Oil Letter

Global Refiners Are Cutting Out Oil Traders to Buy Venezuelan Crude Directly

(NYSE: PSX) Global refiners, including Phillips 66 (NYSE: PSX) and Reliance Industries, are increasingly bypassing oil traders to purchase Venezuelan crude directly from state-run Petróleos de Venezuela, S.A. (PDVSA), marking a significant shift in the market. This move comes six months after the reopening of Venezuela's oil market, with Valero (NYSE: VLO) and Thailand's Tipco also expected to enter direct supply agreements. By cutting out middlemen like Trafigura and Vitol, who previously dominated the sector due to their exclusive U.S. government licenses and established relationships with PDVSA, refiners are positioning themselves to secure better pricing and supply stability. This trend is crucial for oil and gas investors as it indicates a changing landscape in crude oil procurement, potentially impacting pricing dynamics and the profitability of trading houses. As refiners gain more control over their supply chains, investors should closely monitor how this affects market competition and crude oil pricing in the coming months.

Obsidian Energy Announces Closing of $75 Million Add-On to Our Senior Unsecured Notes

(TSX: OBE) Obsidian Energy Ltd. announced the successful closing of a private placement offering of $75.0 million aggregate principal amount to its existing 8.125% senior unsecured notes due December 3, 2030, issued on December 3, 2025. The additional notes were issued at a price of 102.75% of their face value, resulting in an effective yield of 7.186% and gross proceeds of $77.9 million. Upon closing, the aggregate principal amount of the notes outstanding increased from $175.0 million to $250.0 million. The net proceeds will be used to pay down indebtedness under the syndicated credit facility, fund general corporate expenses, and pay related transaction expenses. BMO Capital Markets and RBC Capital Markets acted as bookrunners, while Raymond James Ltd. acted as co-manager for the offering. The notes are not qualified for distribution to the public or registered under the securities laws of any province or territory of Canada or in the United States. Obsidian Energy is an intermediate-sized oil and gas producer with assets primarily in Alberta.

Karoon Energy Completes Baúna Overhaul and Strengthens Cash Flow Outlook

(ASX: KAR) Karoon Energy produced 1.08 million barrels of oil equivalent during 2Q26, generating sales revenue of US$116.4 million as higher realised oil prices helped offset planned operational downtime. Baúna produced 0.84 million barrels during 2Q26 at an average 9,202bopd, down from 1.56 million barrels and 17,350bopd in the previous quarter due to a planned 28-day shutdown and the temporary SPS-92 shut-in. The FPSO operating efficiency reached 97%, exceeding Karoon’s 90% to 95% target range, and all project wells are now online. The Who Dat well produced 0.24 million barrels of oil equivalent on a net revenue interest basis during 2Q26, down from 0.38 million barrels in the previous quarter, with the A1 sidetrack entering production on 13 July at about 1,700 barrels of oil equivalent per day. Total 2Q26 capital expenditure reached US$126.6m, including US$37.2m for the Baúna revitalisation, US$56.6m for the SPS-92 intervention, and US$34m for the Who Dat A1 sidetrack. Karoon ended June with US$80.3m in cash, US$350m of drawn debt, and US$363.6m in total liquidity after investing about 85% of its full-year capital budget during the first half. The company projects higher free cash flow in the second half of 2026 as production rises and capital expenditure falls, subject to oil prices, operating performance and other operating risks.

Eco (Atlantic) Oil & Gas: Audited Results for the Year Ended 31 March 2026

(TSXV: EOG AIM: ECO) Eco (Atlantic) Oil & Gas Ltd. announced its audited results for the year ended 31 March 2026, reporting cash and cash equivalents of US$10.7 million and no debt as at 31 March 2026. The company had total assets of US$30.7 million, total liabilities of US$12.9 million, and total equity of US$17.8 million as at 31 March 2026. On 29 January 2026, Eco completed a direct equity subscription raising US$10 million, net (£7.4 million), through the issue of 26,909,091 new Common Shares and warrants. In Namibia, Eco signed an agreement to farm down 60% participating interest in PEL97, PEL99, and PEL100 to BP Namibia Energy Ltd for a one-time cash consideration of US$2.7 million, with BP carrying 100% of Eco's 25% Retained PI and associated partner carries. The company also signed binding agreements with Navitas Petroleum LP for options and farm-downs in Guyana and South Africa, including a US$2.0 million payment for exclusive options and a US$4.0 million cash payment for Block 1 CBK. The company projects completion of the Sharon Farm-Out in Namibia shortly and expects to complete its acquisition of JHI Associates Inc. soon. Management targets transitioning to semi-annual financial reporting and expects not to file interim financial statements for the three-month period ending June 30, 2026.

Ukraine’s Drone War is Choking Kazakhstan’s Oil Exports

KazMunayGas (LSE: KMG) is facing significant challenges as ongoing drone warfare in Ukraine hampers Kazakhstan's oil exports. Despite the country's crude remaining unsanctioned and European refiners looking for alternatives to Russian oil, security threats and operational difficulties are constraining export capabilities. This situation limits Kazakhstan's potential to increase its market share in Europe, which is crucial given the current tight supply dynamics in the global oil market. For investors in the oil and energy sector, these developments highlight the geopolitical risks that can impact supply chains and pricing. Consequently, the ongoing conflict could lead to increased volatility in oil prices as the market reacts to Kazakhstan's diminished export capacity.

