New York, February 08, 2024 - PRISM MarketView - The energy sector has been in focus this week, particularly with the release of quarterly reports from U.S. oil giants Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX). Exxon Mobil reported fourth-quarter earnings slightly above expectations, but revenue fell short due to a Y/Y decrease. Full-year results showed significant drops in earnings and revenue compared to the previous year, with increased capital expenditures attributed to accelerated activities in certain assets and a new lithium business. Chevron’s report followed a similar pattern, with earnings exceeding expectations but revenue falling short, and significant Y/Y drops in earnings and revenue for the full year. Both companies returned significant cash to shareholders.
The energy sector as a whole is expected to report a substantial earnings decline for the fourth quarter, largely due to lower oil and gas prices. This decline is reflected across most sub-industries, with only Oil & Gas Equipment & Services and Oil & Gas Storage & Transportation showing positive earnings growth.
Lower oil and gas prices in Q4 2023 compared to the previous year have contributed to the sector’s overall decrease in earnings. Looking ahead, analysts predict inconsistent earnings growth for the sector in 2024, with declines expected in Q1 and Q3 but growth forecasted for Q2 and Q4.
Analysts suggest that the U.S. energy market faces challenges in 2024 due to falling commodity prices, with a focus on moderate production growth and shareholder returns likely to continue. Weakness in gas pricing is anticipated until new structural LNG demand emerges, while oil pricing is expected to remain subdued despite OPEC production cuts. Geopolitical tensions could provide short-term upside risk for oil prices, but companies with significant international production exposure may face additional difficulties if conflicts escalate.
While these recent reports seem mixed for the industry, declines in the sector could provide a buying opportunity for a longer-term hold if Energy begins to boom again. The PRISM Emerging Oil and Gas Index features micro/small cap companies within the sector that currently may be encountering mixed market reactions and pricing pressures, could overall potentially hold value.
W&T Offshore, Inc.
W&T Offshore, Inc. (WTI) is an independent oil and natural gas exploration and production company based in Houston, Texas. The company focuses on the acquisition, exploration, and development of oil and natural gas properties primarily in the Gulf of Mexico. W&T Offshore’s operations include both shallow-water and deepwater drilling activities, with a portfolio of assets that includes producing wells, undeveloped leases, and exploration prospects. Recently the company announced an accretive acquisition of six Gulf of Mexico fields.
Gran Tierra Energy, Inc.
Gran Tierra Energy (GTE) is a Canadian-based independent energy company with operations primarily focused in Colombia. The company specializes in the exploration, development, and production of oil and natural gas resources in South America, particularly in Colombia’s prolific Putumayo Basin. Gran Tierra’s portfolio includes a mix of producing assets, development projects, and exploration opportunities. Recently, the company announced the pricing of its additional $100 million offering of 9.500% Senior Secured Amortizing Notes due 2029.
Independence Contract Drilling, Inc.
Independence Contract Drilling, Inc. (ICD) is a U.S.-based land drilling services provider primarily serving the oil and natural gas industry. The company specializes in the design and operation of premium, high-specification drilling rigs used for onshore drilling operations. ICD offers a range of drilling services, including horizontal, directional, and vertical drilling, with a focus on unconventional drilling techniques. Recently the company reported robust third quarter financial results.
PRISM MarketView does not provide investment advice.
Media Contact
Company Name: Prism MarketView
Email: info@prismmarketview.com
Phone: 646-863-6341
Website: https://prismmarketview.com
Company Name: Prism MarketView
Email: info@prismmarketview.com
Phone: 646-863-6341
Website: https://prismmarketview.com
PRISM MarketView Social Media