February 9th, 2024 | 07:15 CET
Prospera Energy, BP, Plug Power: Fossil or renewable energies - Who leads in the commodity market?
The US is currently holding back on the export of liquefied natural gas shipments, posing a challenging situation for economies like Germany that rely on energy imports. Investors are increasingly turning their attention to companies that are helping to drive forward the energy transition. To reach that goal, oil and gas companies like Prospera Energy, with their ambitious oil extraction plans, are gaining the attention of many investors. For those preferring dividend investments, BP is an unavoidable choice. The global company also mixes its energy production with renewable energy. Plug Power is a pioneer in this field, having recently commissioned another hydrogen plant in Tennessee, USA. However, the excitement about the innovation is dampened by an analyst rating.
time to read: 5 minutes
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Author:
Juliane Zielonka
ISIN:
PROSPERA ENERGY INC. | CA74360U1021 , BP PLC DL-_25 | GB0007980591 , PLUG POWER INC. DL-_01 | US72919P2020
Table of contents:
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Author
Juliane Zielonka
Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.
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Record production and profitability target: Prospera Energy on course for success in 2024
Since the first quarter of 2021, Prospera Energy has implemented extensive restructuring measures with a clear focus on profitable development steps in order to generate significant value for its investors. The production rates achieved, as well as the improved profitability, are the result of a systematic approach and a clear vision for the Company's future. Based on the successful drilling results in 2023, Prospera plans to increase production, especially in medium-heavy oil and continue the horizontal transformation to capture the remaining heavy oil reserves.
To fund these ambitious steps, Prospera Energy has developed a comprehensive capital development and acquisition plan for 2024 to achieve a target rate of 5,000 BOE/D by year-end. The plan includes medium oil drilling, infill horizontal drilling for heavy oil and the acquisition of light oil for margin optimization. Financing will be provided from existing cash flows and non-dilutive credit facilities.
In addition, significant asset retirement obligation reduction projects are planned for the summer of 2024, which include the abandonment of more than 40 wells and leasehold reclamation. In addition, a plant/pipeline turnaround is planned that includes maintenance and calibration work to support the planned development.
Prospera Energy relies on its experienced team and efficient infrastructure to achieve its goals. The coming months promise exciting developments for the company and its investors.
BP - Latest quarterly results send share price up 6%
British Petroleum, or 'BP' for short, is a global energy company headquartered in London, UK. As one of the world's largest oil and gas companies, BP (ISIN GB0007980591) is active in all areas of the energy industry, including exploration, production, refining, distribution and marketing of oil and gas products. If you want to bet on large companies, this is the right place.
In its most recent quarterly report released on February 6, 2024, BP reported earnings of USD 1.07 per share for the quarter, beating the average estimate of USD 0.96 by USD 0.11. BP's net margin was 11.12%, and its return on equity was 18.23%. The Company's quarterly sales amounted to USD 52.14 billion, compared to the average estimate of USD 53.14 billion.
In the same quarter of the previous year, the Company's earnings per share amounted to USD 1.59. Quarterly sales fell by 24.7% year-on-year. However, the overall strong performance caused BP's shares to rise by 6%.
CEO Murray Auchincloss emphasizes: "Looking back, 2023 was a year of strong operational performance and real momentum in execution across all business areas. And as we look ahead, our goal remains unchanged - to transform from an international oil and gas company to an integrated energy company - focusing on growing the value of BP."
The current projects provide an outlook on BP's further developments:
- In the robust fossil fuels sector, BP has announced the start of a major project called Seagull, which is expected to contribute around 15,000 BOE/D to net production by 2025.
- In the Gulf of Mexico, BP has approved the expansion of the Argos Southwest project and the Great White development project.
- In Brazil, BP has been awarded the Tupinambá block in the Santos pre-salt basin.
**BP continues to invest in growth engines and core businesses in a disciplined manner. Planned capital expenditure for 2024 and 2025 amounts to around USD 16 billion per year, in line with the medium-term target of USD 14 to 18 billion.
Plug Power - Analyst ranking expresses delight over hydrogen plant for Tennessee
The renewable energy producer Plug Power (ISIN US7291US20) has resumed operations at its hydrogen plant in Charleston, Tennessee, bringing around 10 tons of liquid hydrogen per day to the US market. The Company has also implemented improvements to increase the efficiency of the plant.
The liquid hydrogen is delivered by Plug Power using cryogenic trailers to customers throughout North America, particularly in the Midwest and along the East Coast. Liquid hydrogen is used in material transportation, fuel cell electric vehicles and stationary power applications.
"With the reopening of the Tennessee plant, we are taking another step toward a vertically integrated hydrogen network in North America," said Andy Marsh, CEO of Plug Power. "We also expect our joint venture plant in Louisiana to come online in Q3/2024 and produce an additional 15 tons of liquid hydrogen per day."
However, investors are critical of a recent downgrade of Plug Power by analyst Tom Curran of Seaport Research. Curran downgraded the shares from "Buy" to "Neutral" without specifying a price target. He believes Plug Power needs to make more progress towards profitability to regain investors' attention. Curran emphasizes the need for Plug Power to raise external capital, stop capital outflow and improve margins to succeed in the long term.
The production of liquid hydrogen from Georgia and Tennessee is expected to reduce costs and positively impact Plug Power's fuel margins. Plug Power utilizes advanced cryogenic and liquefaction technologies to transport green hydrogen to customers safely and efficiently. The Company's liquid hydrogen tankers can transport approximately 36 tons per trip. The Company is planning additional plants in New York, Texas and Europe, including plants in Finland and Belgium.
Traditional oil and gas companies such as Prospera Energy (ISIN CA74360U1021) and BP are ahead of the game at the moment. Prospera Energy is currently undergoing a restructuring program and has already presented impressive results for 2023. The ambitious targets for 2024 underpin the team's commitment to creating the greatest value for its shareholders. BP (ISIN GB0007980591) reported earnings of USD 1.07 per share in its quarterly report, beating expectations of USD 0.96 by USD 0.11. The Company continues to invest with discipline and a focus on returns in growth areas and the oil, gas and refining businesses. For 2024 and 2025, BP plans to spend around USD 16 billion p.a., which is in line with the medium-term target of USD 14 to 18 billion. Although Plug Power (ISIN US72919P2020), a pioneer in green hydrogen, is rapidly expanding its production facilities for this energy source, analysts such as Curran from Seaport Research have downgraded Plug from "Buy" to "Neutral". Curran emphasizes that Plug Power must make more progress towards profitability in order to regain investors' attention. For successful investment decisions, participation at the 10th International Investment Forum, which will take place digitally on February 21, is recommended. Twenty companies from the energy, commodities, life sciences, environment and blockchain sectors will present their investment ideas live and be available for Q&A afterwards. The program and free registration can be found here.
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