Occidental Petroleum Announces Dividend Increase [OXY]

Occidental Petroleum Corporation (NYSE:OXY) announced today that its Board of Directors has increased the company’s dividend 18.5 percent to an annual rate of $2.56 per share, from the previous annual rate of $2.16 per share. This increase brings the company’s compound annual dividend growth rate over the last 11 years to 16 percent.

President and Chief Executive Officer Stephen I. Chazen said, “We have now increased our dividend every year for 11 consecutive years, and a total of 12 times during that period. This 18.5-percent increase brings the 11 year compounded dividend growth rate to 16 percent per year. The total increase in the annual dividend rate from 2002 is 412 percent.

“This increase reflects our confidence in the company’s financial strength and future performance. Consistent dividend growth, together with growing oil and gas production and well-above-average returns on capital, are the primary elements of Oxy’s long-term business strategy.”

The $0.64 per share quarterly dividend will be payable on April 15, 2013, to stockholders of record as of March 8, 2013.

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Total [TOT] Reports Fourth Quarter and Full Year 2012 Results

On Wednesday Total [TOT] reported a 4th quarter net profit, excluding changes inventories, of +13% to €3.08B vs consensus of €3B, EPS +3% to €1.05 and revenue +5% to €49.89B, with earnings boosted by higher refining margins and crude prices.

Production -4%to 2.29M barrels of oil equivalent a day, due to a shutdown at the Elgin platform in the North Sea and flooding in Nigeria. Expects output to rise 2-3% in 2013, to sell $9B worth of assets. Proposes 2012 dividend of 2.34/share.

Read the entire Total earnings report

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Northern Tier Energy Announces Fourth Quarter 2012 Dividend

Northern Tier Energy (NYSE: NTI) announced on Tuesday the declaration of a cash distribution of $1.27 per common unit for the fourth quarter of 2012. The distribution will be paid on February 28, 2013 to holders of record as of February 21, 2013.

This will be the second cash distribution paid by Northern Tier Energy since it's initial public offering in July 2012 and will result in cumulative cash distributions since the initial public offering of $2.75 per common unit. Northern Tier Energy LP is a variable distribution master limited partnership. As a result, its quarterly distributions, if any, will vary from quarter to quarter as a result of variations in, among other factors....

1. It's operating performance
2. Cash flows caused by fluctuations in the prices it pays for crude oil and other feedstocks and the prices it receives for finished products
3. Working capital fluctuations
4. Capital expenditures
5. Cash reserves deemed necessary or appropriate by the board of directors of its general partner

Read the entire NTI distribution report


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Are you prepared for the pain..... This may be a double top in the market

 I won't lie, our COT Fund is a buy and hold fund in the spirit of great long term investors like Graham and Buffett. But when it comes to trading, we aren't naive. This market is now set to move one way or the other, is this just a double top in the market?


Whether you think this market is moving higher or falling apart and heading south you need to listen to one of the best educators in our industry. Todd Mitchell. Here's what he is saying......

If you have stock investments then grab hold of your jaw because it is about to drop.....

A widely recognized pioneer in the trading world recently stated that not only has "buy and hold" stock investing stopped working since the year 2000, but it probably won’t work again for a decade or more!

Answer these questions to see what impact this could have on YOU:

*     Do you have an IRA invested in mutual funds?
*     Do you have a stock portfolio that holds positions longer than a month?
*     Did you lose wealth in the 2008 credit crisis?

If you answered YES to any of these questions then you may be in serious trouble for the next several years.

The pioneering trader is none other than Todd Mitchell and today he just released a video that breaks down the current crisis for investors and tells you step by step how to start making money by reinvigorating an over 100 year old trading methodology that optimizes today's unusual market activity.

Instantly opt-in with your email and access Todd's video here. And don't worry, we respect your privacy 

Also as a nice bonus famous trader Doc Severson makes an appearance in the video as well. This video will only be available for the next few days so be sure to check it out.

Automatically opt-in to view the video by following this link >  "Trading through the pain....a trading method that's worked for 100 years"

SeaDrill - Completion of the $2.9 billion sale agreement with SapuraKencana SDRL

Seadrill (SDRL) is set to seal a proposed $2.9B deal to sell its tender rig business to Malaysian JV partner SapuraKencana Petroleum after finalizing details of the cash and shares transaction. An earlier agreement on a merger of the two companies’ existing tender rig business now has SapuraKencana taking on capital commitments plus outstanding debt of $780M as part of the acquisition price.

