SECTOR COMMENTARY:
Markets are headed to a lower opening as a technology-led equity selloff deepened, and government bonds from the U.S. to Germany tumbled, as investors braced for the Federal Reserve to start tapering. The dollar gained haven allure amid a supply crunch from oil to semiconductors, which provided relative value to energy stocks.
In sector news, Total Energies SE said it will buy back $1.5 billion of its shares in the fourth quarter, fulfilling a promise made earlier this year to boost returns and woo investors.
Brent oil climbed above $80 a barrel, the latest milestone in a global energy crisis, on signs that demand is running ahead of supply and depleting inventories. Oil’s latest upswing has come with a flurry of bullish price predictions from banks and traders, forecasts for surging demand this winter, and speculation the industry isn’t investing enough to maintain supplies. The jump to $80 also is adding inflationary pressure to the global economy at a time when prices of energy commodities are soaring. European natural gas, carbon permits and power rose to fresh records Tuesday, with little sign of the rally slowing.
U.S. natural gas futures soared to their highest since 2014 for a second day in a row on Tuesday, putting them on track to close at their highest since 2008, as record global gas prices kept demand for U.S. liquefied natural gas (LNG) exports strong.
BY SECTOR:
INTERNATIONAL INTEGRATEDS
Petrobras is eying adjustments to fuel prices as the prices of some petroleum derivatives are out of line with the global market, Logistics and Sales Director Sales Claudio Mastella said on Monday, Reuters reported.
Royal Dutch Shell plans to begin the overhaul of the hydrocracker and a hydrotreater at its 302,800 barrel-per-day (bpd) joint-venture Deer Park, Texas, refinery later this week, said sources familiar with plant operations, Reuters reported. The 67,000-bpd diesel-producing hydrocracker will undergo planned work along with a 43,000-bpd hydrotreater and an aromatics unit, the sources said. The work is scheduled to finish in early November.
CANADIAN INTEGRATEDS
Cenovus Energy and Headwater Exploration announced that they have entered into an agreement with Peters & Co. Limited and BMO Capital Markets, on behalf of a syndicate of underwriters pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, from Cenovus, through its wholly owned subsidiary, Cenovus Marten Hills Partnership 25,000,000 common shares of the Company at a price of $4.55 per Common Share for total gross proceeds to the Selling Shareholder of $113,750,000. The Selling Shareholder has granted the Underwriters an option to purchase an additional 15% of the Common Shares issued under the Offering (3,750,000 Common Shares) at the Offering Price exercisable to cover over-allotments and for market stabilization purposes in whole or in part at any time until 30 days after the closing. The Company will not receive any of the proceeds from the Offering or the over-allotment option, if exercised.
U.S. E&PS
Range Resources announced the appointment of Reginal W. Spiller to its Board of Directors, concurrent with the retirement of Dr. Steffen A. Palko, effective September 27, 2021.
Whiting Petroleum announced that is has completed its previously announced acquisition of the leasehold interests and related assets in the Williston Basin of North Dakota. The Company also closed the divestiture of its Redtail leasehold interests and related assets, including associated midstream assets, located in the Denver-Julesburg Basin of Colorado. The transactions had an immaterial effect on current production but resulted in the addition of approximately 60 drillable locations that compete for capital immediately.
CANADIAN E&PS
National Bank of Canada upgraded Paramount Resources to Outperform from Sector Perform.
OILFIELD SERVICES
CGG announced the award to Sercel of a major contract to supply land seismic equipment for a 3D mega-crew survey in North Africa. It includes a 508XT acquisition system with 100,000 QuietSeis® digital sensors and a fleet of twenty Nomad 90 Neo broadband vibrator trucks. The equipment is expected to be delivered in Q4 2021.
NOV announced Scott K. Duff Vice President, Corporate Controller and Chief Accounting Officer, notified the Company of his intention to retire. Mr. Duff will step down from his current role effective November 1, 2021 and remain employed as an advisor until his retirement on February 28, 2022. Christy H. Novak will succeed Mr. Duff as Vice President, Corporate Controller and Chief Accounting Officer effective November 1, 2021.
DRILLERS
Helmerich & Payne announced that it has priced its previously announced private offering of $550 million aggregate principal amount of 2.900% senior notes due 2031 to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended, and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act. The offering size was increased from the previously announced offering size of $500 million in aggregate principal amount.
MLPS & PIPELINES
Cheniere Energy Partners announced the early tender results as of 5:00 p.m., New York City time, on September 24, 2021 of its previously announced tender offer to purchase for cash any and all of its outstanding 5.625% Notes due 2026. In connection with the tender offer, Cheniere Partners also announced the results as of the Early Tender Deadline of the previously announced solicitation of consents from holders of the Notes to the proposed amendment to the indenture with respect to the Notes providing for the reduction of the minimum notice period for the optional redemption of the Notes by Cheniere Partners.
Vanguard Renewables and Enbridge announced a partnership whereby Enbridge will purchase upwards of 2 billion cubic feet of renewable natural gas annually from the anaerobic digesters that Vanguard Renewables will invest $200 million to build in the U.S. Northeast, Southeast, and Midwest. Enbridge will invest approximately $100 million in RNG upgrading equipment to convert the farm derived RNG into pipeline quality renewable natural gas and provide transportation and marketing services to market that gas to U.S. customers.
Enbridge will host its ESG Forum webcast highlighting the Company’s industry leading approach to Environmental, Social, and Governance (ESG) practices. In 2021, the Company has continued to advance its ESG and energy transition leadership position. Highlights of Enbridge’s progress include: Linking of company-wide compensation to ESG goals and performance; Issued approximately $3 billion of financing linked directly to our ESG goals; Indigenous workers on the Line 3 U.S. Replacement represented 7% of the workforce; Completion of a third solar self-power facility, and four more are now under construction; Sanctioned the 448MW Calvados offshore wind project in France, Enbridge’s sixth offshore wind facility in Europe; Placed third renewable natural gas (RNG) project, the Dufferin RNG facility, into service in Ontario.
Shell Midstream Partners announced that it expects outages and repairs related to Hurricane Ida to have an impact to both net income and cash available for distribution of approximately $45 to $55 million for the third quarter of 2021 and $20 to $30 million for the fourth quarter of 2021. The majority of the impact is related to the previously disclosed downtime across various pipeline assets, as well as remediation costs related to the Partnership’s assets in the Gulf of Mexico and onshore in southeastern Louisiana.
MARKET COMMENTARY
Wall Street futures were down, with the Nasdaq futures falling over 1%, as technology shares came under pressure from a surge in bond yields that have been lifted by expectations of higher interest rates. European stocks were lower and Asian equities mostly fell as fresh signs of a slowdown in China’s economy hurt investor sentiment. A stronger dollar weighed down on the gold prices. Oil rose on worries over tight supply. Consumer confidence index and home prices data are on the economic radar.
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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