Oil Prices Extend Gains Ahead of EIA Inventory Data
SECTOR COMMENTARY:
Energy stocks are set to pullback modestly, alongside lower broader index futures, though buoyant oil and natural gas prices are helping to offset macro-driven price weakness. Impacted production in the South will continue to be today’s focal point for sector dynamics, while Congressional hearings between representatives from Robinhood, Redditt and several hedge funds to discuss the recent retail trading phenomenon will undoubtedly capture the main headlines.
Oil prices continued their ascent ahead of weekly EIA inventory data and as production and refining capacity remains offline in the areas affected by record cold temperatures. Prices extended this week's gains and reached 13-month highs, as a cold snap sweeping Texas and surrounding regions shut at least a fifth of U.S. refining output and a million barrels of crude production. Roughly 1 million bpd of crude production have been shut, according to Wood Mackenzie analysts, and it could be weeks before production is fully restored. "A flurry of fresh buying in oil futures was triggered as an unexpected impact on oil production and refiners in Texas from a cold storm raised supply fears of crude and fuel," said Chiyoki Chen, chief analyst at Sunward Trading. "A larger-than-anticipated draw in the U.S. crude oil inventories also added to supply concerns," Chen said. API data showed U.S. crude oil stocks fell by 5.8 million barrels in the week to February 12 to about 468 million barrels, compared with analysts' expectations for a draw of 2.4 million barrels.
Natural gas futures were around breakeven after closing yesterday at $3.219, their highest settle price since November 2nd. EIA weekly inventory data due out at 11 AM ET is calling for a draw of 248 bcf.
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No significant news.
According to Reuters, Eni has agreed to buy three solar power projects in Spain from renewable energy developer X–Elio as part of plans to expand its green business. The plants have a total installed capacity of 140 megawatts (MW), Eni said, adding it was in talks with X-Elio to develop more renewable energy projects in the country to reach 1 gigawatts (GW) over the next five years.
According to Reuters, Crescent Point Energy said it has agreed to buy Kaybob Duvernay assets in Alberta from Royal Dutch Shell's unit for C$900 million ($708.77 million).
Repsol posted an adjusted net income of €600 million in 2020. This variable specifically measures the performance of the company’s businesses, all of which achieved positive results in a complex environment marked by the global health crisis. This strong performance was also reflected in the generation of positive operating cash flow in all businesses, totaling €3.197 billion for the Repsol Group. The COVID-19 pandemic unleashed an unprecedented crisis worldwide. For the energy sector this had consequences due to a sharp drop in the price of hydrocarbons and its derivatives as well as a historic collapse of demand. The average price of Brent crude fell 35%, at its lowest plummeting to $15 a barrel in April, while the Henry Hub gas price declined 19%.
According to Reuters, Repsol is prepared either to bring in a partner for the low-carbon unit it plans to spin off within the next two years or list the business publicly, Chief Executive Josu Jon Imaz said.
No significant news.
Antero Resources announced its fourth quarter 2020 financial and operational results. In addition, Net production averaged 3,650 MMcfe/d, including 199,000 Bbl/d of liquids. Realized natural gas equivalent price including hedges averaged $3.12 per Mcfe, a $0.46 premium to NYMEX pricing. Net income was $70 million. Adjusted EBITDAX was $299 million (Non-GAAP); net cash provided by operating activities was $243 million. In addition, Antero announced formation of a $500 to $550 million drilling partnership to fund drilling of 60 incremental wells from 2021 through 2024, enabling Antero to fill unutilized firm transportation capacity, receive additional low pressure gathering fee rebates and realize a cash drilling carry. This partnership begins immediately and includes all wells spud since January 1, 2021.
Bonanza Creek Energy announced its fourth quarter 2020 financial results. During the fourth quarter of 2020, the Company reported average daily sales of 25.0 MBoe/d. Product mix for the fourth quarter was 54% oil, 20% NGLs, and 26% residue natural gas, which was relatively consistent with the third quarter of 2020. Net oil and gas revenue for the fourth quarter of 2020 increased to $62.6 million compared to $58.9 million for the third quarter of 2020. The increase was a result of higher oil, natural gas, and NGL realized prices, partially offset by a slight decline in sales volumes. Crude oil accounted for approximately 75% of total revenue for the quarter. Differentials for the Company’s oil production averaged approximately $4.53 per barrel and $5.08 per barrel off NYMEX WTI for the fourth quarter and full-year, respectively. The Company’s annual oil differential guidance for 2020 had been $4.75 to $5.25 per barrel.
Comstock Resources announced the commencement of cash tender offers to purchase up to $750.0 million aggregate purchase price (as such amount may be increased or decreased by the Company, the "Aggregate Maximum Tender Amount") of its outstanding 7.5% senior notes due 2025 and 9.75% senior notes due 2026 in the priorities set forth in the table below; provided that the Company will not accept for purchase more than $375.0 million aggregate principal amount (as such amount may be increased or decreased by the Company) of the 2025 Notes and $325.0 million aggregate principal amount (as such amount may be increased or decreased by the Company) of the 2026 Notes.
