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Oil Prices Rise Towards $71 on Middle East Tensions

Oil prices rose towards $71 a barrel for Brent on Thursday on rising Middle East tensions, while fresh movement restrictions imposed by countries to counter a surge in COVID-19 cases threatened the demand recovery.

SECTOR COMMENTARY:

Energy stocks are set to open higher, being aided by another slew of earnings across the sector, along with higher broader index futures and oil prices.  Earnings continue to exhibit restrained production guidance plans with the focus remaining steadfast on growing shareholder return and spending within cash flow.

Oil prices rose towards $71 a barrel for Brent on Thursday on rising Middle East tensions, while fresh movement restrictions imposed by countries to counter a surge in COVID-19 cases threatened the demand recovery. Israeli jets struck what its military said were rocket launch sites in Lebanon early on Thursday in response to two rockets fired towards Israel from Lebanese territory, in an escalation of cross-border hostilities amid heightened tensions with Iran.

U.S. natural gas futures held near a 31-month high on Thursday ahead of a report expected to show last week's storage build was smaller-than-usual because power generators burned lots of the fuel to keep air conditioners humming during hot weather.

BY SECTOR:

US INTEGRATEDS

Williams Companies said it had reached an agreement with Shell Offshore and Chevron USA to provide offshore natural gas gathering and crude oil transportation services for the Whale development project, according to Reuters

INTERNATIONAL INTEGRATEDS

According to ReutersPetroleo Brasileiro SA beat second quarter profit estimates on Wednesday, as higher Brent prices, strong sales and relatively controlled expenses boosted the company's bottom line. In an evening securities filing, the company reported quarterly net income of 42.855 billion reais ($8.29 billion), up from a loss in the same period last year, and well above the Refinitiv consensus estimate of 30.7 billion reais.

The board of Petróleo Brasileiro S.A. approved the early payout of dividends to shareholders of 31.6 billion reais ($6.11 billion), the oil company said in a securities filing on Wednesday. 

CANADIAN INTEGRATEDS 

No significant news.

U.S. E&PS

APA Corporation announced second-quarter 2021 results. APA reported net income attributable to common stock of $316 million, or $0.82 per diluted share. When adjusted for items that impact the comparability of results, APA’s second-quarter earnings were $266 million, or $0.70 per diluted share. Net cash provided by operating activities was $969 million, and adjusted EBITDAX was $1.01 billion.

Cimarex Energy reported second-quarter 2021 financial and operating results. Net income for second-quarter 2021 totaled $113.4 million, or $1.10 per share. Net income for the quarter was impacted by a mark-to-market loss on the Company's commodity derivative positions of $125.7 million. Excluding the impact of the mark-to-market loss on commodity derivatives, adjusted net income (non-GAAP) for second-quarter 2021 was $215.6 million, or $2.09 per share.

Earthstone Energy announced financial and operating results for the three months ended June 30, 2021. Net loss was $15.8 million and adjusted net income was $20.3 million. Adjusted EBITDAX was $53.7 million ($25.96 per Boe).

EOG Resources reported second quarter 2021 results. The company earned adjusted net income of $1.0 billion, or $1.73 per share. It also generated over $1.0 billion of free cash flow.

Laredo Petroleum announced its second-quarter 2021 financial and operating results.For the second quarter of 2021, the Company reported a net loss attributable to common stockholders of $132.7 million, or $10.47 per diluted share, which included a $159.3 million non-cash loss on derivatives. Adjusted Net Income for the second quarter of 2021 was $22.0 million, or $1.71 per adjusted diluted share. Adjusted EBITDA for the second quarter of 2021 was $97.0 million.

Marathon Oil reported second quarter 2021 net income of $16 million, or $0.02 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. The adjusted net income was $173 million, or $0.22 per diluted share. Net operating cash flow was $655 million, or $701 million before changes in working capital.

Murphy Oil announced its financial and operating results for the second quarter ended June 30, 2021, including a net loss attributable to Murphy of $63 million, or $0.41 net loss per diluted share. Adjusted net income, which excludes discontinued operations and other one-off items, was $91 million, or $0.59 net income per diluted share.

Northern Oil and Gas announced the company’s second quarter results. Oil and natural gas sales for the second quarter were $225.7 million, up 43% over the first quarter. Second quarter GAAP net loss, inclusive of a $173.1 million non-cash net mark-to-market loss on derivatives, was $90.6 million or $1.49 per diluted share. Second quarter Adjusted Net Income was $65.0 million or $0.92 per diluted share, up from $10.7 million or $0.21 per diluted share in the prior year. The Board of Directors has declared Northern’s second quarterly common stock dividend of $0.045 per share, a 50% increase from the prior quarter, payable October 29, 2021 to stockholders of record on September 30, 2021

PDC Energy announced its 2021 second quarter financial and operating results. Net loss for the second quarter of 2021 was approximately $87 million, or $0.88 per diluted share, compared to a net loss of $222 million, or $2.23 per diluted share in 2020.Adjusted net income was $166 million in 2021 compared to $62 million in 2020. The difference between periods is primarily attributable to the change in sales offset by settled derivatives.

