OGJ150 suffered huge 2020 losses due to COVID-19; spending, reserves down

The latest OGJ150 group of US oil and gas producers posted a collective 2020 full-year net loss of $117.2 billion on revenues of $400 billion, compared with the group’s net earnings of $13 billion in 2019 on revenues of $614 billion. Year-end assets and capital expenditures were down 18% and 45%, respectively. The companies’ financial and operating results in 2020 were substantially affected by the COVID-19 pandemic and the fall in commodity prices.

Since the beginning of 2020, the COVID-19 pandemic has caused significant disruption to the world. For most of 2020, travel restrictions and other restrictions on economic activities aimed at limiting the spread of the COVID-19 virus were implemented in many parts of the world. These constraints led to a collapse in oil and gas demand as well as commodity prices, especially from March to early May. In second-half 2020, the balance of supply and demand slowly improved, thanks to oil production cuts agreed by OPEC+, and a slow recovery in demand, allowing oil prices to somewhat recover.

For full-year 2020, the Brent price averaged $42/bbl, down from $64/bbl in 2019. The WTI price averaged $39/bbl for the full-year 2020, compared to $57 in 2019. Spot gas prices at Henry Hub averaged $2.03/MMbtu during 2020, compared with $2.56/MMbtu during 2019.

The decline in oil and natural gas prices also affected recognized reserves. Compared to the year-ago survey, the current OGJ150 group booked much reduced US and international liquids reserves at yearend 2020. The group also registered a dramatic decline in its natural gas reserves. Oil and gas production fell both in the US and around the world.

To qualify for OGJ150, oil and gas producers are US headquartered, publicly traded, and hold oil or gas reserves in the US. Companies appear on the list ranked by total assets but also are ranked by revenues, stockholders’ equity, capital expenditures, earnings, production, reserves, and US net wells drilled.

In the previous year’s OGJ150, there were 117 companies in the compilation. However, this year, as 27 companies dropped out due to mergers and acquisitions, asset sales, bankruptcy, and other reasons, the current OGJ150 group contains only 90 companies, the first time on record that the number of the companies in the survey is less than 100. Moreover, among the 90 companies, 4 companies—Amazing Energy Oil and Gas Co., Camber Energy Inc., Citadel Exploration Inc., and Petrolia Energy Corp.—hadn’t reported any data at the time of writing.

As always, data for this year’s list reflect the prior year’s operations.

Member changes

Major M&A activities during 2020 include: Concho Resources Inc.’s acquisition by ConocoPhillips; Noble Energy Inc.’s acquisition by Chevron; Parsley Energy Inc.’s acquisition by Pioneer Natural Resources Co; and WPX Energy Inc.’s merger with Devon Energy Corp. (Table 1).

Thirteen companies, including Alta Mesa Resources Inc., Carbon Energy Corp., Chaparral Energy Inc., EP Energy Corp., Humble Energy Inc., and others, sold their US producing properties, liquidated, or became private since the last survey.

Eight companies from last year’s survey terminated their registration to the US Securities and Exchange Commission (SEC) during 2020. OGJ150 usually only includes publicly traded companies trading on major exchanges. However, we decided to keep three companies—Foothills Exploration Inc., Harvest Oil & Gas Corp., and Petro River Oil Corp.—currently listed on the OTC market pink sheets. These companies do not have operational data available to the public and their data is not included in totals and rankings.

The 2020 OGJ150 group contains five limited partnerships (LP). They are Black Stone Minerals LP, Dorchester Minerals LP, Everflow Eastern Partners LP, Atlas Growth Partners LP, and Apache Offshore.

There are eight royalty trusts in the compilation. They are Permianville (formerly Enduro), VOC, MV Oil, San Juan, Cross Timbers, Sabine, Permian Basin, and Gulf Coast Ultra Deep-Water Royalty Trust. Seneca Resources is the only company belonging to the category of subsidiaries of non-US energy companies or of companies operating mainly in other industries.

Group financial performance

Yearend 2020 assets for the OGJ150 group totaled $1.02 trillion, a decrease of 18% from the 2019 level. The decrease reflects huge impairments on properties brought by lower commodity prices.