From SeaDril.com......

Seadrill and SapuraKencana have today entered into a conditional sale and purchase agreement in relation to the proposed transaction. SapuraKencana will acquire all the tender rigs in Seadrill's fleet except for the West Vencedor, T15, and T16. These three rigs are either owned or planned to be owned by Seadrill Partners LLC. Seadrill will in a transition period in co-operation with SapuraKencana retain the management of all tender rigs that are in operation outside Asia.

The agreed acquisition price is for an enterprise value of US$2.9 billion and includes future capital commitments for newbuildings T17, T18, and West Esperanza. Seadrill will furthermore continue to manage and supervise the construction of the current new building program on behalf of SapuraKencana. In addition, the enterprise value includes all the debt in the tender rig business which is estimated at US$780 million as of February 6, 2013. Seadrill has agreed to pay US$75 million to SapuraKencana at closing to compensate for cash flow from the tender rig business from February 8, 2013 to closing, netted off for lost interest income.

The transaction is expected to close by the end of April 2013.

John Fredriksen, Chairman, President and Director of Seadrill says in a comment, "We are pleased to have reached an agreement with our long term partner, SapuraKencana, regarding the sale of our tender rig fleet. We look forward to support the integration of the tender rig fleet and are excited to start a new phase of our long and profitable relationship. Seadrill is as a large shareholder of SapuraKencana and is excited to contribute building SapuraKencana into the leading offshore service provider in South East Asia. Seadrill will as stated before use the net proceeds from the transaction to continue to aggressively grow our modern ultra deep water and jack up exposure."

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The Anatomy of an XOM Earnings Trade

If you have been following our trading partner J.W. Jones on his Apple options trades you'll want to take a minute to see how he uses the same methods to trade COT favorite ExxonMobil [XOM].........

One of the most interesting aspects of options is the myriad opportunities presented for high probability trades for those who understand the details of option behavior.

For example, I have recently discussed the routinely observed collapse of implied volatility immediately following an earnings release. We have looked at several examples of profitable trades constructed to benefit from this expected decline in implied volatility.

Today I would like to review another group of trades based on a fundamental characteristic of option pricing. In order to understand this phenomenon, we need to review briefly the anatomy of the price of an option.

Remember that an option’s price, while quoted as a pair of bid / ask values, is in reality the sum of two components. The current market price is the combination of the extrinsic and intrinsic components of the individual option contract.

The extrinsic component can comprise the entirety or only a variable portion of the market price of an option. All options contain at least a small amount of extrinsic component.

The intrinsic component of an option may comprise the majority of the value of an option, as for example a "deep in the money" option. Conversely, an individual "out of the money" option routinely contains no intrinsic value whatsoever.

Here is an example of the trades and the charts to go with them.



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Marathon Oil Corporation Reports Fourth Quarter and Full Year 2012 Results

Marathon Oil Corporation (NYSE:MRO) today reported fourth quarter 2012 net income of $322 million, or $0.45 per diluted share, compared to net income in the third quarter of 2012 of $450 million, or $0.63 per diluted share. For the fourth quarter of 2012, adjusted net income was $388 million, or $0.55 per diluted share, compared to adjusted net income of $454 million, or $0.64 per diluted share, for the third quarter of 2012.

Marathon Oil reported full-year 2012 net income of $1.582 billion, or $2.23 per diluted share. Net income in 2011 was $2.946 billion, or $4.13 per diluted share. Net income for 2011 included income of $1.239 billion from the Company's former Refining, Marketing and Transportation business, which was spun off on June 30, 2011 and reported as discontinued operations in 2011, so income from continuing operations is better suited for year over year comparison. For full year 2012, adjusted income from continuing operations was $1.736 billion, or $2.45 per diluted share, compared to adjusted income from continuing operations of $2.293 billion, or $3.21 per diluted share, for full year 2011.

Read the entire earnings report

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Baker Hughes to Retain Process and Pipeline Services Business

Baker Hughes Incorporated (NYSE: BHI) announced today that it will retain its Process and Pipeline Services business. Going forward, this business will be reclassified as continuing operations within the Industrial Services segment.

