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The energy sector is poised for a higher start, supported by strength in the crude complex and in the major equity indices. U.S. stock index futures reversed earlier losses to hit session highs after data showed stronger-than-expected jobs growth in August but a rise in unemployment rate and a cooling wage increase eased some concerns about inflation.
WTI and Brent crude oil futures are trading higher on expectations that OPEC+ will discuss output cuts at a meeting on Sept. 5, though concern over China’s COVID-19 curbs and weakness in the global economy continued to limit gains. OPEC+ this week revised market balances for this year and now sees demand lagging supply by 400,000 barrels per day (bpd), against 900,000 bpd forecast previously. The producer group expects a market deficit of 300,000 bpd in its base case for 2023. G7 finance ministers are expected to firm up plans to impose a price cap on Russian oil, aiming to curb revenue for Moscow’s war in Ukraine but keeping crude flowing to avoid price spikes. Meanwhile, investors remain worried about the impact of the latest COVID-19 restrictions in China.
Natural gas futures fell this morning despite the NOAA 6-10 day forecast showing above-normal temps across the northern two-thirds of the US, as well as along the East Coast. Below-normal temps are seen across the Southern Plains and Lower MS Valley.
BY SECTOR:
US INTEGRATEDS
ExxonMobil affiliates have signed an agreement to sell all of ExxonMobil’s interests in the Aera oil-production operation in California to Green Gate Resources E, LLC, a subsidiary of IKAV. The transaction involves a share sale of Mobil California Exploration & Producing Asset Company. In addition, ExxonMobil affiliates have entered into a separate agreement for the sale of an associated loading facility and pipeline system.
INTERNATIONAL INTEGRATEDS
Talks have begun among shareholders in the Trans-Adriatic pipeline (TAP) to expand its capacity, Azerbaijan’s President Ilham Aliyev said, saying quick progress was necessary for his country to be able to boost gas exports to Europe. Azerbaijan owns 20% of TAP with other shareholders comprising BP, Snam, Fluxys and Enagás.
On 25 May 2022, Equinor announced its exit from the four joint ventures with Rosneft as well as the signing of an agreement to leave the Kharyaga project. Equinor can now confirm that the full exit from Kharyaga has also been completed. As part of the exit from Kharyaga, Equinor has in compliance with applicable sanctions covered decommissioning liabilities accrued and owed by Equinor over the years. Following the exit from Kharyaga, Equinor has no remaining assets or projects in Russia.
Shell has shortlisted four candidates to succeed Chief Executive Ben van Beurden who is preparing to step down next year after nearly a decade at the helm of the giant energy firm, two company sources told Reuters. The successor shortlist has been narrowed down to Wael Sawan, Shell’s head of integrated gas and renewables and Huibert Vigeveno, who heads the company’s refining operations of downstream. Recently appointed Chief Financial Officer Sinead Gorman and Zoe Yujnovich, head of upstream, are also seen as possible successors, the sources said.
Shell Offshore, a subsidiary of Shell plc, has agreed to sell its 100% interest in Shell Onshore Ventures LLC which holds a 51.8% membership interest in Aera Energy LLC to IKAV for a total consideration of approximately $2 billion in cash with additional contingent payments based on future oil prices, subject to regulatory approval. The transaction has an effective date of October 1, 2021 and is expected to close in Q4 2022.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
As per SEC filing, Berry filed for a mixed shelf of up to $500 million.
As per SEC filing, Continental Resources filed for a mixed shelf. The size was not disclosed.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
CES Energy Solutions announced that it has successfully entered into a third amended and restated credit agreement dated September 1, 2022 with respect to its syndicated and operating credit facilities. Led by the Bank of Nova Scotia as Agent and a syndicate including The Toronto-Dominion Bank, Bank of Montreal, ATB Financial, and Wells Fargo Bank, the total size of the increased Credit Facility is approximately C$ equivalent $425.0 million consisting of a Canadian Syndicated Revolving Facility of C$250.0 million, a Canadian Operating Facility of C$20.0 million, a U.S. Syndicated Revolving Facility of US$110.0 million, and a U.S. Operating Facility of US$10.0 million. The Credit Facility is secured by substantially all of the Company’s assets and includes customary terms, conditions and covenants.
NexTier Oilfield Solutions and Seneca Resources Company, LLC, the Exploration and Production segment of National Fuel Gas Company, announced the upcoming deployment of NexTier’s first electric Emerald fracturing system, a fully integrated electric fracturing fleet commencing in the first quarter of calendar year 2023.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Famatown Finance Limited, a company indirectly controlled by trusts settled by Mr. John Fredriksen and a member of the Seatankers Group, which is the largest owner of shares of common stock, no par value of International Seaways, with ownership of approximately 16.6% of the outstanding Common Stock, has made a presentation to certain members of the management team of International Seaways, following up on its May 10, 2022 letter to the Board of Directors. Famatown has released the presentation alongside the following statement: “The Seatankers Group continues to believe International Seaways has an attractive platform with valuable assets and is well positioned to capitalise on the global recovery of the product and crude oil transportation market. As stated in our letter to the Board of Directors on May 10, 2022, the Seatankers Group continues to encourage International Seaways to add two new Directors to its Board of Directors who are familiar with the Seatankers Group’s proven approach for value creation. The Seatankers Group remains hopeful that we can continue to work collaboratively with the International Seaways Board of Directors to achieve this board representation and unlock shareholder value.”
International Seaways issued the following statement: “International Seaways is singularly focused on delivering value to our shareholders, and the record earnings we recently announced are evidence that our strategy is yielding results. We engage regularly with our shareholders and, since Famatown disclosed its interest in International Seaways, we have been seeking to work with Famatown constructively. We remain firmly committed to acting in the best interests of International Seaways and all of our shareholders and building on our strong momentum.”
SFL announced that it has agreed to acquire two new eco-design feeder container vessels in combination with long term time charters to a leading European liner company. The Company expects to take delivery of the vessels from the shipyard in Q3 and Q4 2022. The time charters will run for a period of minimum seven years, with purchase options at the end of year six and seven, including a profit share feature. The fixed rate charter backlog will increase by approximately $120 million, with an EBITDA contribution from the vessels estimated to approximately $13 million per year.
The Canada Energy Regulator (CER) said it issued TC Energy’s NOVA Gas Transmission Ltd (NGTL) an “Inspection Officer Order” after an injury at NGTL’s North Corridor Expansion Project worksite near Fairview, Alberta.
MARKET COMMENTARY
Futures for Wall Street’s major indexes struggled for direction and the dollar edged lower ahead of U.S. August nonfarm payrolls numbers due later in the day. European equities rose, snapping five sessions of losses. Japan’s Nikkei posted worst weekly loss in 3 months on concerns over aggressive interest rate hikes globally. In commodities, oil prices rallied on expectations that OPEC+ will discuss output cuts at a September 5 meeting and gold prices were marginally higher.
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.
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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