SECTOR COMMENTARY:
Energy stocks are set to open lower, as a slight reprieve in ascending oil prices is weighing on the sector. Meanwhile, the broader indices are set to open higher, rebounding from the recent swoon in equities amid rising rate concerns.
In sector news, Baker Hughes and Kinder Morgan released fourth quarter earnings. Baker Hughes CEO said ‘oil demand is likely to recover to pre-pandemic levels by the end of the year’ on the company conference call, while the company reported revenues of $5.5 billion; the shares are up over 1% in the premarket.
Meanwhile, Kinder Morgan beat Wall Street expectations for fourth-quarter profit on Wednesday, as the U.S. pipeline operator transported higher volumes of gasoline and jet fuel with demand rising as people resumed travel and business activity picked up. It also raised its dividend by 3%.
Oil slipped on Thursday on indications of rising U.S. stocks and as investors took profits after a recent price rally, but strong demand and short-term supply disruptions continue to support prices close to their highest since 2014. “The voices of those forecasting $100 per barrel oil are getting louder by the day,” said Tamas Varga at oil brokerage PVM.
Natural gas futures are lower ahead of weekly inventory data, with expectations for a draw of 197 bcf.
BY SECTOR:
US INTEGRATEDS
Brightmark RNG Holdings LLC – a joint venture partnership between Chevron U.S.A.Inc. and Brightmark Fund Holdings LLC announced plans to construct an anaerobic digestion project at Vlot Calf Ranch in Chowchilla, California.
INTERNATIONAL INTEGRATEDS
No significant news.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Baker Hughes Company Announces Fourth Quarter and Total Year 2021 Results. Orders of $6.7 billion for the quarter, up 24% sequentially and up 28% year-over-year. Revenue of $5.5 billion for the quarter, up 8% sequentially and flat year-over-year. GAAP operating income of $574 million for the quarter, up 52% sequentially and favorable year-over-year. Adjusted operating income (a non-GAAP measure) of $571 million for the quarter, up 42% sequentially and up 23% year-over-year. Adjusted EBITDA* (a non-GAAP measure) of $844 million for the quarter was up 27% sequentially and up 10% year-over-year.
KBR announced that along with Mura, it has secured a contract for its breakthrough plastics recycling technology, Hydro-PRTSM, from LG Chem, Korea. Under the terms of the contract, KBR will provide technology licensing and engineering to implement the innovative and scalable Hydro-PRTSM technology at LG Chem’s Dangjin plant.
Matson announced preliminary fourth quarter financial results, provides a business update. Matson expects fourth quarter operating income for Ocean Transportation of $445.0 to $455.0 million and Logistics operating income of $14.0 to $15.0 million. It also expect fourth quarter 2021 net income and diluted EPS to be $365.2 to $382.4 million and $8.70 to $9.10, respectively. During the fourth quarter of 2021, Matson repurchased approximately 1.0 million shares for a total cost of $84.5 million. Since the commencement of the share repurchase program on August 3, 2021 to December 31, 2021, Matson repurchased approximately 2.5 million shares for a total cost of $200.1 million. As of December 31, 2021, the Company had approximately 0.5 million shares remaining in its share repurchase program.
DRILLERS
No significant news.
REFINERS
Phillips 66 announced they have signed a technology development agreement to advance the production and commercialization of next-generation anode materials for lithium-ion batteries.
MLPS & PIPELINES
Enbridge announced that it has closed its previously announced offering of $750 million aggregate principal amount of 5.00% Fixed-to-Fixed Rate Subordinated Notes Series 2022-A due January 19, 2082.
Golar LNG provided an update on the formation of Cool Company Ltd. Reference is made to the announcement on 15 December 2021 regarding Golar’s announced execution of a Terms Agreement to separate its 8 TFDE LNG carriers into CoolCo.
Barclays downgraded Holly Energy Partners to Underweight from Equal Weight.
Kinder Morgan’s board of directors approved a cash dividend of $0.27 per share for the fourth quarter ($1.08 annualized), payable on February 15, 2022, to stockholders of record as of the close of business on January 31, 2022. This dividend is a 3% increase over the fourth quarter of 2020. KMI is reporting fourth quarter net income attributable to KMI of $637 million, compared to $607 million in the fourth quarter of 2020; and distributable cash flow (DCF) of $1,093 million, compared to $1,250 million in the fourth quarter of 2020. Adjusted Earnings were $609 million for the quarter, versus $604 million in the fourth quarter of 2020.
Barclays downgraded Magellan Midstream Partners to Equal Weight from Overweight.
Barclays downgraded Shell Midstream Partners to Equal Weight from Overweight.
Shell Midstream Partners announced that the Board of Directors of its general partner declared a cash distribution of $0.30 per limited partner common unit for the fourth quarter of 2021. The distribution will be paid February 11, 2022 to unitholders of record as of February 1, 2022.
MARKET COMMENTARY
U.S. stock index futures bounced, a day after the tech-heavy Nasdaq fell into correction territory, with markets eyeing more fourth-quarter results ahead of the Federal Reserve meeting next week. The European stocks eased, while Asian share markets pushed higher after China slashed its benchmark mortgage rates. Gold prices held near two-month highs as a retreat in U.S. Treasury yields and the dollar sparked investor interest. Meanwhile, oil futures were lower due to profit booking. Netflix is scheduled to report earnings 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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