#WTI (Mar 23)

[fx999blog]

原油交易提醒：美国刺激出台预期支撑油价，但美油商业库存回升，警惕疫情封锁措施打破脆弱平衡 原油交易提醒：美国刺激出台预期支撑油价，但美油商业库存回升，警惕疫情封锁措施打破脆弱平衡 周五（9月25日）美原油小幅走高，盘中刷新两个交易日高位于40.64美元，现报40.48美元，涨幅0.42%。 周四因为市场押注美国出台新的刺激计划，因此油价反弹。在此之前，美国失业金数据不佳一度小幅打压油价，但是因市场押注这将加大美国出台财政刺激的压力，因此油价随后快速反弹。 总体而言，油价目前仍在选择方向。一方面，原油需求复苏慢于预期打击油价前景，且美国炼厂运行率下滑打击短期需求。但是另一方面，OPEC+维持减产，且美原油在未来一段时间内不存在明显增产的空间。油市维持着脆弱的平衡。 目前最大的不确定性因素仍是疫情的进展。随着疫情持续蔓延，部分地区重启封锁，可能进一步打击需求前景，如果这一趋势持续，料原油还有大幅回落的空间。 最新数据显示，上一季度美国原油库存下降100万桶/日，但是本月美国原油库存增加50-100万桶/日，这可能导致原油存储空间再度告急。 日内关注耐用品订单数据，该数据一定程度上反映了航空业的景气程度，料也会对油价产生影响。 市场押注美国出台新的刺激计划，提振油价，日内关注耐用品订单数据 周四股市在震荡交投中上涨，投资者押注于美国出台新的刺激计划以提振遭受疫情重创的经济的前景，此前数据显示上周初请失业金人数上升。 盘中稍早，股市一度下跌，因周四美国劳工部表示，截至9月19日的一周，初请失业金人数增加4000人，经季节性调整后为87万人，预估为84万人，此前一周为86.6万人。 美国就业市场复苏疲软，加剧了经济下行的压力，因此一度施压油价。 不过众议院筹款委员会主席Richard Nea表示，众议院民主党领导人正在研究一项2.2万亿美元的新冠刺激议案，议员们最快可能在下周就该议案进行投票。 OANDA高级市场分析师Edward Moya表示：“失业金数据非常令人失望，这强调了需要采取更多措施。复苏正在停滞，你将看到复苏停滞的时间越长，国会感受到的压力就越大。”此外，Moya表示，美联储主席鲍威尔连续几天都在表示我们需要更多的财政刺激。” 由于交易员们对众议院议长佩洛希和美国财政部长努钦之间陷入停滞的刺激磋商或将恢复重新燃起希望，同时民主党人准备了一项新的刺激计划，因此油价随后反弹。 日内还将发布8月耐用品订单数据，分析机构当前普遍预测，在此前5-7月耐用品下订单增长持续井喷，以填补上之前在疫情引发的封锁期间出现的缺口后，进一步的增长将重新放缓，尤其是考虑到航空业仍然相当不景气的这一背景。油价也将对此作出直接的反应。 海湾国家面临债务违约风险，或被迫讨论延长缩减减产规模的时间 国际货币基金组织（IMF）的数据显示，除卡塔尔外，预计所有海湾国家今年的预算将保持不变或进一步陷入赤字。该地区最大的经济体沙特表现最好，赤字占GDP的11.4％，而阿曼则表现最差，赤字为16.9％。 出现赤字对他们而言，没有什么特别的。依赖石油收入的海湾国家通常在油价上涨时获得大量的现金流，而油价下跌时往往通过借债来弥补支出上的财政空缺，直到油价再度复苏。 但是这次不同的是，海湾国家政府缺乏回旋余地。投资者对其新债券的兴趣可能很大，但如果油价继续徘徊在每桶40美元左右，意味着海湾国家可能会在偿还债务问题上面临风险。 当前油价远低于海湾国家的收支平衡水平，甚至是最低水平。根据国际货币基金组织的数据，仅沙特的收支平衡点今年就达到76.10美元/桶，通过上调增值税和削减开支，明年可能跌至66美元/桶。但即便是按照高盛乐观地预计明年布伦特原油价格将升至每桶65美元，仍无法实现收支平衡目标。 这可能迫使海湾国家再度收紧产量目标，至少可能会进一步推迟2021年初可能放宽的减产。按照OPEC+协议规定，从2021年1月起进一步放宽200万桶/日的减产力度。 美原油产量料维持在当前水平附近，除非油价回升否则增产意愿不足 根据达拉斯联储最新的季度能源调查，维持石油生产将是未来六个月美国石油钻探商的首要任务。根据该机构的数据，19%的受访者(最大比例)最关注于保持目前的生产水平。 调查发现，16%的人把提高产量作为首要任务。这一比例与说自己的首要任务是减少债务的受访者的比例相同。另有16%的受访者表示，他们未来六个月的首要任务是寻找额外的资金来源。 有趣的是，资产剥离是最不受欢迎的优先事项:只有不到8%的受访者将其列为优先事项。8%的受访者将降低成本作为首要任务，12%的受访者将资产收购作为首要任务。 在油田服务中，优先考虑的情况有所不同。该领域近三分之一的受访者表示，未来六个月他们最优先考虑的是业务增长，而保持业务活动在当前水平的优先程度略低。其次是降低成本，约10%的受访者表示这是他们的首要任务。只有不到10%的人选择减少债务。 达拉斯联储最新调查的另一个亮点是，多数石油企业高管认为美国石油产量已经见顶。多达三分之二的受访者认同这一观点。更多数人认为，未来OPEC将在决定油价方面发挥更重要的作用。大约74%的受访者都有这样的想法。 说到价格，美国的钻机数量似乎还需要一段时间才能开始显著增加。据达拉斯联储调查的43%受访者称，只有当WTI原油价格达到每桶51-55美元时，钻机数量才会大幅增加。另有29%的受访者认为，当WTI升至56-60美元时，钻机数量将开始稳步增加，只有11人认为，当WTI价格低于50美元时，钻井公司将开始增加钻机数量。 热带风暴过后美国产量总体恢复，但炼厂运营率依旧低迷 热带风暴贝塔和飓风莎莉过去后，美国墨西哥湾的石油和天然气业务正在恢复正常。 壳牌公司9月23日表示，已开始重新部署工人到位于墨西哥湾西部的Perdido平台，该平台的10万桶/日油当量在测试期间被关闭。壳牌还表示，已恢复在其Mars平台的钻井作业。 据美国安全和环境执法局(BSEE)的数据，截至9月22日，墨西哥湾仍有131690桶/日的原油停产，约占墨西哥湾石油总产量的7.1%，同时约1.3亿立方英尺/日的天然气停产，约占4.8%。只有21个平台仍然被疏散，而在萨莉袭击之前高达150多个。 BSEE在9月22日发布了风暴后的最终报告。然而，Perdido即将恢复的产量可能面临离线的风险。 今年是自2005年以来大西洋风暴最繁忙的季节。根据美国国家飓风中心的数据，虽然目前在海湾和大西洋，除了靠近新斯科舍和纽芬兰的特迪外，没有更多的有名字的风暴活动，但飓风季节仍然持续到11月底。 不过尽管飓风导致供应中断对油价构成了支撑，但是最新数据显示，墨西哥湾的产油商们可以很快从供应中断中恢复过来，因此对于油价的支撑相对有限。 相反，由于夏季出游高峰结束，炼厂纷纷进入维护期，而不断袭击的风暴使得更多的炼厂提前关闭，这实际上降低了原油需求。 路易斯安那州目前还有近100万桶/日的原油提炼能力在最近的风暴之后处于停产状态。 Phillips 66位于路易斯安那州Belle Chasse的日产25.56万桶的Alliance炼油厂提前关闭。尽管风暴没有影响路易斯安那州东南部几乎所有地区，Phillips 66说，Alliance炼油厂将继续关闭，进行原计划在10月份进行的维修。 位于路易斯安那州西南部的Phillips 66和Citgo的Lake Charles两家大型精炼厂在遭受持续破坏和电力中断后仍然处于关闭状态。 电力供应商Entergy正在重建被摧毁的通往炼油厂和其他设施的输电线，该公司表示希望在9月底之前恢复供电。 疫情蔓延导致更多封锁措施也打击需求前景 疫情持续蔓延也继续打击原油的需求前景。 美国约翰斯·霍普金斯大学的统计数据显示，截至美国东部时间24日17时30分（北京时间25日5时30分），美国新冠肺炎确诊病例累计接近697万例，达到6967103例，死亡病例超过20.2万，达到202558例。 同时英国9月24日新增6634例新冠确诊病例，为疫情暴发以来的最高单日新增病例数。为控制新一波疫情，英国首相约翰逊日前宣布，对英格兰地区推出一系列新限制措施，包括缩短酒吧和餐馆营业时间至晚上10时，这些措施可能需施行6个月。 欧洲疾病预防与控制中心(ECDC)主任安德烈娅·阿蒙24日表示，自8月以来，欧洲新增新冠确诊病例数出现了令人担忧的增长。该机构当天发布的最新风险评估报告显示，在欧盟国家和英国的大部分地区，人群对新冠具有免疫力的比例不到15%。 亚洲方面，印度新冠病毒疫情继续肆虐，确诊病例正迅速逼近目前世界最多的美国。而实地的疫情可能比想象的情况更糟糕。一位印度政府科学家告诉BBC记者，感染病例数字正在“阶梯式螺旋上升”，在整个印度激增。唯一“令人安慰”的是死亡率较低：目前大约为1.63%，这个数字低于许多病例数量较高的国家。 随着疫情的持续蔓延导致更多的封锁措施可能意味着原油需求将继续遭遇打击，尤其是燃料油需求料维持疲软的态势。 原油需求复苏慢于预期，原油库存出现回升的迹象 就在OPEC认为他们已经重新平衡油市之际，利比亚的增产使得各产油国感到不快。到本月底，利比亚国家石油公司计划将平均日产量从不足10万桶/日提高到26万桶/日。同时，OPEC+缩减了减产规模200万桶/日，Mercuria首席执行官马克·杜南德（Marco Dunand）称，市场无法应对这一问题。 Dunand表示，需求仍比此前预期疲软，流入市场的任何其他石油都无法吸收。这意味着浮动存储市场可能再度告急，因为本月全球库存增加50万桶/日至100万桶/日（不包括利比亚重启），而上一季度则减少了100万桶/日。 一个特别令人担忧的趋势是新兴国家的经济复苏速度缓慢，这是石油需求增长的主要驱动力。大多数国家仍在与疫情及其对经济的影响作斗争。印度就是一个很好的例子：他的需求被认为是受疫情影响最严重的，该国的病例数位居全球第一，且单日新增人数为全球之最。 另一个令人担心的是，此前受益于低油价而出现的投机性买需也已经结束，尤其是在亚洲国家中。根据牛津能源研究所的说法，这将是一个长期趋势，而不单单只是疫情造成的结果。清洁能源的使用将从根本上改变需求机构。 根据Mercuria的Dunand的说法，第四季度的石油需求平均为每天9500万桶。这一数字低于市场普遍预期的9700万桶/日和2021年春季的9800万桶/日。 而且，库存下降的速度也比预期要弱。除此之外，柴油库存急剧增加，Dunand指出，炼油厂正在将喷气燃料倾倒入柴油库中，利比亚重新开始生产，价格前景再次变得严峻。 据Mercuria负责人说，石油市场上最大的问题是柴油库存过剩。随着欧洲许多国家再次采取限制措施以应对疫情，燃料油需求（特别是喷气燃料）复苏的步伐将再度放缓。如果第二波感染浪潮席卷欧洲大陆，这种趋势如果不能逆转的话，那么需求下降的趋势将加快

[tinydreamkingdom]

The Real Reason Oil Prices Crashed – OilPrice.com WTI crude fell another 11%… Oil prices rose slightly on… The oil markets are expecting… By Irina Slav - Mar 23, 2020, 7:00 PM CDTHere’s a quick question: what happens when a lot of people are producing more and more of a commodity, but fewer people want to… Read More

[ericfruits]

Sunday Night Futures

Weekend: • Schedule for Week of Mar 26, 2017 Monday: • 10:30 AM: Dallas Fed Survey of Manufacturing Activity for March. From CNBC: Pre-Market Data and Bloomberg futures: S&P futures are down 13 and DOW futures are down 90 (fair value). Oil prices were down over the last week with WTI futures at $47.93 per barrel and Brent at $50.80 per barrel.  A year ago, WTI was at $40, and Brent was at $40 - so oil prices are up about 25% year-over-year. Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.28 per gallon - a year ago prices were at $2.05 per gallon - so gasoline prices are up about 23 cents a gallon year-over-year. http://ift.tt/2nValkN

[18kronaldinhoblog]

Ações de Azul e Gol sobem mais de 10%, enquanto Smiles cai 12%; Petrobras sobe 12% com salto do petróleo

SÃO PAULO – Após a forte queda de até 10,35% da última quarta-feira para o Ibovespa, a sessão desta quinta-feira foi de volatilidade para o mercado. Depois de uma queda de quase 8% nesta quinta-feira (19), com os investidores ainda com forte aversão ao risco repercutindo o impacto do coronavírus nas principais economias do globo, o Ibovespa registrou uma alta como reação ao novo corte de juros e programa de compra de títulos do Bank of England e com os investidores em busca de “pechinchas” na bolsa.

As ações da Petrobras abriram quase estáveis, chegaram a subir após a forte queda de 15% na véspera com a derrocada do petróleo, mas logo passaram a cair 4% na mínima do dia. Contudo, no começo da tarde, os papéis ganharam força, fechando em alta de 12,67% para os ativos ON e de 8,15% para os PN. Nesta sessão, o WTI avançou 23,80%, a US$ 25,22 por barril, e o brent avançou 14,4%, a US$ 28,47 o barril.

Na véspera, contudo, o WTI teve queda de 24,4%, chegando ao menor valor em 18 anos. O petróleo tem sido atingido no lado da oferta e da demanda. A desaceleração do turismo de viagens e negócios está afetando a demanda, enquanto os produtores de energia da Arábia Saudita e da Rússia se preparam para aumentar a produção.

Mais uma vez, o destaque fica para as ações de Azul (AZUL4) e Gol (GOLL4), que passaram a subir forte, cerca de 20%, fechando com alta respectiva de 15,65% e 11,61%. Mais cedo, os ativos chegaram a cair mais de 10%, apesar da medida do governo de socorro às aéreas, classificadas pelo Bradesco BBI como positivas, mas não suficientes. Os ativos de aéreas têm sofrido nas bolsas do mundo todo devido às restrições de voo, fechamento de fronteiras e diminuição do turismo por conta do coronavírus. No mês, os papéis AZUL4 e GOLL4 caem mais de 70%. Enquanto isso, Smiles (SMLS3) seguiu em queda, de 12,43%.

As ações do setor de varejo também têm uma sessão de repique após as fortes quedas, com destaque para alta de 15% da Lojas Renner, os ganhos da Centauro de mais de 13%, empresa que divulgou resultados do quarto trimestre de 2019 na véspera. Já a Via Varejo, que caiu mais de 30% na véspera, viu seus papéis subirem 6%.

Confira os destaques:

Lojas Renner (LREN3)

A Lojas Renner anunciou a interrupção do funcionamento de suas lojas na Grande São Paulo a partir desta quinta, diante da pandemia do novo coronavírus. Em fato relevante, a companhia informou ainda que o horário de funcionamento de suas demais unidades será reduzido, mas não deu maiores detalhes.

O Itaú BBA avalia que o impacto do fechamento de todas as unidades da varejista Lojas Renner na Região Metropolitana de São Paulo será significativo sobre os resultados da empresa, observando que a região responde por mais de 15% das vendas da Renner. O banco comenta, contudo, que o impacto será inevitável sobre o comércio como um todo por conta das determinações dos governos municipal (de São Paulo) e do estado.

Na véspera, a prefeitura de São Paulo proibiu o funcionamento de comércio a partir de sexta. De acordo com o prefeito Bruno Covas, apenas padarias, farmácias, restaurantes, supermercados, postos de gasolina, lojas de conveniência e de produtos para animais, além de feiras livres, terão autorização de funcionamento até 5 de abril. Já o governador do estado de São Paulo, João Doria, anunciou ontem o fechamento de todos os shoppings e academias de ginástica da região metropolitana de São Paulo.

