Revenues, net income continue to rise for US producers in 1Q10
Don Stowers, Editor, OGFJ
Laura Bell, Statistics Editor, Oil & Gas Journal
Total revenues and net income continued to rise in the first quarter of 2010 for the OGJ150 group of companies tracked by Oil & Gas Journal and Oil & Gas Financial Journal. In fact, both figures in both categories reached levels not seen since the third quarter of 2008. However, the comeback is incremental, and in general, the larger E&P companies are doing better than their smaller counterparts.
Revenue for the group was $251.6 billion, up by more than $10 billion over the previous quarter and up over $73 billion from the terrible first quarter of 2009. Revenue totals have inched upward every quarter since 1Q09. Net income for the group was $23.3 billion, up nearly $7.4 billion over the prior quarter and much better than the $10.7 billion loss reported in the 1Q09. Income has risen every quarter since 1Q09, but the 46% jump this quarter over 4Q08 represents the biggest increase in more than a year.
Year-to-date capital spending for the group was $30.1 billion, down nearly $2.9 billion from the same quarter in 2009.
This report covers 131 US producers with assets in the United States, although only 124 reported results for the quarter as of press time for this issue.
Despite the ever-smaller number of reporting companies in this report, total assets for the group grew to $1.109 trillion, up $34 billion from the previous quarter and up $77 billion over the same quarter in 2009. Similarly, stockholder equity showed resiliency from the low numbers in 2009. Stockholder equity for the group was $519.1 billion for the 1Q10, up nearly $18 billion from the prior quarter and up about $31 billion from the same period in 2009.
Largest in net income
Among the top 20 companies in net income, 19 showed increases over the prior quarter. Only Fort Worth-based XTO Energy showed a decline (from $537 million in 4Q09 to $330 million in 1Q10). XTO has been acquired by Exxon Mobil Corp., which remains the largest producer by far with $6.3 billion in earnings reported for the quarter. Second-place Chevron Corp. reported nearly $4.6 billion in net income, and third-place ConocoPhillips reported almost $2.1 billion in income.
The fourth- and fifth- ranked companies are Devon Energy Corp. ($1.19 billion) and Occidental Petroleum ($1.06 billion). Anadarko Petroleum is in sixth place with $728 million in earnings, followed by Apache Corp. with $705 million. Rounding out the top 10 in net income are Chesapeake Energy ($596 million), Hess Corp. ($538 million), and Marathon Oil Corp. ($457 million).
Five new companies joined the top 20 in net income, including Chesapeake Energy, which took a $524 million loss the previous quarter. The Oklahoma City company, which is one of the most active shale play producers, successfully rebounded from that loss this quarter. Other new members of the top 20 include Pioneer Natural Resources ($245 million); Noble Energy ($237 million); Cimarex Energy ($204 million); and Ultra Petroleum ($202 million).
The five companies that dropped off the list are: Southwestern Energy ($172 million in net income); Questar Corp. ($150 million); Murphy Oil Corp. ($149 million); EOG Resources ($118 million profit); and Exco Resources ($116 million).
As a group, the top 20 in net income earned about $4.5 billion more than in the previous quarter, an increase of about 28%. This compares to a 7% increase for the previous reporting periods. Comparing the 1Q10 to the 1Q09, net income for the top 20 companies was up more than $11 billion, representing a 116% increase over that disastrous quarter.
Largest in total revenues
Among the top 20 companies in total revenues, 15 showed increases in revenue over the prior quarter. Chevron, the No. 2 company in revenues after ExxonMobil, showed a very slight decline. Murphy Oil, XTO Energy, EOG Resources, and Noble Energy all showed modest revenue declines. As a group, total revenues were $242.3 billion — up about $9.3 billion (4%) over the prior quarter. Total revenues rose 41% compared to the same quarter in 2009.
ExxonMobil again led the group in total revenues with $90.3 billion, followed by (in order): Chevron ($48.2 billion); ConocoPhillips ($45.8 billion); Marathon Oil ($16.8 billion); Hess Corp. ($9.2 billion); Murphy Oil ($5.2 billion); Occidental Petroleum ($4.8 billion); Devon Energy ($3.2 billion); Anadarko Petroleum ($3.1 billion); and Chesapeake Energy ($2.8 billion).
To illustrate how much the domestic oil and gas industry continues to be dominated by the largest companies, the total revenues for the top 20 companies for the 1Q10 was $242.3 billion compared with $251.6 billion for the entire group of 124 companies covered in this report. So the largest 20 companies had 96.2% of the total revenues, while the remaining 104 companies had just 3.8% of the total.
With respect to net income, the top 20 companies earned $20.8 billion, while the entire OGJ150 group had $23.3 billion in income.
Fastest-growing company
Denbury Resources, based in Plano, Texas, tops the list of fastest-growing companies for the quarter with a 137.3% increase in stockholders' equity over the preceding quarter. The company had a whopping 2,671.4% increase in net income quarter to quarter.
Denbury is the largest oil and natural gas operator in Mississippi and Montana, owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River, and holds significant operating acreage in the Rockies, Permian Basin, Mid-Continent, and Gulf Coast regions.
