Rough slips but on track for weekly gains

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The energy sector is poised for a mixed start to lows, under pressure from underlying commodity weakness and despite strength in major equity indices. U.S. stock index futures edged higher ahead of data that will likely offer clues to the strength of U.S. consumer spending amid runaway inflation, while Gap shares fell after the retailer slashed its annual forecast.

WTI and Brent crude oil futures are lower in early trading but were on course for weekly gains, supported by the prospect of a tight market due to rising gasoline consumption in the United States in the summer, as well as the possibility of an EU ban on Russian oil. European Union countries are negotiating a deal on Russian oil sanctions that would embargo shipment deliveries but exempt oil delivered by pipeline to reach Hungary and unlock a sixth package of measures against Moscow. A deal could be struck by EU member states’ ambassadors in Brussels on Sunday, in time for their leaders to agree at a May 30-31 summit. Iran has summoned the Swiss envoy, who represents US interests in Tehran, to protest the US seizure of Iranian oil from a Russian vessel near Greece. The ministry called for the immediate release of the ship and its cargo. The United States on Wednesday imposed sanctions on what it described as a Russian-backed oil smuggling and money laundering ring for the Iranian Revolutionary Guards’ Al-Quds Force.

Natural gas futures fell this morning, continuing the bearish momentum from yesterday afternoon. G-7 countries have reached concrete agreements on phasing out coal-fired power generation and expanding renewable energy generation, German Environment Minister Steffi Lemke said. As U.S. natural gas prices hit new highs not seen since 2008 this week, Europe’s benchmark TTF is down for a third straight week. TTF was trading this morning at 84.51 euros per MWh as Europe took on LNG while Russian supplies remained stable.

BY SECTOR:

INTEGRATED IN THE UNITED STATES

Chevron announced that the independent directors of the Chevron board have selected Dr. Wanda M. Austin as lead independent director, effective May 25, 2022. Dr. Austin succeeds Dr. Ronald D. Sugar in this role, who will remain on the Chevron board . Austin has served on Chevron’s board of directors since December 2016.

Reuters reported that the US Treasury Department is expected to renew as early as Friday Herringbone license to operate in Venezuela under the same limited terms of its existing authorization.

The United Steelworkers (USW) union signed a tentative agreement on Thursday afternoon to end a nine-week strike at Herringbone Richmond, Calif., refinery, the company said.

INTERNATIONAL INTEGRATED

Equine plans to make a final investment decision on what would be its first offshore wind farm in South Korea as early as 2024, and is now considering a third, larger project in the country, the head of its local unit said.

In collaboration with the Energy Skills Center at East Coast College for the pilot program, Equine offers a new approach to skills development in the Norfolk region through the transfer of its UK Apprenticeship Levy to continue preparing the next generation of offshore wind talent.

Norway’s Hammerfest liquefied natural gas plant has resumed operations as planned and is preparing to restart LNG production, operator spokesman Equine Told Reuters.

Petronor President Emiliano López Atxurra has announced the upcoming construction works for Bilbao’s new decarbonization hub, which will consist of a synthetic fuels plant and an urban waste treatment project. At the event he was accompanied by the President of the Basque Regional Government, Iñigo Urkullu; the CEO of Repsol, Josu Jon Imaz; the president of Kutxabank, Gregorio Villalabeitia; the deputy general of the province of Vizcaya, Unai Rementeria; and the Minister of Economic Development, Sustainability and Environment of the Regional Government of the Basque Country, Arantxa Tapia. Josu Jon Imaz, CEO of Repsol, said that “the project will allow us to test the technologies that will be used together for the first time in the world here in Bilbao”.

CANADIAN INTEGRATED

No significant news.

E&PS United States

The board of directors of Hesse declared a regular quarterly dividend of 37.5 cents per share payable on the common shares of the Company on June 30, 2022 to holders of record at the close of business on June 15, 2022.

PDC Energy provided its updated forecast for 2022 following the closing of the acquisition of Great Western Petroleum earlier this month, as well as its updated multi-year outlook. The Company’s projected free cash flow yield for 2022 is estimated at 25% based on recent market capitalization. Its expected total shareholder return of more than $1 billion includes a base quarterly dividend increase of $0.35 per share, a stock buyback program and a special dividend expected at year-end, which reflect all a shareholder return of approximately 15% based on the company’s recent market capitalization. PDC plans capital investments of $950-1,000 million in 2022 to generate between 235,000-250,000 boe per day and 78,000-83,000 barrels per day, after integrating Great Western capital and volumes from of May. The company’s updated guidance has been raised based on performance to date and the timing of Great Western’s closing. The Company expects to produce an average of 255,000 to 265,000 boe per day from May to December 2022.

CANADIAN E&PS

No significant news.

OIL SERVICES

TETRA Technologies announced the completion of a previously planned leadership transition of its Board of Directors. As noted in the company’s proxy statement for the 2022 annual meeting of shareholders, William D. Sullivan retired from the TETRA Board of Directors and his position as Chairman following the conclusion of the annual meeting on May 24, 2022. The board unanimously nominated John “Jay” F. Glick to succeed Sullivan as chairman of the board, effective May 24, 2022.

DRILLERS

Valaris announced the appointment of three new members of the Valaris management committee. The following appointments were made after a rigorous internal and external search process and strongly position the company for continued success in the future: Chris Weber will join Valaris as Senior Vice President and Chief Financial Officer. Mr. Weber is expected to start in the third quarter of 2022. Matt Lyne will join Valaris as senior vice president and chief commercial officer. Mr. Lyne is expected to start in the third quarter of 2022. Davor Vukadin, the company’s associate general counsel, has been promoted to senior vice president and general counsel. Darin Gibbins, who serves as interim chief financial officer, will continue in his role as vice president – ​​investor relations and treasurer after Mr. Weber joins the company. Elizabeth Darby, who served as Acting General Counsel, continues in her role as Chief Compliance Officer. Christophe Raimbault will continue as Vice President and Acting Chief Marketing Officer and will remain with the company following Mr. Lyne’s arrival.

REFINERS

Raymond James added Valero Energy to its Analyst Current Favorites list.

MLPS & PIPELINES

Brazilian energy company Eneva SA is set to acquire local utility Celse, based in the country’s northeastern state of Sergipe, according to the newspaper. O Globo reported. Celse, formerly known as Centrais Eletricas de Sergipe SA, is jointly owned by DC Energia and listed in the United States New Fortress Energy and operates a gas-fired thermoelectric plant in Sergipe.

MARKET COMMENTARY

U.S. stock index futures were in the green after an upbeat outlook for overnight earnings. European equities rose as the easing of bets on aggressive interest rate hikes by central banks boosted sentiment. The Japanese Nikkei ended higher, following a rally on Wall Street overnight. Gold prices rose and the dollar rose slightly. Oil prices have fallen.


The Nasdaq Advisory Services Energy Team is part of the Nasdaq Advisory Services, the most experienced team in the industry. The team provides unparalleled shareholder analysis, a comprehensive view of trading and investor activity, and insights on how best to manage investor relations outreach efforts. If you have any questions, please contact Tamar Essner.


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