Exxon Spill Over Continues - Analyst Blog
01 Aprile 2013 - 5:30PM
Zacks
Oil splurge continues in the
Midwest by the world’s largest oil company by market value,
Exxon Mobil Corporation (XOM). The spill comes in
the wake of an apparent breach in the Pegasus pipeline carrying
crude oil to the U.S. Gulf Coast.
On Mar 29, 2013, Exxon Mobil closed its Pegasus pipeline system
after a leak spilled crude near the town of Mayflower, Ark. The
pipeline used to transfer more than 90,000 barrels per day (bpd) of
crude from Patoka, Ili. to Nederland, Tex.
However, clean-up operations are ongoing at the site. The company
claims to have deployed 2,000 feet of boom and mobilized 15 vacuum
trucks at the site, with the help of its clean-up crew.
Approximately 4,500 barrels of oil and water have been recovered.
The company also said it observed a few thousand barrels of oil in
the area, but was staging a response for more than 10,000 barrels
to be conservative.
The spate of problems from pipeline had always haunted Exxon Mobil
over the past. Last week, the U.S. Department of Transportation's
Pipeline and Hazardous Materials Safety Administration initiated an
administrative enforcement action against the company. The
administrative body proposed a fine of $1.7 million to Exxon Mobil
Pipeline Company as a result of the operator's Jul 2011 crude oil
pipeline failure in the Yellowstone River near Laurel, Mont.
Now, in light of rising U.S. stockpiles, the Exxon Mobil pipeline
debacle – which threatens to lower the crude oil transported from
the U.S. Midwest – could depress oil prices in the country. As it
is, for the week ending Mar 22, 2013, U.S. crude stock increased
0.9% and was hovering more than 12% above the five-year
average.
Exxon Mobil is the world’s largest publicly traded oil company,
engaged in oil and natural gas exploration and production,
petroleum products refining and marketing, chemicals manufacture,
and other energy-related businesses. Approximately 83% of Exxon
Mobil’s earnings come from its operations outside the U.S.
Exxon Mobil holds a Zacks Rank #3 (Hold). However, the Zacks Ranked
#1 stocks of Stone Energy Corporation (SGY),
Range Resources Corporation (RRC) and EPL
Oil & Gas, Inc. (EPL) are expected to outperform the
market over the next few months.
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
STONE ENERGY CP (SGY): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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