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Crude Continues Decline as Potential Iran Deal Eclipses Russia-Ukraine Conflict

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The energy sector is set for a mixed to lower start, pressured by weakness in the crude complex but supported by strength in major equity futures which bounced back as news of talks between the United States and Russia over tensions in Ukraine calmed investor nerves.

WTI and Brent crude oil futures extended yesterday’s declines as the prospect of increased Iranian oil exports eclipsed fears of potential supply disruption resulting from the Russia-Ukraine crisis. OPEC+ will work to integrate Iran into its oil supply-limiting accord should an agreement be reached on reviving its nuclear deal with world powers, seeking to avoid market share competition that could hit prices. A successful outcome to the talks could lift U.S. sanctions on Iran’s exports, potentially bringing 1.3 million barrels per day of Iranian oil back into the market.

Natural gas is pushing higher in early trading as NOAA’s 6–10-day outlook shows below-normal temps across the western half of US, while above-normal temps are seen for the eastern portion.

BY SECTOR:

US INTEGRATEDS

Reuters reported that Guyana is in talks with state-run oil firms from the Middle East to discover new offshore fields, Vice President Bharrat Jagdeo told Reuters, hoping to recruit a new and substantial explorer to its nascent energy industry. Results of the talks with Middle East firms could lead Guyana to bar a consortium led by Exxon Mobil from a prospective drilling rights auction, the vice president added.

INTERNATIONAL INTEGRATEDS                                            

Eni’s Board of Directors, chaired by Lucia Calvosa, approved the unaudited consolidated results for the full year and the fourth quarter of 2021. Financial discipline and cost reduction initiatives implemented to withstand the enduring impact of COVID-19 enabled Eni to capture the full upside of 2021’s strong economic recovery, reporting €9.7 bln of adjusted EBIT (up €7.8 bln or 400% vs. 2020). Adjusted net profit of €4.7 bln, the highest since 2012, driven by better operating performance, improved results of equity investments and remarkable recovery in the upstream scenario. Confirmed the 2021 dividend proposal already disclosed to the market of €0.86 per share (of which, €0.43 paid as interim dividend in September 2021).

Eni said in its post-results slide presentation that its business combination with BP in Angola is expected to be completed by summer.

Vaar Energi, Eni’s Norwegian spin-off, is focused on organic growth opportunities, but does not exclude making value-adding acquisitions, the company’s chief executive said.

Equinor announced on 27 October 2021 a dividend per share of USD 0.18 for third quarter 2021. The NOK dividend per share is based on average USDNOK fixing rate from Norges Bank in the period plus/minus three business days from record date 14 February 2022, in total seven business days. Average Norges Bank fixing rate for this period was 8.8580. Third quarter 2021 dividend per share is consequently NOK 1.5944.

CANADIAN INTEGRATEDS

No significant news.                      

U.S. E&PS

ConocoPhillips announced through its Australian subsidiary that it has completed the purchase of an additional 10% shareholding interest in Australia Pacific LNG from Origin Energy for $1.645 billion. After customary closing adjustments, cash paid for the additional interest is approximately $1.4 billion (AU$2.0 billion). The transaction resulted from the exercise of ConocoPhillips’ preemption right and is funded from cash on the company’s balance sheet.

Scotiabank upgraded Marathon Oil to Sector Outperform from Sector Perform.

Matador Resources reported its estimated proved oil and natural gas reserves at December 31, 2021, which showed a 20% year-over-year increase in total proved reserves, including a 56% year-over-year increase in proved developed reserves, each as compared to the Company’s proved oil and natural gas reserves at December 31, 2020.

CANADIAN E&PS

No significant news.

OILFIELD SERVICES

Balchem reported fourth quarter net earnings of $24.9 million for 2021, compared to net earnings of $22.2 million for the fourth quarter 2020. Fourth quarter adjusted net earnings were $27.8 million, compared to $26.9 million in the prior year quarter. Record fourth quarter adjusted EBITDA(a) was $45.6 million, compared to $43.6 million in the prior year quarter.

Fluor announced that it has increased its credit facility to $1.8 billion and extended the maturity to February 2025. This facility includes an ESG-linked pricing option, which provides the opportunity to further lower the Company’s overall borrowing costs. These key performance indicators will be based on a future agreement with BNP Paribas and BofA Securities as sustainability coordinators.

Granite announced that the Salinas Asphalt Facility has been certified as a Green Business by Monterey County and the California Green Business Network.

Martin Marietta Materials announced that its Board of Directors has declared a regular quarterly cash dividend of $0.61 per share on the Company’s outstanding common stock. This dividend, which represents a cash dividend of $2.44 per share on an annualized basis, is payable March 31, 2022, to shareholders of record at the close of business on March 1, 2022.