Matador Resources reported its estimated proved oil and natural gas reserves at December 31, 2020, which showed a 7% year-over-year increase in total proved reserves, including a 17% year-over-year increase in proved developed reserves and a 12% year-over-year increase in Delaware Basin total proved reserves, each as compared to the Company’s oil and natural gas reserves at December 31, 2019.
Northern Oil and Gas announced the following promotions effective immediately:Mike Kelly, currently Executive Vice President of Finance, is promoted to Chief Strategy Officer and Jim Evans, currently Senior Vice President of Engineering, is promoted to Executive Vice President & Chief Engineer.
Ovintiv announced its fourth quarter 2020 financial and operating results. For 2020, the Company recorded a net loss of $6.1 billion, or ($23.47) per share of common stock, driven primarily by a non-cash ceiling test impairment of $5,580 million, before-tax, related to the decline in 12-month average trailing commodity prices which reduced SEC proved reserves (see proved reserves table within this release). Non-GAAP operating earnings were $91 million, or $0.35 per share of common stock. The Company recorded a net loss in the fourth quarter of $614 million, or ($2.36) per share of common stock. Cash from operating activities for the fourth quarter was $719 million and non-GAAP Cash Flow was $692 million. In addition, the Company issued a new target of reducing total debt to $4.5 billion by year-end 2022. It also reached an agreement to sell its Duvernay assets for $263 million including $12 million of contingent payments.
SM Energy announced fourth quarter and full year 2020 operating and financial results, year-end 2020. Fourth quarter 2020 net loss was $165.2 million, or $1.44 per diluted common share, compared with a net loss of $102.1 million, or $0.90 per diluted common share, in the same period in 2019. The current period included a $152.7 million net derivative loss versus a net derivative loss of $101.0 million in the prior year period. For the full year 2020, net loss was $764.6 million, or $6.72 per diluted common share, compared with a net loss of $187.0 million, or $1.66 per diluted common share, in the same period in 2019. In 2020, the Company recorded impairment charges of $1.0 billion compared with $33.8 million in 2019, partially offset by a $280.1 million gain on extinguishment of debt in 2020 versus no gain on extinguishment recorded in 2019.
Crescent Point Energy announced that it has entered into an agreement with Shell Canada Energy, an affiliate of Royal Dutch Shell, to acquire Shell's Kaybob Duvernay assets in Alberta for $900 million. The total consideration consists of $700 million in cash and 50 million common shares of Crescent Point.
ATB Capital upgraded Crescent Point Energy to Outperform from Sector Perform.
Ovintiv announced its fourth quarter 2020 financial and operating results. For 2020, the Company recorded a net loss of $6.1 billion, or ($23.47) per share of common stock, driven primarily by a non-cash ceiling test impairment of $5,580 million, before-tax, related to the decline in 12-month average trailing commodity prices which reduced SEC proved reserves (see proved reserves table within this release). Non-GAAP operating earnings were $91 million, or $0.35 per share of common stock. The Company recorded a net loss in the fourth quarter of $614 million, or ($2.36) per share of common stock. Cash from operating activities for the fourth quarter was $719 million and non-GAAP Cash Flow was $692 million. In addition, the Company issued a new target of reducing total debt to $4.5 billion by year-end 2022. It also reached an agreement to sell its Duvernay assets for $263 million including $12 million of contingent payments.
Peyto Exploration & Development present the results and in-depth analysis of its independent reserve report effective December 31, 2020. The evaluation encompassed 100% of Peyto’s reserves and was conducted by InSite Petroleum Consultants. For the year ended December 31, 2020, Peyto invested $235.7 million of total capital1 to build approximately 137 mmcf/d of natural gas and 3,700 bbl/d of NGLs (53% pentanes and condensate) at a cost of $8,900/boe/d, which was the lowest cost in Company history. Peyto developed 222 BCFe (37 mmboes) of new Proved Developed Producing (“PDP”) reserves at a Finding, Development and Acquisition (“FD&A”) cost of $1.06/Mcfe ($6.36/boe) while the average field netback was $1.59/Mcfe ($9.56/boe), resulting in a 1.5 times recycle ratio. Peyto replaced 127%, 132% and 167% of annual production with new PDP, Total Proved, and Proved plus Probable Additional (“P+P”) reserves. FD&A costs, including the change in Future Development Capital, for TP and P+P were $0.20/Mcfe ($1.19/boe) and -$0.01/Mcfe (-$0.08/boe), which reflects a reduction of FDC (combined with increased reserve recoveries) for future drilling locations of $190 million and $239 million for the respective categories.
Canaccord Genuity upgraded Peyto Exploration & Development to Buy from Speculative Buy.
