Oil Higher as Market Participants Wait for OPEC’s Decision on Supply Agreement for Second Quarter
SECTOR COMMENTARY:
The energy sector is set for a higher start supported by strength in the crude complex, meanwhile the major equity futures are mostly unchanged the day after the Nasdaq reached highs last touched since November 2021.
WTI and Brent crude oil futures are higher as market participants wait for OPEC’s decision on supply agreement for the second quarter and digest Chinese economic data. According to Reuters, three OPEC+ sources said the organization is considering extending voluntary oil output cuts in the second quarter, which may take effect until the end of the year. China’s February manufacturing PMI was in line with expectations at 49.1, contracting for a fifth straight month.
Natural gas futures are modestly lower on forecasts for seasonally warmer weather and expectations for a lower-than-expected draw in storage. Preliminary estimates for EIA storage data week ending today has a draw of (35) to (45) Bcf vs the 5-year average of (93) Bcf.
BY SECTOR:
US INTEGRATEDS
Chevron New Energies, a division of Chevron U.S.A, announced it is developing a 5-megawatt hydrogen production project in California’s Central Valley. The project aims to create lower carbon energy by utilizing solar power, land, and non-potable produced water from Chevron’s existing assets at the Lost Hills Oil Field in Kern County. This low carbon intensity (LCI) electrolytic hydrogen will be produced through electrolysis, which is the process of using electricity to split water into hydrogen and oxygen.
Exxon Mobil and Shell will work with Singapore to develop a cross-border carbon capture and storage (CCS) project, both companies said.
INTERNATIONAL INTEGRATEDS
Aramco has left unchanged official selling prices (OSPs) for liquefied petroleum gas in March, while Algeria's Sonatrach has raised OSPs for LPG by 3.8-7.4% due to rising oil prices and increased demand from the Mediterranean region, traders said.
Equinor will resume helicopter flights to offshore oil and gas fields on Friday following Wednesday's deadly crash, a company spokesperson said
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Callon Petroleum announced that it has commenced cash tender offers (the "Offers") for any and all of its 8.000% Senior Notes due 2028 (the "2028 Notes") and any and all of its 7.500% Senior Notes due 2030 (the "2030 Notes" and, together with the 2028 Notes, the "Notes"), upon the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement, dated as of March 1, 2024 (as it may be amended or supplemented from time to time, the "Statement"). The Offers will expire at 11:59 p.m., New York City time, on March 28, 2024, unless extended or earlier terminated.
Gerdes Energy Research downgraded Diamondback Energy to Neutral from Buy.
Marathon Oil announced that Rob L. White has been promoted to Executive Vice President and Chief Financial Officer, effective May 1, 2024, and that Zach Dailey, Vice President, Internal Audit, will succeed Mr. White as Vice President, Controller and Chief Accounting Officer, effective May 1, 2024.
Range Resources announced that its Board of Directors declared a quarterly cash dividend on its common stock for the first quarter. A dividend of $0.08 per common share is payable on March 29, 2024 to stockholders of record at the close of business on March 15, 2024
Helix Energy Solutions Group announced a five-year joint framework agreement with Talos Energy in which Talos has agreed to provide Helix the first right of refusal regarding specific annual work scopes for Talos’s decommissioning requirements in the U.S. Gulf of Mexico. The agreement includes a base pricing structure and processes for determining and scheduling specific projects Talos requires. Work is expected to commence in the second quarter of 2024.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
CES Energy Solutions announced strong financial results for the three and twelve months ended December 31, 2023, along with a 20% increase to its quarterly dividend from $0.025 per share to $0.030 per share, which will be paid on the Company's next scheduled dividend payment of April 15, 2024 to the shareholders of record at the close of business on March 29, 2024. Fourth quarter revenue of $553.5 million increased 3% sequentially and decreased 2% year over year. Record quarterly Adjusted EBITDAC of $84.6 million at a 15.3% margin, increased 5% sequentially and year over year. Record annual revenue of $2.16 billion representing an increase of 13% over $1.92 billion in 2022. Record annual Adjusted EBITDAC of $315.8 million at a 14.6% margin representing a 23% increase over $257.0 million at 13.4% in 2022. Annual Cash Flow from Operations of $301.8 million and Free Cash Flow of $211.6 million. Total long-term debt reduced by $100.9 million to $390.6 million and Total Debt/Adjusted EBITDAC reduced to 1.49x from 2.17x year over year.
Forum Energy Technologies announced fourth quarter 2023 revenue of $185 million, a $6 million increase from the third quarter. The fourth quarter net loss was $17 million, or $1.64 per diluted share, compared to third quarter net income of $8 million, or $0.77 per diluted share. Excluding $9 million of foreign exchange losses and $4 million of transaction and other nonrecurring items, cumulatively $1.25 per share, adjusted net loss was $0.39 per diluted share, compared to adjusted net income of $0.05 per diluted share in the third quarter. Fourth quarter adjusted EBITDA was $15 million, compared to $17 million for the third quarter. Free cash flow for the fourth quarter was $9 million compared to $24 million for the third quarter.
Mammoth Energy Services reported financial and operational results for the fourth quarter and full year ended December 31, 2023. Total revenue was $52.8 million for the fourth quarter of 2023 compared to $102.9 million for the same quarter of 2022 and $65.0 million for the third quarter of 2023. Net loss for the fourth quarter of 2023 was $6.0 million, or $0.12 loss per diluted share, compared to net income of $4.8 million, or $0.10 per diluted share, for the same quarter of 2022 and net loss of $1.1 million, or $0.02 loss per diluted share, for the third quarter of 2023. Adjusted EBITDA was $10.5 million for the fourth quarter of 2023, compared to $24.1 million for the same quarter of 2022 and $13.4 million for the third quarter of 2023.
Mammoth Energy Services announced payment of $50.6 million from the Puerto Rico Electric Power Authority for a portion of the work its wholly-owned subsidiary Cobra Acquisitions LLC completed in the aftermath of Hurricane Maria. This is in addition to $13.4 million paid by PREPA in January 2024. As previously announced, on December 1, 2023, Cobra entered into an agreement to transfer approximately $54.4 million of its outstanding receivable with PREPA to SPCP Group, LLC. The aggregate payments from PREPA in 2024 totaling $64.0 million fully satisfied the obligations to SPCP Group and resulted in Cobra receiving approximately $9.6 million in cash.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
New Fortress Energy announced that its Terminal Gas Sul LNG terminal located in Santa Catarina, Brazil, is now operational with the Energos Winter Floating Storage Regasification Unit on-site.
MARKET COMMENTARY
Wall Street futures were subdued after rallying in the previous session on AI enthusiasm and an inflation reading that boosted bets of a June interest rate cut. European shares were trading in the green. Japan's Nikkei share average soared to all-time peaks and closed almost 2% higher. Gold prices ticked higher as the dollar edged down. Oil prices rose as markets awaited an OPEC+ decision on supply agreements for the second quarter. Data on manufacturing PMI and consumer sentiment are scheduled for release later in the day.
Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services – the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Rich Pontillo.
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Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts.
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