Petrobras (PETR3;PETR4) 

A Petrobras comunicou na noite de ontem que iniciou a fase vinculante para vender os blocos de Golfinho e Camarupim, em águas profundas na Bacia do Espírito Santo. A petrolífera estatal tem 100% de participação nos campos. Golfinho é formado por dois blocos, um de petróleo, com produção diária de 15 mil barris de óleo, e outro de gás natural, com uma produção diária de 750 mil metros cúbicos. O bloco de Golfinho fica em alto-mar, perto do litoral do Estado do Espírito Santo. Já o bloco de Camarupim também é formado por dois campos produtores de gás natural. A Petrobras disse que vende também um bloco exploratório chamado de BM-ES-23, onde tem 65% de participação. O restante é da japonesa Inpex e da PTTEP, petrolífera da Tailândia.

Em outro comunicado, a Petrobras informou na noite de ontem que adiou para 30 de abril o prazo para a habilitação de potenciais compradores da sua participação de 51% na Gaspetro – Petrobras Gás S.A.

Ainda em destaque, o Supremo Tribunal Federal (STF) pode voltar a julgar o decreto que facilita o plano de desinvestimentos da Petrobras e que foi suspenso no mês passado pelo presidente da Corte, ministro Dias Toffoli. A interrupção se deu diante da ausência dos ministros Celso de Mello e Cármen Lúcia na sessão. Toffoli também ainda não votou. Até o momento, o julgamento está empatado em 4 a 4.

O ministro Marco Aurélio Mello votou para derrubar o decreto, editado em 2018 ainda durante o governo Temer. Para ele, a norma é inconstitucional por dispensar a licitação no processo da cessão de direitos de exploração, desenvolvimento e produção de petróleo pela Petrobras. O decreto cria um procedimento especial para essas operações. A posição de Marco Aurélio foi seguida pelos ministros Edson Fachin, Ricardo Lewandowski e Rosa Weber, sob os mesmos argumentos.

Já o ministro Alexandre de Moraes afirmou que a legislação permite, desde 1997, situações excepcionais que dispensem o processo licitatório tradicional. Assim como Moraes, o ministro Luís Roberto Barroso defendeu que o decreto melhorou aspectos de governança na empresa e deu mais transparência e segurança jurídica ao processo de cessão. Também votaram dessa forma os ministros Gilmar Mendes e Luiz Fux.

De acordo com o Bradesco BBI, existem vários resultados possíveis do processo de votação. Se o STF decidir contra a Petrobras, terá que decidir se a decisão se aplica a ativos futuros de exploração e produção a serem vendidos, ou também a vendas realizadas após o decreto do ex-presidente Temer (maio de 2018).

Aéreas

Na noite de quarta, o ministro da Infraestrutura do Brasil, Tarcisio Freitas, anunciou três medidas iniciais para preservar a liquidez de caixa nos setores de companhias aéreas e aeroportos do Brasil: 1) as companhias aéreas pagarão taxas aeroportuárias de março a junho de 2020 em setembro a dezembro 2020; 2) uma medida provisória permitirá às companhias aéreas reembolsar passagens aéreas canceladas em até 12 meses; e 3) as concessões aeroportuárias terão até meados de dezembro para pagar taxas de concessão variáveis ​​e fixas. As companhias aéreas e os aeroportos também terão acesso às linhas de crédito existentes oferecidas pelo Banco do Brasil, Caixa Econômica Federal e BNDES.

Conforme destaca o Bradesco BBI, o governo federal está preocupado com a rápida deterioração da liquidez de caixa no setor aéreo, com o cancelamento de voos domésticos e internacionais.

“Em nossa opinião, essas medidas ajudarão, mas não serão suficientes para solucionar os problemas do setor de aviação brasileira”, avaliam.

Eles avaliam que as companhias aéreas pagarão as taxas aeroportuárias no segundo semestre, mas a maioria é formada por custos variáveis ​​e diminuiria com o cancelamento de voos. Além disso, o período de 12 meses para reembolso de passageiros proporcionará alívio nas posições em dinheiro e as companhias aéreas podem descontar esses recebíveis para melhorar a liquidez em dinheiro.

“Por fim, em nossa opinião, o surto da Covid-19 exigirá: 1) linhas de crédito específicas para ajudar as companhias aéreas a financiar capital de giro e reestruturar a dívida; e 2) alternativas para reduzir os custos de mão-de-obra durante esse período, em meio a uma queda maciça nos voos domésticos e internacionais”, avaliam.

A Azul afirmou em nota que avalia como “um bom começo” o anúncio das medidas. No entanto, a acredita que neste momento “é necessário que políticas mais contundentes sejam adotadas para garantir apoio ao setor aéreo durante este cenário de incertezas”. A Associação Brasileira das Empresas Aéreas (Abear), considerou o pacote “uma abertura de porta”.

Sobre o setor, a Gol Linhas Aéreas informou ainda que não distribuirá dividendos relativos a 2019 aos acionistas por causa dos prejuízos recentes. Nesta semana, a empresa começou a implementar a readequação da sua malha aeroviária por causa da epidemia do coronavírus. No quarto trimestre do ano passado, a Gol teve um lucro líquido de R$ 344 milhões. No ano de 2019 consolidado, a empresa lucrou R$ 648 milhões.

Biosev (BSEV3)

A Biosev efetuou uma venda de US$ 83 milhões (R$ 418,1 milhões) para a Dreyfus Suisse, em um contrato de entrega de mercadorias até 31 de outubro deste ano.

A Biosev, que é uma das maiores produtoras de açúcar e de etanol do Brasil, não informou quais são as mercadorias que irão para a Suíça. Tanto Biosev como Dreyfus Suisse são subsidiárias do Grupo Louis Dreyfus, com sede em Roterdã, na Holanda. A Biosev conta atualmente com oito usinas de cana-de-açúcar nos estados de São Paulo, Mato Grosso do Sul e Minas Gerais, além de um terminal próprio no porto de Santos (SP).

Tecnisa (TCSA3)

A construtora e incorporadora imobiliária Tecnisa divulgou balanço e informou um prejuízo de R$ 59,6 milhões no quarto trimestre de 2019. A empresa reduziu em 7,1% o prejuízo sobre igual período de 2018, que foi de R$ 64,1 milhões.

O Ebitda ajustado da Tecnisa ficou negativo em R$ 30,1 milhões no quarto trimestre de 2019 – uma melhora de 12,4% sobre igual período de 2018, quando o Ebitda ajustado também ficou negativo, mas ainda mais, em R$ 34,5 milhões.

No resultado consolidado de 2019, a Tecnisa teve prejuízo de R$ 257,9 milhões. Mesmo com os resultados negativos, a Tecnisa informou que encerrou 2019 com um caixa líquido de R$ 31,2 milhões. No acumulado de 2019, a incorporadora da Tecnisa participou de quatro lançamentos, com um VGV – Valor Geral de Vendas – de R$ 69 milhões na parte da empresa. A Tecnisa informou que no ano passado os distratos recuaram 69% sobre 2018 para R$ 65 milhões, o que possibilitou que a empresa reduzisse em 52% sua provisão para distratos.

O Itaú BBA avaliou como Neutro o resultado divulgado pela Tecnisa. Segundo o banco, o prejuízo já era esperado e uma surpresa positiva foi o crescimento das vendas no quarto trimestre de 2019, para R$ 164 milhões e 67% superiores a igual período do ano anterior. O BBA destacou ainda o banco de terrenos avaliado em R$ 4,1 bilhões na região metropolitana de São Paulo. Além disso, aponta que o cenário para a empresa é positivo porque houve capitalização após a oferta de ações feita no ano passado.

“Nós enxergamos a Tecnisa bem posicionada para retornar à lucratividade, principalmente após a entrega da próxima fase do projeto Jardim das Perdizes e uma reestruturação das dívidas para reduzir o endividamento nos próximos anos”, avalia o BBA. O banco vê a ação TCSA3 como a mais barata da sua cobertura, com preço de mercado de R$ 1,30. O BBA mantém a nota outperform (acima da média) para o papel TCSA3, com um preço-alvo de R$ 1,90 para 2020, uma alta de 46,2%.

Centauro (CNTO3)

O Grupo SBF, controlador da varejista de produtos esportivos Centauro, teve lucro líquido de R$ 163,6 milhões no quarto trimestre de 2019, em alta de 33,1% frente igual período de 2018.

O Bradesco BBI avaliou como “fortes” os resultados do quarto trimestre publicados hoje pela rede varejista de calçados e roupas esportivas Centauro. O BBI comentou que o lucro antes dos juros, impostos, depreciação e amortização (Ebitda) de R$ 121 milhões foi 31% superior ao de igual período de 2018 e chegou 16% acima das projeções do banco.

As vendas nas mesmas lojas avançaram 8,9% no trimestre, outro fato destacado na avaliação. “O canal de comércio eletrônico da Centauro também cresce fortemente e agora responde por 19% das vendas. A empresa tem uma liquidez de R$ 700 milhões no caixa e limpou suas dívidas após a oferta de ações no ano passado. Acreditamos que mesmo com a aquisição das operações da Nike no Brasil (um acordo de R$ 900 milhões) a Centauro será capaz de atravessar esta tempestade” da pandemia, avalia o BBI. O banco mantém a nota Neutra para a ação, com preço-alvo de R$ 40,00 para o papel CNTO3 em 2020, uma alta de 122% sobre os R$ 18,00 na B3.

Tupy (TUPY3)

A fabricante de peças fundidas Tupy anunciou que irá conceder 10 dias férias coletivas a todos os funcionários no país a partir de 19 de março.

A companhia catarinense afirmou que a medida “leva em consideração a suspensão de operações dos nossos clientes no Brasil e exterior em face das restrições impostas pelos governos locais para a contenção da pandemia”, referindo-se ao coronavírus.

Contudo, a companhia informou que seus estoques estão em patamares adequados e não há risco para o fornecimento aos clientes.

Marcopolo (POMO4)

Além da Tupy, a Marcopolo informou que, em atenção às medidas de prevenção e combate ao Covid-19, resolveu conceder férias coletivas em todas as unidades localizadas no Brasil a partir da próxima segunda-feira (23/03) com duração de 20 dias.

“A adoção de férias coletivas pressupõe a paralisação das atividades fabris e administrativas, com restrição de acesso às unidades da Companhia. A decisão faz parte de uma série de ações preventivas adotadas pela Companhia para mitigar o risco de contaminação e preservar a saúde de seus colaboradores, familiares e das comunidades em que está presente”, apontam.

A companhia informou que vai manter seus acionistas e o mercado informados sobre quaisquer eventos subsequentes relevantes ao tema.

Randon (RAPT4) e Fras-le (FRAS3)

A Randon também informou que irá adotar regime de férias coletivas e/ou seletivas, podendo variar conforme a unidade de negócio e a região em que está localizada.

“Essa medida será, dentre outras já adotadas, mais uma forma de contribuir no combate a proliferação do Novo Coronavírus (SARS-COV-2) e da doença COVID-19 por ele provocada. A data de início será definida nos próximos dias e nas unidades em que forem implantadas férias seletivas, será ampliado o uso de home office, com o objetivo de manter o menor número possível de profissionais no mesmo ambiente de trabalho”, destacou a Randon.

Aproveite as oportunidades para fazer seu dinheiro render mais: abra uma conta na Clear com taxa ZERO para corretagem de ações!

The post Ações de Azul e Gol sobem mais de 10%, enquanto Smiles cai 12%; Petrobras sobe 12% com salto do petróleo appeared first on InfoMoney.

[startupcanada]

Pengrowth Reports Second Quarter Results With 16% Increase in Average Daily Production and 40% Increase in Adjusted Funds Flow Since Q1 2018

CALGARY, Alberta, Aug. 03, 2018 (GLOBE NEWSWIRE) — Pengrowth Energy Corporation (“Pengrowth”) (TSX:PGF, OTCQX:PGHEF), today reported its results for the three and six months ended June 30, 2018. Unless otherwise indicated, financial figures are expressed in Canadian Dollars.

“We continue to execute on the multi-year development plan we launched on June 26th of this year. The eight infill wells that were completed at Lindbergh in the second quarter started steam stimulation last week,” said Pete Sametz, President and Chief Executive Officer of Pengrowth. “While it could take up to four months to heat the formation to the point where any one of these wells can be brought into production, Lindbergh remains on track to exit 2018 producing 18,000 bbl/d.”

The Second Quarter at a Glance (Due to 2017 dispositions, comparisons are to the first quarter of 2018):

Production increased 16% to an average of 22,600 boe/d in Q2 compared with 19,541 boe/d in Q1 2018;

Lindbergh operating netbacks before corporate realized commodity risk management increased 31% to  $34.20/bbl compared with $26.16/bbl in Q1 2018;

Capital expenditures for 2018 are 76% complete with $49.5 million spent in the first half of 2018;

Total debt before working capital, which increased 6% to $701.5 million compared with $662.1 million in Q1 2018 due to capital spending, is expected to decrease in the second half on lighter capital spending, free funds flow and the receipt of deferred purchase payments on dispositions;

Royalty expenses increased 43% to $3.99/boe compared with $2.79/boe in Q1 2018 due to the general increase in WCS pricing and an increase in sliding Crown royalty rates due to rising WTI pricing;

Adjusted operating expenses of $10.11/boe in the second quarter were in-line with Guidance;

Cash G&A expenses decreased 15% to $4.28/boe compared with $5.06/boe in Q1 2018;

Guidance for royalty expenses and cash G&A expenses have been updated.

Summary of Financial & Operating Results

  Three months ended (monetary amounts in millions except per boe and per share amounts) Jun 30, 2018 Mar 31, 2018 % Change Jun 30, 2017 % Change         As adjusted (1)   PRODUCTION           Average daily production (boe/d) 22,600 19,541 16 49,349 (54) FINANCIAL           Oil and gas sales (1) $146.4 $125.2 17 $197.9 (26) Capital expenditures $23.1 $26.4 (13) $36.7 (37) Cash proceeds from dispositions $3.5 $4.4 (20) $94.7 (96) Interest and financing charges $12.6 $11.1 14 $17.2 (27) Adjusted funds flow (2) $10.1 $7.2 40 $29.3 (66) Weighted average number of shares outstanding (000’s) 556,117 552,719 1 552,253 1 Adjusted funds flow per share (2) $0.02 $0.01 100 $0.05 (60) OPERATIONAL           Produced petroleum revenue per boe (2) $42.59 $39.97 7 $32.56 31 Operating expenses per boe (1) $10.36 $10.63 (3) $15.25 (32) Adjusted operating expenses per boe (2) $10.11 $10.41 (3) $14.03 (28) Royalty expenses per boe $3.99 $2.79 43 $3.56 12 Operating netback before realized commodity risk management per boe (2) $25.82 $24.04 7 $13.23 95 Cash G&A expenses per boe (2) $4.28 $5.06 (15) $3.59 19 STATEMENT OF INCOME (LOSS)           Net income (loss) $(27.5) $(27.2) 1 $(242.4) (89) Net income (loss) per share $(0.05) $(0.05) — $(0.44) (89) DEBT           Total debt before working capital (3) $701.5 $662.1 6 $1,061.1 (34)



(1)   IFRS 15 was early adopted in the fourth quarter of 2017 effective January 1, 2017 using cumulative effect approach without restating prior period comparatives. See Note 2 to the December 31, 2017 audited Consolidated Financial Statements. (2)   See definition in our MD&A under section “Non-GAAP Financial Measures“. (3)   Includes Credit Facility, current and long term portions of term notes, as applicable, and bank indebtedness. Excludes letters of credit and finance leases.

2018 Guidance Update We have revised our Guidance for royalty expenses and cash G&A expenses as outlined in the table below, providing a summary of full year 2018 Guidance and actual results for the six months ended June 30, 2018:

     Actual YTD June 30, 2018 Original full year 2018 Guidance (1) Revised full year 2018 Guidance (1) Change Average production (boe/d)   21,079 22,500 – 23,500 22,500 – 23,500 — Capital expenditures ($ millions)   49.5 65 65 — Royalty expenses (% of produced petroleum revenue) (2) (3)   8.3 6.0 8.5 2.5 Adjusted operating expenses ($/boe) (2)   10.25 10.50 – 11.50 10.50 – 11.50 — Cash G&A expenses ($/boe) (2)   4.64 3.10 – 3.35 3.50 – 3.85       0.40 – 0.50

(1)         Per boe estimates based on high and low ends of production Guidance. (2)         See definition in our MD&A under section “Non-GAAP Financial Measures“. (3)         Excludes financial commodity risk management activities.

Year to date 2018 royalty expenses as a percent of produced petroleum revenue of 8.3 percent were above full year 2018 Guidance due to actual commodity prices for the first half of 2018 settling above our budgetary assumption of WTI US$50/bbl and the sliding scale associated with Crown royalties payable. Pengrowth is revising its full year 2018 Guidance for royalty expenses as a percent of produced petroleum revenue to 8.5 percent based on the impact of higher commodity prices year to date and the assumption that WTI will average US$65/bbl for the remainder of 2018.

