STOCKS TELEGRAPH

Tag: oil

  • PBF Energy Inc. (PBF) Stock Undergoes Minor Volatility Following BAAQMD Emissions Ruling

    PBF Energy Inc. (PBF) stock prices were up 8.17% as of the market close on July 21st, 2021, bringing the price per share up to USD$10.46 at the end of the trading day. Subsequent premarket fluctuations saw the stock fall by 2.87%, bringing it down to USD$10.16.

    BAAQMD’s Decision

    July 21st, 2021 saw the company address the BAAQMD Board’s decision to adopt Proposed Amended Rule 6-5, in regard to particulate emission in the Bay Area resulting from refinery Fluid Catalytic Cracking units. The company has been collaborating closely with Bay Area Air Quality Management District staff throughout the rule-making process, which will require refineries to meet a specific emission standard by 2026. Fortunately, this will not require the installation of a wet gas scrubber or other potentially costly technology.

    Implementing Change

    In line with this, the company plans to continue with the implementation of previously planned projects over the upcoming months, which will see the Martinez refinery undergo a drastic reduction in emissions. The company expects to close the gap between existing emissions and target emissions by the first quarter of 2022. PBF is keen to continue partnering with the BAAQMD to facilitate efficient improvements in air quality while ensuring the continued provision of the company’s vital products to one of the largest fuel markets in the world.

    Healthy Financials

    The company exhibited improvements in financial reports for the first quarter of 2021, as compared to the prior quarter. March 2021 indicated a significant increase from January, reflecting favorable market conditions as the ongoing push for universal immunizations resulted in a normalizing and resurgence of demand. Despite this increase, however, the independent refining sector is at the mercy of rising compliance costs under the RFS program.

    Solid Liquidity Position

    As the devastating effects of the pandemic played out following its onset, PBF took measures to protect its balance sheet in the face of economic uncertainty. The company reported having a solid liquidity position of USD$2.3 billion as of March 31st, 2021, of which USD$1.5 billion consisted of cash and funds available via an asset-based lending facility. Furthermore, PBF Logistics LP liquidity included USD$44 million in cash and roughly USD$311 million as a part of a revolving credit facility.

    Future Outlook for PBF

    Armed with a solid liquidity position that will help the company execute their strategy over the next couple months until the economy fully returns to pre-pandemic levels, PBF is poised to capitalize on its opportunities for success. Current and potential investors are hopeful that management will leverage the resources at their disposal to usher in significant and sustained increases in shareholder value.

  • Borr Drilling, Ltd. (BORR) Stock Exhibits Minor Volatility as Mexican Operations Continue to Develop

    Borr Drilling, Ltd. (BORR) stock prices were up by a marginal 0.22% as of the market closing on July 6th, 2021, bringing the price per share up to USD$0.81 at the end of the trading day. Subsequent premarket fluctuations have seen the stock dip by 0.83%, bringing it down to USD$0.8050.

    ATM Program

    July 6th, 2021 saw the company announce its at-the-market program and Equity Distribution Agreement with Clarksons Platou Securities, Inc. as their sales agent. Dated for July 6th, 2021, this move will see the company offer for sale from time to time a cumulative total of USD$40 million of BORR’s common shares to be listed on the New York Stock Exchange. Capital generated from the program will be allocated towards general corporate purposes, including, but not limited to, repaying debt obligations.

    Existing Partnership

    June 15th, 2021 saw the company announced the success of the review of the performance and cost efficiency of its five rigs that it operates as a part of a joint venture with its Mexican partner facilitating the provision of integrated well services for Pemex. The services started in May 2019 and have resulted in incremental production of roughly 125,000 barrels of oil per day from the 21 wells drilled as of mid-June 2021. The program has seen a request for an extension, with the five Borr Drilling rigs expected to be employed until the end of 2022.

    Memorandum of Understanding

    In accordance with the extension, BORR and its Mexican partner have entered into a Memorandum of Understanding that will see the implementation of certain changes in the structures of existing joint ventures. The move will see the Mexican partner buying BORR’s 49% stake of the integrated services JVs Opex and Akal. BORR expects gaining access to a gross amount of USD$28 million as a result of the move.

    Scope of Collaboration

    Concurrently, the company will also acquire an incremental 2% stake of the joint ventures performing drilling services from its Mexican partner, resulting in a 51% majority ownership position. The drilling joint ventures will continue earning day rates from regular drilling contracts with its main customers Opex and Akal. The company hopes to streamline its Mexican operation while reducing risk, leading to a more stable cash flow over time. The closing of the transaction is expected for Q3 2021.

