>>> Maurel & Prom seeks merger partners among national or independent oil groups

Maurel & Prom seeks merger partners among national or independent oil groups

Ecopetrol, Petroperu, Pemex suggested as ideal partners
Independent companies such as Tullow, Afren, Lundin could be good fit
Maurel & Prom (M&P) [EPA:MAU] the French oil and gas group, is continuing its hunt for a merger partner, according to Jean-Francois Henin, chairman of Maurel & Prom. A national group looking to expand its global footprint or a similar size peer would be the preferred options, Henin said in an exclusive interview with this news service.

The sudden drop in oil prices - down nearly 30% since the summer – has prompted “everybody to talk with everybody” in the industry, in relation to potential mergers or partnerships. “There are companies that will no longer be able to finance their development plans at present prices,” he said.

Henin said his favoured choice for a deal would be a national oil company that needs to become more international in its focus, such as the Latin American companies Colombia’s Ecopetrol [TSE:ECP], Pemex in Mexico and PetroPeru in Peru.

Maurel & Prom could bring its expertise to such a partnership. “They would like to conquer the world but are still ill equipped,” Henin added.

Teaming up with one of the London-listed, independent oil and gas groups is another option, he said. A second source at M&P suggested Tullow Oil [LON:TLW] which operates in Ghana, Uganda and Kenya and had revenues of USD 1.3bn in the first half of 2014.

Afren [LON:AFR] an independent oil company with operations in Africa and the Kurdistan region of Iraq, was also suggested by the source. The group recently dismissed its CEO and other senior management for gross misconduct.

Premier Oil [LON:PMO] and Ophir Energy PlC [LON:OPHR] were also suggested by the source. Ophir Energy, however, has just made a "conditional" takeover approach for Salamander Energy [LON:SMDR], the South East Asia oil and gas explorer.

Tullow, Premier and Ophir are regularly touted as bid targets or potential buyers of smaller peers, whilst Afren is seen as vulnerable to a takeover following its recent woes.

Scottish group Cairn [LON:CNE], which operates in North West Europe, the Mediterranean (Gulf of Valencia), North West Africa and India, is a further option. Cairn reported group cash at the end of June 2014 of USD 1.1bn.

Maurel & Prom also talked about Lundin Petroleum [STO:LUMI SDB] an independent Swedish oil and gas exploration company with principal businesses in Norway and South East Asia.

Henin does not want to see a partnership with a major oil company that is likely to break up the business. Previous rumours of Shell’s [LON:RDSA] interest were unfounded, Henin said. He added he had had no contacts with Sinopec [HKG:0386], which was also tipped as interested. Recent reports that Pertamina [OTCHKTS:PPAY] was a potential suitor were also unfounded as the Indonesian company wants to invest in other endeavours, Henin said.

In any event, Henin does not have the intention of selling separately his own stakes, 23% in M&P and 25% in MPI, the group created after the spinoff of M&P Nigeria in 2011. “I will only sell in the framework of a merger,” he said.

If the quest for a merger partner does not materialize, Maurel & Prom will seek partnerships, Jean-François Henin said.

However, chances of success for a merger have been considerably enhanced following the 2003 agreement with the government of Gabon, which surrendered its veto rights to changes in the company’s shareholder structure, Henin pointed out.

The issue of governance has been resolved, he added. On May 26, 2014, Jean-Francois Henin, 70, stepped down as CEO, remaining as Chairman of the Board. Michel Hochard, CFO, became executive officer.

For the first half of 2014, Maurel & Prom posted revenues of EUR 295.5 and earnings of EUR 53.3m.

>>> US Gapping Down

Gapping down

In reaction to disappointing earnings/guidance: CAJ -1.8% (light volume).

Brazil names lower on Rousseff Re-election news: PBR -14.9%, EWZ -9.3%, GFA -8.8%, ITUB -8.8%, EBR -8%, TSU -7.8%, CIG -7.2%, ABEV -6%, BAK -5.1%, VALE -5%, BSBR -3.0%, BBVA -2.5%, RIO -1.7%

Select financial related names showing weakness: NBG -4.8%,  LYG -2.8% (downgraded to Underperform from Hold at Jefferies), CS -2.4%, RBS -2%, DB -1.4%, ING -0.8% (announced that ING Bank comfortably passed the Asset Quality Review and stress test which were part of the Comprehensive Assessment as conducted by the ECB and the European Banking Authority).

Select metals/mining stocks trading lower: RGLD -1.1% (downgraded to Neutral from Overweight at HSBC Securities), AU -1.5%, MT -1.5%, BBL -1.5%, BHP -0.7% (announces production costs and updates business costs at group locations), GOLD -0.3% (downgraded to Neutral from Overweight at HSBC Securities) 

Select oil/gas sector showing early weakness with analyst downgrades weighing on select names: PE -3.8% (downgraded to Sell from Neutral at Goldman), SNP -2.8%, SDRL -2.3%, PTR -2.1%, DO -1.5% (downgraded to Sell from Neutral at Goldman), STO -1.5%, HAL -0.9% (removed from Conviction Buy list at Goldman).

