Revenue takes a 20% dip, income down 10% in 2Q

Don Stowers, Editor, OGFJ
Laura Bell, Statistics Editor, Oil & Gas Journal

Revenues in the second quarter of 2012 dropped sharply from the same quarter in 2011 – down $62.5 billion, or 20%, for the group of publicly-traded US-based companies track by Oil & Gas Journal and Oil & Gas Financial Journal. Revenues also fell from the first quarter of 2012 – down $38.5 billion, or 13%. The year-over-year numbers represent the largest decline since the onset of the 2008-2009 recession, which had a significant impact on drilling activity and earnings.

The top 20 fastest growing companies

The only bright spot is net income, which dipped $3.4 billion, or 10%, for the collective companies from 2Q11 to 2Q12, but rose $5.5 billion, or 21%, from the previous quarter despite the reduced revenues.

The number of reporting companies rose slightly, from 123 to 136, in the second quarter of 2012. For these companies, total revenue was $303.1 billion, down $1.5 billion from the same quarter in 2011 but up $2 billion over the prior quarter. So the 1% change either way means that revenue growth has been essentially flat for several quarters.

Year-to-date capital spending stood at nearly $97.2 billion for the second quarter of 2012 compared to $81.6 billion for the second quarter of 2011. This represents a 20% increase.

Total asset value for the combined OGJ150 group of companies grew to nearly $1.298 trillion from $1.276 trillion year over year, representing about a 2% increase. However, compared to the previous quarter, asset value fell by almost $54 billion, a 4% drop.

Stockholder equity for the entire group rose by $19.7 billion to $640.5 billion (about a 2% increase) from the 2Q2011 to the 2Q2012. However, the figure declined by nearly $7.0 billion from $647.5 billion (down about 1%) from the first quarter.

Largest in net income

The 20 largest companies ranked according to net income had $35.1 billion in collective net income for the second quarter of 2012. This compares with $27.3 billion the previous quarter and $33.3 billion for the second quarter of 2011.

Once again, the $35.1 billion in net income for the top 20 companies is greater than the $32.7 billion in collective net income for the entire OGJ150 group of 136 companies. In other words, the largest 20 companies in net income represented 108% of the profits of the entire group.

Of the 136 companies in the group, 50 showed a net loss in the income column. This represents 37% of the entire group. Among the larger companies reporting losses: No. 6 Anadarko Petroleum ($70 million); No. 14 Pioneer Natural Resources ($39.5 million); No. 19 WPX Energy ($6 million); and No. 23 Southwestern Energy ($488.1 million).

The top 20 in spending The top 20 in total revenue The top 20  in assest - market capitalization

In many cases, low natural gas prices were instrumental in the income loss. Since prices have rebounded a little since the second quarter and are trending upward, it is likely many of these companies will show better results when third-quarter financials are reported.

The 10 largest companies in net income were (in order): ExxonMobil ($17.7 billion); Chevron ($7.2 billion); ConocoPhillips ($2.3 billion); Occidental ($1.3 billion); Chesapeake ($1.0 billion); Sandridge Energy ($922 million); Hess Corp. ($535 million); Devon Energy ($477 million); Continental Resources ($406 million); and EOG Resources ($396 million).

ExxonMobil's net income of $17.7 billion amounted to approximately 54% of the total net income for the entire group of 136 companies. The top five companies in net income had about 91% of the total net income for the entire group.

Largest in total revenue

The top 20 companies in total revenue had $253.5 billion in revenue compared to $264.5 billion for the entire OGJ150 group of 136 companies, or roughly 96% of the total.

The 10 largest companies in total revenue were (in order): ExxonMobil ($127.4 billion); Chevron ($62.6 billion); ConocoPhillips ($15.2 billion); Hess ($9.3 billion); Murphy Oil ($7.2 billion); Occidental ($5.8 billion); Apache ($4.0 billion); Marathon Oil ($3.8 billion); Chesapeake ($3.4 billion); and Anadarko ($3.2 billion).

Clearly, among US-based companies in total revenue and net income, ExxonMobil Corp. is in a class by itself.

Top companies in return on...

Top spenders

Spending by the top 20 companies in the second quarter continued to surge. It more than doubled from the first quarter of 2012 to the second – a 103% increase to $80.5 billion. The top 10 spenders were, in order: ExxonMobil ($16.6 billion); Chevron ($13 billion); ConocoPhillips ($7.9 billion); Occidental ($5.1 billion); Chesapeake ($5.1 billion); Devon ($4.3 billion); Hess ($3.9 billion); Apache ($3.8 billion); EOG Resources ($3.7 billion); and Anadarko ($3.6 billion).

Fastest-growing companies

The five fastest-growing companies, ranked by stockholders' equity, were Continental Resources (up 17.3%); PrimeEnergy Corp. (up 14.3%); Legacy Reserves LP (up 12.2%); Rosetta Resources (up 11.7%); and Concho Resources (up 10.9%).

Continental Resources recently unveiled its newest oil field in an area of southern Oklahoma that has produced some of the state's richest discoveries. The South Central Oklahoma Oil Province, known at Continental as SCOOP, covers much of four counties in south central Oklahoma. The rock is an oil-rich portion of the Woodford Shale that lies beneath previously developed oil fields.

Click here to download the PDF of the "OGJ150 Quarterly" 2nd Quarter ending June 30, 2012

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