Friday, July 30, 2010

BP's (NYSE:BP) Bob Dudley Says Time to Slash Cleanup Efforts

While it has been helpful to those who have lost work in the area because of the BP (NYSE:BP) oil spill, there simply isn't much oil left to removed from the Gulf of Mexico, and incoming CEO Bob Dudley said it's time to cut back on the cleanup efforts, while stressing the ongoing commitment of BP to make things right.

The reality of skimming boats, as far as that part of the oil cleanup, is historically, at best, it cleans about 2 percent of the oil spilled in an ocean. Most of the time it's less than that, so even when oil was spewing into the region, that was the case. Now that it's under control with the new containment cap, evaporation and oil-consuming microbes are rapidly removing the oil from the Gulf, and make the former size of the cleanup effort no longer no longer appropriate.

Dudley did reiterate the commitment of BP to cleaning up the effects of the spill, and will continue doing that till the job is completed.

Concerning the overall effects of the oil spill, Dudley said the politically correct statement that "Anyone who thinks this wasn't a catastrophe must be far away from it," not really addressing the realities of the oil rapidly subsiding in the region.

The emotional hype generated by mainstream media outlets to attract eyeballs has left the residue of unbelief concerning any positive news out of the Gulf oil spill.

There is also the want and need to extract as much money out of BP as possible while the public anger remains fixated on them. Even slowing down the cleanup operations has caused much fear and consternation among some politicians and residents, who simply don't listen to the facts and are still overheating on their emotions.

The fact is the reported damage from the oil leak have been overblown, and most of the coastlines of the Gulf haven't been touched by oil, or at most, very little.

So the amount of work to clean the Gulf has to be cut back based on that reality, and not the idea that there is some type of unmanageable amount of hidden oil lurking in the Gulf that crews must be ready to rescue us all from.

BP (NYSE:BP) Oil Shouldn't Catch Loop Current - Thad Allen

The U.S. government front man for the oil spill, Thad Allen, said Friday the oil from BP (NYSE:BP) shouldn't end up in the loop current, which should bring a sigh of relief to residents of the East Coast of the United States.

"The chances that oil will become entrained in the loop are very, very low - and will go to zero as we control the leak at the well with the cap and ultimately kill it," Allen said.

What's more interesting, although Allen didn't address it, is there is relatively little oil to be found now that the oil well has been temporarily plugged.

That suggest, and as scientists have mentioned, that the Gulf is cleaning itself up through evaporation and oil-eating microbes, the reason it's so hard to find the oil.

In other words, there isn't that much oil to in the Gulf to enter into the loop current, even if it did.

Arch Coal (NYSE:ACI) Sales Up 40 Percent, Surpasses Expectations

Arch Coal (NYSE:ACI) is the latest of the commodity companies to report great results for the second quarter, as they turned things around from a loss last year to solid earnings in the second quarter.

The company was led by a 40 percent surge in sales, and said they expect that to continue on for the remainder of the year. They also raised their earnings guidance on the lower end by 10 cents.

Earnings for the second quarter came in at $66.2 million, or 41 cents a share. Last year Arch lost $15.1 million, or 11 cents a share, as sales went in the other direction, dropping 20 percent.

Revenue for the quarter increased to $764.3 million, against last year's $554.6 million. Analysts had been looking for revenue of $765.4 million, and earnings of 25 cents a share.

Full-year earnings guidance was from $1.10 a share, an increase of 10 cents over the $1 a share estimate from April, to $1.40 a share, excluding charges.

Production guidance remains the same, with estimates of 147 million to 155 million tons for the year. That doesn't include coal which will be acquired from third parties.

Bobby Jindal Wants BP (NYSE:BP) Cleanup in Local Hands

In what was defined as a "contentious" meeting with federal officials, Louisiana governor Bobby Jindal said he wants priorities for the BP (NYSE:BP) oil spill cleanup to come from the bottom up, and not from the top down.

Jindal defined what he was talking about, saying, "What we suggest is that they allow each parish to come up with their own detailed plan, parish by parish."

Some of this came from the typical ineptness of the federal government and its multi-layered bureaucracy, which in the recent case of Tropical Storm Bonnie, evidently removed booms and other equipment used to fight oil far too soon before the storm hit the area, according to parish presidents.

This was where a lot of the contention in the meeting revolved around, that the local and regional people in the area now what's best for them, and not the federal government.

Jindal is right in his suggestion. Each region does know what's best for them, and they're the ones with everything at stake. That makes them think through their decisions and the reasons behind it much more efficiently, thoroughly and accurately, than their federal counterparts.

Federal government front man Thad Allen, evidently wouldn't have none of that, rather stating the many government agencies would cooperate closely and "jointly" work on cleaning up the coastal areas.

BP (NYSE:BP) Setting Up Charitable Fund for Obama Moratorium Victims

BP (NYSE:BP) is doing a good thing by setting up a charitable fund for victims of the Gulf oil moratorium forced on the region by the Obama administration.

The fund will target those who aren't able to work because of the misguided moratorium from Obama; specifically oil rig workers.

A statement from the company said it "fulfills the commitment" BP made "as a gesture of good will for the people of the Gulf region."

While a decent gesture by BP, they shouldn't have had to waste this kind of money on victims of Obama. BP has enough on its financial plate in claims and liabilities that will tax them to the utmost. To basically be pressured into paying for the victims of Obama is outrageous, but it seems nobody cares because they think BP needs to be punished.

The problem is the precedent these types of actions set, and allowing an out of control government to be enabled to do whatever it wants, when it wants. This isn't what America is about, and I wish BP wouldn't have caved on this. Not because I want to see workers suffer, but to show the consequences of the misguided and draconian actions the Obama administration continues to do.

Rebranding BP (NYSE:BP) as Amoco

Some BP (NYSE:BP) gas station owners have thrown around the idea of rebranding BP as Amoco in the U.S. market, the company bought out by BP in the latter part of the 20th century.

The thinking by a growing group of owners is Amoco was once thought of as the American Oil Co., and that could work hand in hand with the installation of American Robert Dudley as CEO, who replaced Tony Hayward.

Since BP's largest market is the U.S., that does make some sense, but the branding BP has been going on for years, and it would come with a lot of risk to change it back to Amoco, a brand a lot of people have forgotten, or don't know even existed.

Some people have protested the Gulf oil spill by boycotting BP, and that has hurt station owners anywhere from 10 percent to 40 percent in less sales.

BP has addressed the problem by reducing credit card fees used at the stations, providing more national advertising, and giving cash to distributors.

At this time the idea of rebranding hasn't reached the proportions where it would have a chance of becoming a reality, but it could gain some steam if things remain as they are.

In October BP has its annual convention, where at that time we'll see if this becomes something revolutionary in the company at a grassroots level, or things return more to normal after the oil leak is permanently plugged, and people don't have the company in front of their face on the TV or Internet being reminded of the oil spill and its consequences.

Citigroup (NYSE:C) Maintains "Buy" Rating on Cliffs Natural Resources (NYSE:CLF)

Citigroup (NYSE:C) kept its "Buy" rating on Cliffs Natural Resources (NYSE:CLF), with a price target of $87 a share.

Even though they missed their earnings numbers in the last quarter, Cliffs
still generated earnings five times what they were last year in the second quarter, garnering $260.7 million, or $1.92 a share. Analysts were looking for $2.02 a share.

Still, iron ore prices are the key for the performance of Cliffs, and even if the economy slows down, steel should still be in demand a decent levels, which bodes well for the company.

Uncertainty about China, Europe and the United States makes this a difficult call, but Citigroup evidently believes Cliffs will perform well in the near term, and has called it that way.

Citigroup (NYSE:C) Nabs Former Goldman (NYSE:GS) Forex Trader

Citigroup (NYSE:C), in an internal email to employees, told them they hired former Goldman Sachs (NYSE:GS) forex trader - Jo Narita.

The email said:

"Jo Narita, one of the preeminent traders in [foreign exchange], not only in Japan but globally, has joined the bank after eight years at Goldman Sachs in Japan."

Narita will be charged with growing the forex business in Japan, and also enlarge their overall trading business in the Asian country.

He starts at Citi Tokyo next Monday as head of FX trading.

Texas Emissions Violation a BP (NYSE:BP) Payback for Rejecting $25 Million Grant Request?

It was recently discovered that BP (NYSE:BP) had earlier this month rejected a request for a $25 million cleanup grant from the state of Texas to pay for cleaning up the tar balls on the coast.

BP instead said they would pay as they go with it, and not make a lump sum payment.

Here we are just a short time later listening to news that a BP Refinery is being investigated for allegedly releasing contaminants into the air. I wonder if they're $25 million in contaminants?

Allegedly, BP released up 500,000 pounds of pollution into the air from April 6 to May 16, but was referred by the Texas Commission on Environmental Quality on July 23. That was just after a heated exchange between Texas and BP over the proposed and rejected cleanup grant.

Bank of America (NYSE:BAC) Upgrades Conoco (NYSE:COP)

ConocoPhilllips (NYSE:COP) received an upgrade from Bank of America (NYSE:BAC), as the oil giant more than doubled earnings in the second quarter.

Bank of America upgraded them from "Sell" to "Neutral" on their strong earnings, which came to $4.16 billion, or $2.77 a share. Last year in the same quarter they generated earnings of $859 million, or 57 cents a share.

The financial institution also like the fact Conoco is going to sell the entire stake it has in Lukoil, the largest non-government oil company in Russia.

Bank of America set a price target on Conoco of $61 a share. Conoco closed yesterday at $54.56, gaining $0.67, or 1.24 percent.

BP (NYSE:BP) Says No to $25 Million Texas Cleanup Grant

If there's anything you learn about government, it's they can go through money faster and less efficiently than any other institution on the earth, so the decision by BP (NYSE:BP) to pay Texas for cleanup costs as they go, rather than through a $25 million grant, has the Lone Star state angry over the decision.

But taking Florida as an example, they went through $25 million in money targeted to marketing (provided by BP) so fast, that it wasn't much later they asked for another $50 million. Nice to set a budget taxpayers don't have to pay for.

The problem with politicians is they don't get the danger associated with the endless printing of money, which the Federal Reserve has been doing during the tough economic times, and so are treating BP as if they have a printing press of their own which they don't have to be accountable for.

BP now understands from their dealings with the governments, both state and federal, that they better be slower to throw their money around, or they'll end up having none.

That's at least part of it. On the other hand, BP has done that to the other Gulf states, but feel that Texas doesn't warrant the actions because of minimal damage so far on their coasts.

