- TC Energy: NGTL System hit a record with 17.3 Bcf daily delivery in Q1 2024.
- BP: Profits fell by 45% in Q1 2024
- Ovintiv: Averaged 206 MBOE/d (82% liquids) production in the Permian during Q1
- Anadarko: Produced an average of 108 MBOE/d (59% liquids) in Q1
- Marathon Oil: Produced 181,000 net bopd and 371,000 net boed in Q1
- OXY: Global production averaged 1,172 MBOE/d in Q1 2024, considering selling Permian assets valued over $1B
- ConocoPhillips: Produced 1,902 MBOE/d in Q1
As TC Energy expands its gas network to support the growing demand from data centers, driven by AI, Occidental is considering selling assets in the Permian Basin potentially worth over $1 billion. Keep reading.
But first, let's take a look at the Q1 2024 results for big names like Occidental (OXY), Ovintiv, BP, Marathon Oil, ConocoPhillips, and TC Energy.
Ovintiv Goes Well
For the first quarter of 2024, Ovintiv posted net earnings of $338 million. The company generated $659 million in cash from operating activities and $1,035 million in Non-GAAP Cash Flow, after making capital investments of about $591 million. This resulted in $444 million of Non-GAAP Free Cash Flow. Average production volumes reached 574 MBOE/d, which included 211 Mbbls/d of oil and condensate, 88 Mbbls/d of other NGLs, and 1,648 MMcf/d of natural gas.
Regional Production Breakdown:
-
Permian: Produced an average of 206 MBOE/d (82% liquids), with 21 net wells turned in line (TIL). Ovintiv plans to invest between $1.35 to $1.45 billion here in 2024 to start up 120 to 130 net wells.
-
Montney: Had an average production of 226 MBOE/d (19% liquids), with 11 net wells TIL. The planned investment ranges from $425 to $475 million to activate 60 to 70 net wells.
-
Uinta: Recorded 28 MBOE/d (79% liquids), with nine net wells TIL. Investments of about $300 to $350 million are targeted to open 25 to 30 net wells.
-
Anadarko: Produced 108 MBOE/d (59% liquids) with no new wells this quarter. Plans include spending $100 to $125 million to bring on seven to ten net wells.
2024 Guidance Updates:
-
Total Production: Expected to average between 560 to 575 MBOE/d for both Q2 and the full year.
-
Oil & Condensate: Production is forecasted to range from 205 to 209 Mbbls/d in Q2 and 204 to 208 Mbbls/d for the full year.
-
NGLs (C2 - C4): Anticipated to be between 89 to 92 Mbbls/d in Q2 and 88 to 92 Mbbls/d around the year.
-
Natural Gas: Projected to be between 1,600 to 1,650 MMcf/d for both Q2 and the full year.
-
Capital Investment: Estimated to be between $610 to $650 million in Q2 and $2.2 to $2.4 billion for the full year.
Ovintiv has cut its Scope 1 & 2 greenhouse gas (GHG) emissions intensity by 41% since 2019, progressing towards its goal of a 50% reduction by 2030.
Occidental Showed Mixed Results
Despite a significant outage in the eastern Gulf of Mexico, Occidental maintained an average global production of 1,172 thousand barrels of oil equivalent per day, closely aligning with their forecasts.
Production in the Rockies and other domestic areas exceeded expectations at 286 thousand barrels per day, while the Permian and International sectors hit their targets with 567 and 229 thousand barrels per day, respectively. The Gulf of Mexico faced challenges due to the outage, managing 90 thousand barrels per day, but operations resumed by mid-April.
Despite these operational successes, Occidental's quarterly sales of $6.01 billion fell short of the expected $6.7 billion, marking a 17.19% decline from the same period last year.
Occidental showed solid financial performance with a net income of $718 million. The company generated strong cash flows, achieving $2.0 billion in operating cash flow and $2.4 billion before working capital changes.
BP Reported a Decline
In the first quarter of 2024, BP saw a significant drop in earnings, with profits falling 45% to $3.39 billion from $4.9 billion a year earlier, mainly due to lower energy prices. However, BP's oil production and operations did show some resilience, earning $3.1 billion before interest and tax, an improvement over the $1.9 billion from the last quarter of 2023.
Meanwhile, BP's rival, Shell, also reported a downturn in its first-quarter earnings, with profits decreasing to $7.7 billion from $9.6 billion the previous year.
