Recent Company Earnings:
May 4, 2020
April 28, 2020
Energy giant BP reported a significant fall in first-quarter net profit on Tuesday, as oil prices continue to dive amid intensifying concerns about the coronavirus crisis and dwindling storage capacity.
Source: CNBC
The U.K.-based oil and gas company posted first-quarter underlying replacement cost profit, used as a proxy for net profit, of $800 million. That compared with $2.4 billion in the first quarter of 2019, reflecting a fall of 67%.
Analysts had expected first-quarter underlying replacement cost profit to come in at $987 million, according to data compiled by Refinitiv.
“A good quarter but, undoubtedly, a very brutal environment,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.
BP’s results come shortly after a historic plunge in oil prices. The May contract of U.S. West Texas Intermediate plunged below zero to trade in negative territory for the first time in history last week. Trading volume was thin given it was the day before the contract’s expiration date, but the move lower was unprecedented nonetheless.
WTI futures had fetched more than $60 a barrel at the start of the year. A dramatic fall-off in demand as a result of the coronavirus outbreak has sent oil prices tumbling.
On Tuesday, the June contract of WTI traded at $11.36 per barrel, more than 11% lower for the session, while international benchmark stood at $20.22, up around 1%.
“The real situation that we have here is a fundamental situation of supply and demand,” Looney said. “Demand in the second quarter, we think, will be down around 16 million barrels per day worldwide this year. And that’s about five times the previous demand destruction which we saw in the global financial crisis in 2008 to 2009.”
Shares of BP, which edged into positive territory during mid-morning deals, have fallen approximately 35% since the start of the year.
Dividend confirmed
BP’s debt rose to $51.4 billion at the end of the first quarter, $6 billion higher than the quarter before. And the firm’s debt-to-capital ratio, or gearing, jumped to 36% through the first three months of the year.
The company also announced a dividend of 10.5 cents per share was announced for the quarter.
“The board of BP reviewed the dividend in the first quarter as usual and reviewed it in full and the decision was made to pay that dividend based on the underlying performance of the business in the first quarter and based on the actions we are taking,” Looney told CNBC on Tuesday.
Last week, Norway’s Equinor became the first oil major to cut its dividend this earnings season which had raised concerns that other oil majors may follow suit.
“There will be a sigh of relief from many retail investors that BP has committed to paying a dividend,” Stuart Lamont, investment manager at Brewin Dolphin, told CNBC via email.
“There had been a great deal of debate about what the failure to do so would mean for income investors, who will now have a close eye on Royal Dutch Shell’s results later this week,” Lamont said.
Net-zero by 2050
On February 12, BP’s Looney published a statement entitled “Reimagining energy, reinventing BP.” It outlined the energy firm’s long-term goal of becoming a net-zero company by 2050 “or sooner.”
When asked whether the ongoing impact of the coronavirus crisis had altered his outlook for the business, Looney said there were three reasons to explain why he was now “even more” committed to pursuing this goal.
“Number one, I don’t think this pandemic does anything but add to the challenge for oil outlooks in the future,” Looney said.
“The second is I think it has reminded people in society of the frailty of our ecosystem … People are looking at clear skies and the beauty of that and I think, while we have got different priorities right now, I think people will be very focused on that in the medium term,” he continued.
“Finally, we talked about negative WTI prices last week, Lightsource BP, where we are a 50% shareholder … is letting contracts for 400 megawatts of solar power in the United States. So, there is something about that sector that I think is providing a real attractive proposition for investors and is very resilient at times like this,” Looney added.
April 1, 2020
March 3, 2020
At its annual Security Analyst Meeting today, Chevron Corporation (NYSE: CVX) announced expectations to deliver leading shareholder returns through disciplined capital spending, improved cost efficiency, and continued cash flow growth over the next five years.