    Future Outlook for BORR

    Armed with the flexibility afforded by the ATM program and the extension of its existing collaboration, BORR is poised to capitalize on the expanded scope of upcoming opportunities presented to it. Investors are hopeful that the company will be able to leverage the resources at their disposal to drive further gains.

  • Overseas Shipholding Group, Inc. (OSG) Stock Skyrockets as Meme Stock Phenomenon Continues

    Overseas Shipholding Group, Inc. (OSG) stock prices were up by 0.48% as of the market closing on July 1st, 2021, bringing the price per share up to USD$2.10 at the end of the trading day. Subsequent pre-market fluctuations saw the stock surge by 33.81%, bringing it up to USD$2.81.

    Net Loss Reports

    Net loss for the first quarter of 2021 was reported at USD$15.9 million, representing a net loss of USD$0.18 per diluted share. This is a significant fall from the USD$25.1 million in net income reported in the same quarter of the prior year, representing net income of USD$0.28 per diluted share. A USD$19.2 million gain associated with the acquisition of the Alaska Tanker Company was a significant contributor to the year-over-year difference.

    Sale of Overseas Gulf Coast

    April 2021 saw the company enter into a contractual agreement that would see OSG sell Overseas Gulf Coast for USD$32.5 million. As per the negotiated sale terms, the transaction was recorded as a USD$5.4 million loss for the first quarter of 2021. The unencumbered asset was sold to general additional liquidity that the company plans to allocate to different areas of need.

    Disheartening Financials

    Shipping revenues for Q1 2021 were down 19.4% to USD$81.3 million from the USD$100.9 million reported in the first quarter of 2020. With the onset of the global pandemic having hit the company especially hard, its woes were compounded by Winter Storm Uri shutting down U.S refineries, thereby further reducing transportation demand. TCE revenues were down 32.5% million at USD$65.5 million for Q1 2021, as compared to Q1 2020. Q1 2021 Adjusted EBITDA was down 88.2% from USD$52.8 million in Q1 2020 to USD$6.2 million in Q1 2021.

    Meme Stock Phenomenon

    With no recent news coverage or significant change in fundamentals, OSG seems to find itself becoming the latest target of the meme stock phenomenon that has taken over the stock market as of late. Driven by retail investors who use the social media platform Reddit, underdog companies with high short interests find themselves being pumped in a coordinated short squeeze. In the absence of sound bases for investing in the company, this phenomenon carries a great level of inherent risk and volatility.

    Future Outlook for OSG

    Armed with the fortuitous expansion of their equity value, OSG finds itself at the cusp of new opportunities that it can capitalize on to usher in more organic growth. Investors are hopeful that management will continue to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

  • Recon Technology, Ltd. (RCON) Stock Plummets Following Announcement of USD$55 Million Registered Direct Offering

    Recon Technology, Ltd. (RCON) stock prices plummeted by a significant 19.31% shortly after market trading commenced on June 14th 2021, bringing the price per share down to USD$5.03 early on in the trading day.

    Registered Direct Offering

    June 14th, 2021 saw the company announce having entered into a securities purchase agreement with various accredited investors. The agreement will see the purchasing of USD$55 million worth of the company’s class A ordinary shares in a registered direct offering. Pre-funded warrants to purchase Class A ordinary shares may be issued in lieu of the shares themselves, with the class A ordinary shares warrants being issues in a concurrent private placement.

    Size of Offering

    As per the agreement, the company has agreed to sell a total of 8,814,102 Class A ordinary shares, or pre-funded warrants in lieu thereof. Concurrently, warrants for the purchase of 8,814,102 class A ordinary shares will be offered in a private placement transaction. The pre-funded warrants will have a set exercise price of USD$0.01 per share, with the option of immediate exercising upon the date of issuance until they are exercised in full.

    Pre-Funded Warrants

    The pre-funded warrants will be issued to certain investors who will have elected to purchase them instead of the Class A ordinary shares up for sale in the offering. This is because the investors would otherwise have surpassed 9.99% beneficial ownership of the company’s Class A ordinary shares immediately after the offering.

    Pricing of Offering

    Ordinary share warrants will be exercisable instantly as of the date of issuance, with a set exercise price of USD$6.24. The warrants for ordinary shares will expire in five and a half years from the date of issuance. The purchase price for one unit comprised of one ordinary share and one corresponding ordinary share warrant will also be USD$6.24. Gross proceeds generated from the offering are expected to be USD$55 million before the deduction of expenses related to the offering. Subject to customary closing conditions, the registered direct offering is expected to close around June 15th, 2021.

