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SECTOR COMMENTARY:
The energy sector is set for a mixed start, supported by strength in the underlying commodities while the major market futures cap pre-market gains. U.S stock futures are lower as investors process yesterday’s comments from the Federal Reserve on how long they may have to keep rates high.
WTI and Brent crude oil are extending yesterday’s gains, trading higher amid revised forecasts for higher demand, easing concerns over rate hikes and API data pointing to a drop in U.S. crude inventories. Yesterday’s U.S. ERIA Short Term Energy Outlook showed a new U.S. crude production growth forecast of 590K bpd for 2023 to 12.49M bpd, and another 160K bpd in 2023 to 12.65M bpd (though the 2024 estimate was down from the prior forecast). The report also mentioned expectations for higher demand in China by 700k bpd in 2023 and 400k bpd in 2024. Russian production was also forecast to fall by 1M bpd this year to 9.9M bpd, though that was 400K bpd higher than January’s forecast as Russian exports have remained more resilient than expected. Additionally, traders are keeping an eye on API data, which showed a crude draw of 2.2M barrels.
Natural gas futures are down on forecasts for milder-than-normal weather as an unusually warm winter continues to put a dent in demand.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
TD Securities upgraded BP to Buy from Hold.
The European Union could be able to refill its gas storages up to the required 90% level by November provided demand remains subdued and liquefied natural gas (LNG) imports stay high, Norway’s Equinor said on Wednesday.
It will be difficult for oil major Equinor to further increase its gas output after increasing it last year by some 8%, CEO Anders Opedal told Bloomberg TV on Wednesday.
Equinor delivered adjusted earnings of USD 15.1 billion and USD 5.80 billion after tax in the fourth quarter of 2022. Net operating income was USD 16.6 billion and net income was USD 7.90 billion. Equinor expects organic capex of USD 10-11 billion in 2023, and an annual average of around USD 13 billion for 2024-2026. In 2023 Equinor expects a production growth of around 3% in oil and gas, compared to 2022.
TotalEnergies received some dividends for its stake in Russia’s Yamal LNG project in 2022 but it is becoming more complex to receive such payouts because of Western sanctions against Russia, CEO Patrick Pouyanne said on Wednesday.
TotalEnergies will launch new projects in Brazil and Angola in 2023, the company’s chairman and chief executive Patrick Pouyanne said on Wednesday.
TotalEnergies is still talking with Baghdad over a $27 billion cluster of major energy projects in Iraq, the French energy major’s chairman and chief executive Patrick Pouyanne said on Wednesday.
TotalEnergies announced that the Board of Directors met on February 7, 2023, and decided to propose to the Shareholders’ Meeting on May 26, 2023, the distribution of an ordinary dividend of 2.81 €/share for fiscal year 2022, versus 2.64 €/share for fiscal year 2021, a 6.4% increase. Consequently, taking into account the three ordinary interim dividends of 0.69 €/share previously decided by the Board of Directors, the final ordinary dividend for fiscal year 2022 will be 0.74 €/share, a 7.25% increase compared to the ordinary interim dividends.
On February 7, 2023, the Board of Directors, under the conditions set forth at the Extraordinary Shareholders’ Meeting of May 25, 2022, decided to decrease the share capital of TotalEnergies by way of cancellation of 128,869,261 treasury shares representing 4,92% of the share capital. These shares were repurchased from February 11 to December 15, 2022.
TotalEnergies posted a record adjusted net profit of $36.2 billion in 2022, double the level of a year earlier, joining in the sector’s bumper earnings due to higher oil and gas prices since Russia invaded Ukraine.
TotalEnergies will make a full takeover in 2023 of its Total Eren division, said the company’s chairman and chief executive Patrick Pouyanne.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Citi initiated Chesapeake Energy with a Neutral rating.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Cactus announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to the previously announced agreement to acquire FlexSteel Technologies Holdings, Inc. and its affiliates through a merger with its holding company, HighRidge Resources, Inc. and Atlas Merger Sub, LLC, a newly formed subsidiary of Cactus, Inc.
