Energy Indicators

INDUSTRY NEWS

The Brent oil price rose this month to $36.12 on May 26, representing a monthly increase of 57%. The WTI price also rose, to $34.17, a monthly increase of 167%. Prices have increased significantly throughout the month as oil supply is anticipated to hit a nine-year low, as reported by the International Energy Agency (IEA), as global producers make cuts to balance the reduction in demand caused by coronavirus.

May’s oil and gas production has fallen to 88 million barrels per day (bpd) as the Opec+ members maintaining cuts are joined by Canada and the US in reducing output. The IEA published expectations that demand would in 2020 would be around 91.2m bpd, down from around 100m bpd in 2019.

A study by Alex Kemp of Aberdeen University has suggested that up to 36% of all estimated available hydrocarbons in the North Sea would remain undeveloped through to 2050 if the oil price were to remain at $35 per barrel. Production of several mature fields in the basin has recently been abandoned as operators look to reduce expenditure in a turbulent economic environment. Neptune Energy has terminated an agreement to purchase UK and Norwegian assets owned by Edison for $250m, a deal struck in October last year.

Hurricane Energy saw the value of its shares fall by more than 40% this month as it announced that it was suspending production forecasts, and in a press release described the significant technical challenges it faces in achieving the target for the west of Shetland Lancaster field of 20,000 bpd.

Total has announced that it will maintain its dividend and has also pledged to achieve net-zero carbon emissions across its operations and products in Europe before 2050. This announcement was made notwithstanding a fall in net adjusted profit of 35% for the first quarter of 2020 when compared with the same period of 2019.

COMPANY NEWS

Simmons Energy, a division of Piper Sandler, served as exclusive financial adviser to the special committee of the board of directors of US Well Services as it successfully raised $21 million in the form of newly issued Series B Redeemable Convertible Preferred Stock through a private placement with institutional investors.

USWS is a publicly traded provider of high-pressure hydraulic fracturing in unconventional oil and natural gas basins.

Simmons Energy also served as exclusive financial adviser to KPS Capital Partners as it signed a definitive agreement to acquire the Lufkin rod lift solutions business from Baker Hughes.

Lufkin is a leading global provider of rod lift products, technologies, services and solutions, including automated control and optimisation equipment and software for rod lift equipment to the oil and gas industry.