.The Texas Energy Report

This Texas Energy Report database is published each quarter and is updated as earnings are released throughout the reporting period.

Click on the name of the company for more information about the quarterly earnings report, usually from the company’s own press release

AEP

• Third-quarter 2023 GAAP earnings of $1.83 per share; operating earnings of $1.77 per share
• 2023 operating earnings (non-GAAP) guidance range narrowed to $5.24 to $5.34 per share, midpoint maintained at $5.29
• Long-term growth rate of 6% to 7% and FFO/Debt target of 14% to 15% reaffirmed
• “We’ve made significant progress on our five-year, $8.6 billion regulated renewables investment plan, with $6 billion in approved projects and $800 million currently pending commission approval. These projects provide fuel savings for our customers and are aligned with our integrated resource plans. The transmission and distribution investments we’re making to enhance service and reliability for customers also continue to support our earnings results,” said Julie Sloat, AEP chair, president and chief executive officer.

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Amplify Energy

• During the third quarter of 2023, the Company:
  • Achieved average total production of 20.6 Mboepd, while successfully implementing the planned turnaround at Bairoil
  • Generated net cash provided by operating activities of $18.0 million and a net loss of $13.4 million
  • Delivered Adjusted EBITDA of $19.5 million
  • Generated $6.1 million of free cash flow
• On October 5, 2023, the Company announced the appointment of Vidisha Prasad to its Board of Directors
• As of October 31, 2023, net debt was $104 million, consisting of $120 million outstanding under the revolving credit facility and $16 million of cash on hand
  • Net Debt to Last Twelve Months (“LTM”) Adjusted EBITDA of 1.2x¹
• The Company is reaffirming full-year 2023 guidance

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APA

• Reported production of 412,000 barrels of oil equivalent (BOE) per day; adjusted production, excluding Egypt noncontrolling interest and tax barrels, was 340,000 BOE per day;
• Year-over-year U.S. oil volumes increased 16% driven by operating efficiencies and strong well performance in the Permian Basin;
• Confirmed an estimated recoverable resource of 700 million barrels of oil at Sapakara and Krabdagu discoveries on Block 58, offshore Suriname;
• Generated net cash from operating activities of $764 million and free cash flow of $307 million during the quarter; and
• In the first three quarters of 2023, APA returned 65% of free cash flow to shareholders through dividends and buybacks, including the repurchase of 5.5 million shares at an average price of $37.91.

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Archrock Inc.

• Revenue for the third quarter of 2023 was $253.4 million compared to $213.7 million in the third quarter of 2022.
• Net income for the…
   

November 17, 2023 — Today, the Texas State Board of Educations voted on its Proclamation 2024 which determines the types of textbooks and materials students will use in the 2024-2025 school year. Following the SBOE’s actions, Texas Railroad Commissioner Wayne Christian applauded the outcome and said the following:

“Students need to learn about fossil fuels and real-world energy, where it comes from, how it works, and most importantly how it creates a better world,” said Commissioner Wayne Christian. “America’s future generations don’t need a leftist agenda brainwashing them in the classroom to hate oil and natural gas. Our economy needs STEM students that…
 

November 17, 2023 — Ask a cross section of Texans, and about half are likely to say there is a link between climate change and severe weather events, suggests the newest report in the Texas Trends 2023 survey series.

“But among Texans who have experienced hardship due to an extreme weather event, there is likely to be more certainty in the belief that a direct link does exist,” said Sunny Wong, associate dean for graduate studies at the University of Houston’s Hobby School of Public Affairs and an author of the survey.

The Climate Change: Beliefs and Actions report was released today by the UH Hobby School and the Texas Southern University Barbara Jordan–Mickey Leland School of Public Affairs. In addition to examining perceptions of a link between climate change and weather, it also asked Texans who or what they believe is at the root of the increase in weather-induced crises – including hurricanes, wildfires, drought, severe freezes and heatwaves – and what actions they take at home to prepare for emergencies and cope with widening fluctuations in seasonal weather.