Compass Minerals reported fiscal 2023 first-quarter results. Fiscal 2023 first quarter consolidated revenue grew 6% year over year, driven by higher prices in both business segments and stronger Salt segment sales volumes, partially offset by weaker sales volumes in the Plant Nutrition segment. Consolidated operating earnings of $27.9 million were up 37% from $20.4 million in the corresponding quarter in fiscal 2022, with operating margins improving to 7.9% from 6.2%. Consolidated adjusted EBITDA improved to $61.8 million in the quarter, up 6% year over year. Consolidated adjusted EBITDA margin was essentially flat at 17.5% compared to 17.6% last year.
The Board of Directors of Eagle Materials has declared a quarterly cash dividend of $0.25 per share, payable on April 14, 2023, to stockholders of record of its Common Stock at the close of business on March 17, 2023.
Halliburton Co files automatic mixed shelf of indeterminate amount.
Weatherford International plc announced its results for the fourth quarter of 2022 and full year 2022. Revenues for the fourth quarter of 2022 were $1,209 million, an increase of 8% sequentially and 25% year-over-year. Operating income was $169 million in the fourth quarter of 2022, compared to $121 million in the third quarter of 2022 and $33 million in the fourth quarter of 2021. The Company’s fourth quarter of 2022 net income was $72 million, compared to $28 million in the third quarter of 2022 and a net loss of $161 million in the fourth quarter of 2021. Revenues for the full year 2022 were $4,331 million, compared to revenues of $3,645 million in 2021. Operating income for the full year was $412 million, compared to $116 million in 2021. The Company’s full year 2022 net income was $26 million, compared to a $450 million net loss in 2021. Full year cash flows provided by operations were $349 million, compared to $322 million in 2021. Capital expenditures for full year 2022 were $132 million, compared to $85 million in 2021.
DRILLERS
Nabors Industries reported fourth quarter 2022 operating revenues of $760 million, an increase of approximately 10%, compared to operating revenues of $694 million in the third quarter of 2022. The net loss attributable to Nabors shareholders for the quarter was $69 million, or $7.87 per share. This compares to a loss of $14 million, or $1.80 per share, in the third quarter. The fourth quarter results included a non-cash charge of $36 million, or $3.98 per share, related to mark-to-market treatment of Nabors’ warrants. The third quarter results included a non-cash gain for the warrants of $34 million, or $3.74 per share. Excluding the impact of the Nabors warrants on each quarter’s results, the net loss improved sequentially by $15 million. Fourth quarter adjusted EBITDA was $230 million, a 21% increase compared to $191 million in the previous quarter.
Noble reported transactions made by persons discharging managerial responsibilities.
REFINERS
No significant news.
MLPS & PIPELINES
Credit Suisse downgraded Enbridge to Underperform from Neutral.
TC Energy discontinued gas delivery on its Line 1982, an underground part of Columbia Gas Transmission, in and around East Palestine, Ohio, after a train derailed near the pipeline last week, the company said on Tuesday.
TEN announced that its Board of Directors declared the regular quarterly cash dividend of $0.546875 per share for its Series D Cumulative Perpetual Preferred Shares and the regular quarterly cash dividend of $0.578125 per share for its Series E Cumulative Perpetual Preferred Shares.
MARKET COMMENTARY
U.S. stock futures were slightly lower, with investors assessing overnight comments from Federal Reserve Chair Jerome Powell, while European shares surged. Japan’s Nikkei fell on weak tech earnings including those of Nintendo and Softbank and Chinese shares closed lower due to ongoing U.S.-China tensions. Oil prices rose on an industry report pointing to a drop in U.S. crude inventories. A weak dollar enhanced appeal for gold. Walt Disney Co is expected to report its quarterly earnings later in the day.
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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