BP has promised they will pay for the clean-up cost as Texas has to perform them.

Most, if not all the Texas clean-up, is related to tar balls, which are very low maintenance and easy to handle. There also could be the desire by Texas to use the money as a sort of unemployment fund to get people off of assistance and working again.

It is also being discovered that the damage in the Gulf and the surrounding states isn't going to be near what it originally thought to be based on hype and theory, rather than any semblance of reality, as oil is being hard to find in the Gulf now that the well has been plugged.

So the costs for BP, from that point of view, could end up being much less than projected, as the oil seems to be being eaten by microbes, evaporating, and causing far less damage in the region.

BP's (NYSE:BP) Next Battle: Legal Venue

Now that the crisis of oil spewing into the Gulf of Mexico is winding down, the focus is now on the lawsuits BP (NYSE:BP) will face for years to come.

The two immediate issues in regard to that are whether or not to have the venue in Houston or New Orleans. Obviously BP wants the Houston location and plaintiffs the New Orleans venue.

Arguments have been heard by the federal judges, but it could take up to a month before a final decision is made.

One possible result could be that neither venue is the chosen venue, but they could be one among several. The huge number of cases could make it prohibitive to have them all tried in one district, which could lead to several venues in order to make things move faster.

Some of this will depend on the number of people or businesses who may decide to get some money more quickly through the escrow fund, rather then wait for an underterimined and unpredictable number of years.

Kenneth Feinberg, who is overseeing the escrow fund, had made it clear you either accept their decision or file a lawsuit. If claims are offered and accepted, there is no recourse to those making the decision to accept the claims.

But that could be much better in a lot of instances than going through years of litigation with no guarantee of getting anything. And if plaintiffs are older, they very easily could pass away over the duration of the case.

Lawyers of course will attempt to persuade people and businesses to sue in order to get their huge piece of the pie, but those using the escrow fund avenue wouldn't have to pay, as lawyers will be on site to help them for free.

It will be interesting to see if the judges would allow the venue to be in New Orleans, as the chances of a fair trial there in light of the enormous media attention and coverage is highly unlikely.

HBSC (NYSE:HBC) Takes Lead on BP (NYSE:BP) Vietnam Asset Sale

BP (NYSE:BP) has hired HSBC Holdings Plc (NYSE:HBC) to help them sell their stake in the Nam Con Son natural-gas field in Vietnam. The value of the asset is close to $1.3 billion.

It's no secret BP is attempting to raise capital to fund existing and future liabilities connected to the Gulf oil spill, and they've very publicly let it be known the assets in Vietnam were available for acquisition.

Included in the Vietnam assets are a power station, pipeline and gas field.

BP recently upped the amount of assets they want to divest of to raise capital from about $10 billion to $30 billion. They garnered $7 billion of that recently with the sell of assets to Apache Corp (NYSE:APA), which included Egyptian and North American projects.

South American assets in Venezuela, Colombia and Argentina may be next on the block. Russia has already expressed some interest in the Venezuelan holdings.

Barclays Plc (NYSE:BCS) was recently hired to help sell the assets BP holds in Columbia.

India's giant exploration company, Oil & Natural Gas Corp., may team up with Vietnam Oil & Gas Group to acquire the Nam Con Son field. They already hold a 45 percent stake in the project.

Gulf Re-opens for Fishing, First Time After BP (NYSE:BP) Oil Spill

Some portions of the Gulf of Mexico have been re-opened for fishing, the first time since the BP (NYSE:BP) oil spill has spread oil across the region.

This announcement came from Louisiana wildlife officials, who said state waters which are east of the Mississippi River in four parishes (counties) will be re-opened for fishing.

Both fish and shrimp will be allowed to be fished for at this time.

After extensive testing by the Drug Administration, the fish and shrimp were declared to be safe for consumption, the reason for the announcement fisherman could go ahead and begin again.

Thursday, July 29, 2010

Shell (NYSE:RDS-A) Earnings Up on Oil Prices, Increased Production

Royal Dutch Shell Plc (NYSE:RDS-A) had a strong quarter, led by higher oil prices and a solid production performance which exceeded expectations.

Earnings increased to $4.21 billion, beating street estimates of $4.08 billion. Last year earnings for the quarter stood at $3.82 billion.

Gas and oil production on average increased by 3.11 barrels of oil equivalent a day, a five percent rise. Liquefied-natural-gas sales volumes were up 34% over last year in the same quarter.

Like their major competitors, Shell is increasing its exposure to natural gas, with a goal increasing it to slightly over 50 percent of total production by 2012.

Costs for the quarter beat target goals, coming in at $3.5 billion, a 15 percent gain over projections.

CEO Peter Voser, said the continues on its strategy of divesting of non-core assets, with a goal of increasing sales to $8 billion through 2011.

Approximately 40 percent of capital spending over the next several years will target the Asia Pacific region.

The Obama, Democrat oil moratorium in the Gulf of Mexico, has the most drastic effects on Shell, which has the most oil rigs affected by the drilling ban.

Chief Financial Officer Simon Henry said to investors he estimates a cost of $200 million after taxes for the full year.

With seven rigs shut down during the BP (NYSE:BP) Gulf crisis, Henry said they had a charge of $56 million for the second quarter. Voser has hinted he may attempt to get claim the capital from BP.

Vale (NYSE:VALE) Acquiring Copper Company to Diversify Income Streams

In a move to diversify their income streams, Vale (NYSE:VALE) announced they're acquiring Brazil copper miner Paranapanema for $1.13 billion, a 20 percent premium for the company.

This is a timely move for the miner, as iron ore prices are high, and to acquire a company strategically in a time of strength is a wise move in my estimation.

Even though they did pay a premium for Paranapanema in a time of depressed copper prices, copper prices will inevitably move up again, and when that happens, Vale SA has positioned themselves strongly to take advantage of that.

Vale paid an actual premium of 22.4 percent, measured by the average share price of Paranapanema over the last 90 days. Vale will have a 100 percent stake at the close of the deal.

With 55 percent of revenue coming from iron ore, Vale has been wanting to expand beyond that to make other metals a larger part of their revenue. Copper was only 3 percent of revenue in the first quarter for Vale.

Vale also expanded into fertilizer earlier in the year, acquiring Bunge's (NYSE:BG) domestic fertilizer assets for close to $3.8 billion.

The earnings report for Vale is scheduled after close of the markets today.

Potash (NYSE:POT) Earnings Double in Second Quarter, Revenue Soars

Potash Corp. of Saskatchewan Inc. (NYSE:POT) (TSE:POT) by all measures had a solid quarter, as earnings were over double what they were in the second quarter last year and revenue soared.

Earnings surged $472 million, or $1.55 a share, a major improvement over last year's $186.2 million, or 61 cents a share. Revenue for the quarter grew from $856 billion last year during the same quarter to $1.44 billion.

Analysts had been looking for earnings to come in at $1.19 a share, so Potash blew past those expectations. They also exceeded expectations for revenue, where analysts estimated $1.40 billion.

The company was led by increased sales of potash in the quarter, which rose over three times what they sold last year, generating $641 million, up from $210.7 million last year.

One negative factor was the fall in potash prices for the quarter, shrinking 35 percent to $309 a ton. Volume was able to overcome that though.

Sales of phosphate gained also, although much more moderately, reaching $363.5 million, from the $324.7 million last year. Pricing was better this time for phosphate, increasing 13 percent to $458 a ton.

Nitrogen sales were also much higher growing from $320.6 million last year to $433.3 million this year. Prices for nitrogen grew 20 percent, with volume up to 1.3 million tons from 1.2 million.

Bunge (NYSE:BG) Crushed on Earnings, Guidance Down

Bunge (NYSE:BG) got hammered in the second quarter, surprising almost everyone, as they missed earnings estimates by more than double.

Earnings for the quarter excluding charges came to a loss of 75 cents share, while analysts had been looking for a profit of $1.31 a share.

Some reports were based on including the one-time gain of $2.4 billion, which made it appear Bunge had exploded in earnings. Including items that would be true, as they garnered earnings of $1.8 billion, or $11.15 a share.

That was up from the $313 million, or $2.28 a share last year in the same quarter.

Most investors, analsysts and traders know that game though, and the quarter was a disaster for Bunge, as earnings are measured excluding items and charges.

Revenue was also diappointing in the quarter, coming to $10.97 billion, where analysts estimated $12.17 billion.

Earnings for the year was also downwardly revised by Bunge from a range of $5.30 to $5.80 a share to a range of $3.25 to $3.50 a share.

Traders punished the company on the news, with shares dropping to
$46.94, a loss of $7.03 or 13.03 percent as of 2:17 PM EDT.

Rush Limbaugh Right on BP (NYSE:BP) Oil Leak?

All the scoffers were out when Rush Limbaugh at the beginning of the BP (NYSE:BP) oil spill noted the ability of the Gulf of Mexico to absorb a lot of the oil spill naturally.

You would have thought there was no truth to the statement at all because of the obvious fact that most people either love Limbaugh or hate him.

The emotions got in the way and his detractors used his comments to attack him, but now that things are settling down and the smoke is clearing, there is a growing number of scientists and professors saying it's quite possible the damage alleged from the oil spill isn't going to be anywhere what was originally thought because of the microbes in the Gulf which evidence shows are devouring the oil.

This is why people are asking the question of where is the oil. The answer is it isn't there. It isn't settling on the ocean floor, approximately 40 percent is evaporating, and much of the rest is being greedily eaten by these tiny microbes.

What this does is also question the integrity of the environmentalists who have jumped on the bandwagon of devastation to further their dubious agendas.

Citing a Time article saying just these things, a British columnist said this:

"So the questions must be asked: how much of the hype that was generated by this incident served political purposes? And whose interests did it serve? The hysterical anti-oil eco-lobby? The anti-Obama camp in the first instance, and then the White House itself when the President turned public anger on BP? The US media which loves a scare story, particularly when it involves a “foreign” enemy?

"And who will be the ultimate losers? Obviously, those who hold shares in BP (around half of whom are American) and all the pension funds which rely on the value of those shares. But also, perhaps, the eco-lobby itself whose judgment and credibility are called into question once again."

Others have talked about the affect of the oil-eating microbes, another other factors, and one of our writers at Commodity Surge tackled it as well.

The emerging narrative based on actual facts is the alleged environmental damage, whether in the number of birds or wildlife killed, damage to beaches and wetlands or marshes, isn't in reality that much,

Eugene Turner, an LSU coastal scientist, who isn't a friend in any way to the oil industry, sums it up well, "We don't want to deny that there's some damage, but nothing like the damage we've seen for years."

