The Empire Wind project, developed by
BP plc ( BP Quick Quote BP - Free Report) and Equinor ASA ( EQNR Quick Quote EQNR - Free Report) , received approval from the Biden-Harris administration. This marks a substantial stride toward achieving the administration’s clean energy goals.
Empire Wind secured the sixth approval for a commercial-scale offshore wind energy project since President Biden was elected, overcoming initial challenges and uncertainties in its development.
Empire Wind, along with other offshore wind projects, is grappling with escalated construction and financing expenses. The industry contends that existing power sales contracts do not address these cost overruns. However, a new auction proposed by the New York state could offer much-needed assistance.
Empire Wind 1 was projected to commence production in 2026, followed by Empire Wind 2 a year later.
The approval of Empire Wind marks a significant step toward achieving the country’s target of deploying 30,000 megawatts (MW) of offshore wind along its coastlines by 2030. The project is anticipated to produce sufficient electricity to meet the needs of more than a million homes in New York.
BP and Equinor are developing two offshore wind ventures, referred to as Empire Wind 1 and Empire Wind 2, within their leased area, situated 12 nautical miles south of Long Island, NY, and 16.9 nautical miles to the east of Long Branch, NJ.
BP plans to double its offshore team to 800 employees in the next two years as part of its strategy to boost renewables and low-carbon energy production, aiming to reduce greenhouse gas emissions by the end of the decade, with a focus on offshore wind.
However, BP and Equinor faced setbacks as they recorded impairments of $300 million and $540 million, respectively, for their New York projects. This followed the rejection by the state regulator to renegotiate power supply terms.
Starting on Nov 30, New York will launch an offshore wind solicitation open to all bidders, including those with existing contracts. This provides companies with the opportunity to submit their planned projects at higher prices and potentially exit their previous contracts.
Zacks Rank & Stocks to Consider
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the
energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here . PBF Energy Inc. ( PBF Quick Quote PBF - Free Report) reported third-quarter 2023 earnings of $6.61 per share, beating the Zacks Consensus Estimate of $4.86 per share. Better-than-expected quarterly results were primarily driven by lower costs and expenses.
Compared with composite stocks belonging to the industry, the leading upstream energy company’s debt-to-capitalization ratio has been consistently lower over the past few years. The company boasts a robust liquidity position, with a cash balance of $1.9 billion, which is more than sufficient to cover its long-term debt of $1.2 billion. This underscores the company’s strong financial liquidity.
Liberty Energy ( LBRT Quick Quote LBRT - Free Report) reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of earnings of 74 cents per share. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
Liberty’s board of directors announced a cash dividend of seven cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend reflects a 40% rise from the previous quarter’s level. As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.