Other news: SRPT -32.1% (announces regulatory update on Eteplirsen; FDA states further discussion needed to determine what constitutes a complete NDA submission; NDA submission planned for mid-year 2015), PANW -5.1% (cautious MadMoney mention), GPRO -5% (still checking), APT -4.4% (volatile Ebola name; still checking for anything specific), RGLS -3.3% (modestly pulling back), VOD -0.8% (Telegraph details possible investigation into wholesale trading at Vodafone), AMZN -0.6% (Amazon.com Germany workers may strike again, according to reports; Barron's profiles cautious view on Amazon)

Analyst comments: PCP -0.6% (downgraded to Neutral from Overweight at JP Morgan; downgraded to Outperform at RBC Capital Mkts), KO -0.6% (downgraded to Neutral from Buy at Buckingham Research; tgt lowered to $41 from $44).

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: STX +2.6%, AGN +2.1%, (also Valeant Pharma delivers letter to Allergan Board; prepared to improve offer and provide value of at least $200 a share; urges Allergan Board to take control of process), HUN +2%.

M&A news: CQB +1% (Cutrale-Safra to acquire Chiquita for $14.50 per share in cash in a transaction valued at ~$1.3 billion).

Other news: ISR +32.3% (continued strength), RNA +10.8% (on negative SRPT Eteplirsen update; seen as competitive positive for RNA's DMD drug candidates), NQ +8.5% (still checking), SPEX +8.5% (light volume; continued strength), PAY +6.1% (Barron's profiles positive view; also positiive mention on MadMoney), NNVC +5% (signs CRADA for material transfer with USAMRIID for evaluating its Anti-Ebola drug candidates), AKBA +4.5% (announces positive top-line results from its Phase 2b study of AKB-6548 in non-dialysis patients with anemia related to chronic kidney disease; study meets primary endpoint), NVAX +4.3% (presents RSV F Protein Nanoparticle Vaccine Clinical Data; announces Ebola Vaccine development program), JASO +2.9% (still checking), CNIT +2.3% (Entered Strategic Partnership with Pengfeng Investment on Automobile New Media Platform), NLNK +1.4% (still checking), MU +1.1% (announces $1 bln stock buyback), TSEM +1.1% (signs definitive agreement to re-finance its bank debt with a $111 mln term loan maturing 2018), YELP +1% (reports of Tabelog interest), GILD +0.9% (favorable commentary on Friday's Mad Money), CLF +0.9% (WSJ Ahead of the Tape Column profiles positive view on Cliffs), DECK +0.7% (favorable commentary on Friday's Mad Money), NXPI +0.5% (added to IBD list), TWTR +0.3% (acquired Twitpic domain and photo archive).

Analyst comments: BABA +1.1% (initiated with a Buy at Jefferies; tgt $118), AA +0.9% (upgraded to Buy from Hold at Deutsche Bank), SHPG +0.8% (upgraded to Outperform from Mkt Perform at William Blair)

NYT : Valeant Ready to Raise Offer for Botox Maker Allergan

Valeant Ready to Raise Offer for Botox Maker Allergan

A vial of Botox, made by Allergan.

Valeant Pharmaceuticals said on Monday that it was willing to raise its offer for Allergan, and once again invited the Botox maker to negotiate a friendly deal.

But Valeant stopped short of announcing a new mix of cash and stock, instead saying it was "prepared to improve its offer and provide value to your shareholders of at least $200 a share." That would mark a roughly 20 percent increase from Valeant’s current offer, but is also contingent on Valeant’s stock price rising.

The overture, made in a letter from Valeant’s chief executive, J. Michael Pearson, to the Allergan board, was released as Allergan reported strong third quarter earnings.

At Allergan, total product net sales increased more than 17 percent in the quarter to $1.7 billion, and earnings per share improved according to Allergan’s preferred accounting methods.

In the letter from Valeant, Mr. Pearson argues that Allergan’s stock is trading at artificially high levels because of the ongoing takeover attempt by Valeant and its partner in the effort, the hedge fund Pershing Square Capital Management.

And Mr. Perason’s says that Valeant’s own stock is artificially depressed for the same reason. Mr. Pearson notes that Allergan’s own adviser, Goldman Sachs, endorsed Valeant’s stock earlier this year.

Because of Valeant’s depressed share price, the company declined to propose a new mix of cash and stock. But a person briefed on the process said Valeant and Pershing Square would be willing to offer additional cash, and more stock, as part of a revised offer.

