We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Oil & Gas Stock Roundup: LNG Deals Steal Market Attention
Read MoreHide Full Article
Key Takeaways
Shell signed a 15-year LNG supply deal with Italian utility Edison starting in 2028.
NextDecade secured a 20-year LNG sales agreement with ConocoPhillips for Train 5 output.
EQT inked a 20-year LNG deal with Commonwealth LNG, expanding its export portfolio.
It was a week when oil prices went up, while natural gas futures moved southward.
The headlines were dominated by liquefied natural gas (“LNG”) deals, with Shell ((SHEL - Free Report) ), NextDecade ((NEXT - Free Report) ) and EQT Corporation ((EQT - Free Report) ) signing long-term agreements. Developments associated with Chevron ((CVX - Free Report) ) and ExxonMobil ((XOM - Free Report) ) also grabbed attention.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures increased more than 1% to close at $62.69 per barrel, but natural gas prices fell some 3.5% to end at $2.941 per million British thermal units (MMBtu).
The crude price gain was mainly driven by stronger geopolitical risks, including new U.K. sanctions on Russian oil and a Ukrainian drone attack. Expectations of Fed rate cuts also boosted economic activity and crude demand.
Meanwhile, the drop in natural gas prices can be linked to a large weekly build, combined with softer seasonal demand and weaker LNG exports.
Recap of the Week’s Most Important Stories
1. Shell, the UK-based energy major, announced that Italian utility firm Edison has entered into an LNG sales and purchase agreement with its subsidiary, Shell International Trading Middle East. Per the terms of the agreement, Edison will buy 0.7 million tons of U.S. LNG from Shell for 15 years on a free-on-board basis. Shell will begin supplying LNG from 2028, per the contract.
The Italian firm’s contract with Shell should enable it to expand its LNG and gas portfolio while enhancing flexibility to meet the growing demand for LNG. Furthermore, by securing U.S. gas supplies, the company aims to reinforce the United States’ position as a reliable supply source.
As far as Shell is concerned, the company’s long-term strategy revolves around LNG. This London-based firm bought BG Group for $50 billion in 2016 to become the world’s largest producer and shipper of LNG. (Shell Signs Long-Term U.S. LNG Supply Deal With Italian Firm Edison)
2. LNG developer NextDecade has inked an agreement with U.S. exploration and production firm ConocoPhillips to sell 1 million tons per annum of the fuel. The contract has a duration of 20 years. Per the terms of the agreement, ConocoPhillips will purchase LNG from NextDecade’s Rio Grande LNG Train 5 in Brownsville, TX, on a free-on-board basis. The LNG price will be linked to the Henry Hub index price.
NextDecade has successfully taken another step toward reaching a final investment decision (FID) for Rio Grande LNG Train 5. Generally, for such large-scale projects, developers reach an FID after securing sufficient customer deals to support the required funding. The Zacks Rank #3 (Hold) company had previously stated that it aims to reach an FID for Train 5 by the fourth quarter of this year. The LNG supply deal with COP is contingent upon the FID of Rio Grande LNG Train 5.
To date, NextDecade has sold 4.5 mtpa of LNG from Rio Grande LNG Train 5 under long-term sales and purchase agreements spanning 20 years. Per NEXT, this is sufficient for the company to reach an FID on Train 5. With this deal, the company has concluded the commercialization of the fifth liquefaction train. Phase 1 of NEXT’s Rio Grande LNG has three liquefaction trains with a total capacity of 17.6 mtpa. Trains 4 and 5 are expected to provide an additional 10.8 mtpa capacity to the facility. (ConocoPhillips Inks 20-Year LNG Offtake Agreement With NextDecade)
3. Natural gas producer EQT has inked an agreement with Commonwealth LNG for the purchase of 1 million tons per annum of LNG. The contract spans 20 years. Commonwealth’s LNG export facility is currently under construction in Cameron Parish, LA.
Per the terms of the deal, EQT will buy LNG from Commonwealth LNG on a free-on-board basis. The price of the purchased LNG will be linked to the Henry Hub index. EQT recently signed another 20-year LNG purchase agreement with NextDecade Corporation to purchase 1.5 mtpa of LNG. The incremental export capacity enables the company to extend its direct-to-customer strategy, implemented in domestic markets, into the international energy landscape as well.
The deal with Commonwealth LNG strengthens the company's position in the LNG landscape and helps connect U.S. supply to international markets. This sale and purchase agreement enables EQT to form a diversified LNG export portfolio, which should provide it with flexibility in marketing cargoes overseas, optimizing returns. EQT believes that it is well-positioned to cater to the rise in global demand for lower-carbon energy that supports economic development while reducing carbon emissions. (EQT Inks 20-Year LNG Purchase Agreement to Diversify Its Portfolio)
4. American supermajor Chevron is set to boost its oil output in Argentina’s renowned Vaca Muerta shale formation, aiming to reach 30,000 barrels per day (bpd) by the end of 2025. The company’s target of increased output is a clear signal of both confidence and ambition in one of the world’s largest unconventional energy resources.
