Top 10 oil and gas producers so far this year

The latest rally in oil prices shows real strength, with oil prices posting big gains again on Monday. The rally began last week after Washington indicated Israel might strike Iran’s oil facilities. Brent crude for November delivery gained 3.4% in the intraday session on Monday to trade at $80.71 a barrel at 1:20 pm ET, while WTI crude oil It was changing hands at $77.05 a barrel after gaining 3.1%.

Clearview Energy Partners predicted oil prices could gain as much as $28/bbl if flows are blocked in the Strait of Hormuz; $13/bbl if Israel strikes Iranian energy infrastructure and $7/bbl if the US and its allies impose economic sanctions on Iran.

Citi analysts, meanwhile, provided estimates that a major Israeli strike on Iran’s export capacity could knock 1.5 million bbl/d of crude off the market, while an attack on downstream assets and other infrastructure would minor, such as 300,000-450,000 bbl. /day. Iran’s oil output hit a six-year high of 3.7 million bbl/d in August, according to ANZ Bank.

Unsurprisingly, oil and gas stocks are soaring, with the sector’s favorite benchmark, Energy Select Sector SPDR Fund (NYSEARCA:XLE), up nearly 10% over the past 30 days. However, the energy sector has yet to catch up with the broader market, having returned 12.0% from 20.0% by S&P 500. That said, some power stocks have even outperformed the hot AI leader Nvidia Corp. (NASDAQ:NVDA). Here are the top 10 energy sector performers so far this year.

#1 Sintana Energy Inc. (OTCQB:SEUSF)

Market value: $320.0 million

Annual Return: 274.8%

based in Toronto, Canada Sintana Energy Inc. (OTCQB:SEUSF)(CVE:SEI) is engaged in the exploration and development business of crude oil and natural gas in Colombia. The company holds five onshore and offshore oil exploration licenses in Namibia as well as the Magdalena Basin in Colombia.

SEI shares rose after Galp Energy announced in April its part-owned Mopane discovery offshore Namibia is “world-class”. Flows from the Mopane-1X well peaked at 14,000 barrels of oil equivalent per day in one test.

Related: Crude oil rises more than 3.5% as Hezbollah strikes Haifa

#2 CES Energy Solutions Corp. (OTCPK:CESDF)

Market cap: $1.3 billion

Annual Return: 125.6%

Based in Calgary, Canada CES Energy Solutions Corp. (OTCPK:CESDF) is an oilfield services company that provides solutions for drill bits, completion and stimulation points, wellhead and pump jack, and pipeline services to downstream markets.

CES was one of the best performers TSX Composite components in the last two years. The stock has delivered a stunning return of more than 400% over the past three years, unmatched by an 11% increase in the TSX benchmark over the time frame, thanks to the company’s solid long-term financial growth prospects.

#3 Targa Resources Corp. (NYSE:TRGP)

Market cap: $34.6 billion

Annual Return: 82.4%

based in Texas Stretcher Resources Body. (NYSE:TRGP) owns general and limited partner interests in a limited partnership that provides natural gas and natural gas liquids services. The company gathers, compresses, treats, processes and sells natural gas. TRGP earned a buy recommendation from Goldman Sachs due to its strong return on equity (or ROE).

“Stronger-than-expected economic growth is the clearest upside risk to ROE. (This) would create an advantage for asset turnover through faster growth in sales and profit margins through operating leverage. However, stronger growth has recently coincided with hotter-than-expected inflation,” wrote GS analyst David J. Kostin. “

GS estimates that Targa Resources will be able to increase its ROE by 17% this year. TRGP has been an exceptional performer and is currently trading at a decade high.

#4 The Williams Companies (NYSE:WMB)

Market cap: $60.5 billion

YTD returns: 43.0%

The Williams Companies Inc. (NYSE:WMB) is one of the largest energy infrastructure companies in the United States, operating a total of 33,000 miles of pipelines, which it says represents one-third of the gas transported in the US. The company posted solid results, with the recent increase in electricity demand, particularly from artificial intelligence (AI) data centers, likely to keep demand high for the company’s gas pipelines.

WMB continued to rapidly expand its gas infrastructure. At the beginning of the year, the company COMPLETED the acquisition of transportation link facilities from Hartree Partners for $1.95 billion. Gas assets include six underground natural gas storage facilities in Louisiana and Mississippi with a total capacity of 115B cf, 30 pipeline interconnections to attractive markets, including connections to Transco, and 230 miles of gas transmission pipelines. Transco is the largest natural gas pipeline in the US

“Importantly, this storage will also allow us to deliver value to customers in markets with growing renewable adoption as daily natural gas peaks increase the need for storage.,” Williams president and CEO Alan Armstrong said in a press release.

#5 Topaz Energy Corp. (OTCPK:TPZEF)

Market cap: $2.9 billion

Annual Return: 35.3%

Based in Calgary, Canada Topaz Energy Corp. (OTCPK:TPZEF) operates as an energy infrastructure and royalty company in Canada. The Company owns copyright on ~6 million gross acres of developed and undeveloped land.

