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Oil & Gas Stock Roundup: CVX-HES & COP Take Center Stage
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It was a week when oil prices dropped while natural gas futures continued the northward journey.
The headlines revolved around the federal clearance to the Chevron (CVX - Free Report) -Hess (HES - Free Report) deal and ConocoPhillips’ (COP - Free Report) settlement with Venezuela's PDVSA. Developments associated with Shell (SHEL - Free Report) and APA Corporation (APA - Free Report) also grabbed attention.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures fell around 4% to close at $68.18 per barrel, but natural gas prices moved up 6.7% to end at $2.90 per million British thermal units (MMBtu).
The crude price pullback was blamed on weakening economic signals, particularly from key regions like China, and reports that Saudi Arabia - a key player in OPEC - was preparing to ramp up production in December.
Meanwhile, natural gas settled with a fifth consecutive gain due to a lower-than-expected increase in supplies, together with worries over possible Hurricane-related production disruption.
Recap of the Week’s Most Important Stories
1. American energy multinationals Chevron and Hess announced that the Federal Trade Commission (“FTC”) had completed its antitrust review of the companies’ proposed merger. This is a significant step toward finalizing the deal. However, this process has led to some notable changes in the role of Hess’ CEO, John Hess, in Chevron.
John Hess had initially expected to join Chevron’s board following the merger, which would have positioned him as one of its largest shareholders. Instead, Hess will take on the role of advisor to Chevron, focusing on government relations and social investment initiatives in Guyana.
The FTC has intervened, stating that his appointment could raise potential conflicts of interest concerning Chevron’s alignment with OPEC (the Organization of the Petroleum Exporting Countries). The organization expressed concerns that having Hess on the board could amplify his influence in a way that would lead CVX to adjust its production levels in line with OPEC’s output decisions, potentially driving up oil prices. (Chevron-Hess Merger Advances, FTC Blocks John Hess' Board Role)
2. ConocoPhillips, the U.S. oil giant, has achieved a significant legal victory in its long-standing battle to recover compensation from Venezuela’s state-owned oil company, PDVSA. Per a Reuters report, on Sept. 27, a Trinidad court approved COP's request to seize payments related to a proposed offshore gas project between Venezuela and Trinidad. This move ensued as PDVSA stopped making payments related to a $700 million settlement deal signed in late 2019.
ConocoPhillips has been aggressively enforcing arbitration rulings against PDVSA, including a $1.33 billion claim in Trinidad’s high court. Judge Frank Seepersad, presiding over the case, stated that PDVSA’s previous behavior, such as relocating its European headquarters to Moscow, raised concerns that the company might transfer assets out of Trinidad’s jurisdiction to avoid payment. As a result, a receiver has been appointed to seize specific PDVSA assets tied to the settlement.
In a critical distinction, the court's decision targets PDVSA and its subsidiaries, not the Venezuelan state. COP's legal team identified the assets it seeks to claim from PDVSA, including compensation from the Dragon Gas Field project. PDVSA has seven days to respond and potentially challenge the court's ruling. Neither COP nor PDVSA has issued comments following the decision. (ConocoPhillips Secures Court Approval to Seize PDVSA Payments)
3. Shell has secured a win for a shallow water block from the government of Trinidad and Tobago, outpacing bids made by other energy giants like BP and EOG Resources. With Trinidad and Tobago's declining natural gas output, the nation is struggling to provide sufficient gas to its liquefied natural gas and petrochemical facilities.
The government is seeking to increase its natural gas production rates and has organized bidding rounds to attract producers to advance exploration and production activities in the country. It is also urging producers to achieve the initial output from offshore projects to raise production.