Chevron has long invested in Argentina’s Vaca Muerta, but 2025 marks a landmark push. The company currently produces about 25,000 bpd from this vast shale formation and plans a jump to 30,000 bpd by the year-end.
According to Chevron’s Argentina country manager, Vaca Muerta has huge potential for growth, and the company’s focus remains on this shale asset, where it holds a strong unconventional resource base that can be quickly scaled into one of its key assets, given favorable market and regulatory conditions. Recent advances in drilling techniques — many adapted from successful U.S. shale plays — have enabled Chevron to scale up quickly, solidifying Vaca Muerta in its global portfolio. (Chevron Targets 30,000 Bpd Output in Argentina's Vaca Muerta by 2025)
5. ExxonMobil, a U.S.-based integrated energy firm, announced that it has signed an agreement with Superior Graphite, a leading private player in the graphite business, to acquire its technology and U.S.-based assets. The agreement signifies ExxonMobil’s entry into the synthetic graphite market.
The acquisition involves a production unit in Kentucky and certain international offices of Superior Graphite. It also includes a research center owned by Superior Graphite. Exxon Mobil has mentioned that it intends to build a supply chain for synthetic graphite in the United States. Synthetic graphite is particularly attractive because it is less labor-intensive and of significantly better quality. Furthermore, the company can use carbon-intensive feedstocks from its available refining processes to produce the same.
ExxonMobil is aiming to grow its presence in the electric vehicle (EV) market. This deal marks a significant step in its efforts to produce more materials critical to powering EVs and battery production. Additionally, the company is also working on lithium extraction in southwest Arkansas from underground brine. Lithium is a key component in EV batteries. These initiatives underscore XOM’s efforts to advance lower-carbon energy technologies. (ExxonMobil to Acquire Superior Graphite Assets, Boost EV Ambitions)
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
Company Last Week Last 6 Months
XOM +2.7% +1.3%
CVX +2.2% -0.3%
COP -0.6% -6.8%
OXY -0.5% -0.2%
SLB -0.7% -14.5%
RIG +7.5% +8.2%
VLO 0% +23.9%
MPC +0.2% +27%
With oil and gas moving in opposite directions for the week, stocks were mixed. The Energy Select Sector SPDR — a popular way to track energy companies — went up 1.4% last week. But over the past six months, the sector tracker has gone down 1.6%.
What’s Next in the Energy World?
Market participants will keep a close eye on regular data releases to gauge the direction of commodities. U.S. government statistics on oil and natural gas, one of the most reliable indicators, will be a key focus for energy traders. Fuel demand and stock drawdowns in the coming weeks will shape commodity price trends. Additionally, Baker Hughes' rig count data, a critical indicator of U.S. crude and natural gas production trends, is also closely monitored. Tariff-related developments will also be a key factor in determining price trends.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Oil & Gas Stock Roundup: LNG Deals Steal Market Attention
Key Takeaways
It was a week when oil prices went up, while natural gas futures moved southward.
The headlines were dominated by liquefied natural gas (“LNG”) deals, with Shell ((SHEL - Free Report) ), NextDecade ((NEXT - Free Report) ) and EQT Corporation ((EQT - Free Report) ) signing long-term agreements. Developments associated with Chevron ((CVX - Free Report) ) and ExxonMobil ((XOM - Free Report) ) also grabbed attention.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures increased more than 1% to close at $62.69 per barrel, but natural gas prices fell some 3.5% to end at $2.941 per million British thermal units (MMBtu).
The crude price gain was mainly driven by stronger geopolitical risks, including new U.K. sanctions on Russian oil and a Ukrainian drone attack. Expectations of Fed rate cuts also boosted economic activity and crude demand.
Meanwhile, the drop in natural gas prices can be linked to a large weekly build, combined with softer seasonal demand and weaker LNG exports.
Recap of the Week’s Most Important Stories
1. Shell, the UK-based energy major, announced that Italian utility firm Edison has entered into an LNG sales and purchase agreement with its subsidiary, Shell International Trading Middle East. Per the terms of the agreement, Edison will buy 0.7 million tons of U.S. LNG from Shell for 15 years on a free-on-board basis. Shell will begin supplying LNG from 2028, per the contract.
The Italian firm’s contract with Shell should enable it to expand its LNG and gas portfolio while enhancing flexibility to meet the growing demand for LNG. Furthermore, by securing U.S. gas supplies, the company aims to reinforce the United States’ position as a reliable supply source.
As far as Shell is concerned, the company’s long-term strategy revolves around LNG. This London-based firm bought BG Group for $50 billion in 2016 to become the world’s largest producer and shipper of LNG. (Shell Signs Long-Term U.S. LNG Supply Deal With Italian Firm Edison)
2. LNG developer NextDecade has inked an agreement with U.S. exploration and production firm ConocoPhillips to sell 1 million tons per annum of the fuel. The contract has a duration of 20 years. Per the terms of the agreement, ConocoPhillips will purchase LNG from NextDecade’s Rio Grande LNG Train 5 in Brownsville, TX, on a free-on-board basis. The LNG price will be linked to the Henry Hub index price.