Matson reported net income of $394.5 million, or $9.39 per diluted share, for the quarter ended December 31, 2021.  Net income for the quarter ended December 31, 2020 was $85.6 million, or $1.96 per diluted share.  Consolidated revenue for the fourth quarter 2021 was $1,267.0 million compared with $700.1 million for the fourth quarter 2020.

Newpark Resources announced results for its fourth quarter ended December 31, 2021. Total revenues for the fourth quarter of 2021 were $179.6 million compared to $151.8 million for the third quarter of 2021 and $129.7 million for the fourth quarter of 2020. Net loss for the fourth quarter of 2021 was $3.7 million, or ($0.04) per share, compared to net loss of $10.5 million, or ($0.11) per share, for the third quarter of 2021, and net loss of $18.4 million, or ($0.20) per share, for the fourth quarter of 2020.

NOV recently signed an agreement with Joint Industry Project (JIP) Partners Equinor, Shell, The Research Council of Norway, The Net Zero Technology Centre, and the American Bureau of Shipping (ABS) as part of the qualification and final product validation for subsea storage technology.

Shawcor Ltd. announced that its pipe coating division has been awarded a three year contract with Vallourec S.A. to apply the unique LotusFlo technology to offshore downhole production tubulars designed for the Buzios oilfields. The Buzios oilfields are located off the coast of Brazil and operated by Petróleo Brasileiro S.A.(“Petrobras”). With this award, Shawcor will increase its total current orders for this technology, including additional orders in the Gulf of Mexico market, to a range of C$18M-C$25M. The work will be executed out of Shawcor’s Channelview facility and is expected to commence in the fourth quarter of 2022, continuing over a multi-year period on an as-needed basis.

TechnipFMC announced that the delisting of its shares (ISIN: GB00BDSFG982) on Euronext Paris was completed on February 18, 2022.

DRILLERS

On June 11, 2021, Nabors Industries Ltd. issued Warrants to all holders of Nabors’ common shares to purchase Common Shares pursuant to a Warrant Agreement dated as of June 10, 2021 between Nabors and Computershare Trust Company, N.A. Nabors, in compliance with section 8.04 of the Warrant Agreement, hereby notifies Warrant holders that effective as of March 21, 2022 the following series of notes are “Designated Notes” under the Warrant Agreement and may be used to pay the exercise price of the Warrants: Nabors Industries, Inc.’s 5.10% Notes due 2023, Nabors Industries, Inc.’s 5.75% Notes due 2025 and Nabors’ 7.25% Notes due 2026. As a result of this designation, upon the Effective Date, no other series of notes, including Nabors Industries, Inc.’s 0.75% Exchangeable Notes due 2024, will be accepted by Nabors as payment of the exercise price of the Warrants.

As part of the ongoing succession planning efforts of Transocean, on February 11, 2022, Keelan Adamson, age 52, was promoted to President and Chief Operating Officer of the Company.  The Company’s Chief Executive Officer, Jeremy Thigpen, will continue in his capacity as Chief Executive Officer and a member of the Company’s Board of Directors.  Mr. Adamson will continue to report to Mr. Thigpen.

REFINERS

Marathon Petroleum said that power had been restored at its 140,000 barrel per day Detroit, Michigan refinery and intermittent flaring would be possible as units are brought back online.

MLPS & PIPELINES

According to SEC filing, Enbridge completed the offering of (i) US$400,000,000 aggregate principal amount of its 2.150% Senior Notes due 2024, (ii) US$500,000,000 aggregate principal amount of its 2.500% Senior Notes due 2025 and (iii) US$600,000,000 aggregate principal amount of its Floating Rate Senior Notes due 2024. The Notes are fully and unconditionally guaranteed by Enbridge Energy Partners, L.P. and Spectra Energy Partners, LP, each of which is an indirect, wholly-owned subsidiary of the Corporation.

Enterprise Products Partners L.P. announced that one of its affiliates has completed the previously announced $3.25 billion acquisition of Navitas Midstream Partners, LLC. This acquisition gives Enterprise a foothold for natural gas gathering, treating and processing in the core of the Midland Basin of the Permian.

MARKET COMMENTARY

U.S. stock index futures rose after news that the U.S. Secretary of State Antony Blinken agreed to a meeting with Russia’s foreign minister Sergei Lavrov, raising the prospect of ending the standoff over Ukraine. European shares edged higher, helped by gains in defensive sectors such as real estate and consumer staples. In Asian equity markets, Chinese stocks ended higher, with property developers leading gains after more cities eased mortgage rules for homebuyers and Hong Kong shares ended in the red dragged by tech shares following China’s crackdown on online food delivery platforms. The safe-haven Japanese yen fell on hopes of easing Ukraine tensions, while the dollar edged up. Gold prices retreated. Oil prices extended losses as the prospect of increased Iranian oil exports eclipsed fears of potential supply disruption.


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


This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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