Page 15 - AsianOil Week 32

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Middle East: Aramco update highlights a assumption of Painted Pony’s debt makes up
quiet week the majority of the transaction at CAD350mn
It has been a quiet week, with companies ($264mn), while CNRL will pay CAD111mn
throughout the region returning to work fol- ($84mn) in cash for the company.
lowing the Eid al-Adha break. The big news CNRL is one of Canada’s largest produc-
was Saudi Aramco’s Q2 earnings update, which ers, and the deal illustrates its desire to keep
showed that the company’s net income had growing its footprint in the liquids-rich Mont-
dropped by a full 50% during the first half of the ney shale gas play in northeastern British
year, with Q2 $10bn lower than Q1. Aramco put Columbia.
a characteristically brave face on the results, her- News of the deal comes within days of
alding the firm’s resilience, though much of the CNRL reporting a better-than-expected loss
financial hurt experienced by the company and for the second quarter of 2020. The company’s A number of
its majority sovereign stakeholder was self-im- adjusted loss came in at CAD772mn ($581mn)
posed, given the Ministry of Energy’s direction or CAD0.65 ($0.49) per share, while Refinitiv shale producers,
to Aramco to produce a single-day record in data showed that analysts had expected it to
early April. post an adjusted loss of CAD0.85 ($0.64) per including
For the energy sector, Aramco’s earnings share.
update took some of the spotlight off the tragic Other second-quarter losses also contin- Pioneer Natural
explosion in the port of Beirut that has brought ued to pile up over the past week, extending Resources and
an already crippled economy to a near-complete a trend that quickly became clear after the
halt, with the government set to resign en masse. first North American producers reported Devon Energy,
Countries around the world have jumped for- their earnings. Among those reporting a loss
ward with humanitarian aid, though the wounds in recent days in the US was leading shale have also
are not just skin-deep. producer EOG resources, which performed
Meanwhile, Baghdad announced last week worse than analysts’ expectations. The com- unveiled plans
that it would increase voluntary additional oil pany posted a net loss of $909.4mn, or $1.57 for a variable
production cuts to 400,000 bpd below its 3.8mn per share, for the second quarter of 2020, from
bpd ceiling in August to make up for previous a profit of $847.8mn, or $1.46 per share, a year dividend.
non-compliance with OPEC+ cuts. ago.
A number of shale producers, including
If you’d like to read more about the key events shaping Pioneer Natural Resources and Devon Energy,
the Middle East’s oil and gas sector then please click have also unveiled plans for a variable divi-
here for NewsBase’s MEOG Monitor. dend in an effort to keep rewarding sharehold-
ers as they struggle to deliver returns. Other
Quarterly losses mount in North America shale players have also said they may consider
Larger North American companies appear to such a move. Pioneer’s CEO, Scott Sheffield,
be gaining the confidence to make acquisitions has suggested this could be a new model for a
despite the continued uncertainty over the near- volatile industry that had fallen out of favour
term oil and gas outlook. with investors in recent years.
This week, Canadian Natural Resources
Ltd (CNRL) announced that it had agreed to If you’d like to read more about the key events shaping
acquire Painted Pony Energy for CAD461mn the North American oil and gas sector then please click
($347mn) including debt. Indeed, the here for NewsBase’s NorthAmOil Monitor.™

Week 32 13•August•2020 www. NEWSBASE .com P15