Oil & Gas Stock Roundup Headlined by Equinor's North Sea Start-Up,
Marathon's JV
Recap of the Week’s Most-Important Stories
1. Equinor recently announced that offshore Troll phase 3
production has commenced in the North Sea. The field came online back in 1995.
With the initiation of the third phase, the Troll A platform and Kollsnes
processing facility’s production life is expected to extend beyond 2050.
Equinor labels the Troll phase 3 as one of its most profitable projects as it
has a breakeven price of $10 per barrel. Also, its low carbon dioxide emissions
of less than 100 grams per barrel of oil equivalent are praiseworthy. The Zacks
Rank #1 (Strong Buy) Norwegian company has managed to reduce emissions from the
project as the Troll A platform is powered by electricity from shore.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Phase three will produce from the Troll West gas cap and has a recoverable
resource of 347 billion cubic meters of gas. The gas cap is placed over the oil
column in Troll West. Oil and gas production from the site will continue
simultaneously. The project includes eight wells, divided into two templates,
which are connected to the Troll A platform through an umbilical. (Equinor
Commences Massive Troll Phase 3 Gas Production)
2. Downstream operator Marathon Petroleum and
Archer-Daniels-Midland Company — a leading producer of food and beverage
ingredients — recently entered into an agreement to form a joint venture for
producing soybean oil to meet the steadily expanding demand for renewable
diesel fuel.
The Spiritwood facility, which is expected to be completed in 2023, will source
and process local soybeans and supply the resultant soybean oil solely to
Marathon Petroleum. The Spiritwood complex has plans to produce 600 million
pounds of refined soybean oil per year, which is enough feedstock for 75
million gallons of sustainable diesel, annually.
The approximately $350-million worth Spiritwood complex will feature
cutting-edge automation technologies and have the potential to process 150,000
bushels of soybeans per day once completed. Plenty of new jobs have been
created in the region as a result of the new complex building and the facility
is said to employ roughly 75 people once it is fully functional.
The Spiritwood complex intends to commence production, keeping
the 2023 harvest in view. (Marathon Petroleum, ADM to Form Soybean Oil
Production JV)
3. Offshore contract drilling operator Transocean Ltd. RIG
recently secured a firm contract worth $252 million for its new-build
ultra-deepwater drillship the Deepwater Atlas from BOE Exploration &
Production LLC (BOE), which includes a $30-million mobilization fee. A hefty
performance bonus based on the agreed-upon operating indicators is also
included in the contract.
This award is the outcome of BOE and the Shenandoah working interest owners'
final investment decision to sanction the previously announced Shenandoah
project in the United States Gulf of Mexico.
The Shenandoah program is divided into two sections. The
Deepwater Atlas is scheduled to begin operations in the third quarter of 2022
after its delivery from the shipyard, initially with dual blowout preventers
(BOP) rated to 15,000 psi. The initial drilling operation will take about 255
days to complete and generate nearly $80 million of contract drilling revenues.
(Transocean Wins $252M Deal for Deepwater Atlas Drillship)
4. Canada’s Imperial
Oil IMO recently announced that it is on track to build an
international-level renewable diesel facility at its Strathcona refinery close
to Edmonton, Alberta.
From locally produced and cultivated feedstocks, this new complex is set to
produce more than 1 billion liters of renewable diesel fuel, annually. The
project is intended to reduce emissions in the Canadian transportation industry
by around 3 million tons a year, which is equivalent to removing almost 650,000
passenger vehicles from the road for a year.
Blue hydrogen (hydrogen produced from natural gas with carbon capture and
storage) will be used in renewable diesel manufacturing to significantly curb
greenhouse gas emissions compared to conventional hydrogen production.
Annually, around 500,000 tons of carbon dioxide are predicted to be captured.
To manufacture premium low-carbon diesel fuel, the blue hydrogen
and biofeedstock will be mixed with a patented catalyst. (Imperial Oil to Make
Renewable Diesel Plant at Strathcona)
5. NOV Inc. NOV
recently inked a deal wherein it agreed to supply two GustoMSCTM NG-20000X
self-propelled wind turbine installation jack-up vessel designs known as the
Cadeler X-Class to COSCO SHIPPING Heavy Industry and Cadeler.
The Cadeler X-Class has a deck area of 5,600-meter square and a carrying
potential of above 17,600 tons. The hybrid, DNV-certified, cyber-secure jack-up
vessel is devised to transport and install seven complete 15-Megawatt (MW)
turbine sets or five sets of 20-plus MW turbines, representing a major
improvement from the previous designs.
The oilfield service provider’s chairman, president and CEO Clay Williams
stated that "NOV is honored to partner with Cadeler and COSCO as we design
and deliver the next generation of wind turbine installation jack-up vessels.
These vessels, which will be a key part of the next stage in the evolution of
offshore wind energy, are a perfect example of what comes from close
collaboration with our customers and an unending desire to seek improvement."
(NOV Inks Deal to Offer Two Self-Propelled Wind Turbine Vessels)
Price Performance
The following table shows the price movement of some major oil
and gas players over the past week and during the last six months.
Company
Last Week Last 6 Months
XOM
+5.7% +1.5%
CVX
+4.6%
-1.6%
COP
+7.5%
+8.1%
OXY
+16.9% -5.1%
SLB
+9.9%
+1.3%
RIG
+24.3% +2.3%
VLO
+11.5%
-14.2%
MPC
+9.6%
+7.9%
The Energy Select Sector SPDR — a popular way to track energy companies — was
up 7.5% last week. The best performer was Transocean whose stock surged 24.3%.
Over the past six months, the sector tracker has increased 1.2%. Upstream
biggie ConocoPhillips COP
was the major gainer during the period, experiencing an 8.1% price
appreciation.
What’s Next in the Energy World?
As the global oil consumption outlook strengthens amid
tightening fundamentals, market participants will be closely tracking the
regular releases to watch for signs that could further validate the upward
momentum. In this context, the U.S. government’s statistics on oil and natural
gas — one of the few solid indicators that come out regularly — will be on
energy traders' radar.
Data on rig count from the energy service firm Baker Hughes,
which is a pointer to trends in U.S. crude production, is closely followed too.
News related to coronavirus vaccine approval/rollout/distribution will be of
utmost importance. Last but not the least, investors will keep an eye on the
OPEC+ summit outcome for the next course of their oil production policy.
Want the latest recommendations from Zacks Investment Research? Today, you can
download 7 Best Stocks for the Next 30 Days. Click to get this free
report
Yahoo -> Finance -> Portfolio
RIG | 4400 shares | Long term investment
