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Wednesday's Energy Stocks: Utilities buoy sector; 8point3 rises on Q3 earnings

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Wednesday's Energy Stocks: Utilities buoy sector; 8point3 rises on Q3 earnings

A rally among electric and gas utilities kept the energy sector on the positive side of the ledger while broader markets extended their gains Wednesday, Oct. 4. The Dow Jones Industrial Average increased 0.09% to 22,661.64, and the S&P 500 rose 0.12% to 2,537.74. The SNL Energy Index gained 0.48% to end the day at 289.87.

According to a recent report by CreditSights analysts, NRG Yield Inc. and 8point3 Energy Partners LP appear ripe for acquisition, with activist investors and the pending outcome of a solar trade case seen as potential catalysts for M&A.

After market close, 8point3 Energy Partners reported 2017 third-quarter revenue of $27.7 million, net income of $28.7 million, adjusted EBITDA of $53.5 million and cash available for distribution of $33.2 million. The partnership also lifted its fiscal year 2017 guidance, now expecting revenue of $66.5 million to $69.5 million, net income of $32.0 million to $34.5 million, adjusted EBITDA of $117.0 million to $120.0 million and cash available for distribution of $106.0 million to $109.0 million.

NRG Yield retreated 2.11% on light volume to end at $18.55, while 8point3 Energy Partners advanced 1.21% in robust trading to finish at $15.02.

In the electric and diversified utilities sector, Entergy Corp. climbed 3.61% to close at $78.41, Alliant Energy Corp. edged up 1.38% to finish at $41.95, and American Electric Power Co. Inc. settled 1.75% higher at $71.52, all in strong trading.

The SNL Electric Company Index spiked 1.02% to close at 484.03, and the SNL Large Diversified Index added 1.03% to close at 226.82.

S&P Global Ratings worries that lenders may tighten company credit lines in the next two years, taking away the lifeline that saved many exploration and production companies during the 2015-2016 downturn on crude oil prices.

LINN Energy Inc. rose 2.70% on heavy volume to finish at $38.00, after agreeing to sell certain properties in the Washakie Field in Wyoming to an undisclosed buyer for $200 million. The assets in the sale include about 163,000 net acres with second-quarter net production of about 66 MMcfe/d, proved reserves of about 226 Bcfe and proved developed PV10 of about $102 million.

Shares of Marathon Oil Corp. saw an increase of 1.02% to settle at $13.90. The company expects that its third-quarter U.S. production will come in at the high end of its guidance, which is between 230,000 net barrels of oil equivalent per day and 240,000 net boe/d.

A Kinder Morgan Inc. subsidiary, DCP Midstream LP and Targa Resources Corp. will jointly develop a nearly 2-Bcf/d pipeline project that will carry growing gas production from the booming Permian Basin to markets along the Texas Gulf Coast. Kinder Morgan slid 0.16% in active trading to close at $18.82, DCP Midstream earned 0.41% on light volume to end at $34.62, and Targa declined 1.10% in light trading to finish at $46.86.

The SNL Midstream Energy Index lost 0.20% to finish at 111.80.

NYMEX November natural gas futures turned higher Wednesday, Oct. 4, amid outlooks for warm weather that offer some demand support and suggest a slower rate of storage building in the final weeks of the titular injection season. Climbing to a $2.977/MMBtu intraday high, the contract slipped to a finish 4.5 cents higher on the day at $2.940/MMBtu.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.

Market prices and index values are current as of the time of publication and are subject to change.