Oil Prices Rise as Record U.S. Crude Exports Signal a Hopeful Sign for Demand
Energy stocks are set to continue their recent strong performance, with the benchmark energy index set to open higher by more than 1%. Further gains in energy prices, with oil up around 1%, and S&P 500 futures set to gain about 0.2% (as of 9:00 AM ET) as better than expected earnings outside of mega cap technology and third quarter U.S. GDP having risen by a better than expected 2.6% are underpinning risk sentiment. Energy earnings continue to ramp up.
Oil rose on Thursday, extending a rally of nearly 3% in the previous session, as optimism over record U.S. crude exports and signs that recession fears are abating outweighed concern over slack demand in China. Figures on Wednesday showed record U.S. crude exports, a hopeful sign for demand, even as crude stocks rose. The U.S. dollar weakened in early trade on hopes that interest-rate hikes may become less aggressive. "It appears that recession concerns have abated lately but continuously betting on healthy economic growth will prove foolhardy," said Tamas Varga, an analyst at oil broker PVM.
U.S. natural gas futures were little changed on Thursday as the market waited for direction from a federal report expected to show a smaller than usual storage build last week when colder than normal weather boosted heating demand.
BY SECTOR:
US INTEGRATEDS
The Board of Directors of Chevron declared a quarterly dividend of one dollar and forty-two cents ($1.42) per share, payable December 12, 2022, to all holders of common stock as shown on the transfer records of the Corporation at the close of business November 18, 2022.
INTERNATIONAL INTEGRATEDS
Igor Sechin, the head of Russia's largest oil producer Rosneft, said that the company has transferred $700 million in second-half 2021 dividends into special accounts for BP.
The ACCC has issued a determination granting authorisation to BP Australia Pty Ltd (BP) to expand its existing BP Rewards Program. BP proposes to introduce additional fuel and non-fuel offers at BP sites and participating BP Reseller sites for all or certain groups of consumers who are members of the existing BP Rewards Program.
Saipem CEO expects to soon start work on contract for operating and maintenance of Eni's Coral Sul infrastructure in Mozambique.
Ørsted and Equinor have just signed an agreement under which Equinor will supply Norwegian gas to Denmark via Baltic Pipe. The agreement covers the period from 1 January 2023 to 1 April 2024, and the total volumes of gas supplied during the period will be approx. 8 TWh, corresponding to roughly a quarter of the expected total Danish gas consumption.
Petrobras, regarding the pieces of news in the media about expectations of new adjustments in fuel prices, clarified that adjustments in product prices are made in the normal course of its business and follow its current commercial policies. Petrobras reiterates its commitment to the practice of competitive prices, in balance with the market, while avoiding the immediate pass-through of external volatility and exchange rate volatility caused by circumstantial events.
Repsol obtained net income of €3.222 billion between January and September, a period in which the company brought strategic partners into its Upstream (Exploration and Production) and Renewables businesses to boost its transformation and its multi-energy and decarbonization profile. The company announced a proposal to increase cash remuneration to its shareholders by 11% in 2023. In a context marked by international tensions, Repsol continued to provide essential services to society, guaranteeing supply in Spain by allocating more than €2 billion to increase its inventories in the first nine months of 2022. It provided significant discounts to its customers, who since March have benefited from savings of more than €300 million at Repsol service stations in Spain. The company will increase to €0.35 gross/share the cash retribution to be distributed to the shareholders next January, while the Board of Directors will propose to next year's General Shareholders' Meeting a complementary payment of €0.35 gross/share, so that the remuneration in 2023 will increase by 11%, to €0.70 gross/share. This will bring forward the remuneration target set by the Strategic Plan for 2024. In addition, Repsol will bring forward its share buyback and redemption target for the entire 2021-2025 period by three years, expecting to reach 200 million redeemed shares by the end of this year. To this end, Repsol will set in motion a new buyback program, which will allow it to redeem the 50 million shares that remain to achieve this multi-year target.
The European Union's temporary windfall tax on profits reaped by fossil fuel companies "creates a seed of doubt" in companies' ability to invest in the sector, Repsol's Chief Executive Josu Jon Imaz told analysts.
Malaysian state energy firm Petronas said a fire and explosion occurred at the Pengerang refinery-petrochemical complex, a joint venture it operates with Saudi Aramco in the southern Malaysian state of Johor.