    Future Outlook for RCON

    Armed with a solid liquidity position from their private placement, RCON is poised to capitalize on the opportunities presented to it. The company is keen to continue its trajectory of success and usher inorganic growth over the long term. Current and potential investors are hopeful that the management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

  • Torchlight Energy Resources, Inc. (TRCH) Stock Continues Long-Term Upward Trend Amid Market Dominated by Meme Stocks

    Torchlight Energy Resources, Inc. (TRCH) Stock Continues Long-Term Upward Trend Amid Market Dominated by Meme Stocks

    Torchlight Energy Resources, Inc. (TRCH) stock prices were up by 3.65% as of the market closing on June 11th, 2021, bringing the price per share up to USD$3.12 at the end of the trading day. Subsequent pre-market fluctuations have seen the stock rise by 7.37%, bringing it up to USD$3.35.

    Meme Stock Craze

    Several of the recent trading days having been dominated by the meme stock phenomenon, wherein members of the online social media community, Reddit, collaborate on pumping “meme” stocks that have no apparent rational basis for being invested in. These underdog companies, sometimes on the brink of collapse, are resuscitated (often only temporarily) by the fortuitous whims of the Reddit-driven retail investors. With no recent news or fundamental developments that justify significant upswings in stock prices, TRCH, too, seems to be the latest target of the meme stock craze.

    Promising Track Record

    Interestingly, however, this seems to be a long-term trend for the company, rather than a short-term surge in price. The past year has seen the stock price skyrocket by 576%, with the last 3 years representing a 90% increase in the value of the company’s equity. The most recent month had seen a 13% increase, with the price rising through both the latest trading day and the subsequent pre-market hours.

    Shaky Foundation

    In their recently disclosed financial statements, TRCH reported a meagre USD$111,230 in revenue over a 12-month period. This fails to signal confidence in the management and the execution of their business plan. Nevertheless, the stock has enjoyed consistent growth in stock price. It seems much more likely that investors are banking on the company’s untapped potential rather than its accomplishments. This is atypical because of the risks involved. Investors might be hoping for the company to stumble upon fossil fuels with an exploration program before it finds itself to have run out of money.

    Sustaining Growth

    Pinning hopes on potential future developments entails a very probably need for infusions of capital to sustain the company until it can support itself. This puts them at the mercy of capital markets, where share price itself impact the value of the shares themselves, as determiners of costs of capital. From here, companies can go on to execute their intended strategies and provide returns on investments made; or companies can suffer heavy losses and eventual de-listing. TRCH has consistently rewarded its investors who took the high risk.

    Future Outlook for TRCH

    Armed with a solid liquidity position from their private placement, as well as the fortuitous surge in the value of their equity, TRCH is poised to capitalize on the opportunities presented to it. The company is keen to continue its trajectory of success and usher in more organic growth over the long term. Current and potential investors are hopeful that the management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

  • US presidential change signals risk appetite as Brent crude hits

    US presidential change signals risk appetite as Brent crude hits $40

    Crude prices increased on Monday, with Brent hitting a point of $40 a barrel after Joe Biden took up the presidency of the United States and signals a rise in risk appetite.

    The crude Brent LCOc1 had risen to 40.36 dollars per barrel by 91cents, or 2.3 percent, whereas the USA West Texas Intermediate Oil CLc1 was at $38.04, up 90 cents, or 2.4%.

    The crude Brent LCOc1 had risen to 40.36 dollars per barrel by 91cents, or 2.3 percent, whereas the USA West Texas Intermediate Oil CLc1 was at $38.04, up 90 cents, or 2.4%.

    According to Analyst, oil prices rose, gaining from a risk-on position and a weaker US dollar led by Joe Biden becoming president-elect.

    In order to discuss the No. 1 issue, he is facing when he assumes office in January, Biden will hold a meeting with a coronavirus task force on Monday. Renewed lockdown measures in Europe aimed at containing an increase in COVID-19 cases continue to put oil prices under pressure.

    Besides that, as investors holding other currencies became more accessible, the dollar weakened, entering a 10-week low and lifting commodities priced in the greenback.

    The core personnel of the Organization of Petroleum Exporting Countries (OPEC) is skeptical of Biden’s easing measures on Iran and Venezuela, which could make it extremely challenging to balance supply with demand by increasing oil production.

    The restoration of Iranian oil supplies, nevertheless, is more likely to arise at the end of 2021 or 2022, ING analysts said.

    Compared to September, China, the world’s biggest crude importer, posted a 12 percent decrease in October imports.

    OCBC’s Lee said that this data could be pessimistic for international commodity markets:

    “China may be close to the end of what it needs in the form of raw materials given the number of stocks it has.”

    That being said, after Beijing raised quotas by 20 percent, some experts predict imports to spike in 2021.