The energy sector is poised for a higher start, supported by strength in the crude complex and in the broader index futures which rebounded this morning on a slew of upbeat earnings results and a rebound in big tech stocks. The move higher comes despite government bond yields on the benchmark 10-year Treasury notes advancing to their highest levels since January 2020.
WTI and Brent crude oil futures are up ~1% in early trading, carrying over their swing higher for the fourth-consecutive session following news of a fire on a pipeline from Iraq to Turkey that briefly stopped flows, increasing concerns about an already tight short term supply outlook. The explosion, that set off a fire on the pipeline that carries crude out of Iraq to the Turkish port of Ceyhan for export, was caused by a falling power pylon, not an attack, a senior security source said. The gains come despite a report from the IEA that said that the oil market was due to flip into surplus in the first quarter of this year.
Natural gas futures slipped to a one-week low on this morning, pressured by forecasts for less cold and lower heating demand through the end of January than previously expected. Also weighing on U.S. futures was a 7% drop in European gas prices.
BY SECTOR:
US INTEGRATEDS
RBC Capital Markets upgraded ExxonMobil to Sector Perform from Underperform.
INTERNATIONAL INTEGRATEDS
Eni, through Vår Energi, jointly owned by Eni (69,85%) and by HitecVision (30,15%), will participate in a total of 10 new licenses as a result of the “Awards in Predefined Areas 2021” by the Ministry of Petroleum and Energy of Norway. Vår Energi has been granted the following 5 operatorships and 5 partnerships in licenses distributed over the three main oil and gas provinces in the Norwegian Continental Shelf.
Eni and the United Nations Educational, Scientific, and Cultural Organization (UNESCO) have signed a four-year Memorandum of Understanding in Mexico to identify potential joint project initiatives that will contribute to boost the sustainable development of the local economy through economic diversification, protection of natural and cultural heritage, access to basic services and to respect and promote human rights and inclusion.
Oslo, Norway, PGS is awarded a seismic acquisition contract for CO2 storage offshore Norway by Equinor on behalf of Northern Lights JV DA. Acquisition is scheduled to start in Q2 2022 and has a duration of approximately 1 month.
Two months after closing a Series B fundraise, Interface Fluidics has announced a joint industry project with Equinor and ExxonMobil to accelerate the deployment of the world’s first compact, rapid fluid screening equipment for oil and gas. Essentially a portable laboratory, this technology will revolutionize pressure-volume-temperature (PVT) testing, an essential part of the exploration and production process for the oil and gas industry.
Peruvian prosecutors opened an investigation into a unit of Repsol after an oil spill at a local refinery blamed on unusually large waves from the weekend volcano eruption and tsunami in Tonga 10,000 kilometers (6,213 miles) away.
S-Oil and Saudi Aramco signed four memorandum of understanding contracts during an investment forum held at a hotel in Riyadh in Saudi Arabia. Under agreement, S-Oil will bring in Saudi Aramco’s competitive blue hydrogen and blue ammonia to Korea and the two parties will jointly build related infrastructure, as well as collaborate on R&D and explore new business opportunities in the sector.
Doosan Heavy I&C signed an amendment to shareholders’ agreement to build a joint venture dubbed TWAIG Casting & Forging for a project to build a casting and forging factory with Saudi Arabian Industrial Investments Company (Dussur) and Saudi Aramco Development Co.
Shell has acquired 100% of solar development company solar-konzept Italia Srl (SKI) from solar-konzept International GmbH. The acquisition increases Shell’s solar development pipeline in Italy to approximately 2GW and supports Shell’s global ambition to supply customers with renewable power.
Masdar welcomed TotalEnergies and its expertise in the energy sector, to a Masdar-led initiative focused on green hydrogen to produce sustainable aviation fuel (SAF). Masdar, Siemens Energy and TotalEnergies signed a collaboration agreement on the sidelines of Abu Dhabi Sustainability Week (ADSW) 2022, to act as co-developers for a demonstrator plant project, which will be established at Masdar City, Abu Dhabi’s flagship sustainable urban development.
The U.S. Department of Energy said it had approved an exchange of 400,000 barrels of crude oil from the Strategic Petroleum Reserve for release to Atlantic Trading and Marketing, an arm of French company TotalEnergies.
CANADIAN INTEGRATEDS
Imperial Oil said it plans further reductions in greenhouse gas emissions intensity over the next decade to help support Canada’s net zero goals. By the end of 2030, Imperial anticipates reduced Scope 1 and 2 greenhouse gas emissions intensity of its operated oil sands facilities by 30 percent, compared with 2016 levels. The company plans to achieve this through implementation of lower greenhouse gas next generation technologies at its Cold Lake operation, efficiency improvements at its facilities, and the use of carbon capture and storage.