Shell reported profits of $9.45 billion in the third quarter, easing from the previous quarter's record high due to weaker refining and gas trading as the company announced plans to boost its dividend later in the year. Shell also extended its share repurchasing programme, announcing plans to buy $4 billion of stock over the next three months. The third-quarter adjusted earnings were slightly above an average analyst forecast provided by the company for a $9 billion profit. That compares with record quarterly earnings of $11.5 billion in the previous quarter and $4.1 billion a year earlier.
Shell announced the commencement of a $4 billion share buyback programme covering an aggregate contract term of approximately three months. The purpose of the programme is to reduce the issued share capital of the company. All shares repurchased as part of the programme will be cancelled. It is intended that, subject to market conditions, the programme will be completed prior to the company’s Q4 results announcement, scheduled for February 2, 2023.
The Board of Shell announced an interim dividend in respect of the third quarter of 2022 of US$ 0.25 per ordinary share.
Shell does not expect to pay UK windfall taxes in the current quarter as it is investing in new North Sea oil and gas projects such as Jackdaw, triggering a mechanism largely offsetting the tax, its chief financial officer said.
TotalEnergies posted a sharp jump in in its third quarter net profits compared to a year ago, as it joined other energy giants in its sector to have benefited from higher oil and gas prices. TotalEnergies' third quarter adjusted net income stood at $9.863 billion. That compared to an adjusted net income of $4.769 billion for the 2021 third quarter, while that figure stood at $9.796 billion for the 2022 second quarter.
TotalEnergies announced that in accordance with the shareholder return policy presented during the investor day on September 28, aiming for a shareholder return of 35% to 40% from 2022, the Board of Directors convened on October 26, 2022 under the chairmanship of Mr. Patrick Pouyanné, Chairman and Chief Executive Officer: declared the distribution of the third 2022 interim dividend at €0.69/share, equal to the first and second 2022 interim dividends and an increase of 5% from the interim and the final dividends paid for the 2021 financial year, set the ex-dividend and payment dates of the special 2022 interim dividend of €1/share.
TotalEnergies announced 2 days ago it reached the milestone of 500 MW of onsite B2B solar distributed generation in operation. More than 300 sites of its industrial and commercial customers have been equipped with solar panels in Asia, the Middle East, Europe and the United States.
TotalEnergies still has $6 billion of capital employed in Russia after writing down around $11 billion in the first nine months of the year, its finance chief said.
Reuters reported that TotalEnergies and the Lebanese government have reached a deal handing the French oil major temporary majority control of an offshore exploration block and paving the way for negotiations with Qatar over a stake in the gas project, two sources said.
CANADIAN INTEGRATEDS
Suncor Energy announced that it has agreed to purchase an additional 21.3% working interest in the Fort Hills Project and associated sales and logistics agreements from Teck Resources, for consideration of $1 billion. Upon closing, Suncor's aggregate share in the project will increase to 75.4%. The acquisition will be funded by cash from asset sale processes currently underway and the company remains on track with its previously articulated capital allocation framework.
U.S. E&PS
Antero Resources announced its third quarter 2022 financial and operating results. Net income was $560 million, Adjusted Net Income was $531 million (Non-GAAP). Adjusted EBITDAX was $878 million (Non-GAAP); net cash provided by operating activities was $1.1 billion. Antero is revising its cash production expense guidance to a range of $2.55 to $2.65 per Mcfe reflecting higher fuel costs and ad valorem tax due to the increase in commodity prices. On October 25, 2022, Antero's Board of Directors authorized a $1 billion increase in the Company's share repurchase program to $2 billion.
CNX Resources reported third quarter results: total production volume total of 146.4 bcfe; loss per share of $2.28; total revenue and other operating income of $117.1 million.
EQT reported a profit for the third quarter compared with a year-ago loss as supply snags and sanctions against Russia powered fuel demand. Prices of natural gas soared to their highest in 14 years during the third quarter, with several nations turning to U.S. producers to plug the supply gap caused by sanctions on major producer Russia over its invasion of Ukraine. EQT cut its full-year total sales volume forecast to between 1,925 billion cubic feet (bcfe) and 1,975 bcfe, from 1,950 bcfe to 2,050 bcfe earlier. Total sales volume fell 1.4% to 488 bcfe in the July-September quarter from 495 bcfe last year. Meanwhile, quarterly net income stood at $684 million, or $1.69 per share, in the three months ended Sept. 30, compared with a loss of $1.98 billion, or $5.54 per share, a year earlier. EQT said its average realized price for the reported quarter stood at $3.41 per thousand cubic feet of gas equivalent (Mcfe), higher than last year's $2.33 per Mcfe.
