Oil
Oil

Oil Edges Lower as Traders Continue to Focus on Forecasts for Weak Demand

SECTOR COMMENTARY: 

The energy sector is set for a lower start, pressured by weakness in the crude complex and the major equity futures which are extending yesterday's declines ahead the release of the FOMC minutes this afternoon. 

WTI and Brent crude oil futures are edging lower as traders continue to focus on forecasts for weak demand and expectations U.S. interest rate cuts may take longer than expected to begin. The losses come despite supply disruptions in the Red Sea and increasing geopolitical tensions. Market participants will be keeping an eye out for any new resolution to the conflict abroad after the U.S vetoed a ceasefire draft, API numbers set to release later today, FOMC minutes and tomorrow's DOE Weekly Petroleum Status report. 

Natural gas futures are higher by 12% with the boost coming from CHK's announcement to cut its 2024 capex guidance by 20%. 

BY SECTOR:

US INTEGRATEDS

No significant news.

INTERNATIONAL INTEGRATEDS

Airbus and TotalEnergies have signed a strategic partnership to meet the challenges of aviation decarbonization with sustainable aviation fuel. In line with the objective of achieving net carbon neutrality of aviation by 2050, this partnership aims to contribute to the reduction of the sector's CO2 emissions, in which Sustainable Aviation Fuels (SAF) play a key role. SAF supplied by TotalEnergies can reduce up to 90% CO2 emissions over lifecycle compared to their fossil fuel equivalent.

CANADIAN INTEGRATEDS

No significant news. 

U.S. E&PS

Chesapeake Energy reported fourth quarter and full-year 2023 results and issued 2024 guidance. Net cash provided by operating activities of $470 million. Net income totaled $569 million, or $4.02 per fully diluted share; adjusted net income totaled $185 million, or $1.31 per share. Adjusted EBITDAX of $635 million; free cash flow of $91 million. The company also produced approximately 3.43 bcfe/d net (98% natural gas) and closed remaining Eagle Ford divestiture package for approximately $700 million. 

Diamondback Energy announced financial and operating results for the fourth quarter and full year ended December 31, 2023. Diamondback's fourth quarter 2023 net income was $960 million, or $5.34 per diluted share. Adjusted net income was $854 million, or $4.74 per diluted share. Fourth quarter 2023 net cash provided by operating activities was $1.6 billion. For the year ended December 31, 2023, Diamondback's net cash provided by operating activities was $5.9 billion. Fourth quarter 2023 Consolidated Adjusted EBITDA was $1.7 billion. Adjusted EBITDA net of non-controlling interest was $1.6 billion.

Matador Resources reported financial and operating results for the fourth quarter and full year 2023. The company record quarterly average production of 154,300 BOE per day (88,700 barrels of oil per day). Net cash provided by operating activities of $618.3 million. Adjusted free cash flow of $180.5 million. Net income of $254.5 million, or $2.12 per diluted common share. Adjusted net income of $238.4 million, or $1.99 per diluted common share. Adjusted EBITDA of $552.8 million.

Diamondback Energy announced a series of leadership appointments and promotions, effective immediately. Al Barkmann, currently Senior Vice President of Reservoir Engineering, has been promoted to Executive Vice President and Chief Engineer. Jere Thompson, currently Senior Vice President of Strategy and Corporate Development, has been promoted to Executive Vice President of Strategy and Corporate Development. Hunter Landers, currently Vice President of Completions, has been promoted to Senior Vice President of Completions. Greg Dolezal, currently Vice President of Information Technology, has been promoted to Vice President and Chief Information Officer. Diamondback also announced the addition of two Vice Presidents to the executive team. Neil Wiese has been promoted to Vice President of Finance and Austen Gilfillian has been promoted to Vice President of Viper Energy, Inc.

Gran Tierra Energy announced that it has obtained an exemption order from the Canadian securities regulators which permits Gran Tierra to purchase up to 10% of its “public float” of shares of common stock through the NYSE American and other trading systems based in the United States as part of Gran Tierra’s normal course issuer bids announced on October 31, 2023. Absent this exemptive relief, Gran Tierra’s purchases under a normal course issuer bid on markets other than the TSX would be limited to not more than 5% of its outstanding Shares over any 12-month period. A substantial majority of the trading volume of Gran Tierra’s Shares occurs through the U.S. Markets.

Occidental Petroleum is exploring a sale of Western Midstream Partners, a U.S. natural gas-focused pipeline operator that has a market value of close to $20 billion, including debt, according to people familiar with the matter.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

Expro Group Holdings reported financial and operational results for the three months and year ended December 31, 2023. Revenue of $407 million for the fourth quarter, up 10% sequentially. Revenue of $1,513 million for the full year, up 18% year-over-year. Adjusted EBITDA of $85 million for the fourth quarter, up 70% sequentially. Adjusted EBITDA margin1 of 21%, up sequentially from 14%. Adjusted EBITDA of $249 million for the full year as compared to $206 million for 2022. Adjusted EBITDA margin of approximately 16% for both 2023 and 2022.

