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Oil

Oil Prices Rise as U.S. Crude Stockpiles Fall to Lowest Since January 2020

Oil prices rose on Thursday as crude stockpiles in the U.S., the world's top oil consumer, fell to their lowest since January 2020, with Brent crude oil prices pushing back past $75 a barrel.

SECTOR COMMENTARY:

Energy stocks are set to open higher, tracking stronger broader index futures and oil prices, as Brent crude oil rose back above $75 per barrel. A drop in domestic crude oil inventories to their lowest level since January 2020 lifted prices, as did further strengthening economic data to support global oil demand growth.  The earnings parade carried on across the energy sector.

Oil prices rose on Thursday as crude stockpiles in the U.S., the world's top oil consumer, fell to their lowest since January 2020, with Brent crude oil prices pushing back past $75 a barrel. Brent topped $75 a barrel for the first time in more than two years in June, but fell back sharply this month on fears about the rapid spread of the Delta variant of coronavirus and a compromise deal by leading oil producers to increase supply.  "The (oil inventory) falls suggest the rise in cases of COVID-19's Delta variant is having little impact on mobility," ANZ analysts said in a note on Thursday.

Natural gas futures are down a penny, trading around $3.95, ahead of weekly inventory data.  Analysts expect a build of 43 bcf.

BY SECTOR: 

US INTEGRATEDS

The Board of Directors of Chevron declared a quarterly dividend of one dollar and thirty-four cents ($1.34) per share, payable September 10, 2021 to all holders of common stock as shown on the transfer records of the Corporation at the close of business August 19, 2021.

The Board of Directors of Exxon Mobil declared a cash dividend of $0.87 per share on the Common Stock, payable on September 10, 2021 to shareholders of record of Common Stock at the close of business on August 13, 2021. 

INTERNATIONAL INTEGRATEDS

Repsol posted net income of €1.235 billion for the first half of 2021. In this period, the company has advanced towards the decarbonization objectives laid out in its 2021-2025 Strategic Plan and carried out an efficiency-oriented management of the company. Adjusted net income, which specifically measures the performance of the businesses, was €959 million with positive results in all business segments, especially in Exploration and Production.

Royal Dutch Shell published second quarter 2021 results. Second quarter 2021 income attributable to Royal Dutch Shell plc shareholders was $3.4 billion, which included post-tax impairment charges of $1.8 billion and charges of $1.2 billion due to the fair value accounting of commodity derivatives. Adjusted Earnings for the quarter were $5.5 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the second quarter 2021 was negative $0.8 billion. Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.24 per share. Share buybacks of $2 billion launched which is targeted to be completed by the end of 2021. 

CANADIAN INTEGRATEDS

Suncor Energy reported second quarter 2021 results. Suncor’s second quarter 2021 operating earnings were $722 million ($0.48 per common share), compared to an operating loss of $1.345 billion ($0.88 per common share) in the prior year quarter.Suncor’s net earnings were $868 million ($0.58 per common share) in the second quarter of 2021, compared to a net loss of $614 million ($0.40 per common share) in the prior year quarter. In addition, the company updated its full-year business environment outlook assumptions for Brent Sullom Voe from US$63.00/bbl to US$68.00/bbl, WTI at Cushing from US$60.00/bbl to US$65.00/bbl, WCS at Hardisty from US$48.00/bbl to US$52.00/bbl, New York Harbor 2-1-1 crack from US$17.00/bbl to US$18.00/bbl and AECO-C Spot from $2.50/GJ to $3.50/GJ, due to improvements in key forward curve pricing for the remainder of the year. As a result of these updates, the full-year current income tax expense range has increased from $1.0 billion – $1.3 billion to $1.2 billion – $1.5 billion.

Suncor Energy’s Board of Directors approved a quarterly dividend of $0.21 per share on its common shares, payable September 24, 2021 to shareholders of record at the close of business on September 3, 2021.                       

