Oil Lifted by a Drop in U.S. Shale Ouput
SECTOR COMMENTARY:
The energy sector is poised for a higher start, backed by further strength in the underlying commodities while major equity futures steadied as investors readied for the start of the Fed’s two-day policy meeting.
WTI and Brent crude oil futures extended yesterday’s gains into the start of today’s session, lifted by a drop in U.S. shale output that has spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia. U.S. oil output from top shale-producing regions is on track to fall to 9.393 million bpd in October, the lowest level since May 2023, the U.S. Energy Information Administration (EIA) said on Monday. It will have fallen for three months in a row. Those estimates come after Saudi Arabia and Russia this month extended a combined supply cuts of 1.3 million bpd to the end of the year. Traders are also looking to the interest rate decisions due this week from the central banks of the U.S., Britain, Japan, Sweden, Switzerland and Norway.
Natural gas futures continued to build on yesterday’s rally, garnering support from reports showing the amount of gas flowing to the country's LNG export plants increased after Freeport LNG's facility in Texas returned to near full service over the past few days. Forecasts for milder weather and lower gas demand over the next two weeks than previously expected are keeping a cap on gains.
BY SECTOR:
US INTEGRATEDS
No significant news.
INTERNATIONAL INTEGRATEDS
BP appointed Kate Thomson as interim finance chief after CFO Murray Auchincloss took over as interim CEO following Bernard Looney's abrupt departure last week.
Equinor and its partners said they had raised the project cost estimate for their joint Johan Castberg oilfield in the Arctic Barents Sea by close to 13 billion Norwegian crowns ($1.20 billion).
Shell said it has opened its largest electric vehicle (EV) charging station worldwide in Shenzhen, China.
CANADIAN INTEGRATEDS
Cenovus Energy announced the early tender results for its tender offers to purchase for cash certain of its outstanding series of Notes. Cenovus also announced it has increased the previously announced Pool 2 Maximum Amount from $250,000,000 to $500,000,000. The Pool 1 Maximum Amount and the Series Tender Cap remain unchanged at $500,000,000 and $250,000,000, respectively.
U.S. E&PS
Apache Industrial has announced the appointment of Flip Shanley to Senior Vice President of Operations – Fireproofing.
EQT announced it has entered into a Heads of Agreement (HOA) for liquefaction services from Commonwealth LNG's facility in Cameron, Louisiana to produce 1 million tons per annum of LNG under a 15-year tolling agreement. Final terms remain subject to negotiation of a definitive agreement between the parties. Commonwealth anticipates a final investment decision on the project in the first quarter of 2024, with first cargo deliveries expected in 2027.
Gran Tierra Energy announced the commencement of offers to Eligible Holders to exchange any and all of the outstanding 6.250% Senior Notes due 2025 issued by Gran Tierra Energy International Holdings Ltd. on February 15, 2018, and any and all of the outstanding 7.750% Senior Notes due 2027 issued by the Company on May 23, 2019 for newly issued 9.500% Senior Secured Amortizing Notes due 2029, pursuant to the terms and subject to the conditions set forth in the exchange offer memorandum and consent solicitation statement, dated September 19, 2023 in respect of the Exchange Offers and Solicitations of Consents. Any capitalized terms used in this press release without definition have the respective meanings assigned to such terms in the Exchange Offer Memorandum.
Vital Energy announced the pricing of $400 million in aggregate principal amount of 10.125% senior unsecured notes due 2028 at 101% of par and $500 million in aggregate principal amount of 9.750% senior unsecured notes due 2030 at 98.742% of par in an upsized registered underwritten offering for a total of $900 million. Interest for the notes due 2028 is payable on January 15 and July 15 of each year, and the first interest payment for the notes due 2028 will be made on January 15, 2024, and will consist of interest from July 15, 2023 to that date. Interest for the notes due 2030 is payable on April 15 and October 15 of each year, and the first interest payment for the notes due 2030 will be made on October 15, 2023, and will consist of interest from closing to that date. The offering is expected to close on September 25, 2023, subject to customary closing conditions. The Company intends to use a portion of the net proceeds from this offering of the notes and a concurrent offering of common stock to fund the satisfaction and discharge of the indenture governing its 9.500% senior unsecured notes due 2025, to repay a portion of the borrowings outstanding under its senior secured credit facility and use any excess for general corporate purposes.
CANADIAN E&PS
Cenovus Energy announced the early tender results for its tender offers to purchase for cash certain of its outstanding series of Notes. Cenovus also announced it has increased the previously announced Pool 2 Maximum Amount from $250,000,000 to $500,000,000. The Pool 1 Maximum Amount and the Series Tender Cap remain unchanged at $500,000,000 and $250,000,000, respectively.
OILFIELD SERVICES
No significant news.
DRILLERS
Seadrill Limited initiated a share repurchase program September 12, 2023 to repurchase up to $250 million of the Company's common shares in open market transactions on the OSE and NYSE through March 31, 2024 pursuant to an agreement with Arctic Securities AS and its subsidiary, Arctic Securities LLC.
REFINERS
Flyscan Systems announced that Marathon Petroleum is joining strategic investors Hatch, Enbridge and Business Development Bank of Canada's (BDC) Cleantech Practice to support the company's continued advancement and growth. The funding will enable Flyscan to accelerate commercialization and scale-up of its operations as it continues to enter into commercial agreements with multiple energy companies in North America.
MLPS & PIPELINES
No significant news.
MARKET COMMENTARY
U.S. stock index futures inched higher ahead of a two-day Federal Reserve monetary policy meeting and as investors awaited Instacart's Nasdaq debut to assess a potential recovery in the IPO market. European shares edged higher in choppy trading as cautious investors eyed a slew of central bank decisions this week, while Germany's DAX lagged regional peers as weakness in industrial stocks weighed. Japan's Nikkei share average closed lower, with chip-related stocks leading the decline. Gold prices hit a two-week high as the dollar eased from a six-month peak, with markets braced for a new set of economic forecasts from the Fed. Oil prices rose for a fourth consecutive session as weak U.S. shale output spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia.
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 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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