Cash G&A expenses in the first half of 2018 included administrative support costs associated with disposed properties and salaries of staff subject to corporate restructuring and, as a result, full year 2018 cash G&A expenses per boe are anticipated to be higher than original 2018 Guidance. Pengrowth is therefore revising full year 2018 Guidance related to cash G&A expenses per boe to a range of $3.50 – $3.85/boe.

Operational Review Average daily production for the second quarter increased 16% to 22,600 boe/d compared with 19,541 boe/d in the first quarter of 2018 (the “prior quarter”).

  Three months ended PRODUCTION Jun 30, 2018 Mar 31, 2018 % Change Jun 30, 2017 % Change Bitumen (bbl/d) 15,876 15,118 5 13,657 16 Natural gas (Mcf/d) 34,064 20,040 70 118,939 (71) Light oil (bbl/d) 769 798 (4) 9,322 (92) Natural gas liquids (NGL) (bbl/d) 278 285 (2) 6,547 (96) Total boe/d 22,600 19,541 16 49,349 (54)

Lindbergh was responsible for 70% of second quarter consolidated production with a 5% increase in average daily production to 15,876 bbl/d compared with 15,118 bbl/d in the prior quarter. The steam-oil ratio (“SOR”) for the second quarter increased 4.3% to 3.12 compared with 2.99 in the prior quarter as new well pairs were being stimulated and brought online. As the steam chambers are fully developed for these new producers, we anticipate that the SOR will decrease. The cumulative SOR as at June 30, 2018 was 2.64.

Production at Lindbergh is currently meeting expectations at 16,700 bbl/d, but is down from the previously reported 17,500 bbl/d as a result of planned maintenance activities and steam being allocated to stimulate the eight infill producing wells which were completed during the second quarter.

The three wells completed at Groundbirch brought total production to 28 million cubic feet per day (“MMcf/d”) before production was curtailed to approximately 20 MMcf/d due to low gas prices.

Financial Results Lindbergh’s second quarter operating netbacks before corporate realized commodity risk management increased 31% to $34.20/bbl compared with $26.16/bbl in Q1 2018 due to higher commodity prices, lower transportation expenses, offset by higher royalties and increased adjusted operating expenses on a per barrel basis.

  Three months ended Lindbergh Operating Netbacks ($/bbl) (1) Jun 30, 2018 Mar 31, 2018 % Change Jun 30, 2017 % Change Produced petroleum revenue (2) 52.47 42.33 24 34.20 53 Royalties (4.57) (2.57) 78 (2.31) 98 Adjusted operating expenses (10.79) (10.59) 2 (12.06) (11) Transportation expenses (2.91) (3.01) (3) (2.90) — Operating netbacks before realized commodity risk management 34.20 26.16 31 16.93 102

(1)         See definition in our MD&A under section “Non-GAAP Financial Measures“. (2)         After physical delivery contracts

Corporate operating netbacks before realized commodity risk management in the second quarter increased 7% to $25.82/boe compared with $24.04/boe in Q1 2018 due to higher commodity prices, lower adjusted operating expenses, lower transportation expenses, offset by higher royalties on a per boe basis.

  Three months ended Corporate Operating Netbacks ($/boe) (1) (2) Jun 30, 2018 Mar 31, 2018 % Change Jun 30, 2017 % Change Produced petroleum revenue 42.59 39.97 7 32.56 31 Royalties (3.99) (2.79) 43 (3.56) 12 Adjusted operating expenses (10.11) (10.41) (3) (14.03) (28) Transportation expenses (2.67) (2.73) (2) (1.74) 53 Operating netbacks before realized commodity risk management 25.82 24.04 7 13.23 95 Realized commodity risk management (9.82) (7.96) 23 (0.07) 13,929 Operating netbacks ($/boe) 16.00 16.08 — 13.16 22

(1)         See definition in our MD&A under section “Non-GAAP Financial Measures“. (2)         Prior year comparative figures changed to conform to presentation in the current year.

During the second half of 2017, to ensure compliance with relaxed covenants on its debt, Pengrowth entered into a series of WTI hedges on 10,000 bbl/d of production at approximately WTI US$50/bbl to the end of 2018. For the second quarter of 2018, these hedges resulted in a 23% increase in realized commodity risk management loss of $9.82/boe compared with $7.96/boe in the first quarter of 2018 as a result of increased commodity prices. At this time, Pengrowth does not have any WTI crude oil pricing hedges in place for 2019.

As a result, corporate operating netbacks for the second quarter were relatively flat compared with the first quarter of 2018 at $16.00/boe despite increased benchmark WTI prices.

Adjusted funds flow for the three months ended June 30, 2018 increased 40% to $10.1 million compared with $7.2 million in the prior quarter due to higher commodity pricing, a 15% decrease in cash G&A expenses per boe, a 3% decrease in operating expenses per boe, partially offset by a 43% increase in royalties per boe and a 14% increase in interest and financing charges.

Pengrowth reported a net loss in the second quarter of $27.5 million compared with a net loss of $27.2 million in the first quarter of 2018.

Market Access a Key Differentiator Due to the quality of Lindbergh bitumen, Pengrowth has secured term sales agreements at Hardisty with a number of refiners that ensures market access for 17,000 bbl/d of diluted bitumen (“dilbit”) to the end of 2018, and 7,500 bbl/d of dilbit in 2019.

These physical delivery contracts also protect against pipeline apportionment, mitigate credit risk and limit exposure to widening WCS differentials. Since Pengrowth’s physical delivery fixed price differential contracts averaged a discount of approximately US$16.80/bbl to WTI in the second quarter, this resulted in a higher realized bitumen sales price by approximately CA$3.95/bbl as compared to benchmark prices in the second quarter of 2018.

Balance Sheet and Liquidity Pengrowth’s total debt (excluding letters of credit) at June 30, 2018 increased 6% to $701.5 million compared with $662.1 million as at March 31, 2018.

The increase in debt compared to the prior quarter was due to Pengrowth’s front-end loaded infill drilling and development program at Lindbergh which was weighted to the first half of 2018, with 76% of the $65 million 2018 capital program spent as at June 30, 2018. Pengrowth expects to have free funds flow after capital expenditures in the second half of 2018, which together with the collection of the approximately $18 million of deferred disposition proceeds will be applied to decrease the outstanding debt.

Debt Maturities Pengrowth has no scheduled debt maturities in 2018. The available Credit Facility had drawings of $179.0 million at June 30, 2018 (December 31, 2017 – $109.0), and $79.8 million of outstanding letters of credit (December 31, 2017 – $69.4 million).

Pengrowth’s total debt before working capital was 70 percent denominated in U.S. dollars at June 30, 2018 (US$366.3 million). As the Canadian dollar weakens relative to the U.S. dollar, this translates into a higher Canadian dollar equivalent debt.

To manage foreign exchange risk, Pengrowth holds a series of swap contracts that fix the foreign exchange rate on  70% of the principal for Pengrowth’s U.S. dollar denominated term debt. At June 30, 2018, Pengrowth held a total of US$255 million in foreign exchange swap contracts at a weighted average rate of US$0.75 per CA$1.00 as follows:

Principal amount (US$ millions) Swapped amount (US$ millions)   % of principal swapped Average fixed rate (US$ per CA$) 366.3 255.0 70% 0.75

Outlook: Multi-Year Development Plan At a WTI price of US$65/bbl, capital spending is expected to increase to a range of $120 to $125 million in 2019 and be fully funded with generated cash flows. Pengrowth expects free funds flow under this scenario to be used for debt repayment.

Under the WTI US$65/bbl price scenario, Lindbergh full year average production volumes are expected to grow to a range of 17,500 to 18,000 bbl/d in 2019 with total corporate volumes expected to be between 22,000 to 22,500 boe/d. In 2020, under this price scenario, Lindbergh volumes are expected to average between 19,500 and 20,000 bbl/d with corporate volumes of 23,000 to 24,000 boe/d.

Ultimately, the multi-year development plan aims to grow Lindbergh production to 35,000 bbl/d by the end of 2023. Timing to further expand production to 40,000 to 50,000 bbl/d will depend on commodity prices.

Groundbirch maintains a significant inventory of more than 300 locations in some of the most productive Montney horizons in the basin, as demonstrated by recent Pengrowth and industry results. Capital investment in Groundbirch beyond 2018 will be curtailed until natural gas pricing improves.

Should WCS oil prices decline, Pengrowth can adjust to some extent its capital spending levels. A prolonged or significant decrease in WCS pricing may not leave sufficient free funds flow to be directed to debt repayment.

Conference Call and Audio Webcast: Pengrowth will host a conference call and listen-only audio webcast at 8:00 a.m. MT (10:00 a.m. ET) today to discuss the quarter.

Those interested in participating in the conference call may do so by calling 1-844-358-9179 (toll free)

The listen-only audio webcast can be accessed through the following link:

https://ift.tt/2Ko9iB9

Within 24 hours of the event, the webcast will be available for replay at the link above.

An archived recording of the conference call will be available for seven days following the call and can be accessed by dialing 1-855-859-2056 (toll free), Passcode: 7065637.

FREQUENTLY RECURRING TERMS

Pengrowth uses the following frequently recurring industry terms and abbreviations in this press release:

Units of Measurement “bbl“ barrel “bbl/d” barrels per day “boe“ barrel of oil equivalent “boe/d“ barrels of oil equivalent per day “Mcf/d“ thousand cubic feet per day “MMcf/d“ million cubic feet per day “SOR“ steam oil ratio “CSOR“ cumulative steam oil ratio     Commodities and Currencies “WTI“ West Texas Intermediate crude oil price “WCS“ Western Canadian Select crude oil price “$US” United States Currency “$CA” Canadian Currency     Other Terms “dilbit” bitumen blended with diluent “G&A“ general and administrative expenses “IFRS“ International Financial Reporting Standards

Caution Regarding Engineering Terms: When used herein, the term “boe” means barrels of oil equivalent on the basis of one boe being equal to one barrel of oil or NGLs or 6,000 cubic feet of natural gas (6 mcf: 1 bbl). Barrels of oil equivalent may be misleading, particularly if used in isolation. A conversion ratio of six mcf of natural gas to one boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All production figures stated are based on Company Interest before the deduction of royalties.

Caution Regarding Forward Looking Information: This press release contains forward-looking statements within the meaning of securities laws, including the “safe harbour” provisions of the Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “forecast”, “target”, “project”, “guidance”, “may”, “will”, “should”, “could”, “estimate”, “predict” or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements in this press release include, but are not limited to, statements with respect to expected exit production of 24,000 boe/d in 2020; anticipated $65 million of capital expenditures in 2018 and the focus thereof on adding production volumes at Lindbergh and Groundbirch; expected average daily production in 2018; continued optimization activities at Lindbergh including the eight additional infill wells being brought into production in the next four months; Lindbergh production reaching 18,000 bbl/d by the end of the year; expected production at Groundbirch of 20 MMcf/d to the end of 2018; plans to utilize the majority of Groundbirch natural gas in the Company’s thermal operations; G&A cost structures expected to decrease in the second half of 2018 and the expectation for higher realized prices for liquids production and higher expected adjusted funds flow starting in 2019, anticipated free funds flow and use of free funds flow to pay down debt. Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to Pengrowth concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: changes in general economic, market and business conditions; the volatility of oil and gas prices; fluctuations in production and development costs and capital expenditures; the imprecision of reserve estimates and estimates of recoverable quantities of oil, natural gas and liquids; Pengrowth’s ability to replace and expand oil and gas reserves; geological, technical, drilling and processing problems and other difficulties in producing reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions; increases in debt service charges; the loss of key personnel; the marketability of production; defaults by third party operators; unforeseen title defects; fluctuations in foreign currency and exchange rates; fluctuations in interest rates; inadequate insurance coverage; compliance with environmental laws and regulations; actions by governmental or regulatory agencies, including changes in tax laws; Pengrowth’s ability to access external sources of debt and equity capital; the impact of foreign and domestic government programs and the occurrence of unexpected events involved in the operation and development of oil and gas properties. Further information regarding these factors may be found under the heading “Business Risks” in our most recent management’s discussion and analysis and under “Risk Factors” in our Annual Information Form dated February 28, 2018.

The foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release, and Pengrowth does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Non-GAAP Measures In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), Pengrowth presents additional and non-GAAP measures including total debt before working capital, total debt including working capital, adjusted funds flow, adjusted funds flow per share, free funds flow, produced petroleum revenue per boe, adjusted operating expenses per boe, royalty expenses (% of produced petroleum revenue), Lindbergh operating netbacks, corporate operating netbacks, adjusted operating expenses, cash G&A expenses and cash G&A expenses per boe. These measures do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. These measures are provided, in part, to assist readers in determining Pengrowth’s ability to generate cash from operations. Pengrowth believes these measures are useful in assessing operating performance and liquidity of Pengrowth’s ongoing business on an overall basis. These measures should be considered in addition to, and not as a substitute for, net income (loss), cash provided by operations and other measures of financial performance and liquidity reported in accordance with IFRS. Further information including reconciliation to the applicable GAAP measure with respect to these non-GAAP measures can be found in the MD&A.

Note to US Readers We report our production and reserve quantities in accordance with Canadian practices and specifically in accordance with NI 51-101. These practices are different from the practices used to report production and to estimate reserves in reports and other materials filed with the SEC by companies in the United States.

Current SEC reporting requirements permit, but do not require United States oil and gas companies, in their filings with the SEC, to disclose probable and possible reserves, in addition to the required disclosure of proved reserves. The SEC does not permit the inclusion of estimates of contingent resources in reports filed with it by United States companies. Under current SEC requirements, net quantities of reserves are required to be disclosed, which requires disclosure on an after royalties basis and does not include reserves relating to the interests of others. Because we are permitted to prepare our reserves information in accordance with Canadian disclosure requirements, we have included contingent resources, disclosed reserves before the deduction of royalties and interests of others and determined and disclosed our reserves and the estimated future net cash therefrom using forecast prices and costs. See “Presentation of our Reserve Information” in our most recent Annual Information Form or Form 40-F for more information.

We incorporate additional information with respect to production and reserves which is either not generally included or prohibited under rules of the SEC and practices in the United States. We follow the Canadian practice of reporting gross production and reserve volumes; however, we also follow the United States practice of separately reporting these volumes on a net basis (after the deduction of royalties and similar payments). We also follow the Canadian practice of using forecast prices and costs when we estimate our reserves. The SEC permits, but does not require, the disclosure of reserves based on forecast prices and costs.

About Pengrowth Energy Corporation (TSX:PGF): Pengrowth Energy Corporation is a Canadian energy company focused on the sustainable development and production of oil and natural gas in Western Canada from its Lindbergh thermal oil property and its Groundbirch Montney gas property. The Company is headquartered in Calgary, Alberta, Canada and has been operating in the Western Canadian basin for over 28 years. The Company’s shares trade on both the Toronto Stock Exchange under the symbol “PGF” and on the OTCQX under the symbol “PGHEF”.

Additional information about Pengrowth is available at www.pengrowth.com and on SEDAR at www.sedar.com.

For investor and media Inquiries please contact:

Tom McMillan 1-855-336-8814 Tom.McMillan@pengrowth.com

  Shared from The Canadian Business Journal https://ift.tt/2LGsdfR Canada Incorporation & Corporate Registry Services

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[dani-qrt]

U.S. and Brent crude part ways, leaving market flummoxed over oil…

NEW YORK/LONDON (Reuters) – Global oil markets have been roiled by a surprising divergence between the world’s major benchmarks, Brent crude and its U.S. counterpart, which in recent days have traded at odds with one another, wrongfooting investors betting on the exact opposite.

FILE PHOTO: Oil tanker is seen at sunset anchored off the Fos-Lavera oil hub near Marseille, France, October 5, 2017. REUTERS/Jean-Paul Pelissier/File Photo

Graphic – Brent soars, others lag: reut.rs/2JmAsvJ

Traders worldwide have been struggling to make sense of where oil prices are headed, juggling countervailing signals from major producers Saudi Arabia and Russia on the path for future OPEC supply, against renewed U.S. sanctions on Iran and Venezuela’s ongoing economic crisis.

The market expected OPEC, led by Saudi Arabia, to add to global supplies as sanctions reduce Iranian exports in coming months. But instead of bringing Brent closer in line with U.S. crude, the opposite has happened, roiling both futures trading and key physical grades.

On Thursday, U.S. crude futures traded as much as $11 below Brent , the deepest discount since early 2015. Traders say the tide of light sweet crude from the United States is threatening to swamp the global market.

That whipsawed traders in the last several days, as hedge funds and other money managers raised their bullish bets on U.S. crude in the week ended May 22 – while cutting long bets on Brent, the opposite of what has ended up happening.

