Bob BeckHigher crude oil and natural gas prices helped boost first half earnings for North American oil and gas companies.
Associate Managing Editor-Economics
Laura Bell
Statistics Editor
Generally, revenues and profits were significantly higher than a year ago.
A sample of 105 earnings reports show first half profits up from a year ago for 80 of the companies.
Twelve companies posted lower earnings, and 13 recorded losses.
However, for the latter group, losses were smaller by a third for eight of the companies. Total profits moved up 33%, while revenues moved up 9%.
Higher prices key
Significant increases in crude oil and natural gas prices were the major contributors to the improvement in earnings.
The average price for world export crude oil averaged $18.62/bbl in the first half, up 7.1% from first half 1995.
The average price for West Texas Intermediate crude oil was up 9% at $19.74/bbl for the period, and the futures price for light sweet crude oil on the New York Mercantile Exchange (Nymex) averaged $20.57/bbl, up 9.1% from first half 1995.
The Nymex natural gas futures price in first half 1996 averaged $2.42/MMBTU, up 54.1% from the same period a year earlier. The average spot gas price in the first half was $2.23/MMBTU, up 53.8% from first half 1995.
Large independents winners
The sharpest gains in earnings were recorded by some of the large independents.
Combined profits for this group of 58 companies in first half 1996 were up 125%, with increased revenues of 21%.
For this group, profits in second quarter 1996 were up 161% from second quarter 1995, while revenues were up 18%. The majority of the companies, 46, recorded higher profits during the first half this year than for the same period last year.
Profits slipped for five of the companies, and eight posted losses-although for five of those companies the losses were reduced from a year ago.
The sample also included 25 smaller independent companies, of which 15 showed higher profits during the first half this year while four had lower earnings and six recorded losses.
In all, this group's first half 1996 earnings were $17.4 million compared with a loss of $19 million in first half 1995. Revenues for this group moved up 21.2%.
For the 22 largest companies, profits were up 27.3%, and revenues gained 8.1% from a year ago.
Nineteen of these companies posted higher earnings in the first half, while only three had lower profits. One firm, Sun Co. Inc., had a loss of $8 million.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.
