A sample of 42 US-based oil and gas producers and refiners posted collective net earnings of $61.45 billion in fourth-quarter 2022, compared with combined profits of $39.14 billion in the previous year’s fourth quarter. Total revenues were $372.61 billion for the quarter, compared with $313.88 billion a year ago.
The group also reported full-year 2022 earnings of $235.6 billion, compared with net earnings of $87.7 billion for full-year 2021.
While the group’s fourth-quarter earnings rose year-on-year, most companies reported lower oil and gas profits in the fourth quarter compared with third-quarter 2022, reflecting lower quarterly crude oil and natural gas liquids (NGL) and domestic natural gas prices.
Brent crude oil prices averaged $88.56/bbl in fourth-quarter 2022, up from $79.59/bbl for the same quarter a year ago but down from $100.71/bbl in third-quarter 2022. West Texas Intermediate (WTI) averaged $82.80/bbl in fourth-quarter 2022, compared with $77.45/bbl in fourth-quarter 2021 and $93.18/bbl in third-quarter 2022. Oil prices saw considerable weakness at the end of 2022, as macroeconomic headwinds led to concerns about oil demand.
US crude oil production in fourth-quarter 2022 averaged 12.36 million b/d, compared with 11.66 million b/d in fourth-quarter 2021 and 12 million b/d in third-quarter 2022, according to the US Energy Information Administration (EIA). NGL production averaged 5.97 million b/d during the quarter, compared with 5.75 million b/d for the same quarter a year ago.
According to Baker Hughes, the number of active oil rigs in the US increased to 621 at end-December 2022 from 604 at end-September. There were 480 active rigs to end December 2021.
US commercial crude oil stock at the end of 2022 was 426 million bbl, compared with 421 million bbl at the end of fourth-quarter 2021 and a 5-year average of 438.2 million bbl. The US Strategic Petroleum Reserve (SPR) at end-December was 372 million bbl, compared with 593 million bbl at end-2021 and a 5-year average of 632.2 million bbl.
US oil product stock at the end of December was 786 million bbl, compared with 777 million bbl at the end of fourth-quarter 2021 and a 5-year average of 827.8 million bbl.
For fourth-quarter 2022, US refinery inputs were 16.39 million b/d, compared with 16.02 million b/d during the same period a year ago and 16.82 million b/d in third-quarter 2022. The refinery utilization rate was 91%, compared with 88.8% in the previous year’s fourth quarter and 93.5% in third-quarter 2022.
According to Muse, Stancil & Co., refining cash margins in fourth-quarter 2022 averaged $42.52/bbl for Middle-West refiners, $24.48/bbl for West Coast refiners, $29.85/bbl for Gulf Coast refiners, and $26.96/bbl for East Coast refiners. In the same quarter of the prior year, these refining margins were $17.07/bbl, $14.88/bbl, $11.52/bbl, and $8.60/bbl, respectively.
Natural gas prices at Henry Hub averaged $5.55/MMbtu in fourth-quarter 2022, compared with $4.77/MMbtu in the previous year’s fourth quarter and $8/MMbtu in third-quarter 2022.
US marketed gas production grew to 109 bcfd from 105.4 bcfd in fourth-quarter 2021, according to EIA data. The number of active gas rigs in the US dropped to 156 at end-December from 159 at end-September. This compared with 106 rigs at end-December 2021. US LNG exports averaged 10.48 bcfd during the quarter, up 1.56% from the previous quarter.
A sample of 12 companies based in Canada, including oil and gas producers and pipeline operators, posted total earnings of $5.59 billion (Can.) in fourth-quarter 2022. In fourth-quarter 2021, this group’s combined income was $9.21 billion (Can.).
Prices for Western Canada Select (WCS) decreased to $57/bbl in fourth-quarter 2022 from $62.50/bbl in the prior year quarter. Prices for WCS were negatively impacted in fourth-quarter 2022 by pipeline disruptions extending down the US Gulf Coast.