“The market doesn’t know where the price of oil is going to be and probably doesn’t know where it should be, and so it’s open to some major price fluctuations,” said Richard Hastings, an independent analyst in Charlotte, North Carolina.

U.S. exports reached record highs of over 2.6 million barrels a day this month, as cargoes of light, sweet shale have muscled into refineries around the world, from China to northwest Europe.

Around the Atlantic Basin, Angolan and Nigerian crudes, both staples for Chinese and Indian refineries, are now selling slowly, undercut by U.S.-linked grades, traders said.

A swathe of maintenance at some of Asia’s large refineries means big buyers are not pushed to take cargoes of crude right now and can afford to be choosy, when so much is on offer. Independent Chinese refineries, known as teapots, have even started reselling cargoes of West African crude to buy cheaper Brazilian or U.S. oil, according to traders.

U.S. crude futures are being pulled down, in part, by the oil glut in the Permian shale basin, which currently produces more than 3 million barrels a day – nearly one-third of U.S. crude production, which hit a new record of 10.5 million bpd, according to U.S. Energy Department data released on Thursday.

“This was inevitable. There was way too much production growth for infrastructure to handle,” said Vikas Dwivedi, global oil and gas strategist at Macquarie in Houston.

Physical prices for these trapped crude grades such as WTI at Midland are now at their weakest levels in three-and-a-half years, trading as much as $13 below benchmark U.S. futures. That translates to a $23 to $25 discount to Brent.

But coastal U.S. grades are trading at multi-year highs, illustrating the demand globally for U.S. barrels. Coastal sour Mars traded at its strongest differential in more than three years on Thursday, while prices for coastal benchmark Light Louisiana Sweet were at their strongest differential in more than three years on Thursday.

LLS traded on Thursday at $9 more than U.S. futures – making it nearly comparable to Brent crude.

The European market has seen a sudden increase in the amount of crude stored on ships, often a sign of an oversupplied market, and that has pushed the North Sea grades that underpin the Brent price to multi-month lows, another reason the Brent futures price should have aligned itself more closely with U.S. crude.

Reporting by Amanda Cooper in New York and Ayenat Mersie in London; Editing by David Gaffen and Lisa Shumaker

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[newestbalance]

U.S. and Brent crude part ways, leaving market flummoxed over oil…

NEW YORK/LONDON (Reuters) – Global oil markets have been roiled by a surprising divergence between the world’s major benchmarks, Brent crude and its U.S. counterpart, which in recent days have traded at odds with one another, wrongfooting investors betting on the exact opposite.

FILE PHOTO: Oil tanker is seen at sunset anchored off the Fos-Lavera oil hub near Marseille, France, October 5, 2017. REUTERS/Jean-Paul Pelissier/File Photo

Graphic – Brent soars, others lag: reut.rs/2JmAsvJ

Traders worldwide have been struggling to make sense of where oil prices are headed, juggling countervailing signals from major producers Saudi Arabia and Russia on the path for future OPEC supply, against renewed U.S. sanctions on Iran and Venezuela’s ongoing economic crisis.

The market expected OPEC, led by Saudi Arabia, to add to global supplies as sanctions reduce Iranian exports in coming months. But instead of bringing Brent closer in line with U.S. crude, the opposite has happened, roiling both futures trading and key physical grades.

On Thursday, U.S. crude futures traded as much as $11 below Brent , the deepest discount since early 2015. Traders say the tide of light sweet crude from the United States is threatening to swamp the global market.

That whipsawed traders in the last several days, as hedge funds and other money managers raised their bullish bets on U.S. crude in the week ended May 22 – while cutting long bets on Brent, the opposite of what has ended up happening.

“The market doesn’t know where the price of oil is going to be and probably doesn’t know where it should be, and so it’s open to some major price fluctuations,” said Richard Hastings, an independent analyst in Charlotte, North Carolina.

U.S. exports reached record highs of over 2.6 million barrels a day this month, as cargoes of light, sweet shale have muscled into refineries around the world, from China to northwest Europe.

Around the Atlantic Basin, Angolan and Nigerian crudes, both staples for Chinese and Indian refineries, are now selling slowly, undercut by U.S.-linked grades, traders said.

A swathe of maintenance at some of Asia’s large refineries means big buyers are not pushed to take cargoes of crude right now and can afford to be choosy, when so much is on offer. Independent Chinese refineries, known as teapots, have even started reselling cargoes of West African crude to buy cheaper Brazilian or U.S. oil, according to traders.

U.S. crude futures are being pulled down, in part, by the oil glut in the Permian shale basin, which currently produces more than 3 million barrels a day – nearly one-third of U.S. crude production, which hit a new record of 10.5 million bpd, according to U.S. Energy Department data released on Thursday.

“This was inevitable. There was way too much production growth for infrastructure to handle,” said Vikas Dwivedi, global oil and gas strategist at Macquarie in Houston.

Physical prices for these trapped crude grades such as WTI at Midland are now at their weakest levels in three-and-a-half years, trading as much as $13 below benchmark U.S. futures. That translates to a $23 to $25 discount to Brent.

But coastal U.S. grades are trading at multi-year highs, illustrating the demand globally for U.S. barrels. Coastal sour Mars traded at its strongest differential in more than three years on Thursday, while prices for coastal benchmark Light Louisiana Sweet were at their strongest differential in more than three years on Thursday.

LLS traded on Thursday at $9 more than U.S. futures – making it nearly comparable to Brent crude.

The European market has seen a sudden increase in the amount of crude stored on ships, often a sign of an oversupplied market, and that has pushed the North Sea grades that underpin the Brent price to multi-month lows, another reason the Brent futures price should have aligned itself more closely with U.S. crude.

Reporting by Amanda Cooper in New York and Ayenat Mersie in London; Editing by David Gaffen and Lisa Shumaker

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[everettwilkinson]

Global Stocks Jump, Dow Futs At New All Time Highs As Brexit Talks Begin

S&P futures rose 0.3% in subdued trading with Dow Jones futs once again in record territory as European stocks jump 0.6% following Sunday’s landslide victory for Macron’s party in the French parliamentary elections and as Brexit negotiations are set to officially roll out on Monday.

In the latest terrorist incident in London overnight, a man drove a van into pedestrians as people left their mosque following prayers, with UK PM May stating that UK police have confirmed the incident is being treated as a potential terrorist attack. Later updates stated that the one fatality could have been dead before being run-over while 2 others are considered to be seriously injured.

Asian equities opened on the front foot led by a rebound in tech stocks while benchmark sovereign yields and FX remains little changed; kiwi outperforms following solid domestic data; yen slightly lower. Australian bonds modestly softer, T-note futures unchanged with the AUDUSD sliding, but then recouping all losses after Moody’s cut the long-term ratings of Australia’s four major banks, ANZ, CBA, NAB and Westpac, to Aa3 from Aa2.

In China, the PBOC kept daily CNY fixing little changed and conducted net 110 billion yuan of open market operations, injecting liquidity for a fifth straight day and boosting cash injections in the past two days to the most since January. 7-day repo rate fell 23 basis points. Boosted by the sudden bout of PBOC liquidity generosity, Chinese 10-year sovereign bond yield declined 8 basis points, the most since Dec. 29, to 3.50%, sending the yield to the lowest since early May, however the 1-year yield dropped just 4 basis points to 3.58%, sending the Chinese 1s10s yield curve even more inverted.

Chinese and Hong Kong stocks jumped 0.7% and 1.2% ahead of a decision by index provider MSCI on Tuesday, expected to see it add mainland-listed Chinese stocks to its top share benchmarks for the first time. Chinese data had also helped, with Reuters noting that liquidity conditions appear to have eased and home prices up 10.4% in May from a year ago, although slowing from April’s 10.7% gain.

“Generally, the environment still remains fairly positive for risk appetite,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group in Singapore.

In Europe, stocks headed for their biggest rise in seven weeks on Monday as investors snapped up slammed retail, tech and automaker stocks and France’s shares and bonds cheered an absolute parliamentary majority for President Emmanuel Macron as the Stoxx Europe 600 gained for a second day. Europe’s retailers also clawed back some ground having been clobbered along with U.S. peers like Wal-Mart and Target on Friday by Amazon’s $ 13.7 billion deal to buy upscale grocer Whole Foods Market. The CAC 40 jumped after President Emmanuel Macron’s government claimed a historic majority in France’s legislature, although marred by a record low turnout, which perhaps is why the German-French spread moved just fractionally on monday.

“We expect the Macron reforms to transform France like the Thatcher reforms had cured the erstwhile sick man of Europe, the United Kingdom, some 35 years ago,” said Berenberg European economist Holger Schmieding. “And like the ‘Agenda 2010’ reforms had turned Germany from one of the weakest into one of the strongest economies in Europe almost 15 years ago.”

As Bloomberg notes, investors are once again in risk-on mode as the week begins, even as a cloud of uncertainty swirls around both U.K. leadership and the outlook for Brexit negotiations.

“Risk assets around the world are rallying again as the ‘carry party’ resumes,” Societe Generale SA strategist Kit Juckes wrote in a client note. Fed Chair Janet Yellen “did nothing to persuade the market” to take its hawkish outlook for the path of interest rates seriously, he said.

Sterling rose with cable just above $ 1.28 ahead of the formal start of negotiations on Britain’s planned exit from the European Union, expected to generate plenty of headlines for the currency in the weeks ahead. Brexit Secretary David Davis starts negotiations in Brussels on Monday, which will be followed by a Brussels summit on Thursday and Friday where Prime Minister Theresa May will meet – but not negotiate with – fellow European Union leaders.

Davis’s agreement to Monday’s agenda led some EU officials to believe that May’s government may at last be coming around to Brussels’ view of how negotiations should be run. May’s own political survival is in doubt after she lost her parliamentary majority in an election this month.

On the topic of Brexit negotiations, which officially kick off today, SocGen’s Juckes said “we expect nothing because the UK position is as clear as mud’ beyond growing signs that the UK wants free trade without being part of the customs union or conceding grounds on borer controls. Sterling’s probably range-bound. Any rally triggered by ‘soft Brexit’ hopes is probably temporary.”

With no macro data on today’s calendar, the market will await comments by New York Fed President William Dudley when he speaks at a business roundtable in New York state.

“In the wake of Friday’s weak U.S. data, Dudley could provide insight into whether the Fed is still poised to continue normalizing monetary policy,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

The euro was steady as talks begin on the U.K.’s split from the European Union, while the British pound strengthened after dropping early in the session.

In commodities, oil futures lingered near six-week lows over concerns about a supply glut amid faltering demand. WTI slipped 0.35% to $ 44.58 a barrel, while Brent dropped 0.3% to $ 47.21. Iron ore rallied 2.8% after snapping a three-week losing streak.  Gold touched a 3-1/2-week low earlier in the session and was trading down slightly at $ 1,250 an ounce.

In rates, two-year gilts underperform the rest of the curve after the Sunday Times reported the BOE is considering ending its term funding scheme; euro-area periphery bonds outperform core peers. The yield on 10-year Treasuries was little changed at 2.15 percent.

Bulletin headline Summary from RanSquawk

European equities enter the North American open in positive territory, continuing from Asia, buoyed by Macron’s convincing parliamentary election victory.

A quiet morning in FX land, with all focus on GBP, GBP/USD has pivoted around the 1.28 handle, as participants await the Brexit negotiations.

Looking ahead, the highlight will be the fallout of day one of Brexit Negotiations, with Barnier and Davis set to brief the press at 17:00BST

Global Market Snapshot

S&P 500 futures up 0.3% to 2,437.75

STOXX Europe 600 up 0.7% to 391.35

MXAP up 0.6% to 155.18

MXAPJ up 0.7% to 505.44

Nikkei up 0.6% to 20,067.75

Topix up 0.6% to 1,606.07

Hang Seng Index up 1.2% to 25,924.55

Shanghai Composite up 0.7% to 3,144.37

Sensex up 0.8% to 31,303.70

Australia S&P/ASX 200 up 0.5% to 5,805.17

Kospi up 0.4% to 2,370.90

German 10Y yield rose 0.2 bps to 0.278%

Euro down 0.04% to 1.1193 per US$

Brent Futures down 0.4% to $ 47.17/bbl

Italian 10Y yield rose 1.9 bps to 1.695%

Spanish 10Y yield fell 2.5 bps to 1.431%

Brent Futures down 0.4% to $ 47.17/bbl

Gold spot down 0.2% to $ 1,250.84

U.S. Dollar Index up 0.01% to 97.18

Key Overnight Headlines

London police say one dead, eight injured after van hits pedestrians

BOE said to consider ending the Term Funding Scheme at a meeting this week

Macron’s party secures French parliamentary majority, turnout plummets

Trump isn’t under investigation for obstruction of justice, his lawyer says

RBA’s Lowe repeats growth likely a bit stronger over next couple of years

Japan May trade balance -203.4 billion yen vs +43.3 billion estimate

Oil Declines as U.S. Adds Yet More Rigs in Oversupplied Market

Amazon Said to Plan Cuts to Shed Whole Foods’ Pricey Image

Basic Energy Said to Be in Talks to Merge With Rival Key Energy

Boeing Takes Aim at Airbus Single-Aisle Edge With Stretched 737

GE Won’t Participate on New Boeing If Three Engine Providers

JD Takes $ 17.6b of Orders During ‘618’ Online Shopping Gala

Ocado Jumps as Amazon Deal Seen Positive by Credit Suisse

Clovis to Seek Broader Label as Ovarian Cancer Study Meets Goals

Myriad Genetics, Foundation Medicine May Fall on Clovis Plans

Pentagon Sees Saving $ 2b From 445-Jet Contract for F-35 Fighter

In Asia, equity markets began the week on the front-foot with all major indices in the green, as participants eyed the political landscape in Europe including the start of Brexit negotiations today and after French President Macron’s party and its allies won a clear majority in the 2nd round parliamentary elections. Nikkei 225 (+0.62%) gained as JPY softened across the board, while ASX 200 (+0.54%) was led higher by outperformance in utilities and financials. Elsewhere, Shanghai Comp. (+0.7%) and Hang Seng (+1.1%) are also upbeat following a firm liquidity operation by the PBoC, while the region also awaits MSCI’s verdict tomorrow on whether to add China A-shares to its Emerging Markets Index in the nation’s 4th attempt for inclusion. Finally, 10yr JGBs were subdued alongside gains in riskier assets and after the BoJ’s Rinban announcement, in which it refrained from JGB purchases and instead concentrated on treasury bills.

Top Asian News

Hong Kong Wants to Win the Next Alibaba With Exchange Revamp

China’s Home Prices Increase in Fewer Cities as Curbs Bite

Japan’s Recovery Creates Room for Bolder Reforms, IMF Says

Aussie Extends Drop After Moody’s Cuts Ratings on Nation’s Banks

CRCC May Eye Up to $ 2b From Shanghai, Hong Kong Share Sales: IFR

Why the Qatar Crisis Defies Rapid Resolution: QuickTake Q&A

Taiwan Watchdog Fines SinoPac, Ousts Chairman for Lax Oversight

In Prohibition Pakistan, Brewery Plans Soft Drink Switch

Abe’s Popularity Slides as Mounting Japan Scandals Take Toll

Toshiba Finalizing Chip Sale to Group With Bain: Nikkan Kogyo

In Europe, equities likewise have kicked-off the week on the front foot, with all major European bourses firmly in the green (Eurostoxx 600 +0.6%) in a continuation of the positive sentiment seen during Asia-Pac trade. The CAC 40 (+1 %) is trading broadly in-line with the market as Macron’s victory in the French parliamentary elections was largely priced in given the results seen in the first round. In terms of sector performance, gains have been relatively broad-based with modest underperformance for RWE following a broker downgrade while Ocado (+6.5%) trade higher in the wake of Amazon’s purchase of Whole Foods. In fixed income markets, prices have largely been swayed by the upside in equities as paper trades lower this morning (albeit modestly so) in what will be a quieter week with regards to sovereign supply (Belgium comes to market today with 3 OLO offerings). Peripheral yields are marginally lower this morning with Greek paper also taking a bit of a breather after the nation managed to strike a deal with creditors last week.