The letter marks a change in tone from Mr. Pearson. Until now, he has let Pershing Square’s chief executive, William A. Ackman, lob most of the attacks at Allergan’s board.

But the Valeant chief executive on Monday communicated his frustration with Allergan’s continued refusals to engage in deal talks.

"One month ago I extended an olive branch, which was summarily rejected the same day," Mr. Pearson wrote. "You have refused all of our offers to meet and answer any questions you may have about Valeant or about our offer. Instead, you have allowed management to continue making baseless attacks."

But there are few signs that Allergan’s board is going to have a change of heart anytime soon. Instead, Valeant and Pershing Square have to hope that Allergan shareholders replace a majority of the board at a special meeting, scheduled for Dec. 18, if Allergan doesn’t strike another deal to complicate matters before then.

With that in mind, Valeant’s letter appeared intended for Allergan’s shareholders as much as for the board.

"To be clear, Valeant is prepared to improve its offer and provide value to your shareholders of at least $200 a share," Mr. Pearson wrote. "We are confident that an increase in our stock price, and in consideration, will provide that value. No other potential acquirer of Allergan has the operational and tax synergies that we have, and no other potential acquirer of Allergan can provide the value that we can."

>>> Allergan beats by $0.02, reports revs in-line; guides Q4 EPS above consensus

Allergan beats by $0.02, reports revs in-line; guides Q4 EPS above consensus

Reports Q3 (Sep) earnings of $1.78 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $1.76; revenues rose 16.5% year/year to $1.82 bln vs the $1.8 bln consensus.
Co guided for Q3 non-GAAP EPS of $1.76-1.78 vs. $1.47 consensus on October 9.
Total specialty pharmaceuticals net sales increased 14.3 percent, or 14.6 percent on a constant currency basis, compared to total specialty pharmaceuticals net sales in the third quarter of 2013. Total core medical devices net sales increased 30.4 percent, or 31.1 percent on a constant currency basis, compared to total core medical devices net sales in the third quarter of 2013.
Co issues guidance for Q4, sees EPS of $1.80-1.83 vs. $1.79 Capital IQ Consensus Estimate; sees Q4 total product net sales of $1.845-1.920 bln, may not be comparable to $1.89 bln Capital IQ Consensus Estimate. Co raises FY14 EPS to $6.27-6.30 from $6.20-6.25.

VRX this morning said it was prepared to raise its bid for AGN, provide value of at least $200/share

>>> Merck beats by $0.02, reports revs in-line; narrows EPS and revenue guidance

Merck beats by $0.02, reports revs in-line; narrows EPS and revenue guidance

Reports Q3 (Sep) adj earnings of $0.90 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.88; revenues fell 4.3% year/year to $10.56 bln vs the $10.65 bln consensus.
Co issues in-line guidance for FY14, narrows EPS to $3.46-3.50 from $3.43-3.53, excluding non-recurring items, vs. $3.47 Capital IQ Consensus Estimate; lowers top end of FY14 revs to $42.4-42.8 bln from $42.4-43.2 bln vs. $42.56 bln Capital IQ Consensus Estimate.
The gross margin was 60.0 percent for the third quarter of 2014 compared to 62.8 percent for the third quarter of 2013.
Third-quarter pharmaceutical sales declined 4 percent to $9.1 billion. Expected declines occurred due to the ongoing impact of product divestitures, as well as the loss of market exclusivity for certain products, including TEMODAR and SINGULAIR

>>> US Early premarket gappers

Early premarket gappers

Gapping up: ISR +32.3%, NQ +8.5%, NVAX +7.2%, PAY +6.1%, NLNK +1.4%, YELP +1%, HUN +1%, GILD +0.9%, CLF +0.9%, DECK +0.7%, TWTR +0.3%

Gapping down: PBR -14.9%, EWZ -9.3%, CIG -7.2%, ABEV -6%, PANW -5.1%, VALE -5%, GPRO -5%, NBG -4.8%, APT -4.4%, BBVA -2.5%, CS -2.4%, RIO -1.7%, AU -1.5%, MT -1.5%, BBL -1.5%, ING -0.8%, BHP -0.7%, AMZN -0.6%, TSLA -0.3%

(BFW) Popolare Milano CEO: ECB Tests Could Bring Consolidation Process

Popolare Milano CEO: ECB Tests Could Bring Consolidation Process
2014-10-27 08:18:41.248 GMT


By Maria Ermakova
Oct. 27 (Bloomberg) -- “Peculiar” nature of Italian
banking system makes consolidation difficult, CEO Castagna says
in Bloomberg Television interview with Jonathan Ferro.
* Italian banks reacted to ECB assessment only in 2014: CEO
* NOTE: ECB Failure List Shrinks After Banks’ Good Behavior on
Capital {NSN NE2GTQ6S9728 <go>}


Link to Company News:{2539Z GR <Equity> CN <GO>}
Link to Company News:{PMI IM <Equity> CN <GO>}

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To contact the reporter on this story:
Maria Ermakova in Milan at +39-02-8064-4284 or
mermakova@bloomberg.net

To contact the editor responsible for this story:
Dan Liefgreen at +39-02-8064-4204 or
dliefgreen@bloomberg.net

>>> Lundin Petroleum : Has spud the Kitabu-1 exploration well in Block SB307/308

Has spud the Kitabu-1 exploration well in Block SB307/308, offshore Sabah, Malaysia. 