NextDecade has successfully taken another step toward reaching a final investment decision (FID) for Rio Grande LNG Train 5. Generally, for such large-scale projects, developers reach an FID after securing sufficient customer deals to support the required funding. The Zacks Rank #3 (Hold) company had previously stated that it aims to reach an FID for Train 5 by the fourth quarter of this year. The LNG supply deal with COP is contingent upon the FID of Rio Grande LNG Train 5.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
To date, NextDecade has sold 4.5 mtpa of LNG from Rio Grande LNG Train 5 under long-term sales and purchase agreements spanning 20 years. Per NEXT, this is sufficient for the company to reach an FID on Train 5. With this deal, the company has concluded the commercialization of the fifth liquefaction train. Phase 1 of NEXT’s Rio Grande LNG has three liquefaction trains with a total capacity of 17.6 mtpa. Trains 4 and 5 are expected to provide an additional 10.8 mtpa capacity to the facility. (ConocoPhillips Inks 20-Year LNG Offtake Agreement With NextDecade)
3. Natural gas producer EQT has inked an agreement with Commonwealth LNG for the purchase of 1 million tons per annum of LNG. The contract spans 20 years. Commonwealth’s LNG export facility is currently under construction in Cameron Parish, LA.
Per the terms of the deal, EQT will buy LNG from Commonwealth LNG on a free-on-board basis. The price of the purchased LNG will be linked to the Henry Hub index. EQT recently signed another 20-year LNG purchase agreement with NextDecade Corporation to purchase 1.5 mtpa of LNG. The incremental export capacity enables the company to extend its direct-to-customer strategy, implemented in domestic markets, into the international energy landscape as well.
The deal with Commonwealth LNG strengthens the company's position in the LNG landscape and helps connect U.S. supply to international markets. This sale and purchase agreement enables EQT to form a diversified LNG export portfolio, which should provide it with flexibility in marketing cargoes overseas, optimizing returns. EQT believes that it is well-positioned to cater to the rise in global demand for lower-carbon energy that supports economic development while reducing carbon emissions. (EQT Inks 20-Year LNG Purchase Agreement to Diversify Its Portfolio)
4. American supermajor Chevron is set to boost its oil output in Argentina’s renowned Vaca Muerta shale formation, aiming to reach 30,000 barrels per day (bpd) by the end of 2025. The company’s target of increased output is a clear signal of both confidence and ambition in one of the world’s largest unconventional energy resources.
Chevron has long invested in Argentina’s Vaca Muerta, but 2025 marks a landmark push. The company currently produces about 25,000 bpd from this vast shale formation and plans a jump to 30,000 bpd by the year-end.
According to Chevron’s Argentina country manager, Vaca Muerta has huge potential for growth, and the company’s focus remains on this shale asset, where it holds a strong unconventional resource base that can be quickly scaled into one of its key assets, given favorable market and regulatory conditions. Recent advances in drilling techniques — many adapted from successful U.S. shale plays — have enabled Chevron to scale up quickly, solidifying Vaca Muerta in its global portfolio. (Chevron Targets 30,000 Bpd Output in Argentina's Vaca Muerta by 2025)
5. ExxonMobil, a U.S.-based integrated energy firm, announced that it has signed an agreement with Superior Graphite, a leading private player in the graphite business, to acquire its technology and U.S.-based assets. The agreement signifies ExxonMobil’s entry into the synthetic graphite market.
The acquisition involves a production unit in Kentucky and certain international offices of Superior Graphite. It also includes a research center owned by Superior Graphite. Exxon Mobil has mentioned that it intends to build a supply chain for synthetic graphite in the United States. Synthetic graphite is particularly attractive because it is less labor-intensive and of significantly better quality. Furthermore, the company can use carbon-intensive feedstocks from its available refining processes to produce the same.
ExxonMobil is aiming to grow its presence in the electric vehicle (EV) market. This deal marks a significant step in its efforts to produce more materials critical to powering EVs and battery production. Additionally, the company is also working on lithium extraction in southwest Arkansas from underground brine. Lithium is a key component in EV batteries. These initiatives underscore XOM’s efforts to advance lower-carbon energy technologies. (ExxonMobil to Acquire Superior Graphite Assets, Boost EV Ambitions)
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
Company Last Week Last 6 Months
XOM +2.7% +1.3%
CVX +2.2% -0.3%
COP -0.6% -6.8%
OXY -0.5% -0.2%
SLB -0.7% -14.5%
RIG +7.5% +8.2%
VLO 0% +23.9%
MPC +0.2% +27%
With oil and gas moving in opposite directions for the week, stocks were mixed. The Energy Select Sector SPDR — a popular way to track energy companies — went up 1.4% last week. But over the past six months, the sector tracker has gone down 1.6%.
What’s Next in the Energy World?
Market participants will keep a close eye on regular data releases to gauge the direction of commodities. U.S. government statistics on oil and natural gas, one of the most reliable indicators, will be a key focus for energy traders. Fuel demand and stock drawdowns in the coming weeks will shape commodity price trends. Additionally, Baker Hughes' rig count data, a critical indicator of U.S. crude and natural gas production trends, is also closely monitored. Tariff-related developments will also be a key factor in determining price trends.