Thursday, 24 May 2012

Chesapeake selling 504,000 DJ acres, production

(Reuters) - Chesapeake Energy Corp has put 504,000 acres in the DJ Basin in Wyoming and Colorado up for sale, as the U.S. energy company scrambles to raise cash to close a $9 billion to $10 billion funding shortfall.
The deal includes oil and gas production from 29 wells that the company operates and Chesapeake's interest in 24 nonoperated wells, according to a prospectus on the deal.
Chesapeake, the nation's second-largest gas producer behind Exxon Mobil Corp and for years one the most active gas drillers, sold off a third of its holdings in the region - then around 800,000 acres - to China's CNOOC Ltd for nearly $1.3 billion in 2011.
The company faces a 2012 funding shortfall as natural gas prices are the lowest in a decade.
It has already announced that it is looking to sell its 1.5 million acres of lease holdings in the oil-rich Permian basin as well as find a joint venture partner in another liquids-rich region, the Mississippi Lime basin, in order to raise cash.
Analysts and investors have also called for change at the company after Reuters reported that Chief Executive Officer Aubrey McClendon had taken out more than $1 billion in loans using his interest in thousands of company wells as collateral.
Chesapeake shares were down 1.8 percent at $14.82 on Thursday afternoon on the New York Stock Exchange.
(Reporting by Anna Driver in Houston and Michael Erman in New York; Editing by Lisa Von Ahn and Matthew Lewis)

Friday, 11 May 2012

Kenya's Equity could consider overseas listing -CEO

ADDIS ABABA | Wed May 9, 2012 11:22am EDT
May 9 (Reuters) - Kenya's Equity Bank could consider an overseas listing as rapid expansion puts it in danger of outgrowing its home stock market, its chief executive said on Wednesday.
With operations in five east African countries and a knack for rolling out banking services targeted at the lower end of the market, Equity has become one of Nairobi's most actively traded stocks and a darling of foreign investors.

"When Equity raises more money, that will be a major issue that has to be dealt with: Is the market still big enough for any additional capitalisation?" Chief Executive James Mwangi told Reuters on the sidelines of an event ahead of the World Economic Forum on Africa, which runs this week in Ethiopia.
"That would be the time to think about London, South Africa or New York," he said.
Africa's small but fast-growing companies are increasingly looking to do dual listings, particularly in London, to raise their profile among foreign investors.
They are also keen to escape the constraints of their home markets. Despite the surging economic growth, stock markets across frontier Africa remain relatively illiquid.
Equity Bank and the region's biggest telecoms firm Safaricom are typically the most traded stocks on the Nairobi Stock Exchange and can account for the vast majority of volume in some sessions.
In what some analysts have said will be a watershed moment for African equities, Nigerian cement giant Dangote Cement has said it plans to list its global depositary receipts in London.

(Reporting by David Dolan; additional reporting by Duncan Miriri in Nairobi; editing by David Clarke)

Jamie Dimon’s Ahab meets his Moby Dick

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

JPMorgan’s Ahab has met his Moby Dick. Chief Executive Jamie Dimon has toiled at length to build a bank strong enough to withstand the greatest of storms. The $2 billion hedging hit the bank disclosed late on Thursday will put JPMorgan to the test. Its capital buffers may be safe for now, but the ramifications are apt to be broader.
The losses come from the bank’s chief investment office. That’s part of the core treasury function at JPMorgan, responsible for managing the entire firm’s balance sheet. That it was being “poorly monitored,” as Dimon conceded, is even more worrying than the discovery of a random rogue trader.
The CIO has made news of late because of reports that one of its overseas traders, Bruno Iksil, was taking such large positions in a credit index to hedge JPMorgan’s risk that he was distorting the market. Rivals labeled him the London whale. Dimon declined to discuss specifics.
But just last month, on the bank’s first-quarter earnings call, executives defended the CIO. Finance chief Doug Braunstein said the bank was “very comfortable” with its positions. Now, Dimon admits a revised hedging strategy was “flawed,” there was “sloppiness” and that “egregious mistakes” were made.
Investors have come to expect such disarming honesty from Dimon. But the mess is reminiscent of similar failings at JPMorgan before his time. In fall 2001, the bank was adamant that its overall exposure to Enron was around $900 million, before later revealing the amount was almost triple that figure. A year later, executives hosted an emergency call with investors – like the one hastily assembled on Thursday afternoon – to announce that all its trading desks had lost money even though all had remained within their risk limits.
This latest mishap is a timely reminder that even a driven banking captain can be hobbled by a trading whale. JPMorgan could suffer still more losses. The amount at risk is nearly twice original estimates and the portfolio is more volatile than JPMorgan expected. What’s becoming increasingly evident is that even a single-minded obsession for risk and balance sheet management isn’t enough to contain a financial whale.

