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January 21st, 2022 | 09:25 CET

Shell, Saturn Oil + Gas, Plug Power - Energy stocks in focus

  • Oil
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Oil prices remain in bullish mode, reaching a new seven-year high. The latest increase was due to an explosion of a critical oil pipeline between Iraq and Turkey, through which up to 450,000 barrels of crude oil are transported daily. In general, the supply situation remains tight. OPEC expects a further increase in global oil demand. The primary beneficiaries of this supply shortage are oil producers; they were already able to post record results last year.

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: ROYAL DUTCH SHELL A EO-07 | GB00B03MLX29 , Saturn Oil + Gas Inc. | CA80412L8832 , PLUG POWER INC. DL-_01 | US72919P2020

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] 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

    Full interview


    Royal Dutch Shell - On two highs

    Although renewable energies are rising due to climate targets, oil and natural gas remain more in demand than ever. As a result, oil multinationals such as Exxon Mobil, Royal Dutch Shell, and BP posted record results in 2021. These shares are becoming more attractive because most producers are distributing an ever-larger share of their profits to investors, thus offering a high dividend yield.

    In addition, a large part of the profits flows into the reorientation and conversion of the groups into sustainable, renewable energy companies. Instead of oil and gas, the billions at Royal Dutch Shell are to be generated primarily by wind, sun and hydrogen.

    For an undisclosed sum, Royal Dutch Shell is taking over Solar-Konzept Italia Srl (SKI) from the German solar-konzept International GmbH. The acquisition increases Shell's solar development pipeline in Italy to about 2 GW and supports the Company in its global effort to supply customers with renewable energy. Integrated energy supply is key to Shell's Powering Progress strategy and commitment to achieve net-zero emissions by 2050.

    Various analyst firms continue to be positive on Shell shares. British investment bank Barclays left its rating for Shell at "Overweight" with a price target of 3000 pence, equivalent to EUR 36.02. Deutsche Bank experts see the stock as a buy candidate with a price target of 2038 pence, or EUR 24.47.

    Saturn Oil & Gas - Production output increased twenty-fold

    Saturn Oil & Gas, an oil producer, based in the Canadian province of Saskatchewan, can also profit from the tight supply and high demand for crude oil. By completing a transformative acquisition of light oil deposits in the Oxbow area of southeastern Saskatchewan, one of the most economically viable oil reservoirs in North America, the Canadians rose to become one of the region's leading oil producers. With the acquisition, production capacity was increased twenty-fold to 7,000 barrels per day, which corresponds to a daily turnover of USD 487,000.

    The attractiveness of this transaction was already evident in the figures for the third quarter. The producer increased operating cash flow in Q3 by a factor of more than 13 compared to the same period last year, posting CAD 13.9 million. This corresponds to a cash flow of CAD 0.55 per share. Almost half of the free cash flow of CAD 9.5 million was invested in three successful wells. Also, in the future, the Canadians drive the strategy that, on the one hand, the debt reduction of the enterprise is consistently advanced, and the remaining free cash flow in new drillings is invested.

    The analyst firm GBC Research classifies the share as massively undervalued. According to the experts, the maturity of the Oxbow asset and the low decline rate of 12% give Saturn Oil & Gas great flexibility for future investments. The price target was therefore increased from CAD 9.20 to CAD 12.17. Thus, the share certificates have multiplication potential. Further information is expected from the Company at the International Investment Forum (IIF) on February 17, 2022. Free to attend:

    Plug Power gives an update

    Despite an update and a surprise revenue increase, shares of the fuel cell producer continue to slide. At around USD 21, the Nasdaq-listed stock's chart picture suggests a further sell-off.

    Plug Power raised its revenue forecast for the current fiscal year from USD 900 million to between USD 900 million and USD 925 million. In addition, the US company is sticking to its mid-term forecast for 2025 published last year. Then, the operating margin is expected to be 17% on total revenues of USD 3 billion.

    Due to low supply and rising demand, oil prices remain at record highs. Profiteers are not only oil giants such as Exxon or Royal Dutch Shell but also the Canadian oil producer Saturn Oil & Gas. Analysts rate the Canadian Company's shares as a potential multiplier. In contrast, shares of hydrogen and fuel cell companies such as Plug Power continue to correct strongly.

    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    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 also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author

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    Commented by André Will-Laudien on September 12th, 2022 | 13:25 CEST

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