Marathon Oil announced that the Company's board of directors has declared a dividend of 9 cents per share on Marathon Oil Corporation common stock. The dividend is payable on Dec. 12, 2022, to stockholders of record on Nov. 16, 2022.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
GE’s Grid Solutions and Power Conversion businesses have been selected by Baker Hughes to provide the high-voltage (HV) equipment and the energy management system (EMS) to support Venture Global LNG’s Plaquemines liquefied natural gas (LNG) export facility in Louisiana.
Core Laboratories N.V. reported third quarter 2022 revenue of $126,000,000. Revenue for the third quarter of 2022 was adversely impacted by the devaluation of the Euro and British Pound when translated into U.S. dollars. Using a constant U.S. dollar exchange rate, revenue would be $1,500,000 higher sequentially and $4,300,000 higher year-over-year. Core's operating income was $14,600,000, with diluted earnings per share of $0.16, all in accordance with U.S. generally accepted accounting principles. Operating income, ex-items, a non-GAAP financial measure, was $13,300,000, yielding operating margins of 11%, and EPS, ex-items, of $0.18. Sequential incremental margins, excluding the aforementioned currency devaluation, were over 55%.
Granite Construction announced results for the quarter ended September 30, 2022. Net income totaled $73 million, or $1.44 per diluted share, compared to net income of $35 million, or $0.73 per diluted share, for the same period in the prior year. Adjusted net income totaled $63 million and adjusted diluted EPS totaled $1.41, compared to adjusted net income of $43 million and adjusted diluted EPS of $0.93, for the same period in the prior year. Revenue decreased $52 million to $1,010 million compared to $1,062 million in the prior year. Comparable revenue, which excludes Granite Inliner revenue of $65 million in the prior year, increased $13 million.
CarbonCapture announced the selection of Fluor to provide engineering and project integration services for Project Bison, CarbonCapture’s multi-megaton atmospheric carbon removal facility in Wyoming.
SLB announced it has entered into an agreement to acquire Gyrodata Incorporated, a global company specializing in gyroscopic wellbore positioning and survey technology. The transaction will integrate Gyrodata’s wellbore placement and surveying technologies within SLB’s Well Construction business, bringing customers innovative drilling solutions.
TechnipFMC reported third quarter 2022 results. Total Company revenue in the third quarter was $1,733 million. Income from continuing operations attributable to TechnipFMC was $5 million, or $0.01 per diluted share. Adjusted income from continuing operations was $12.7 million, or $0.03 per diluted share.
DRILLERS
Patterson-UTI Energy reported financial results for the quarter ended September 30, 2022. The Company reported net income of $61.5 million, or $0.28 per share, for the third quarter of 2022, compared to net income of $21.9 million, or $0.10 per share, for the second quarter of 2022. Revenues for the third quarter of 2022 were $728 million, compared to $622 million for the second quarter of 2022. The board of directors has doubled its quarterly cash dividend to $0.08 per share and increased its share repurchase authorization to $300 million. The dividend will be payable on December 15, 2022, to holders of record as of December 1, 2022.
Precision Drilling announced 2022 third quarter financial results: Realized $429 million of revenue during the quarter, an increase of 69% over the same period last year and 32% compared to the previous quarter. Generated net earnings of $31 million or $2.26 per share compared with a net loss of $38 million or $2.86 per share in third quarter of 2021.
REFINERS
As per SEC filing, on October 26, 2022, Delek US Holdings entered into (i) a third amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent, the Company, as borrower, certain subsidiaries of the Company, as guarantors, and the other lenders party thereto, providing for a senior secured asset-based revolving credit facility with an initial commitment of $1.1 billion. The Revolving Credit Facility permits borrowings in Canadian dollars of up to $50.0 million. The Revolving Credit Facility also permits the issuance of letters of credit of up to $500.0 million, including letters of credit denominated in Canadian dollars of up to $10.0 million. The Company may designate restricted subsidiaries as additional borrowers under the Revolving Credit Facility.