The fervor point to media hype fueled by radical green organizations who have been losing donations and money for years, who attempt to hype any potential environmental disaster to the utmost in order to generate funding for the cause.

Too bad these scientists and professors didn't have the guts to come forward far before this, as it would have calmed things down and allowed an accurate assessment of the situation.

It is understandable from the point of view of the focus of the majority of people being on the oil leak, but now that's it has been stopped, it's incredible to see how quickly things are restoring themselves naturally.

Democrats Continue Sham Attack on BP (NYSE:BP) Over Lockerbie

Democrats are scrambling to keep the attention off of their dismal record since they took control of the country, and continue to pursue BP (NYSY:BP) over the so-called issue concerning Scotland's release of the Lockerbie bomber.

Every single lawmaker in Britain has already said there is absolutely no connection between BP and the release of Abdelbaset Ali Mohmet al-Megrahi, who was believed to have only three months to live at the time because of cancer.

Democratic Senator Robert Menendez has resumed the faux whining about the circumstance, with Democrats evidently angry over it not taking hold in the minds of the American public, who, for the most part, don't believe BP had anything to do with it.

Now the Democrats look like Chicago thugs rather than statesmen, as they went so far as to call the non-existent event one of "blood money," causing an even bigger rift in relations with one of our strongest historical allies, Britain.

Menendez has now invoked the name of Tony Hayward in an attempt to revive the issue, knowing how deeply angry the public is with him, and that he can get away with bashing him, this time about not showing up for the media show which had meant to be created to make Democrats look tough for their base.

The attempt to create a circus in order to probe the lame duck CEO of BP backfired on them, as they've had to reschedule it for September, even though it's highly unlikely Hayward will attend.

The September date was mentioned because of the elections to come soon afterwards, which the Democrats would use the highly emotional issue to attempt to draw votes in an election where they are expected to get crushed in.

Too bad Democrats don't mind destroying relationships with allies of the American people in order to garner a few votes.

Incoming BP (NYSE:BP) CEO Bob Dudley Says Company Will "Make this Right"

In an interview Wednesday, incoming BP (NYSE:BP) CEO Bob Dudley said he has been getting the impression from people that once the oil well is successfully capped, the company will pick up and leave the region.

He said that's far from the truth, and he and BP will "make this right in America."

"The only way you can build a reputation is not just by words, but by action," Dudley said. "I picked up that people think that, well, once we cap this well, we're somehow going to pack up and disappear. That is certainly not the case. We've got a lot of cleanup to do. We've got claims facilities. We've got 35 of those around the Gulf coast."

Dudley, who will take over as CEO from Tony Hayward on October 1, said the top priority of BP is to focus on and take care of the crisis surrounding the consequences of the Macondo oil well.

Microbes Saving BP (NYSE:BP) and Gulf?

A lot of liberal pundits laughed and mocked when it was suggested at the beginning of the BP (NYSE:BP) oil spill that the microbes in the water, i.e., the Gulf itself, could take care of a large portion of the oil being spilled into the ocean.

That didn't agree with the narrative though, so it generated ridicule and faux outrage at the idea that the situation may possibly be under better control than thought.

This isn't to excuse the circumstances or diminish the damage and cost to the people of the area economically, but it does show there's lot more truth to the assertion than was being allowed in the public discourse on the matter.

Suddenly there is admission from scientists and professors that, indeed, the fact there isn't much oil being found now that the leak is contained is probably the result of the heavy concentration of oil-eating microbes in the area.

When delving into the question of where the oil is, there are several possibilities, with all probably contributing factors.

One is there is the evaporation process which will remove some of the oil from the waters. That is especially true of what Edward Bouwer, professor of environmental engineering at Johns Hopkins University, called the "more toxic components of oil."

Evaporation could account for up to 40 percent of the oil that is disappearing from the Gulf.

Although some have theorized some of the oil has settled into sediments on the floor of the Gulf, where it could cause the most damage if it was true, the reality is this isn't part of the Gulf scenario, as one report cited by Yahoo news noted that "federal scientists [have determined] the oil [is] primarily sitting in the water column and not on the sea floor."

What is thought to be the reason behind the inability to find a large amount of oil is it's simply gone. A number of researchers believe it's the microbes in the Gulf of Mexico, which are extremely prolific, that has done the oil in.

The natural release of oil into the Gulf has been happening for as long as people know. That has generated a large number of microbes which feed on the oil leaking into the ocean, and were prepared for what they consider an abundance of food.

These microbes get all hot and bothered by the hydrocarbons in oil, and use it to reproduce and grow. The result is a huge surge in the population, which continues to gorge on the oil.

Why this is especially the probable cause of the missing oil in this case is, the warm waters of the Gulf are especially conducive microbes, which grow far faster in the warm waters than they do in colder water.

Proof that this is what is happening comes from Samantha Joye, microbial geochemist at the University of Georgia, who notes the oxygen levels in portions of the Gulf which had had a lot of oil in it has went down. Since microbes need oxygen to consume oil, it is conclusive evidence they're working overtime to eat the excess oil.

The dispersant used so effectively in the Gulf is also considered part of the reason for the quickly disappearing oil as it relates to the microbes. Breaking up the oil makes it easier for microbes to quickly eat the oil, which is what the dispersant does, and the microbes seem to like to take a bite out of the dispersant too.

All that show of having thousands of boats out there to appease the media and those that want to "feel" something is being done, was largely a waste of time, counting for at most, about 2 percent of the oil being cleaned up. And that's on the top end of the estimate. It's probably much lower than that.

While it's obviously too early to know the extent of the damage from the oil, it is important to note it could be far less than originally anticipated, and that would be good news for everyone involved, including BP and other oil companies in the region.

For liberals, they need to learn to get their facts and stories straight before mocking and laughing at those who actually have connections to the industry and understand the power of nature to mend herself. We're seeing it happen before our eyes. I guess she's not politically correct.

Obama Administraton Holding Up BP (NYSE:BP) Paying Claimants?

Kenneth Feinberg seemed somewhat frustrated when talking about the implementation of the BP (NYSE:BP) escrow fund.

When asked about payment delays of claims and when things would be up and running, Feinberg said, "The first check is delayed into August. Not because of my apparatus -- my apparatus could be up and running Aug. 6. It's the escrow fund."

On Wednesday, when an official from the Obama administration spoke about the escrow fund, he said that "is still on track, and we expect it to be finalized soon." He refused to give reasons as to what was causing the delay.

Note in both of these circumstances there wasn't a shot taken at BP for some type of delaying tactics from the government or Feinberg. That in itself suggests a government side to the problem.

A spokesman from BP also said earlier this week that the company was waiting for the finalization of the escrow fund before funding it, implying it was the Obama administration that was holding things up.

Feinberg also seems to be out of the loop on the reasonings behind the delay, only saying the process of distributing fund to claimants was delayed because of BP not putting money into it. He made no mention as to why the money wasn't being put in.

The knee-jerk reaction was to blame BP, but as the story unfolds, it appears to be something on the side of the Obama administration that is keeping individuals and businesses from receiving their money.

That's besides the outrageous moratorium on drilling in the Gulf of Mexico by the Obama administration, which is costing thousands of jobs in the region.

Cliffs Natural Resources (NYSE:CLF) Earnings Up Fivefold

Cliffs Natural Resources Inc (NYSE:CLF) reported earnings for the second quarter surged by over five times what they were the year before in the same quarter, based on strong iron ore demand and higher prices.

Profits in the quarter increased to $260.7 million, or $1.92 a share, up from $45.5 million last year, or 36 cents a share. It was still below the $2.02 a share analysts had been looking for.

The earnings also had the benefit of iron ore prices rising to their peak level over the last 12 months during the quarter, making you wonder what lies ahead in what appears to be more economic slowdown in the steel sector.

Second quarter commodity prices were solid in general, and has helped many raw materials companies look good.

Now the obvious question is where do they go from here, as the global economy looks somewhat feeble at best.

Even in a slower economy though, iron ore demand should remain fairly strong, at least in the short term, and that could bode well for Cliffs Natural Resources and other iron ore producers.

Wednesday, July 28, 2010

DryShips (Nasdaq:DRYS) Beats Estimates, But Faces Major Challenges

DryShips (Nasdaq:DRYS) reported earnings which beat analysts expectations, but underscored the challenges the company continues to face in light of slowing business, but growing fleet of vessels.

Earnings for the second quarter came to $80.4 million, or 30 cents a share, beating analysts' estimates of 22 cents a share.

Revenue in the quarter also surpassed estimates, reaching $224.2 million, with the target being $216 million.

Last year Dryships generated a profit of $57.4 million, or 24 cents a share, with revenue coming in at $207.5 million.

What is challenging is the major reasons behind the charges last quarter which partially brought them the earnings results.

First, interest rate swaps were the major charge they took, without which the company would have only had earnings of $8.7 million, or 2 cents a share.

But over the long haul, things like floating the senior subordinated notes in order to strengthen their balance sheet to attain financing, is the big hurdle to overcome.

That was also a charge they took in the quarter, albeit a much smaller one. It does make you look at them going forward concerning how they'll finance the two new drillships they're having built for them in South Korea.

There are also two other vessels beside those two they're to take delivery of in the next year or two, with no charter contracts in place to pay for them. By that I mean no charter contracts for the drillships under construction. The other two ships evidently do have some charters to help pay for them.

Either way, DryShips will need close to $1 billion in financing. And with the new ships on their books and few revenue-generating charters to pay for them, it's getting difficult for DryShips to find ways of raising capital.

There have been rumors that the company will issue high-yield bonds to get some of that capital. That could work, as look at the people who invested in Greek bonds. If someone's willing to do that, everything else looks like a sure thing.

The foolish decision to impose a moratorium on the Gulf of Mexico by the Obama administration will also offer major challenges for DryShips, although it's being spun by CEO CEO George Economou as a positive for the company.

The problem with his assessment is it would have to be the absolute perfect circumstances for it to work out that way, which is highly unlikely.

Here's what he said in a release:

"The moratorium imposed on all deepwater drilling in the U.S. Gulf of Mexico is expected to be a short-term negative for the industry as some rigs may move out of the region and compete for business elsewhere.

"However, in the medium-to-long term the resulting emphasis on modern equipment and safety measures is expected to be a positive development for the industry overall. While it's early to authoritatively say what the actual regulations will be one expected result will be a focus on newer equipment. With four state of the art sixth generation drill ships, we believe that any new safety regulations will be advantageous for us."

