Black Gold, Green Standards: ESG Gems in Oil & Gas

With the green transition changing the face of energy, we examine how some top oil and gas companies are adapting to create the fuel of the future!

Jul 31, 2023

Jericho Energy Ventures (TSXV: JEV) (OTC: JROOF) is THE green transition opportunity. It’s developing the next generation of green hydrogen solutions for the massive industrial and commercial markets. Governments around the world are spending billions in hydrogen grants and incentives, meaning there has never been a better time to get behind this rapidly growing industry!

Jericho could be investors’ ticket to ride the green wave.

Find Out More

Hello, and welcome to another edition of Investing Intel from the team at ValueTheMarkets! As always, the newsletter is packed with stock picks and investing insights we think you’ll enjoy, including:

👉 Three stock tips

👉 Investing signals

👉 Key dates for your diary

👉 Investment strategy insights

To many investors, oil and gas is the last place they would look for a green investment opportunity. However, many hydrocarbon specialists are taking great efforts to adapt their operations to a future where carbon emissions must be eliminated.

These businesses recognize the need to transition from simply being oil and gas giants, to being energy giants. Business is about survival, and the smartest companies realize that they can’t be left behind by the green revolution.

That’s why we’ve picked out three oil and gas stocks that look well-placed to play a part in the green transition, thus offering long-term investors the possibility of solid returns well into the future.

Equinor ASA (NYSE: EQNR)

Equinor has a clear strategy for transitioning towards renewable energy. They have set a target to reach net-zero emissions by 2050 and plan to increase investment in renewable energy to half of their total annual investments by 2030.
The business is a global leader in offshore wind energy. They are involved in several key offshore wind projects, such as the American Empire Wind and Beacon Wind projects, which have the potential to provide renewable energy to over 2 million homes.
Equinor’s carbon capture and storage (CCS) technology captures CO2 emissions and stores them underground. The company operates two CCS facilities in the North Sea and is developing the Northern Lights project, which aims to store CO2 emissions from industrial sites across Europe.
Despite the volatility in energy markets, Equinor maintains a solid financial position. The company's commitment to dividends and strong cash flow generation is attractive to investors.
Equinor is committed to social responsibility, investing in local communities, promoting human rights, and focusing on employee safety.

TotalEnergies (NYSE: TTE)

TotalEnergies is undergoing a massive transition, intending to become one of the world's top five producers of renewable energy. They aim to increase their renewable energy generation capacity to 100 GW by 2030. Their rebrand from Total to TotalEnergies signals their broad energy focus beyond oil and gas.
The company is not just focusing on one form of renewable energy; they're investing in solar, wind, and battery storage. This diversified approach could help them capture a larger share of the renewable energy market.
TotalEnergies has committed to reaching net-zero emissions by 2050 across its global businesses. The company plans to accomplish this by increasing energy efficiency, growing the percentage of its revenues from renewables and electricity, and investing in carbon capture, utilization, and storage technologies.
TotalEnergies has a healthy balance sheet, strong cash flow, and consistent dividends, which make it attractive to investors. The shift to renewable energy does not undermine the fact that TotalEnergies is still one of the world's largest oil companies with a strong financial standing.
The company shows a strong commitment to social aspects, such as community engagement, employee welfare, and human rights. They also emphasize corporate governance and transparency, with a focus on aligning management incentives with long-term sustainability goals.

Enbridge (NYSE: ENB)

Enbridge operates across the energy spectrum, including crude oil and liquids pipelines, natural gas pipelines, gas distribution, and renewable energy. This diversification helps mitigate risk and provides various avenues for growth.
The company's primary business, which is pipelines, operates more like toll roads than traditional oil & gas businesses. Enbridge gets paid based on volume, not the price of oil or gas, providing the company with a stable cash flow.
Enbridge has made significant investments in renewable energy. They own and operate one of Canada's largest portfolios of wind power.
The company has set ambitious targets to become net-zero by 2050, reduce emission intensity by 35% by 2030, and increase renewable energy capacity.
Enbridge places a significant focus on safety, investing in advanced technology and regular inspections to prevent accidents. The company also works closely with communities to address concerns and create job opportunities.
With a history of consistent dividend payouts, Enbridge is attractive for income-focused investors.

