SECTOR COMMENTARY:
Heading into the final trading session of the week. energy stocks are set for a higher start, backed by further gains in the crude complex and the broader index futures which are up about half a percent following yesterday’s rally. A robust start to the third-quarter earnings seasons and better-than-expected retail sales data are supporting prices this morning.
Oil prices have extended their trend higher, up another 1%, with Brent earlier ticking above $85/bbl for the first time in over three years as OPEC+ members appear content with its current production plan, likely keeping the market in a supply deficit for the rest of the year. Brent is tracking for a 6th straight week of gains, the longest streak since 2015. However, WTI and Brent continue to hold firmly in technically overbought territory with RSI’s of 75.30 and 74.70, respectively. “We maintain the view that we have held all year – that the oil market remains in the early days of a multi-year, structurally strong cycle,” RBC analyst Michael Tran said in a note.
U.S. natural gas futures slipped about 2% on forecasts for less demand next week than previously expected, a small increase in output, a small decline in global gas prices and forecasts calling for the U.S. weather to remain mild through the end of October. Prices fell despite forecasts for a big increase in heating demand in two weeks and a slow but steady rise in U.S. liquefied natural gas exports as utilities in Europe scramble to fill gas inventories before the winter heating season.
US INTEGRATEDS
The United Steelworkers union (USW) urged locked-out workers at Exxon Mobil Corp’s Beaumont, Texas, refinery to reject a company contract offer in a vote scheduled for Tuesday, according to a union statement seen on Thursday by Reuters.
INTERNATIONAL INTEGRATEDS
Berenberg upgraded BP to Buy from Hold.
Reuters reported that TotalEnergies Q3 variable cost margin, European refining at 20.5$/T.
U.S. E&PS
Seaport Global Securities initiated coverage of Coterra Energy with a Neutral rating.
For the third quarter of 2021, EOG anticipates a net loss of $494 million on the mark-to-market of its financial commodity derivative contracts. During the third quarter of 2021, the net cash paid for settlements of financial commodity derivative contracts was $293 million.
Kosmos Energy announced the pricing of its registered underwritten public offering of 37,500,000 shares of common stock at a price to the public of $3.30. In addition, Kosmos has granted the underwriters a 30-day option to purchase up to an additional 5,625,000 shares of common stock at the public offering price less underwriting discounts. The Offering is expected to close on October 19, 2021, subject to customary closing conditions. Kosmos intends to use the net proceeds from this offering to repay outstanding borrowings under its commercial debt facility, including borrowings incurred to finance a portion of the previously announced acquisition of Anadarko WCTP Company. Barclays, BofA Securities and Jefferies are acting as joint book-running managers in the Offering.
Berenberg upgraded Kosmos Energy to Buy from Hold.
Stifel Nicolaus and Company upgraded Range Resources to Buy from Hold.
OILFIELD SERVICES
KBR announced that JKC Australia LNG Pty Ltd, a joint venture in which KBR has a 30% ownership interest, has entered into a binding settlement agreement that resolves outstanding claims and disputes between JKC and its client, ICHTHYS LNG PTY, Ltd.
Schlumberger announced a significant contract award by Turkish Petroleum (TP) for the engineering, procurement, construction and installation (EPCI) of end-to-end production solutions for the Sakarya gas field, Turkey’s largest gas reserve. The contract is awarded to Schlumberger and Subsea 7, as part of a consortium.
Weatherford International announced that its wholly owned subsidiary, Weatherford International Ltd., is amending its previously announced tender offer for its outstanding 11.00% Senior Notes due 2024 by increasing the aggregate principal amount of the Notes that it would purchase for cash to up to $1,600,000,000 from $1,500,000,000. No other terms of the Tender Offer are being amended.
Weatherford International announced that its wholly owned subsidiary, Weatherford International Ltd., has priced its previously announced offering of 8.625% senior notes due 2030 at an issue price of 100%. The aggregate principal amount of the Notes to be issued was increased from the previously announced $1,500.0 million to $1,600 million. The offering of the Notes is expected to close on October 27, 2021, subject to customary closing conditions.
MLPS & PIPELINES
Credit Suisse upgraded Shell Midstream Partners to Neutral from Underperform.
Targa Resources announced its quarterly dividend on common shares and its quarterly dividend on Series A preferred shares with respect to the third quarter of 2021.Targa announced today that its board of directors has declared a quarterly cash dividend of $0.10 per common share, or $0.40 per common share on an annualized basis, for the third quarter of 2021. This cash dividend will be paid November 15, 2021 on all outstanding common shares to holders of record as of the close of business on October 29, 2021. Targa also announced today that its board of directors has declared a quarterly cash dividend of $23.75 per Series A preferred share for the third quarter of 2021. This cash dividend will be paid November 12, 2021 on all outstanding Series A preferred shares to holders of record as of the close of business on October 29, 2021.
Teekay GP LLC, the general partner of Teekay LNGPartners, has declared a cash distribution of $0.2875 per common unit for the quarter ended September 30, 2021. The cash distribution is payable on November 12, 2021 to all common unitholders of record on November 5, 2021. Teekay LNG’s common unit distributions are reported on Form 1099 for United States tax purposes.
MARKET COMMENTARY
Bitcoin hit a six-month high of $60,000, approaching the record hit in April, as traders became increasingly confident U.S. regulators would approve the launch of an exchange-traded fund based on its futures contracts. Global stocks rose as a bright start to the earnings season helped ease investor concerns about higher inflation. The dollar was little changed versus major peers. Oil prices advanced on forecasts of a supply deficit as rocketing gas and coal prices stoke a switch to oil products. Gold prices fell as U.S. bond yields rebounded. U.S. retail sales figures are due later in the day.
NASDAQ ENERGY TEAM THOUGHT LEADERSHIP
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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