“When we looked closely at the numbers, we found opinions dividing along generational and political lines,” said research associate Maria P. Perez Argüelles…
 

By Alex Mills

As wind and solar energy continue their quest to become major players in the energy production game, each face stiff head winds as financing and equipment costs rise and inflation eats away at the bottom line.

The Wall Street Journal reported this week about presentations of executives during the Super-Return Energy Conference in New York that revealed some companies that invest in energy projects are wondering about the profitability of wind and solar projects.

“The irrational exuberance, all the excitement about clean energy, is clearly getting squeezed out” of a market than can no longer afford it, said David Foley, a senior managing director at Blackstone, who leads the asset managing group.

The stock indexes tracking clean energy companies have dropped significantly recently, Foley said, making it more challenging for companies to raise capital and …
 

By Alex Mills

The price of crude oil, natural gas, and gasoline has dropped more than 10% in recent weeks, but the U.S. Energy Information Administration (EIA) believes higher prices are in the future even though several economic indicators create questions.

West Texas Intermediate crude has declined 13% since November 2022 to average $80 per barrel so far in November compared to $92 last year, according to EIA. WTI closed at $75.65 on Wednesday.

The national average for retail gasoline has followed suit declining from $3.804 per gallon in November 2022 to $3.405 this week, which is an 11% decline, according to AAA. The average price in Texas this week was $2.871, which is 10% less than last year. Many locations across Texas reported retail gasoline prices as low as $2.61 on Wednesday.

Natural gas witnessed the largest decline this year of 49%. Natural gas traded on the spot market at Henry Hub in November 2022 averaged $6.40 per million British thermal units (mmBtu) compared to $3.264 this year. Natural gas closed at $3.12 on …
 

The latest: Lanes of Highway 59 were being reopened late this afternoon as firefighters brought the plant fire under control, but crews are expected to remain at the plant through the night.

As many as 400 customers are reported without electrical power in the area of the plant

November 8, 2023 — Officials say firefighters are making progress in gaining control over what has been reported as a “chemical fire” north of Houston.

The location is identified as Sound Resource Solutions, a plant near Shepherd, Texas, about halfway between Houston and Lake Livingston along Highway 59 (which has been closed in the area most of the day) — a petroleum products processing plant that works with Xylene and other chemicals in the making of solvents among other materials.

The fire, which began with an explosion about 8:30 this morning, has been sending thick black smoke into the air since, but San Jacinto County officials say there has so far been no trace of dangerous chemicals in the air around the plant, which is in a rather sparsely-populated section of Central Texas.

The smoke, however, is…
 

November 3, 2023 — State taxes gathered from Texas oil companies appears to be stabilizing after a couple of years of volatility, with year-over-year income that’s varied between 14% and 78% over the past 12 months; natural gas income remains volatile

The oil production tax income for October 2023 is reported up 8% at $586 million, when compared to October 2022, according to the latest report from Texas Comptroller Glenn Hegar.

Natural gas severance tax income was down, however, by 53% when compared to a year ago, at $192 million.

Motor fuel tax income was up one-percent year-over-year at $316 million.

Motor vehicle sales and rental taxes were up 3% in October at $606 million when compared to a year ago.

Comptroller Hegar attributed some of the up-and-down nature of the overall state tax picture on…
 

October 25, 2023 — The Railroad Commission of Texas assessed $2,425,495.50 in fines involving 597 enforcement dockets against operators and businesses at the Commissioners’ Conference on Tuesday. The Commission has primary oversight and enforcement of the state’s oil and gas industry and intrastate pipeline safety.

Fifty-nine dockets involved $1,010,697 in penalties after operators failed to appear at Commission enforcement proceedings.

Operators were ordered to come into compliance with Commission rules and assessed $151,986 for any oil and gas, LP-Gas, critical infrastructure, or pipeline safety rule violations. Pipeline operators and excavators were assessed…
 

On October 20, the Baker Hughes Company reported 118 natural gas-directed rigs were active in the United States, a decrease of 38 rigs since the start of 2023. The decline in active drilling rigs coincides with lower natural gas prices for most of 2023, compared with relatively high natural gas prices for most of 2022.

