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February 15th, 2023 | 11:07 CET

Shell, Saturn Oil + Gas, BP - Records upon records

  • Mining
  • Oil
  • Gas
  • renewableenergies
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According to the will of German politics, the future's energy mix should consist of 100% renewable energy sources. Coal, oil and natural gas are to be abandoned due to the high CO2 emissions. In addition, the shutdown of the remaining 3 nuclear reactors has already been decided. The fact that this wishful thinking can hardly be put into practice in the coming decades is shown by the strategic shift of the oil multinationals, which, due to the high demand for oil and gas, significantly lowered the originally planned reduction in oil production.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: Shell PLC | GB00BP6MXD84 , Saturn Oil + Gas Inc. | CA80412L8832 , BP PLC SP.ADR/6 DL -_25 | US0556221044

Table of contents:

    BP - Oil production remains higher

    The past fiscal year 2022 was the most successful for the British oil multinational since 2008. After a solid third quarter due to skyrocketing oil and gas prices in the wake of the Ukraine conflict, the final quarter was somewhat weaker. However, BP posted a record bottom-line profit of USD 28 billion. BP reported an adjusted profit of USD 4.8 billion in the fourth quarter of 2022. This result was just below analysts' forecast of USD 5 billion. In the third quarter, the profit was still USD 8.2 billion. The main reasons for the decline were weaker gas trading activities, higher refinery maintenance costs, and lower oil and gas prices.

    Also more telling for the future was the strategy update released by CEO Bernard Looney. It was announced that the oil giant would increase its annual spending on renewables and oil and gas by USD 1 billion. "We must continue to invest in the near term in today's energy system, which depends on oil and gas to meet today's needs and ensure an orderly transition," the CEO said. In addition, the originally planned 40% reduction in oil production by 2030 has been reduced to 25%. At the beginning of the new decade, the plan is to still produce 2 million barrels of oil equivalent per day.

    Saturn Oil & Gas - Record production volumes in final quarter

    At the end of January, the Canadian energy company drew attention with the completion of its acquisition of Ridgeback Resources, which is expected to increase daily production by 140% to around 30,000 BOE per day.

    In addition to the recent acquisition, Saturn Oil & Gas has two properties in its portfolio, Viking and Oxbow, for which drilling results were reported last year. A total of 57 horizontal wells were drilled to find light oil reserves, which are already in production. The estimated average production rate increased to a record 12,514 BOE/D in Q4 2022, with the volume produced already increasing to 13,128 barrels of oil equivalent in the closing month.

    At Oxbow, 25 gross wells were drilled, which were reactivations of existing wells. At the Viking site, the development and production of the light oil reservoir exceeded the average IP30 production rate in each new horizontal well by 38% over the forecast guidance curve in 32 gross wells. Already active on both properties is the 2023 drilling program.

    Justin Kaufmann, Chief Development Officer of Saturn Oil & Gas, expressed satisfaction with the published results, "In 2022, Saturn recorded the most active and effective investment program in its history. We are very pleased with the overall results of the drilling program as they exceed our forecast guidance curves and expand our model. This will allow us to capture additional light oil resources for future development."

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    Shell - Demand remains high

    The CEO of the Shell energy group, Wael Sawan, is taking the same line as BP. The group chief emphasized that gas plays a crucial role in the transition to a lower-carbon energy supply. As China has ended its Zero-COVID policy, demand for fossil fuels is likely to continue to rise. It is expected to be a long time before energy flows are reorganized.

    The London-based petroleum and natural gas company reported USD 36.22 billion in revenues for the past fiscal year. The British company's earnings were thus 50% higher than in the previous year. The dividend was raised to 28.75 cents per share, an increase of 15% from a year earlier. In addition, the Company plans a share buyback program worth USD 4 billion. Despite lower oil and gas prices, adjusted earnings increased in the final quarter of 2022, but net income for shareholders was lower YOY at USD 10.5 billion.

    Due to sanctions against Russia, Western oil producers benefited disproportionately in the past fiscal year. They also expect the demand for fossil fuels to remain high. Saturn Oil & Gas reported solid results from the past drilling program.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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