Page 11 - NorthAmOil Week 04 2022

NorthAmOil PERFORMANCE NorthAmOil

The company also announced plans to accel- $5.50bn a year ago.
erate its debt retirement programme, having Reuters reported that the company had
retired $685mn of long-term debt in 2021. topped analyst expectations but Zacks Equity
It will redeem $600mn of $1bn worth of debt Research said Baker Hughes’ adjusted earn-
that is due to mature in 2025. Once these notes ings of $0.25 per share had fallen short of the
are retired in February, the company will have Zacks consensus estimate of $0.29. However,
retired $1.8bn of debt since the start of 2020. the investment research firm added that Baker
“Today’s announcements of the dividend Hughes had beaten its expectations on revenue
increase and debt retirement demonstrate my and that its bottom line compared favourably
confidence in our business, customers, employ- with a year ago.
ees and value proposition,” stated Halliburton’s The lower-than-expected earnings were
chairman, president and CEO, Jeff Miller. attributed to a decline in cost productivity in
On the company’s earnings call, Miller said the company’s Digital Solutions, though this was
Halliburton anticipated customer spending offset by higher contributions from its Oilfield
in North America to grow more than 25% y/y. Services business.
Halliburton estimates that the North American “Overall, 2021 proved to be successful on
completions market is nearing 90% utilisation, many fronts for Baker Hughes, with key com-
and its fleets are currently sold out. Miller added mercial successes and developments in the LNG
that fully electric hydraulic fracturing locations and new energy markets, as well as record cash
were expected to take up a larger share of the flow from operations and free cash flow, and
market, in an illustration of how operators are peer-leading capital allocation,” stated Baker
turning to electrification, among other meas- Hughes’ chairman and CEO, Lorenzo Simonelli.
ures, to help decarbonise their operations. “As we look ahead to 2022, we expect the pace
of global economic growth to remain strong,
Baker Hughes although slightly moderate compared to 2021.
Baker Hughes posted fourth-quarter net We believe the broader macro recovery should
income of $294mn, up from $8mn in the third translate into rising energy demand for 2022
quarter of 2021, but down 55% on $653mn in and relatively tight supplies for oil and natural
the final quarter of 2020. Company revenue of gas, providing an attractive investment environ-
$5.52bn was up 8% sequentially on $5.09bn, ment for our customers and a strong tailwind for
and also marked a slight y/y increase on many of our product companies.”™

POLICY

US DoE approves 13.4mn barrel SPR release

US THE US Department of Energy (DoE) with both upstream and downstream operations
announced on January 25 that it had approved and commodity traders. The group consists of
a release of 13.4mn barrels of crude from the Shell Trading US, Trafigura Trading, Phillips
country’s Strategic Petroleum Reserve. 66, Macquarie Commodities Trading, Chev-
The move forms part of a previously ron, ExxonMobil Oil and BP Products North
announced plan to release 50mn barrels of crude America.
from the SPR in co-ordination with several other Including five previous exchanges, the DoE
countries in a bid to ease rising crude prices has now released nearly 40mn barrels of oil
globally. US President Joe Biden unveiled the out of the promised 50mn. Under Biden’s plan,
plan to co-ordinate releases with China, India, 32mn barrels of the total will be exchanged,
Japan, South Korea and the UK in November while 18mn barrels will be sold outright. The
2021. DoE announced earlier in January that it had
The latest US release marks the second-larg- completed the 18mn barrel sale, awarding
est crude exchange in the country’s history, contracts to six companies that mainly con-
according to the DoE, after the heating oil sisted of refiners. That sale also completed the
exchange of 2000. Companies that receive SPR requirement of Section 30204 of the Bipar-
crude through an exchange are expected to tisan Budget Act of 2018 for the US to sell a
return the amount of oil received, as well as an total of 30mn barrels during the 2022-25 fiscal
additional amount that depends on the length of years.
time they hold the oil. Awardees of the current exchange pro-
Seven companies are participating in the lat- gramme under Biden’s SPR release plan are due
est exchange, comprising a mix of refiners, those to return the oil by 2024.™

Week 04 27•January•2022 www. NEWSBASE .com P11