Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
This project is groundbreaking and is likely to lead us to x billion more carbon capture projects in the near future.
It is time that ESG funds slowly face reality and recognise that without companies like Petrofac with their long experience in similar fields of activity, it will not work and the decarbonisation target by 2030 or 2050 cannot be achieved.
Https://finance.yahoo.com/video/oil-demand-still-oil-bull-160720373.html
I would say the chances are not bad that the real value of Tullow will soon be priced in. I wasn't as optimistic as I am now, everything seems to be going in the right direction. The mood is likely to change soon and catapult us to unimagined heights.
These were really fantastic days for Petrofac, unfortunately not for us.
It really couldn't be going better.
First the Fitch rating:
London - 27 Sep 2023: Fitch Ratings has revised Petrofac Limited's Outlook to Stable from Negative.
Then ADNOC doubles carbon capture target ahead of COP28 summit.
Adnoc has allocated $15 billion to invest in a range of projects by 2030, which will help it accelerate its low-carbon growth strategy.
And now Adnoc awards landmark CO2 recovery project to Petrofac with a contract value of more than $600 million.
It's unbelievable what Petrofac has already won this year in various renewable energy projects such as Tennet/Hitach/Petrofac and CO2 recovery, decommissioning Australia, Gulf of Mexico.
Brief summary
In first place:
Tennet (Hitachi/Petrofac $14 billion 50/50 until 2031)
$244 million for the first stage of clean-up at an abandoned oil field in the Timor Sea (Australia)
Petrofac, has added a third Gulf of Mexico field, and extended the scope of its existing contract to decommission two fields, offshore Gulf of Mexico.
And now Adnoc awards landmark CO2 recovery project for $600 million.
And not to forget Petrofac to partner OCI Global for gasification-based green methanol programme.
Now that the markets are going crazy, of course the blowflies are coming out of the woodwork and trying to talk everything down. But not me, I'm standing long and the chances are not too bad that this patience will pay off in the end. But nothing is certain.
Fantastic future prospects Adnoc doubles carbon capture target to 10m tonnes
https://www.agbi.com/articles/adnoc-doubles-carbon-capture-target/
The oil market is 'fundamentally tight,' S&P Global Vice Chairman
@DanielYergin tells CNBC’s
https://twitter.com/CNBCMiddleEast/status/1708738124908744941
Let the nervous short and mid term speculators fight over pennies.
We stay cool and take it all when the time is right.
UAE giant advancing its 5 million bpd oil production capacity target to 2027 on back of improved market fundamentals
Billions of dollars worth of upstream-focused oil and gas deals have been awarded by the state giant and its subsidiaries this year, with more than $25 billion in additional work said to be in the bidding stage.
https://www.upstreamonline.com/focus/abu-dhabi-project-activities-soar-to-record-highs-as-adnoc-embarks-on-multiple-expansion-plans/2-1-1511868
Https://www.wealthprofessional.ca/news/industry-news/the-macro-backdrop-for-oil-has-never-been-as-positive-in-my-career/379918
“What we see now are [oil] inventories falling at the fastest pace in history, owing to strong global demand, tepid supply, and curtailed volumes from OPEC,” says Nuttall, who runs the Ninepoint Energy Fund—the largest energy mutual fund in Canada. “To me, the macro backdrop for oil has never been as positive in my career.”
The British oil company - which currently produces 13,000 barrels per day - has announced investments of more than $1 billion, or nearly 600 billion CFA francs, by 2026.
https://directinfosgabon.com/petrole-tullow-oil-promet-plus-de-600-milliards-de-fcfa-dinvestissements-dici-2026/
@Davebt196
Of course they are right in all respects. If things were different we wouldn't be stuck here at 75p.
However, some aspects are neglected here:
There is the largest framework agreement for renewable energies in European history with Tennet (Petrofac / Hitachi $14
billion until 2031 50/50)
This would mean that you can bid for Adnoc orders 100% again.
