Liquefied natural gas exporter Cheniere Energy and oil stocks Denbury and Callon Petroleum reported Q4 earnings early Thursday as energy prices soared following Russia's invasion of Ukraine.
Natural gas futures climbed 6.2% while global benchmark Brent oil soared 8% to $104.82 per barrel, crossing the psychologically important level of $100 for the first time since 2014. U.S. West Texas Intermediate crude jumped 8% to $99.48.
The Ukrainian cities of Kyiv, Odessa, Kharkiv and Mariupo were reportedly under a coordinated attack by Russia as President Vladimir Putin announced a "special military operation" was underway.
Ukrainian President Volodymyr Zelenskiy called for more sanctions on Russia. The U.K. announced its first wave of sanctions aimed at hitting Russian banks and tech exports and the Biden Administration is implementing comprehensive sanctions on Russian sovereign debt. So far, no sanctions have targeted Russia's energy sector.
LNG Earnings
Cheniere Energy reported a Q4 loss of $5.22 per share on revenue of $6.56 billion. Analysts polled by FactSet expected EPS of $1.65 on revenue of $4.61 billion.
The company continues to expand its Sabine Pass Louisiana export facility to take advantage of growing LNG markets. A sixth train, or liquefaction production unit, turned out its first export cargo in December.
Cheniere's full-year adjusted EBITDA of $4.9 billion was at top of its expected range. The company raised its EBITDA guidance to $7 billion to $7.5 billion for 2022.
Shares swept up 9% to 129.63 in early trading on the stock market today. LNG stock has climbed nearly 26% since the start or the year, following a 68% advance in 2021, according to MarketSmith charts.
Tudor, Pickering and Holt analysts have a buy rating on LNG stock with a price target of 136.
The number of Cheniere LNG cargoes rose by 18% to 153 year-over-year. LNG exports have climbed in recent months as Cheniere completed its Sabine Pass expansion amid increased global demand for LNG.
Europe gets about a third of its natural gas from Russia and about a quarter of that gas travels via pipelines routed through Ukraine. But Russia's invasion of Ukraine puts Europe's access to natural gas at risk. On Tuesday, Germany stopped certifications on the Nord Stream 2 gas pipeline as the West announced sanctions on Russia.
Europe has been outbidding Asian markets for the limited amounts of LNG available from the U.S., Australia and Qatar.
Oil Stocks Earnings
Denbury reported Q4 EPS of 76 cents on revenue of $661.9 million. Both the top and bottom lines beat Wall Street estimates. Production was 361,900 barrels per day vs. estimates for 313,000 bpd.
Shares fell 4.7% early to 64.23. DEN stock is forming a flat base with an 88.12 buy point.
Callon Petroleum reported Q4 EPS of $2.66, falling short of analyst estimates for $2.72. But revenue of $692.2 million beat expectations for $533.8 million. Shares dropped 4.8%.
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