In fourth-quarter 2022, the Canadian dollar weakened relative to the US dollar as the average exchange rate decreased to $0.74 from $0.79 in the prior year quarter. The rate decrease had a positive impact on price realizations for Canadian companies during fourth-quarter 2022 when compared with the prior year quarter.
US oil, gas producers
ExxonMobil Corp. had fourth-quarter 2022 earnings of $12.8 billion, resulting in full-year earnings of $55.7 billion. This compares with third-quarter 2022 earnings of $19.7 billion, fourth-quarter 2021 earnings of $8.87 billion, and full-year 2021 earnings of $23 billion.
Fourth-quarter results included unfavorable identified items of $1.3 billion associated with additional European taxes on the energy sector and asset impairments, partly offset by one-time adjustments related to the Sakhalin-1 project expropriation in Russia. Capital and exploration expenditures were $7.5 billion in the fourth quarter, bringing full-year 2022 investments to $22.7 billion.
ExxonMobil’s upstream earnings for fourth-quarter 2022 were $8.2 billion, compared with $12.4 billion in the third quarter. The quarter-over-quarter decline in earnings was mainly due to a 15% and 13% decline in realized prices for crude oil and natural gas, respectively, due to higher global inventories. Positive unsettled derivatives mark-to-market effects of $1.6 billion were driven by the decline in gas prices and more than offset yearend inventory impacts and seasonally higher expenses.
Production in the fourth quarter was 3.8 million boe/d. Growth more than offset divestment impacts, as production increased by more than 100,000 boe/d compared with the prior quarter. The Permian basin delivered record production in the quarter of more than 560,000 boe/d and the company also loaded the first LNG cargo from the Coral South LNG development in Mozambique.
ExxonMobil’s energy products fourth-quarter 2022 earnings totaled $4.1 billion, compared with $5.8 billion in the third quarter. Continued strong industry refining margins partially offset an unfavorable derivatives mark-to-market impact of $1 billion. In addition, increased maintenance spends and lower throughput, driven by French industrial actions, were offset by favorable yearend inventory impacts. Identified items associated with additional European taxes on the energy sector as well as asset impairments reduced earnings by about $700 million.
The chemical products segment had fourth-quarter 2022 earnings of $250 million, compared with $812 million in the third quarter on weaker margins.
Chevron Corp. earned $6.4 billion (net) for fourth-quarter 2022, up from earnings of $5.1 billion in fourth-quarter 2021 but down from the $11.2 billion reported for third-quarter 2022. Included in the current quarter were $1.1 billion in international upstream write-off and impairment charges and pension settlement costs of $17 million. Foreign currency effects decreased earnings by $405 million. Adjusted earnings of $7.9 billion in fourth-quarter 2022 compared with adjusted earnings of $4.9 billion in fourth-quarter 2021. Chevron had full-year 2022 earnings of $35.5 billion, compared with $15.6 billion in 2021.
Chevron’s worldwide net oil-equivalent production was 3.01 million b/d in fourth-quarter 2022 and 3 million b/d for full-year 2022. Both quarterly and annual production were down 3% compared with their respective 2021 periods. International production decreased 7% in 2022 primarily due to the end of concessions in Thailand and Indonesia, while US production increased 4% compared with 2021, mainly in the Permian basin.
Chevron’s US refinery crude oil input in fourth-quarter 2022 increased slightly to 888,000 b/d from the year-ago period. Refined product sales of 1.24 million b/d were up 7% from the year-ago period, mainly due to higher renewable fuel sales following the Renewable Energy Group Inc. acquisition and higher jet fuel demand.
The company’s international refinery crude oil input of 653,000 b/d in fourth-quarter 2022 increased 8% from the year-ago period as refinery runs increased due to higher demand.
