OGJ150 suffered huge losses in 2015; capital spending, reserves down

Sept. 5, 2016
A steep, dramatic downturn in oil and natural gas prices maintained its momentum in 2015, making for a challenging year for the OGJ150 group of US oil and gas producers.

A steep, dramatic downturn in oil and natural gas prices maintained its momentum in 2015, making for a challenging year for the OGJ150 group of US oil and gas producers.

The current OGJ150 group posted a total net loss of $154.62 billion in 2015 compared with earnings of $75.05 billion in 2014 and $89.65 billion in 2013. Total revenue and total assets for the group declined 36.75% and 17.1%, respectively, compared with 2014 results.

In light of difficult market conditions, the OGJ150 companies took significant actions to reduce capital spending and drilling in 2015. Nevertheless, the group's oil and gas production continued to increase over the year, reflecting efficiency gains of shale production and retreating to the most productive areas.

Meanwhile, sustained low oil and gas prices have reduced proved liquids and gas reserves reported by the OGJ150 companies, as low prices have curtailed drilling and made recovery economics more challenging.

Industry deterioration has shrunk the OGJ150 list. There are 137 companies that qualified for this edition of the OGJ150. Last year's group contained 143 firms. Ten companies dropped out from last year's list, while three new companies joined the list this year.

To qualify for the OGJ150, oil and gas producers must be headquartered in the US, publicly traded, and hold US oil or gas reserves. 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.

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

Changes to the group

Three companies appear in the OGJ150 for the first time. They include Antero Resources Corp., Parsley Energy Inc., and Rice Energy Inc. The highest-ranking of these, Antero Resources, sits at No. 15 with yearend 2015 assets totaling $14.15 billion.

Ten companies previously included in the OGJ150 no long appear on the list this year. New Source Energy Partners LP filed Chapter 11 and terminated its registration to the US Securities and Exchange Commission. Daleco Resources Corp. and Breitling Energy Corp. dropped off the list due to a lack of current filings. Cross Border Resources Corp. was acquired by Red Mountain Resources Inc. Eagle Rock Energy Partners LP was merged with Vanguard Natural Resources LLC. Rosetta Resources Inc. was merged into Noble Energy Inc. Treaty Energy Corp. changed its name to Trimerica Energy Corp. Fidelity Exploration & Production Corp. sold its US producing properties. FX Energy Inc. was acquired by Orlen Upstream, a wholly owned subsidiary of PKN Orlen SA. And Legend Oil & Gas Ltd. discontinued its oil and gas exploration, development, and production operations in October 2015.

The 2016 OGJ150 contains eight limited partnerships (LP). The largest LP is Breitburn Energy Partners LP with assets of $4.87 billion at yearend 2015. The smallest LP, Apache Offshore Investment Partner, had assets of $13.17 million at yearend 2015.

There are five royalty trusts in the compilation. These are San Juan Basin, Cross Timbers, VOC Energy, Permian Basin, and Sabine Oil & Gas.

There also are four subsidiaries of non-US energy companies or of companies operating mainly in other industries. These are Seneca Resources Corp., EQT Production Co., Kinder Morgan, and Wexpro Co.

Group financial performance

Yearend 2015 assets for the OGJ150 group totaled $1.25 trillion, a decrease of 17.1% from yearend 2014. The group's revenue for 2015 totaled $582.54 billion, down 36.73% from a year earlier.

Combined stockholder equity declined 22.74% from a year ago to $559.14 billion. Twenty-nine firms posted negative stockholder equity, as their liabilities exceeded their assets. This compares with 13 firms with negative stockholder equity in 2014.

The group reported a collective net loss of $154.62 billion for 2015 compared with earnings of $75 million for 2014 and earnings of $89 million for 2013.

One hundred one companies in the group, or 84% of the total, posted a net loss in 2015. This compares with 55 such firms in last year's compilation. Seventy-two of the firms recorded net loss in excess of $100 million compared with 16 such firms in last year's OGJ150.

The largest loss was reported by Apache Corp. For the year ending 2015, the Houston independent producer reported a net loss of $23.52 billion. Devon Energy Corp., meanwhile, reported the secondary largest loss of $15.2 billion.

There are only five firms in the group with net income of more than $100 million; in last year's group, there were 48 such companies.

