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Oil

WTI Slightly Positive and Brent Around the Flatline Following the In-line PCE Report

SECTOR COMMENTARY:

Energy stocks are set to open just above breakeven levels, tracking higher broader market futures, which erased premarket losses and shifted into the green following tame January PCE data.  Inflation rose 0.4% in January, which was in-line with expectations, and +2.8% from a year ago.  While still positive, markets were primed for weakness if the inflation figures rose anywhere above market expectations.  Risk sentiment should be positive today.  Meanwhile, earnings continue to wrap up across the energy sector. 

Oil prices were mixed, with WTI slightly positive and Brent around the flatline following the in-line PCE report. Brent has hovered comfortably above the $80 mark for three weeks, with the Middle East conflict having only a modest impact on crude flows. A Reuters survey of 40 economists and analysts on Thursday forecast an average price of $81.13 a barrel for the front-month contract this year.

Natural gas futures are down about 3 cents ahead of weekly inventory, in which analysts expect a draw of 88 bcf.

BY SECTOR:

US INTEGRATEDS

The Biden administration has awarded contracts worth $247.7 million to buy 3.2 million barrels of oil for the Strategic Petroleum Reserve to Exxon Mobil, Macquarie Commodities, and Sunoco Partners Marketing & Terminals, the Energy Department said. 

INTERNATIONAL INTEGRATEDS

After the accident, Equinor decided to halt all regular flights on the Norwegian continental shelf out of consideration for those affected and to gain an overview of the situation. The company aims to return to normal helicopter operations soon and is now making the necessary preparations to achieve this safely.

Petróleo Brasileiro informed that it has signed a Memorandum of Understanding with Yara Brasil Fertilizantes S.A. to study potential business partnerships for local initiatives in the fertilizer segment, production of industrial products and decarbonization of production.

Exane BNP Paribas upgraded Repsol to Outperform from Neutral while downgraded Eni to Underperform from Neutral.

Shell's U.S. solar business Savion has put around a quarter of its assets up for sale, according to a marketing document and industry sources, as the oil major extends a retreat from owning renewables projects under CEO Wael Sawan.

TotalEnergies has signed a sale and purchase agreement with Sembcorp Fuels, a wholly owned subsidiary of Singapore-based Sembcorp Industries. The deal entails the delivery of up to 0.8 million tons of liquefied natural gas (LNG) per annum (Mtpa) for a duration of sixteen years, commencing in 2027. The LNG will be sourced from TotalEnergies’ global portfolio. This new agreement adds to the companies’ current SPA, which runs until 2029.

Cristal Union will take a 10% stake in TotalEnergies's biogas unit BioNorrois due to be launched later this year, which will use sugar beet residue from one of Cristal Union's factories, the companies said.

CANADIAN INTEGRATEDS

TD Securities downgraded Imperial Oil to Hold from Buy.

U.S. E&PS

Coterra Energy announced that it has priced an offering of $500 million aggregate principal amount of senior unsecured notes due 2034, which will carry an interest rate of 5.60%. The offering is expected to close on March 13, 2024, subject to the satisfaction of customary closing conditions. This is Coterra’s first debt offering since transactions completed in connection with the merger of Cabot Oil & Gas Corporation and Cimarex Energy Co. Coterra intends to use the net proceeds from the offering, together with cash on hand, to fund the repayment at, or prior to, maturity of the $575 million outstanding principal amount of its 3.67% Series L Senior Notes due September 18, 2024.

Crescent Point Energy announced its operating and financial results for the year ended December 31, 2023. Adjusted funds flow totaled over $2.3 billion for the year ended December 31, 2023, or $4.27 per share diluted, driven by a strong operating netback of $43.71 per boe. In fourth quarter, adjusted funds flow totaled $574.5 million, or $1.03 per share diluted. The Company's reserves at year-end 2023 increased across all categories driven by organic additions and strategic acquisitions, net of non-core dispositions. Proved plus Probable reserves totaled 1,201.3 million boe, Proved ("1P") reserves totaled 768.3 MMboe and Proved Developed Producing reserves totaled 381.1 MMboe.

Crescent Point Energy announced its Board of Directors has approved and declared a quarterly cash base dividend of $0.115 per share, an increase of 15 percent from the prior level as previously announced. The base dividend is payable on April 1, 2024 to shareholders of record on March 15, 2024.

Talos Energy announced its operational and financial results for fiscal quarter and full year ended December 31, 2023. The company announced Q4 net income of $85.898 million, adjusted EPS of $-0.01 and revenue of $384.959 million. The company also announced the $1.29 billion acquisition of QuarterNorth Energy Inc., which is expected to close in March 2024.

CANADIAN E&PS

Canadian Natural Resources announced Q4 2023 financial results. The Company generated strong quarterly financial results, including: Net earnings of approximately $2.6 billion and adjusted net earnings from operations of approximately $2.5 billion. Cash flows from operating activities of approximately $4.8 billion. Adjusted funds flow of approximately $4.4 billion. Free cash flow of approximately $2.5 billion after total dividend payments of $1.0 billion and base capital expenditures of $0.8 billion and $0.1 billion in abandonment expenditures. 

