ASX energy shares surged higher today after news of a COVID-19 vaccine. Woodside, Santos, and Oil Search’s share prices have all seen strong gains.
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The share prices of Australia’s biggest energy companies soared in today’s trading after news of an imminent COVID-19 vaccine hit the market in US trading hours. Biopharmaceutical company Pfizer Inc (NYSE: PFE) announced overnight that its vaccine was 90% effective after undergoing Phase-3 testing.
The news of the vaccine has led to an anticipation of a bounce-back in the world economy, and is a particular boost to the energy markets. Oil prices immediately leapt at the news, and at the time of writing, the near-dated futures contract of Brent Crude has risen by 7.5% after the vaccine announcement.
Here are three ASX energy shares that have received a boost and are trading strongly today following the vaccine news.
Oil Search Limited (ASX:OSH)
Oil Search is an oil and gas producer based in Papua New Guinea (PNG). It is the largest company in PNG and its biggest investor, holding a 29% share of the ExxonMobil-operated PNG LNG Project.
The company has not had a fantastic year in FY20 after releasing a rather downbeat Q3 trading update in October. In that announcement, it reported a 29% fall in revenue to $189 million, which was a 47.6% decline on Q3 FY19. The lower revenue was out down to the prevailing low energy prices, which caused a large reduction in the average realised LNG and gas price. At the time, the company also said that COVID-19 has severely impacted its business, and that it does not expect demand for LNG demand to fully recover until 2027.
The share price of Oil Search has had a horror year in 2020, tumbling by almost 60% before today’s rise. In today’s trading, the Oil Search share price has risen dramatically by almost 14%% to $3.34 at the time of writing, giving the company a market cap of $5.9 billion.
Santos Ltd (ASX: STO)
Santos is one of the leading independent oil and gas producers in the Asia-Pacific region. It supplies natural gas to Australian, Indonesian and other Asian markets, and develops oil and liquids businesses in Australia, Indonesia and Vietnam.
Santos has had a relatively good year in 2020 despite the pandemic. In October, Santos announced that it delivered record third quarter production of 25.1 mmboe, which was 22% higher than the prior quarter and driven by higher production in all five of the company’s core assets. Later that month, the company provided further optimism for FY21 when it announced that the cost of its Narrabri gas project would be much cheaper than the $3 billion-plus price tag being widely quoted.
Santos’s share price has declined by almost 40% in 2020 leading up to today’s trading. The share price has recovered by 12.77% today to $5.65, commanding a market cap of $10.4 billion at the time of writing.
Woodside Petroleum Limited (ASX: WPL)
Woodside is the largest operator of oil and gas production in Australia, and also Australia’s largest independent dedicated oil and gas company.
This has not been a pretty year for Woodside, and its share price has been at the lowest levels since 2004. In its latest results announcement in October, it reported a decrease of revenue by 9% from Q2 2020, and 42% down from Q3 2019. It also announced a reduction of 8% in its workforce. The company cited that depressed LNG prices were the main reason for its lacklustre result.
Woodside’s share price was not spared the market woes this year, falling by around 46% in 2020. The Woodside share price is trading up by 7.3% today to $19.67 per share, giving the company a market cap of $17.6 billion.
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Motley Fool contributor Eddy Sunarto owns shares of Santos Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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