Shell, the London-based supermajor, owns a majority stake in Trinidad’s Atlantic LNG project, along with BP. This project has a production capacity of 15.3 million tons per annum. The two companies have been trying to increase the supply of gas for the liquefaction trains of the project. As such, Shell’s victory against other bidders for the shallow water block is indeed significant for the company. (Shell Outbids Competitors to Secure Trinidad Shallow Water Block)
4. APA has announced a long-term, multi-million-dollar extension of its enterprise deal with Palantir Technologies Inc. to enhance the Zacks Rank #3 (Hold) company’s oil and gas operations with cutting-edge artificial intelligence (“AI”) technologies. This extended collaboration builds on the work already done across APA’s global portfolio in the last three years. The agreement will introduce new AI capabilities through Palantir’s Artificial Intelligence Platform (“AIP”) software, which aims to accelerate APA’s performance and optimize cost management.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
As oil and gas operations become increasingly complex, the need for advanced data analytics and AI to manage operations efficiently has never been greater. For an enterprise like APA, which manages a vast global portfolio, real-time insights and predictive analytics are critical for decision-making and optimizing resource allocation. The decision to extend and enhance its collaboration with Palantir emphasizes APA’s commitment to leveraging the latest technologies to gain a competitive edge in the industry.
Palantir’s AIP enables companies like APA to monitor complex operations across various assets, predicting issues before these become critical problems. This results in cost savings, better resource management and a more sustainable approach to oil and gas production. (APA and Palantir Sign Multi-Million-Dollar Deal Extension)
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
With oil and gas moving in opposite directions for the week, stocks were mixed. The Energy Select Sector SPDR — a popular way to track energy companies — fell 1.8% last week. However, the sector tracker has decreased 6.5% over the past six months.
What’s Next in the Energy World?
Market participants will, as always, keep a close eye on regular data releases to gauge the direction of commodities. U.S. government statistics on oil and natural gas, one of the most reliable indicators, will be a key focus for energy traders. Fuel demand and stock drawdowns in the coming weeks will shape commodity price trends. Additionally, Baker Hughes' rig count data, a critical indicator of U.S. crude and natural gas production trends, is also closely monitored.
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Oil & Gas Stock Roundup: CVX-HES & COP Take Center Stage
It was a week when oil prices dropped while natural gas futures continued the northward journey.
The headlines revolved around the federal clearance to the Chevron (CVX - Free Report) -Hess (HES - Free Report) deal and ConocoPhillips’ (COP - Free Report) settlement with Venezuela's PDVSA. Developments associated with Shell (SHEL - Free Report) and APA Corporation (APA - Free Report) also grabbed attention.
Overall, it was a mixed seven-day period for the sector. West Texas Intermediate (WTI) crude futures fell around 4% to close at $68.18 per barrel, but natural gas prices moved up 6.7% to end at $2.90 per million British thermal units (MMBtu).
The crude price pullback was blamed on weakening economic signals, particularly from key regions like China, and reports that Saudi Arabia - a key player in OPEC - was preparing to ramp up production in December.
Meanwhile, natural gas settled with a fifth consecutive gain due to a lower-than-expected increase in supplies, together with worries over possible Hurricane-related production disruption.
Recap of the Week’s Most Important Stories
1. American energy multinationals Chevron and Hess announced that the Federal Trade Commission (“FTC”) had completed its antitrust review of the companies’ proposed merger. This is a significant step toward finalizing the deal. However, this process has led to some notable changes in the role of Hess’ CEO, John Hess, in Chevron.
John Hess had initially expected to join Chevron’s board following the merger, which would have positioned him as one of its largest shareholders. Instead, Hess will take on the role of advisor to Chevron, focusing on government relations and social investment initiatives in Guyana.
The FTC has intervened, stating that his appointment could raise potential conflicts of interest concerning Chevron’s alignment with OPEC (the Organization of the Petroleum Exporting Countries). The organization expressed concerns that having Hess on the board could amplify his influence in a way that would lead CVX to adjust its production levels in line with OPEC’s output decisions, potentially driving up oil prices. (Chevron-Hess Merger Advances, FTC Blocks John Hess' Board Role)
2. ConocoPhillips, the U.S. oil giant, has achieved a significant legal victory in its long-standing battle to recover compensation from Venezuela’s state-owned oil company, PDVSA. Per a Reuters report, on Sept. 27, a Trinidad court approved COP's request to seize payments related to a proposed offshore gas project between Venezuela and Trinidad. This move ensued as PDVSA stopped making payments related to a $700 million settlement deal signed in late 2019.
