SECTOR COMMENTARY:
The energy sector is set to kick off the week higher, backed strong gains in the crude complex and from support in the major equity indices which inched higher on rise in economy-sensitive stocks and despite sharp declines across the tech space.
WTI and Brent crude oil futures jumped over 3% in early trading, supported by hopes the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild and as the prospect of an imminent rise in Iranian oil exports receded. Indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off until next week as European officials voiced dismay on Friday at sweeping demands by Iran’s new, hardline government.
Natural gas futures dropped over 9% this morning, extending last week’s selloff amid warming weather forecasts in key consuming regions through the third week of December.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
BP supports adding the U.S. crude oil grade WTI Midland on a delivered basis to the North Sea Dated Brent benchmark, which underlies the Brent futures contract LCOc1, according to a document seen by Reuters. “BP strongly blieves that the inclusion of WTI Midland, executed correctly, is the best solution for enhancing liquidity,” the document said. BP did not immediately reply to a request for comment.
SOLENOVA, an Eni-Sonangol JV aimed at developing renewable energy projects, has reached the Final Investment Decision (FID) and the signing of the Engineering, Procurement and Construction (EPC) contract for the first phase of the Caraculo photovoltaic project, located in the Namibe province in Angola. These milestones confirm the progress of the project, in line with the expected start-up in the fourth quarter of 2022. The plant will have a total capacity of 50 MWp to be built in a phased manner, the first phase being 25 MWp.
Petrobras repeated on Monday that it does not anticipate any decisions regarding fuel price adjustments, in a response to President Jair Bolsonaro, who said on Sunday that the firm would start lowering fuel prices as early as this week, Reutersreported. Petroleo Brasileiro SA said in a securities filing that there are no decisions made by its executive pricing committee that the market is not aware of. The oil giant added that it will stick to its current pricing policy, following the normal course of its business.
South Africans took to their beaches on Sunday to protest against plans by Royal Dutch Shell to do seimsic oil exploration they say will threaten marine wildlife such as whales, dolphins, seals and penguins on a pristine coastal stretch, Reuters reported.
Aramco raised its January official selling price (OSP) to Asia for its flagship Arab Light crude to $3.30 a barrel versus Oman/Dubai crude, up $0.60 from December, the company said on Sunday, Reuters reported. The company set the Arab Light OSP to Northwestern Europe at minus $1.30 per barrel versus ICE Brent and to the United States at plus $2.15 per barrel over ASCI (Argus Sour Crude Index).
Aramco announced its entry into Saudi Arabia’s domestic lubricants market, offering consumers a new line of lubricant products under the ORIZON® brand. Aramco timed the ORIZON® launch to coincide with the inaugural Saudi Arabian Formula 1 Grand Prix in Jeddah, Saudi Arabia. Aramco is a global sponsor of Formula 1.
Saudi Aramco awarded in-Kingdom and out-of-Kingdom contracts to extend Worley’s services for Saudi Aramco’s offshore Maintain Potential Program. Under the contracts, Worley will continue to provide project management, engineering, design, fabrication and installation supervision for Saudi Aramco’s portfolio of offshore projects. The term of the extension is three years and the services will be executed by Worley’s Al-Khobar and Houston offices. Worley has held these contracts for the past 19 years. The extension of these contracts further grows and develops our business in Saudi Arabia and contributes to the Saudi community.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
ConocoPhillips announced several updates that highlight the company’s differentiated value proposition. This announcement follows the recent closing of the company’s acquisition of Shell’s Permian Basin properties on Dec. 1 for net cash of $8.6 billion. Planned companywide 2022 capital expenditures was ~$7.2 billion. The planned capital includes ~$0.2 billion for Scope 1 and 2 emissions-reduction projects across the company’s global operations and investments in several early-stage low carbon technology opportunities to address end-use emissions. Expected 2022 annual average production was ~1.8 MMBOED, representing low single-digit percentage underlying growth versus pro forma 2021. Expected 2022 return of capital to shareholders was ~$7 billion, representing a ~16% increase versus 2021. The company is initiating a three-tier capital return program that will consist of a compelling ordinary dividend tier, a share repurchase tier, and a newly authorized quarterly variable return of cash (VROC) tier. The first VROC of $0.20 per share will be paid on Jan. 14, 2022, to shareholders of record as of Jan. 3, 2022.
Crescent Point Energy announced its formal 2022 capital expenditures budget and production guidance, another quarterly dividend increase beginning first quarter 2022, planned share repurchases and the renewal of its credit facilities. Crescent Point’s 2022 capital expenditures budget of $825 to $900 million is expected to generate annual average production of 133,000 to 137,000 boe/d. This production range represents an increase from the Company’s preliminary 2022 guidance of 131,000 to 135,000 boe/d and reflects the positive impact of Crescent Point’s strong operational performance, primarily driven by its Kaybob Duvernay asset. Consistent with its capital allocation framework, the Company plans to allocate approximately 15 percent of its annual budget to long-term projects, including the advancement of various decline mitigation programs and environmental initiatives. The Company’s 2022 budget includes capital allocated to environmental projects designed to further reduce Crescent Point’s overall emissions and inactive well inventory. The Company’s Board of Directors also approved and declared a first quarter 2022 dividend of $0.045 per share to be paid on April 1, 2022 to shareholders of record on March 15, 2022, which represents a 50 percent increase from its fourth quarter 2021 dividend. On an annualized basis, this equates to a dividend payment of $0.18 per share. The Company’s previously announced fourth quarter 2021 dividend of $0.03 per share is scheduled to be paid on January 4, 2022.
Ranger Oil announced an increase in the Company’s oil sales guidance for the fourth quarter 2021 and updated its current hedge position. Darrin Henke, President and Chief Executive Officer of Ranger commented, “I am very pleased to announce that, due to the observed outperformance of existing wells, faster cycle times and less anticipated downtime, we now expect our fourth quarter sales volumes to be considerably higher than initially anticipated. As a result, we are positively revising as well as narrowing our guidance of anticipated sales volumes for the fourth quarter from a range of 25,700 – 27,700 barrels of oil per day (“bbl/d”), to a range of 26,700 – 28,000 bbl/d.” “Given the continued operating efficiencies driving the revised guidance, the Company does not anticipate a change to its previously disclosed capital expenditure guidance of between $65 million and $75 million for the quarter.”
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Forum Energy Technologies announced that as part of the company’s executive management succession planning process, its Board of Directors appointed Mr. Neal Lux as President and Chief Executive Officer, effective February 18, 2022. Mr. Lux currently serves as Executive Vice President and Chief Operating Officer. Mr. C. Christopher Gaut, the current Chairman, President and Chief Executive Officer, will become Executive Chairman at that time. The Board has also appointed Mr. Lux as a Class II director, effective February 18, 2022.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
U.S. stock index futures were higher, in line with European stocks, in a rebound from last week when the spread of the COVID-19 Omicron variant and expectations of tighter U.S. monetary policy rocked global markets, while Asian shares retreated. The dollar ticked higher as Treasury yields rose following news that initial observations suggested those suffering from the Omicron COVID-19 strain only had mild symptoms. Oil prices rose by more than $1 a barrel after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States. Gold prices edged lower, pressured by rising expectations that the Federal Reserve could reduce its asset purchases at a faster pace.
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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