FinancialNewsMedia.com News Commentary
PALM BEACH, Fla., Sept. 21, 2023 /PRNewswire/ -- The oil and gas CAPEX market is expected to witness significant growth owing to factors, including strong profitability due to a trend toward reducing project costs and optimizing portfolios, which has led to divesting of low-margin fields, as well as a greater emphasis on investments in higher-margin growth opportunities. Capital expenditure (CAPEX) refers to the funds utilized by a company/organization to acquire, upgrade, and maintain physical assets, such as property, plants, buildings, technology, or equipment. It is often used to undertake new projects or investments by a company. The global oil and gas CAPEX market considers the entire capital expenditure of international oil and gas operators annually. According to a new market research report from Mordor Intelligence titled "Oil and Gas CAPEX Market Report (2023-2028)," the market is estimated at USD 797.58 billion in 2023. It is expected to register a CAGR of 4.27% during the forecast period. The report said: "Investment in the upstream oil and gas industry grew after the rise in oil and gas demand amid the opening of the COVID-19 lockdowns. An expansion in demand recovered crude oil prices in 2022. In 2020, crude oil prices were about USD 41.96 per barrel, while in 2022, the prices reached more than USD 110 per barrel, resulting in a surge in investment in the oil & gas industry. The CAPEX market is expected to witness noteworthy growth owing to factors such as strong profitability due to a trend toward reducing project costs and optimizing portfolios, leading to divesting of low-margin fields, as well as a greater emphasis on investments in higher-margin growth opportunities." Active Mining Companies from around the markets with current developments this week include: Trio Petroleum Corp. (NYSE: TPET), Devon Energy Corp. (NYSE: DVN), Occidental Petroleum Corporation (NYSE: OXY), Marathon Oil Corporation (NYSE: MRO), Southwestern Energy Company (NYSE: SWN).
Mordor Intelligence concluded: "North America is one of the largest markets in terms of capital expenditure in the oil and gas industry, with the United States being the leader, followed by Canada and Mexico. The United States is a major crude oil and natural gas producer in the world, and the country is expected to cover around 60% of the world's oil demand in the coming years. The United States has always been at the forefront in the past and is also expected to dominate the region's oil and gas CAPEX market in the forecast period. The country oil and gas projects accounts for approximately 70% of the total investments in North America during the forecast period. Of the total number of upstream projects in the country, more than 80% are estimated to be the new build while the expansion projects are expected to account for the remaining 20% during the forecast period (2023 – 2028)."
Trio Petroleum Corp. (NYSE American: TPET) BREAKING NEWS: Trio Petroleum Corp Provides Update on Testing of the HV-1 Discovery Well - Pumping Unit and Storage Tanks and other Temporary Facilities Being Installed - Testing Rates Up To 145 Barrels of Oil Per Day - Trio Petroleum Corp. ("Trio" or the "Company"), a California-based oil and gas company, today provided an update on the testing of the HV-1 discovery well at the Company's South Salinas Project.
The Brown Zone (aka Brown Chert) in the HV-1 well was perforated on September 7 with 350 feet of perforations across a gross interval from 5,465 to 5,850 feet measured depth and then acidized for borehole clean-up. The well was then tested by swabbing for seven days during the September 8-18 timeframe. A pumping unit is now being installed at the HV-1 well for further testing of the Brown Zone and temporary tanks and other facilities are also being installed at the well site. Results of pumping will be announced when available.
The Brown Zone in the HV-1 well is mechanically isolated from the deeper Mid-Monterey Clay zone that we previously tested with results previously announced. Swab testing to-date suggests that the Brown Zone and the Mid-Monterey Clay collectively, if commingled, might deliver approximately 145 barrels of oil per day (BOPD), with potentially significantly higher oil production rates when the well is on pump.
Trio's CEO, Frank Ingriselli, stated: "We continue to be encouraged by the preliminary test results at the HV-1 well. We should get a much better understanding of the potential rates of oil and gas production at the well by having it on pump. Though our original primary objective was the Yellow Zone, also known as the Yellow Chert, which we still believe will be the most prolific producing zone of the structure, we have been very encouraged by the results in the Brown Zone and the Mid-Monterey formation. Given the greater than expected positive results, we may decide to initially produce from the Brown Zone, or to produce from the Brown Zone and the Mid-Monterey formation commingled for the foreseeable future and wait moving up-hole to the top of the anticline to test and produce from our primary objective - the Yellow Zone. We will continue to announce results as additional information becomes available." CONTINUED… Read this and more news for Trio Petroleum at: https://ir.trio-petroleum.com/press-releases/
In other mining industry developments and happenings in the market this week:
WaterBridge NDB LLC, a portfolio company of Five Point Energy LLC, recently announced the formation of NDB Midstream LLC, a strategic partnership with WPX Energy Permian, LLC, a subsidiary of Devon Energy Corp. (NYSE: DVN). The partnership between two technical leaders, WaterBridge NDB within the produced water handling sector and Devon with 50-plus years of innovation in oil and gas, yields the largest private water infrastructure system in the prolific Stateline region of the Delaware Basin in Loving County, Texas and Lea and Eddycounties in New Mexico.