As I said, highly unlikely.

BP (NYSE:BP) Claims Payouts Reach Over $256 million

Claims paid by BP (NYSE:BP) for people or businesses who have lost income or profits since the oil spill has surpassed over a quarter of a billion dollars, standing at about $256 million so far.

Over the last week they've paid over $30 million, with a minimum of $60 million to cover payments for August to be sent this week as well.

Breaking it down, fisherman remain the highest compensated recipients of the claims, accounting for close to $39 million, shrimpers have received $23 million, and charter boat businesses another $6 million.

A large chunk of $117 million has went to a variety of ancillary businesses and individuals impacted by the accident. People working at processing seafood is one example of that, as well as those who may have worked in businesses and earning a living from the Gulf.

So far, approximately 133,000 claims have been filed against BP, with close to 83,000 checks written overall.

Hess (NYSE:HES) Earnings Explode in Second Quarter

Hess Corp. (NYSE:HES) increased earnings by close to four times what it was last year, as demand for gasoline and diesel led them to the solid quarter.

Earnings for the quarter were $375 million, or $1.15 a share, far above the $100 million, or 31 cents a share, in the same quarter last year.

Revenue grew to $7.75 billion, a 15 percent improvement over the prior quarter. Revenue failed to meet estimates, as analysts had been looking for $8.93 billion, with earnings of $1.13 a share.

This seems to mirror the performance of other companies already reporting, as margins were up significantly, which seems to be the impetus behind the performance of Hess as well.

Their exploration-and-production segment is by far the largest generator of profits for Hess, and that unit increased by 94 percent, as production gained 2 percent and prices for oil rose 32 percent and prices for natural gas were up 22 percent.

Is Wheat Supply Really Under Pressure?

With the focus on the drought in Russia, and losses of production is some parts of Europe, the impression we're facing a severe shortage of wheat has been put forth by the press, but the reality is there is so much wheat out there, the losses from Russia and Europe are largely irrelevant.

Even with wheat prices continuing to find support and move upward, the reality of the bountiful wheat harvest, which will be realized or focused on in August, will again put downward pressure on wheat prices going forward.

In spite of the surge in wheat prices the last month, expectations are prices will probably end the year lower by about 2 percent over last year.

It's even fortunate the Russian drought has caught the eye of the agriculture press, or wheat prices probably would have been much lower than that.

South America and Australia are particularly strong this year, and wheat exporters will have pressure on margins again as wheat prices begin their inevitable downward march, as global inventories remain strong in spite of drought news coverage.

ArcelorMittal (NYSE:MT) Misses Revenue, Lowers Guidance

Strong revenue wasn't enough for ArcelorMittal (NYSE:MT) to impress investors and traders, as they were able to generate $21.65 billion in revenue for the second quarter, a 43 percent gain, also beating analysts' estimates by close to $2 billion. They are getting punished though for missing on revenue, even though earnings outperformed.

Earnings per share were $1.13, on $1.7 billion in net profits, 43 cents above estimates.

Guidance was the most concerning for shareholders, as the third quarter looks weak for earnings, based largely on a slowing Chinese economy.

Chief Executive Officer Lakshmi Mittal said in this in a statement, “Although the third quarter will be impacted by a combination of seasonal factors and the effects of the economic slowdown in China, underlying demand continues to show improvement. The challenge for the second half of the year will be to pass on the full extent of cost increases to our customers.”

Mittal added that profits could plunge by up to 30 percent in the third quarter from this quarter.

Other factors include the rising costs of iron ore at the same time demand is slowing. That should eventually push down iron ore prices, but that hasn't caught up with lower demand yet.

Conoco (NYSE:COP) Surges on Increased Margins, Oil Prices

ConocoPhillips (NYSE:COP) enjoyed over double the earnings in their latest quarter, as refinery margins and oil prices led them during the reporting period.

Profits came to $4.16 billion, or $2.77 a share in the second quarter, contrasting with the $859 million, or 57 cents a share in the same quarter last year. Revenue also exploded from $35.45 billion to $45.69 billion during that time.

Price per barrel of oil rose to $71.09, a 37 percent gain, while natural gas prices increased to $4.50 per million cubic feet, a gain of 22 percent.

Conoco's profit margins from refineries were much stronger, where the American refineries generated income of $782 million. That was unfortunately offset by a $1.1 billion impairment charge in connection to its Germany-based Wilhelmshaven refinery.

The goal of selling about $10 billion in assets remains on the front of Conoco's strategy, and CEO Jim Mulva announced the next assets to be sold will be its entire stake in Lukoil, the largest private oil company in Russia.

In June Conoco sold its stake in the Canada oil sands to Sinopec for $4.65 billion.

Major BP (NYSE:BP) Assets Not of Interest to Eni SpA (NYSE:E)

Italian natural gas and oil giant Eni SpA (NYSE:E), said in a statement today that they aren't interested in acquiring major assets BP is putting on the selling block.

Claudio Descalzi, head of Eni's exploration and production division, siad the company has no "need to buy any producing assets."

Eni itself is looking to shed between $3 billion to $4 billion of its own assets, and is looking toward Indonesia and Egypt as the markets they're interested in expanding into.

CEO Paolo Scaroni noted on the conference call that Eni is looking for buyers of about $4 billion of their assets at this time.

BP (NYSE:BP) Falls on Continued Uncertainty and Fear

BP (NYSE:BP) share price fell Tuesday after the earnings of the company took a $17.15 billion hit, as the company took a pre-tax $32.2 billion dollars loss from costs related to the Macondo oil spill in the Gulf of Mexico.

Even the expected news Tony Hayward would step down on October 1 to make way for newly crowned CEO Robert Dudley wasn't enough to move the company into the positive, as it was already factored into the price.

What's more important for shareholders of BP and potential investors, is how they can somehow get their minds around the liabilities and lawsuits the company may have to pay out going forward, and what they will be after divesting up to $30 billion in assets to help pay for those expenses.

There are so many variables that it will be largely be a guess, and with leadership more palatable to most now being the face of the company, it does nothing to help with the uncertainties of the future of BP.

This had to happen, as the well, once plugged, and now a new CEO to step in soon, will reslt in all the focus, from an investors standpoint, being on the cost associated with the Gulf of Mexico oil spill.

Now that the smoke is clearing and people and institutions are getting a look, it's simply overwhelming as to where to even begin to figure out what this will cost BP over the years, and how to factor that into the share price of the oil giant.

How to discount an unknown is impossible, and this is far beyond the unknowns any company will have under normal circumstances, or even volatile ones.

The Gulf oil spill is unprecedented in history, and there are no guidelines to follow or stepping stones to walk on to show the way.

In the short term we could see shares in BP rise, as the permanent sealing of the well is announced, but again, where does one go from there?

There can be no doubt BP will be a speculative play for some time, and possibly once we see the percentage of individuals and businesses accepting the decisions of those presiding over the escrow fund we'll be able to at least get some clarity there.

Cleanup costs should eventually be clearer as well, once investigations into what it'll take to clean up the damage, and more importantly, what the actual damage is.

After that, most of the focus will fall on the lawsuits against the company and how they determine to deal with them.

Will they fight what appears to be frivolous and unwarranted lawsuits, or will they settle the vast majority of them to move things along fast so they can eventually start to restore confidence in the company once again?

The history of BP doesn't lend a lot of confidence either, as far as safety and accident issues go, so that will continue to be a factor in the back of the minds of anyone thinking about investing in the company.

Appearances things are settling down will probably give BP another shot in the arm as far as share prices rising, as they have throughout July, especially when the well is permanently sealed.

Then the job of factoring in all the variables begins, and I don't see how that could be done quickly in any way in order to discount potential and probable future liabilities.

More than likely we'll see a lot of movement with BP, and speculators could thrive in those circumstances based on every bit of news, which will gravitate toward claims and lawsuits as the narrative changes.

BP closed Tuesday at $38.00, down only $0.65, or 1.65 percent.

BP (NYSE:BP) Change of Leadership Won't Dampen Cleanup Efforts says Thad Allen

Government point man in the Gulf of Mexico oil spill, former Coast Guard Admiral Thad Allen, said the change of CEOs by BP (NYSE:BP) won't change the commitment to cleanup efforts in the region.

Commenting on the decision to remove Tony Hayward on October 1, Allen said, "I don't see any diminishing of performance or priorities," from the transition.

Effectively Bob Dudley will be CEO, as Hayward will obviously be a lame duck and non-entity; at least in the United States, where he has numerous PR disasters which made the situation worse than it had been from that perspective.

The schedule to being the "static kill' on Monday remains on target as well, which at the end of the week should finish off with the relief well ready to plug the well permanently on the bottom.

The static kill will focus on the top of the well, where cement and mud is injected into the well. The relief well does a similar thing from the bottom of the well.

Allen added the containment cap which has stopped the oil from flowing into the Gulf remains stable and continues to do the job it was intended to do.

BP's (NYSE:BP) Bonds Up as Market Likes Strategy to Raise Capital

The market liked what they heard from BP (NYSE:BP) on plans to raise capital to deal with the oil spill by selling billions in assets, rather than primarily go the debt route, although they have billions in credit lined up from about a dozen banks to go that route if they have to.

As a result, bonds from BP have went up for two days in a row while the cost of credit default swaps fell, which is insurance used to protect investors against default by a company.

This of course precludes bonds, which are debt after all.

MarketAxess reports that traders were primarily targeting short term bonds of BP, which they pushed up by 3/4 point to a 4.994 percent yield. In comparison to Treasurys, that's 400 basis points above their yield.

Notes due November 2013 which stood at 5.25 percent were the most active.

The progress of BP in stopping the oil from flowing into the Gulf, along with being close to permanently plugging the well has generated optimism.

Fixed-income managers said BP is still a very risky company, even though things have the appearance of settling down.

It won't really be until a firmer grip on overall liabilities emerge, that a more accurate picture of the health of the company in the years ahead will be really known.

And all those assets they're being forced to sell, will also be lost revenue and earnings.

So while a leaner BP with new leadership sounds more attractive than what they've been, it presents a entire new set of problems that can't be dismissed out of hand.

Tuesday, July 27, 2010

Century Aluminum (Nasdaq:CENX) Earnings in Positive Territory

Century Aluminum (Nasdaq:CENX) was profitable this second quarter, as it generated earnings of $5.1 million, or 5 cents a share. Last year in the same quarter the company was hammered by losses of $107.1 million, or $1.45 a share.

