Oil Prices Near One-Year Highs on Falling Crude Stocks
SECTOR COMMENTARY
Energy stocks are set to continue their recent upward momentum, underpinned by higher broader equity futures and rising oil prices, which are near one year highs.
Both benchmark oil contracts were close to their highest in about a year on Wednesday, boosted by a draw in U.S. crude and gasoline stocks, which fueled demand recovery hopes as OPEC+ has forecast that the market will be in deficit in 2021.
Natural gas futures eased on Wednesday on forecasts for less heating demand next week than previously expected.
INTERNATIONAL INTEGRATEDS
Reuters - Petroleo Brasileiro SA produced 2.682 million barrels of oil equivalent per day in the fourth quarter, the company said in a Tuesday securities filing. That represented a decrease of 9.1% from the third quarter and 11.3% from the same quarter a year before.
Reuters - Petroleo Brasileiro SA received offers from three consortia looking to build the company's first in-house platforms in more than seven years, the company said on Tuesday. The company said it had received offers from consortia led by Samsung Heavy Industries, Daewoo Heavy Industries & Machinery and Keppel Corporation.
Reuters - Total said there would be no disruption in the supply to its petrol stations network despite a strike at some of its French refineries.
Reuters - Adani Total Gas Limited has reached a 3-year deal to import liquefied natural gas from Total’s portfolio, CEO Suresh Manglani said.
U.S. E&PS
JPMorgan downgraded Cabot Oil & Gas Corp to ‘Neutral’ from ‘Overweight.’
JPMorgan downgraded Centennial Resource Development to ‘Underweight’ from ‘Neutral.”
Press Release - Earthstone Energy provided an operations update, released 2021 guidance and announced its year-end 2020 estimated proved reserves. The Company has estimated its oil and gas sales volumes for the fourth quarter of 2020 to be approximately 1.40 MMBoe or an average of approximately 15,232 Boepd (47% oil). For the year ended December 31, 2020, the Company estimates its annual sales volumes grew 15% to approximately 5.63 MMBoe, or an average of approximately 15,382 Boepd (56% oil) compared to 13,429 Boepd (63% oil) reported for the year ended December 31, 2019. The Company also announced its year-end 2020 SEC total estimated proved reserves of approximately 78.9 MMBoe. The Company’s 2021 capital budget of $90-100 million assumes a one-rig operated program on its acreage in the Midland Basin commencing in March as well as expected non-operated activity. This program is expected to result in spudding 21 gross / 18.5 net operated wells and bringing 16 gross / 13.5 net operated wells and 0.7 net non-operated wells online in 2021.
JPMorgan upgraded SM Energy to ‘Neutral’ from ‘Underweight.’
CANADIAN E&PS
Press Release - Enerplus announced that it has closed the equity offering previously announced on January 25, 2021. Upon closing of the Offering, a total of 33,062,500 Common Shares were issued at a price of C$4.00 per Common Share for gross proceeds of C$132,250,000. This includes 4,312,500 Common Shares issued pursuant to the exercise by the underwriters of the over-allotment option in full. The syndicate of underwriters was led by RBC Capital Markets and BMO Capital Markets.
Press Release - MEG Energy announced that it has successfully closed its previously announced offering of US$600 million in aggregate principal amount of 5.875% senior unsecured notes due February 2029.
OILFIELD SERVICES
Press Release - Halliburton announced it was awarded a contract from Kuwait Oil Company to collaborate on their digital transformation journey through the maintenance and expansion of digital solutions for their North Kuwait asset. It will allow KOC to accelerate their data-to-decisions cycle by designing and operating digital twins of the field to automate work processes, supported by DecisionSpace 365, a cloud-based subscription service for E&P applications.
Press Release - Superior Energy Services announced that the Company has successfully completed its financial restructuring and emerged from Chapter 11, implementing the Plan of Reorganization that was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on January 19, 2021. The Company emerges with a strengthened capital structure that eliminated more than $1.30 billion of existing debt.
Stifel upgraded TETRA Technologies to ‘Buy’ from ‘Hold.’
MLPS & PIPELINES
Press Release - Enterprise Products Partners announced its financial results for the three months and year ended December 31, 2020. Enterprise reported net income attributable to common unitholders for 2020 of $3.8 billion, or $1.71 per unit on a fully diluted basis, compared to $4.6 billion, or $2.09 per unit on a fully diluted basis for 2019. Net income for 2020 and 2019 was reduced by non-cash, asset impairment and related charges of approximately $891 million, or $0.40 per fully diluted unit, and $133 million, or $0.06 per fully diluted unit, respectively. The company added that the net profit fell to $366 million, or 15 cents per unit, in the quarter-ended Dec. 31, compared with $1.08 billion, or 48 cents per unit, in the third quarter.
MARKET COMMENTARY
Wall Street futures rose a day after strong quarterly earnings reported by heavyweights Alphabet and Amazon and on fresh hopes over progress of the pandemic relief package. European shares edged up as investors focused on a busy day of earnings, while Asian equities ended in the green as governments looked to boost spending. The dollar was little changed, while silver prices climbed. Private firms added 174,000 jobs in January, well above the 50,000 Dow Jones estimate, according to ADP..
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
- 1/8/20 – CNBC’s Squawk Alley: Oil market reaction to US-Iran tensions
- 1/8/20 – Bloomberg Day Break – Steady escalation of US-Iran tensions
- 12/5/19 – Bloomberg Balance of Power – OPEC's Limited Efficacy
- 9/17/19 – Oil's New Risk Premium Discussion on CNBC TV
- 9/16/19 – Discussion on Bloomberg TV about Impact of Abqaiq Attack
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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