Trillion Energy International Inc. C.TCF

OIL & GAS SECTOR ANALYSIS BY BLOOMBERG & MKT EXPECTATIONS

[Humanist]

VERY INFORMATIVE READ IN GEN.. ENJOY 

In this week's Trillion Dispatch

 

dec 16/ 2022/ 3:40 pm 

 

• Global gas crunch to worsen

 

• HSBC to end O&G funding

 

• Oil prices to rally?

 
 
 
 

The Big Idea...
Wall Street Sees Energy Stocks Beating Market for a Third Year in 2023

 

(Bloomberg) -- Energy shares are set to trounce the broader US market for the second straight year and most Wall Street analysts see that run extending into 2023, for one key reason: They’re still the cheapest stocks around.
This year hasn’t been a close contest. Energy has soared about 55% in 2022, which would be a record annual gain, while the runner-up among the 11 major S&P 500 Index segments is barely positive. The gap drives home how much of an oasis the industry has provided in an otherwise abysmal year for shareholders. 
With questions swirling around the outlook for 2023 as the Federal Reserve’s policy tightening spurs angst over a possible recession, energy bulls say the industry still looks attractive. They point to valuation — no S&P 500 sector has a lower price-to-earnings ratio — and to projections that oil prices will stabilize, in part amid the war in Ukraine.
“Energy screens more cheaply than any other sector category,” Ben Cook, a portfolio manager at Hennessy Funds who expects oil and gas stocks to lead again in 2023. “At the same time, it has the highest free cash-flow yield of any sector. It does look like energy can three-peat,” he said in an interview.
The stocks are coming off another blockbuster quarter of earnings, after crude surged following Russia’s invasion of Ukraine. The commodity’s price has since tumbled, but some analysts see it finding a floor with the war dragging on, Chinese demanding rebounding and potential OPEC production cuts.
The median forecast among those compiled by Bloomberg is for West Texas Intermediate to trade around $93 per barrel in 2023, from about $75 now. Bloomberg Intelligence sees a scenario where crude could rebound to $108.

By: Geoffrey Morgan, Bloomberg News
©2022 Bloomberg L.P.

 
 

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Latest in...
Oil Prices May Rally Next Year as Russian Exports Sink, IEA Says

 

(Bloomberg) -- Oil prices could rally next year as sanctions squeeze Russian supplies and demand beats earlier expectations, the International Energy Agency said. 
Russia’s output — which defied the agency’s previous predictions of collapse this year — is poised to plunge 14% by the end of the first quarter, the Paris-based IEA said in a report on Wednesday. If that forecasts holds true, it could reverse the recent trend in oil futures, which have retreated to $80 a barrel in London after their worst weekly slump in four months.
“While lower oil prices come as a welcome relief to consumers faced by surging inflation, the full impact of embargoes on Russian crude and product supplies remains to be seen,” the IEA said. “As we move through the winter months and toward a tighter oil balance in the second quarter, another price rally cannot be ruled out.”
The IEA, which advises major economies, bolstered forecasts for global oil demand in 2023 by 300,000 barrels a day amid vigorous growth in India and surprising resilience in China. Consumption will grow by 1.7 million barrels a day next year to average 101.6 million a day.
Still, it’s a softer warning on prices than recent messages from the agency, which a few weeks ago was highlighting the risk of a supply squeeze and urging the OPEC+ coalition to reverse its latest production cuts.
The IEA acknowledged that Russian exports have continued to swell despite its repeated predictions that an international boycott would slash shipments. Moscow’s oil shipments climbed to a seven-month high of 8.1 million barrels a day in November, although revenue fell due to lower prices, according to the report.
Russia’s resilience also contributed to shallower cutbacks than expected from OPEC+, the IEA said. The 23-nation group led by Saudi Arabia reduced supplies last month by just a quarter of the 2 million barrels-a-day it had announced, as many members were already pumping below their designated quotas.
By: Grant Smith, Bloomberg News
©2022 Bloomberg L.P.

