LAURA BELL, STATISTICS EDITOR - OIL & GAS JOURNAL
AS THE OIL AND GAS INDUSTRY begins a gradual recovery from an economic downturn that has moved into a third year, the comeback has not been linear. Each recent quarter has not been better than the last. Rather, the recovery has seen fits and starts, and the fourth quarter of 2016 was no exception. Still, if you look at the market fundamentals, the overall outlook is promising.
Once again, operators in the Permian and Delaware basins of West Texas and southeastern New Mexico have been some of the top performers, although other shale plays and conventional plays are starting to show some signs of life. Capital markets and private equity seem to think prices have stabilized and don't seem to fear another plunge as OPEC is seen as living up to its promised production cuts. Regardless, operational efficiencies improved dramatically during the downturn, and shale economics have risen to a level that is very competitive with conventional production.
TOTAL REVENUES
Total revenues for the OGJ150 group of companies in 4Q16 inched up by $632.2 million to $128.3 billion compared to the previous quarter. This is only about one half of 1%, but the fourth quarter results rose by $4.4 billion - about a 3% increase - compared to the same period in 2015.
By comparison, total revenue rose 8% in the third quarter compared to the prior quarter.
NET INCOME
Net income for the group slid to a negative $17.5 billion in the fourth quarter compared to a smaller loss of just $1.03 billion in 3Q16, as a number of companies moved farther into the red. However, year-over-year, the fourth quarter losses were considerably less than the $58.5 billion in losses seen in the final quarter of 2015.
Here is a quick look at total revenue for the OGJ150 group of companies for the past nine quarters:
• 4Q16 -- $128.3B
• 3Q16 -- $127.7B
• 2Q16 -- $117.3B
• 1Q16 -- $100.2B
• 4Q15 -- $123.9B
• 3Q15 -- $145.5B
• 2Q15 -- $159.3B
• 1Q15 -- $145.2B
• 4Q14 -- $198.1B
As you can see, total revenue for the group bottomed out in the first quarter of 2016 and has improved in subsequent quarters. However, current revenues are still tens of billions of dollars - more than $70 billion - less than they were two years ago in 4Q14.
Here is a glimpse of net income figures for the group for the past nine quarters (brackets indicate a net loss):
• 4Q16 - [$17.52B]
• 3Q16 - [$1.03B]
• 2Q16 - [$17.11B]
• 1Q16 - [$18.94]
• 4Q15 - [$58.45B]
• 3Q15 - [$47.27B]
• 2Q15 - [$28.51B]
• 1Q15 - [$15.17B]
• 4Q14 - $2.52B
EIGHT QUARTERS OF LOSSES
As is apparent, we have had eight consecutive quarters of losses for the group, which took a step backward in 4Q16. The third and fourth quarters of 2015 saw the worst losses, of $47.27 billion and $48.45 billion, respectively. If the relatively poor showing for the 4Q16 is just an anomaly, the trend indicates that net losses will lessen. Some forecasters are predicting a return to profitability in the first or second quarter of 2017.
By press time for this issue, only 102 of the 130 publicly traded companies included in the OGJ150 Quarterly Report had reported their financial results to the US Securities Exchange Commission. Of these companies, only 25 reported a positive net income for the fourth quarter. This is a decline from the 34 companies that reported a positive net income in the 3Q16.
EXXON STILL ON TOP
No surprise, Exxon Mobil Corp. once again led the way with $1.68 billion in net income on total revenues of $58.4 billion for the quarter. However, even this was down from the $2.9 billion in reported income for XOM in the previous quarter.
Other top companies that reported positive net income were:
• Devon Energy -- $331M
• Kinder Morgan CO2 -- $221M
• Matador Resources -- $104.3M
• Sanchez Energy -- $58M
• Cimarex Energy -- $38.2M
• Seneca Resources -- $35.1M
• Halcon Resources -- $28.5M
• Diamondback Energy -- $28.4M
• Continental Resources -- $27.7M
• W&T Offshore -- $16.5M
• Newfield Expl. -- $13M
The top 20 companies in net income accounted for a total of $2.63 billion.
The top 20 companies in total revenue had $120.23 billion of the $128.3 billion total for the entire group, or 93% of the total. Again, ExxonMobil led the way with $58.38 billion in revenues. Other top companies in total revenues included:
• Chevron -- $31.5B
• ConocoPhillips -- $6.8B
• Devon Energy -- $3.4B
• Occidental -- $2.8B
• Anadarko -- $2.6B
• EOG Resources -- $2.4B
• Chesapeake -- $2.0B
• Apache -- $1.5B
• Hess Corp. -- $1.4B
BIG SPENDERS
Year-to-date capital spending plunged significantly for the OGJ150 group of companies. The group spent $157.3 billion in 2015, but just $85.4 billion in 2016 - a 45% decline, or nearly $72 billion less than the year before.
Among the top 20 companies in capital spending, the companies spent $126.9 billion in 2015, but this dropped to about $71 billion in 2016 - a 44% decline, or nearly $56 billion less than the prior year.
The top companies in capital spending are:
• Chevron -- $18.1B
• ExxonMobil -- $17.6B
• ConocoPhillips -- $4.9B
• Anadarko -- $3.5B
• Occidental -- $2.7B
• EOG Resources -- $2.6B
• Concho Resources -- $2.4B
• Devon Energy -- $2.3B
• Hess Corp. -- $2.3B
• EQT -- $2.1B
MARKET CAPITALIZATION
The top five companies in market capitalization for the fourth quarter are: ExxonMobil ($374.4 billion); Chevron Corp. ($222.6 billion); Occidental Petroleum ($54.4 billion); Anadarko Petroleum ($35 billion); and ConocoPhillips ($27.2 billion).
Market capitalization for the top 20 companies totaled $984.4 billion. This represents about 83% of the total market capitalization for the entire group of companies - nearly $1.2 trillion.
FASTEST GROWING COMPANIES
The fastest-growing companies as measured by stockholder equity were RSP Permian Inc., which grew by 85.7% in the 4Q16; Matador Resources Co., with 57.9% growth; Reserve Petroleum Co., which had a 0.8% growth rate; and Evolution Petroleum Corp., which saw 0.4% growth.
Click here to download the PDF of the OGJ150 Quarterly "Quarter ending Dec. 31, 2016"
