Looking forward to 2024, oil prices are expected to continue to rise, while natural gas demand is projected to remain slow.
With compelling reasons to enter the oil and gas sector, what’s the best way for Australian investors to get exposure? The biggest ASX-listed oil and gas stocks by market cap are one place to start. Data for the list below was obtained on January 9, 2024, using TradingView’s stock screener. All market cap and share price data was accurate at that time.
1. Woodside Energy Group
Market cap: AU$59.234 billion; current stock price: AU$31.10
As the biggest ASX oil and gas stock by market cap, Woodside Energy Group (ASX:WDS) leads the country in natural gas production and is considered a pioneer in Australia’s liquefied natural gas (LNG) industry.
In June 2022, Woodside Petroleum merged with BHP’s (ASX:BHP,NYSE:BHP,LSE:BHP) oil and gas business to form Woodside Energy Group. The new company’s natural gas production accounts for 5 percent of global LNG supply. With its newly expanded portfolio, Woodside saw a record H1 net profit after tax of US$1.74 billion in the first half of 2023. In the third quarter, the company achieved first production at Shenzi North in the US Gulf of Mexico, ahead of its 2024 target, and is on track to achieve first production at the Sangomar project in Senegal in mid-2024.
2. Santos
Market cap: AU$24.595 billion; current stock price: AU$7.57
Australian energy company Santos (ASX:STO) is the country’s second biggest oil and gas producer. The ASX-listed firm supplies its products to markets located across Australia and Asia.
In its third quarter 2023 report, Santos highlighted robust performance with significant free cash flow of US$470 million and an underlying profit of US$1.6 billion to date.
Santos has partnered with SK E&S and others to develop carbon capture and storage (CCS) projects in Australia. “Just as Australia has been a reliable energy producer for Asian economies for more than half a century, there is an enormous opportunity for Australia to be at the forefront of helping them decarbonise using our natural competitive advantage in carbon storage resources and knowhow,” said Santos CEO and Managing Director Kevin Gallagher.
3. Viva Energy Group
Market cap: AU$5.315 billion; current stock price: AU$3.49
Viva Energy Group (ASX:VEA), based in Melbourne, owns the Geelong oil refinery and distributes Shell-branded (LSE:SHEL,NYSE:SHEL) fuels throughout Australia. Viva Energy oversees a vast network of over 1,300 Shell and Liberty service stations nationwide.
In its 2023 half-year report, Viva Energy reported a year-over-year increase in fuel sales of 11 percent for the period, as well as an increase in EBITDA of 40 percent, reaching AU$362 million. In the third quarter, the company saw its fuel sales increase year-over-year by 4.7 percent.
4. Beach Energy
Market cap: AU$3.634 billion; current stock price: AU$1.59
Oil and gas exploration and production company Beach Energy (ASX:BPT) has a diverse portfolio, with onshore and offshore oil and gas production in five basins across Australia and New Zealand.
Beach Energy doubled the production capacity of Otway gas plant in 2022 to 180 terajoules per day with the connection of two new wells
In May 2023, the company announced the connection of two new wells, meaning that four of the six wells that were initially drilled in 2022 are now connected and delivering gas. Additionally last year, the company made gas discoveries at both Tarantula Deep 1 and Trigg Northwest 1, as part of its ongoing Perth Basin gas exploration campaign.
In its fiscal year 2023, Beach Energy reported AU$1.62 billion in sales revenue. However, in its fiscal year 2024 first quarter the company disclosed a 12 percent decrease in revenue to AU$397 million on lower production and lower gas prices. Production for Q1 was down 10 percent quarter-on-quarter on lower Otway Basin customer nominations.
5. Karoon Energy
Market cap: AU$1.627 billion; current stock price: AU$2
Karoon Energy (ASX:KAR) is focused on continued company growth through a broad pipeline of exploration and development projects in Brazil, including its producing Baúna and Piracaba oil fields.
In its 2023 annual report, Karoon outlined production of 7.04 million barrels, up 52 percent from the previous year. This resulted in sales revenue of AU$566.5 million, representing an increase of 47 percent year-over-year.
In December, Karoon completed its acquisition of interests in the US Gulf of Mexico from LLOG, which include a 30 percent working interest in the Who Dat and Dome Patrol oil and gas fields and associated infrastructure, a nearly 16 percent working interest in the Abilene field and varying interests in adjacent exploration acreage.
FAQs for oil and gas investing
What is crude oil?
Crude oil is a mixture of hydrocarbons in liquid form that is found in natural underground reservoirs in the Earth’s crust. This petroleum liquid is refined to produce a variety of energy and industrial products, including asphalt, diesel and jet fuels, gasoline, heating oils, lubricants and propane.
Does Australia have oil?
Geoscience Australia states that the country hosts about 0.3 percent of global oil reserves.
“Most of Australia’s known remaining oil resources are condensate and liquefied petroleum gas associated with giant offshore gas fields in the Browse, Carnarvon and Bonaparte basins,” according to the government agency.
Where does Australia get its oil?
Australia’s domestic oil production does not cover its oil consumption; for that reason, the country receives oil imports from Singapore, South Korea, China, Malaysia and India.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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