Baker Hughes is a leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. The company's 58,000 plus employees today work in more than 80 countries helping customers find, evaluate, drill, produce, transport and process hydrocarbon resources. For more information on Baker Hughes' century long history, visit Baker Hughes.com
 

Learn John Carters Elephant Trade Secret at this Wednesdays Free Webinar

Learn John Carters Elephant Trade Secret

I just got word of John Carter putting on an exclusive free event this week where he's teaching ALL of his best swing trading techniques and tricks and I for one won't miss it.

Just click here to get details and seat reservations

John's also going to teach his exclusive "elephant trade" technique....the one that's helped him work on his golf game while paying for his kids college!

The event is FREE and will be Wednesday evening at 8 p.m. and all you have to do is sign up.

See you in the markets and we'll see you Wednesday evening,

Ray @ The Crude Oil Trader

Crude Oil Demand Picking up on China and U.S. Growth

Global oil demand this year is expected to accelerate at nearly double 2012's pace as stronger economies in China, Latin America and the U.S. offset sluggishness in Europe, according to the Economist Intelligence Unit.

Consumption worldwide will average nearly 91 million barrels a day in 2013, up 1.5% from about 89.7 million barrels a day in 2012, Economist Intelligence Unit analysts said in an updated monthly forecast. Estimated 2013 consumption would be an all time high for any year, based on industry data. Last year's use was up 0.8% from 2011.

Among the wealthiest nations and regions, demand trends for the European Union and the U.S. probably will diverge. The U.S. is now expected to post "modest, but still positive, growth… as the economy there stabilizes," the report said. Meanwhile, "recession continues to bite" in the EU, causing further contractions in demand.

U.S. demand is projected to grow 0.1%, compared with the small contraction the group estimated previously. EU consumption is forecast to decline 0.8%, while China's demand will climb an estimated 4.5%, to an average of 9.97 million barrels a day.

Read the entire "The Economist" report
 

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Update on Todd's RHT Trade and A New JOY Global Long Trade

In today’s video COT contributor Todd Mitchel show us where he is trailing his stop up to lock in more profits in the RHT (Red Hat, Inc.) stock trade, which by the way is doing exactly what he said it would do. He will then discuss another long stock trade (JOY = Joy Global, Inc.) that he put on yesterday afternoon at 63.21.

This trade is working out very nicely too.....80% of the first profit objective has already been hit at 65.17 (+1.96 point profit per share already) – and now his trailing stop has already been moved up to 63.60 locking in .39. So, regardless what JOY does from here, he came out way ahead and the trade is a winner. Be sure to watch the entire video for all the details and have a fantastic weekend!

Watch "Update on Todd's RHT Trade and A New JOY Global Long"


20 Survival Skills for the Trader

Are Natural Gas Prices Headed Lower?

The natural gas futures contract has been trying to push higher since the immediate sell off after yesterday's EIA inventory release. However, as of this writing it looks like that effort is starting to wane.

Aside from the fact that yesterday's net withdrawal from inventory was bullish versus last year and the five year average for the same week it is not going to be repeated in next week's inventory based on the warm spell this week. In addition the inventory withdrawals for the next several weeks are likely to underperform versus history basis the latest NOAA six to ten day and eight to fourteen day forecast which both remain bearish.

The six to ten day forecast covering the period Feb 6 to the 10th is projecting above normal temperatures across the eastern two thirds of the country with the mid west expecting strongly warmer temperatures. The eight to fourteen day forecast is marginally less bearish in that the above normal temperatures are forecast for the eastern half of the country for the period February 8th through the 14th.

As it looks at the moment the first half of the February will likely experience less than normal levels of heating demand for the first half of February and thus not supportive of higher prices or at least not supportive of the market breaking out of the upside of the trading range (about $3.50/mmbtu) during that period.

Read Dominick Chirichella entire article and great chartwork.



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Chevron Reports Fourth Quarter 2012 Earnings

Chevron Corporation (NYSE: CVX) today reported earnings of $7.2 billion ($3.70 per share – diluted) for the fourth quarter 2012, compared with $5.1 billion ($2.58 per share – diluted) in the 2011 fourth quarter. Results in the 2012 period included a gain of $1.4 billion from an upstream asset exchange.

