SECTOR COMMENTARY:
The energy sector is poised for a mixed to lower start, looking past strength in the crude complex and pressured by weakness in the major equity indices. U.S. stock index futures pared earlier losses but remained in negative territory as The Federal Reserve’s preferred measure of inflation accelerated slightly as expected in December compared to the prior month.
In earnings news, Chevron reported fourth-quarter net income of $6.35 billion. Chevron’s profit for 2022 more than doubled to record $36.5B, but still fell shy of estimates, undercut by asset writedowns and a retreat in oil and gas prices, and rising costs. Chevron posted adjusted earnings of $7.9 billion, or $4.09/share, missing estimates of $4.38 per share.
WTI and Brent crude oil futures are trading higher for the third consecutive session, buoyed by better than expected U.S. economic growth, strong middle distillate refining margins and hopes of a rapid recovery in Chinese demand. The move higher comes ahead of an OPEC+ meeting next week where it is expected that no change will be implemented to crude production levels. Additionally, the U.S. Federal Reserve’s next decision on interest rates will be made at a meeting over Jan. 31 and Feb. 1 against a backdrop of a dip to inflation and gross domestic product that grew by a faster than expected 2.9% in the fourth quarter. In China, critically ill COVID-19 cases are down 72% from a peak early this month while daily deaths among COVID-19 patients in hospitals have dropped by 79% from their peak, pointing to a normalization of the Chinese economy and boosting expectations of a recovery in oil demand.
Natural gas futures are down for the fourth-straight session as NOAA’s 6-10 day outlook shows below-normal temps are likely across most of the US, from the West Coast to the Appalachians and Northeast, especially across the Upper Midwest.
BY SECTOR:
US INTEGRATEDS
Chevron reported earnings of $6.4 billion ($3.33 per share – diluted) for fourth quarter 2022, compared with $5.1 billion ($2.63 per share – diluted) in fourth quarter 2021. Included in the current quarter were $1.1 billion of international upstream write-off and impairment charges, and pension settlement costs of $17 million. Foreign currency effects decreased earnings by $405 million. Adjusted earnings of $7.9 billion ($4.09 per share – diluted) in fourth quarter 2022 compared to adjusted earnings of $4.9 billion ($2.56 per share – diluted) in fourth quarter 2021. Chevron reported full-year 2022 earnings of $35.5 billion ($18.28 per share – diluted), compared with $15.6 billion ($8.14 per share – diluted) in 2021. Adjusted earnings of $36.5 billion ($18.83 per share – diluted) in 2022 compared to adjusted earnings of $15.6 billion ($8.13 per share – diluted) in 2021. For a reconciliation of adjusted earnings, see Attachment 6.
Chevron announced Mark A. Nelson, executive vice president, Strategy, Policy & Development, has been named vice chairman and executive vice president, Strategy, Policy & Development, effective February 1, 2023. In this new corporate officer role, Nelson will continue leading Chevron’s Strategy & Sustainability, Corporate Affairs, and Business Development functions, and take on additional corporate responsibilities.
PETRONAS has signed two Project Development Agreements with ExxonMobil Exploration and Production Malaysia Inc. (Exxon Mobil) to jointly pursue Carbon Capture and Storage (CCS) activation projects in Malaysia.
INTERNATIONAL INTEGRATEDS
Petrobras, following up on the releases disclosed on 01/26/2023 and 04/27/2022, informs that it has finalized today, after the fulfillment of all the preceding conditions, the sale of its total interest in the Albacora Leste production field, located in the Campos Basin, to the company Petro Rio Jaguar Petróleo LTDA. (PetroRio), a subsidiary of Petro Rio S.A..
Strikes at TotalEnergies sites were suspended, the hardline CGT union said, but they will be proposed again at each site for the Jan. 31 national strike.
TotalEnergies said it would buy an extra 6.65% stake in the Fort Hills Energy Limited Partnership and associated sales and logistics agreements from Teck Resources TECKb.TO for 312 million Canadian Dollars ($234 million).
CANADIAN INTEGRATEDS
No significant news.
U.S. E&PS
No significant news.
CANADIAN E&PS
No significant news.
OILFIELD SERVICES
Granite has been awarded an approximately $46 million contract by the California Department of Transportation (Caltrans) to improve safety and mobility along U.S. Highway 101 in Humboldt County, California. The project will be funded by the Federal Highway Administration (FHWA) and was included in Granite’s fourth quarter 2022 CAP.
Liberty Energy, Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S. LOS Corp, Liberty Oilfield Services LLC, other subsidiaries of the Company, Wells Fargo Bank, National Association, as administrative agent, and other lenders entered into an Eighth Amendment to the Credit Agreement and Amendment to the U.S. Guaranty and Security Agreement. The Eighth Amendment further amends the credit agreement and guaranty and security agreement originally entered into by the parties on September 19, 2017, which governs the Company’s revolving credit facility.
The Board of Directors of Matson declared a first quarter dividend of $0.31 per common share. The dividend will be paid on March 2, 2023 to all shareholders of record as of the close of business on February 9, 2023.
DRILLERS
No significant news.
REFINERS
No significant news.
MLPS & PIPELINES
Cheniere Energy announced that its Board of Directors has declared a quarterly cash dividend of $0.395 per common share payable on February 27, 2023 to shareholders of record as of the close of business on February 7, 2023.
Golar LNG Partners LP, an indirect subsidiary of New Fortress Energy, has declared a cash distribution of $0.546875 per unit of 8.75% Series A Cumulative Redeemable Preferred Units for the period from November 15, 2022 through February 14, 2023. This will be payable on February 15, 2023 to all Series A preferred unitholders of record as of February 7, 2023.
NuStar Energy L.P. announced that its Board of Directors has declared a fourth quarter 2022 common unit distribution of $0.40 per unit. The fourth quarter common unit distribution will be paid on February 14, 2023 to holders of record as of February 8, 2023.
MARKET COMMENTARY
U.S. stock index futures slipped ahead of key consumer spending data scheduled for release later in the day, with the tech-heavy Nasdaq set to lead losses at open after Intel’s bleak outlook dragged chipmakers lower. European shares edged higher as energy and materials stocks rose ahead of central bank meetings next week. Japan’s Nikkei posted the biggest weekly jump in more than two months. The dollar edged up to pull away from multi-month lows against the euro and sterling. Gold prices remained little changed. Oil prices were buoyed by better-than-expected U.S. economic data and strong middle distillate refining margins.
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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