U.S. E&PS

Antero Resources announced its second quarter 2021 financial and operational results. Net loss was $523 million, or $1.70 per diluted share, compared to a net loss of $463 million, or $1.73 per diluted share, in the prior year period.  The net loss was driven by a $757 million unrealized commodity derivative fair value loss primarily as a result of the rise in the natural gas futures strip prices during the quarter.  Adjusted Net Income (non-GAAP measure) was $42 million, or $0.13 per diluted share, compared to Adjusted Net Loss of $99 million, or $0.37 per diluted share, in the prior year period. In addition, the company increased guidance for its realized natural gas price to a premium to NYMEX of $0.15 to $0.25 per Mcf from a range of $0.10 to $0.20 per Mcf previously, reflecting a 33% increase at the midpoint.

APA Corporation announced drilling success and updated the status of its appraisal program offshore Suriname in Block 58. As previously noted, the primary objective of the first phase of the appraisal drilling program is to deliver a fast-track, black oil development.

CNX Resources released financial and operational results for the second quarter 2021. The company reported quarterly shares loss of $1.61 and natural gas, NGL and Oil revenue of $369.5 million.

EQT announced financial and operational results for the second quarter 2021. Net loss attributable to EQT for the three months ended June 30, 2021 was $936 million, $3.35 per diluted share, compared to net loss attributable to EQT for the same period in 2020 of $263 million, $1.03 per diluted share. Sales volume increased compared to the same period in 2020 primarily as a result of prior period sales volume decreases of 36 Bcfe from the 2020 Strategic Production Curtailments (defined below) and sales volume increases of 33 Bcfe from the assets acquired from the Chevron Acquisition (defined below). 

Marathon Oil announced that the Company's board of directors declared a dividend of 5 cents per share on Marathon Oil Corporation common stock. This represents an increase from the Company's last quarterly base dividend payment of 4 cents per share.

CANADIAN E&PS

Athabasca Oil reported its 2021 second quarter results. Recorded operating income was $93 million ($31.09/boe) driven by strong oil prices and 90% liquids weighting.Adjusted funds flow was $50 million ($0.09 per share) and free cash flow was $28 million. Net loss per share was $0.03. 

Tourmaline Oil released its financial and operating results for the second quarter of 2021. Second quarter 2021 cash flow was $570.2 million ($1.89 per diluted share) compared to $225.2 million ($0.83 per diluted share) in Q2 2020. Second quarter 2021 after tax net earnings were $420.8 million ($1.40 per diluted share) compared to $20.1 million ($0.07 per diluted share) in second quarter of 2020. In addition, Full-year 2021 EP capital spending of $1.27 billion is currently expected.

Whitecap Resources reported its operating and unaudited consolidated financial results for the three and six months ended June 30, 2021. Whitecap's second quarter results were exceptional across all areas of the business, achieving record production of 116,799 boe/d which was 4% above its forecast of 112,000 boe/d, on capital investments of $39 million, which was approximately 30% below forecast of $55 - $60 million. The record production in the second quarter includes 153 MMcf/d of natural gas, which is expected to increase as it continue to grow Montney production in the second half of the year and in 2022. The second quarter funds flow netback of $25.07/boe was 15% higher than the first quarter and resulted in funds flow of $267 million ($0.43 per share). Funds flow per share increased 126% compared to the prior year quarter and 19% compared to the first quarter of 2021.

OILFIELD SERVICES

Calfrac Well Services announced its financial and operating results for the three months ended June 30, 2021. Revenue in the second quarter of 2021 was $207.3 million, an increase of 127 percent from the same period in 2020. The net loss was $30.5 million or $0.82 per share diluted compared to a net loss of $277.3 million or $95.61 per share diluted in the same period last year, which included an impairment of PP&E and other assets of $201.6 million.

ChampionX announced second quarter of 2021 results. Revenue was $749.2 million, net income attributable to ChampionX was $7.3 million, and adjusted EBITDA was $105.4 million. Income before income taxes margin was 1.5%, and adjusted EBITDA margin was 14.1%. Cash provided by operating activities was $60.9 million, and free cash flow was $40.8 million.

Core Laboratories N.V. reported second quarter 2021 revenue of $118,700,000.  Core's operating income was $12,800,000, with earnings per diluted share of $0.17, all in accordance with U.S. generally accepted accounting principles. Operating income, ex-items, a non-GAAP financial measure, was $13,200,000, yielding operating margins of 11% and EPS, ex-items, of $0.18. 