The group’s revenue for 2020 totaled $400 billion, down by 34% from a year earlier. Combined stockholder equity declined 26% from the year ago level to $467.89 billion.

Of all the companies in this year’s survey, 16 posted negative stockholder equity for 2020, as their liabilities exceeded assets. Comparatively, among the 117 companies (107 provided data) in last year’s survey, nine firms reported negative stockholder equity.

The group reported a collective net loss of $117.2 billion for 2020, compared to net earnings of $13 billion for 2019. Most companies reported losses in 2020, mainly due to lower realized commodity prices, lower sales volumes/production curtailments, and increased impairments.

A total of 69 companies (out of 86 companies with earnings data) posted net losses in 2020, compared with 59 (out of 107 with earning data) in 2019, and 33 (out of 107 with earnings data) in 2018. Fifty companies recorded net losses exceeding $100 million in 2020, compared with 30 such companies in 2019 and 10 in 2018.

Only 17 of the companies in the OGJ150 group posted a profit in 2020, compared with 59 such companies in 2019. The number of companies posting net income of over $100 million decreased to four in 2020 from 21 such companies in 2019. There were 42 such companies in 2018.

Capital and exploration spending for the 2020 OGJ150 group was $64 billion, a decrease of 45% from the group level in 2019.

Group operations

Worldwide liquids production of the OGJ150 companies decreased in 2020 by 6.5% to 3.6 billion bbl. US liquids production by the group was down 6.45% to 2.55 billion bbl.

OGJ150’s worldwide gas production decreased 6.6% in 2020 to 17 tcf. US gas output by the group decreased 4.6% to 12.64 tcf.

In 2020, OGJ150 worldwide liquids reserves declined 25% to 33.17 billion bbl. US liquids reserves for the group decreased 24% to 22.78 billion bbl.

Group’s worldwide natural gas reserves decreased 3.8% to 189.8 tcf. Gas reserves in the US decreased 14.3% to 143.64 tcf.

The number of US net wells drilled by the group in 2020 totaled 4,922, down 45% from a year earlier.

Top 20 companies by assets

Due to large-scale M&A activities in 2020 and a severely shortened OGJ150 list, the top 20 biggest companies by assets have unprecedented dominance for the whole industry.

The top 20 companies as ranked by yearend 2020 assets had total assets of $944.3 billion, down 13% from the previous top 20’s yearend 2019 assets. Their assets represented 92% of the group’s total, compared to a ratio of 87% in last year’s survey.

ExxonMobil, as usual, tops the OGJ150 group with assets of $332.75 billion at yearend 2020. At the end of 2019, the company’s assets totaled $362.6 billion.

Following ExxonMobil are Chevron, Occidental Petroleum, ConocoPhillips, and EOG Resources, unchanged in rank compared to a year ago. Pioneer Natural Resources Co., last year’s No. 12 company by assets, now ranks No. 6, reflecting its acquisition of Parsley Energy Inc.

Diamondback Energy Inc. slipped from No. 7 last year to No. 10 this year, as its yearend assets declined by $6 billion. The company recorded an impairment on proved oil and natural gas properties of $6 billion for 2020, compared to $790 million recorded for 2019.

EQT Corp. moved up to No. 8 from No. 13 last year. The company acquired strategic Appalachian basin assets from Chevron for $735 million. EQT Corp. increased total proved reserves by 13% in 2020 compared to 2019.

The top 20 received revenues of $376.6 billion in 2020, down 33.6% compared to 2019. This accounted for 94% of total revenues for this year’s OGJ150, compared to a ratio of 92% in the last survey.

The top 20 companies posted a collective loss of $85.5 billion in 2020, compared to a combined net income of $21.6 billion a year earlier. The top 20’s loss accounted for 73% of the group’s total loss.

Total stockholders’ equity for the top 20 was $439.56 billion in 2020, down 23% from the comparative 2019 level. Their equity represented 94% of the group’s total, compared to a ratio of 90% in last year’s survey.

Capital and exploration expenditures by the top 20 decreased by 41% in 2020 to $54.38 billion. This was 85% of the OGJ150’s total capital spending in 2020, up from 80% in the last survey.

