Winners and losers in the U.S. ice storm

A winter storm that hit parts of the southern United States over the past week led several energy companies to report stronger-than-expected results after they were called on to provide more power at higher prices, while others faced millions of dollars in losses. Here is a look at the winners and losers in the energy sector from the storm:

WINNERS

❚ Gas producers: Comstock Resources said on an analysts call last Wednesday that the week was “like hitting the jackpot,” adding it was able to sell at “super-premium prices” a material amount of production at anywhere from US$15 per million cubic feet of gas (mcf) to as much as around US$179 per mcf.

EQT Corp., asked on Wednesday whether it also benefited from high prices in regions affected by the cold snap, answered in the affirmative. EQT largely produces gas out of the Marcellus and Utica shale regions in Pennsylvania and Ohio.

Australia’s Macquarie Group, the second-biggest gas marketer in North America behind oil major BP, lifted its profit guidance on Monday due to the effects of the extreme winter conditions. The company now expects fiscal 2021 profits to rise by 10 per cent, after earlier anticipating earnings to drop for the year.

Other natural gas-weighted production companies, including Cabot Oil & Gas, Southwestern Energy Co., Range Resources Corp. and Antero Resources, may benefit from the freeze, Morgan Stanley analysts said in a note.

❚ Refiners with limited exposure to Texas markets: Shares of refiners such as Hollyfrontier Corp. and Valero Energy Corp. rose after the freezing temperatures knocked a large swath of U.S. Gulf Coast refining offline, said Bob Yawger, director of energy futures at Mizuho. Going forward, euro zone refiners, including Shell and Total, are positioned to benefit as they ramp up their shipments of gasoline into New York Harbor, Yawger said.

LOSERS

❚ Utilities: Just Energy on Monday raised doubt about its ability to continue as a going concern, after it forecast a Us$250-million loss from the Texas winter storms.

Innergex Renewable Energy Inc. forecast a financial impact of up to $60 million (Canadian) on its Texas wind farms.

Algonquin Power & Utilities Corp. said on Friday it expects the potential hit on the company’s adjusted core earnings for this year to be between US$45 million and US$55 million after ice and freezing conditions restricted electricity production at its Renewable Energy Group’s Texas-based wind facilities.

❚ Oilfield Services: Solaris said on Monday last week’s weather would have an impact on first-quarter financials, but did not quantify the hit.

❚ Shale oil producers: Shale oil producers in the southern United States could take at least two weeks to restart the more than two million barrels per day (bpd) of crude output that shut down, as frozen pipes and power supply interruptions continue to slow their recovery. Some of the production may never return, analysts said.

❚ Gulf Coast refiners: Refiners with oil processing facilities along the Gulf Coast, the main U.S. refining hub, such as Phillips 66 and Exxon Mobil, were forced to halt operations. By Thursday, the historic sub-zero temperatures in Texas and Louisiana shut in at least 3.5 million barrels per day, or about 19 per cent, of U.S. refining capacity.