KBR announced its second quarter 2021 financial results and updated FY 2021 financial guidance. Revenue was $1.5 billion, an 11% increase in the quarter, is aligned with management's consolidated revenue guidance for the year of circa $6 billion. Diluted loss per share was $1.08. KBR updated its FY 2021 financial guidance. Consolidated revenue were $5.8 billion to $6.2 billion. GAAP earnings (loss) per share was $(0.10) to $0.10 and adjusted EPS was $2.00 to $2.20. During the quarter, KBR repurchased $28 million of common shares and issued a quarterly dividend of $0.11 per share, an increase of 10% from 2020.

Kirby Corporation announced net earnings attributable to Kirby for the second quarter ended June 30, 2021 of $10.2 million, or $0.17 per share, compared with earnings of $25.0 million or $0.42 per share for the 2020 second quarter. Consolidated revenues for the 2021 second quarter were $559.6 million compared with $541.2 million reported for the 2020 second quarter.

ATB Capital Markets upgraded NOV to Outperform from Sector Perform.

Oceaneering International reported net income of $6.2 million, or $0.06 per share, on revenue of $498 million for the three months ended June 30, 2021.  Adjusted net income was $10.4 million, or $0.10 per share, reflecting the impact of $3.2 million of pre-tax adjustments associated with a loss on the sale of an asset and foreign exchange losses recognized during the quarter, and $1.6 million of discrete tax adjustments, primarily due to changes in valuation allowances. 

Oil States International reported a net loss of $15.3 million, or $0.25 per share, for the second quarter of 2021. During the second quarter of 2021, the Company generated revenues of $145.7 million and Adjusted Consolidated EBITDA of $10.1 million (excluding $2.6 million of restructuring charges).

Patterson-Uti Energy reported financial results for the three months ended June 30, 2021.  The Company reported a net loss of $103 million, or $0.55 per share, for the second quarter of 2021, compared to a net loss of $150 million, or $0.81 per share, for the second quarter of 2020.  Revenues for the second quarter of 2021 were $292 million, compared to $250 million for the second quarter of 2020.

Toromont Industries reported its financial results for the second quarter ended June 30, 2021. Net earnings increased $34.2 million or 67% to $85.4 million in the quarter versus a year ago to $85.4 million and EPS (basic) was up 66% to $1.03 per share. The company also generated revenue of $1.1 billion in the quarter.

U.S. Silica Holdings announced net income of $26.0 million, or $0.34 per diluted share, for the second quarter ended June 30, 2021, compared with a net loss of $20.8 million, or $0.28 per diluted share, for the first quarter of 2021. Revenue of $317.3 million for the second quarter of 2021 increased 84% when compared with the second quarter of 2020 and increased 35% compared with $234.4 million in the first quarter of 2021. However, excluding the $48.9 million benefit in the Oil & Gas segment related to a customer settlement, revenue increased 15% sequentially.

DRILLERS

Helmerich & Payne reported a net loss of $56 million, or $(0.52) per diluted share, from operating revenues of $332 million for the quarter ended June 30, 2021, compared to a net loss of $121 million, or $(1.13) per diluted share, on revenues of $296 million for the quarter ended March 31, 2021. The net losses per diluted share for the third and second quarters of fiscal year 2021 include $0.05 and $(0.53), respectively, of after-tax gains and losses comprised of select items.

Transocean announced it was awarded two contracts which, in aggregate, contribute approximately $55.5 million in backlog. 

REFINERS

PBF Energy reported second quarter 2021 income from operations of $147.5 million as compared to income from operations of $620.8 million for the second quarter of 2020. Excluding special items, second quarter 2021 loss from operations was $120.5 million as compared to a loss from operations of $433.7 million for the second quarter of 2020. PBF Energy's financial results reflect the consolidation of PBF Logistics LP, a master limited partnership of which PBF Energy indirectly owns the general partner and approximately 48% of the limited partner interests as of quarter-end. The company reported second quarter 2021 net income of $69.9 million and net income attributable to PBF Energy Inc. of $47.9 million or $0.39 per share.