 
 
 
 

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Latest in...
HSBC To End Funding For New Oil And Gas Fields

 

HSBC has announced it will stop financing new oil and gas fields, as part of its efforts to drive down global greenhouse gas emissions.
Environment groups said the move sends "a strong signal" to fossil fuel giants that investment is waning.
Europe's largest bank said it made the decision after receiving advice from international energy experts.
It comes following previous criticism of HSBC for funding oil and gas projects despite its green pledges.
Jeanne Martin, head of the banking programme at ShareAction, a charity that campaigns for reducing investment for fossil fuels like oil and gas, said: "HSBC's announcement sends a strong signal to fossil fuel giants and governments that banks' appetite for financing new oil and gas fields is diminishing."
The charity called on other banks to follow suit - saying this move sets a "a new minimum level of ambition" for the sector.
In 2020, HSBC made a pledge to be "net zero" - which means not adding to greenhouse gases already in the atmosphere - and investing up to $1 trillion (£806bn) in clean energy.
However, the bank came under criticism earlier this year when it was revealed it had invested an estimated $8.7bn (£6.4bn) into new oil and gas in 2021, according to ShareAction.

In the update to its energy policy, the bank said the decision had been made "follow[ing] consultation with leading scientific and international bodies" who had estimated that current oil and gas fields would meet any demand in 2050 under a "net-zero" scenario.
By: Esme Stallard
BBC News Climate and Science

 
 
 
 

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Latest in...
The Global Gas Crunch Is Set To Worsen As China Reopens

 

China’s natural gas imports are set for a 7-percent rise next year as the country reopens after Covid lockdowns, which could aggravate an already tight supply situation globally.
The 7-percent import increase forecast was made by state-owned energy major CNOOC, which said, as quoted by Bloomberg, that it was already looking for LNG cargoes for next year.
The report notes that gas inventories at ports in the northern part of the country are depleting at a faster rate than usual because the weather is colder, pushing consumption higher, and this will, too, have an effect on future demand for imports.
What’s more, pipeline supply of natural gas from Central Asia is in decline, which means China will need to rely more on LNG in its gas import mix to make up the difference. And this means more intense competition for a limited number of cargoes between Asia and Europe next year as well.
This year, Chinese gas demand has been trending lower for most of the year, with imports declining consistently over the first ten months of the year, per a report by Energy Intelligence. LNG imports were down by a sizeable 21.6 percent over the ten-month period, reflecting the effects of lockdowns and other restrictions under the country’s zero-Covid policy.
Yet now this policy is being reversed, mass mandatory testing is being dropped and analysts expect a rebound in economic activity before too long. This will drive higher demand for energy and contribute to higher prices due to the tight supply situation in both oil and gas.

By: Irina Slav for Oilprice.com
© OilPrice.com

 
 
 
 

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Latest in...
Europe’s Power Grid Strains With High Cost of Low Temperatures

 

(Bloomberg) - Short-term power prices in Europe soared again Wednesday even as a forecast of warmer temperatures and higher winds bring signs of relief from the region’s first major test of winter. 
Intraday prices in France traded at more than €600 ($638) per megawatt hour for some half-hour periods, with levels in Germany and the UK not far behind. It’s the price Europe is paying this winter for its reliance on natural gas to keep the lights on when cold snaps coincide with windless conditions.
“Despite this grim scenario for the week, we could see that the electricity system is coping relatively well with the situation, albeit power prices suffered a significant increase,” analysts at RBC wrote in a note. 
Relatively little power is sold in the intraday market compared to the much larger market for longer-term contracts where most electricity is guaranteed. But it’s where the system is fine tuned to make sure supply meets demand. 
The tight market should ease by the weekend when temperatures are set to rise in much of northwest Europe and the UK, cutting demand for gas to heat homes. At the same time, wind speeds are forecast to increase, ending a period of calm weather that has added to dependence on gas and coal in the power grid. 
And the French nuclear fleet is still trending in the right direction to avoid catastrophe this winter. Electricite de France SA has steadily turned on more reactors this month, even if behind schedule, with generation inching closer to a level that would be normal for this time of year. 
Still, in a sign of how delicate the electricity balance is, capacity on a power connection between Norway and the UK was cut by about a third until Friday. The cables are key to Britain’s energy security this winter, with imports hitting a record earlier this week. 
By: William Mathis, Bloomberg News
©2022 Bloomberg L.P.