Full year 2012 earnings were $26.2 billion ($13.32 per share – diluted), down 3 percent from $26.9 billion ($13.44 per share – diluted) in 2011. Sales and other operating revenues in the fourth quarter 2012 were $56 billion, down from $58 billion in the year ago period, mainly due to lower crude oil volumes.

“Chevron delivered another very strong year in 2012,” said Chairman and CEO John Watson. “Our upstream portfolio continues to produce excellent results. We’ve now led the industry in earnings per barrel for over three years. Our downstream businesses also delivered highly competitive earnings per barrel.”

“Strong cash flows allowed us to invest aggressively in our major capital projects and to acquire several important, new resource opportunities. We also raised the dividend on our common shares for the 25th consecutive year and continued our share repurchase program, both of which demonstrate our commitment to providing near term, top tier returns to our shareholders”.....Read the entire Chevron earnings report.


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Exxon Mobil Corporation Announces Fourth Quarter 2012 Results

ExxonMobil [XOM] reports fourth quarter 2012 earnings were over $9.9 billion, up 6% from the fourth quarter of 2011. Full year 2012 earnings were $44.9 billion, up 9% from 2011, with record earnings per share of $9.70.

Capital and exploration expenditures were a record $39.8 billion in 2012 as they continue pursuing opportunities to find and produce new supplies of oil and natural gas to meet global demand for energy.

Capital and exploration expenditures were $12.4 billion, up 24% from the fourth quarter of 2011. Oil equivalent production decreased 5% from the fourth quarter of 2011. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production decreased 2%.

Cash flow from operations and asset sales was $14.0 billion, including proceeds associated with asset sales of $0.8 billion. Share purchases to reduce shares outstanding were $5 billion. Dividends per share of $0.57 increased 21% compared to the fourth quarter of 2011.....Read the entire ExxonMobil earnings report.


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National Oilwell Varco Announces Fourth Quarter and Full Year 2012 Earnings

National Oilwell Varco (NYSE: NOV) today reported that for the fourth quarter ended December 31, 2012 it earned net income of $668 million, or $1.56 per fully diluted share. Earnings improved nine percent compared to the third quarter of 2012, and improved 16 percent compared to the fourth quarter of 2011.

Excluding $51 million in pre-tax transaction charges and a net $69 million tax benefit related to certain U.S. foreign tax credits in the fourth quarter of 2012, net income was $638 million, or $1.49 per fully diluted share, down two percent from the third quarter of 2012, and up nine percent from the fourth quarter of 2011, excluding transaction charges from all periods.

The net $69 million tax benefit resulted from a strategic reorganization of certain foreign operations to more fully integrate recently acquired business groups. Revenues reported for the full year 2012 were $20.04 billion, and net income was $2.49 billion, or $5.83 per fully diluted share. Operating profit for the full year 2012 was $3.55 billion......Read the entire NOV earnings report.


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CME Group: Natural Gas Inventory Withdrawal Below Market Consensus

Today's natural gas inventory came in below the market consensus but still above both last year and the five year average for the same week. The market has viewed the data as bearish in that the market is off about 2% as of this writing. It also supports my view that I have discussed in the newsletter that yesterday's gain in prices were mostly driven by a short covering rally ahead of the expectation for a bullish inventory report today. Another way of looking at the reaction is a buy the rumor, sell the fact pattern.

Next week's inventory report is going to be based on a period that has experienced very warm weather over a major portion of the eastern half of the US and thus the inventory withdrawal is likely to underperform versus history. The latest NOAA six to ten day and eight to fourteen day forecasts remain bearish as they are both projecting above normal temperatures over a major portion of the US for the period February 4th through the 13th.

Inventory withdrawals are likely to underperform versus history during the aforementioned timeframe. With the longer range forecast projecting March to experience above normal temperatures over most of the US.... a sort of early spring.... that does not leave much potential for a sustained winter cold spell. The fundamentals remain bearish and are likely to stay bearish based on the current weather forecasts for the rest of the official heating season which end at the end of March.

Read the entire CME Group article and see Dominick Chirichellas detailed charts.


