Oil prices climbed on the eve of October’s busiest day of earnings season, but significant impairment charges put a damper on the brief rally. Large scale oil producers wrote off billions in the early stages of Q3’15 earnings, as Anadarko Petroleum (ticker: APC), Freeport McMoRan (ticker: FMX), Occidental Petroleum (ticker: OXY) and Whiting Petroleum (ticker: WLL) wrote off more than $12 billion combined. A list of company-declared impairments are listed below.
Q3’15 Reporting Company
Write Off (Millions)
|Anadarko Petroleum Co.||$1,545|
|Basic Energy Services||$81|
|Cabot Oil & Gas||$140|
On a related level, Hess Corp. (ticker: HES) got a head start on the 2016 capital guidance scene, setting aside a midpoint of $3.0 billion for its budget. The allotted expenditures are a 27% decline from 2015 levels of $4.1 billion, and its year-over-year oil and gas production is expected to decrease by about 9% to average a midpoint of 340 MBOEPD in 2016. Management anticipates running four rigs in the Bakken, essentially cutting its fleet in half. In 2014, Hess spent $5.6 billion on its operations and directed $2.2 billion to the Bakken alone.
ConocoPhillips (ticker: COP) trimmed its budget to $11.5 billion annually through 2017 earlier this year, adding activity in unconventional plays would be “significantly reduced.” Further capital cuts are expected as more companies finalize 2016 drilling plans, even though 2015 budgets were, on average, 35% below 2014 plans.