Even with the better performance, it was far below the estimated earnings average of 25 cents a share.

Revenue for the quarter rose to $287.9 million, a gain of 52 percent, coming short of the $292 million analysts were looking for.

The earnings results of the quarter came from forward contracts of $9.3 million connected, for the most part, to LME price protection options, according to Century.

Charges for the quarter included $16 million for energy costs at Hawesville, along with $7 million for market inventory adjustments.

Valero (NYSE:VLO) Generates First Profit in a Year

Valero Energy Corp (NYSE:VLO) shattered analysts' expectations, posting a profit of $583 million, or 93 cents a share. Analysts at Thomson Reuters had been looking for 71 cents a share in earnings.

Last year during the same quarter, Valero took a loos of $254 million, or 36 cents a share.

Revenue also soared in the quarter, rising from $17.4 billion last year to $21.8 billion this year.

Lower-grade crude oil helped them in earnings, as the spread between higher grades and lower grades was better than expected.

Consequently, margins were close to double for the refiner over last year in the Gulf Coast region, where they have five plants in the market.

Going forward, the margins and cost remain strong, but aren't expected to be quite as good as the previous quarter, which led Valero Chief Executive Officer Bill Klesse to say the company needs the economy to grow if fuel demand is to increase.

In other words, the third quarter won't be as good as this quarter if there isn't something outside the company to increase demand.

Massey Energy (NYSE:MEE) Earnings Loss From Charges Related to Upper Big Branch

Not unexpectedly, Massey Energy Co (NYSE:MEE) posted a loss for the quarter in light of the charges related to the explosion at Upper Big Branch mine in West Virginia which killed 29 workers; the worst mining accident in 40 years.

Massey had a net loss of $88.7 million, or 88 cents a share. Last year during the same quarter they enjoyed a profit of $20.2 million, or 24 cents a share.

Revenue for the latest quarter beat last year's numbers, coming in at $693.1 million, in contrast to $603.2 million in 2009.

After the mining accident, Massey told shareholders charges would be taken from $80 million to $150 million costs and liabilities related to the incident.

Included in the results for the quarter is pre-tax charges of $128.9 million connected to the accident. Without the charges Massey would have lost 2 cents a share.

Patriot Coal (NYSE:PCX) Losses Less Than Expected, Lowers Sales Guidance

Patriot Coal (NYSE:PCX) wasn't able to generate the number it did last year in the same quarter, and its earnings suffered, with losses of $13.6 million, or 15 cents a share. Last year they enjoyed a profit of $31.4 million, or 39 cents a share.

Revenue managed to beat expectations, with the company posting $539 million, above the $526.1 million analysts were expecting. That was a six percent improvement over estimates.

Patriot lowered its sales guidance from 33 million to 35 million, down to 32 million to 34 million.

With the company having to shut down or close two coal mines off and on throughout the year, production questions have arisen as to their ability to grow the unit which produces coal for the making of steel.

The company said in their report they had concerns over the regulatory environment causing the cost per ton to increase while production decreases.

UBS (NYSE:UBS) Starts Oasis Petroleum (NYSE:OAS) with "Buy" Rating

UBS (NYSE:UBS) has launched coverage of Oasis Petroleum (NYSE:OAS), and they began with a "Buy" rating on the energy company, with a price target of $20 a share.

"We favor Oasis’ pure-play Bakken, 91% oil-weighted profile and believe that management can achieve the most attractive growth profile in the space through 2012 without additional external financing," said the UBS analyst covering the company.

Oasis Petroleum focuses on unconventional natural gas and oil resources to develop and/or acquire.

Oasis was down today to $16.28, dropping $0.40, or2.40 percent as of 3:50 PM EDT.

Teck (NYSE:TCK) Gets Half of Horizonte (LON:HZM), Horizonte Gets Araguaia

Teck Resources (NYSE:TCK) (TSE:TCK) did something it had hoped it didn't have to, and that was to offload its Araguaia nickel project in Brazil.

They've done that now, as Horizonte Minerals (LON:HZM) acquired the nickel project for an extremely cheap 50 percent stake in the company by Teck. Tecks' stake includes the deal for Araguaia, but still a great deal for Horizonte.

Debts from the global recession and crisis brought Teck to a place where they've had difficulty paying off gigantic debts they owe, and which they couldn't attain refinancing for after acquiring Fording Canadian Coal Trust a couple of years ago.

Their loss is Horizonte's gain, as they are getting the assets at a price of 0.7 cents a pound of nickel in the ground, far below the average 3 cents a pound usually asked for.

There will be at least 100 million tons of resource in the deal, and a high probability of it reaching 150 million tons, and at the high end could even reach 200 million tons.

With a 50 percent stake in Horizonte, as least Teck is able to retain a position in nickel, something they wanted to be sure to do, and the reason they've held back on selling the promising asset.

DuPont (NYSE:DD) Raises Guidance, Beats Estimates

DuPont Co. (NYSE:DD) generated profits of $1.17 a share in the second quarter, beating the 94 cents a share analysts had been looking for. The chemical and seed company also increased its earnings guidance for the rest of the year on surging demand for their products.

Original earnings estimates of 2010 were $2.50 to $2.70, which were upwardly revised from $2.90 to $3.05 a share. Analysts were looking for $2.64 a share.

Revenue for the quarter grew to $8.62 billion, gaining 26 percent, with net income coming in at $1.16 billion or $1.26 a share. Last year in the same quarter the company generated $417 million, or 46 cents a share.

Some of the segments where demand increased were crop seeds, plastics, auto paints and solar power materials.

The largest business unit of the company, agriculture, enjoyed a 31 percent increase to $762 million, largely on surging seed sales. Corn sales enjoyed a 2 percent gain in market share in the North American market and a 4 percent gain in soybeans domestically.

Performing even better, as measured by percentages was their electronics and communications unit, which exploded in sales by five times over the same quarter last year, increasing 53 percent. Leading the division was the production of photovoltaic materials and solid growth in Asia.

Corn Products International (NYSE:CPO) Beats Estimates, Raises Guidance

Corn Products International (NYSE:CPO) is among a large number of companies posting earnings today, and the company has reason to celebrate, as they exceeded expectations while raising earnings guidance for the full year.

Earnings in the second quarter rose to 75 cents a share, far above the 60 cent average analysts were looking for, on net income of $36.8 million. That compares to losses last year of $84.8 million, on sales of $1.07 billion.

Guidance for the full year was raised from a range of $2.25 to $2.60 a share, to $2.55 to 2.75 a share. Expectations were at $2.57 a share for the year.

Earnings for the second half the year are projected to be from $1.17 a share to $1.37 a share.

The company said all regions experienced double-digit growth in the quarter.

AK Steel (NYSE:AKS) Exceeds Estimates, but Poor Guidance

Although AK Steel (NYSE:AKS) was able to turn things around some and turn a profit in the latest quarter, exceeding analysts' expectations, their guidance wasn't inspiring, causing investors to push the price of the stock down early in the trading day, and it remains down by well over 3 percent.

Earnings for the quarter were $26.7 million, or 24 cents a share, over three times the 7 cents a share analysts expected. Last year during the same quarter AK Steel lost $47 million, or 43 cents a share.

Revenue for the quarter, similar to US Steel (NYSE:X), surged by over double what it was last year, $793.6 million, to $1.6 billion.

Like their peers, there isn't much pricing power in the steel industry at this time, and the company expects prices to fall 5 percent in the quarter. That brings projections for price per ton down from $17 that was looked for to $15.

US steel also reported challenges for the next quarter on managing operational costs.

Iron ore costs are priced in to increase by about 65 percent next quarter for AK Steel and the rest of the steel industry.

U.S. Steel (NYSE:X) Losses Confirm Slow Economy

United States Steel Corp. (NYSE:X) reported a second-quarter loss, even though they were able to double sales during the quarter over last year.

Considering the deep recession last year, that isn't an unexpected result, and doesn't say much to the performance of the company or an improved economy.

US Steel did attempt to spin the results as a "sharp turnaround," which when comparing numbers is true, but again, needs to really be compared with numbers in a healthy economy to give an accurate measurement of the their performance.

Losses for the quarter came to $25 million, or 17 cents a share, a definite improvement over the loss of $392 million last year during the same quarter, or $2.92 a share.

Even with sale doubling to $4.68 billion, it shows margins were low and the ability to raise prices minimal. The company stated the increased revenue was also hindered by operating expenses, which had almost doubled over the same quarter in 2009.

Guidance wasn't very impressive from the steel giant either, as they did say they expect to generate a profit in the third quarter, but falling orders and lower steel prices will have operating results underperform.

BP (NYSE:BP) Loses Over $17 Billion, Drops Hayward

The consequences of the oil spill starting April 20 crushed BP (NYSE:BP) for the quarter, ending with the announced ouster of Tony Hayward as CEO of the company.

Surprisingly, analysts had been looking for BP to generate earnings of $1.43 a share, while they in fact lost an enormous $5.42 a share, missing by $6.85 a share. Losses for the quarter mounted to $17.2 billion. It is one of the worst quarters in the history of the company.

Last year during the same quarter the company enjoyed earnings of $4.4 billion, or $1.01 a share. Last quarter they generated $6.1 billion, or $1.79 a share.

The oil giant noted in order to cover existing and future costs they booked a $32.2 billion pre-tax charge. That includes the escrow fund of $20 billion, which they'll pay $5 billion annually to cover claims.

Speculation over the removal of CEO Tony Hayward has ended as well, with American Robert Dudley announced as the new CEO, who will take over for Hayward on October 1.

CF Industries (NYSE:CF) Earnings Report Preview

Analysts covering CF Industries (NYSE:CF) are looking for a strong quarter, with earnings expected to increase to $2.94 on revenue of $1.2 billion.

Last quarter, the company recording earnings of $2.41, far surpassing estimates of $1.42. Last year during the same quarter CF has revenue of $991 million.

For the year CF is expected to generate earnings of $6.9 a share, in comparison with $4.56 a share last year during the same period.

CF has been skyrocketing in share price since July first, when they were at $65.49 a share. Monday they closed at $77.90 a share, after starting the day over $80 a share.

The earnings report is scheduled for 10:00 AM EDT on August 6.

Alcoa (NYSE:AA) Refinances Debt by Issuing $1 Billion in Notes

Alcoa (NYSE:AA) decided to refinance some of its debt by issuing $1 billion in notes.

Yielding 6.15 percent, the notes will be due in August 2020 and will replace existing notes due from 2011 to 2013.