Top European News

Macron Under Pressure to Deliver as Turnout Plummets in France

Brexit Talks Begin With May Under Pressure to Get Soft Split

London Home Sellers Cut Price for Second Time in Three Months

ECB’s Smets Says Start of Brexit Negotiations a ‘Sad Day’

ECB’s Smets Says Inflation Expectations Must Be Solidly Anchored

Buyers Line Up as Europe’s Biggest Debt Collector Divests Units

Kazakhstan Says Eni-Shell Venture Offers Settlement to End Spat

Astra, Tesaro May Move on Clovis Oncology’s Ovarian Cancer Data

U.K.’s Johnson: ‘Realistic Prospect’ of Brexit Deal With EU

SNCF Mandates Lazard to Sell Ermewa, Les Echos Says

In currencies, GBP will be a focus throughout the session as today sees the beginning of negotiations between EU’s Barnier and Brexit Secretary Davis. That said, GBP remains firmer against the greenback and back above 1.2800 even despite weekend reports of a potential attack on May’s leadership which could further add to the political uncertainty gripping the nation. Elsewhere, the broader risk sentiment has supported the USD with USD/JPY gaining traction in early trade. However, some remain cynical about how much room there is to the upside with hearty offers at 111.50. Finally, AUD saw some selling pressure this morning amid news that Moody’s has downgraded the nation’s big four banks.

In commodities, this morning has been a quieter one for the commodity complex with energy prices stuck in a tight range amid light newsflow, other than reports that oil output has been increasing at Libya’s Sharara oil-field. In metals, copper eked mild gains overnight amid the positive risk sentiment in Asia, although upside was limited alongside subdued trade across the complex, while the risk sentiment has acted as a downward force for gold prices. There were new details released by Jodi about Saudi Arabian oil data as follows:

Crude exports fell by 0.226min BPD M/M to 7.006min BPD in April

Crude Stocks fell 3.927min BBLS TO 263.927min BBLS in April

Domestic refinery crude throughput rose 0.390min BPD to 2.651 min BPD in April

Crude output rose by 0.046min BPD M/M to 9.946min BPD in April

Looking at the day ahead, there are no data releases scheduled in the US, although we have two Fed speakers: at 8am, Fed’s Dudley holds a business rountable in Plattsburgh, NY; while later at 7pm Fed’s Evans speaks in New York.

* * *

DB’s Jim Reid concludes the overnight wrap

Politics remains a hotbed of activity at the moment. There may only be around 20 miles between France and the UK but the fascinating thing about these two very different countries at the moment is that while the French seem to be rejecting socialism in their droves the momentum in the UK seems to be leading the country in the opposite direction. While Macron talks of sweeping labour market reform, the buoyant UK opposition (ahead in the polls now) talk of renationalisation, higher taxes and higher spending.

As expected Macron’s En Marche party swept the board in the second round of the parliamentary election yesterday winning 350 out of 577 seats – perhaps slightly short of expectations but still a commanding victory. The record low turnout (estimated at 44%) will also be a disappointment and already Melonchon has suggested that this doesn’t give Macron legitimacy to tear up worker’s rights. Indeed Melenchon said that “this bloated majority in the National Assembly does not in our eyes have the legitimacy to perpetrate the anticipated social coup, the destruction of all public social order by the repeal of the labour law”. Elsewhere the ruling Socialist party fell from 280 to an estimated 45 seats though and were firmly defeated. It’s easy to forget that it was only 14 months ago that the En Marche party was formed and how remarkable it is that they’ve come from nowhere to secure such a victory and banish the two main parties. Europe is going through a buoyant patch economically at the moment which is taking the edge off populism but under the surface huge political change is still occurring.

Meanwhile in the UK politics is as decisive as at any point I can remember with Brexit, the recent elections and the tragic fire last week in a tower block in London creating anger, resentment, activism and at times scenes descending into what seems like mob behaviour. The overnight breaking news of another vehicle striking into pedestrians in North London is sadly another talking point. When the opposition party leader Jeremy Corbyn suggests that empty privately owned houses in the region of the Grenfell Tower fire should be subject to requisition orders to house the homeless and that a YouGov poll suggests that 59% of the population agrees with the idea in theory then you can see that a political tide is turning.

Added to this, PM May has had such a difficult 10 days that opinion polls now give the Labour Party (led by a socialist core) a lead in the polls (recent Survation poll being evidence) a couple of months after being 20% behind and written off by many and expected to see one of the worst election results by an opposition party in history. For now PM May stumbles on without an official political understanding with the DUP as yet and only 2 days before the Queen’s Speech where she will lay out the Government’s legislative agenda for the next Parliamentary session (now lasting 2 years). On the same day there seems to  be momentum building for a “day of rage” against the Government with marches and protests planned. Those on the left of the political spectrum have really been emboldened over the last few weeks. Wednesday could be an interesting day in the UK. As we’ve been saying a lot over the last year we think the Brexit and Trump vote will be seen in years to come as an inflexion point across the world where Governments had to spend more to appease the bottom half of the population on the income scale or risk getting voted out. The recent political developments in the UK make me more convinced of this. Europe is not immune from this but as discussed above populism is seeing a slight retracement as growth edges towards the upper end of the post financial crisis range. If and when growth fades Europe will again likely face these issues.

Staying with the UK today sees Brexit negotiations officially begin. Chancellor of the Exchequer Phillip Hammond suggested yesterday in a TV interview that a gentle departure from the EU should be targeted. The Chancellor indicated that “transactional structures” would be needed to help smooth the process and that “we need to get there via a slope, not via a cliff edge” – suggesting a softer tone in negotiations. In contrast to the PM, Hammond also rejected the mantra “no deal is better than a bad deal”. Hammond also said that his position was one of a “jobs first” Brexit which is also a slight shift in tone compared to the PM. Separately, Hammond said that the UK government had “heard a message last week in the general election” and that ways to soften austerity were being looked at with voters seemingly growing “weary” of it. Hammond did however also say that he will still look to balance the budget by the middle of the next decade and that the UK had to “live within our means”. It’s worth noting that Hammond is due to deliver his Mansion House speech tomorrow after it was delayed from last week.

Away from politics, the big story in markets on Friday and over the weekend was that of Amazon’s $ 14bn bid for Whole Foods. The headlines sparked ripple effects of selling through the retail sector on Friday with investors quick to dump shares over fears of a potential huge new entrant in the market, potential further disruption and more fears of narrower margins. Bricks and mortar food retailers like Wal-Mart (-4.65%) and Kroger (-9.24%) were hit but it didn’t stop there with other general US bricks and mortar retailers under pressure. Costco (-7.19%), Walgreens Boots (-4.99%), CVS (-3.78%) and Target (-5.14%) all stood out. It was a similar story in CDS with spreads for the likes of Nordstrom (+6bps), Target (+4bps) and Wal-Mart (+3bps) all wider. Europe wasn’t immune with Tesco (-4.92%), Sainsbury (-3.85%) and Carrefour (-3.22%) also seeing big moves lower. Since the bid was made there have been plenty of articles over the weekend questioning whether this is deflationary for food prices and as such overall inflation. So it’s sure to be a talking point for a while.

While the retail sector did its best to drag markets down on Friday the S&P 500 actually managed to eke out a small +0.03% gain by the end of play after steadily rising into the close. A decent day for the energy sector had a lot to do with that after Oil (+0.63%) pared some of last week’s heavy fall. The Nasdaq (-0.22%) did however close in the red for the fifth time in the last six sessions. Prior to this the Stoxx 600 (+0.66%) had actually put up its best day since May 4th supported in part by the positive progress made in Greece to some degree.

This morning in Asia it’s been a fairly positive start to the week for risk. In equity markets the Nikkei (+0.60%), Hang Seng (+0.87%), Shanghai Comp (+0.33%), Kospi (+0.41%) and ASX (+0.20%) appear to all be feeding off the positive momentum into the Wall Street close on Friday. US equity index futures are also up +0.20%. It’s worth adding that there are some eyes already looking ahead to tomorrow’s decision from the MSCI as to whether or not China’s domestic A-shares will be included in its globally tracked EM index. The MSCI has previously delayed the decision over concerns about regulation worries and accessibility. Staying with China, house prices data out this morning revealed that new home prices rose in 56 of the 70 cities tracked by the government, down slightly from 58 in April. Meanwhile in Japan this morning our economists noted that customs trade stats for May confirmed stagnant international trade growth with a seasonally +0.9% mom rise in export volumes, a +0.4% mom rise in import volumes, flat growth in export value and +0.3% mom rise in import value.

Other markets were relatively quiet on Friday. Treasuries were a bit stronger at the margin (10y -1.2bps to 2.152%) and the USD softer (-0.28%) following some soft US data and dovish Fedspeak. In terms of the former both housing starts (-5.5% mom vs. +4.1% expected) and building permits (-4.9% mom vs. +1.7%) declined unexpectedly in May while the labour markets conditions index also rose a little less than expected (+2.3 vs. +3.0 expected). The flash June University of Michigan consumer sentiment reading was also a little disappointing after falling 2.6pts to 94.5 and the lowest since November. Both current conditions and expectations weakened although inflation expectations 1-year ahead did hold steady at 2.6% while 5-10 year expectations actually rose two-tenths to 2.6%. It’s worth noting that the Atlanta Fed’s Q2 GDPNow forecast is down to 2.9% (a 0.3% downward revision versus Wednesday) and at the lowest so far.

Meanwhile the Fedspeak consisted of comments from Kashkari and Kaplan. The former (who dissented last week) reiterated his view that the Fed should not have hiked rates last week given recent inflation data, preferring instead to wait and see if the data is transitory or not. The latter meanwhile told reporters that before he is comfortable taking the next step in tightening, “I’m going to want to see more evidence that we’re making progress in reaching our 2% inflation objective”.

In terms of the data in Europe on Friday, the only release of note was the confirmation of the final inflation readings for the Euro area in May. Headline CPI was unrevised at -0.1% mom which has in turn confirmed an annual reading of +1.4% yoy and down from +1.9% in April. The more significant core reading was confirmed at +0.9% yoy which compares to +1.2% the month prior.

To the week ahead now. It’s a quiet start to the week today with no data of note in either Europe of the US. It’s not looking likely to be much busier on Tuesday with only Germany PPI and the US current account balance in Q1 due. On Wednesday the early focus will be on the UK with May public sector net borrowing data due out. In the US we’ll get existing home sales for May. The calendar finally picks up a bit on Thursday. In France we’ll receive June confidence indicators while in the UK we’ll get CBI total orders data for June. In the US on Thursday the data includes initial jobless claims, Kansas City Fed’s manufacturing index, FHFA house price index and the conference board’s leading index. The busiest day for data looks set to be Friday. In Asia we’ll receive the flash June manufacturing PMI for Japan while in Europe we’ll get the flash PMIs for the Euro area, Germany and France. Also due out is the final revisions to Q1 GDP in France. Over in the US on Friday we’ll also receive the flash PMIs along with May new home sales.

Away from the data there are a bunch of Fedspeakers scheduled over the week including Dudley (Monday), Evans, Fischer, Rosengren and Kaplan (Tuesday), Powell (Thursday) and Mester, Bullard and Powell (Friday). Away from that we’ll receive BoJ minutes from the April meeting on Wednesday while the BoJ’s Kuroda (Wednesday) and Iwata (Thursday) are also due to speak. Also of note is the Queen’s speech scheduled for Wednesday which officially marks the state opening of the new parliamentary session in the UK. EU leaders are also due to gather for a 2-day meeting beginning Thursday to discuss the relocation of European agencies after Brexit.

from CapitalistHQ.com http://capitalisthq.com/global-stocks-jump-dow-futs-at-new-all-time-highs-as-brexit-talks-begin/

[startupcanada]

Freehold Royalties Ltd. Strong Growth in Funds from Operations and Second Quarter Results

CALGARY, Alberta, Aug. 02, 2018 (GLOBE NEWSWIRE) — Freehold Royalties Ltd. (Freehold) (TSX:FRU) announced second quarter results for the period ended June 30, 2018.

Results at a Glance

        Three Months Ended Six Months Ended   June 30 June 30 FINANCIAL ($000s, except as noted) 2018 2017 Change   2018 2017 Change   Royalty and other revenue   40,153   38,430 4 % 79,519 79,521 –   Net income   5,386   13,084 -59 %   9,809   20,172 -51 %    Per share, basic and diluted ($)   0.05   0.11 -55 %   0.08   0.17 -53 % Funds from operations   34,540   31,769 9 %   66,924   63,838 5 %    Per share, basic ($)   0.29   0.27 7 %   0.57   0.54 6 % Operating income (1)   38,331   35,235 9 %   75,989   72,319 5 %    Operating income from royalties (%)   100   97 3 %   99   94 5 % Acquisitions   2,697   1,267 113 %   33,578   34,619 -3 % Working interest dispositions   7   28,808 -100 %   8,137   29,096 -72 % Dividends declared   18,625   17,705 5 %   36,651   33,043 11 %    Per share ($) (2)   0.1575   0.15 5 %   0.31   0.28 11 % Net debt   77,908   49,819 56 %   77,908   49,819 56 % Shares outstanding, period end (000s)   118,293   118,073   –     118,293   118,073  –   Average shares outstanding (000s) (3)   118,238   118,018   –     118,211   117,987   –   OPERATING             Royalty production (boe/d) (4)   11,052   11,270 -2 %   11,124   10,986 1 % Total production (boe/d) (4)   11,721   12,589 -7 %   11,860   12,670 -6 %    Oil and NGL (%)   54   54   –     54   55 -2 % Average price realizations ($/boe) (4)   36.96   32.98 12 %   35.73   33.93 5 % Operating netback ($/boe) (1) (4)   35.94   30.76 17 %   35.39   31.54 12 %

(1)   See Non-GAAP Financial Measures. (2)   Based on the number of shares issued and outstanding at each record date. (3)   Weighted average number of shares outstanding during the period, basic. (4)   See Conversion of Natural Gas to Barrels of Oil Equivalent (boe).

President’s Message

With oil prices continuing to display strength, our funds from operations per share grew by 7% from Q1 to Q2 and we are forecasting an adjusted payout ratio for 2018 near the lower end of our target adjusted payout range of 60%-80%. We will continue to monitor commodity prices and allocate free cash flow in ways that maximize shareholder value.

On the activity front, drilling on our royalty lands came in slightly below expectations, however the second quarter typically represents a period of reduced activity. We are maintaining our 2018 production forecast between 11,750-12,250 boe/d and we continue to position Freehold as a high quality investment in oil and gas with low debt, sustainable dividends and an attractive yield.

Tom Mullane President and CEO  

Dividend Announcement

The Board has declared a dividend of $0.0525 per common share to be paid on September 17, 2018 to shareholders of record on August 31, 2018. The dividend is designated as an eligible dividend for Canadian income tax purposes.

2018 Second Quarter Highlights

Freehold delivered strong financial results in the second quarter of 2018. Highlights included:

Freehold’s royalty production averaged 11,052 boe/d, nearly flat versus Q2-2017 and Q1-2018. Volumes were impacted by acquisitions completed in Q1-2018, the strength of our audit function (approximately 380 boe/d of prior period adjustments) and third-party drilling on our lands.

Royalty interests accounted for 94% of total production and contributed 100% of operating income in Q2-2018, representing all-time highs for Freehold.

Funds from operations totaled $34.5 million, an increase of 9% compared to Q2-2017. Higher funds from operations was driven by better oil and natural gas liquids (NGL) prices and lower cash costs. On a per share basis, funds from operations was $0.29/share in Q2-2018 up from $0.27/share in both Q2-2017 and Q1-2018.

Freehold generated $15.1 million in free cash flow (1), over and above our dividend, which we applied to outstanding debt. At June 30, 2018, net debt totaled $77.9 million resulting in a net debt to 12-month trailing funds from operations ratio of 0.6 times.

Freehold closed a $2.7 million royalty acquisition in Q2-2018. The transaction included a 3% gross overriding royalty on a 21% working interest on the Mitsue Gilwood Sands Unit No. 1. Annualized 2018 production and operating income associated with this asset is estimated to be 16 bbl/d and $0.4 million.

Wells drilled on our royalty lands totaled 85 (1.2 net) in the quarter compared to 58 (1.6 net) in Q2-2017. The second quarter typically represents a period of slower drilling on our lands as spring break-up occurs, slowing operations. For the year, 324 gross (7.6 net) wells have been drilled.

In Q2-2018, Freehold issued 18 new lease agreements with 10 companies, compared to 42 issued in Q1-2018 and 12 leases in Q2-2017, highlighting the success of our leasing team. Year-to-date (YTD) we have completed 60 new lease agreements on our royalty lands. Since the inception of our leasing team in January 2017 we have completed 161 new lease agreements.

Cash costs (1) for the quarter totaled $5.17/boe, down from $5.63/boe in Q2-2017. For 2018, we are forecasting cash costs of approximately $5.00/boe.

Dividends declared for Q2-2018 totaled $0.1575 per share, up 5% versus the previous year. In March 2018, Freehold announced an increase to its monthly dividend from $0.05 to $0.0525 per share commencing in April 2018.

