Aenert news. Energy Companies
Thanks to the large-scale implementation of oil and gas production technologies in fields with low permeability, the United States has become one of the main exporters of liquefied natural gas in the world, and has also significantly reduced its own imbalance between the production and consumption of oil and petroleum products. In this regard, indicators of the current state of shale gas and tight oil production are undoubtedly necessary indicators for assessing the prospects for the state of the global hydrocarbon market.
In the USA, hundreds of large and small companies are engaged in the extraction of shale gas and tight oil, each of which has its own characteristics in the composition of the resource base, doing business, and applying the latest technological achievements. Generalized, but indirectly, the state of this market allows us to take into account the financial indicators of oil service companies, for which the US market is the main one, and which we considered earlier. In this commentary, we present second quarter 2023 production and financial results for selected companies focused primarily on shale gas and tight oil production against the backdrop of overall performance of this resource in the United States.
After rapid production growth in 2023Q1 (an increase of more than 2% compared to 2022Q4), the second quarter saw a slight decline in production volumes to 83.2 billion cubic feet per day (83.7-2023Q1). It should be noted that the significant growth in shale gas production continued for four consecutive quarters, which could not last indefinitely.
However, oil production continued to grow in the second quarter, for the fifth quarter in a row. Small declines occurred at Eagle Ford (TX) and Bakken (ND & MT), but were offset by higher production at Spraberry (TX Permian) and Wolfcamp (TX & NM Permian).

US average daily production of shale gas and tight oil



Source: EIA.gov

To assess the financial performance of companies, it should be taken into account that in the second quarter of this year there was a significant decrease in the commodity price compared to the average prices of the previous quarter. Thus, Worldwide oil ($/BBL) amounted to 73.59 versus 74.52, and Worldwide natural gas liquids ($/BBL) 24.41 versus 19.08, respectively.

EOG Resources

EOG Resources, Inc. is one of the largest crude oil and natural gas exploration and production companies in the United States, most of which is shale gas and tight oil. EOG Resources operates primarily in the U.S. in in areas of operations such as Eagle Ford, Permian Basin, South Texas and many others, as well as in Trinidad.

In the second quarter of 2023, total revenue was $5.573 million (GAAP) and net income was $1.553 million, down 7 percent and 23 percent from the prior quarter, respectively. In the second quarter of 2022, the company's financial performance was even higher.

EOG Resources. Revenue, net income and share price



Source: based on EOG Resources

At the same time, production of Crude oil & Condensate in 2022Q2 increased slightly compared to 2022Q2 to 476.6 MBod, as did Natural gas liquids (up to 215.7 MBbld).

Over the past year and a half, the company's stock market has been relatively quiet with minor correctional changes.

Devon Energy

Devon Energy Corporation has a first-class portfolio of oil and natural gas assets. At the end of 2022, reserves totaled 1,815 MMBOE of which oil accounted for 44%. Devon operates in five major regions - Delaware Basin, Eagle Ford, Anadarko Basin, Powder River Basin and Williston Basin. The Delaware Basin is the most productive of these regions. Devon is headquartered in Oklahoma City.

In 2023Q2, the company's Total Revenue amounted to $3,454 million, of which 2,493 million came from oil, gas and NGL sales. This is almost 40% less than in the same quarter a year earlier. Net Income changed even more significantly downward - $698 millions in 2023Q2 versus $1,696 millions a year earlier.

In the second quarter of this year, oil production by Devon Energy was at 323 MBbls/d, which is slightly higher than in 2023Q1. The largest volume of production was obtained in the Delaware Basin.

Devon Energy. Revenue, net income and share price



Source: Based on Devon Energy Corporation

The company's total gas production amounted to 636 MMcfd/d, which is almost the same as last year. The largest volume of gas production was in the Delaware and Anadarko Basins.

The company's share price has dropped markedly since its peak at the end of last year.

Occidental Petroleum Corporation

Occidental Petroleum Corporation (Oxy) is an American oil and gas production company headquartered in Houston, Texas.  At the end of the last year proved reserves were - 1913 MMbbl Oil, 846 MMbbl NGL and 6350 Bcf natural gas. Most of the reserves are concentrated in the United States.  The company's total reserves are estimated at 3,817 MMboe.

The company's total Net oil & gas sales in 2023Q2 were $4,941 million, or approximately 7% less than the prior quarter and more than 35% less than the second quarter a year earlier. Net Income decreased similarly – to $605 million, which was the worst result in the last two years.

Occidental Petroleum Corporation. Revenue, net income and share price



Source: Based on Occidental Petroleum Corporation

At the same time, daily production volumes in the second quarter of this year (990 MBOE/D) decreased slightly compared to the first quarter, but remained higher than in all quarters of the previous year. The value of the company's shares decreased slightly.

From the data presented it follows that sales volumes and Net Income of the companies examined have been declining for three to four quarters in a row. Moreover, in the second quarter this coincided with a general decline in shale gas production in the United States and a slowdown in the growth rate of oil production. It is possible that these are not random coincidences, but the end of a period of sustainable growth and the start of unstable volatility in the market.

By the Editorial Board