Equinor ASA EQNR entered an agreement to acquire battery storage developer East Point Energy LLC, marking its entry into the U.S. power market through flexible assets.
The agreement backs Equinor's strategy of a clean energy economy and would provide a forum to expand its contributions in the United States.
Headquartered in Charlottesville, VA, East Point Energy has a 4.1-gigawatt pipeline of early to mid-stage battery storage projects focused on the U.S. East Coast. Equinor claimed that additional development possibilities beyond the current pipeline have been determined.
Once the deal closes, East Point Energy will become a fully-owned subsidiary of Equinor. The company will continue to develop the business and add capabilities to own and operate energy storage projects in the future. The transaction is expected to complete in the third quarter of 2022.
Battery storage plays a crucial role in the energy transition, enabling additional insights into renewables. The acquisition will allow Equinor to further unlock the potential in the renewable space in the United States, capturing value from volatility in the power markets and providing reliable services to the grid.
Equinor recognizes a significant opportunity to establish a profitable business by utilizing battery storage resources in selected power markets. The agreement strengthens and diversifies Equinor's renewable energy contributions in the United States, including offshore wind projects — Empire Wind and Beacon Wind.
Equinor currently carries a Zacks Rank #3 (Hold). The company is a well-known name in the energy space as it is committed to reducing emissions from its operations to build up a resilient business model in line with the Paris Agreement.
Some better-ranked players in the energy space are BP plc BP, Cenovus Energy Inc. CVE and Kinder Morgan, Inc. KMI. All companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
BP is a fully integrated energy company, with a strong focus on renewable energy. In the past few quarters, BP has successfully been reducing long-term debt. Thus, BP will likely continue generating handsome free cash flow in the coming quarters.
BP announced plans to execute a $2.5-billion share buyback, which is expected to complete before reporting the second-quarter results. The company anticipates buying back $1 billion worth of shares every quarter, considering Brent's crude price at $60 per barrel. Also, the company expects to receive $2-3 billion of divestment and other proceeds this year.
Calgary, Canada-based Cenovus is a leading integrated energy firm. With multiple divestments announced last year, Cenovus reached its asset sale commitment for 2021, making it well-positioned to focus on high-return opportunities in the portfolio.
Cenovus has a strong focus on returning capital to shareholders. The company increased the quarterly base dividend to 10.5 Canadian cents per share, suggesting a 200% increase from 3.5 Canadian cents per share. This year's commitment to growing shareholders' returns comprises the plan to buy back up to 146.5 million common shares.
Kinder Morgan is a leading midstream energy infrastructure provider in North America. KMI expects to generate a net income of $2.5 billion in 2022. The company anticipates DCF and adjusted EBITDA of $4.7 billion and $7.2 billion, respectively. Moreover, to strengthen the balance sheet, it is planning to end this year with a net debt to adjusted EBITDA of 4.3 times.
With a strong focus on returning capital to shareholders, Kinder Morgan projects the annual dividend at $1.11 per share. The company's board of directors approved a cash dividend of 27.75 cents per share for the first quarter of 2022. This suggests a 2.8% increase from the prior dividend of 27 cents per share.
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BP p.l.c. (NYSE: BP): Free Stock Analysis Report
Cenovus Energy Inc (NYSE: CVE): Free Stock Analysis Report
Kinder Morgan, Inc. (NYSE: KMI): Free Stock Analysis Report
Equinor ASA (EQNR): Free Stock Analysis Report
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