Canadian Natural Resources Limited announced that its Board of Directors approved a 5% increase to its quarterly cash dividend on its common shares to C$1.05 (One dollar and five cents) per common share. The dividend will be payable on April 5, 2024 to shareholders of record at the close of business on March 15, 2024.

OILFIELD SERVICES

Aris Water Solutions announced financial and operating results for the fourth quarter and year ended December 31, 2023. Adjusted Net Income was $15.4 million for the fourth quarter of 2023 versus $9.0 million for the fourth quarter of 2022 and $13.9 million in the third quarter of 2023. Adjusted EBITDA was $49.3 million for the fourth quarter of 2023, up approximately 37% from $36.1 million in the fourth quarter of 2022, and up approximately 10% from $44.9 million in the third quarter of 2023. 

Enerflex reported its financial and operational results for the three months and year ended December 31, 2023. Generated revenue of $782 million compared to $778 million in Q3/2023, with results driven by continued strong performance from recurring businesses. Adjusted earnings before finance costs, income taxes, depreciation, and amortization of $126 million compared to $122 million in Q3/2023 and $86 million in Q4/2022.

BMO Capital upgraded Enerflex to Outperform from Market Perform.

DRILLERS

Seadrill Limited reported its fourth quarter and full year 2023 results. For the fourth quarter 2023, Seadrill recognized $408 million in total operating revenues. The Company generated $315 million in contract revenues, compared to $324 million the prior quarter, operating an average of 12 rigs at an economic utilization of 92.4%. These figures exclude the three drillships (West Gemini, Sonangol Quenguela, and Sonangol Libongos) the Company manages through Sonadrill, its 50:50 joint venture with Sonangol E.P., which generated an additional $73 million in management contract revenues. The Company earned an additional $20 million in reimbursable and other revenues, which includes bareboat charter income from Gulfdrill, a 50:50 joint venture between Seadrill and Gulf Drilling International.Operating expenses increased sequentially to $356 million from $304 million the prior quarter. The increase was primarily attributable to a change in provisions, repair and maintenance projects, severance, and personnel costs. Adjusted EBITDA was $100 million, a $51 million decrease from the prior quarter.

REFINERS

Vertex Energy announced its financial results for the fourth quarter ended December 31, 2023. The company reported fourth quarter 2023 net loss attributable to the Company of ($63.9) million, or ($0.68) per fully-diluted share, versus net income attributable to the Company of $44.4 million, or $0.56 per fully-diluted share for the fourth quarter of 2022.

MLPS & PIPELINES

Delek Logistics Partners announced that it, along with Delek Logistics Finance Corp., a subsidiary of Delek Logistics, priced an upsized offering of $650 million in aggregate principal amount of 8.625% senior notes due 2029 at par. The aggregate principal amount of the offering was increased from the previously announced offering size of $550 million.

Excelerate Energy reported its financial results for the full year and fourth quarter ended December 31, 2023. Reported Net Income of $126.8 million for the full year 2023 and $20.0 million for the fourth quarter. Reported Adjusted EBITDA of $346.8 million for the full year 2023 and $71.4 million for the fourth quarter. Secured supply for previously announced Petrobangla SPA by executing a long-term contract to purchase 0.85 to 1.0 MTPA of LNG from QatarEnergy on a delivered ex-ship basis in Bangladesh for 15 years, beginning January 2026. Authorized up to $50 million of Class A common stock repurchases through February 2026.

Golar LNG Limited reported full year 2023 total operating revenues of $298 million, a net loss attributable to Golar of $47 million inclusive of $331 million of non-cash items, and Adjusted EBITDA of $356 million. Q4 2023 total operating revenues of $80 million, a net loss attributable to Golar of $33 million inclusive of $117 million of non-cash items, and Adjusted EBITDA of $114 million.

New Fortress Energy reported its financial results for the fourth quarter and for the year ended December 31, 2023. Adjusted EBITDA of $388 million in the fourth quarter of 2023 and $1.3 billion in the full year 2023. Net income of $215 million in the fourth quarter of 2023 and $549 million in the full year 2023. Adjusted EPS of $1.01 on a fully diluted basis in the fourth quarter of 2023 and $2.75 in the full year 2023. EPS of $1.06 on a fully diluted basis in the fourth quarter of 2023 and $2.65 in the full year 2023.

New Fortress Energy announced that its 6 MTPA (300 TBtu) Barcarena LNG terminal located in Pará, Brazil is now operational with the Energos Celsius Floating Storage Regasification Unit (FSRU) on-site. NFE cohosted an event on-site to celebrate the terminal’s commissioning with the state government of Pará and the Ministry of Mines and Energy for Brazil, including Helder Barbalho, the Governor of Pará, and Alexandre Silveira, the Minister of Mines and Energy for Brazil.

MARKET COMMENTARY

U.S. stock index futures recouped premarket losses and inched into positive territory following PCE data that rose in-line with expectations. German stocks surged after early readings showed inflation dropped in several of the country's economically important states. Japan's Nikkei finished lower as investors sold stocks to book profits. The dollar edged lower against a basket of currencies.


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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