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SECTOR COMMENTARY:
The energy sector is set for a higher start supported by strength in the major averages. U.S. equity futures rose this morning after the major averages posted their worst weekly performance of 2023 last week on fears the Federal Reserve will become more hawkish.
WTI and Brent crude oil futures are trading lower on a stronger dollar as the greenback hovers near seven-week highs following the release of recent strong economic reports which suggest the economy continues to be resilient. Conversations for a higher terminal funds rate are back as investors digested better-than-expected U.S personal consumer data on Friday. However, losses today were limited by supply concerns after Russia halted exports to Poland via the Druzhba pipeline. Russian pipeline operator Transneft blamed the halt on a lack of completed paperwork for supplies for the second half of February.
Natural gas futures are sharply higher this morning amid colder temperatures and on forecasts for higher heating demand than previously expected.
BY SECTOR:
US INTEGRATEDS
Chevron, through its subsidiary Chevron Shipping Company LLC, announced entrance into an agreement with Sembcorp Marine Repairs & Upgrades Pte. Ltd, a wholly owned subsidiary of Sembcorp Marine Ltd. (Sembcorp Marine), intending to reduce the carbon intensity of their LNG fleet operations. Under the agreement, with Sembcorp Marine’s support, Chevron will install new technologies aboard Chevron vessels to support their energy transition goals. The changes are also in alignment with decarbonization targets set by the International Maritime Organization (IMO).
Exxon Mobil planned to bring a new crude distillation unit at its 369,024 barrel-per-day (bpd) Beaumont, Texas refinery into full production by the end of the first quarter, a company spokesperson said on Friday.
INTERNATIONAL INTEGRATEDS
China’s Yulong Petrochemical has agreed two two-year crude oil supply deals with BPand Chevron to supply its 400,000 barrel-per-day greenfield refinery in northern China from next year, a company official told Reuters on Monday.
A 655,000-barrel cargo of Venezuelan heavy crude chartered by a unit of Italy’s Enideparted on Friday from a port operated by state-run PDVSA, shipping data showed, marking Venezuela’s first export to Europe after a three-month pause.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Kosmos Energy announced its financial and operating results for the fourth quarter of 2022. For the quarter, the Company generated a net loss of $114 million, or $0.24 per diluted share. When adjusted for certain items that impact the comparability of results, the Company generated an adjusted net income of $111 million, or $0.23 per diluted share for the fourth quarter of 2022.
Pioneer Natural Resources announced that the Company is not contemplating a significant business combination or other acquisition transaction.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
NOV announced that its Board of Directors declared the regular quarterly cash dividend of $0.05 per share of common stock, payable on March 31, 2023 to each stockholder of record on March 17, 2023.
ProFrac Holding announced that it has successfully completed its acquisition of Performance Proppants, making it the largest in-basin proppant producer serving the Haynesville. ProFrac acquired Performance Proppants for approximately $475 million, consisting of $469 million in cash and the remainder in shares of ProFrac Class A common stock.
DRILLERS
Noble reported fourth quarter and full year 2022 results. Contract drilling services revenue for the fourth quarter of 2022 totaled $586 million compared to $289 million in the third quarter, with the increase primarily attributable to the business combination. Marketed fleet utilization was 88% in the three months ended December 31, 2022 compared to 89% in the previous quarter. Contract drilling services costs for the fourth quarter were $366 million, up from $186 million in the third quarter of 2022. Adjusted EBITDA for the three months ended December 31, 2022 was $157 million compared to $97 million in the third quarter of 2022. Capital expenditures totaled $77 million in the fourth quarter and $194 million for the full year ending December 31, 2022. Net cash provided by operating activities for the fourth quarter was $171 million and free cash flow was $106 million. Our business combination with Maersk Drilling closed on October 3, 2022. Results for the fourth quarter reflect the combined company for 90 out of 92 days of the period.
REFINERS
Calumet Specialty Products Partners announced that its unrestricted subsidiary Montana Renewables, LLC has appointed Citigroup Global Markets Inc. to serve as lead underwriter in the proposed offering of $250 million* of tax-exempt bonds to be issued by Cascade County, Montana. Montana Renewables is engaged in the production of SAF, Renewable Hydrogen, Renewable Diesel and Renewable Naphtha from qualifying solid waste and other feedstocks. The Bonds are expected to be issued in the first quarter of 2023.
MLPS & PIPELINES
Nordic American Tankers reported December 31, 2022 earnings. The 4Q 2022 Net result is more than $50 million better than the same quarter 2021. The direction of NAT is unquestionably upwards. The net profit for 4Q 2022 more than tripled from 3Q 2022 and landed at $36 million or an Earnings per share (EPS) of $0.17. the previous quarter saw a net profit of $10.0 million and an EPS of $0.05. Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) for 4Q 2022 came in with a positive $51.1 million, compared to an adjusted EBITDA of $28.4 million in 3Q 2022. The bulk of our 2022 periodic drydockings took place in the fourth quarter and as such affected our revenues negatively.
MARKET COMMENTARY
Futures tracking the main U.S. indexes rose after Wall Street posted its worst weekly performance of 2023 on fears that the Federal Reserve would keep raising rates this year. European shares rose, supported by gains across all major sectors. Japan’s Nikkei settled lower, taking cues from Wall Street. Oil prices were slightly down in volatile trade. The dollar fell, while gold prices were little changed. U.S. January durable goods orders are expected 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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