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Musings: Hydraulic Fracturing Issue Encounters Protests And Movies

On Friday, January 11th a 30 day public comment period in New York State on the issue of hydraulic fracturing ended, but not without a certain amount of high drama. The wife and son of the late Beatles star John Lennon, Yoko Ono and Sean Lennon, led a group of protestors on a visit to the Albany office of New York Governor Andrew Cuomo (Dem) and the Department of Environmental Conservation. At the latter stop, the duo, who founded Artists Against Fracking last July, delivered 50 boxes reportedly containing 204,000 comments about hydraulic fracturing.

Around the same time, Ms. Ono had an op-ed published in the Albany Times Union in which she wrote, "My husband, John Lennon, and I bought a beautiful farm in rural New York more than 30 years ago. Like the rest of our state, this peaceful farming community is threatened by fracking for gas. She went on to say, “Governor Cuomo, please don’t frack New York. Don’t allow our beautiful landscapes to be ruined, or our precious and famous clean water to be dirtied."

Read the entire Musings article



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Kinder Morgan [KMP] to acquire Copano [CPNO] for Approximately $5 Billion

Kinder Morgan Energy Partners (NYSE: KMP) and Copano Energy (NASDAQ: CPNO) on Tuesday announced a definitive agreement whereby KMP will acquire all of Copano’s outstanding units for a total purchase price of approximately $5 billion, including the assumption of debt. The transaction, which has been approved by the boards of directors of both companies, will be a 100 percent unit for unit transaction with an exchange ratio of .4563 KMP units per Copano unit.

The consideration to be received by Copano unitholders is valued at $40.91 per Copano common unit based on KMP’s closing price as of Jan. 29, 2013, representing a 23.5 percent premium to Copano’s close on Jan. 29, 2013. The transaction, which is expected to close in the third quarter of 2013, is subject to customary closing conditions, including regulatory approval and a vote of the Copano unitholders. TPG, Copano’s largest unitholder (owning over 14 percent of its outstanding equity), has agreed to support the transaction.

Copano, a midstream natural gas company with operations primarily in Texas, Oklahoma and Wyoming, provides comprehensive services to natural gas producers, including natural gas gathering, processing, treating and natural gas liquids fractionation. Copano owns an interest in or operates about 6,900 miles of pipelines with 2.7 billion cubic feet per day (Bcf/d) of natural gas throughput capacity and 9 processing plants with more than 1 Bcf/d of processing capacity and 315 million cubic feet per day of treating capacity.

Read the Entire Press Release
 

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Energy Stocks & Crude Oil Special Trend Analysis Report

Crude oil has been trading ways for the past year between the 2011 high and low. The trading range through 2012 has been contracting with a series of lower highs and higher lows. This pennant formation because it is taking place after an uptrend is a bullish pattern with $110 and possibly even $140+ per barrel in the next 6-18 months.

If you look at the weekly investing chart of crude oil the key support and resistance levels area clearly marked. A breakout of the white pennant will trigger a move to the next support or resistance level. And judging from the positive economic numbers not only form the USA but globally the odds are increased for the $110+ price target to be reached sooner than later.

Crude Oil Price Chart – Weekly Investing



Crude Oil Price Chart – Daily short term Analysis and Target

If we zoom into the daily chart and analyze price and volume you will notice the $100 per barrel level is potentially only 2-3 days way… But keep in mind whole numbers (decade & Century Numbers) naturally act as support and resistance levels. So when the $100 century price is reached there will be a wave of sellers with fat thumbs who will slam the price back down to the $96 and possibly back down to the $92 level before oil continues higher.



Utility Stocks – XLU – Weekly Investing Chart

The utility sector has done well and continues to look very bullish for 2013. This high dividend paying sector is liked by many and the price action speaks for its self



Energy Sector Weekly Investing Chart

Energy stocks which can be followed using the XLE exchange traded fund (ETF) typically leads the price of oil. Looking at energy stocks we can see that they are outperforming the price of crude oil and on the verge of breaking out of a large Cup & Handle pattern. If so then $90 is the next stop but prices may go much higher in the long run.



Energy Stocks and Crude Oil Conclusion:

In short, crude oil is stuck in a large trading range much like gold and silver which I just wrote about here...."Precious Metals & Miners Making Waves and New Trends"

Once a breakout takes place on either the white or yellow lines on the first crude oil weekly chart we should see oil, energy and utility stocks start making some big moves. Depending on the direction of the breakout (Up or Down) it must be played in that direction to generate substantial profits obviously.

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Chris Vermeulen


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