In connection with the transaction, Devonand NDB Midstream entered into a long-term agreement pursuant to which Devonhas committed all of its produced water within a large area of mutual interest, including an initial dedication of ~52,000 acres, and contributed to NDB Midstream 18 SWDs with ~375,000 bpd of permitted capacity and ~210 miles of produced water pipelines for gathering, transportation, disposal and reuse. As part of the transaction, Devon received a 30% equity interest in NDB Midstream as well as a commitment by Five Point to fund a portion of the initial build of the system expansion.
Occidental (NYSE: OXY) recently announced that a wholly owned subsidiary has entered into a definitive purchase agreement to acquire all the outstanding equity of Carbon Engineering Ltd. for total cash consideration of approximately $1.1 billion, to be made in three approximately equivalent annual payments, with the first at closing. This transaction is expected to close before the end of 2023, subject to Canadian court reviews, Canadian and U.S. regulatory approvals and other customary closing conditions.
Occidental has been working with Carbon Engineering on direct air capture (DAC) deployment since 2019. Acquiring Carbon Engineering aligns with Occidental's integrated net-zero strategy and provides Occidental, through its 1PointFive subsidiary, the opportunity to rapidly advance DAC technology breakthroughs and accelerate deployment of DAC as a large-scale, cost effective, global carbon removal solution. Carbon Engineering's DAC-based climate solutions utilize standardized processes and proven industrial equipment.
Marathon Oil Corporation (NYSE: MRO) recently reported second quarter 2023 net income of $287 million or $0.47 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $295 million or $0.48 per diluted share. Net operating cash flow was $1,076 million or $1,121 million before changes in working capital (adjusted CFO). Free cash flow was $442 million or $531 million before changes in working capital and including Equatorial Guinea(E.G.) distributions and other financing (adjusted FCF).
"Second quarter adds to our track record of consistent execution against our well-established Framework for Success" said Chairman, President, and CEO Lee Tillman. "We built on our return of capital leadership, increasing shareholder distributions to over $430 million during second quarter, including over $370 millionof share repurchases. Second quarter financial and operational results were again very strong, highlighted by notable increases to our cash flow, free cash flow, and production relative to the first quarter. We remain on track to deliver against our full year capital spending and production guidance with oil equivalent production trending above the midpoint. In summary, we remain well positioned to continue offering our investors top tier and sustainable free cash flow generation, an advantaged return of capital profile, and differentiated per-share growth with an investment grade balance sheet - all at an attractive valuation. I remain confident that our 2023 business plan is both resilient and compelling across a broad range of commodity prices and that it benchmarks at the very top of both the E&P sector and the S&P 500 on the metrics that matter most."
Southwestern Energy Company (NYSE: SWN) recently announced financial and operating results for the second quarter ended June 30, 2023. The Highlights Were: Generated $231 million net income, $95 million adjusted net income (non-GAAP), $484 million adjusted EBITDA (non-GAAP) and $425 million net cash provided by operating activities; Reported total net production of 423 Bcfe, or 4.6 Bcfe per day, including 4.0 Bcf per day of gas and 106 MBbls per day of liquids; Invested $595 million of capital and placed 50 wells to sales, including 28 in Appalachia and 22 in Haynesville; Reduced full-year capital investment guidance $200 million, or approximately 10%, due to activity reductions, moderating inflation, and operational efficiencies; and Closed divestiture of non-core Pennsylvania Utica assets, applying $123 million of net proceeds to debt reduction
"Southwestern Energy continues to improve the resilience and free cash flow generation capacity of our business. With our successes mitigating inflationary pressures and driving operational efficiencies, we expect to deliver our 2023 plan with less activity and corresponding investment. Debt reduction remains our top capital allocation priority, which we accelerated with a non-core asset sale. Our disciplined strategy to manage through the commodity price cycle maintains the Company's financial strength and productive capacity. We are well positioned to increase shareholder value in the supportive longer-term natural gas environment," said Bill Way, Southwestern Energy President and Chief Executive Officer.
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