After expenses, Alcoa expects to finish the offering with $993 million.

Including cash on hand, they will use it to fund the acquisition of its current notes.

Bookrunners on the notes offering are Bank of America Securities LLC (NYSE:BAC), Citigroup Global Markets Inc. (NYSE:C), Deutsche Bank Securities Inc. (NYSE:DB) and UBS Securities LLC (NYSE:UBS).

BP's (NYSE:BP) Time to Kill Oil Well Approaching

Former Coast Guard Adm. Thad Allen, who retired the the middle of the
BP (NYSE:BP) Gulf oil crisis, but still represents the U.S. government in managing the cleanup process, said the process to begin killing the Macondo oil well should begin on August 2.

The well kill will be performed in two stages, with the first being called a "static kill," referring to cement and mud being shot into the well via the top. That will be the procedure on the second of August.

Assuming that is successful, the second stage, which is tentatively scheduled for August 7, would be to shoot mud and cement in from the relief well, which has reached its desired position and is ready to take the next step. The relief well is far below the top of the oil well and deep underground. That is called a bottom kill, and depending on the outcome of the static kill, could take several days or several weeks to complete.

The time frames could easily change if tropical storms enter the region and operations have to be shut down.

BP (NYSE:BP) Going to Send Hayward to Siberia?

Speculation continues to swirl over the fate of BP (NYSE:BP) CEO Tony Hayward, as there are unlimited expectations an announcement will come soon from the board of directors of the company, probably at the earnings report on Tuesday.

Spokesman for BP have continued to say the board supports Hayward, so it'll be interesting to see if this media-created story becomes a reality because of the negative scrutiny it maintains on the company.

Unnamed sources have been cited by a number of news organizations saying Hayward could be assigned to TNK-BP in Russia. I wonder if it's anywhere near Siberia?

There have been several names thrown about, but the media darling at this time is Robert Dudley, who is currently running the Gulf cleanup operations. At least he's the favorite of the American press.

The board of directors of BP held a meeting Monday, evidently to make a decision on Hayward. That's odd in the sense of everything they've said about Hayward, and possibly the timing, which most feel would be better if left until after the oil spill is permanently plugged.

In the short term, this is really an irrelevant distraction generated by the mainstream media, who are attempting to extend the story to draw eyeballs.

Who really cares at this time who's running BP, as it does absolutely nothing to change the circumstances and actions needed to be taken to solver the problem. Changing CEOs at this time won't matter in that regard, other than giving the news cycle a temporary boost.

Fluor (NYSE:FLR) Beats Analysts, But Earnings Fall

Earnings in the second quarter fell for Fluor Corp. (NYSE:FLR) over a year ago, but the company still managed to handily beat analysts' expectations.

For the quarter, Fluor generated $157.4 million, or 87 cents a share. Last year they were stronger with $169.3 million in profits, and 93 cents a share.

Revenue was also down from last year's $5.3 billion, dropping to $5.15 billion.

Analysts had been looking for revenue of $4.97 billion, and earnings of 71 cents a share.

Chairman and Chief Executive Officer Alan Boeckmann said this about the performance of the company in a release, "Fluor has once again demonstrated the tremendous power of its diversified business model with the recognition of record new awards and growing backlog led by our global mining business. Looking ahead to the balance of 2010, we see the potential for continued strong new awards in the second half, especially in our mining, oil and gas, and infrastructure businesses."

The company raised the lower end of their guidance, projecting earnings per share for the entire year to range from $2.90 to $3.20 a share. Prior estimates were from $2.80 a share to $3.20 a share.

Monday, July 26, 2010

Imperial Oil (Amex:IMO) Getting Coverage from TD Newcrest

Imperial Oil Ltd. (Amex:IMO) has had coverage initiated on them by TD Newcrest, and they started the company with a hold, and a price target of C$44.

"Imperial is in a position to leverage its operating expertise in the development of future expansions. IMO also has a significant pipeline of technology-based opportunities geared toward further improving full-cycle returns and capital efficiencies, in addition to having access to ExxonMobil’s (NYSE:XOM) technology pipeline... At a P/NAV of 95% relative to a peer group average of 87%, however, we believe that the current valuation reflects the bulk of the upside described above. Admittedly, this premium valuation may, in part, be due to the potential (eventual) takeout of the remaining 30.4% float not currently owned by its parent, ExxonMobil. Our neutral position is additionally supported by limited share liquidity and what we see as a dearth of near-term catalysts," said a TD analyst.

In other words, there's nothing in the short term which in evidence to make Imperial Oil move up, while those reasons that are there are already priced into the share price of the stock.

BHP (NYSE:BHP), Vale (NYSE:VALE), Rio Tinto (NYSE:RTP) Get Boost from Iron Ore Prices

Iron ore prices shot up to their highest levels in seven months, and Vale SA (NYSE:VALE), Rio Tinto Group (NYSE:RTP) and BHP Billiton Ltd (NYSE:BHP) are hoping it's a pattern that will continue, being the three largest suppliers of iron ore in the world.

The increase is being attributed to China buying up iron ore again, with the thinking being that drew from their stockpiles while hoping for prices to drop.

That can't be confirmed yet though, and it remains to be seen if they're really back in the market or traders drove the iron ore prices up.

Spot price for iron ore increased to $133.40 a metric ton, a gain of 5 percent.

China, the largest producer of steel in the world, acquires the iron ore for steel production.

Duncan Energy (NYSE:DEP) Beats Quarterly Estimates

Duncan Energy Partners (NYSE:DEP) released their quarterly results and the company exceeded analysts' expectations.

Both revenue and earnings were up, with the company generating profits of $23.3 million, or 40 cents a share. Analysts had been looking from 39 cents a share.

For revenue, that increased from last year's 226.7 million, to $265.2 million. Analysts projected $256.83 in revenue for the second quarter.

Duncan was trading at $29.48 at 12:21 PM EDT, down 0.4, or 0.14 percent.

Fluor (NYSE:FLR) Lands Tenaska Carbon Capture Deal

Fluor Corporation (NYSE:FLR) announced it has landed a deal with Tenaska to provide them with their Econamine FG Plussm carbon capture technology, which will be used at the Tenaska Trailblazer Energy Center, which is under development close to Sweetwater, Texas.

Fluor's Power Group president Dave Dunning, said about the deal, "Trailblazer represents an innovative environmental breakthrough in clean energy production that will have positive implications worldwide. We are eager to move forward and begin building this important new energy source for Tenaska and Texas."

The Trailblazer plant will be run by pulverized coal which will capture approximately 85 to 90 percent of the carbon dioxide (CO2) byproduct. From there it will be sent through a pipeline to be used for recovering oil in the Permian Basin.

Michael Lebens, president of Tenaska's Engineering & Operations Group, said in a press release, "Fluor's Econamine FG Plussm technology has been licensed at commercial scale in 26 industrial plants worldwide, including three in the United States. The combination of Fluor's expertise with the technology and its 20 years of experience in practical applications makes it the best choice for use at Trailblazer."

Barton Biggs Says Too Early to Invest in BP (NYSE:BP)

Barton Biggs, who helped found the hedge fund Traxis Partners LP, and who runs the fund, said in a Bloomberg interview he believes its too early to invest in BP, saying it's still “too speculative” at this time.

Biggs said in a radio interview, “It’s too speculative for me. Are these people down in the Gulf who aren’t going to be able to fish and their business was fishing, are they going to be able to sue BP for payments for the next 20 years? I don’t know, it’s too hard to call.”

Concerning that, Kenneth Feinberg, who runs the escrow fund set up by BP, that those making claims will have to decide on the spot whether they're going to accept terms offered them. Those who think they can do better will have to sue and take their chances in that way, which would cater to the idea of Biggs concerning long-term liabilities.

We'll have to wait to see how individuals and businesses respond to offers from the escrow fund before we get a clearer picture on the way things will go over time.

There are also the hundreds of lawsuits already filed against BP, which are sure to mount as many join the effort to get a piece of the monetary pie.

Once BP proves they can permanently seal the oil leak, it'll also be a huge step where they can than face and hopefully manage the liabilities they will then face.

Barton Biggs Says Too Early to Invest in BP (NYSE:BP)

Barton Biggs, who helped found the hedge fund Traxis Partners LP, and who runs the fund, said in a Bloomberg interview he believes its too early to invest in BP, saying it's still “too speculative” at this time.

Biggs said in a radio interview, “It’s too speculative for me. Are these people down in the Gulf who aren’t going to be able to fish and their business was fishing, are they going to be able to sue BP for payments for the next 20 years? I don’t know, it’s too hard to call.”

Concerning that, Kenneth Feinberg, who runs the escrow fund set up by BP, that those making claims will have to decide on the spot whether they're going to accept terms offered them. Those who think they can do better will have to sue and take their chances in that way, which would cater to the idea of Biggs concerning long-term liabilities.

We'll have to wait to see how individuals and businesses respond to offers from the escrow fund before we get a clearer picture on the way things will go over time.

There are also the hundreds of lawsuits already filed against BP, which are sure to mount as many join the effort to get a piece of the monetary pie.

Once BP proves they can permanently seal the oil leak, it'll also be a huge step where they can than face and hopefully manage the liabilities they will then face.

Pressure Mounting to Replace BP's (NYSE:BP) Hayward

The media pressure has ramped up on BP (NYSE:BP) Tony Hayward to have him replaced, as speculation is there will be an announcement tomorrow during the quarterly report of the company.

Interestingly, this is largely a media concoction, as the Board of Directors of BP, through their spokespeople, have reaffirmed their support for Hayward throughout the ordeal.

The company has again denied there's been any decision made about the removal of Hayward as CEO of BP, and said they're meeting Monday night to discuss things, and whatever decisions made at that time will be "announced as appropriate."

This doesn't imply they're going to get rid of Hayward, but speaks to ending the speculation, as it's distracting at this time in regard to larger and more important issues.

One way or the other, it would be difficult for them to not announce something about Hayward during the quarterly report, even if it is to reaffirm he's staying on in his position at this time.

If and when Hayward is removed, the leading candidate at this time is Managing Director Robert Dudley, who would become the first American the lead the company in its history.

This would make sense because the bulk of BP's business is in North America.

BP (NYSE:BP) Expected to Announce Management Changes at Earnings Results Release

When BP (NYSE:BP) released their first-half results on July 27, rumors are flying they'll have another and anticipated announcement, which will be concerning management changes at the company.