PBF Energy reported third quarter 2022 income from operations of $1,400.0 million as compared to income from operations of $100.9 million for the third quarter of 2021. Excluding special items, third quarter 2022 income from operations was $1,403.0 million as compared to income from operations of $101.0 million for the third quarter of 2021. PBF Energy's financial results reflect the consolidation of PBF Logistics LP, a master limited partnership of which PBF Energy indirectly owns the general partner and approximately 48% of the limited partner interests as of quarter-end. The company reported third quarter 2022 net income of $1,084.2 million and net income attributable to PBF Energy Inc. of $1,056.4 million or $8.40 per share. This compares to net income of $78.7 million, and net income attributable to PBF Energy Inc. of $59.1 million or $0.49 per share for the third quarter 2021. Adjusted fully-converted net income for the third quarter 2022, excluding special items, was $1,008.1 million, or $7.96 per share on a fully-exchanged, fully-diluted basis, as described below, compared to adjusted fully-converted net income of $14.0 million or $0.12 per share, for the third quarter 2021. The company announced that it will pay a quarterly dividend of $0.20 per share of Class A common stock on November 29, 2022, to holders of record at the close of business on November 14, 2022.
The Board of Directors of Valero Energy has declared a regular quarterly cash dividend on common stock of $0.98 per share. The dividend is payable on December 8, 2022 to holders of record at the close of business on November 17, 2022.
MLPS & PIPELINES
Antero Midstream announced its third quarter 2022 financial and operational results. Net Income was $84 million, or $0.17 per diluted share. Adjusted Net Income was $96 million, or $0.20 per share (non-GAAP measure). On October 25, 2022, Antero Midstream closed the previously announced bolt-on acquisition of Marcellus gathering and compression assets from Crestwood Equity Partners, LP for $205 million in cash.
Genesis Energy, L.P. announced its third quarter results. It generated the following financial results for the third quarter of 2022: Net Income Attributable to Genesis Energy, L.P. of $3.4 million for the third quarter of 2022 compared to Net Loss Attributable to Genesis Energy, L.P. of $20.9 million for the same period in 2021.
Magellan Midstream Partners, L.P. reported net income of $330 million for third quarter 2022, compared to $237 million for third quarter 2021. Diluted net income per common unit was $1.59 in third quarter 2022 and $1.08 in third quarter 2021. Diluted net income per unit excluding MTM commodity-related pricing adjustments, a non-generally accepted accounting principles (non-GAAP) financial measure, was $1.29 for third quarter 2022. These results exceeded the $1.15 guidance provided by management in late July primarily due to higher-than-expected refined products transportation revenues, lower overall expenses and additional commodity margin resulting in part from improved basis differentials during the quarter.
Golar LNG Partners LP, an indirect subsidiary of New Fortress Energy, has declared a cash distribution of $0.546875 per unit of 8.75% Series A Cumulative Redeemable Preferred Units for the period from August 15, 2022 through November 14, 2022. This will be payable on November 15, 2022 to all Series A preferred unitholders of record as of November 7, 2022.
PBF Logistics LP announced third quarter 2022 net income attributable to the limited partners of $34.9 million, or $0.55 per common unit. During the quarter, the Partnership generated cash from operations of $64.5 million, EBITDA attributable to PBFX of $53.8 million, Adjusted EBITDA of $54.6 million and distributable cash flow of $43.9 million. Included in reported results for the third quarter are $0.8 million, or $0.01 per common unit, of non-cash unit-based compensation expense and continued environmental remediation costs associated with the East Coast Terminals. The board of directors of PBF Logistics GP LLC, the Partnership's general partner, declared a regular quarterly cash distribution of $0.30 per common unit. The distribution is payable on November 18, 2022, to unitholders of record at the close of business on November 7, 2022.
MARKET COMMENTARY
Major U.S. stock index futures edged up on growing hopes that the Federal Reserve may slow the pace of its interest rate hikes to tame inflation, while shares of Meta Platforms plunged following a bleak forecast. European shares fell, as investors were cautious ahead of a widely expected interest rate hike from the European Central Bank, while Credit Suisse tumbled after unveiling restructuring plans. Japan's Nikkei closed lower, with investors focused on the outlook for individual stocks as earnings season hits full swing. The U.S. dollar rose, while gold prices fell. Tech giants Apple, Amazon and Intel will report quarterly earnings after markets close.
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.
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.
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