When natural gas prices are low, producers often decrease their drilling activity, reducing the number of active drilling rigs deployed. Producers may not respond immediately to decreases in natural gas prices; it typically takes four to six months for producers to respond to price changes. The extent to which producers…
 

By Alex Mills

Inflation and rising interest rates hit the solar energy sector hard during the last three months, resulting in declining interest among investors.

The Wall Street Journal reports the iShares Global Clean Energy ETF reached its lowest level since July 2020 this week. The exchange-traded fund invests in renewable-energy companies and utilities in line with a benchmark compiled by S&P Dow Jones Indices, including First Solar and Plug Power. It has plunged 32% this year.

The WSJ further noted some stocks have fallen even harder. “U.S.-listed Enphase Energy has shed 64% in 2023, while competitor SolarEdge Technologies has sunk more than 70%. Excluding stocks that have been ejected from the S&P 500, SolarEdge ranks as the index’s worst performer this year,” the WSJ reported Wednesday.

SolarEdge warned that demand in Europe has significantly weakened, furthering battering sentiment on the renewable energy sector amid a difficult year.

SolarEdge CEO Zvi Lando cited “substantial unexpected cancellations and pushouts”…
 

October 20, 2023 — In the first nine months of 2023, U.S. LNG developers signed 14 long-term sales and purchase agreements totaling 19.65 mtpa. The pace is far slower than in 2022 when Russia’s invasion of Ukraine led European countries to scramble for future supplies not shipped from Moscow. The first nine months of 2022 saw 30 SPAs totaling 35.0-35.5 mtpa, and the full year brought 38 agreements totaling 48.53-49.03 mtpa. Q3 of this year was particularly slow, with only two SPAs signed.

European buyers contracted 35% of the 1Q23-3Q23 long-term SPA volumes. Asian buyers came in second at 31%, while supermajors and majors snagged 27% and merchants and traders locked in 7%. This compared to a 2022 breakdown of 38% supermajor/major, 32% Asian, 21% European and 9% merchant/trader.

Venture Global LNG has signed the most long-term SPAs in the first nine months of 2023 at five, totaling 5.95 mtpa – two SPAs covering 1.7 mpta for Plaquemines LNG and three SPAs covering 4.25 mtpa. Counterparties are Germany’s state-owned Securing Energy for Europe, The Woodlands-based global LNG shipper Exelerate Energy, and Asian firms JERA and China Gas. These deals follow a banner 2022 when the company signed 13 SPAs totaling 12…
 

October 20, 2023 — Citing the latest Current Employment Statistics (CES) report from the U.S. Bureau of Labor Statistics (BLS), the Texas Independent Producers and Royalty Owners Association (TIPRO) today highlighted new employment figures showing an increase in upstream employment for the month of September.

According to TIPRO’s analysis, direct Texas upstream employment for September 2023 totaled 210,700, an increase of 1,700 jobs from revised August employment numbers. Texas upstream employment in September 2023 represented the addition of 18,700 positions compared to September 2022, including an increase of 2,600 jobs in oil and natural gas extraction and 16,100 jobs in the services sector.

TIPRO’s new employment data yet again indicated strong job postings for the Texas oil and natural gas industry during the month of September. According to the association, there were 11,990 active unique jobs postings for the Texas oil and natural gas industry in September, including 4,564 new job postings added during the month by companies.

In comparison, the state of California had 3,376 unique job postings last month, followed by Louisiana (1,652), Oklahoma (1,649) and Pennsylvania (1,218). TIPRO reported a total of 52,767 unique job postings nationwide last month within the oil and natural gas…
 

By Alex Mills

Texas produces a lot of energy: oil, natural gas, wind, solar and electricity. Texas also uses a lot of energy.

The events during February 2021 and the summer of 2023 stretched electric generating capacity in Texas to the max.

Even though Texas leads the nation in net electricity generation with 50,622 thousand megawatt hours, according to the Energy Information Administration, the state has experienced periods of high demand as the population and economy expand.

Now, the entire nation is watching how Texas will respond to these challenges.