Assuming the announcement will be made, which is highly likely, what isn't a certainty is if it'll be effective immediately. Changing CEOs in the midst of the attempt to permanently stop the oil well may be a bad one, although Tony Hayward, at least in America, is pretty much considered a lame duck.

Watching Hayward, it would be easy to see why he would agree to the measures, even if the board of the company continues to support him. The bulk of BP's business is performed in the U.S., and it's doubtful he would be able to effectively do his job there in light of the oil spill coming from the explosion on the Deepwater Horizon.

It is thought that Hayward will remain on at least until a relief well is successfully put in place, although it wouldn't be surprising to seem him leave sooner with the pressure being asserted from the U.S.

Enbridge Energy (NYSE:EEP) Beats Earnings, Revenue Estimates

Enbridge Energy (NYSE:EEP) announced second-quarter profits after the markets closed on Friday, reporting earnings and profits significantly above analysts' estimates.

Earnings for the oil and gas pipeline operator increased to $0.85 a share, against expectations of $0.71. Revenue also surpassed projections, reaching $1.75 billion; $14 million above the $1.61 billion being looked for.

With revenue close to level, it points to the cost-cutting measures put in place by the company as to its earnings performance.

On the revenue side, the liquids unit led the way, with growth in that segment increasing 60 percent to $167.8 million, up from the $104.8 million last year in the same quarter.

The gas division on the other hand fell 27 percent to $38.8 million, down from $52.8 million in 2009. Lower gas volume was the major reason behind that, along with lower NGL as well.

BP (NYSE:BP) Ready to Launch Libya Offshore Drilling

In deal three years in the making, BP (NYSE:BP) is poised to launch its drilling program into Libyan offshore waters, in a well that will be deeper than the Macondo field well, which has been leaking oil into the Gulf of Mexico until a second containment cap stopped the spill from continuing to enter the waters.

The Libya deepwater drilling will be in the Gulf of Sirte, and is set to start in the next several weeks.

BP spokesman David Nicholas said to AFP news on Saturday: "We expect to begin the first well in the next few weeks," also saying it "can take six months or more to drill."

Concerning the outrageous accusations by Democrats in America that BP and/or the British government had released the Lockerbie bomber in order to secure the oil contracts, UK Foreign Secretary William Hague said this, "There is no evidence that corroborates in any way the allegation of BP's involvement in the Scottish Executive's entirely separate decision to release him on compassionate grounds."

According to Scottish Justice Secretary Kenny MacAskill, all the material related to the incident is in the public domain, and nothing is left to be relieved, other than the communication between the governments of the US and the UK over the matter. That can only be released if given permission from the United States.

Every politician asked in Britain has said there is no connection between BP and the Lockerbie bomber release, and the accusation and showcase hearings meant to distract the American people away from the horrid performance of the Democrats is ridiculous and needs to be stopped.

It underscores the desperate plight of the Democrats who have rejected the will of the American people and forced through unwanted legislation, along with uncontrolled spending, which generations of Americans will have to pay back.

To risk solid relations with the UK in order to protect themselves, well, from themselves, is the ultimate in reckless behavior.

Alcoa (NYSE:AA) Executives Play Musical Chairs

In an attempt to broaden the experience and knowledge related to the operations of Alcoa (NYSE:AA), the company announced they've had two of their senior finance executives switch positions.

As of August 1, Graeme Bottger, who is now EPS Chief Financial Officer, will take over the duties of Tony R. Thene as Alcoa Vice President and Controller. Thene, will assume the duties of Chief Financial Officer of Alcoa's Engineered Products and Solutions business group.

In a press release, Alcoa Executive Vice President and Chief Financial Officer Chuck McLane, said this about the changes, "Tony moves to the top finance position in EPS at a time when our downstream business is pursuing an external growth strategy and strengthening productivity, both areas where his controller background will be beneficial to EPS."

"In Graeme's 29-year Alcoa career, he has held a broad range of global operating and corporate positions that prepare him well for his new assignment as Alcoa's Controller," McLane added. "During his five years as EPS CFO, the group grew dramatically in size and importance within the Alcoa portfolio."

Normally under these types of circumstances executives are being groomed for something larger further down the road.

Saturday, July 24, 2010

Diamond Producer De Beers' CEO Gareth Penny Stepping Down

In a move that stunned those with an interest in the largest diamond producer in the world - De Beers, CEO Gareth Penny announced he'll be stepping down after a highly successful half-year of revenue.

With nothing else on his plate, there are some questions as to why he's doing it, other than his comment "I feel it’s the right time." Penny has run the company for the last five years.

Some said it felt odd that there was no replacement to step in to replace Penny, and no announcement before this. It implies something happened behind the scenes, whether it's the reality or not.

Sales for the last half increased to $2.6 billion, or 84 percent, as Asian demand skyrocketed, especially demand from China and India.

As far as carats go, production in that regard is estimated to increase from 30 million to 32 million for the year, with projections for 2011 coming in at around 40 million carats.

Penny will remain at the company until September, when his position will be taken over by Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver, who will remain in the capacity of joint-CEOs until a replacement is found.

Mosaic (NYSE:MOS) Doubles Potash Sales, Declares Dividend

In their quarterly report, Mosaic (NYSE:MOS) said they generated a profit of $396.1 million, or $0.89 a share. That was on sales of $696.5 million in potash sales, double last year's total.

Last year, earnings came in at $146.9 million, or 33 cents a share in the same quarter. Revenue in the quarter rose to $1.86 billion, an increase of 17 percent.

Phosphate sales remained level with last year, reaching $1.2 billion.

The downside is their highly productive mine in South Fort Meade, Florida, which a U.S district judge allowed a dubious claim by the Sierra Club that it could harm water, result in a restraining order against them. That particular mine generates about 33 percent of all phosphate production from the company on an annual basis.

Mosaic executives said while they doubt the Sierra Club will be able to prove and/or convince the judge there is a legitimate threat to the water quality, they are putting together a contingency plan in the unlikely case they are ruled against. They added they would immediately seek appeal if that is the case.

Even so, Mosaic likes what they see going forward, and the Board of Directors declared a quarterly dividend of $0.05 a share Friday. Shareholders of record as of the close of business on August 6, 2010 will qualify for the dividend, which will be paid on August 19, 2010.

Citigroup (NYSE:C) Keeps "Hold" on Fluor (NYSE:FLR)

Fluor (NYSE:FLR) was maintained as a "Hold" by Citigroup, Inc. (NYSE:C), while placing a price target of $52 on the company.

Analyst at Citigroup said this about Flour, “We are raising our 2010, 2011 and 2012 EPS estimates by $0.12, $0.10 and $0.03 to $2.94, $3.32 and $3.53 per share, respectively. The upward changes to our EPS estimates are driven by higher than previously modeled new awards, a lower effective tax rate (i.e. both more in-line with management’s guidance), partially offset by modestly lower margins and higher assumed burn rates.”

Among the commodity sector Fluor serves are oil and gas, mining and metals, and power.

Fluor ended the week strong, moving up $4 a share over the last five trading days, finishing at $47.04. On Friday they closed ahead by $1.02, or 2.22 percent.

Friday, July 23, 2010

Wheat Futures Gains About to End?

While the financial press continues report on the continuing weather challenges concerning wheat in major producers like Russia and Canada, the question must be asked as to how long that will be able to offer support to wheat futures, which have finished their fourth straight week in gains.

Damage in Russia is real, and Canada to a lesser extent as well, but that has to be taken in light of the global wheat planting and harvest, and like in past years, it has been enormous, and that hasn't changed in any way in 2010.

Over the next several weeks, a growing number of analysts and traders are expecting wheat to fall in price, to as low as $5 a bushel by the middle of next month, and possibly more.

Weather-related damages happen every year, and every year reports give a boost to prices temporarily, until the market catches on that there is plenty of wheat available in other regions to make up for it.

For example, this year there is a bumper crop in the United States, and that will contribute a lot to the price of wheat in the near future.

Many other smaller countries have also started to increase wheat acreage over the last several years, and that has played a big part in imports and exports around the globe, and will continue to going forward.

Bottom line is, it won't matter what happens in Russia and Canada, as there will be plenty of wheat for the world to consume, and after this brief period of higher wheat prices, we'll see them start to go down ahead in the near future.

Corn Plunges 6 Percent on Bearish Outlook

Things changed quickly for corn futures this week, as concerns over hot, dry weather rapidly moved from high corn prices to plunging ones, as rains and cooler weather increased the outlook for the corn harvest, but not for corn traders.

For the week, corn dropped 6 percent, with September corn falling 5 1/4 cents to $3.71 1/4 a bushel, and December corn decreasing more, 5 3/4 cents, to $3.84 1/2 a bushel.

Some are trying to extend the corn price rally by implying the rain was too much and would have a detrimental effect on corn, but that adds too much confusion and uncertainty, as you can't have it both ways.

That isn't to say there won't be some negative effects, as corn planted in lower areas could be impacted, but overall, the outlook is far better than it was, the reason corn prices will continue to fall, even with attempts to use every different weather pattern as a way to try to push corn prices up.

BP (NYSE:BP), Exxon (NYSE:XOM), Anadarko (NYSE:APC), Shell (NYSE:RDS-a), Chevron (NYSE:CVX), Marathon Oil (NYSE:MRO) Pulling Workers from Gulf

With Tropical Storm Bonnie due to hit the Gulf region Saturday, BP (NYSE:BP), Exxon (NYSE:XOM), Anadarko (NYSE:APC), Shell (NYSE:RDS-a), Chevron (NYSE:CVX) and Marathon Oil (NYSE:MRO) are pulling all non-essential workers from the area.

In the case of BP, that will interrupt the drilling of the relief well, which is close to being completed, and operations to permanently seal the Macando oil well near at hand.

The containment cap will remain in place, although monitoring of it will be put on hold. It seems to have held solidly, and shouldn't pose a problem while the storm passes through the area.

If it picks up in strength, which is possible when it hits the warmer waters, more workers could be evacuated from the Gulf.

Schlumberger (NYSE:SLB) Earnings Up, But Not Enough

After competitors like Halliburton (NYSE:HAL) and Weatherford (NYSE:WFT) exceeded analysts' expectations earlier in the week, Schlumberger (NYSE:SLB) had pressure to perform strongly as well, but were only able to meet expectations, not surpass, causing the share prices to drop on what was perceived as disappointing news.

Even the 33 percent increase in earnings to $818 million, or 68 cents a share, wasn't enough to get investors excited, as revenue wasn't able to even meet expectations, reaching $5.94 billion for the quarter.