ConocoPhillips had fourth-quarter 2022 earnings of $3.2 billion, compared with fourth-quarter 2021 earnings of $2.6 billion. Excluding special items, fourth-quarter 2022 adjusted earnings were $3.4 billion, compared with fourth-quarter 2021 adjusted earnings of $3 billion.
Full-year 2022 earnings were $18.7 billion, compared with full-year 2021 earnings of $8.1 billion. Excluding special items, full-year 2022 adjusted earnings were $17.3 billion, compared with full-year 2021 earnings of $8 billion.
Production for fourth-quarter 2022 was 1.76 million boe/d, an increase of 150,000 boe/d from the same period a year ago. After adjusting for closed acquisitions and dispositions and the conversion of previously acquired Concho-contracted volumes from a two-stream to a three-stream basis, fourth-quarter 2022 production decreased by 3,000 boe/d or 0.2% from the same period a year ago. Organic growth from the Lower 48 and other development programs more than offset decline; however, total company fourth-quarter production was lower overall, primarily due to weather and downtime impacts in the Lower 48.
Occidental Petroleum Corp. had net income of $1.73 billion in fourth-quarter 2022, compared with net income of $1.34 billion in fourth-quarter 2021.
The company’s oil and gas pre-tax income on continuing operations for the fourth quarter was $2.5 billion, compared with pre-tax income of $3.3 billion for third-quarter 2022. Total average global production from continuing operations of 1.23 million boe/d for the fourth quarter came within the midpoint of guidance.
During the fourth quarter, Occidental repaid $1.1 billion of debt and retired $450 million of interest rate swaps, with total year debt repayments of over $10.5 billion, representing 37% of total outstanding principal.
Hess Corp. had net income of $624 million in fourth-quarter 2022 compared with net income of $265 million in fourth-quarter 2021. On an adjusted basis, the company had net income of $548 million in fourth-quarter 2022.
During fourth-quarter 2022, Hess’s oil and gas net production, excluding Libya, was 376,000 boe/d, up 27% from 295,000 boe/d in fourth-quarter 2021, primarily due to higher production in Guyana. Exploration and production (E&P) capital and exploratory expenditures were $818 million, compared with $593 million in the prior-year quarter. E&P net income was $667 million in fourth-quarter 2022, compared with $309 million in fourth-quarter 2021.
Devon posted a fourth-quarter net income of $1.2 billion, down from $1.5 billion in the last 3 months of 2021. Revenues rose slightly to just under $4.3 billion but production expenses climbed 18% to $715 million.
Devon’s production averaged 636,000 boe/d in the fourth quarter, with oil volumes reaching a record high of 316,000 b/d. The company’s production in the quarter was reduced by 2% due to the impact of severe winter weather across its portfolio.
Chesapeake posted a fourth-quarter 2022 profit of $3.5 billion, which included a tax benefit of nearly $1.4 billion, on revenues of $4.1 billion. Operating profits climbed to $2.2 billion during the period versus $1.4 billion in fourth-quarter 2021.
Diamondback reported a fourth-quarter profit of $1 billion, in line with fourth-quarter 2021, as revenues also were flat at just over $2 billion. For the year, the company had net income of nearly $4.4 billion, more than double its 2021 performance.
US independent refiners
Phillips 66 had fourth-quarter 2022 earnings of $1.9 billion, compared with earnings of $5.4 billion in third-quarter 2022 and $1.27 billion in fourth-quarter 2021. Excluding special items of $15 million, the company had adjusted earnings of $1.9 billion for the fourth quarter, compared with third-quarter 2022 adjusted earnings of $3.1 billion.
Adjusted pre-tax income for refining was $1.6 billion in the fourth quarter, compared with adjusted pre-tax income of $2.9 billion in the third quarter. The decrease was due primarily to lower realized margins.
Phillips 66’s realized margins declined to $19.73/bbl in the fourth quarter from $26.87/bbl in the third quarter, mainly due to lower market crack spreads and lower clean product differentials. Pre-tax turnaround costs for the fourth quarter were $236 million. Crude utilization rate was 91% and clean product yield was 86%.