 
 
 
 

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Latest in...
More Biden Oil And Gas Restrictions Are On The Horizon

 

Despite pleading with oil and gas companies to boost their output in recent months, to tackle global shortages and rising prices, President Biden is once again hitting the industry hard by proposing a greater emissions reduction in operations. And he’s not the only one, as the U.K. and EU look to reduce gas flaring and venting practices to curb their methane emissions in line with climate pledges.
The Biden Administration has proposed a rule to further limit methane leaks and gas flaring on public land, which could have a significant impact on the industry if passed. It would build upon the extension of the Environmental Protection Agency’s (EPA) 2021 rule that requires drillers to detect and plug leaks at well sites across the country. The Interior Department is recommending the new rule to support Biden’s aim of reducing emissions and meeting U.S. climate pledges. It would mean stricter monthly time and volume limits on gas flaring in oil and gas operations. Scientists believe that a significant reduction of methane emissions worldwide would have a major impact on climate change, helping to reduce the effects of global warming in line with Paris Agreement targets. 
In addition to reducing levels of flaring, the proposal would mean that energy firms must establish waste minimisation strategies, showing that they have the necessary pipeline capacity for their anticipated gas production. It could lead to new projects being rejected if deemed to have levels of gas flaring beyond the stipulated maximum. Interior Secretary Deb Haaland explained, “This proposed rule will bring our regulations in line with technological advances that industry has made in the decades since the BLM’s (Bureau of Land Management) rules were first put in place, while providing a fair return to taxpayers.” 
If passed, the proposal is expected to generate $39.8 million annually in royalties for the U.S., as well as prevent billions of cubic feet of gas from being released into the atmosphere. BLM Director Tracy Stone-Manning stated, “This draft rule is a common-sense, environmentally responsible solution as we address the damage that wasted natural gas causes.” She added, “It puts the American taxpayer first and ensures producers pay appropriate royalties.
By: Felicity Bradstock for Oilprice.com 
© OilPrice.com

 
 
 
 

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Trillion Energy News
 
Trillion Energy Commences New Wells In Its Multi-Well Program

 

 Drilling of the Guluc-2 well has commenced
December 12, 2022 - Vancouver, B.C. - Trillion Energy International Inc. (“Trillion” or the “Company”) (CSE: TCF) (OTCQB: TRLEF) (Frankfurt: Z62) is pleased to have commenced Guluc-2 at the SASB natural gas field, Black Sea, after completing West Akcakoca-1 17 ½” diameter section to 1,008 metres depth. 

Drilling of Guluc-2 17 ½’ section to 1,008 metres is in progress and the well will be drilled to total depth upon which the well will be perforated and tested. Upon completion of Guluc-2, the rig will move back and complete the West Akcakoca-1 well.

Both are long reach directional wells being drilled from the Akakoca platform and targeting gas reserves at both the east and west perimeter of the Akcakoca gas field.  

Upon successful completions of the wells occurring, gas will be sold to market almost immediately. The Guluc-2 well is expected to commence production towards the end of January, 2023; while West Akcakoca-1 by March 2022. Gas sale revenues generated from these wells will be used for further field development.   
        
After the wells at the Akakoca platform are completed, the rig will move to the East Ayazli tripod. 

The Company’s development program initially includes seven production wells coming online during a time when acute natural gas shortages are menacing Europe and Turkiye. Drilling of additional 10 targets are expected to follow. Natural gas prices continue at $30 per MCF for December.