3Q revenues drop 39%, income in free fall

Of the 124 publicly traded US companies covered in this quarter's OGJ150 report, only 23 reported a positive net income, and of those, five are trusts - VOC Energy Trust, San Juan Basin Royalty Trust, Cross Timbers Royalty Trust, Sabine Royalty Trust, and Permian Basin Royalty Trust. In all, 82% of the 124 companies reported a net loss for the quarter. Some of those losses were substantial. For example:

• Apache Corp. reported a net loss of $5.6 billion;
• Chesapeake Energy reported a net loss of $4.6 billion;
• EOG Resources reported a net loss of $4.1 billion;
• Devon Energy reported a net loss of $3.9 billion; and
• Freeport McMoRan reported a net loss of $3.7 billion.

Seventeen companies on the OGJ150 failed to report their earnings to the US Securities Exchange Commission by press time for this issue. Several of those companies have been delisted from their stock exchange or have received notification of pending delisting. Others filed for bankruptcy protection.

Two companies dropped off the list from the previous quarter. Rosetta Resources was acquired by Noble Energy in an all-stock transaction valued at $2.1 billion, plus the assumption of Rosetta's net debt of $1.8 billion.

New Orleans based Treaty Energy changed its name to Trimerica Energy Corp. The company had not reported its earnings at the time this issue of OGFJ went to press.

Let's look at the numbers.

Total revenues for the entire group plummeted by $92.5 billion (39%) in the third quarter compared to the same quarter in 2014. Revenues fell by $13.8 billion (9%) just from the second quarter of 2015.

In the third quarter of 2014, collective net income for the group of companies was $28.3 billion. In the third quarter of 2015, the group reported a net loss of $47.3 billion - a $75.6 billion drop of 267%. In 2Q15 the companies reported a $28.5 billion net loss compared with the $47.3 billion loss in the third quarter - an $18.8 billion decline (66%).

YTD CAPITAL SPENDING

Year-to-date capital spending in the third quarter stood at approximately $121.9 billion compared to $159.1 billion in the same quarter of 2014 - down about $37.2 billion or 24%. By comparison, spending in the previous quarter declined by 16%, so the severity of spending cuts continues to hammer the oilfield services sector and other industry vendors as well as workers.

Total asset value for the OGJ150 group of companies has also continued to fall. In 3Q15, asset value declined by $165.4 billion (12%) compared to the same quarter in 2014. It dropped by $78.3 billion (6%) compared to the previous quarter alone.

STOCKHOLDERS' EQUITY

In another measure of the effect of low oil prices on producers and investors, stockholders' equity for the collective group of companies fell by $114.6 billion year over year from the third quarter of 2014. That's about a 16% drop. From the previous quarter alone, stockholders' equity declined by $53 billion - an 8% drop in equity.

Laura Bell, statistics editor of Oil & Gas Journal who has been crunching the numbers for the OGJ150 for more than a decade, noted, "Twenty-five companies had a negative stockholders' equity. I can't remember EVER that we've had this many companies in this category."

LARGEST IN NET INCOME

The top 20 companies ranked according to net income had a good quarter compared with the prior (2Q15) quarter. Net income grew by $2.1 billion or 38%. However, No. 2 Chevron accounted for nearly 70% of this growth, as its net income grew from $608 million in the second quarter to more than $2.1 billion in the 3Q15.

The list of top companies by net income looks a lot different from the second quarter. Only nine companies that were on the 2Q list were on the 3Q list - ExxonMobil, Chevron, Kinder Morgan CO2, Sabine Royalty Trust, Permian Basin Royalty Trust, San Juan Basin Royalty Trust, Evolution Petroleum, Dorchester Minerals LP, and VOC Energy Trust. Missing are such energy stalwarts as Occidental Petroleum, EV Energy Partners LP, Anadarko Petroleum, EOG Resources, and Continental Resources.

Taken as a group, the top 20 companies by net income reported a $19.2 billion year-over-year decline from the 3Q14, a 72% drop.

LARGEST IN TOTAL REVENUE

Total revenue continues its downward spiral for the top 20 in that category. The year-over-year drop from the 3Q14 was approximately $87.6 billion - down 40%. Revenue declined by $14.6 billion (10%) from the previous quarter.

Two companies, Whiting Petroleum and Freeport McMoRan, dropped off the top 20 list in total revenue and were replaced by Linn Energy and WPX Energy.

ExxonMobil with $67.3 billion in revenues and Chevron with $34.3 billion stood alone as the No. 1 and No. 2 companies, respectively, in total revenues. However, both companies showed declines from the previous quarter. Exxon reported a 10% drop to $67.3 billion for the quarter, and Chevron had a 15% fall to $34.3 billion in revenue.

BIG SPENDERS

Year-to-date collective spending for the top 20 companies fell from $127.6 billion in the third quarter of 2014 to $98 billion in 3Q15, approximately a $30 billion decline (24%).

Top spenders, in order, are: Chevron ($22.1 billion); ExxonMobil ($21 billion); ConocoPhillips ($8 billion); Anadarko Petroleum ($4.9 billion); Devon Energy ($4.2 billion); Occidental Petroleum ($4.2 billion); EOG Resources ($4 billion); Apache ($3.8 billion); Hess ($3.4 billion); and Marathon Oil ($3 billion).

The next 10, in order, are: Chesapeake Energy ($2.8 billion); Continental Resources ($2.6 billion); Noble Energy ($2.5 billion); Concho Resources ($2.2 billion); Whiting Petroleum ($2.1 billion); Murphy Oil ($2 billion); Pioneer Natural Resources ($1.6 billion); EQT Production ($1.5 billion); Southwestern Energy ($1.4 billion); and Gulfport Energy ($1.4 billion).

Click here to download the PDF of the OGJ150 Quarterly "Quarter ending Sept. 30, 2015"