Oil Passes $100 a Barrel Again: Why It's More Serious This Time

Brent Crude Oil (NYSE: BCO) has surged above $100 a barrel, marking a significant moment for the oil market amid rising tensions in the Middle East. This increase is largely attributed to the ongoing conflict involving Iran, which threatens to disrupt vital oil flows through the strategically important Strait of Hormuz. Unlike previous price spikes, this situation reflects a more unstable geopolitical environment that could have enduring effects on global supply chains and energy security. For oil and energy investors, this price escalation signals potential volatility and risks in the market, necessitating close monitoring of geopolitical developments. The implications of sustained high prices could influence investment strategies and operational decisions across the sector.

Chevron Only Outperform-rated Name Among Global Oil Majors Initiated at Piper Sandler

(NYSE: CVX) Chevron (NYSE: CVX) has been initiated with an "Outperform" rating by Piper Sandler, distinguishing it as the only oil major to receive such a rating among its peers. The firm highlights Chevron's robust production volumes, which are expected to reach approximately 3.1 million barrels of oil equivalent per day in 2024, alongside projected revenues of $60 billion for the same year. This positive outlook is underpinned by Chevron's strategic investments in renewable energy and its commitment to maintaining a strong balance sheet. For oil and gas investors, this endorsement signals confidence in Chevron's operational efficiency and growth potential, making it a compelling choice in the current market landscape. Overall, Chevron's strong fundamentals and strategic positioning could provide investors with a valuable opportunity for long-term gains.

Halliburton (HAL) Lands Iraq Field Development Contract With Basra Oil Company

(NYSE: HAL) Halliburton (NYSE: HAL) has secured a significant contract with Basra Oil Company to provide integrated field management, digital solutions, and EPCM services for oil and gas field development in southern Iraq. This agreement enhances Halliburton's international portfolio and marks a strategic expansion in the region. The stock closed at $33.03, reflecting a 53.8% increase over the past year and a 72.3% rise over the last five years. This contract is crucial for oil and gas investors as it underscores Halliburton's growth potential and its ability to secure large-scale projects in key markets. Overall, this development positions Halliburton favorably for future revenue growth and operational expansion.

Kimbell Royalty Partners: Big Deals, Bigger Upside

(NYSE: KRP) Kimbell Royalty Partners (NYSE: KRP) has announced significant acquisitions totaling $45 million, which are expected to enhance its production volumes by approximately 1,000 barrels of oil equivalent per day. The company reported a revenue increase of 20% year-over-year, reaching $30 million in the last quarter. With these strategic deals, Kimbell is poised to capitalize on the growing demand for energy resources, positioning itself favorably in the competitive oil and gas market. Investors should note the company's guidance for continued growth, projecting a further 15% increase in production over the next year. This expansion not only strengthens Kimbell's asset base but also underscores its commitment to delivering value to shareholders. Overall, these developments signal a promising outlook for Kimbell Royalty Partners in the evolving energy landscape.

ExxonMobil (XOM) is up 6.9% After Geopolitical Oil Spike and Earnings Optimism - What's Changed

(NYSE: XOM) ExxonMobil (XOM) has seen a 6.9% increase in its stock price amid rising oil prices driven by geopolitical tensions in the Middle East, with investors anticipating its second-quarter earnings release on July 31, 2026. The company is expected to report significantly stronger results and improved margins, reflecting its record production levels achieved through the use of automation and digital tools. This operational efficiency has allowed ExxonMobil to maintain a leaner workforce while enhancing its cost structure and safety practices. For oil and gas investors, these developments signal a potentially robust earnings performance and a more stable investment outlook amid fluctuating oil prices. Overall, ExxonMobil's ability to adapt to market conditions and leverage technology could position it favorably in the competitive energy landscape.

Equinor and Partners Make New Oil Discovery in Barents Sea

Equinor (NYSE: EQNR) and its partners have announced a significant oil discovery in the Barents Sea, estimated to hold between 100 to 200 million barrels of recoverable oil. Production is expected to commence in the coming years, enhancing the company's capabilities in the region. This discovery is crucial as it aligns with Equinor's strategy to boost output while focusing on sustainable energy practices. The Barents Sea is increasingly vital for oil and gas investors, as new finds can lead to substantial revenue growth and improved market positioning. Overall, this discovery underscores the potential for future investments in the area.

KMI Q2 Earnings Beat Estimates on Natural Gas Pipeline Strength

(NYSE: KMI) Kinder Morgan, Inc. (NYSE: KMI) reported second-quarter 2026 adjusted earnings of 37 cents per share, surpassing the Zacks Consensus Estimate of 31 cents by 19.35% and marking a 32.1% increase from 28 cents in the same quarter last year. Revenues rose 10.8% year over year to $4.48 billion, exceeding the consensus estimate of $4.29 billion by 4.43%. The growth was driven by a 7% increase in natural gas transport volumes and a significant 26% rise in gathering volumes. This strong performance highlights the resilience and profitability of Kinder Morgan's operations, making it an attractive option for oil and gas investors looking for stable returns in the current market. Overall, the results indicate robust demand for natural gas infrastructure, which is critical for future energy transitions.

Cenovus to Hold Second-quarter 2026 Conference Call and Webcast on July 29

(TSX:CVE) (NYSE:CVE) Cenovus Energy Inc. will release its second-quarter 2026 results on Wednesday, July 29, 2026. The news release will provide consolidated second-quarter operating and financial information. The company’s financial statements will be available on Cenovus’s website, cenovus.com. Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. Cenovus common shares are listed on the Toronto and New York stock exchanges. A live audio webcast of the conference call will be available and will remain archived for approximately 30 days. The second-quarter 2026 conference call is scheduled for 9 a.m. MT (11 a.m. ET).

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