A week ago, RBC reiterated a Buy rating on Topaz Energy with a price target of $28.00. Topaz Energy Corp has an analyst consensus of Strong Buy with a consensus price target of $30.06, representing a 15.04% upside. Last month, National Bank also maintained a buy rating on the stock with a $32.50 price target.

#6 ONEOK Inc. (NYSE:OKE)

Market cap: $55.6 billion

Annual Return: 35.2%

based in Tulsa, Oklahoma ONEOK Inc. (NYSE: OK) is another midstream infrastructure company engaged in the processing, storage, transportation and marketing of natural gas and natural gas liquids. The company recently posted Q2 adjusted EPS of $1.33, beating the Wall Street consensus by $0.12, due to higher natural gas processing volumes.

Like its peers, ONEOK has sought to expand its gas assets through mergers. The company recently announced the acquisition of 43% of the outstanding common units of Enlink for $14.90 per unit and 100% of the interests in the managing member for $300 million, for total cash consideration of approximately $3.3 billion. The acquisition includes a crude oil infrastructure platform capable of processing 1.7 billion cubic feet per day of Permian gas and 1.6 million barrels per day of Permian crude oil gathering capacity.

Morgan Stanley recently upgraded OKE shares to Overweight from Equal Weight with a price target of $111, up from $103 (up 17.3%), expecting a positive revision cycle next year . Morgan Stanley’s Devin McDermott expects the company to deliver a strong execution in growing and realizing synergies with EnLink and Medallion, following a strong execution in integrating the Magellan acquisition.

#7 Kinder Morgan Inc. (NYSE:KMI)

Market cap: $52.4 billion

YTD returns: 34.2%

Another energy infrastructure giant, Kinder Morgan (NYSE:KMI) owns and operates approximately 82,000 miles of pipeline and 139 terminals. Kinder Morgan reported that its natural gas pipeline segment saw growth due to higher margins realized on its storage assets and higher volumes on its gathering systems. On earnings conference callCEO Kim Dang said he expects “significant new demand for natural gas” to grow from energy-intensive technology such as artificial intelligence, crypto mining and data centers.

“We expect demand for natural gas to grow substantially between now and 2030, led by a doubling of demand for LNG exports and a more than 50% increase in exports to Mexico.Dang said.

“The focus on renewable energy sources as the only energy sources is fatal,” Dang added, arguing that Big Tech leaders, “like the rest of us, realize that the wind doesn’t blow all the time and the sun doesn’t shine all the time.”

Sital Mody, president of natural gas at the energy infrastructure company Kinder Morgan is very optimistic about the Eagle Ford’s natural gas prospects. Mody predicted strong growth in Eagle Ford Shale production through 2030 due to favorable economics and the low nitrogen content of natural gas produced in the basin. Conformable DATA from S&P Global Commodity Insight, natural gas production from the Eagle Ford Shale averaged 5.2 Bcf/d in 2023; Kinder Morgan has forecast that production will increase by another 2.5 Bcf/d, or nearly 50%, by 2030 and will likely rival that of Haynesville.

#8 Galp Energia SA (OTCPK:GLPEF)

Market cap: $14.6 billion

Annual Return: 30.6%

Galp Energia SA (OTCPK:GLPEF) operates as an integrated energy operator in Portugal and internationally.

In April, Galp described the Mopane discovery (see Sintana Energy above) as “potentially an important commercial discovery”. Galp believes that the complex alone could contain hydrocarbons in excess of 10 billion barrels of oil equivalent (boe) and sees possible additional exploration and appraisal wells in the vicinity of the project.

“All data obtained from the current Mopane drilling campaign will be analyzed and integrated into an updated reservoir model. The model will serve as the basis for refining Galp’s near-term drilling plan to further explore, evaluate and develop the wider Mopane complex,“, the company said in a statement.

#9 Diamondback Energy Inc. (NASDAQ:FANG)

Market cap: $57.4 billion

Annual Return: 28.8%

based in Midland, Texas Diamondback Energy, Inc. (NASDAQ:FANG) was one of the outstanding performers in the current earnings season. The company reported Q2 revenue of $2.48 billion (+29.2% y/y), beating the Wall Street consensus by $280 million, while Q2 Non-GAAP EPS of $4.52 beat $0.02. The company had an average production of 276.1 MBO/d (474.7 MBOE/d).

Earlier, Diamondback Energy agreed to buy private Permian producer Endeavor Energy Resources in a cash and stock deal valued at $26 billion. Interestingly, FANG shares are up more than 10% after the deal was announced almost a week ago, which means the market is looking at it favorably. The stock prices of the acquiring company, more often than not, tend to fall because the company has to pay a premium, along with a high risk of failure.

#10 Exxon Mobil Corp. (NYSE:XOM)

Market cap: $554.6 billion

Annual Return: 25.8%

Exxon Mobil Corp. (NYSE:XOM) is America’s largest integrated oil and gas company.

XOM is trading at an all-time high, thanks in large part to Wall Street being optimistic about the company’s long-term prospects. XOM has a consensus rating of “Moderate Buy” among the 19 analysts covering the stock, based on 12 “Strong Buy” ratings and seven “Hold”.

By Alex Kimani for Oilprice.com

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