2024-11-14 11:46

Nov 14 (Reuters) - Shale producer Ovintiv (OVV.N) , opens new tab said on Thursday it was acquiring oil assets from Paramount Resources (POU.TO) , opens new tab for $2.38 billion in cash, expanding its presence in Canada's Montney shale play. At the same time, Ovintiv said it had agreed to offload its existing operations in the Uinta formation in Utah to privately owned FourPoint Resources for $2 billion, with the proceeds used to help pay for the Montney purchase alongside cash and debt. The moves help Ovintiv to further concentrate its oil and gas exploration and production operations in the Montney and the Permian Basin in Texas and New Mexico, the key shale basins in Canada and the United States. While Ovintiv has sought to expand its exposure to the Permian - including through buying oil-focused assets for $4.3 billion last year - the company said the cost of buying in the basin had increased significantly. "This asset stands on its own as the most valuable undeveloped acreage in North America, but part of the reason why it is so accretive for us is the cost of entry is priced right," Chief Executive Brendan McCracken said. He added the deal was "extraordinary value creation" for the company and its shareholders, adding its location next to Ovintiv's existing assets in the region would aid integration efforts. Following both deals, Ovintiv's free cash flow would increase by $300 million in 2025. In mid-afternoon trading, shares of Ovintiv were 3.6% higher while Paramount's shares rose 16.9%. The Ovintiv gain came even as the company suspended its share buyback program until it had repaid any borrowings to accomplish the purchase - expected in the second quarter of next year. "While a greater position in the Montney could potentially weigh on the valuation, the assets come at a low entry cost, have the potential to grow oil production," Siebert Williams Shank analysts said in a note, adding they expected markets to react well to both transactions. The Montney assets will add 70,000 barrels of oil equivalent per day of production, nearly doubling Ovintiv's existing production in the shale formation, according to a statement. Both deals are expected to close by the end of the first quarter, the Ovintiv statement said. FourPoint's all-cash purchase of Ovintiv's Uinta position was supported by investment firms Quantum Capital and Kayne Anderson, according to a FourPoint statement. Sign up here. https://www.reuters.com/markets/deals/ovintiv-buy-montney-oil-assets-238-billion-2024-11-14/

2024-11-14 11:40

LONDON, Nov 14 (Reuters) - The pound dropped to its lowest against the dollar since early July on Thursday, brushed aside by the U.S. currency's relentless rise following Donald Trump's U.S. election victory. Those developments are swamping British news for investors, although they will be keeping an eye on finance minister Rachel Reeves' first Mansion House speech to leaders of the City, as well as remarks from Bank of England governor Andrew Bailey. Reeves said in advance that she wants Britain to build a slew of "megafunds" with up to 80 billion pounds ($102 billion) in fresh investment firepower, under plans for the biggest shake-up in British pensions seen in decades. Sterling was last down 0.6% on the dollar at 1.2632, its lowest since July 2, falling through its early August low in mid-morning London trading. The move was largely in line with peers. The euro was down 0.6%, at a one year low, and the dollar was around 0.5% higher on the Japanese yen and the Swiss franc. "Cable (pound/dollar) is a dollar story at the moment," said Nick Rees, currency analyst at Monex Europe. Higher trade tariffs and tighter immigration under the incoming Trump administration are projected to fuel inflation, potentially slowing the Federal Reserve's rate cutting cycle longer term. These, alongside expectations for deeper deficit spending and higher short term economic growth are lifting Treasury yields, providing the dollar with additional support. The benchmark 10-year Treasury yield hit 4.483% on Thursday, its highest since July. The pound was steady on the euro at 83.12 pence to the common currency. It has been gradually strengthening in recent months, "a reflection of European political risk which should be negative for the euro," said Rees, pointing to the situation in France and Germany. The collapse of Germany's ruling coalition last week forced the country into a snap election that will is likely to take place in February, while the French government is trying to push its draft budget for next year over the line, despite lacking a majority in parliament. Sign up here. https://www.reuters.com/markets/currencies/sterling-squashed-by-dollar-steamroller-traders-watch-out-reeves-speech-2024-11-14/

2024-11-14 11:37

$1.29 of green finance in 2023 for every $1 of high carbon Follows pressure from New York public pension trustee Helped by reduced demand for bank capital from oil firms BAKU, Nov 14 (Reuters) - The United States' biggest lender JPMorgan (JPM.N) , opens new tab provided $1.29 in financing to green energy for every dollar backing high-carbon energy supply in 2023, executives told Reuters, the first time it has released the figure. The decision by the bank - a major funder of traditional energy companies - to disclose an Energy Supply Financing Ratio followed engagement with New York City Comptroller Brad Lander, who oversees public pension money. Banks are increasingly under pressure from investors to show how they are helping clients in the transition to clean energy, and JPMorgan's announcement comes as negotiators meet at a United Nations conference in Baku to discuss the move away from fossil fuels. JPMorgan said its new measure, to be included in a report scheduled for release on Thursday, is meant to capture the energy mix of a company's capital investments rather than its current asset base. When calculating the ratio, JPMorgan considered its financing activities such as loans, debt underwriting, tax-oriented investments and green bonds, and classified these as either for high- or low-carbon energy. For companies that do both, for example a power utility with both natural gas and renewable assets, the bank looked at forward-looking data such as the client's capital expenditures to decide how to classify the financing, said Rama Variankaval, JPMorgan's Global Head of Corporate Advisory. JPMorgan has previously said it aims to finance $2.5 trillion in sustainable development by 2030, with $1 trillion of that focused on climate solutions. JPMorgan's lending to green energy had grown in recent years, amid a reduction in demand for external finance from cash-rich oil companies. The ratio was affected by "the very deliberate strategy of JPMorgan to do more low-carbon financing and also partly because the oil and gas sector has come to the capital markets far less," Variankaval said. While it remains unclear whether U.S. companies will face a domestic rule on climate-related disclosures under the climate-sceptic government of incoming President Donald Trump, more banks are set to provide similar ratios in the future. Despite not setting a target ratio, JPMorgan is "optimistic in the long-term outlook for low-carbon energy in the U.S. and, candidly, across the world", said Global Head of Sustainability Heather Zichal. "Our focus has been, and will continue to be, on scaling the technologies that the world needs, and supporting our clients in every sector as they are adapting to a rapidly changing economy," Zichal said. Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/jpmorgan-gives-green-energy-finance-ratio-first-time-2024-11-14/