“We’re the test case for the country. (The Federal Energy Regulatory Commission) is looking to us, (the Department of Energy) is looking to us, everybody’s looking to Texas to manage through this,” said Will McAdams, a member of the Public Utility Commission of Texas.

The Electricity Reliability Council of Texas (ERCOT) Board of Directors met Tuesday and ERCOT Chief Executive Officer Pablo Vegas said this summer electricity demand surpassed the previous daily record (80,000 megawatts) 49 times, and the immediate challenge is to prepare for the coming winter.

Natural gas, which currently generates 47%, continues to show…
 

By Alex Mills

The conflict in Israel and Gaza has had little impact on global oil supplies and prices this week. Brent crude, which is traded on the international exchange, closed at $85 per barrel and West Texas Intermediate closed at $83, which is a small change since last week.

Meanwhile, the U.S. Energy Information Administration (EIA) issued its International Energy Outlook (IEO) 2023 with projections that global energy consumption will increase through 2050.

“Global population growth, increased regional manufacturing, and higher living standards push growth in energy consumption beyond advances in energy efficiency,” according to EIA’s projections.

“IEO2023 fills an important niche among global outlooks by focusing on a plausible but sober assessment of global energy trends through the first half of the century,” said EIA Administrator Joe DeCarolis. “There is considerable uncertainty in the energy landscape over the next 30 years, and the IEO provides a set of policy neutral baselines that will help guide sound decision-making.”

EIA said the residential and industrial sectors will experience the fastest growth. Global consumption of liquid fuels (petroleum) increases through…
 

Octobewr 11, 2023 — Battery experts at The University of Texas at Austin have shed new light on a critical issue facing battery components commonly used in electric vehicles.

Over time, particles that make up nickel-based cathodes in these batteries tend to crack, limiting the life cycle of the battery and raising safety issues. The prevailing theory saw this as an inevitable problem caused by the natural expansion and contraction of the particles that occurred during the battery’s natural process for delivering power.

But, in a newarticle published recently in Joule, the UT team found that unstable electrolytes – the material that serves as the transport medium for ions in the battery reaction – and their high level of reactivity with the cathode are the culprit of this phenomenon.

“We found that the electrolyte reacting with the cathode surface leads to the increased crack formation,” said Arumugam Manthiram, a professor in the Walker Department of Mechanical Engineering who led the research. “Unfortunately, the whole field has been misled…
 

Emerging economies are expected to support overall demand, IEA’s latest medium-term market report says, with new LNG supply likely to ease market strains after 2025

October 11, 2023 — After a decade of unprecedented expansion, growth in global demand for natural gas is expected to slow in the coming years as consumption declines in mature markets, according to the IEA’s new medium-term forecast.

Global gas demand is on course to grow by an average on 1.6% a year between 2022 and 2026, down from an average of 2.5% a year between 2017 and 2021, says the Gas 2023 Medium-Term Market Report. The report notes that the advent of the global energy crisis in 2022, triggered by Russia’s invasion of Ukraine, has ushered in a different era for global gas markets after their decade of strong growth between 2011 and 2021.

Overall gas demand from mature markets in Asia Pacific*, Europe and North America peaked in 2021, and is forecast to decline by 1% annually through to 2026, according to the report. An accelerated rollout of renewables and improved energy efficiency are among the key drivers behind the downward trend for natural gas in these markets. For Europe, the loss of piped gas from Russia, following its invasion of Ukraine, pressed governments to seek alternative solutions to maintain energy security.

Decreasing demand in mature markets across the world – a collection of countries that represents almost half of global gas consumption – means that growth will be highly concentrated in fast-growing Asian markets as well as some gas-rich economies in the Middle East and Africa. China alone is expected to account for almost half of the total growth in global gas demand between 2022 and 2026, drawing on the fuel to serve its industrial production, power sector and urban areas.

An increase in the amount of new liquefied natural gas (LNG) capacity coming online is expected to affect market dynamics in 2025 and 2026 by easing some of the tightness and unlocking price sensitive demand. Global LNG capacity is expected to expand by 25% between 2022 and 2026, with the United States consolidating its position as the world’s largest LNG exporter through the construction of new liquefaction plants. Growth in LNG supply signals a shift to a more globalised gas marketplace, which will improve resiliency and the ability of suppliers and consumers to respond to supply and demand shocks.