The top 20 companies drilled 3,772 net wells in the US in 2020, down 38.5% from 2019. This represents 77% of all net wells drilled by the group, up from 69% a year ago.

The top 20 companies’ worldwide liquids production decreased 1.9% in 2020, totaling 3.08 billion bbl, while liquids production in the US was basically flat compared to 2019. The top 20 companies accounted for 86% of the group’s worldwide liquids production and 80% of the US liquids production. The top 20 held 87% of the OGJ150 group’s worldwide liquids reserves and 80% of US liquids reserves in 2020. In last year’s survey, these two ratios were 82% and 73%, respectively.

Moreover, thanks to M&A activity, 2020 saw a rapid concentration of natural gas resources to large companies.

The top 20 accounted for 77% of the group’s worldwide natural gas production and 69% of the group’s US natural gas production. In last year’s survey, these two ratios were 68% and 57%, respectively. The top 20 companies also held 76% of the group’s worldwide natural gas reserves and 68% of US natural gas reserves in this year’s survey. In last year’s survey, these two ratios were 61% and 54%, respectively.

Leaders in revenues, earnings

The top five companies as ranked by 2020 revenues are ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, and EOG Resources. ExxonMobil posted revenue of $181.5 billion in 2020, down from revenue of $265 billion in 2019.

Only 17 companies in the group reported profits in 2020. The top five companies as ranked by 2020 earnings are California Resources Corp., Cabot Oil & Gas Corp., Bonanza Creek Energy Inc., Black Stone Minerals LP, and W&T Offshore Inc.

California Resources Corp. reported $1.87 billion as net income, which includes reorganization items from emerging from bankruptcy.

Cabot Oil & Gas Corp. reported net income of $200.5 million, despite the lowest natural gas price realizations in its 31-year history as a public company. This, however, compares to its net income of $681 million in 2019.

Bonanza Creek Energy Inc. reported net income of $103 million in 2020, up from $67 million in 2019. The increase in net income mainly came from income tax benefit and a jump in derivative gains.

Comparatively, ExxonMobil reported a net loss of $22.44 billion for 2020, a decrease of $37 billion. The noncash provision for depreciation and depletion was $46 billion, up $27 billion from the prior year, mainly due to asset impairments.

Chevron reported a net loss of $5.5 billion in 2020, compared to net income of $2.9 billion in 2019. US upstream reported a loss of $1.61 billion in 2020, compared with a loss of $5.09 billion in 2019. The smaller loss was largely due to the absence of fourth-quarter 2019 impairment charges of $8.17 billion, primarily associated with Appalachia shale and Big Foot. However, international upstream reported a loss of $825 million in 2020, compared with earnings of $7.67 billion in 2019.

Top 20 in capital spending, drilling

The 20 companies in the OGJ150 group that had the largest capital spending in 2020 combined for a total of $55.77 billion, down 40% from $93 billion a year ago in such outlays.

ExxonMobil led the group with capital spending of $18.57 billion, down from 2019 outlays of $25.63 billion, followed by Chevron, whose 2020 spending was $8.92 billion, down from $14 billion a year earlier.

ConocoPhillips is third with capital spending of $4.7 billion in 2020, down 29% from a year earlier, followed by EOG Resources with $3.24 billion in capital outlays. EOG reported 2019 capital spending of $6.15 billion.

EOG Resources is No. 4 in terms of 2020 capital spending but continues to be the first in the count of US net wells drilled for the year. The company reported that its 2020 net wells drilled in the US totaled 548, down from 760 in 2019. With 546 net wells drilled in the US last year, Chevron is second on the list, followed by ExxonMobil, Ovintiv Inc., and Occidental Petroleum.

The total US net wells drilled by these top 20 firms was 4,010. This compared to 6,267 in 2019 and 5,690 in 2018.

Top 20 in oil production, reserves

With 7.64 billion bbl, ExxonMobil tops the OGJ150 group in worldwide liquids reserves at end 2020. However, this represents a stunning decline of 42% from the company’s worldwide liquids reserves a year ago. ExxonMobil’s worldwide liquids reserves was 13.1 billion bbl at yearend 2019 and 14 billion bbl at yearend 2018.