There is an oil price of currently $94, which is expected to remain at a very high level for a long time and will allow companies to make appropriate investments.
The offshore decommissioning market alone is already a strong argument
And one could list many more points.
The whole framework currently looks fantastic for an oil service provider like Petrofac.
If you don't want to see it, I can't help you anymore.
Petrofac currently has such a low valuation that its price can literally double overnight.
Unfortunately, they are not entirely correct - bonds recovered from their low of 53 on March 28th to 75 on June 15th and have been stable since then.
The second half of the year is likely to be strong and lead to a reversal in free cash flow. The chances of a capital increase should therefore be low.
The next trading update should provide a little more certainty at the latest. Until then, you should approach the matter a little more optimistically, or if you don't believe in Petrofac, it's better to get out and look for another stock.
The bonds (Petrofac Ltd. 9,75% 21/26) been stable at $74 for the last 3 months
This is a sign of trust, if there were really fears that there would be a capital increase, this would also be noticeable in the bonds.
I hope this is enough to allay your fears.
In my opinion that doesn't mean anything, it's just a short-term weakness at the moment due to the FED interest rate decision and a suspicious radio silence from Petrofac regarding new contracts. I think there will be big news soon. Maybe the ADIPEC will be October 2nd - 5th? The 2 Tennet contract should also follow soon.
A little more patience, I'm pretty sure we'll soon have the dry spell behind us. But at a certain point, things can happen very quickly and we will overcome this valuation gap very quickly. The price/earnings ratio in this sector keeps drifting further and further apart and with oil prices constantly rising, this simply has to change for the better soon: (But there is no guarantee. Pierre Andurand, for whom the name means something, had to experience this painfully this year ) There is also an interesting article that deals with this topic, although it is primarily about the USA but can also be transferred to the UK)
Why Oil Stocks Are Lagging Behind Soaring Crude Oil Prices
https://oilprice.com/Energy/Energy-General/Why-Oil-Stocks-Are-Lagging-Behind-Soaring-Crude-Oil-Prices.html
Https://oilprice.com/Latest-Energy-News/World-News/Morgan-Stanley-Says-All-Oil-Signals-Flashing-Tightness.html
Morgan Stanly’s new Brent price forecast for Q4 this year is $95 per barrel—up from $82.50. Its outlook for Q1 2024 is for $92.50 per barrel, up from an estimate of $80 in its previous outlook.
And we benefit directly from the high oil prices, even if it only affects 5% of our revenue.
Integrated energy services (Petrofac oil production acc. FY222 1,261kboe)
A small side note:
The sale of this asset (which is not actually part of our core business), should it be necessary at some point in the future,
should literally halve our debt overnight (estimatedly this is just an assumption on my part).
https://oilprice.com/Latest-Energy-News/World-News/Morgan-Stanley-Says-All-Oil-Signals-Flashing-Tightness.html
Morgan Stanly’s new Brent price forecast for Q4 this year is $95 per barrel—up from $82.50. Its outlook for Q1 2024 is for
$92.50 per barrel, up from an estimate of $80 in its previous outlook.
Since this is backwardation, Brent Crude Futures Dec 2024 have risen from $72 in July 2023 to currently $83, which is positive for us because this is a sign that confidence is growing and that high oil prices will continue.
But forget the first sentence I posted earlier.
I've probably had one more beer today than is good for me.
Could it be that we get significantly more for a part of our production than the current $93-94? According to the following article, this could be the case.
A small excerpt from the article:
https://oilprice.com/Latest-Energy-News/World-News/Hedge-Funds-Are-Sold-On-100-Oil.html
Another notable trend: oil producers are selling contracts for later delivery to lock in higher prices for future production.
The spread between the December 2023 and December 2024 contracts has widened to $10 per barrel, with the deepening
backwardation and indication of growing confidence that high oil prices are here to stay.