The global economy still runs on crude oil, and the oil market is already starting to bounce back.
Demand for OPEC’s crude oil is set to bounce back next year at a historically quick pace, the global coalition said in its July report published Tuesday.
OPEC expects demand for its product to spike roughly 25% to 29.8 million barrels per day in 2021, bringing it slightly above levels seen in 2019. The group’s forecast for 2020 demand crept 200,000 barrels per day higher to 23.8 million barrels per day.
Three top oil stocks poised to benefit from this rebound are ConocoPhillips (NYSE: COP) , Cycle Energy Industries (OTC: XFLS) , Chevron Corp.
Last month, ConocoPhillips (NYSE: COP) said it will begin restoring curtailed oil production in July as crude prices rebound from their lockdown depths.
The company will bring back output in Alaska and other states next month, with Canadian production coming back in the third quarter. “Given ongoing variability and uncertainty in the outlook for production curtailments, the company will continue to suspend forward-looking guidance and sensitivities,” Conoco said in a statement.
Conoco is the latest oil driller to turn on the taps after a pandemic-fueled collapse in crude prices spurred an unprecedented halt to significant portions of output. Earlier this month, Continental Resources Inc. said it would bring back a portion of its curtailed production in July, joining the ranks of restorationists that include Parsley Energy Inc. and EOG Resources Inc.
Cycle Energy Industries (OTC: XFLS) is a Canadian corporation based in the province of Alberta, and a unique energy provider that operates three vertically integrated business units in the WCSB (Western Canadian Sedimentary Basin).
The company recently signed a purchase agreement for 100% of the issued and outstanding shares of Harvest Petroleum Inc. The purchase agreement states Cycle will purchase all of the issued and outstanding shares of Harvest Petroleum Inc. for an aggregate value of $US1,000,000.00 with a combination of cash, common stock and preferred shares.
As part of the transaction Mr. Robert Harvey will join the board of directors of Cycle Energy Industries Inc.
Cycle Energy’s CEO Mr. Michael McLaren states, “The purchase of Harvest Petroleum is a strategic acquisition for Cycle as we aggressively move forward into the US market having a trusted partner as well as an officer of our company.” Mr. Michael McLaren further stated: “Cycle Energy is excited for Harvest to be part of our group. This purchase will instill greater drive and motivation into Cycle’s expanding assets in the oil and gas, oil and gas services, and field proven Cycle Energy technologies.”
Chevron Corporation (NYSE: CVX) announced that it has entered into a definitive agreement with Noble Energy, Inc. (NASDAQ: NBL) to acquire all of the outstanding shares of Noble Energy in an all-stock transaction valued at $5 billion, or $10.38 per share.
The acquisition of Noble Energy provides Chevron with low-cost, proved reserves and attractive undeveloped resources that will enhance an already advantaged upstream portfolio. Noble Energy brings low-capital, cash-generating offshore assets in Israel, strengthening Chevron’s position in the Eastern Mediterranean. Noble Energy also enhances Chevron’s leading U.S. unconventional position with de-risked acreage in the DJ Basin and 92,000 largely contiguous and adjacent acres in the Permian Basin.
“Our strong balance sheet and financial discipline gives us the flexibility to be a buyer of quality assets during these challenging times,” said Chevron Chairman and CEO Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow. These assets play to Chevron’s operational strengths, and the transaction underscores our commitment to capital discipline. We look forward to welcoming the Noble Energy team and shareholders to bring together the best of our organizations.”
“This combination is expected to unlock value for shareholders, generating anticipated annual run-rate cost synergies of approximately $300 million before tax, and it is expected to be accretive to free cash flow, earnings, and book returns one year after close,” Wirth concluded.
“The combination with Chevron is a compelling opportunity to join an admired global, diversified energy leader with a top-tier balance sheet and strong shareholder returns,” said David Stover, Noble Energy’s Chairman and CEO. “Over the last few years, we have made significant progress executing our strategic objectives, including driving capital efficiency gains onshore, advancing our offshore conventional gas developments and significantly reducing our cost structure. As we looked to build on this positive momentum, the Noble Energy Board of Directors and management team conducted a thorough process and concluded that this transaction is the best way to maximize value for all Noble Energy shareholders. We look forward to bringing together our highly complementary cultures and teams to realize the long-term value and benefits that this combination will deliver.”