The Obama administration moratorium did hurt Schlumberger more than some rivals, as they figured it cost them close to 2 cents a share for the quarter, and with the ongoing ban, will cost them from 8 to 12 cents a share in the second half.

With expectations high after other strong industry performances, and solid numbers for the last four quarters, Schlumberger was expected to exceed, rather than just meet, expectations, causing the disappointment from the market.

Schlumberger plunged to $58.91 as of 3:40 PM EDT, dropping $2.39, or 3.90 percent.

Citigroup (NYSE:C) Slashes Diamond Offshore Drilling (NYSE:DO) Estimates

Citing costs in the third quarter, Citigroup (NYSE:C) lowered estimates for Diamond Offshore Drilling (NYSE:DO) today.

After disappointing earnings in the second quarter, Citi cut its estimate from $7.90 for Diamond to $7.30.

Citigroup analyst Robin Shoemaker said, "The company's forecast for increased shipyard and rig start-up costs lead us to lower [the] 3Q10 estimate.... Our EPS projections for 2010 and 2012 are little changed and are based on conservative day rate assumptions."

Diamond dropped to $61.52 at 2:14 PM EDT, a loss of $0.79, or 1.35 percent.

China Looking at Switching from U.S. Dollar Benchmark

China and other BRIC nations (Brazil, Russia, India) have been talking some time about the idea of switching from the U.S. dollar as a benchmark to some other currency arrangement.

One of those possibilities has been to move to a basket of currencies as a benchmark as the measure of an exchange rate for the renminbi, or yuan.

Deputy Gov. Hu Xiaolian of China's central bank said this on their government Web site earlier today.

Hu said, "Compared with pegging to a single currency, the exchange-rate regime with reference to a basket of currencies will help adjust exports and imports, current account, and balance of payment in a more effective manner.

"A floating exchange rate has impact on total imports and exports of an economy. Therefore, the floating cannot be aimed to adjust [only the] bilateral trade balance, and it is not advisable to just look at the [dollar-renminbi] exchange rate.

Peabody Energy (NYSE:BTU) Declares Quarterly Dividend on Common Stock

The Board of Directors for Peabody Energy (NYSE:BTU) declared a quarterly dividend on common stock of the company of $0.07 a share, or $0.28 on an annual basis.

It will be offered to shareholders of record as of August 6, 2010, and will be payable on August 27, 2010. The yield on the dividend is 0.6 percent.

Peabody, which is the largest private-sector coal company in the world, also had analysts at FBR Capital reiterate an "Outperform/Top Pick" rating on their shares recently, and retain a price target of $55.00 a share.

They said in a note to clients Thursday, “Yesterday, BTU reported solid 2Q10 estimates, raised its midpoint of 2010 guidance, and reiterated its view on the coal super-cycle (we call it “COALbalization”). We were positioned near the top end of guidance and are trimming estimates slightly to account for 4Q10 met coal price risk and modest U.S. steam volumes. Specifically, we are lowering our 2010–12 EBITDA estimates for BTU by an average 2% and reducing our EPS estimates by an average 8%, reflecting lower U.S. steam volumes and slight, below-expectations contracting…We are lowering our 2010 EPS/ EBITDA estimates to $3.00/$1,844M from $3.12/$1,847M…We are also lowering our 2011 EPS/ EBITDA estimates to $3.85/$2,138M from $4.29.$2,218M to reflect about 5 MT lower U.S. volumes and slightly lower pricing for Colorado coal, which got contracted during the current quarter.”

Alcoa (NYSE:AA) Declares Quarterly Dividend Again

Alcoa has paid a quarterly dividend to shareholders for over 60 years, and that tradition continued today, as the Board of Directors again declared a dividend for the aluminum producer.

This quarter a dividend of 3 cents a common share was declared for shareholders of record at the close of business on August 6, 2010, which will be payable on August 25, 2010.

A quarterly dividend will also be paid on Alcoa's $3.75 cumulative preferred stock, in that case 93.75 cents a share for shareholders of record at the close of business on September 10, 2010, and payable on October 1, 2010.

Alcoa continues to struggle as aluminum demand remains depressed, although they are projecting about a 10 percent increase in demand going forward.

BP's (NYSE:BP) Alaskan Assets May Be On the Block Again

After some movement on other assets BP (NYSE:BP) is selling to raise capital to fund its liabilities in the Macondo Well oil spill, reports are they may be opening up talks again concerning assets it holds in Alaska, including the Prudhoe Bay oil field, which they hold a 26 percent stake in.

BP couldn't get the deal done with Apache (NYSE:APA), which seemingly wasn't willing to pay the price BP wanted, with approximately $1 billion separating the parties. BP had asked for about $10 billion and Apache was holding strong at close to $9 billion.

They did sell other assets to Apache earlier in the week for $7 billion, which were located in Egypt and North America.

This week BP also let it be known assets in Vietnam and Colombia were also for sale, which has generated significant interest, especially the Vietnam assets.

A number of government-owned oil companies are always looking out for energy assets to acquire, so BP will get a good price for those the choose to sell, even though it is known they need the cash badly.

Prudhoe Bay also had the sticking point of the right of first refusal from existing partners in the project, which include oil giants Exxon Mobil Corp. (NYSE:XOM), ConocoPhillips (NYSE:COP) and Chevron Corp. (NYSE:CVX). Exxon and Conoco have equal stakes of 36 percent and Chevron a small 2 percent stake.

BP (NYSE:BP) Vessels to Evacuate Area Later Friday

Tropical storm Bonnie has hit the south of Miami in Florida, with winds topping off at about 40 miles an hour. It is headed in the direction of the BP (NYSE:BP) cleanup zone, where it is possible they'll have to evacuate most the drilling ships and other vessels from the area some time today.

Expectations are it'll hit the Marcondo oil well cleanup zone on Sunday.

According to government representative and former U.S. Coast Guard Admiral Thad Allen, it'll probably leave the area without supervision for about two days at most. He said at a briefing with reporters, "If we have to evacuate the scene we're probably looking at a very limited window - probably 48 hours."

That is good news in general, as it was thought it could have been a two-week period rather than two-day period that tropical storm would affect the area.

During the time they're gone, no eyes will be able to see what is happening in reference to the containment cap, which has been given the go ahead to remain in place indefinitely by government officials.

Once Bonnie starts to travel across the Gulf, it is expected the warm waters will cause it to pick up wind speed. It is traveling at close to 18 miles an hour at this time.

U.S. Travel Association Wants $500 Million from BP (NYSE:BP)

Based on a study by the U.S. Travel Association and research group Oxford Economics USA, they've come to the conclusion BP (NYSE:BP) should pay them $500 million to help with the alleged potential losses of $23 billion over the next three years in the Gulf region.

Roger Dow, CEO of the U.S. Travel Association, said, "(BP's) oil spill will have long-term effects on businesses and jobs in the Gulf Coast region unless we counteract the usual course of events with an unprecedented response."

The hired company, Oxford, determined losses for the area could be from $7.6 billion to $22.7 billion. Gee, I'd think they could get a little closer in range than that.

Evidently the Association has already petitioned the government to secure the funds for them, although there's nothing in place to disperse the funds or protect from abuse even if the idea were to be agreed to.

While BP deserves a lot of blame, this is a ridiculous demand, and the numbers extremely far-fetched, and can't be taken seriously when being that far apart.

The money would supposedly be used in marketing, but Florida when through $25 million so quickly for the same purpose that it seems to be a waste of money, as governments only know how to spend and not stretch their dollar for best use.

Others like Douglas Shifflet of travel research firm D.K. Shifflet & Associates, said the numbers related to the impact of the spill are difficult to determine, as something on this scale has never happened before. So throwing around numbers like $500 million may get you attention, but it's based on smoke and mirrors and not any reflection of reality.

Then you would also have to factor in the slow economy, and not what would be happening if there wasn't a recessionary period we were going through. To garner numbers from the past wouldn't make any sense, as they are meaningless as to averages, with people holding on to their money and staying close to home. That would have happened whether there was an oil spill in the Gulf or not, so would have to be part of the process.

This is probably more of a stunt to bring the Association and its members into the awareness of those handling the BP escrow fund, as tourism marketing probably isn't at the top of their list of priorities when doling out the money for claims. And it definitely isn't when considering the $500 million being thrown out by the U.S. Travel Association.

Barrick (NYSE:ABX) Rating Raised by CIBC World Markets

Barrick Gold (NYSE:ABX) had its rating raised from "sector performer" to "sector outperformer" by CIBC World Markets, as higher gold prices are expected to overcome negative factors.

Production at the gold miner is expected to continue to be low, and costs to remain high.

Barrick, who is the largest gold producer in the world, has been pressured by Newmont Mining (NYSE:NEM), which has cut operational costs to far below Barrick's.

CIBC thinks that will change once the broader markets tumble or remain level.

BP (NYSE:BP) Being Sued by Alabama Attorney General

Alabama Attorney General Troy King announced on Thursday he will sue BP (NYSE:BP) in order to make up for lost tax revenue because of the Macondo oil well spill in the Gulf of Mexico.

King let it be known he was dissatisfied with government-appointed escrow fund czar Kenneth Feinberg, along with BP, for their handling of claims made against the company.

Concerning the recovery of funds, King said, "Make no mistake - we will be ready and we will pursue all violations of our state's statutes and regulations and we will obtain complete financial restitution for all losses and impacts."

Republican Robert Bentley, a state representative running for governor, said the effects of the oil spill may have a negative impact on General Fund budgets and the state education budget as well. He is a member of the committee which oversees and prepares the education budget for Alabama.

Representing the state in the lawsuit will be Balch Bingham, based in Alabama. They will receive as high as 14 percent of what is recovered from the litigation.

Syngenta (NYSE:SYT) Drops 5 Percent on Lower Earnings

After missing estimates and plunging 11 percent in earnings for their latest reporting period, Syngenta (NYSE:SYT) declined almost 5 percent in New York, as the agrochemical and seed business continues under pressure.

The company ended Thursday's trading session at $43.77, a fall of $2.22, or 4.83 percent.

Profits came in at $1.25 billion for the six-month period ending June 30, down from the $1.4 billion in the same period last year, and missing analysts' estimates of $1.32 billion.

Revenue also missed, although not by much, as it increased from $6.66 billion last year to $6.74 percent this year, gaining 1 percent Estimates were for $6.78 billion in sales.

Guidance wasn't inspiring either, as the company looks to remain level for the rest of 2010 for earnings, assuming the market in Latin America remains robust.