Valero Energy reported net income attributable to Valero stockholders of $162 million, or $0.39 per share, for the second quarter of 2021, compared to $1.3 billion, or $3.07 per share, for the second quarter of 2020. Excluding some adjustments, second quarter 2021 adjusted net income attributable to Valero stockholders was $197 million, or $0.48 per share, compared to an adjusted net loss attributable to Valero stockholders of $504 million, or $1.25 per share, in the second quarter of 2020.

MLPS & PIPELINES

AltaGas reported second quarter 2021 financial results and provided an update on the Company's operations. Normalized EPS was $0.08 in Q2 2021 compared to $0.06 in Q2 2020 and Normalized FFO per share was $0.56 in Q2 2021 compared to $0.51 in Q2 2020.

Enbridge announced that its Board of Directors appointed Mayank (Mike) Ashar as a director of Enbridge.

Magellan Midstream Partners reported net income of $280.4 million for second quarter 2021 compared to $133.8 million for second quarter 2020. The 2021 results included a $69.7 million gain primarily related to Magellan's sale of a portion of its interest in the Pasadena marine terminal joint venture during the current period. Diluted net income per common unit was $1.26 in second quarter 2021, or 95 cents excluding the 31-cent favorable impact of the gain on asset sale, compared to 59 cents in second quarter 2020. Management continues to project annual DCF of $1.07 billion for 2021. The benefit from the stronger-than-expected second-quarter results are being offset as the partnership has now hedged approximately 80% of its forecasted gas liquids blending activities at lower margins than anticipated as well as higher costs in the second half of the year than assumed in the previous guidance. 

PBF Logistics LP announced second quarter 2021 net income attributable to the limited partners of $37.1 million, or $0.59 per common unit. During the quarter, the Partnership generated cash from operations of $35.5 million, EBITDA attributable to PBFX of $57.0 million, Adjusted EBITDA of $60.0 million and distributable cash flow of $48.5 million. Included in reported results for the second quarter are $3.0 million, or $0.05 per common unit, of non-cash unit-based compensation expense and continued environmental remediation costs associated with the East Coast Terminals. The board of directors of PBF Logistics GP LLC, the Partnership's general partner, declared a regular quarterly cash distribution of $0.30 per common unit. The distribution is payable on August 26, 2021, to unitholders of record at the close of business on August 12, 2021.

SunCoke Energy reported results for the second quarter 2021, reflecting continued strong performance in both the Domestic Coke and Logistics segments. Revenues in the second quarter of 2021 increased $26.3 million to $364.3 million as compared to the prior year period. Second quarter 2021 net loss attributable to SXC was $8.8 million, or $0.11 per share, reflecting a $22.7 million, or $0.27 per share impact of debt extinguishment costs related to our debt refinancing. In addition, the company increased its full-year 2021 Adjusted EBITDA guidance range from $215 million - $230 million to $255 million - $265 million reflecting successful execution of foundry/export coke initiatives and robust performance at CMT driven by strength in commodity markets

TC Energy announced net income attributable to common shares for second quarter 2021 of $982 million or $1.00 per share compared to net income of $1.3 billion or $1.36 per share for the same period in 2020. Comparable earnings for second quarter 2021 were $1.0 billion or $1.07 per common share compared to $863 million or $0.92 per common share in 2020. TC Energy's Board of Directors also declared a quarterly dividend of $0.87 per common share for the quarter ending September 30, 2021, equivalent to $3.48 per common share on an annualized basis.

TC Energy reached agreement with the Department of National Defence, that subject to conditions and regulatory approval, allows for the development of a transformative 1,000-megawatt clean energy storage project on federal lands.

MARKET COMMENTARY

Futures tracking the Dow and the S&P 500 rose as comments from the Federal Reserve that the U.S. economic recovery was on track lifted economically sensitive stocks. European stocks hit record highs as strong corporate earnings set an upbeat tone. Japan’s Nikkei ended higher, as Nissan Motor and some semiconductor firms delivered surprisingly strong earnings. Gold prices rose after Fed Chairman Jerome Powell reassured investors that a rate hike is not on the cards anytime soon, sending the dollar to multi-week lows. Amazon.com and Gilead Sciences are scheduled to report earnings after market close.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP


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