According to ExxonMobil’s annual report, certain quantities of crude oil, bitumen, and natural gas that qualified as proved reserves in prior years did not qualify as proved reserves at yearend 2020. Amounts no longer qualifying as proved reserves include 3.1 billion bbl of bitumen at Kearl, 0.6 billion bbl of bitumen at Cold Lake, and 0.5 billion oil-equivalent bbl in the US.

Chevron’s worldwide liquids reserves were the second highest at yearend 2020, totaling 4.47 billion bbl, down from 4.77 billion bbl a year ago. ConocoPhillips is No. 3 in the current list with 2.39 billion bbl, compared with 2.92 billion bbl a year ago.

With 738 million bbl of output, ExxonMobil produced the most liquids worldwide during 2020, followed by Chevron and Occidental Petroleum. With the addition of Anadarko, Occidental Petroleum’s worldwide liquids production was 350 million bbl for 2020, up from 275 million bbl for 2019.

Chevron held the largest liquids reserves in the US at yearend 2020, totaling 2.34 billion bbl. ExxonMobil, No. 2 on the list, reported 1.96 billion bbl of US liquids reserves at yearend 2020, a decline of nearly 40% from the year-ago level.

Chevron and ExxonMobil are followed by ConocoPhillips’ 1.9 billion bbl, and EOG Resources’ 1.56 billion bbl. At yearend 2019, ConocoPhillips reported 2.37 billion bbl for US liquids reserves, and EOG Resources reported 2.43 billion bbl.

Diamondback Energy Inc. stood out as the company reported a strong increase in proved undeveloped reserves, which was primarily attributable to the continued development of the company’s horizontal well inventory. Diamondback Energy has moved to No. 7 in terms of its liquids reserves in the US, which total 1 billion bbl at yearend 2020. In the previous edition of OGJ150, Diamondback Energy was No. 8 on the list with US liquids reserves at 941 million bbl.

Pioneer Natural Resources Co.’s US liquids reserves also increased to 948 million bbl at yearend 2020 from 885 million bbl at yearend 2019, reflecting its acquisition of Parsley Energy Inc. in 2020.

Chevron produced the most liquids in the US in 2020, followed by Occidental, EOG, and ExxonMobil. Although ExxonMobil produced 738 million bbl worldwide in 2020, the company only produced 176 million bbl in the US.

Gas production, reserves leaders

With 27 tcf, Chevron is the leading OGJ150 company in terms of worldwide gas reserves, followed by ExxonMobil, EQT, and Cabot Oil & Gas Corp. ExxonMobil’s worldwide gas reserves dropped to 25.2 tcf at yearend 2020 from 33 tcf a year ago.

Chevron posted the most worldwide gas production among the OGJ150 companies with 2.41 tcf in 2020, followed by ExxonMobil, EQT, and Antero Resources.

EQT Corp. leads the OGJ150 group in US natural gas reserves. The company reported an increase in its US gas reserves to 18.86 tcf at yearend 2020 from 16.68 tcf a year earlier. This increase was driven by reserve additions associated with the Chevron assets acquisition.

Cabot Oil & Gas Corp., which held the third largest US gas reserves previously at 12.9 tcf, is now second with 13.67 tcf.

ExxonMobil, the perennial No. 1 holder in this category, fell from the throne. Its gas reserves in the US are now ranked No. 3 with 13.44 tcf at yearend 2020, down dramatically from 19.03 tcf a year earlier.

EQT Corp. produced 1.42 tcf of gas in the US last year, followed by ExxonMobil with 1.08 tcf and Antero Resources with 875 bcf. Cabot Oil & Gas is fourth as ranked by US gas production, with 858 bcf produced last year.

Fast-growing companies

The list of fastest-growing companies ranks firms based on growth in stockholder equity. For a company to appear on this list, it must have posted positive net income in both 2020 and 2019, and it must have had an increase in net income in 2020. Limited partnerships, newly public companies, and subsidiaries are not included.

Posting an 11.6% boost in stockholder equity last year, Bonanza Creek Energy Inc. is the only company on the list. Bonanza Creek Energy recorded 2020 net income of $103.5 million, compared to $67 million a year earlier. The Colorado-based exploration and production company is ranked No. 42 by assets in the OGJ150 list.