Marathon Oil's Strong Performance
Marathon Oil made significant strides in its drilling operations, notably bringing online 12 three-mile lateral wells. These wells were more cost-effective, with a per foot well cost that was over 20% lower than comparable two-mile lateral wells. The first such pad in the Permian region notably achieved an impressive 30-day initial production rate of 5,265 barrels of oil equivalent per day (boed), which included 62% oil, across three wells.
Marathon Oil's production averaged 326,000 net boed during the first quarter, with oil production specifically at 172,000 barrels per day (bopd). January's winter storms had a noticeable impact, reducing oil production by 4,000 net bopd, primarily in the Bakken region.
In addition to its successful well completions, Marathon Oil brought 49 company-operated wells to sales in the first quarter. This included contributions from various regions:
-
Eagle Ford: 127,000 net boed, including 65,000 net bopd, with 27 wells brought to sales.
-
Bakken: 105,000 net boed, including 68,000 net bopd, with 18 wells brought to sales.
-
Permian: 48,000 net boed, including 28,000 net bopd, with four wells brought to sales.
-
Oklahoma: 45,000 net boed, including 10,000 net bopd, with no new wells brought to sales.
The company has disclosed approximately 600 high-quality refract and redevelopment opportunities, about 30% of which are concentrated on the Ensign Eagle Ford acreage acquired.
Snapshot of ConocoPhillips
For the second quarter of 2024, ConocoPhillips expects production to range between 1.91 to 1.95 million barrels of oil equivalent per day.
In the first quarter of 2024, ConocoPhillips reported earnings of $2.6 billion, a slight decrease from $2.9 billion during the same period in 2023. Adjusted earnings for the first quarter were also $2.4 billion, compared to $2.9 billion in the previous year's first quarter. The company maintained a robust production level, delivering 1,902 thousand barrels of oil equivalent per day (MBOED). Notably, production in the Lower 48 states reached 1,046 MBOED, which included significant contributions from the Permian at 736 MBOED, the Eagle Ford at 197 MBOED, and the Bakken at 96 MBOED.
ConocoPhillips also marked several operational achievements during the quarter. The company successfully executed its first major winter construction season at the Willow project in Alaska and made progress in developing LNG projects both in the U.S. and Qatar. Additionally, its Montney development program in Canada saw increased activity following the startup of the second phase of its central processing facility, leading to record production levels for the asset. Another milestone was reached with the export of the 1,000th LNG cargo from the APLNG facility in April.
Comparing year-over-year, total production for the first quarter of 2024 was up by 110 MBOED. Adjusting for recent acquisitions and dispositions, the production increase was 43 MBOED or 2% compared to the previous year's first quarter.
TC Energy Ramps Up for Natural Gas Boom
TC Energy is beefing up its gas pipeline network to support the growing number of data centers that require more power, especially due to the rapid expansion of the artificial intelligence sector. The company projects that by 2030, the demand for natural gas could increase by 6 to 8 billion cubic feet per day (Bcf/d) to accommodate this need.
Supporting this outlook, a recent Wells Fargo report in April highlighted that U.S. electrical demand from data centers is expected to rise by 20%, potentially pushing natural gas demand up to 45 Bcf/d from the current 35 Bcf/d used in power generation.
In the first quarter of 2024, TC Energy reported that its gas throughput averaged 30 Bcf/d, which is a 5% increase from the year before. Deliveries to power generators also hit a record high for the quarter, with average flows reaching 2.9 Bcf/d, up about 11% from last year.
Deliveries averaged 15.3 billion cubic feet per day (Bcf/d), up by 0.7 Bcf/d from early 2023. The system also set a new daily record with 17.3 Bcf delivered.
Assets like Columbia Gas, Columbia Gulf, and Great Lakes Gas Transmission reached their highest delivery records.
Throughput increased by 13%, nearly reaching 3 Bcf/d, mainly due to more activity on the Sur de Texas pipeline.
And Bonus - Occidental Considers Selling Permian Assets for Over $1 Billion
Here's the latest from the energy sector: So OXY is looking to sell part of its Permian Basin operations, hoping to bring in over $1 billion. This is all for reducing the company's substantial debt, which stood at $18.5 billion at the end of 2023.
The sale has been delayed due to the FTC requesting more information on Occidental's $12 billion acquisition of CrownRock. This pushed the deal's closure to later this year and delayed other planned asset sales.
Despite these challenges, Occidental is pressing ahead, planning to take on an additional $9.1 billion in debt to finance the acquisition. The company has started selling its Barilla Draw assets, which cover about 27,500 acres and produce roughly 24,400 barrels per day. With recent increases in Permian Basin transactions, Occidental is optimistic about attracting strong interest in these assets.
