Crude Flat Ahead of U.S. Inventory Report
SECTOR COMMENTARY:
The energy sector is poised for a mixed to lower start, supported by mild strength in the crude complex but pressured by weakness in the major equity futures which fell on rising inflation concerns that dampened investor sentiment.
WTI and Brent crude oil futures are slightly higher in early trading, backed by last night’s API report and tighter supplies. Ahead of the official EIA data later today, last night’s industry supply report showed U.S. crude stocks declined by 2.5 million barrels for the week to Nov. 5, defying analysts' estimates for a 2.1 million build in crude stocks.
After collapsing more than 8% yesterday, natural gas futures extended their slide lower and hit a seven-week low this morning as the U.S. market continues to follow global gas prices lower. The decline also came as U.S. output rises toward a monthly record high and on forecasts for lower heating demand next week than previously expected.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
On behalf of the Wisting licence partners, Equinor signed a contract with Aker Solutions for front-end engineering and design (FEED) of a floating production and storage vessel (FPSO) for the Wisting field. Valued at around NOK 350 million, the study includes an option for engineering, procurement, construction, and installation (EPCI) calculated at NOK 8-12 billion.
Repsol implements buy-back programme up to 2.29% of its share capital, Reutersreported.
According to Reuters, Royal Dutch Shell is currently committed to exploring in Africa for hydrocarbons and doing so fits the company's purpose, its exploration manager for deepwater Africa Benjamin Mee said on Wednesday at an industry event. More than 80% of Shell's exploration will be focused on core positions with an emphasis on deepwater and the company plans to spend about $1.5 billion per year on upstream exploration, Mee added.
Arabian Pipes Co. secured orders worth SAR 305 million for the supply of steel pipes to Saudi Aramco, the company said in a bourse statement. The contract duration is 12 months and the financial impact is expected to appear from Q2 2022 until Q2 2023.
TotalEnergies and Daimler Truck AG Partner to Develop Hydrogen Ecosystem for Transportation in Europe. The partners will collaborate in the development of ecosystems for heavy-duty trucks running on hydrogen, with the intent to demonstrate the attractiveness and effectiveness of trucking powered by clean hydrogen and the ambition to play a lead role in kickstarting the rollout of hydrogen infrastructure for transportation.
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
Continental Resources announced the pricing of its private placement of $800 million of 2.268% senior notes due 2026 and $800 million of 2.875% senior notes due 2032. The offering is expected to close on November 22, 2021, subject to customary closing conditions.
CANADIAN E&PS
Storm Resources announced that it has entered into a definitive arrangement agreement with Canadian Natural Resources pursuant to which the Purchaser has agreed to acquire all of the issued and outstanding common shares of Storm for cash consideration of $6.28 per Storm Share. The proposed transaction is to be completed by way of a plan of arrangement under the Business Corporations Act ( Alberta ) and is expected to close in December 2021 .
Vermilion Energy reported operating and condensed financial results for the three months ended September 30, 2021. Fund flows from operations was $263 million in Q3 2021, an increase of 52% from the prior quarter. The increase was primarily due to higher commodity prices. E&D capital expenditures were $66 million in the quarter, resulting in $196 million of free cash flow and a payout ratio of 27% including reclamation and abandonment expenditures. The board of directors have approved a $75 million increase to our 2021 capital program to $375 million.
OILFIELD SERVICES
Baker Hughes and Shell Global Solutions BV (Shell) signed a broad strategic collaboration agreement to accelerate the global energy transition by helping each other achieve their respective commitments for net-zero carbon emissions and advancing solutions to decarbonize energy and industrial sectors.
Halliburton Company announced it signed an agreement with Teck Resources Limited to grant Teck access to Neftex® Predictions to support their global mineral exploration efforts. Teck is one of Canada’s leading mining companies and is committed to responsible mining and mineral development with major business units focused on copper, zinc, and steelmaking coal as well as investments in energy assets with operations in Canada, the United States, Chile, and Peru.
Shawcor Ltd. reported its operational and financial results for the three months ended September 30, 2021. Third quarter 2021 consolidated revenue was $291 million, 9% higher than the $268 million reported in the third quarter of 2020. Non-oil and gas businesses grew to 40% of total revenue. Net Loss in the third quarter of 2021 was $8.3 million (or loss per share of $0.12 diluted) compared with a net loss of $18.3 million (or $0.26 loss per share diluted) in the third quarter of 2020.
Smart Sand reported a quarterly adjusted loss of 17 cents per share for the quarter ended in September. Revenue rose 47.3% to $34.48 million from a year ago. The company reported a quarterly loss of $7.26 million.
DRILLERS
Noble Corporation and The Drilling Company of 1972 A/S ("Maersk Drilling") announced that they have entered into a definitive business combination agreement to combine in a primarily all-stock transaction. Following the completion of the transaction, the Maersk Drilling shareholders and Noble shareholders will each own approximately 50% of the outstanding shares of the combined company. The combined company will be named Noble Corporation and its shares will be listed on the New York Stock Exchange and Nasdaq Copenhagen.
REFINERS
No significant news.
MLPS & PIPELINES
Ardmore Shipping announced results for the three months ended September 30, 2021. The company reported a net loss of $12.8 million for the three months ended September 30, 2021, or $0.37 loss per basic and diluted share. This compares to net loss of $6.6 million, or $0.20 loss per basic and diluted share, for the three months ended September 30, 2020. Reported EBITDA of $1.3 million for the three months ended September 30, 2021 as compared to $7.2 million for the three months ended September 30, 2020.
Truist Securities upgraded DCP Midstream to Buy from Hold.
MARKET COMMENTARY
Wall Street futures slipped, while European shares were little changed as investors awaited U.S. inflation data due later in the day. In Asian equity markets, Chinese stocks closed lower on disappointing factory gate inflation figures, while Japan's Nikkei ended in the red as rising costs of raw materials weighed on a raft of corporate earnings. Meanwhile, oil prices dropped ahead of the U.S. Energy Information Administration oil inventory report expected later in the day. Gold prices dipped as the dollar and Treasury yields firmed.
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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