Top 6 US Stocks for Rising Energy Prices

New discoveries offshore Guyana are increasing resource estimates.

• Three additional discoveries have been made offshore Guyana, increasing the recoverable resource estimate for the Stabroek Block to nearly 11 billion oil-equivalent barrels. This follows two previous discoveries earlier this year, bringing the total to five in 2022.
• Improvements in the realized prices were able to offset weather related impacts in Canada. Poor weather in Q1 2022 contributed to a drop in production volumes from 3.82M barrels of oil equivalent (BOE) to 3.68M BOE but higher oil prices actually lead to growth in earnings in their upstream sector.

Increased interest in Australian Pacific LNG.

• ConocoPhillips acquired an additional 10% interest in Australian Pacific LNG from Origin Energy (ASX:ORG) for US$1.65B. This brings ConocoPhillips’ interest to 47.5%, from which they’re expecting to receive US$1.8B in dividend distributions for 2022.

Production license extended until 2048.

• The company was granted an extension on their production licenses in Norway’s Greater Ekofisk area. The extension now provides them with the license to produce in the area until 2048. Plans for development and operation in the area are still being finalized, however this should provide a welcome bit of security for the future.

Unchanging CAPEX despite inflation.

• EOG Resources has managed to deviate from the rest of the industry and keep CAPEX budget unchanged in the face of industry cost inflation. Technical improvements and increased drilling efficiency have aided in cost reduction.

Robust in-house software suite.

• EOG’s investment in Information Technology is hoping to deliver sustainable competitive advantage over its peers. With over 140+ proprietary applications in use, EOG is targeting a data driven approach that will assist with decision-making, accountability and transparency across the company and help deliver the lowest cost outcomes.

Dominance in the renewable market helps capture the shift from fossil fuels.

• With one of the largest clean energy generation portfolios on the market, NextEra Energy is well positioned to capture the shift away from fossil fuels due to rising costs and environmental policy. Considerable scale advantages allow NextEra Energy to expand and operate their portfolio at a cost advantage to its competitors. Market leadership in the renewable sector is poised to continue as 14GW of wind and solar capacity come to fruition in the near term.

Recent asset sales allow capital to be committed to future growth.

• The recent sale of Clearway’s Thermal generation business for a total consideration of US$1.9B has created a foundation for future growth, with capital being reinvested to accelerate their renewable generation pipeline. Given that the company’s renewable segment’s operations have grown 31% in the last year to 3,319 MWh, further investment should provide opportunity to capture market share as the desirability is on the rise due to oil supply constraints.

Demand for oil services and waste management is on the rise.

• Clean Harbors (NYSE: CLH) is an essential operator in the oil industry, providing waste management, emergency spill response, industrial cleaning and maintenance and recycling services to a variety of Fortune 500 companies. As domestic oil production and refinery volumes rose, so too did Clean Harbors’s earnings, climbing a scarcely believable 108% to US$45.3M when compared to the corresponding period last year. If oil continues to be in short supply and the US continues to fulfill the need left by a pivot away from Russian oil, then Clean Harbors will find their services in hot demand.