Oil-Weighted E&Ps Profit from Higher Prices, Shifts in Strategy -- RBN Energy -- June 9, 2017

Active rigs:

$45.50	6/9/2017	06/09/2016	06/09/2015	06/09/2014	06/09/2013
Active Rigs	52	27	82	192	189

RBN Energy: oil-weighted E&Ps profit from higher prices, shifts in strategy. Two examplses:

Apache Corp. posted the largest operating profit in the peer group during the first quarter of 2017 at $744 million, compared with $37 million for full-year 2016, while generating $1.4 billion in cash flow. Higher prices and lower lease operating costs led to significant margin expansion across all of the company’s major regions. Compared with first-quarter 2016 results, margins went from $21/boe to $33/boe for Apache’s operations in Egypt, $17/boe to $37/boe for the North Sea, $11/boe to $20/boe for the Permian and $5/boe to $13/boe in the rest of the company’s North American operations. After cutting capital expenditures by 83% in 2014-16, Apache is taking advantage of its dramatic turnaround to boost investment from $1.7 billion to $3.1 billion, with the increase slated to fund 14%-21% output growth from its Permian properties, including its new Alpine High play.

EOG Resources posted a $232 million operating profit in the first quarter of 2017, the second-largest quarterly profit in our study group, and EOG joined Apache as the only producers that generated more than $1 billion in cash flow. EOG produced 571 Mboe/d, including a record 316 Mb/d of crude oil. In the first quarter, EOG received more than $10/boe over its 2016 realized prices, or $36.98/boe. Lifting costs were $11.73/boe in the first quarter, up nearly $2/boe from its 2016 results, which the company said resulted from the divestment of lower-cost natural gas-weighted properties. Reductions in DD&A expense helped offset the rise in lifting costs, falling 4.5% to $15.88/boe. In contrast to the industry trend, impairments increased from $3/boe in 2016 to $3.73/boe in the first quarter of 2017, which was also divestiture-related.

 Disclaimer: this is not an investment site. Do not make any financial, investment, job, travel, or relationship decisions based on what you read here or what you think you may have read here.