The group's 2015 return on assets was -12.3% compared with 4.9% for 2014 and 6.2% for 2013. Return on stockholders' equity was -27.6% compared with 10.4% a year earlier.

Group operations

Capital and exploration expenditures of the group decreased 29.5% to $161.21 billion during 2015. The number of US net wells drilled by the group last year totaled 11,329, down 37% from 18,012 a year earlier.

Compared with a year ago, the group's total worldwide liquids reserves were down 7.42% in 2015 to 39.57 billion bbl. The group's combined US liquids reserves decreased 11.61% to 22.58 billion bbl.

Independents' proved oil reserves were impacted most with downward revisions. According to Ernst & Young LLP's US oil and gas reserves study 2016, the largest downward revisions in 2015 on an absolute basis were reported by ConocoPhillips at 269 million bbl, Occidental Petroleum Corp. at 248 million bbl, and Continental Resources Inc. at 246.8 million bbl (OGJ Online, June 14, 2016).

Worldwide proved gas reserves for the OGJ150 group decreased 17.33% to 199 tcf in 2015. Group gas reserves in the US dropped 20.23% to 145.49 tcf.

The largest downward revisions for proved gas reserves in 2015, on an absolute basis, came from ExxonMobil Corp. at 6.7 tcf, Chesapeake Energy Corp. at 4.2 tcf, and Southwestern Energy at 3.5 tcf. The largest 2015 gas reserves addition came from Antero Resources at 2.3 tcf, and EQT Production at 2 tcf.

The OGJ150 companies' worldwide liquids production increased 6.89% in 2015 to 3.52 billion bbl compared with 3.29 billion bbl a year earlier. The group's US liquids production increased 11.37% to 2.17 billion bbl.

Worldwide gas production of the group moved up 3.54% to 17.92 tcf. US gas production for the group was up 5.91% to 13.36 tcf.

Top 20 companies by assets

The top 20 companies in the OGJ150 as ranked by yearend 2015 assets posted collective assets of $1.07 trillion, down 13.38% from a year earlier. The assets of the 20 firms, led by ExxonMobil, Chevron Corp, and ConocoPhillips, represent 85% of the assets of all OGJ150 companies.

ExxonMobil again tops the OGJ150 group with assets of $336.75 billion. At the end of 2014, the company's assets totaled $349.49 billion. Chevron's yearend 2015 assets totaled $266.1 billion, slightly up from a year ago. ConocoPhillips's total assets at the end of 2015 totaled $97.48 billion, down from $116.54 billion a year ago.

Hess Corp., ranked No. 9 a year earlier, moved to No. 6, despite a $4.38-billion decrease in its total assets. Marathon Oil Corp. moved to No. 7 in this year's list from No. 10 a year earlier, while its yearend assets actually went down by $3.7 billion.

Noble Energy's total assets increased from $22.55 billion at the end of 2014 to $24.19 billion at the end of 2015. Noble Energy's acquisition of Rosetta Resources accounted for the largest transaction activity during the year (OGJ Online, May 11, 2015).

This group of 20 contains three companies that were not included in the top 20 of the previous edition of the OGJ150. They are Antero Resources, Concho Resources, and EQT Production.

EQT Production is now ranked No. 20 vs. No. 28 a year ago, with its total assets increased to $8.99 billion at yearend 2015 from $8.15 billion at yearend 2014.

Leaders in earnings

The list of the top 20 earners during 2015 varies greatly from a year ago, indicating the dramatic deterioration in US oil and gas producers' financial positions.

The collective net income of this year's top 20 earners was $23.36 billion compared with $82.38 billion for the prior year's top 20. Most of the top earners in last year's compilation reported losses in 2015. ConocoPhillips, ranked No. 3 in last year's list, reported a net loss of $4.37 billion in 2015.

ExxonMobil, Chevron, and Antero Resources reported the highest 2015 earnings in this year's OGJ150 group. ExxonMobil and Chevron reported 2015 earnings of $16.55 billion and $4.71 billion, respectively, down from $33.62 billion and $19.31 billion, respectively, a year ago. Antero Resources' earnings climbed 45% to $979.99 million in 2015 from $675.83 million in 2014.

Except for ExxonMobil, Chevron, and Kinder Morgan, the remaining 17 companies qualified for the list of the top 20 earners did not qualify a year ago.

Except for ExxonMobil, Chevron, Anterto Resources, and EQT Production, the remaining 16 companies in the top 20 by net income list are not ranked in the top 20 by assets.