The Kitabu prospect is a stratigraphic trap located four kilometres to the north of the Shell-operated producing South Furious 30 oil field with target reservoirs in onlapping turbidite sandstones of the same Miocene sequence. Lundin Petroleum estimates the Kitabu prospect to have the potential to contain unrisked, grossprospective resources of 71 million barrels of oil equivalent. 

Kitabu-1 is a vertical well to be drilled by the jackup rig West Prospero to a depth of 2,270 metres in approximately 50 metres water depth. The drilling of the well is expected to take approximately 35 days.

FT : India’s ONGC plans $180bn spending spree

India’s Oil and Natural Gas Corporation plans to launch a “huge” global acquisition spree, as the state-backed energy flagship delivers an aggressive Rs11tn ($180bn) investment push to take on Chinese rivals and drive foreign production up sevenfold by 2030.
Dinesh Sarraf, ONGC chairman, said that the group aimed to raise its international oil and gas output from 8.5m tonnes of oil and oil equivalent last year to 60m tonnes over that period, as India prepares to meet projections of rapidly rising domestic energy demand.

The foreign expansion is likely to see India’s largest industrial company by market capitalisation ramp up operations in almost all of the world’s energy-producing regions.
“The kind of investments which we will require is huge,” Mr Sarraf told the Financial Times. “Our goals are so high we can’t pick and choose [parts of the world]; it will come from virtually everywhere.”
ONGC has historically been viewed as a conservative, midsized global energy player, held back by cautious management and risk-averse political leadership in New Delhi. It also has often lost out to more aggressive state-backed Chinese energy groups in the race to snap up foreign oil and gasfields, analysts say.
Recent years have seen a markedly bolder approach, however, following the launch last year of a strategy known as “Perspective 2030”, designed to bolster overseas operations. ONGC has invested about $7bn since mid-2013 to acquire foreign assets in countries such as Mozambique and Brazil.
Mr Sarraf pledged that this global expansion would now accelerate, potentially aided by a rapid recent fall in global oil prices. “We see this as a time we can make certain deals,” he said. “Prices are lower, and so some [new] deals may be available.”
India is set to overtake China to become the largest source of growth in global oil demand by 2020, according to the International Energy Agency. Almost of all of this increase will be met via imports, given India’s limited domestic production.

ONGC’s plans have been helped by recent economic reforms launched by India’s prime minister Narendra Modi, who last week moved to deregulate diesel controls and increase natural gas prices, boosting the energy explorer’s share price.
Later this year Mr Modi also plans to sell off a further 5 per cent stake in ONGC, which is 69 per cent-owned by India’s government, raising in the region of $3bn that could be used for further acquisitions around the globe.
Mr Sarraf confirmed that ONGC was considering an offer from Rosneft of Russia to invest in both its Vankor and Yurubcheno-Tokhomskoye oilfields in eastern Siberia, along with other potential assets in the Arctic region.
ONGC plans to build up its presence elsewhere in the former Soviet Union, he said. Expansion was also likely in Africa, in particular Angola and Nigeria, alongside large swaths of Latin America, and in both the US and Canada, where ONGC would consider assets ranging from shale gas to tar sands.
Mr Sarraf took over as ONGC’s chairman earlier this year, having previously led the group's overseas arm, ONGC Videsh, and held positions in various other state-backed energy groups, including explorer Oil India.
ONGC generated revenues of Rs1.8tn ($2bn) during its past financial year, up 7 per cent from the previous year, but has struggled to raise overall production levels. Output from Indian oil and gasfields has declined over the past decade, including during the past financial year.
But Mr Sarraf rejected concerns that ONGC’s expansion target would prove unrealistic, given its limited success increasing production and a shortage of appropriately-priced foreign assets. “It is very difficult. But it is achievable,” he said.

The group also has “full political support” from Mr Modi’s government to make aggressive bids against foreign rivals. “Now all of the world is our competitors,” he said. “Earlier it used to only be the Chinese; now it is Thailand, Malaysia, even the IOCs [international oil companies].”
Mr Sarraf cautioned that ONGC would not follow the path taken by China’s energy giants, however, who he suggested had secured global assets by paying inflated prices.
“Whether we are more successful, or the Chinese are more successful, that is a matter of perception,” he said. “If success is defined in terms of making rational decisions, I would say we are more successful.”