Investing Signals

Of course, we’re also giving you a weekly dose of the top trending stocks. Here is our rundown of some of the most Googled stocks from the last week:

Tupperware Brands Corporation (NYSE: TUP)
Dish Network Corp (NASDAQ: DISH)
XPeng Inc (NYSE: XPEV)
Snap Inc (NYSE: SNAP)
Alphabet (NASDAQ: GOOGL)

Tupperware Brands has seen its share price rocket over the past week, more than doubling in price even as the troubled plastic container business struggles to find a buyer. Analysts are somewhat puzzled over the leap in share price, with many attributing it to meme stock status.

Telecoms provider Dish Network Corp has been making headlines too, after the company partnered with tech giant Amazon to sell wireless plans. Collaboration is very much the name of the game, with Chinese automaker XPeng enjoying a boost in share price as it partnered with German car giant Volkswagen.

But it’s not wall-to-wall good news among the top trenders. Social media app maker Snap saw its share price stumble heavily after quarterly results showed a dip in revenue and slowing user growth.

But Google's parent company Alphabet experienced the opposite fortune following the release of its own quarterly update, with the stock rising by 10% as both revenue and earnings topped analyst expectations.

Fear & Greed

The Fear and Greed Index is a measure of stock market sentiment calculated by CNN Business using seven measures, including market momentum, market volatility, and safe haven demand. It’s meant to shed light on the emotions currently driving the market, giving you insight into how traders are making decisions. Remember, traders are humans, not robots.

Sentiment remains in the realm of extreme greed after US markets performed solidly last week, with the DOW having finished up on Friday afternoon in the green for the third consecutive week. With earnings season continuing, look out for earnings updates from heavy hitters like Apple and Amazon to steer market sentiment over the coming days.

Dates in the Diary

Monday 31^st – US Chicago PMI (Jul) / Eurozone Inflation (Jul) / Eurozone GDP (Q2) / Chinese NBS Manufacturing PMI (Jul)
Tuesday 1^st – US JOLTS Job Openings (Jun) / US ISM Manufacturing PMI (Jul) / Chinese Caixin Manufacturing PMI (Jul) / Eur] ozone Unemployment Rate (Jun)
Wednesday 2^nd – US Total Vehicle Sales (Jul)
Thursday 3^rd – US ISM Services PMI (Jul) / Bank of England Interest Rate Decision / German Balance of Trade (Jun)
Friday 4^th – US Employment Data (Jul) / Canadian Employment Data (Jul) / Eurozone Retail Sales (Jun)

Investing Strategies – Event-Driven Investing

Do you keep your eye on the newspaper enough to be an event-driven investor?

Are you a newshound? Do you love to keep up with current events? Have you ever thought about using this to your advantage when it comes to investing?

If so, then event-driven investing might be the perfect strategy for you.

The core principle at work here is that events can create temporary discrepancies between a company's intrinsic value and its market price. By carefully analyzing the potential impact of these events on a company's financials and prospects, an event-driven investor will seek to identify mispriced securities and make profitable trades.

As an example, you might read that a business has announced its intention to make a new acquisition. News like this often has a significant effect on a company’s share price, be that positive or negative. This is a potential opportunity to hunt for some returns for an event-driven investor.

Analyze the acquisition and its terms to conclude whether it will be effective, or if it could be blocked by regulators. If the potential acquisition looks like a bad move or one which will never come to fruition, shorting the stock could be a good option while investing in the stock is a good idea if that deal looks like an intelligent piece of business.

A high-profile example of this kind of opportunity comes in the form of Microsoft’s proposed takeover of Activision Blizzard, which came in at $95 per share. Initially, this sent ATVI stock leaping from around $65 per share to north of $80 following the announcement in January 2022.

However, regulatory hurdles have since seen ATVI stock slalom in price as investors gain and lose confidence in the companies’ ability to get the deal over the line. This kind of turbulence creates significant opportunities for discerning event-driven investors.

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Investing Intel