Also, half of the current top 20 earners are either royalty trusts, LP, or subsidiaries. There was only one LP shown in last year's top 20 earner list.

Top 20 in production, reserves

ExxonMobil leads this year's OGJ150 group in worldwide liquids production and reserves, worldwide gas production and reserves, as well as in US gas production and reserves.

Following ExxonMobil in worldwide liquids production are Chevron, ConocoPhillips, Oxy, and Anadarko Petroleum Corp. The worldwide liquids reserves holders in the OGJ150 group that follow ExxonMobil are Chevron, ConocoPhillips, Oxy, EOG Resources Inc., and Devon Energy.

Chevron tops the group in US liquids production and ExxonMobil ranks No. 1 in US liquids reserves. ConocoPhillips and EOG rank at No. 2 and No. 3, respectively, in both categories.

Following ExxonMobil in US gas production are Chesapeake, Southwestern, Anadarko, and ConocoPhillips. Second in US gas reserves is Antero Resources, followed by EQT Production, Cabot Oil & Gas Corp., ConocoPhillips, and Range Resources Corp.

Top 20 in capital spending, drilling

The collective outlays of the top 20 capital and exploratory spending leaders totaled $126.93 billion in 2015, down from $176.23 billion in 2014 and $170.63 billion in 2013.

Chevron, ExxonMobil, and ConocoPhillips were the leading three companies in spending last year, followed by Anadarko, Devon Energy, Oxy, and EOG.

Chevron's spending was $29.5 billion in 2015, down from 2014 outlays of $35.4 billion. ExxonMobil decreased its 2015 outlays to $28 billion from $34.62 billion in 2014. ConocoPhillips reduced its 2015 spending to $10 billion from $17 billion in 2014.

With a count of 896 wells, Chevron leads the OGJ150 group in the number of net wells drilled in the US during 2015. This compares with 1,125 net wells the company drilled in the prior year.

With 697 net wells drilled in the US last year, ExxonMobil is second on the list, followed by Anadarko, EOG, Chesapeake, and ConocoPhillips.

The top 20 drilled 7,501 net wells in 2015, down from 11,991 net wells in 2014 and 12,138 in 2013.

Fastest-growing firms

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 2014 and 2015, and it must have had an increase in net income in 2015. Limited partnerships, newly public companies, and subsidiaries are not included.

Normally a list of the top 20 fastest-growing companies in the OGJ150, only two of the firms qualified for the list this year. These are Antero Resources and Evolution Petroleum Corp. None of the companies were on the list last year.

Antero Resources, ranked No. 15 in total assets, reported stockholders' equity of $7.28 billion for 2015 compared with $5.47 billion in 2014. The company's earnings climbed 45% to $979.99 million in 2015 from $675.83 million in 2014.

As of Dec. 31, 2015, Antero Resources held about 569,000 net acres of oil and gas properties in the Appalachian basin in West Virginia, Ohio, and Pennsylvania. The company's 13.2 tcfe of proved reserves at yearend 2015 were 4% higher than the prior year and comprised of 72% gas, 27% NGLs, and 1% oil. Production for 2015 totaled 545 bcfe, a 48% increase over 2014 levels.

Evolution Petroleum, the second fastest-growing company and No. 96 based on total assets, posted an increase in stock equity of 0.4% to $51.87 million and net income increased 38.8% from a year ago to $4.99 million.

OGJ 150

About the Author

Conglin Xu | Managing Editor-Economics

Conglin Xu, Managing Editor-Economics, covers worldwide oil and gas market developments and macroeconomic factors, conducts analytical economic and financial research, generates estimates and forecasts, and compiles production and reserves statistics for Oil & Gas Journal. She joined OGJ in 2012 as Senior Economics Editor. 

Xu holds a PhD in International Economics from the University of California at Santa Cruz. She was a Short-term Consultant at the World Bank and Summer Intern at the International Monetary Fund. 


About the Author

Laura Bell-Hammer | Statistics Editor

Laura Bell-Hammer has been the Statistics Editor for the Oil & Gas Journal since 1994. She was the Survey Editor for two years prior to her current position with OGJ. While working with OGJ, she also was a contributing editor for Oil & Gas Financial Journal. Before joining OGJ, she worked for Vintage Petroleum in Tulsa, gaining her oil and gas industry knowledge.