ConocoPhillips has been aggressively enforcing arbitration rulings against PDVSA, including a $1.33 billion claim in Trinidad’s high court. Judge Frank Seepersad, presiding over the case, stated that PDVSA’s previous behavior, such as relocating its European headquarters to Moscow, raised concerns that the company might transfer assets out of Trinidad’s jurisdiction to avoid payment. As a result, a receiver has been appointed to seize specific PDVSA assets tied to the settlement.
In a critical distinction, the court's decision targets PDVSA and its subsidiaries, not the Venezuelan state. COP's legal team identified the assets it seeks to claim from PDVSA, including compensation from the Dragon Gas Field project. PDVSA has seven days to respond and potentially challenge the court's ruling. Neither COP nor PDVSA has issued comments following the decision. (ConocoPhillips Secures Court Approval to Seize PDVSA Payments)
3. Shell has secured a win for a shallow water block from the government of Trinidad and Tobago, outpacing bids made by other energy giants like BP and EOG Resources. With Trinidad and Tobago's declining natural gas output, the nation is struggling to provide sufficient gas to its liquefied natural gas and petrochemical facilities.
The government is seeking to increase its natural gas production rates and has organized bidding rounds to attract producers to advance exploration and production activities in the country. It is also urging producers to achieve the initial output from offshore projects to raise production.
Shell, the London-based supermajor, owns a majority stake in Trinidad’s Atlantic LNG project, along with BP. This project has a production capacity of 15.3 million tons per annum. The two companies have been trying to increase the supply of gas for the liquefaction trains of the project. As such, Shell’s victory against other bidders for the shallow water block is indeed significant for the company. (Shell Outbids Competitors to Secure Trinidad Shallow Water Block)
4. APA has announced a long-term, multi-million-dollar extension of its enterprise deal with Palantir Technologies Inc. to enhance the Zacks Rank #3 (Hold) company’s oil and gas operations with cutting-edge artificial intelligence (“AI”) technologies. This extended collaboration builds on the work already done across APA’s global portfolio in the last three years. The agreement will introduce new AI capabilities through Palantir’s Artificial Intelligence Platform (“AIP”) software, which aims to accelerate APA’s performance and optimize cost management.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
As oil and gas operations become increasingly complex, the need for advanced data analytics and AI to manage operations efficiently has never been greater. For an enterprise like APA, which manages a vast global portfolio, real-time insights and predictive analytics are critical for decision-making and optimizing resource allocation. The decision to extend and enhance its collaboration with Palantir emphasizes APA’s commitment to leveraging the latest technologies to gain a competitive edge in the industry.
Palantir’s AIP enables companies like APA to monitor complex operations across various assets, predicting issues before these become critical problems. This results in cost savings, better resource management and a more sustainable approach to oil and gas production. (APA and Palantir Sign Multi-Million-Dollar Deal Extension)
Price Performance
The following table shows the price movement of some major oil and gas players over the past week and during the last six months.
Company Last Week Last 6 Months
XOM +0.5% +2.5%
CVX -0.1% -5.4%
COP -4.7% -14.7%
OXY -1.2% -19%
SLB -0.3% -18.3%
RIG -5.1% -31.4%
VLO +1.1% -20.3%
MPC -0.5% -19%
With oil and gas moving in opposite directions for the week, stocks were mixed. The Energy Select Sector SPDR — a popular way to track energy companies — fell 1.8% last week. However, the sector tracker has decreased 6.5% over the past six months.
What’s Next in the Energy World?
Market participants will, as always, keep a close eye on regular data releases to gauge the direction of commodities. U.S. government statistics on oil and natural gas, one of the most reliable indicators, will be a key focus for energy traders. Fuel demand and stock drawdowns in the coming weeks will shape commodity price trends. Additionally, Baker Hughes' rig count data, a critical indicator of U.S. crude and natural gas production trends, is also closely monitored.