Seven Generations Energy reported quarterly sales volumes averaged 190.1 Mboe/d (43% natural gas, 35% condensate, 22% other NGLs), delivering full-year volumes of 183.9 Mboe/d (43% natural gas, 35% condensate, 22% other NGLs) in-line with the company’s revised full-year 2020 budget. Fourth quarter funds flow of $275 million and capital investments of $126 million resulted in free cash flow of $149 million, which was allocated toward net debt reduction. Full-year capital expenditures of $626 million were 3.7% below the $650 million revised budget established in May 2020. Subject to the completion of the Merger Transaction, the company reiterates prior full-year guidance expectations, with production expected to average between 180-185 Mboe/d and capital investments expected to be approximately $650 million.
Baker Hughes announced it is acquiring ARMS Reliability, a leading global provider of reliability solutions to some of the world’s largest industrial companies across a wide range of industries including mining, oil and gas, power, manufacturing, and utilities. The acquisition deepens Baker Hughes’ industrial asset performance management (APM) capabilities and will expand the company’s industrial asset management offerings.
KBR won a $539 million engineering task order to support rapid prototyping and fielding of systems for the U.S. Air Force's Tactical Exploitation of National Capabilities (TENCAP) program. TENCAP takes national space capabilities and applies them at the tactical level to support operational requirements.
Oil States International reported a net loss for the fourth quarter of 2020 of $18.7 million, or $0.31 per share, which included non-cash asset impairment charges of $4.3 million ($3.4 million after-tax, or $0.06 per share) and severance and restructuring charges of $2.7 million ($2.2 million after-tax, or $0.04 per share). During the fourth quarter of 2020, the Company generated revenues of $137.4 million and Adjusted Consolidated EBITDA of $2.2 million (excluding $2.7 million of severance and restructuring charges). These results compare to revenues of $134.8 million and Adjusted Consolidated EBITDA of $0.4 million reported in the third quarter of 2020 (excluding $0.3 million of severance and restructuring charges)
TechnipFMC has been awarded a significant integrated Engineering Procurement Construction and Installation contract by NIpetco and PetroAmriya, two Joint Ventures between Energean and Egyptian Natural Gas Holding Company (EGAS) and Egyptian General Petroleum Corporation (EGPC) for a subsea tieback located offshore Egypt on the North El Amriya and North Idku concession.
Kepler Cheuvreux downgraded TechnipFMC to Hold from Buy.
UBS downgraded TechnipFMC to Neutral from Buy.
No significant news.
No significant news.
Energy Transfer reported financial results for the quarter ended December 31, 2020.ET reported net income attributable to partners for the three months ended December 31, 2020 of $509 million. For the three months ended December 31, 2020, net income per limited partner unit (basic and diluted) was $0.19 per unit. Adjusted EBITDA for the three months ended December 31, 2020 was $2.59 billion.
Credit Suisse downgraded Noble Midstream Partners to Neutral from Outperform.
Sunoco reported financial and operating results for the three-month periods ended December 31, 2020. For the three months ended December 31, 2020, net income was $83 million versus $83 million in the fourth quarter of 2019. Adjusted EBITDA for the quarter totaled $159 million compared with $168 million in the fourth quarter of 2019. This year-over-year decrease reflects lower reported fuel volume and margins partially offset by a decline in operating expenses.
Targa Resources reported fourth quarter and full year 2020 results. Fourth quarter 2020 net income (loss) attributable to Targa Resources Corp. was $33.6 million compared to ($112.8) million for the fourth quarter of 2019. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items of $438.1 million for the fourth quarter of 2020 compared to $465.2 million for the fourth quarter of 2019 and $1,636.6 million for the full year 2020 compared to $1,435.5 million for the full year 2019.
TC Energy announced net income attributable to common shares for fourth quarter 2020 of $1.1 billion or $1.20 per share compared to net income of $1.1 billion or $1.18 per share for the same period in 2019. For the year ended December 31, 2020, net income attributable to common shares was $4.5 billion or $4.74 per share compared to net income of $4.0 billion or $4.28 per share for 2019. Comparable earnings for fourth quarter 2020 were $1.1 billion or $1.15 per common share compared to $970 million or $1.03 per common share in 2019. For the year ended December 31, 2020, comparable earnings were $3.9 billion or $4.20 per common share compared to $3.9 billion or $4.14 per common share for 2019. TC Energy's Board of Directors also declared a quarterly dividend of $0.87 per common share for the quarter ending March 31, 2021, equivalent to $3.48 per common share on an annualized basis, an increase of 7.4 per cent. This is the twenty-first consecutive year the Board has raised the dividend.
U.S. stock index futures edged lower. Weekly jobless claims rose 13,000 to 861,000. Meanwhile, a clutch of disappointing earnings reports from companies including Airbus and Orange weighed on European shares, while Chinese equities were down on worries over policy tightening. The dollar fell, while gold prices rebounded from a 2-1/2-month low.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
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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 Tamar Essner.
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