Sector Update: Energy Stocks, Crude Oil Finishing Near Session Lows

Monday, October 26, 2020 3:54 PM | MT Newswires

Energy stocks continued to lose ground this afternoon, with the NYSE Energy Sector Index falling 3.4% while the SPDR Energy Select Sector ETF also was down 3.4%.

Front-month West Texas Intermediate crude oil settled $1.29 lower at $38.56 per barrel while the global benchmark Brent crude contract declined $1.32 to $40.45 per barrel. Henry Hub natural gas futures rose 5 cents to $3.02 per 1 million BTU.

In company news, Cabot Oil & Gas (COG) was ending almost 2% lower, giving back a small morning advance that followed BofA Securities Monday raising its stock rating for the petroleum producer to neutral from underperform previously and setting a $22 price target for Cabot shares.

Cenovus Energy (CVE) fell 8% after Sunday announcing plans to acquire Canadian oil and natural gas producer Husky Energy (HSE.TO) for $2.88 billion in stock. Under terms of the proposed transaction, investors will receive 0.7845 of a Cenovus share and a 0.0651 of a purchase warrant to acquire another share for each of their Husky shares, providing Cenovus shareholders with about 61% of the combined companies.

Pacific Ethanol (PEIX) was 9.6% lower this afternoon, reversing a 5.2% gain prior to the company saying it priced a $75 million private placement of nearly 5.1 million shares at $8.42 apiece, or about 5% under Friday's closing price. The company, which Monday announced plans to rename itself as part of a strategic realignment to focus on making specialty alcohols, also issued preliminary Q3 results, expecting to report about $15 million in net income on $204 million in net sales. Analysts, on average, have been looking for the company to earn $14.5 million on a GAAP basis on $210.3 million in sales.

To the upside, Mid-Con Energy Partners (MCEP) jumped more than 24% after agreeing to an all-stock buyout offer from larger rival Contango Oil & Gas (MCF), which will issue 1.75 of its shares for each Mid-Con share and valuing the target company at about 5% above its volume-weighted average price during the previous 15 days. Contango shares were 9% lower this afternoon.

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