“After their heyday between 2011 and 2021, the world’s gas markets have entered a new and more uncertain period that is likely to be characterised by slower growth and higher volatility – and could lead to a peak in global demand by the end of this decade,” said Keisuke Sadamori, IEA Director of Energy Markets and Security. “Different trends are playing out across different regions, with demand declining in mature markets but continuing to grow in emerging and developing economies. We expect a substantial increase in new LNG capacity coming online in the years ahead, which should ease some of the tightness and security of supply concerns that markets have been experiencing since Russia started withholding supplies in 2021.”

While gas prices decreased …
 

October 9, 2023 — The Railroad Commission of Texas has submitted comments in response to the National Marine Fisheries Service (Service) proposal to designate a huge swath of waters in the Gulf of Mexico – approximately 28,270 square miles – as expanded critical habitat for the Rice’s whale without sufficient data. The zealous proposal may lead to major limitations when transporting oil and gas products, which in turn would have an alarming and negative effect on the economy of Texas.

The Gulf Coast is vital to Texas being the leading state for energy exports, including liquefied natural gas (LNG), natural gas liquids (NGLs), crude oil, as well as petroleum and coal product exports. A study by American Petroleum Institute found that increased exports of LNG could support between 220,000 and 452,000 more jobs for the U.S. labor market and add up to $73 billion to the U.S. economy by 2040.

Restricting energy activity in the Gulf of Mexico will impact the supply of crude oil, petroleum products, and liquified natural gas when there’s no scientific evidence to support a vast habitat that spans from Texas to Florida…
 

By Alex Mills

Natural gas production and consumption in the U.S. set a record in 2022, and it is on its way to set a new record this year.

The Energy Information Administration (EIA) at the U.S. Department of Energy revised its 2022 data this week stating “dry natural gas production was the highest for any year on record, dating back to 1930.”

Domestic dry natural gas production in 2022 averaged 99.6 billion cubic feet per day (bcf/d), which is 5.3% higher than 2021 of 94.6 bcf/d.

Texas, the leading producing state, had the largest increase, rising from 23.5 bcf/d in 2021 to 25.3 bcf/d in 2022, an increase of 7.8%, according to EIA.

Deliveries of natural gas to consumers increased also, rising 5.5% from 75.8 bcf/d to 80 bcf/d in 2022.

Natural gas exports increased for the eighth consecutive year to a new record 18.9 bcf/d, which was 10.6 bcf/d more than imports making the…
 

October 2, 2023 — As part of ERCOT’s reliability-first approach to grid operations, a Request for Proposal (RFP) was issued to stakeholders today to increase operating reserves, adding up to an additional 3,000 MW for the winter 2023-2024 peak load season.

“Our request to procure capacity in advance of winter is part of our continued commitment to maintain grid reliability and resiliency,” said ERCOT President and CEO Pablo Vegas. “ERCOT is not projecting energy emergency conditions this winter season, but we want to be prepared and ensure all available tools…
 

By Alex Mills

Even though crude oil and natural gas production in the U.S. is on a record-setting pace, a majority of the oil companies that participated in a recent survey see positive and negative economic factors impacting future business activity.

The Dallas Fed Energy Survey’s business activity index released this week surveyed 147 oil and gas companies during Sept. 13-21 that revealed the industry continues to witness rising operating costs, but crude oil and natural gas prices are beginning to reverse many negative opinions.

“Firms reported rising costs for an 11th consecutive quarter,” according to the Dallas Fed. “Among oilfield services firms, the input cost index remained positive but declined from 41.2 to 33.4. Among E&P firms, the finding and development costs index edged up from 14.9 to 18.3. Additionally, the lease operating expenses index was essentially unchanged at 25.6.”

While drilling activity has declined during the past year, crude oil prices are up.

Drilling activity is down 20% since September 2022, according to the Baker Hughes Rotary Rig Count. The U.S. rig count…