Basic payout ratio (1) (dividends declared/funds from operations) for Q2-2018 totaled 54% while the adjusted payout ratio (1) ((cash dividends plus capital expenditures)/funds from operations) for the same period was 56%. (1)  See Non-GAAP Financial Measures.

Royalty Drilling

Including drilling associated with acquisitions and unit wells, 324 (7.6 net) wells were drilled on our royalty lands during the first six months of 2018. This represents an increase of 56% on gross wells but a decrease of 25% on net wells versus the same period in 2017. While the second quarter typically represents a period of slowed activity, we saw even lower drilling activity than expected.

Activity through the first six months of 2018 was primarily focused on Saskatchewan oil prospects, including Viking at Dodsland, Mississippian plays in southeast Saskatchewan, and Shaunavon and Cantuar in southwest Saskatchewan. Together, Saskatchewan and Manitoba wells represented approximately 60% of our gross non-unit drilling through the quarter. Alberta activity has been concentrated in the Cardium, with strong drilling on our newly acquired Pembina Cardium acreage. Drilling for Deep Basin Spirit River, Ellerslie and Montney remains positive, along with Mannville Oil drilling in eastern Alberta. Our top payors continue to represent some of the most well capitalized E&P companies in Canada.

Royalty Interest Drilling

        Three Months Ended June 30 Six Months Ended June 30   2018 2017 2018 2017     Equivalent   Equivalent   Equivalent   Equivalent   Gross Net (1) Gross Net (1) Gross Net (1) Gross Net (1) Non-unitized wells   24   1.0   35   1.5   168   7.0   175 10.0 Unitized wells (2)  61   0.2   23   0.1   156   0.6   33   0.2 Total   85   1.2   58   1.6   324   7.6   208   10.2

(1)   Equivalent net wells are the aggregate of the number obtained by multiplying each gross well by our royalty interest percentage. (2)   Unitized wells are in production units wherein we generally have small royalty interests in hundreds of wells.

2018 Guidance Update

Below are details of some of the changes made to our key operating assumptions for 2018 based on results for the first half of the year and expectations for the remainder of the year. 

We are maintaining our 2018 average production range of 11,750-12,250 boe/d. Volumes are expected to be weighted approximately 54% oil and NGL and 46% natural gas (previously 55% and 45% respectively). We continue to maintain our royalty focus with royalty production accounting for 94% of forecasted 2018 production and 99% of operating income.

As part of continued weakness in equity markets and depressed prices associated with natural gas we reduced our 2018 drilling forecast from 25 to 20 net wells.

We are maintaining our WTI oil price assumption of US$65.00/bbl but have increased our WCS oil price assumption to $55.00/bbl (from $53.00/bbl) as Q2-2018 heavy oil differentials were lower than expected.

Our AECO natural gas price assumption remains unchanged at $1.75/mcf. Even though market prices are slightly lower, there have been significant AECO price fluctuations, so a change was not yet justified.

Based on our current $0.0525/share monthly dividend level, we expect our 2018 adjusted payout ratio ((cash dividends plus capital expenditures)/funds from operations) to be approximately 55% (previously 54%). The expectation of our longer-term payout ratio remains cautious as the forward commodity market is showing future light oil prices below current levels.

General and administrative costs remain at $2.50/boe.

We have increased our forecast year-end net debt to funds from operations to approximately 0.4 times (from 0.3 times) due to acquisitions completed YTD, changes in working capital and a slight increase in gas production relative to oil production.

Key Operating Assumptions

              Guidance Date 2018 Annual Average     Aug 2, 2018 May 9, 2018 Mar. 8, 2018 Total daily production  boe/d    11,750-12,250  11,750-12,250  11,750-12,250 West Texas Intermediate crude oil  US$/bbl     65.00   65.00   60.00 Edmonton Light Sweet crude oil  Cdn$/bbl     76.00   76.00  N/A Western Canadian Select crude oil  Cdn$/bbl     55.00   53.00   45.00 AECO natural gas Cdn$/Mcf     1.75   1.75   2.00 Exchange rate Cdn$/US$     0.77   0.79   0.80 Operating costs  $/boe     1.45   1.45   1.45 General and administrative costs (1)  $/boe     2.50   2.50   2.50 Weighted average shares outstanding  millions     118   118   118

(1)   Excludes share based compensation.

Recognizing the cyclical nature of the oil and gas industry, we continue to closely monitor commodity prices and industry trends for signs of changing market conditions. We caution that it is inherently difficult to predict activity levels on our royalty lands since we have no operational control. As well, significant changes (positive or negative) in commodity prices (including Canadian oil price differentials), foreign exchange rates, or production rates may result in adjustments to the dividend rate.

Based on our current guidance and commodity price assumptions, and assuming no significant changes in the current business environment, we expect to maintain the current monthly dividend rate through the next quarter. We will continue to evaluate the commodity price environment and adjust the dividend levels as necessary (subject to the quarterly review and approval of our Board of Directors).

Conference Call Details

A conference call to discuss financial and operational results for the period ended June 30, 2018 will be held for the investment community on Friday, August 3, 2018 beginning at 7:00 am MT (9:00 am ET). To participate in the conference call, approximately 10 minutes prior to the conference call, please dial 1-800-806-5484 (toll-free in North America), participant access code 6624442#.

Availability on SEDAR

Freehold’s 2018 second quarter interim unaudited condensed consolidated financial statements and accompanying Management’s Discussion and Analysis (MD&A) are being filed today with Canadian securities regulators and will be available at www.sedar.com and on our website at www.freeholdroyalties.com.

Forward-looking Statements

This news release offers our assessment of Freehold’s future plans and operations as at August 2, 2018, and contains forward-looking statements that we believe allow readers to better understand our business and prospects. These forward-looking statements include our expectations for the following:

our outlook for commodity prices including supply and demand factors relating to crude oil, heavy oil, and natural gas;

light/heavy oil price differentials;

changing economic conditions;

continuing to monitor commodity prices and allocate free cash flow in ways that maximize shareholder value;

continuing to position Freehold as a high quality investment in oil and gas with low debt, sustainable dividends and an attractive yield;

foreign exchange rates;

cash costs forecasted at approximately $5.00/boe;

drilling activity during 2018 and the impact on our production base;

our expected adjusted payout ratio for 2018;

average production for 2018, contribution from royalty lands and weighting of oil, NGL and natural gas;

2018 percentage of production and operating income from royalties;

key operating assumptions including operating costs and general and administrative costs;

forecast year-end net debt to funds from operations;

industry drilling and development activity on our royalty lands, including our estimate of 2018 net royalty wells at 20;

our dividend policy and expectations for future dividends; and

maintaining our monthly dividend rate through the next quarter.

By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, royalties, environmental risks, taxation, regulation, changes in tax or other legislation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, and our ability to access sufficient capital from internal and external sources. Risks are described in more detail in our AIF.

With respect to forward-looking statements contained in this news release, we have made assumptions regarding, among other things, future commodity prices, future capital expenditure levels, future production levels, future exchange rates, future tax rates, future legislation, the cost of developing and producing our assets, our ability and the ability of our lessees to obtain equipment in a timely manner to carry out development activities, our ability to market our oil and gas successfully to current and new customers, our expectation for the consumption of crude oil and natural gas, our expectation for industry drilling levels, our ability to obtain financing on acceptable terms, shut-in production, production additions from our audit function and our ability to add production and reserves through development and acquisition activities. The key operating assumptions with respect to the forward-looking statements referred to above are detailed in the body of this news release.

You are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits we will derive from them. The forward-looking information contained in this document is expressly qualified by this cautionary statement. To the extent any guidance or forward looking statements herein constitute a financial outlook, they are included herein to provide readers with an understanding of management’s plans and assumptions for budgeting purposes and readers are cautioned that the information may not be appropriate for other purposes. Our policy for updating forward-looking statements is to update our key operating assumptions quarterly and, except as required by law, we do not undertake to update any other forward-looking statements.

You are further cautioned that the preparation of financial statements in accordance with International Financial Reporting Standards (IFRS), which are the Canadian generally accepted accounting principles (GAAP) for publicly accountable enterprises, requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates may change, having either a positive or negative effect on net income, as further information becomes available and as the economic environment changes.

Conversion of Natural Gas to Barrels of Oil Equivalent (BOE)

To provide a single unit of production for analytical purposes, natural gas production and reserves volumes are converted mathematically to equivalent barrels of oil (boe). We use the industry-accepted standard conversion of six thousand cubic feet of natural gas to one barrel of oil (6 Mcf = 1 bbl). The 6:1 boe ratio is based on an energy equivalency conversion method primarily applicable at the burner tip. It does not represent a value equivalency at the wellhead and is not based on either energy content or current prices. While the boe ratio is useful for comparative measures and observing trends, it does not accurately reflect individual product values and might be misleading, particularly if used in isolation. As well, given that the value ratio, based on the current price of crude oil to natural gas, is significantly different from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio may be misleading as an indication of value.

Non-GAAP Financial Measures

Within this news release, references are made to terms commonly used as key performance indicators in the oil and natural gas industry. We believe that, operating income, operating netback, basic payout ratio, adjusted payout ratio, free cash flow and cash costs are useful supplemental measures for management and investors to analyze operating performance, financial leverage, and liquidity, and we use these terms to facilitate the understanding and comparability of our results of operations and financial position. However, these terms do not have any standardized meanings prescribed GAAP and therefore may not be comparable with the calculations of similar measures for other entities.

Operating income, which is calculated as royalty and other revenue less royalties and operating expenses, represents the cash margin for product sold. Operating netback, which is calculated as average unit sales price less royalties and operating expenses, represents the cash margin for product sold, calculated on a per boe basis.

Payout ratios are often used for dividend paying companies in the oil and gas industry to identify its dividend levels in relation to the funds it receives and uses in its capital and operational activities. Basic payout ratio is calculated as dividends declared as a percentage of funds from operations. Adjusted payout ratio is calculated as dividends paid in cash plus capital expenditures as a percentage of funds from operations.

Free cash flow is calculated by subtracting capital expenditures from funds from operations. Free cash flow is a measure often used by dividend paying companies to determine cash available for payment of dividends, paying down debt or investment.

Cash costs is a total of certain cash expenses in the statement of income deducted in determining funds from operations. For Freehold cash costs are identified as royalty expense, operating expense, general and administrative expense, interest expense and share based compensation payments. It is key to funds from operations, representing the ability to, sustain dividends, repay debt and fund capital expenditures.

We refer to various per boe figures which provide meaningful information on our operational performance. We derive per boe figures by dividing the relevant revenue or cost figure by the total volume of oil, NGL and natural gas production during the period, with natural gas converted to equivalent barrels of oil as described above.

For further information related to these non-GAAP terms, including reconciliations to the most directly comparable GAAP terms, see our most recent MD&A.

For further information, contact:

Freehold Royalties Ltd. Matt Donohue Manager, Investor Relations and Capital Markets t.  403.221.0833 f.  403.221.0888 tf. 1.888.257.1873 e.  mdonohue@rife.com w. www.freeholdroyalties.com

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[melindarowens]

Global Stocks Jump, Dow Futs At New All Time Highs As Brexit Talks Begin

S&P futures rose 0.3% in subdued trading with Dow Jones futs once again in record territory as European stocks jump 0.6% following Sunday’s landslide victory for Macron’s party in the French parliamentary elections and as Brexit negotiations are set to officially roll out on Monday.

In the latest terrorist incident in London overnight, a man drove a van into pedestrians as people left their mosque following prayers, with UK PM May stating that UK police have confirmed the incident is being treated as a potential terrorist attack. Later updates stated that the one fatality could have been dead before being run-over while 2 others are considered to be seriously injured.

Asian equities opened on the front foot led by a rebound in tech stocks while benchmark sovereign yields and FX remains little changed; kiwi outperforms following solid domestic data; yen slightly lower. Australian bonds modestly softer, T-note futures unchanged with the AUDUSD sliding, but then recouping all losses after Moody’s cut the long-term ratings of Australia’s four major banks, ANZ, CBA, NAB and Westpac, to Aa3 from Aa2.

In China, the PBOC kept daily CNY fixing little changed and conducted net 110 billion yuan of open market operations, injecting liquidity for a fifth straight day and boosting cash injections in the past two days to the most since January. 7-day repo rate fell 23 basis points. Boosted by the sudden bout of PBOC liquidity generosity, Chinese 10-year sovereign bond yield declined 8 basis points, the most since Dec. 29, to 3.50%, sending the yield to the lowest since early May, however the 1-year yield dropped just 4 basis points to 3.58%, sending the Chinese 1s10s yield curve even more inverted.

Chinese and Hong Kong stocks jumped 0.7% and 1.2% ahead of a decision by index provider MSCI on Tuesday, expected to see it add mainland-listed Chinese stocks to its top share benchmarks for the first time. Chinese data had also helped, with Reuters noting that liquidity conditions appear to have eased and home prices up 10.4% in May from a year ago, although slowing from April’s 10.7% gain.

“Generally, the environment still remains fairly positive for risk appetite,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group in Singapore.

In Europe, stocks headed for their biggest rise in seven weeks on Monday as investors snapped up slammed retail, tech and automaker stocks and France’s shares and bonds cheered an absolute parliamentary majority for President Emmanuel Macron as the Stoxx Europe 600 gained for a second day. Europe’s retailers also clawed back some ground having been clobbered along with U.S. peers like Wal-Mart and Target on Friday by Amazon’s $ 13.7 billion deal to buy upscale grocer Whole Foods Market. The CAC 40 jumped after President Emmanuel Macron’s government claimed a historic majority in France’s legislature, although marred by a record low turnout, which perhaps is why the German-French spread moved just fractionally on monday.

“We expect the Macron reforms to transform France like the Thatcher reforms had cured the erstwhile sick man of Europe, the United Kingdom, some 35 years ago,” said Berenberg European economist Holger Schmieding. “And like the ‘Agenda 2010’ reforms had turned Germany from one of the weakest into one of the strongest economies in Europe almost 15 years ago.”

As Bloomberg notes, investors are once again in risk-on mode as the week begins, even as a cloud of uncertainty swirls around both U.K. leadership and the outlook for Brexit negotiations.

“Risk assets around the world are rallying again as the ‘carry party’ resumes,” Societe Generale SA strategist Kit Juckes wrote in a client note. Fed Chair Janet Yellen “did nothing to persuade the market” to take its hawkish outlook for the path of interest rates seriously, he said.

Sterling rose with cable just above $ 1.28 ahead of the formal start of negotiations on Britain’s planned exit from the European Union, expected to generate plenty of headlines for the currency in the weeks ahead. Brexit Secretary David Davis starts negotiations in Brussels on Monday, which will be followed by a Brussels summit on Thursday and Friday where Prime Minister Theresa May will meet – but not negotiate with – fellow European Union leaders.

Davis’s agreement to Monday’s agenda led some EU officials to believe that May’s government may at last be coming around to Brussels’ view of how negotiations should be run. May’s own political survival is in doubt after she lost her parliamentary majority in an election this month.

On the topic of Brexit negotiations, which officially kick off today, SocGen’s Juckes said “we expect nothing because the UK position is as clear as mud’ beyond growing signs that the UK wants free trade without being part of the customs union or conceding grounds on borer controls. Sterling’s probably range-bound. Any rally triggered by ‘soft Brexit’ hopes is probably temporary.”

With no macro data on today’s calendar, the market will await comments by New York Fed President William Dudley when he speaks at a business roundtable in New York state.

“In the wake of Friday’s weak U.S. data, Dudley could provide insight into whether the Fed is still poised to continue normalizing monetary policy,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

The euro was steady as talks begin on the U.K.’s split from the European Union, while the British pound strengthened after dropping early in the session.

In commodities, oil futures lingered near six-week lows over concerns about a supply glut amid faltering demand. WTI slipped 0.35% to $ 44.58 a barrel, while Brent dropped 0.3% to $ 47.21. Iron ore rallied 2.8% after snapping a three-week losing streak.  Gold touched a 3-1/2-week low earlier in the session and was trading down slightly at $ 1,250 an ounce.

In rates, two-year gilts underperform the rest of the curve after the Sunday Times reported the BOE is considering ending its term funding scheme; euro-area periphery bonds outperform core peers. The yield on 10-year Treasuries was little changed at 2.15 percent.

Bulletin headline Summary from RanSquawk

European equities enter the North American open in positive territory, continuing from Asia, buoyed by Macron’s convincing parliamentary election victory.

A quiet morning in FX land, with all focus on GBP, GBP/USD has pivoted around the 1.28 handle, as participants await the Brexit negotiations.