By Antony Currie
May 10, 202

Friday, 4 May 2012

April hiring seen picking up

Visitors enter a job fair at the Phoenix workforce connection in Phoenix, Arizona

WASHINGTON | Fri May 4, 2012 12:22am EDT
(Reuters) - Employers likely increased hiring in April, although not enough to lower the country's 8.2 percent jobless rate, keeping pressure on President Barack Obama ahead of his November re-election bid.
Employers likely added 170,000 workers to their payrolls last month, according to a Reuters survey of economists, up from March's meager print of 120,000.
That would allay fears the economy is losing momentum. But it also could dampen hopes that a stretch of strong winter hiring signaled a turning point for the economic recovery.
"We're still growing just gradually," said Nigel Gault, an economist at IHS Global Insight in Lexington, Massachusetts.
"Hiring is coming back into line with what you would expect with sluggish growth."
The Labor Department will release the April employment report on Friday at 8:30 a.m. EDT (1230 GMT).
The report, which regularly sets the tone for financial markets around the world, could rattle nerves at the White House. Weak growth and high unemployment create a formidable headwind for Obama, who entered office during the darkest days of the 2007-09 recession.
His Republican challenger, Mitt Romney, repeatedly has accused Obama of doing too little to foster job growth.
The unemployment rate, which soared to as high as 10 percent during Obama's first year in the office, is seen holding steady at 8.2 percent. After holding near 9 percent for most of last year, it fell sharply over the winter.
Still, it remains about 2 percentage points higher than its average over the last 50 years, and the Federal Reserve thinks it probably will not post a full recovery for at least several more years.
Nevertheless, Fed Chairman Ben Bernanke said last month the central bank is providing enough support for the economy, and an as-expected jobs report is unlikely to alter that stance.

So far this year, the labor market has given mixed signals.
During the winter, fast growth in payrolls led many analysts to think the economy was turning a corner. Then jobs growth braked in March, fueling fears the recovery was losing momentum.
Most economists think mild weather muddied the waters, boosting hiring in the winter but making March look weaker because companies had pulled hiring forward.
The consensus forecast for payroll gains in April is just below the average of the last six months. That's because economists think the weather effect is still dissipating.
"It's not that there's something wrong with the economy. Employment just got ahead of itself," said Robert Mellman, an economist at JPMorgan in New York.
The report is expected to show the private sector accounted for all the job gains in April, adding 175,000 new positions, with manufacturing registering another strong month.
However, a report from payroll processing firm ADP on Wednesday showed U.S. companies added only 119,000 jobs last month, suggesting economists' forecasts could be on the high side.
Public payrolls are expected to contract for the seventh time in eight months as state and local governments struggle with funding shortfalls, though the pace of public-sector job losses is slowing.
Wall Street analysts see economic growth holding at a lackluster 2.2 percent annual rate in the second quarter, matching its pace in the first three months of the year.
Average hourly earnings are seen rising 0.2 percent, while the length of the average work week is seen steady at 34.5 hours.
Even if hiring does slow a bit in the spring, a stable work week reinforces the view that economic growth remains on track.
"This shouldn't set off alarm bells," said Michael Gapen, an economist at Barclays in New York.