NLNG continues to produce and export despite force majeure – spokesperson


The energy sector has posted bumper profits in the current year, with major oil companies setting records right, left and center.
ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX) and Shell (NYSE:SHEL) together generated $46 billion in second-quarter profits, with all three setting new quarterly profit records. However, the outlook for the future is not so rosy.
It’s the start of earnings season, with just 7% of S&P 500 companies reporting third quarter 2022 results.
Unlike the first two quarters of the year, the current one is shaping up to be another disappointing show despite 69% of S&P 500 companies reporting a positive EPS surprise and 67% reporting a positive earnings surprise. .
According to the latest earnings report from FactSet, the S&P 500’s blended earnings growth rate is expected to reach a meager 1.6%, marking the lowest earnings growth rate reported by the index since the third quarter of 2020 ( -5.7%).
At least nine sectors, including energy, lowered their earnings forecasts for the quarter, a sign of a deteriorating macroeconomic outlook.
Indeed, FactSet indicates that downward revisions to earnings estimates for companies in the energy sector have been a major contributor to the decline in the overall earnings growth rate of the S&P 500.
Still, the energy sector is expected to post the strongest earnings growth of all eleven sectors at 119.4%. Higher year-over-year oil prices contribute to the year-over-year revenue improvement for this sector, as the average price of oil in Q3 2022 ($91.43) was higher 30% to the average price of oil in Q3 2021 ($70.52). ). At the sub-industry level, the sector’s five sub-industries are expected to post a year-over-year revenue increase of more than 20%:
Refining and marketing of oil and gas (273%); Oil and gas exploration and production (116%); Integrated oil and gas (106%); oil and gas equipment and services (73%); and oil and gas storage and transportation (23%).
The energy sector is also poised to be the top contributor to S&P 500 earnings growth for the third consecutive quarter. If this sector were excluded, the index would show a 4.9% revenue decline rather than a 1.6% revenue growth.
Big Oil Profits
At the corporate level, several major oil companies are expected to release their third quarter 2022 dashboards in the coming weeks.
Exxon Mobil Corporation is expected to report earnings on 10/28/2022 before market open.
The report will cover the fiscal quarter ending September 2022. According to Zacks Investment Research, based on forecasts from 9 analysts, the consensus EPS forecast for the quarter is $3.59, a big improvement from 1, $58 shown for the corresponding period last year.
Chevron Corporation is expected to release earnings on 10/28/2022 before market open. The report will be for the fiscal quarter ending September 2022.
According to Zacks Investment Research, based on forecasts from 8 analysts, the consensus EPS forecast for the quarter is $5.06 versus $2.96 for Q3 2021.
ConocoPhillips (NYSE: COP) is expected to report earnings on 03/11/2022 before market open. The report will be for the fiscal quarter ending September 2022.
According to Zacks Investment Research, based on forecasts from 7 analysts, the consensus EPS forecast for the quarter is $3.74 versus $1.77 for Q3 2021.
BP Plc. (NYSE: BP) is expected to report earnings on 11/01/2022 before market open. The report will be for the fiscal quarter ending September 2022.
Zacks Investment Research further reports that based on forecasts from 4 analysts, the consensus EPS forecast for the quarter is $2.13 versus $0.99 for Q3 2021.
Royal Dutch Shell Plc. (NYSE: SHEL) is expected to report earnings on 10/27/2022. According to Zacks Investment Research, based on forecasts from 3 analysts, the consensus EPS forecast for the quarter is $3.18. Reported EPS for the same quarter last year was $1.06.
TotalEnergies SE (NYSE: TTE) is expected to report earnings on 10/27/2022. According to Zacks Investment Research, based on forecasts from 3 analysts, the consensus EPS forecast for the quarter is $4.27 versus $1.76 for Q3 2021.
Energy sector earnings set to fall in 2023, but watch OFS
Unfortunately, slowing growth is likely to remain the main theme for the coming year. In a recent Moody’s research report, analysts say they have changed their outlook for the global energy sector from positive to stable.
According to the report, profits for the sector will broadly stabilize in 2023, but will remain below the levels reached by recent peaks.
Analysts note that commodity prices have fallen from very high levels at the start of 2022, but predicted that prices are likely to remain cyclically high through 2023.
This, combined with modest volume growth, will support strong cash flow generation for oil and gas producers.
Moody’s estimates that U.S. energy sector EBITDA for 2022 will reach $623 billion, but will fall to $585 billion in 2023.
Analysts say weak capital spending, growing uncertainty about future supply expansion and the high geopolitical risk premium will, however, continue to support cyclically high oil prices.
Meanwhile, strong US LNG export demand will continue to support high natural gas prices.
A particular element of this report is how bullish analysts are about the Oil Field Services (OFS) sector.
“Growing demand for oilfield services (OFS) amid growing drilling and completions activity will continue to drive pricing power and support significant earnings growth for OFS companies,” the analysts wrote.
While discipline will always be the name of the game when it comes to capacity, Moodys says pricing power will continue to strengthen next year, “enabling OFS companies to increase profit margins, even with the ‘labour and material cost inflation’.
Moodys also expects improved profit margins for OFS from increased daily rates for onshore and offshore platforms, as well as higher future rates as customers renew their contracts.
US rigs are up around 30% since January and have recovered to around 95% of their January 2020 levels, according to the report.
OFS companies have reported that drilling and well completion activity and prices have increased slightly, while thugs also say they are seeing an increase in job vacancies.
Oilfield workers have been among the hardest hit demographics by the Covid-19 pandemic in 2020. Nationally, the oil and gas industry is estimated to have lost 107,000 jobs according to global consultancy Deloitte, with an estimated 200,000 thugs losing their jobs at the height of global lockdowns.

From: Alex Kimani
Kimani reports for Oilprice.com

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