Marathon Petroleum had net income of $3.64 billion for fourth-quarter 2022, compared with net income of $1.1 billion for fourth-quarter 2021. Adjusted net income was $3.1 billion for the quarter compared with adjusted net income of $794 million for fourth-quarter 2021.
The company’s Refining and Marketing (R&M) segment reported adjusted EBITDA of $4.6 billion in fourth-quarter 2022, versus $1.5 billion for fourth-quarter 2021. The increase was driven by higher R&M margin. R&M margin was $28.82/bbl for fourth-quarter 2022, versus $15.88/bbl for fourth-quarter 2021. Crude capacity utilization was about 94%, resulting in total throughput of 2.9 million b/d for fourth-quarter 2022, which is roughly flat year-over-year.
Refining operating costs were $5.62/bbl for fourth-quarter 2022, versus $5.36/bbl for fourth-quarter 2021. The majority of this increase was primarily driven by higher energy costs, project expense associated with higher turnaround activity, as well as a special compensation expense.
Valero Energy had net income of $3.1 billion for fourth-quarter 2022, compared with $1 billion for fourth-quarter 2021. Adjusted net income was $3.2 billion for fourth-quarter 2022, compared with $988 million for fourth-quarter 2021. For full-year 2022, net income was $11.5 billion, compared with $930 million in 2021.
The refining segment reported operating income of $4.3 billion for the fourth quarter, compared with $1.3 billion for fourth-quarter 2021. Refining throughput volumes averaged 3 million b/d in fourth-quarter 2022. Valero’s refineries operated at 97% capacity utilization rate in the fourth quarter, which was the highest utilization rate since 2018.
Canadian firms
All financial figures are presented in Canadian dollars unless noted otherwise.
Suncor had fourth-quarter 2022 net earnings of $2.74, compared with $1.55 billion in the prior year quarter, primarily due to significantly higher crude oil and refined product realizations, higher upstream production, partially offset by increased operating expenses and income taxes.
Suncor’s total upstream production increased to 763,100 boe/d in fourth-quarter 2022, compared with 743,300 boe/d in the prior year quarter, primarily driven by increased production from the company’s oil sands assets.
The company’s refinery crude throughput was 440,000 b/d and refinery utilization was 94% in fourth-quarter 2022, compared with 447,000 b/d and 96% in fourth-quarter 2021. The decrease was due to unplanned maintenance in the current period, including the weather-related event that occurred late in the quarter at the company’s Commerce City refinery.
Imperial Oil had estimated net income of $1.73 billion in fourth-quarter 2022 and cash flow from operating activities of $2.8 billion, compared with net income of $2.03 billion and cash flow from operating activities of $3.09 billion in third-quarter 2022.
Fourth quarter results reflected strong operating performance across all business segments and robust diesel crack spreads, which were offset by lower upstream realizations. Full year estimated net income was $7.34 billion with cash flow from operating activities of $10.48 billion.
Imperial Oil’s upstream production in the fourth quarter averaged 441,000 boe/d, bringing full-year production to 416,000 boe/d. In the downstream, throughput in fourth-quarter 2022 averaged 433,000 b/d with capacity utilization of 101%, the highest quarterly utilization in company history.
Cenovus Energy recorded net earnings of $784 million in the fourth quarter, down from third-quarter net earnings of $1.6 billion. Total revenues were about $14.1 billion in the fourth quarter, down from $17.5 billion in the third quarter. The decrease was mainly due to lower benchmark commodity prices, which drove reduced prices for the company’s products across the upstream and downstream businesses.
The company’s production was 806,900 boe/d for fourth-quarter 2022, an increase of nearly 30,000 boe/d compared with the third quarter. However, oil sands sales volumes in the fourth quarter were lower than production by about 18,000 b/d as a third-party pipeline outage led the company to store product in December.