Saturn Oil + Gas, Nel ASA, RWE - How three energy giants are redefining the future of global energy supply

Saturn Oil & Gas to grow production to 40,000 boe/d by 2025

Strong economies rely on a robust and secure energy supply. For companies like Saturn Oil & Gas, this means continuous growth in the coming years because the demand for oil and gas is robust. The Canadian energy company has ambitious goals for 2025. The chances of achieving this are good because the Company has an excellent strategy.

With a capital expenditure budget of CAD 300 million, Saturn Oil & Gas aims to achieve an average production of 38,000 to 40,000 boe/d. Of this, 85% will be oil and liquids. Saturn relies on its proven blueprint strategy, which has often proved successful in the past. This blueprint strategy involves the targeted acquisition of undervalued assets. What characterizes these assets is the upside potential and ability to unlock value, which are then seamlessly integrated into the existing Saturn portfolio. The experienced team ensures ever-improving operating results with continuous development programs, ongoing production optimization and sustainable cost reduction. The use of state-of-the-art technology also contributes to innovative process optimization in the oil and gas business.

Another factor in value creation is the restructuring of debt. The Company's recently issued debt has a term of five years, which has the following advantages: It reduces the interest burden by around 40%. The annual repayment rate is fixed at 10%, ensuring a lasting reduction in liabilities. This new debt structure gives the energy company more entrepreneurial freedom in the use of capital.

"Our focus on systematically reducing the leverage ratio over time supports our opportunistic acquisitions and enables the Company to further improve its key figures per share," CEO John Jeffrey explained to the stakeholders. "Over the next three years, we will build on the 2025 budget and drive the generation of free cash flow while reducing net debt, reflecting Saturn's commitment to sustainable value creation."

The multi-million investments will be strategically distributed throughout 2025. Approximately 70% of the investment will flow into production during the second half of the year and 30% in the first half. Of the 30%, approximately 24% will be invested in the first quarter. Experienced investors know that Saturn's drilling areas are then cleared of Canada's weather-related snow and ice, allowing production to run at full speed.**

Nel ASA struggles with price losses despite positive developments

In Europe, the energy supply situation looks somewhat more mixed. The Norwegian hydrogen specialist Nel ASA is experiencing significant price losses at the end of 2024. Since the beginning of the year, the share price has fallen by almost 59%. Also striking is the 20% drop in the share price at the beginning of November 2024, shortly after the US presidential election. One reason for this could be that the future US president believes climate change is a hoax and is more committed to oil and gas. Ideal for companies like Saturn.

However, in view of the supply chain law passed by the EU in the summer of 2024, things could start looking up again for the Norwegians. The new EU directive requires large companies to pay attention to human rights and environmental standards in their supply chains. In the event of violations, heavy penalties of up to 5% of global revenue will be imposed. This could drive existing players out of the market. Good for NEL, less favourable for European economies.

In the wake of the supply chain law, the energy minister of the Gulf state of Qatar, Saad al-Kaabi, announced that he would stop trading with Europe if the sanctions were implemented. "If I lose 5% of my revenue because I trade with Europe, then I will no longer trade with Europe. This is not a bluff," explains Saad al-Kaabi quite rigorously. Despite the decline in the share price, Nel ASA can point to some successes. The Company has doubled its production capacity at the fully automated electrolyser production plant at the Herøya site to 1 GW.

There are also positive signals in the order situation. Recently, Samsung C&T awarded the Company a follow-up order worth EUR 5 million for the delivery of 10-megawatt electrolysers. These are to be used in Korea's first project for hydrogen production using nuclear energy. The aim is to produce hydrogen from surplus nuclear power generation in order to utilize energy that would otherwise be wasted in times of oversupply, thus increasing overall energy efficiency. This process is the subject of controversial debate in the EU. Researchers are convinced that around 400 new nuclear power plants, each with an output of 1 GW, would be needed to meet current global hydrogen demand alone. In Germany, the land of energy misdirection, relying on nuclear power is politically unthinkable.

Nevertheless, analysts are cautious given the geopolitical tensions. The infrastructure is lacking to make hydrogen a flourishing energy source of the future. Goldman Sachs is, therefore, lowering its rating to "Neutral". Renewable energy is still in its infancy in Europe. Customers are progressive countries in Asia. Despite the concerns, Nel can grow into a key player in hydrogen supply.

RWE is massively expanding in the US: A milestone of 10 GW of green energy reached

The energy company RWE has expanded its renewable energy capacity in the US to 10 GW. RWE now operates 170 plants in 24 US states. These plants consist of 5.2 GW of onshore wind power, 4.3 GW of solar energy and 0.5 GW of battery storage. In 2024, the global player added new plants with a total capacity of 953 MW to the US power grid. These plants supply around 51,000 American households with electricity.

At the same time, RWE is pushing ahead with further renewable energy projects in Italy. In the Campania region, two more pioneering agri-photovoltaic plants are being built. To preserve local agriculture, the solar modules are mounted on 3-metre-high mobile support structures. This allows the area to be used for two purposes. In addition, the modules protect the plants growing below them from extreme weather events such as hail, frost, drought and heavy rain.

The European gas market is currently undergoing changes. The transit agreement between Russia and Ukraine expired on December 31, 2024. Affected on a daily basis: 42 million m³ of Russian gas, which previously flowed into Slovakia, Moldova, Austria and Italy. The EU Commission is signalling no further interest in continuing Russian gas transit through Ukraine. This is a bitter blow for Slovakia, which still depends heavily on Russian gas supplies.

Saturn Oil & Gas will start 2025 with a well-thought-out growth plan. The CAD 300 to 320 million investment budget will enable the production of 38,000-40,000 boe/d, with 85% attributable to oil and liquids. The Company also has greater financial leeway thanks to a restructuring of its debt. The restructuring has reduced interest rates by 40%, with a fixed annual repayment rate of 10%. With its proven blueprint strategy, investors can participate directly in the continuous increase in value. The Norwegian company Nel ASA, on the other hand, recorded a 59% drop in share price last year. But there is also good news: The production capacity for electrolysers in Herøya has been doubled to 1 GW. Samsung C&T has placed a follow-up order worth EUR 5 million for a Korean nuclear energy hydrogen project. Despite the current infrastructure challenges in Europe, Nel ASA is well-equipped to become a key player in hydrogen supply. RWE reaches a milestone in the US by generating 10 GW of renewable energy. The Company is also expanding in Europe with innovative agri-photovoltaic projects that enable dual use of land to generate energy and to continue farming.