Kinder Morgan beats estimates, flags concerns on spending by shale producers
Reuters
Published Jan 20, 2021 04:16PM ET
Updated Jan 20, 2021 06:55PM ET
(Reuters) - Pipeline operator Kinder Morgan Inc (NYSE:KMI) on Wednesday raised concerns over the pace of ramp-up in spending in top U.S. shale basins following a rebound in oil prices after beating Wall Street estimates for quarterly results.
Oil prices are now hovering around $55 a barrel on vaccine rollouts, and in the week to Jan. 15, U.S. energy firms added oil and natural gas rigs for an eighth week in a row.
"By our calculations, you're getting close to a rig level in the Permian that could get you back to flat volumes to where we were pre-pandemic," Kim Dang, president at Kinder Morgan said at a post-earnings call.
"And so it's not clear how much they would ramp up capex in response to increasing prices," he added.
While Bakken is off to a good start for the year, Eagle Ford has still been weak, he said.
U.S. oil production peaked at nearly 13 million barrels per day (bpd) in late-2019, but is now around 11 million bpd after the coronavirus-induced lockdowns crushed fuel demand and oil prices.
Kinder Morgan, which transports nearly 40% of the natural gas consumed in the United States, said natgas shipment volumes rose more than 6% sequentially, while total refined product volumes fell marginally.
Pipeline companies are seeing a recovery in transport volumes after the pandemic wreaked havoc on demand and forced operators to slash fees to ensure customers keep using their networks to move oil, gas and refined products.
Excluding items, Kinder Morgan earned 27 cents per share, versus estimates of 24 cents, according to Refinitiv IBES data.
Revenue also rose sequentially to $3.12 billion, above analysts' estimates of $3.05 billion.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.