2024-11-14 11:32

TSX ends up 0.2% at 25,049.67 Eclipses Wednesday's record closing high Energy climbs 2.4%; oil settles 0.4% higher Technology pulls back 3.5% Nov 14 (Reuters) - Canada's main stock index extended its record-setting run on Thursday as gains for energy shares offset a pullback in technology stocks and investors weighed recent declines for the Canadian dollar. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 60.65 points, or 0.2%, at 25,049.67, eclipsing the record closing high it posted on Wednesday and marking its fourth consecutive day of gains. "The broad optimism after the U.S. election continues," said Angelo Kourkafas, senior investment strategist at Edward Jones. "Yes, there are some concerns about what Trump policies might mean but at the same time corporate profits are on the rise, the economy is still growing and interest rates are lower which is a really good mix for further gains." Ongoing economic growth, a solid job market, and inflation that remains above the 2% target mean the Federal Reserve does not need to rush to lower interest rates and can deliberate carefully, Chair Jerome Powell said. U.S. President-elect Donald Trump has proposed sweeping tariffs that could hurt Canada's trade-dependent economy. The Canadian dollar touched its weakest level since May 2020 at 1.4053 per U.S. dollar, or 71.16 U.S. cents. "We have seen a significant depreciation of the Canadian dollar but relative to other currencies, it has held up pretty well," Kourkafas said. The energy sector rose 2.4% as the price of oil clawed back some recent declines, settling 0.4% higher at $68.70 a barrel. Shares of Paramount Resources (POU.TO) , opens new tab jumped 15.3% after the company agreed to a $2.38 billion all-cash deal to sell oil assets to shale producer Ovintiv (OVV.N) , opens new tab. The materials group, which includes fertilizer companies and metal mining shares, was up 1% and heavily weighted financials added 0.6%. The biggest decliner was technology. It was down 3.5% after notching gains in the previous seven sessions. Sign up here. https://www.reuters.com/markets/tsx-futures-inch-up-ahead-powells-speech-us-data-2024-11-14/

2024-11-14 11:26

Central Europe has strong ties to German car sector US tariffs could deal another blow to German economy ING says Central Europe 'fully exposed' to US trade overhaul BUDAPEST, Nov 14 (Reuters) - If U.S. President-elect Donald Trump delivers on a pledge to hit European imports with tariffs, Hungary will feel the effects "exponentially" because of its German trade links, a top business leader said on Thursday. Germany is expected to be more affected by any U.S. tariffs than other euro area members, Nomura forecasts, which will have a knock on effect on Central Europe given its deep trade ties. These are particular strong in the automotive sector, with the region sending 20% to 30% of its exports to Germany. The U.S. election result has raised new risks for Europe's largest economy, whose stagnation has dented recovery prospects in export-reliant central Europe, said Andras Savos, President of the German-Hungarian Chamber of Industry and Commerce. "If the President-elect delivers on what he and the people around him have promised and the U.S. clams up completely and pursues the flagged policies, that will deal another blow to the German economy," Savos told a media briefing. "If the German economy is struck, this will affect us (Hungary) exponentially," he said, adding that planned investments in Hungary were in an "astonishing" nosedive. Economists at ING said central Europe was "fully exposed" to the ramifications of the planned overhaul of U.S. trade policy despite relatively lower direct ties. "The main exposure is through the trade link with Germany and the focus on automotive, which seems like the worst combination as we look to the future," ING said. "We believe that market expectations for a recovery next year in the CEE region are overly optimistic, and we will see further downside surprises." German auto exports to the U.S. were worth 23.41 billion euros in 2023, compared with car exports worth 18.92 billion euros to Germany from Poland, Romania, the Czech Republic, Slovakia and Hungary, Eurostat figures showed. Eurostat and UN Trade and Development (UNCTAD) could not provide a breakdown on the share of cars and car parts exported to the United States from central Europe through Germany. Sign up here. https://www.reuters.com/markets/europe/central-europe-feel-impact-any-us-tariff-hit-germany-2024-11-14/

2024-11-14 11:23

PARIS, Nov 14 (Reuters) - French oil major Totalenergies (TTEF.PA) , opens new tab will fit all upstream assets which it operates with real-time methane leak detection equipment by the end of next year to help it cut emissions, it said on Thursday. Methane emissions remain in the atmosphere for less time than CO2 but have a higher planet-warming effect, according to climate scientists. Totalenergies' announcement, made on the sidelines of the COP-29 climate conference in Baku, Azerbaijan will help Total reach its target of slashing methane emissions to near zero by 2030. The French company hopes to grow its oil and gas operations with new exploration even as it cuts overall emissions, notably by electrifying production facilities and reducing flaring. Last year Total was among 50 oil and gas companies to pledge to eliminate routine flaring, or burning off gas from oil fields, and to step up monitoring to reduce emissions. (This story has been refiled to clarify which assets will be fitted with leak detection equipment in paragraph 1) Sign up here. https://www.reuters.com/business/energy/totalenergies-monitor-methane-all-upstream-assets-by-2025-2024-11-14/