Looking ahead, the highlight will be the fallout of day one of Brexit Negotiations, with Barnier and Davis set to brief the press at 17:00BST

Global Market Snapshot

S&P 500 futures up 0.3% to 2,437.75

STOXX Europe 600 up 0.7% to 391.35

MXAP up 0.6% to 155.18

MXAPJ up 0.7% to 505.44

Nikkei up 0.6% to 20,067.75

Topix up 0.6% to 1,606.07

Hang Seng Index up 1.2% to 25,924.55

Shanghai Composite up 0.7% to 3,144.37

Sensex up 0.8% to 31,303.70

Australia S&P/ASX 200 up 0.5% to 5,805.17

Kospi up 0.4% to 2,370.90

German 10Y yield rose 0.2 bps to 0.278%

Euro down 0.04% to 1.1193 per US$

Brent Futures down 0.4% to $ 47.17/bbl

Italian 10Y yield rose 1.9 bps to 1.695%

Spanish 10Y yield fell 2.5 bps to 1.431%

Brent Futures down 0.4% to $ 47.17/bbl

Gold spot down 0.2% to $ 1,250.84

U.S. Dollar Index up 0.01% to 97.18

Key Overnight Headlines

London police say one dead, eight injured after van hits pedestrians

BOE said to consider ending the Term Funding Scheme at a meeting this week

Macron’s party secures French parliamentary majority, turnout plummets

Trump isn’t under investigation for obstruction of justice, his lawyer says

RBA’s Lowe repeats growth likely a bit stronger over next couple of years

Japan May trade balance -203.4 billion yen vs +43.3 billion estimate

Oil Declines as U.S. Adds Yet More Rigs in Oversupplied Market

Amazon Said to Plan Cuts to Shed Whole Foods’ Pricey Image

Basic Energy Said to Be in Talks to Merge With Rival Key Energy

Boeing Takes Aim at Airbus Single-Aisle Edge With Stretched 737

GE Won’t Participate on New Boeing If Three Engine Providers

JD Takes $ 17.6b of Orders During ‘618’ Online Shopping Gala

Ocado Jumps as Amazon Deal Seen Positive by Credit Suisse

Clovis to Seek Broader Label as Ovarian Cancer Study Meets Goals

Myriad Genetics, Foundation Medicine May Fall on Clovis Plans

Pentagon Sees Saving $ 2b From 445-Jet Contract for F-35 Fighter

In Asia, equity markets began the week on the front-foot with all major indices in the green, as participants eyed the political landscape in Europe including the start of Brexit negotiations today and after French President Macron’s party and its allies won a clear majority in the 2nd round parliamentary elections. Nikkei 225 (+0.62%) gained as JPY softened across the board, while ASX 200 (+0.54%) was led higher by outperformance in utilities and financials. Elsewhere, Shanghai Comp. (+0.7%) and Hang Seng (+1.1%) are also upbeat following a firm liquidity operation by the PBoC, while the region also awaits MSCI’s verdict tomorrow on whether to add China A-shares to its Emerging Markets Index in the nation’s 4th attempt for inclusion. Finally, 10yr JGBs were subdued alongside gains in riskier assets and after the BoJ’s Rinban announcement, in which it refrained from JGB purchases and instead concentrated on treasury bills.

Top Asian News

Hong Kong Wants to Win the Next Alibaba With Exchange Revamp

China’s Home Prices Increase in Fewer Cities as Curbs Bite

Japan’s Recovery Creates Room for Bolder Reforms, IMF Says

Aussie Extends Drop After Moody’s Cuts Ratings on Nation’s Banks

CRCC May Eye Up to $ 2b From Shanghai, Hong Kong Share Sales: IFR

Why the Qatar Crisis Defies Rapid Resolution: QuickTake Q&A

Taiwan Watchdog Fines SinoPac, Ousts Chairman for Lax Oversight

In Prohibition Pakistan, Brewery Plans Soft Drink Switch

Abe’s Popularity Slides as Mounting Japan Scandals Take Toll

Toshiba Finalizing Chip Sale to Group With Bain: Nikkan Kogyo

In Europe, equities likewise have kicked-off the week on the front foot, with all major European bourses firmly in the green (Eurostoxx 600 +0.6%) in a continuation of the positive sentiment seen during Asia-Pac trade. The CAC 40 (+1 %) is trading broadly in-line with the market as Macron’s victory in the French parliamentary elections was largely priced in given the results seen in the first round. In terms of sector performance, gains have been relatively broad-based with modest underperformance for RWE following a broker downgrade while Ocado (+6.5%) trade higher in the wake of Amazon’s purchase of Whole Foods. In fixed income markets, prices have largely been swayed by the upside in equities as paper trades lower this morning (albeit modestly so) in what will be a quieter week with regards to sovereign supply (Belgium comes to market today with 3 OLO offerings). Peripheral yields are marginally lower this morning with Greek paper also taking a bit of a breather after the nation managed to strike a deal with creditors last week.

Top European News

Macron Under Pressure to Deliver as Turnout Plummets in France

Brexit Talks Begin With May Under Pressure to Get Soft Split

London Home Sellers Cut Price for Second Time in Three Months

ECB’s Smets Says Start of Brexit Negotiations a ‘Sad Day’

ECB’s Smets Says Inflation Expectations Must Be Solidly Anchored

Buyers Line Up as Europe’s Biggest Debt Collector Divests Units

Kazakhstan Says Eni-Shell Venture Offers Settlement to End Spat

Astra, Tesaro May Move on Clovis Oncology’s Ovarian Cancer Data

U.K.’s Johnson: ‘Realistic Prospect’ of Brexit Deal With EU

SNCF Mandates Lazard to Sell Ermewa, Les Echos Says

In currencies, GBP will be a focus throughout the session as today sees the beginning of negotiations between EU’s Barnier and Brexit Secretary Davis. That said, GBP remains firmer against the greenback and back above 1.2800 even despite weekend reports of a potential attack on May’s leadership which could further add to the political uncertainty gripping the nation. Elsewhere, the broader risk sentiment has supported the USD with USD/JPY gaining traction in early trade. However, some remain cynical about how much room there is to the upside with hearty offers at 111.50. Finally, AUD saw some selling pressure this morning amid news that Moody’s has downgraded the nation’s big four banks.

In commodities, this morning has been a quieter one for the commodity complex with energy prices stuck in a tight range amid light newsflow, other than reports that oil output has been increasing at Libya’s Sharara oil-field. In metals, copper eked mild gains overnight amid the positive risk sentiment in Asia, although upside was limited alongside subdued trade across the complex, while the risk sentiment has acted as a downward force for gold prices. There were new details released by Jodi about Saudi Arabian oil data as follows:

Crude exports fell by 0.226min BPD M/M to 7.006min BPD in April

Crude Stocks fell 3.927min BBLS TO 263.927min BBLS in April

Domestic refinery crude throughput rose 0.390min BPD to 2.651 min BPD in April

Crude output rose by 0.046min BPD M/M to 9.946min BPD in April

Looking at the day ahead, there are no data releases scheduled in the US, although we have two Fed speakers: at 8am, Fed’s Dudley holds a business rountable in Plattsburgh, NY; while later at 7pm Fed’s Evans speaks in New York.

* * *

DB’s Jim Reid concludes the overnight wrap

Politics remains a hotbed of activity at the moment. There may only be around 20 miles between France and the UK but the fascinating thing about these two very different countries at the moment is that while the French seem to be rejecting socialism in their droves the momentum in the UK seems to be leading the country in the opposite direction. While Macron talks of sweeping labour market reform, the buoyant UK opposition (ahead in the polls now) talk of renationalisation, higher taxes and higher spending.

As expected Macron’s En Marche party swept the board in the second round of the parliamentary election yesterday winning 350 out of 577 seats – perhaps slightly short of expectations but still a commanding victory. The record low turnout (estimated at 44%) will also be a disappointment and already Melonchon has suggested that this doesn’t give Macron legitimacy to tear up worker’s rights. Indeed Melenchon said that “this bloated majority in the National Assembly does not in our eyes have the legitimacy to perpetrate the anticipated social coup, the destruction of all public social order by the repeal of the labour law”. Elsewhere the ruling Socialist party fell from 280 to an estimated 45 seats though and were firmly defeated. It’s easy to forget that it was only 14 months ago that the En Marche party was formed and how remarkable it is that they’ve come from nowhere to secure such a victory and banish the two main parties. Europe is going through a buoyant patch economically at the moment which is taking the edge off populism but under the surface huge political change is still occurring.

Meanwhile in the UK politics is as decisive as at any point I can remember with Brexit, the recent elections and the tragic fire last week in a tower block in London creating anger, resentment, activism and at times scenes descending into what seems like mob behaviour. The overnight breaking news of another vehicle striking into pedestrians in North London is sadly another talking point. When the opposition party leader Jeremy Corbyn suggests that empty privately owned houses in the region of the Grenfell Tower fire should be subject to requisition orders to house the homeless and that a YouGov poll suggests that 59% of the population agrees with the idea in theory then you can see that a political tide is turning.

Added to this, PM May has had such a difficult 10 days that opinion polls now give the Labour Party (led by a socialist core) a lead in the polls (recent Survation poll being evidence) a couple of months after being 20% behind and written off by many and expected to see one of the worst election results by an opposition party in history. For now PM May stumbles on without an official political understanding with the DUP as yet and only 2 days before the Queen’s Speech where she will lay out the Government’s legislative agenda for the next Parliamentary session (now lasting 2 years). On the same day there seems to  be momentum building for a “day of rage” against the Government with marches and protests planned. Those on the left of the political spectrum have really been emboldened over the last few weeks. Wednesday could be an interesting day in the UK. As we’ve been saying a lot over the last year we think the Brexit and Trump vote will be seen in years to come as an inflexion point across the world where Governments had to spend more to appease the bottom half of the population on the income scale or risk getting voted out. The recent political developments in the UK make me more convinced of this. Europe is not immune from this but as discussed above populism is seeing a slight retracement as growth edges towards the upper end of the post financial crisis range. If and when growth fades Europe will again likely face these issues.

Staying with the UK today sees Brexit negotiations officially begin. Chancellor of the Exchequer Phillip Hammond suggested yesterday in a TV interview that a gentle departure from the EU should be targeted. The Chancellor indicated that “transactional structures” would be needed to help smooth the process and that “we need to get there via a slope, not via a cliff edge” – suggesting a softer tone in negotiations. In contrast to the PM, Hammond also rejected the mantra “no deal is better than a bad deal”. Hammond also said that his position was one of a “jobs first” Brexit which is also a slight shift in tone compared to the PM. Separately, Hammond said that the UK government had “heard a message last week in the general election” and that ways to soften austerity were being looked at with voters seemingly growing “weary” of it. Hammond did however also say that he will still look to balance the budget by the middle of the next decade and that the UK had to “live within our means”. It’s worth noting that Hammond is due to deliver his Mansion House speech tomorrow after it was delayed from last week.

Away from politics, the big story in markets on Friday and over the weekend was that of Amazon’s $ 14bn bid for Whole Foods. The headlines sparked ripple effects of selling through the retail sector on Friday with investors quick to dump shares over fears of a potential huge new entrant in the market, potential further disruption and more fears of narrower margins. Bricks and mortar food retailers like Wal-Mart (-4.65%) and Kroger (-9.24%) were hit but it didn’t stop there with other general US bricks and mortar retailers under pressure. Costco (-7.19%), Walgreens Boots (-4.99%), CVS (-3.78%) and Target (-5.14%) all stood out. It was a similar story in CDS with spreads for the likes of Nordstrom (+6bps), Target (+4bps) and Wal-Mart (+3bps) all wider. Europe wasn’t immune with Tesco (-4.92%), Sainsbury (-3.85%) and Carrefour (-3.22%) also seeing big moves lower. Since the bid was made there have been plenty of articles over the weekend questioning whether this is deflationary for food prices and as such overall inflation. So it’s sure to be a talking point for a while.

While the retail sector did its best to drag markets down on Friday the S&P 500 actually managed to eke out a small +0.03% gain by the end of play after steadily rising into the close. A decent day for the energy sector had a lot to do with that after Oil (+0.63%) pared some of last week’s heavy fall. The Nasdaq (-0.22%) did however close in the red for the fifth time in the last six sessions. Prior to this the Stoxx 600 (+0.66%) had actually put up its best day since May 4th supported in part by the positive progress made in Greece to some degree.

This morning in Asia it’s been a fairly positive start to the week for risk. In equity markets the Nikkei (+0.60%), Hang Seng (+0.87%), Shanghai Comp (+0.33%), Kospi (+0.41%) and ASX (+0.20%) appear to all be feeding off the positive momentum into the Wall Street close on Friday. US equity index futures are also up +0.20%. It’s worth adding that there are some eyes already looking ahead to tomorrow’s decision from the MSCI as to whether or not China’s domestic A-shares will be included in its globally tracked EM index. The MSCI has previously delayed the decision over concerns about regulation worries and accessibility. Staying with China, house prices data out this morning revealed that new home prices rose in 56 of the 70 cities tracked by the government, down slightly from 58 in April. Meanwhile in Japan this morning our economists noted that customs trade stats for May confirmed stagnant international trade growth with a seasonally +0.9% mom rise in export volumes, a +0.4% mom rise in import volumes, flat growth in export value and +0.3% mom rise in import value.

Other markets were relatively quiet on Friday. Treasuries were a bit stronger at the margin (10y -1.2bps to 2.152%) and the USD softer (-0.28%) following some soft US data and dovish Fedspeak. In terms of the former both housing starts (-5.5% mom vs. +4.1% expected) and building permits (-4.9% mom vs. +1.7%) declined unexpectedly in May while the labour markets conditions index also rose a little less than expected (+2.3 vs. +3.0 expected). The flash June University of Michigan consumer sentiment reading was also a little disappointing after falling 2.6pts to 94.5 and the lowest since November. Both current conditions and expectations weakened although inflation expectations 1-year ahead did hold steady at 2.6% while 5-10 year expectations actually rose two-tenths to 2.6%. It’s worth noting that the Atlanta Fed’s Q2 GDPNow forecast is down to 2.9% (a 0.3% downward revision versus Wednesday) and at the lowest so far.

Meanwhile the Fedspeak consisted of comments from Kashkari and Kaplan. The former (who dissented last week) reiterated his view that the Fed should not have hiked rates last week given recent inflation data, preferring instead to wait and see if the data is transitory or not. The latter meanwhile told reporters that before he is comfortable taking the next step in tightening, “I’m going to want to see more evidence that we’re making progress in reaching our 2% inflation objective”.

In terms of the data in Europe on Friday, the only release of note was the confirmation of the final inflation readings for the Euro area in May. Headline CPI was unrevised at -0.1% mom which has in turn confirmed an annual reading of +1.4% yoy and down from +1.9% in April. The more significant core reading was confirmed at +0.9% yoy which compares to +1.2% the month prior.

To the week ahead now. It’s a quiet start to the week today with no data of note in either Europe of the US. It’s not looking likely to be much busier on Tuesday with only Germany PPI and the US current account balance in Q1 due. On Wednesday the early focus will be on the UK with May public sector net borrowing data due out. In the US we’ll get existing home sales for May. The calendar finally picks up a bit on Thursday. In France we’ll receive June confidence indicators while in the UK we’ll get CBI total orders data for June. In the US on Thursday the data includes initial jobless claims, Kansas City Fed’s manufacturing index, FHFA house price index and the conference board’s leading index. The busiest day for data looks set to be Friday. In Asia we’ll receive the flash June manufacturing PMI for Japan while in Europe we’ll get the flash PMIs for the Euro area, Germany and France. Also due out is the final revisions to Q1 GDP in France. Over in the US on Friday we’ll also receive the flash PMIs along with May new home sales.

Away from the data there are a bunch of Fedspeakers scheduled over the week including Dudley (Monday), Evans, Fischer, Rosengren and Kaplan (Tuesday), Powell (Thursday) and Mester, Bullard and Powell (Friday). Away from that we’ll receive BoJ minutes from the April meeting on Wednesday while the BoJ’s Kuroda (Wednesday) and Iwata (Thursday) are also due to speak. Also of note is the Queen’s speech scheduled for Wednesday which officially marks the state opening of the new parliamentary session in the UK. EU leaders are also due to gather for a 2-day meeting beginning Thursday to discuss the relocation of European agencies after Brexit.

source http://capitalisthq.com/global-stocks-jump-dow-futs-at-new-all-time-highs-as-brexit-talks-begin/ from CapitalistHQ http://capitalisthq.blogspot.com/2017/06/global-stocks-jump-dow-futs-at-new-all.html

[investsnews-blog]

Petróleo fecha em baixa em um mercado calmo

Petróleo fecha em baixa em um mercado calmo

Nova York, 23 Jan 2017 (AFP) – O petróleo caiu nesta segunda-feira em um mercado que não se entusiasmou com os sinais de corte na oferta dos principais produtores do mundo. O barril de “light sweet crude” (WTI) caiu 47 centavos, a 52,75 dólares nos contratos para entrega em março do mercado de Nova York. Em Londres, o barril de Brent do mar do Norte para março caiu 26 centavos, a 55,23 dólares.…

[startupcanada]

Freehold Royalties Ltd. Strong Growth in Funds from Operations and Second Quarter Results

CALGARY, Alberta, Aug. 02, 2018 (GLOBE NEWSWIRE) — Freehold Royalties Ltd. (Freehold) (TSX:FRU) announced second quarter results for the period ended June 30, 2018.