Whiting Petroleum announced second quarter 2021 results. Revenue for the second quarter of 2021 increased $44 million to $352 million when compared to the first quarter of 2021, primarily due to increased commodity prices between periods. Net loss for the second quarter of 2021 was $62 million, or $1.57 per share, as compared to a net loss of $0.9 million, or $0.02 per share, for the first quarter of 2021. Adjusted net income (non-GAAP) for the second quarter of 2021 was $118 million, or $3.01 per share, as compared to $108 million, or $2.79 per share, for the first quarter of 2021. The primary difference between net loss and adjusted net income for both periods is non-cash expense related to the change in the value of the Company’s hedging portfolio.

CANADIAN E&PS

Parex Resources announced its unaudited financial and operating results for the three months ended June 30, 2021. The company recognized net income of $91.7 million ($0.72 (or CAD $0.88) per share basic) compared to net income of $47.5 million ($0.37 (or CAD $0.47) per share basic) in the previous quarter ended March 31, 2021 and net income of $19.3 million ($0.14 (or CAD $0.19) per share basic) in Q2 2020. FFO was $131.6 million ($1.03 (or CAD $1.27) per share basic) as compared to $38.8 million ($0.28 (or CAD $0.39) per share basic) for Q2 2020. FFO increased in the current quarter due to higher global oil prices.

Canadian Natural Resources reported quarterly adjusted earnings of C$1.24​​ per share for the quarter ended in June. Revenue rose 127.3% to C$6.53 billion from a year ago. Canadian Natural Resources Ltd's reported EPS for the quarter was C$1.30​.The company reported quarterly net income of C$1.55 billion.

Canadian Natural Resources announced that its Board of Directors has declared a quarterly cash dividend on its common shares of C$0.47 (forty-seven cents) per common share.

OILFIELD SERVICES

Enerflex reported its financial and operating results for the three months ended June 30, 2021. Enerflex earned $4.3 million on revenue of $204.5 million in the second quarter of 2021. Quarterly basic earnings per share was C$0.05.

Raymond James upgraded Enerflex to Outperform from Market Perform.

HSBC upgraded Halliburton to Hold from Reduce.

DRILLERS

No significant news.

REFINERS 

No significant news.

MLPS & PIPELINES

BP Midstream Partners reported financial results for the second quarter 2021. Net income attributable to the Partnership in the second quarter was $40.5 million (or $0.37 per common unit). Adjusted EBITDA attributable to the Partnership in the second quarter was $45.6 million. On July 15, 2021, the board of directors of the general partner of BPMP declared a quarterly cash distribution of $0.3475 per unit for the second quarter of 2021. 

BP Midstream Partners receives non-binding offer from BP Pipelines (North America) Inc., through its wholly-owned subsidiary BP Midstream Partners Holdings LLC, to acquire all of the outstanding common units held by the public in exchange for newly-issued American Depositary Receipts of BP p.l.c. at a value of $13.01 per BPMP common unit.

Cheniere Energy Partners announced its financial results for the second quarter of 2021. Net income was $395 million and $742 million for the three and six months ended June 30, 2021, respectively. Adjusted EBITDA was $690 million and $1,469 million for the three and six months ended June 30, 2021, respectively.

DCP Midstream reported its financial results for the three months ended June 30, 2021. For the respective three and six months ended June 30, 2021, DCP had net (loss) income attributable to partners of $(31) million and $22 million, net cash provided by operating activities of $72 million and $68 million, adjusted EBITDA of $333 million and $608 million, and distributable cash flow of $225 million and $400 million. Net (loss) income per limited partner unit - basic and diluted was $(0.22).

Keyera announced its 2021 second quarter financial results. Adjusted earnings before interest, taxes, depreciation, and amortization was $224 million, compared to $182 million in Q2 2020. Net earnings were $79 million, compared to $18 million for the same period in 2020.

Keyera announced a cash dividend for August 2021 of 16.00 cents per common share.

NuStar Energy reported net income of $63 million for the second quarter of 2021, or $0.25 per unit, compared to net income of $30 million, or a $0.06 net loss per unit for the second quarter of 2020. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $189 million for the second quarter of 2021, up $27 million or 17 percent from $162 million for the second quarter of 2020.

Targa Resources reported second quarter 2021 results. Second quarter 2021 net income attributable to Targa Resources Corp. was $56.2 million compared to net income of $81.0 million for the second quarter of 2020. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items of $460.0 million for the second quarter of 2021 compared to $351.2 million for the second quarter of 2020. On July 15, 2021, TRC declared a quarterly dividend of $0.10 per share of its common stock for the three months ended June 30, 2021, or $0.40 per share on an annualized basis. Total cash dividends of approximately $23.3 million will be paid on August 16, 2021 on all outstanding shares of common stock to holders of record as of the close of business on July 30, 2021.

MARKET COMMENTARY

U.S. stock index futures rose as investors looked to a busy day of quarterly earnings reports. European stocks hit record highs, helped by strong earnings from Novo Nordisk and Siemens while Chinese shares were down, weighed by investors dumping companies that faced criticism in state media and could also portend more government crackdowns. Gold prices were on the back foot as an uptick in the dollar raised early tapering bets and dented demand for the safe-haven metal.

NASDAQ ENERGY TEAM THOUGHT LEADERSHIP 


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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