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TC Energy's (TRP) Coastal GasLink Cost to Balloon Further
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TC Energy (TRP - Free Report) , a Canadian energy company, has released an updated cost estimate for the Coastal GasLink Project. The company’s cost estimate for the project’s completion has increased to approximately C$14.5 billion, due to factors like labor market conditions, contractor underperformance, and unexpected events such as adverse weather.
Six months ago, TC Energy nearly doubled its cost estimate for the Coastal GasLink pipeline to nearly C$9 billion. If construction continues into 2024, the cost of its Coastal GasLink project could rise by another C$1.2 billion. According to the company, due to strong market interest, it may increase its planned C$5 billion asset-sale programme to cover the increased costs.
According to the company, the increased costs were caused by a combination of factors such as supply chain constraints, the impact of Covid-19 on construction schedules, and increased material costs. TC Energy stated that it is actively pursuing cost mitigants and recoveries that may partially offset some of the costs, though some of these may not be determined until the project is in service.
The project is currently 83% complete, with mechanical completion expected by the end of 2023. TC Energy's 2023 capital expenditure outlook has been revised to $11.5-$12.0 billion, reflecting its increased costs.
The company's CEO, François Poirier, stated that the project will provide benefits to various stakeholders and play a role in global energy security and emissions reduction. The company's priorities for 2023 include project execution, balance sheet and financial flexibility, asset returns, and low-carbon opportunities. Due to an increase in the Coastal GasLink project’s expected cost, TC Energy will recognize an impairment to its equity investment in the project in its fourth-quarter 2022 financial results.
Zacks Rank and Key Picks
TC Energy, a provider of energy infrastructure, builds and operates energy infrastructure such as natural gas pipelines, liquids pipelines, power generation facilities, and gas storage facilities.
Helmerich & Payne: Helmerich & Payne is valued at around $4.88 billion. Over the past 60 days, the Zacks Consensus Estimate for HP's fiscal 2023 earnings has been revised by 18.8%.
Helmerich & Payne, headquartered in Tulsa, OK, has a trailing four-quarter earnings surprise of roughly 130.98%, on average. In the past year, HP stock has increased by 51.8%.
Patterson-UTI Energy: PTEN beat the Zacks Consensus Estimate for earnings in three of the last four quarters. On average, the company has a trailing four-quarter earnings surprise of roughly 169.23%.
Patterson-UTI is worth approximately $3.53 billion. Its shares have gained 53.4% in the past year.
Halliburton: HAL currently has a Forward P/E ratio of 13.24. For comparison, its industry has an average Forward P/E of 34.80, which means HAL is trading at a discount to the group.
HAL is worth approximately $37.08 billion. Its shares have gained 23.3% in the past year.
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TC Energy's (TRP) Coastal GasLink Cost to Balloon Further
TC Energy (TRP - Free Report) , a Canadian energy company, has released an updated cost estimate for the Coastal GasLink Project. The company’s cost estimate for the project’s completion has increased to approximately C$14.5 billion, due to factors like labor market conditions, contractor underperformance, and unexpected events such as adverse weather.
Six months ago, TC Energy nearly doubled its cost estimate for the Coastal GasLink pipeline to nearly C$9 billion. If construction continues into 2024, the cost of its Coastal GasLink project could rise by another C$1.2 billion. According to the company, due to strong market interest, it may increase its planned C$5 billion asset-sale programme to cover the increased costs.
According to the company, the increased costs were caused by a combination of factors such as supply chain constraints, the impact of Covid-19 on construction schedules, and increased material costs. TC Energy stated that it is actively pursuing cost mitigants and recoveries that may partially offset some of the costs, though some of these may not be determined until the project is in service.
The project is currently 83% complete, with mechanical completion expected by the end of 2023. TC Energy's 2023 capital expenditure outlook has been revised to $11.5-$12.0 billion, reflecting its increased costs.
The company's CEO, François Poirier, stated that the project will provide benefits to various stakeholders and play a role in global energy security and emissions reduction. The company's priorities for 2023 include project execution, balance sheet and financial flexibility, asset returns, and low-carbon opportunities. Due to an increase in the Coastal GasLink project’s expected cost, TC Energy will recognize an impairment to its equity investment in the project in its fourth-quarter 2022 financial results.
Zacks Rank and Key Picks
TC Energy, a provider of energy infrastructure, builds and operates energy infrastructure such as natural gas pipelines, liquids pipelines, power generation facilities, and gas storage facilities.
Currently, TC Energy (TRP - Free Report) carries a Zacks Rank #3 (Hold). Meanwhile, investors interested in the energy sector might look at stocks like Helmerich & Payne (HP - Free Report) and Patterson-UTI Energy (PTEN - Free Report) both sporting a Zacks Rank #1 (Strong Buy) and Halliburton (HAL - Free Report) holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Helmerich & Payne: Helmerich & Payne is valued at around $4.88 billion. Over the past 60 days, the Zacks Consensus Estimate for HP's fiscal 2023 earnings has been revised by 18.8%.
Helmerich & Payne, headquartered in Tulsa, OK, has a trailing four-quarter earnings surprise of roughly 130.98%, on average. In the past year, HP stock has increased by 51.8%.
Patterson-UTI Energy: PTEN beat the Zacks Consensus Estimate for earnings in three of the last four quarters. On average, the company has a trailing four-quarter earnings surprise of roughly 169.23%.
Patterson-UTI is worth approximately $3.53 billion. Its shares have gained 53.4% in the past year.
Halliburton: HAL currently has a Forward P/E ratio of 13.24. For comparison, its industry has an average Forward P/E of 34.80, which means HAL is trading at a discount to the group.
HAL is worth approximately $37.08 billion. Its shares have gained 23.3% in the past year.