Results at a Glance

        Three Months Ended Six Months Ended   June 30 June 30 FINANCIAL ($000s, except as noted) 2018 2017 Change   2018 2017 Change   Royalty and other revenue   40,153   38,430 4 % 79,519 79,521 –   Net income   5,386   13,084 -59 %   9,809   20,172 -51 %    Per share, basic and diluted ($)   0.05   0.11 -55 %   0.08   0.17 -53 % Funds from operations   34,540   31,769 9 %   66,924   63,838 5 %    Per share, basic ($)   0.29   0.27 7 %   0.57   0.54 6 % Operating income (1)   38,331   35,235 9 %   75,989   72,319 5 %    Operating income from royalties (%)   100   97 3 %   99   94 5 % Acquisitions   2,697   1,267 113 %   33,578   34,619 -3 % Working interest dispositions   7   28,808 -100 %   8,137   29,096 -72 % Dividends declared   18,625   17,705 5 %   36,651   33,043 11 %    Per share ($) (2)   0.1575   0.15 5 %   0.31   0.28 11 % Net debt   77,908   49,819 56 %   77,908   49,819 56 % Shares outstanding, period end (000s)   118,293   118,073   –     118,293   118,073  –   Average shares outstanding (000s) (3)   118,238   118,018   –     118,211   117,987   –   OPERATING             Royalty production (boe/d) (4)   11,052   11,270 -2 %   11,124   10,986 1 % Total production (boe/d) (4)   11,721   12,589 -7 %   11,860   12,670 -6 %    Oil and NGL (%)   54   54   –     54   55 -2 % Average price realizations ($/boe) (4)   36.96   32.98 12 %   35.73   33.93 5 % Operating netback ($/boe) (1) (4)   35.94   30.76 17 %   35.39   31.54 12 %

(1)   See Non-GAAP Financial Measures. (2)   Based on the number of shares issued and outstanding at each record date. (3)   Weighted average number of shares outstanding during the period, basic. (4)   See Conversion of Natural Gas to Barrels of Oil Equivalent (boe).

President’s Message

With oil prices continuing to display strength, our funds from operations per share grew by 7% from Q1 to Q2 and we are forecasting an adjusted payout ratio for 2018 near the lower end of our target adjusted payout range of 60%-80%. We will continue to monitor commodity prices and allocate free cash flow in ways that maximize shareholder value.

On the activity front, drilling on our royalty lands came in slightly below expectations, however the second quarter typically represents a period of reduced activity. We are maintaining our 2018 production forecast between 11,750-12,250 boe/d and we continue to position Freehold as a high quality investment in oil and gas with low debt, sustainable dividends and an attractive yield.

Tom Mullane President and CEO  

Dividend Announcement

The Board has declared a dividend of $0.0525 per common share to be paid on September 17, 2018 to shareholders of record on August 31, 2018. The dividend is designated as an eligible dividend for Canadian income tax purposes.

2018 Second Quarter Highlights

Freehold delivered strong financial results in the second quarter of 2018. Highlights included:

Freehold’s royalty production averaged 11,052 boe/d, nearly flat versus Q2-2017 and Q1-2018. Volumes were impacted by acquisitions completed in Q1-2018, the strength of our audit function (approximately 380 boe/d of prior period adjustments) and third-party drilling on our lands.

Royalty interests accounted for 94% of total production and contributed 100% of operating income in Q2-2018, representing all-time highs for Freehold.

Funds from operations totaled $34.5 million, an increase of 9% compared to Q2-2017. Higher funds from operations was driven by better oil and natural gas liquids (NGL) prices and lower cash costs. On a per share basis, funds from operations was $0.29/share in Q2-2018 up from $0.27/share in both Q2-2017 and Q1-2018.

Freehold generated $15.1 million in free cash flow (1), over and above our dividend, which we applied to outstanding debt. At June 30, 2018, net debt totaled $77.9 million resulting in a net debt to 12-month trailing funds from operations ratio of 0.6 times.

Freehold closed a $2.7 million royalty acquisition in Q2-2018. The transaction included a 3% gross overriding royalty on a 21% working interest on the Mitsue Gilwood Sands Unit No. 1. Annualized 2018 production and operating income associated with this asset is estimated to be 16 bbl/d and $0.4 million.

Wells drilled on our royalty lands totaled 85 (1.2 net) in the quarter compared to 58 (1.6 net) in Q2-2017. The second quarter typically represents a period of slower drilling on our lands as spring break-up occurs, slowing operations. For the year, 324 gross (7.6 net) wells have been drilled.

In Q2-2018, Freehold issued 18 new lease agreements with 10 companies, compared to 42 issued in Q1-2018 and 12 leases in Q2-2017, highlighting the success of our leasing team. Year-to-date (YTD) we have completed 60 new lease agreements on our royalty lands. Since the inception of our leasing team in January 2017 we have completed 161 new lease agreements.

Cash costs (1) for the quarter totaled $5.17/boe, down from $5.63/boe in Q2-2017. For 2018, we are forecasting cash costs of approximately $5.00/boe.

Dividends declared for Q2-2018 totaled $0.1575 per share, up 5% versus the previous year. In March 2018, Freehold announced an increase to its monthly dividend from $0.05 to $0.0525 per share commencing in April 2018.

Basic payout ratio (1) (dividends declared/funds from operations) for Q2-2018 totaled 54% while the adjusted payout ratio (1) ((cash dividends plus capital expenditures)/funds from operations) for the same period was 56%. (1)  See Non-GAAP Financial Measures.

Royalty Drilling

Including drilling associated with acquisitions and unit wells, 324 (7.6 net) wells were drilled on our royalty lands during the first six months of 2018. This represents an increase of 56% on gross wells but a decrease of 25% on net wells versus the same period in 2017. While the second quarter typically represents a period of slowed activity, we saw even lower drilling activity than expected.

Activity through the first six months of 2018 was primarily focused on Saskatchewan oil prospects, including Viking at Dodsland, Mississippian plays in southeast Saskatchewan, and Shaunavon and Cantuar in southwest Saskatchewan. Together, Saskatchewan and Manitoba wells represented approximately 60% of our gross non-unit drilling through the quarter. Alberta activity has been concentrated in the Cardium, with strong drilling on our newly acquired Pembina Cardium acreage. Drilling for Deep Basin Spirit River, Ellerslie and Montney remains positive, along with Mannville Oil drilling in eastern Alberta. Our top payors continue to represent some of the most well capitalized E&P companies in Canada.

Royalty Interest Drilling

        Three Months Ended June 30 Six Months Ended June 30   2018 2017 2018 2017     Equivalent   Equivalent   Equivalent   Equivalent   Gross Net (1) Gross Net (1) Gross Net (1) Gross Net (1) Non-unitized wells   24   1.0   35   1.5   168   7.0   175 10.0 Unitized wells (2)  61   0.2   23   0.1   156   0.6   33   0.2 Total   85   1.2   58   1.6   324   7.6   208   10.2

(1)   Equivalent net wells are the aggregate of the number obtained by multiplying each gross well by our royalty interest percentage. (2)   Unitized wells are in production units wherein we generally have small royalty interests in hundreds of wells.

2018 Guidance Update

Below are details of some of the changes made to our key operating assumptions for 2018 based on results for the first half of the year and expectations for the remainder of the year. 

We are maintaining our 2018 average production range of 11,750-12,250 boe/d. Volumes are expected to be weighted approximately 54% oil and NGL and 46% natural gas (previously 55% and 45% respectively). We continue to maintain our royalty focus with royalty production accounting for 94% of forecasted 2018 production and 99% of operating income.

As part of continued weakness in equity markets and depressed prices associated with natural gas we reduced our 2018 drilling forecast from 25 to 20 net wells.

We are maintaining our WTI oil price assumption of US$65.00/bbl but have increased our WCS oil price assumption to $55.00/bbl (from $53.00/bbl) as Q2-2018 heavy oil differentials were lower than expected.

Our AECO natural gas price assumption remains unchanged at $1.75/mcf. Even though market prices are slightly lower, there have been significant AECO price fluctuations, so a change was not yet justified.

Based on our current $0.0525/share monthly dividend level, we expect our 2018 adjusted payout ratio ((cash dividends plus capital expenditures)/funds from operations) to be approximately 55% (previously 54%). The expectation of our longer-term payout ratio remains cautious as the forward commodity market is showing future light oil prices below current levels.

General and administrative costs remain at $2.50/boe.

We have increased our forecast year-end net debt to funds from operations to approximately 0.4 times (from 0.3 times) due to acquisitions completed YTD, changes in working capital and a slight increase in gas production relative to oil production.

Key Operating Assumptions

              Guidance Date 2018 Annual Average     Aug 2, 2018 May 9, 2018 Mar. 8, 2018 Total daily production  boe/d    11,750-12,250  11,750-12,250  11,750-12,250 West Texas Intermediate crude oil  US$/bbl     65.00   65.00   60.00 Edmonton Light Sweet crude oil  Cdn$/bbl     76.00   76.00  N/A Western Canadian Select crude oil  Cdn$/bbl     55.00   53.00   45.00 AECO natural gas Cdn$/Mcf     1.75   1.75   2.00 Exchange rate Cdn$/US$     0.77   0.79   0.80 Operating costs  $/boe     1.45   1.45   1.45 General and administrative costs (1)  $/boe     2.50   2.50   2.50 Weighted average shares outstanding  millions     118   118   118

(1)   Excludes share based compensation.

Recognizing the cyclical nature of the oil and gas industry, we continue to closely monitor commodity prices and industry trends for signs of changing market conditions. We caution that it is inherently difficult to predict activity levels on our royalty lands since we have no operational control. As well, significant changes (positive or negative) in commodity prices (including Canadian oil price differentials), foreign exchange rates, or production rates may result in adjustments to the dividend rate.

Based on our current guidance and commodity price assumptions, and assuming no significant changes in the current business environment, we expect to maintain the current monthly dividend rate through the next quarter. We will continue to evaluate the commodity price environment and adjust the dividend levels as necessary (subject to the quarterly review and approval of our Board of Directors).

Conference Call Details

A conference call to discuss financial and operational results for the period ended June 30, 2018 will be held for the investment community on Friday, August 3, 2018 beginning at 7:00 am MT (9:00 am ET). To participate in the conference call, approximately 10 minutes prior to the conference call, please dial 1-800-806-5484 (toll-free in North America), participant access code 6624442#.

Availability on SEDAR

Freehold’s 2018 second quarter interim unaudited condensed consolidated financial statements and accompanying Management’s Discussion and Analysis (MD&A) are being filed today with Canadian securities regulators and will be available at www.sedar.com and on our website at www.freeholdroyalties.com.

Forward-looking Statements

This news release offers our assessment of Freehold’s future plans and operations as at August 2, 2018, and contains forward-looking statements that we believe allow readers to better understand our business and prospects. These forward-looking statements include our expectations for the following:

our outlook for commodity prices including supply and demand factors relating to crude oil, heavy oil, and natural gas;

light/heavy oil price differentials;

changing economic conditions;

continuing to monitor commodity prices and allocate free cash flow in ways that maximize shareholder value;

continuing to position Freehold as a high quality investment in oil and gas with low debt, sustainable dividends and an attractive yield;

foreign exchange rates;

cash costs forecasted at approximately $5.00/boe;

drilling activity during 2018 and the impact on our production base;

our expected adjusted payout ratio for 2018;

average production for 2018, contribution from royalty lands and weighting of oil, NGL and natural gas;

2018 percentage of production and operating income from royalties;

key operating assumptions including operating costs and general and administrative costs;

forecast year-end net debt to funds from operations;

industry drilling and development activity on our royalty lands, including our estimate of 2018 net royalty wells at 20;

our dividend policy and expectations for future dividends; and

maintaining our monthly dividend rate through the next quarter.

By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, royalties, environmental risks, taxation, regulation, changes in tax or other legislation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, and our ability to access sufficient capital from internal and external sources. Risks are described in more detail in our AIF.

With respect to forward-looking statements contained in this news release, we have made assumptions regarding, among other things, future commodity prices, future capital expenditure levels, future production levels, future exchange rates, future tax rates, future legislation, the cost of developing and producing our assets, our ability and the ability of our lessees to obtain equipment in a timely manner to carry out development activities, our ability to market our oil and gas successfully to current and new customers, our expectation for the consumption of crude oil and natural gas, our expectation for industry drilling levels, our ability to obtain financing on acceptable terms, shut-in production, production additions from our audit function and our ability to add production and reserves through development and acquisition activities. The key operating assumptions with respect to the forward-looking statements referred to above are detailed in the body of this news release.

You are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits we will derive from them. The forward-looking information contained in this document is expressly qualified by this cautionary statement. To the extent any guidance or forward looking statements herein constitute a financial outlook, they are included herein to provide readers with an understanding of management’s plans and assumptions for budgeting purposes and readers are cautioned that the information may not be appropriate for other purposes. Our policy for updating forward-looking statements is to update our key operating assumptions quarterly and, except as required by law, we do not undertake to update any other forward-looking statements.

You are further cautioned that the preparation of financial statements in accordance with International Financial Reporting Standards (IFRS), which are the Canadian generally accepted accounting principles (GAAP) for publicly accountable enterprises, requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates may change, having either a positive or negative effect on net income, as further information becomes available and as the economic environment changes.

Conversion of Natural Gas to Barrels of Oil Equivalent (BOE)

To provide a single unit of production for analytical purposes, natural gas production and reserves volumes are converted mathematically to equivalent barrels of oil (boe). We use the industry-accepted standard conversion of six thousand cubic feet of natural gas to one barrel of oil (6 Mcf = 1 bbl). The 6:1 boe ratio is based on an energy equivalency conversion method primarily applicable at the burner tip. It does not represent a value equivalency at the wellhead and is not based on either energy content or current prices. While the boe ratio is useful for comparative measures and observing trends, it does not accurately reflect individual product values and might be misleading, particularly if used in isolation. As well, given that the value ratio, based on the current price of crude oil to natural gas, is significantly different from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio may be misleading as an indication of value.

Non-GAAP Financial Measures

Within this news release, references are made to terms commonly used as key performance indicators in the oil and natural gas industry. We believe that, operating income, operating netback, basic payout ratio, adjusted payout ratio, free cash flow and cash costs are useful supplemental measures for management and investors to analyze operating performance, financial leverage, and liquidity, and we use these terms to facilitate the understanding and comparability of our results of operations and financial position. However, these terms do not have any standardized meanings prescribed GAAP and therefore may not be comparable with the calculations of similar measures for other entities.

Operating income, which is calculated as royalty and other revenue less royalties and operating expenses, represents the cash margin for product sold. Operating netback, which is calculated as average unit sales price less royalties and operating expenses, represents the cash margin for product sold, calculated on a per boe basis.

Payout ratios are often used for dividend paying companies in the oil and gas industry to identify its dividend levels in relation to the funds it receives and uses in its capital and operational activities. Basic payout ratio is calculated as dividends declared as a percentage of funds from operations. Adjusted payout ratio is calculated as dividends paid in cash plus capital expenditures as a percentage of funds from operations.

Free cash flow is calculated by subtracting capital expenditures from funds from operations. Free cash flow is a measure often used by dividend paying companies to determine cash available for payment of dividends, paying down debt or investment.

Cash costs is a total of certain cash expenses in the statement of income deducted in determining funds from operations. For Freehold cash costs are identified as royalty expense, operating expense, general and administrative expense, interest expense and share based compensation payments. It is key to funds from operations, representing the ability to, sustain dividends, repay debt and fund capital expenditures.

We refer to various per boe figures which provide meaningful information on our operational performance. We derive per boe figures by dividing the relevant revenue or cost figure by the total volume of oil, NGL and natural gas production during the period, with natural gas converted to equivalent barrels of oil as described above.

For further information related to these non-GAAP terms, including reconciliations to the most directly comparable GAAP terms, see our most recent MD&A.

For further information, contact:

Freehold Royalties Ltd. Matt Donohue Manager, Investor Relations and Capital Markets t.  403.221.0833 f.  403.221.0888 tf. 1.888.257.1873 e.  mdonohue@rife.com w. www.freeholdroyalties.com

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