Post by
loonietunes on Jan 03, 2023 9:06pm
Stockwatch Energy today
Energy Summary for Jan. 3, 2023 2023-01-03 20:51 ET - Market Summary by Stockwatch Business Reporter West Texas Intermediate crude for February delivery plunged $3.33 to $76.93 on the New York Merc, while Brent for March lost $3.81 to $82.10 (all figures in this para U.S.). Western Canadian Select traded at a discount of $27.40 to WTI, up from a discount of $27.50. Natural gas for February lost 49 cents to $3.99, falling below $4 for the first time since last February. The TSX energy index lost 14.13 points to close at 228.87. Oil prices tumbled into the new year, weighed down by bearish Chinese data and global recession fears. China has raised its export quotas for refined oil products, a sign of lower domestic demand as the country battles waves of COVID infections. Chinese factory activity also shrank in December at the sharpest pace in nearly three years. Meanwhile, managing director Kristalina Georgieva of the International Monetary Fund predicted that 2023 will be even "tougher" than 2022, amid simultaneous slowdowns in the world's three major economies (the United States, the European Union and China). "We expect one-third of the world economy to be in recession," she told CBS on Sunday. "Even countries that are not in recession, it would feel like recession for hundreds of millions of people." Here in Canada, oil stocks largely fell with prices, despite some boosterish efforts to prop them up. Oil sands giant Canadian Natural Resources Ltd. (CNQ) lost $3.90 to $71.29 on 9.59 million shares, even as it became the only Canadian oil producer to make RBC's "Top 30 Global Ideas" list for 2023. The analysts lauded its "impressive shareholder returns" and "superior free cash flow generative power." They reiterated their "outperform" rating and their price target of $89. (In a separate list, the one that discloses the cozy ties between the analysts' employer and the stocks under the analysts' coverage, RBC noted that it "makes a market" in Canadian Natural's securities, among other services.) Despite the gloomy start to the year, one Alberta producer is hoping that 2023 will be the year it finally goes public -- though for now it is making the unusual choice to target a U.S. listing only. The private Hammerhead Resources Inc., a 14-year-old Calgary-based Alberta Montney producer, is moving ahead with its planned merger with the Nasdaq-listed Decarbonization Plus Acquisition Corp. IV (DCRD). DCRD announced this morning that it has filed the definitive proxy statement for its shareholders to vote on the $1.39-billion merger on Jan. 23. Both Hammerhead and DCRD are portfolio companies of Riverstone Holdings. As is typical of mergers involving firms like DCRD, which as a SPAC (special-purpose acquisition company) is a blank-cheque entity created to take another company public, the resulting issuer will continue to be led by management of Hammerhead. This includes president and chief executive officer Scott Sobie, a former long-time executive of Talisman Energy (bought by Spain's Repsol in 2015). Other familiar faces at Hammerhead include Mike Kohut, the former vice-president of finance at Paramount Resources Ltd. (POU: $25.62), and Daniel Labelle, a former geologist with Delphi Energy (the predecessor of a company bought in 2021 by Kiwetinohk Energy Corp. (KEC: $14.62)). The board of the combined company remains largely undetermined, but will include Jim McDermott, founder and CEO of the California-based Rusheen Capital Management. The above Mr. Sobie, announcing the merger plans back in September, dubbed himself "extraordinarily proud" of Hammerhead's activities since its inception in 2009. He set a goal of boosting the company's Montney production to a range of 46,000 to 48,000 barrels a day in 2024, a 40-per-cent increase from 31,500 to 32,500 barrels a day in 2022. Beyond that, the company has remained fairly quiet about its ambitions, including on whether it plans to stick to a Nasdaq listing only or try to obtain a Canadian one as well. Further afield, Charle Gamba's Colombian gas producer, Canacol Energy Ltd. (CNE), defied today's carnage and added eight cents to $2.04 on 311,900 shares. It gave investors a monthly production update this morning, pegging its sales for December at 177 million cubic feet a day (the equivalent of around 31,100 barrels a day). This takes its full-year average to about 182.3 million cubic feet a day. For context, Canacol originally set itself a forgivingly wide full-year target of 160 million to 200 million cubic feet a day, though it later narrowed this to 182 million. A prolonged period of bad weather called this guidance into question, particularly after November's output came in at just 162 million cubic feet a day. Investors breathed a sigh of relief to see something of a rally in December. They will nonetheless be hoping for improvement in 2023, a year for which Canacol has set another cautious target of 160 million to 206 million cubic feet a day. 2023 Canjex Publishing Ltd. All rights reserved.