U.S. E&PS
Occidental CEO Vicki Hollub said the U.S. shale energy business is much stronger today than it was two to three years ago due to innovation.
GeoPark Limited (“GeoPark” or the “Company”) (NYSE: GPRK), a leading independent Latin American oil and gas explorer, operator and consolidator today announced its operational update for the three-month period ended December 31, 2021 (“4Q2021”).
All figures are expressed in US Dollars. Growth comparisons refer to the same period of the prior year, except when otherwise specified.
Oil and Gas Production:
- Annual average oil and gas production of 37,602 boepd, within 37,000-38,000 boepd guidance and with an exit production of 39,300 boepd (exit production includes approximately 1,800 boepd in Argentina blocks that are being divested with closing expected in late January 2022)
CANADIAN E&PS
Gran Tierra Energy Inc. has provided a corporate update. All dollar amounts are in United States (“U.S.”) dollars and all production volumes are on a working interest before royalties basis and are expressed in barrels (“bbl”) of oil per day (“BOPD”), unless otherwise stated.
Highlights
- 2022 Production Year to Date: Gran Tierra’s current average production1 is approximately 30,000 BOPD.
- 2021 Production In-Line with Guidance: Total Company 2021 average production was approximately 26,500 BOPD, in-line with prior guidance.
OILFIELD SERVICES
TechnipFMC and Magnora ASA announced that their partnership, Magnora Offshore Wind AS, has been offered the opportunity to enter into an Option Agreement for the N3 area by the Crown Estate Scotland in the ScotWind leasing round. The planned development will have a total capacity of approximately 500 megawatts (MW), which could power more than 600,000 homes in the United Kingdom.
DRILLERS
Valaris announced that it has been awarded two one-well contracts with subsidiaries of Murphy Oil Corporation for semisubmersible VALARIS DPS-5. The first contract is in the U.S. Gulf of Mexico and is expected to commence in the third quarter 2022 with a minimum duration of 30 days. This contract has a one-well option with an estimated duration of 90 days. The second contract, offshore Mexico, will commence in direct continuation of the first contract and has an estimated duration of 60 days.
REFINERS
No significant news.
MLPS & PIPELINES
BP Midstream Partners LP announced that the Board of Directors of BP Midstream Partners GP LLC, the general partner of the Partnership, declared a quarterly cash distribution of $0.3475 per unit for the fourth quarter of 2021.
Enbridge announced the following executive leadership changes. Bill Yardley, Executive Vice President and President, Gas Transmission and Midstream, has decided to retire on May 31, 2022. Cynthia Hansen, Executive Vice President and President, Gas Distribution and Storage, has been appointed Executive Vice President and President, Gas Transmission and Midstream, to succeed Mr. Yardley, effective March 1, 2022. Michele Harradence, Senior Vice President and Chief Operations Officer, Gas Transmission and Midstream and has been appointed Senior Vice President and President, Gas Distribution and Storage, to succeed Ms. Hansen effective March 1, 2022. Vern Yu, Executive Vice President and Chief Financial Officer, has been assigned expanded accountability for Corporate Development and Energy Services and has been appointed Executive Vice President, Corporate Development and Chief Financial Officer, effective March 1, 2022. Mr. Yu is based in Calgary.
EnLink Midstream, LLC announced a quarterly distribution for the fourth quarter of 2021, reflecting a previously announced 20% increase, and further announced that it will host a webcast and conference call on Wednesday, February 16, at 8 a.m. Central time to discuss its fourth quarter and full-year 2021 earnings, along with 2022 financial guidance. Consistent with prior communications in December, EnLink’s Board of Directors declared a cash distribution of $0.1125 per common unit for the fourth quarter of 2021, which represents an increase of 20% from the third quarter 2021 distribution. The fourth quarter 2021 cash distribution will be paid on February 11, 2022, to unitholders of record on January 31, 2022.
Phillips 66 Partners LP announced that the board of directors of its general partner declared a fourth-quarter 2021 cash distribution of $0.875 per common unit. The quarterly distribution is payable Feb. 14, 2022, to unitholders of record as of Jan. 31, 2022.
MARKET COMMENTARY
Futures for Wall Street’s major indexes were up on upbeat earnings, while European equities steadied as strong earnings updates from luxury majors countered pressure from elevated U.S. Treasury yields. Oil prices rose after a fire at a pipeline from Iraq to Turkey briefly stopped flows. Gold edged up as the U.S. dollar was slightly down. Building permits and housing starts data is due later today.
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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