S&P/ASX 200 Index (ASX: XJO) energy shares have been off to a strong start in the new year.
While the broader ASX 200 is down 3.5% in 2022, the S&P/ASX 200 Energy Index (ASX: XEJ) has gained 8.9%.
That energy index is comprised of big name ASX 200 energy shares like Santos Ltd (ASX: STO), up 7.2% so far this year.
Then there's competing ASX 200 energy share Woodside Petroleum Limited (ASX: WPL), which has gained 22.5% since the opening bell on 4 January.
And the Beach Energy Ltd (ASX: BPT) share price has leapt 13.1% higher in that same time, giving it a current market cap of $3.3 billion.
ASX 200 energy shares to become 'cash machines'
Earlier today Woodside released its full year results. And they didn't disappoint.
Among the highlights, the ASX 200 energy share reported a 262% increase in underlying net profit after tax (NPAT) to US$1.62 billion. The company also paid a fully franked final dividend of US$1.05 per share, up 255% year on year.
Shaw and Partners called the results a "watershed moment" for the Aussie energy sector, with expectations that fossil fuels will be part of the energy mix for a long time yet as the world transitions to renewable sources.
According to Shaw and Partners (quoted by The Australian):
Over the past several years, the chorus of investors demanding returns from the sector has grown louder. The US Shale sector has responded, the Super Major have responded, howver the Australian listed companies have been caught in no man's land.
Woodside's CY21 today is the first time I can remember since CY14 that an Australain Oil & Gas company has so comprehensively beaten consensus estimates and at the same time provided a return to shareholders.
The broker said that companies in the sector, like ASX 200 energy shares, "are going to become cash machines, in the same way cigarette companies did post advertising restrictions in the 1970s".
Shaw and Partners expects this won't be the last time Woodside reports a double-digit yield and beats earnings expectation.
US and European energy shares also undergoing 'tectonic shift'
The same tide that's lifting ASX 200 energy shares is at work across the globe, as energy prices continue to surge.
Travis Stice, CEO of US shale driller Diamondback Energy said (quoted by Bloomberg), "Eighteen months ago, we were in a global apocalypse for the energy sector, and now you're talking about out-sized returns. We should all pause and recognize the tectonic shift."
Shell CEO Ben van Beurden added, "We are struggling as an industry to keep up with supply. Partly, that is because of the fact that during the lean years, we've all been very disciplined in cash preservation and in our investment decisions."
With the tectonic shift still underway and the energy industry struggling to meet demand, ASX 200 energy shares look set for some healthy tailwinds.