ProPetro Holding announced financial and operational results for the fourth quarter and full year of 2023. Revenue was $348 million compared to $424 million for the prior quarter. Net loss of $17 million, or $0.16 per diluted share, compared to net income of $35 million, or $0.31 per diluted share, for the prior quarter. Adjusted EBITDA of $64 million compared to $108 million in the prior quarter. The Company repurchased and retired 5.8 million shares during 2023. During the fourth quarter of 2023, the Company repurchased and retired 1.6 million shares. Subsequent to year-end through February 16, 2024, the Company repurchased an additional 0.8 million shares, bringing the total repurchases to 6.6 million shares, representing approximately 6% of our outstanding common stock since plan inception in May 2023.

Select Water Solutions announced its financial and operating results for the quarter and year ended December 31, 2023. Revenue for the fourth quarter of 2023 was $374.9 million as compared to $389.3 million in the third quarter of 2023 and $381.7 million in the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $27.6 million as compared to $15.3 million in the third quarter of 2023 and $7.6 million in the fourth quarter of 2022. Adjusted EBITDA was $58.3 million in the fourth quarter of 2023 as compared to $63.0 million in the third quarter of 2023 and $52.2 million in the fourth quarter of 2022.

Baker Hughes announced Wednesday a significant contract award from Petrobras for integrated well construction services in the Buzios field, offshore Brazil.

TechnipFMC announced that its Board of Directors has authorized and declared a quarterly cash dividend of $0.05 per share, payable on April 3, 2024 to shareholders of record as of the close of business on the New York Stock Exchange on March 19, 2024. The ex-dividend date is March 18, 2024.

DRILLERS

No significant news.

REFINERS

CVR Energy announced fourth quarter 2023 net income attributable to CVR Energy stockholders of $91 million, or 91 cents per diluted share, on net sales of $2.2 billion, compared to fourth quarter 2022 net income attributable to CVR Energy stockholders of $112 million, or $1.11 per diluted share, on net sales of $2.7 billion. Adjusted earnings for the fourth quarter of 2023 was 65 cents per diluted share compared to adjusted earnings of $1.68 per diluted share in the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $97 million, compared to net income of $172 million in the fourth quarter of 2022. Fourth quarter 2023 EBITDA was $204 million, compared to fourth quarter 2022 EBITDA of $313 million. Adjusted EBITDA for the fourth quarter of 2023 was $170 million, compared to adjusted EBITDA of $388 million in the fourth quarter of 2022.

HF Sinclair reported fourth quarter net loss attributable to HF Sinclair stockholders of $(62.2) million, or $(0.34) per diluted share, for the quarter ended December 31, 2023, compared to net income attributable to HF Sinclair stockholders of $587.0 million, or $2.92 per diluted share, for the quarter ended December 31, 2022. Excluding the adjustments shown in the accompanying earnings release table, adjusted net income attributable to HF Sinclair stockholders for the fourth quarter of 2023 was $164.6 million, or $0.87 per diluted share, compared to $597.8 million, or $2.97 per diluted share, for the fourth quarter of 2022.

Delek US Holdings announced that its Board of Directors has approved a $0.005 per share increase in the regular quarterly dividend to $0.245 per share, to be paid on March 8, 2024, to shareholders of record on March 1, 2024. 

MLPS & PIPELINES

EnLink Midstream reported financial results for the fourth quarter and full-year 2023 and provided 2024 financial guidance. Reported net income of $100.1 million and $350.0 million for the fourth quarter of 2023 and full-year 2023, respectively, and net cash provided by operations of $360.7 million and $1.22 billion for the fourth quarter and full-year 2023, respectively. Generated adjusted EBITDA, net to EnLink, of $350.8 million and $1.35 billion for the fourth quarter of 2023 and full-year 2023, respectively. Grew full-year 2023 adjusted EBITDA 5% compared to 2022. Expects to generate approximately $290 million in FCFAD based on the midpoint of 2024 guidance.

EnLink Midstream announced that ExxonMobil and EnLink are exploring opportunities for EnLink to support ExxonMobil's carbon capture and sequestration (CCS) efforts beyond the southeast Louisiana Mississippi River Corridor into several additional Gulf Coast areas.

MARKET COMMENTARY

Wall Street futures were under pressure ahead of chip designer Nvidia's high-stakes earnings report that could either hurt or further fuel this year's AI-led rally. European shares slipped following a batch of disappointing earnings reports from companies including HSBC and JDE Peet's, while investors looked out for region-wide consumer confidence data. Among Asian stock markets, Japan's Nikkei finished lower for a second day, teetering below an all-time high. China shares rose as investors cheered policymakers' efforts to boost market confidence and support the struggling property sector. The dollar steadied, while gold prices were little changed as traders awaited minutes of the Federal Reserve's latest policy meeting for further clues on the central bank's rate outlook. Oil prices extended losses on fresh concerns about the growth outlook following steps by Chinese authorities to prop up economic growth in the country.


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  Rich Pontillo.


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Nasdaq Energy News

Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services. 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.

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