNG export terminal in Louisiana, paving the way for commercial operations to begin in mid-August.

* Coastal Gaslink found in an internal audit that it commenced construction of the pipeline at some areas that had not yet finished archaeological impact assessments. Coastal Gaslink has since suspended all clearing activity until an interview review is completed.

* Alliance Resource Partners LP has completed its $145 million acquisition of oil and gas mineral interests from Wing Resources LLC and Wing Resources II LLC, a move that increases the company's presence in the Permian Basin.

* Halcón Resources Corp. reached an agreement with certain holders of its of its 6.75% senior unsecured notes for a comprehensive restructuring of the company's balance sheet, which would be implemented through a Chapter 11 proceeding.

* Maryland regulators suspended the license of Smart One Energy LLC to operate as a natural gas supplier in the state for enrolling customers without their consent. The state Public Service Commission also imposed a civil penalty of $561,000 against the company.


* Notching record upstream production volumes in the second quarter, Chevron Corp. intends to expand output even further and dispose of a large chunk of assets over the next few years to improve cash flow and earnings, as it continues to return value to shareholders, executives said during the company's second-quarter earnings conference call.

* Philadelphia Energy Solutions LLC may be reporting to the government the toxic release from the June blast at its oil refinery, Reuters reported, citing two sources familiar with the plan.

* Already almost $13 billion into a divestment plan that began in January, Petróleo Brasileiro S.A. - Petrobras is still looking to sell more assets and investments as it looks to establish itself as an asset-heavy oil and gas exploration and production company, executives said the company's second-quarter earnings call.

* ConocoPhillips' $1.5 billion claim against Petróleos de Venezuela SA over an offshore oil project has been dismissed by the International Chamber of Commerce's arbitration tribunal, according to Reuters.

* Amplify Energy Corp. shareholders approved the company's all-stock merger of equals with Midstates Petroleum Co. Inc.


* A federal bankruptcy judge is set to decide today whether to approve Contura Energy Inc.'s winning bid for the assets of three Blackjewel LLC coal mines, according to The Associated Press.

* American Resources Corp. decided to submit a revised bid for the assets and operations of Blackjewel's eastern division.

* Three judges recently agreed with a lower court's ruling to dismiss a lawsuit from environmental groups against various governmental agencies over their role in reauthorizing mining activities at a New Mexican coal mine.

* A coal miner was killed July 31 while working in a Kentucky mine owned by Murray Energy Corp., the fifth fatal coal mine accident recorded by the U.S. Mine Safety and Health Administration this year.


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Ontario Power Generation Inc. has been on an asset-buying spree that is nearing C$5 billion as its bulks up its baseload assets and moves to increase returns for its sole shareholder, the provincial government.

New from RRA

* An administrative law judge recommended Aug. 1 that the Michigan Public Service Commission authorize Consumers Energy Co. a $127.5 million permanent gas distribution rate increase in Case No. U-20322.

The day ahead

* Early morning futures indicators pointed to a lower opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

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