February 24, 2020
Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or the “Company”), a designer and manufacturer of drilling tool technologies, today announced unaudited preliminary revenue for the year ended December 31, 2019, was $19.0 million, up 4% from the prior year. Fourth quarter 2019 preliminary revenue included approximately $600 thousand from the rental of the Company’s well bore conditioning tool, the Drill-N-Ream® (DNR) in the Middle East, or almost half of SDP’s total Middle East revenue for the year. For the year, international revenue nearly quadrupled to $1.3 million compared with $360 thousand in 2018. At the end of 2019, SDP had $1.2 million in cash. Preliminary results are subject to change pending review by the Company’s independent accountants.
February 20, 2020
Houston oilfield service company Halliburton plans to pay down its long-term debt by issuing $1 billion in lower-interest notes.
Source: Houston Chronicle
Halliburton on Wednesday said it plans to issue a type of debt known as senior notes. Due in March 2030, the notes will pay 2.92 percent interest.
The company said it will use proceeds from the sales to buy back previously issued senior notes and reduce other forms of debt.
Halliburton closed 2019 with about $10.3 billion of debt, almost one-third less than the $15.4 billion in debt it had at the end of 2015, according to a Securities and Exchange Commission filing.
With the price of crude hovering just above $50 per barrel, most oil companies are reducing drilling and fracking activity, resulting in recent losses for oilfield service companies. Halliburton lost $1.1 billion in 2019.
Shell Midstream Partners, L.P. (NYSE: SHLX) reported net income attributable to the Partnership of $140 million for the fourth quarter of 2019, which equated to $0.37 per common limited partner unit. Shell Midstream Partners also generated adjusted earnings before interest, income taxes, depreciation and amortization attributable to the Partnership of $187 million.
February 19, 2020
HOUSTON, Feb. 19, 2020 (GLOBE NEWSWIRE) — Hi-Crush Inc. (NYSE: HCR) (the “Company”), a fully-integrated provider of proppant logistics solutions, today reported fourth quarter and full year 2019 results. Revenues during the fourth quarter of 2019 totaled $125.5 million compared to $173.0 million during the third quarter of 2019.
DENVER, Feb. 19, 2020 /PRNewswire/ —
- Fourth quarter oil production averaged 92.0 MBbls per day
- Full year oil production averaged 86.2 MBbls per day
- 2019 capital investment (including midstream) totaled $1.32 billion; below guidance range
- Lower D&C costs drove the beat
- Generated $1.34 billion of net cash from operating activities
- $141 million of free cash flow1 in 2019; $59 million after dividend
February 14, 2020
February 13, 2020
Houston exploration and production company Marathon Oil has cut its drilling budget by about 10 percent amid an ongoing shale slump that caused revenue and profits to decline in 2019.
Source: Houston Chronicle
In a Wednesday afternoon statement, Marathon said the company is cutting capital expenditures by 10 percent, to $2.4 billion from $2.6 billion in 2019.
The company plans to spend $2.2 billion of its capital expenditure budget on drilling, hydraulic fracturing and other activities in the field while the remain $200 million will go to secure new oil leases and exploratory work looking for new geological formations with oil and natural gas.
Marathon remains in the black, but like other companies in the exploration and production sector, more than a year of crude oil prices in the $50 range is taking its toll on profit and drilling activity.
Active in the Eagle Ford Shale, Permian Basin, Oklahoma and Bakken Shale, Marathon reported a $20 million loss during the fourth quarter of 2019 compared with a $165 million profit a year earlier and revenue fell to $1.2 billion from $1.3 billion.
For the year, the company reported a $480 million profit, a 56 percent drop from the $1.1 billion profit in 2018; revenue of $5.2 billion was 21 percent off the $6.6 billion in 2018.
“We’ll continue to be guided by our unwavering commitment to capital discipline and sustainability,” Marathon Oil CEO Lee Tillman said in a statement.
February 7, 2020
Houston oilfield service company National Oilwell Varco finished up a year of losses $6.1 billion in the red.
Source: Houston Chronicle
In a statement released on Thursday evening, the company reported closing 2019 with a $6.1 billion loss, a dramatic drop from the $31 million end-of-year loss in 2018. The company’s annual revenue remained flat at $8.5 billion.
Most of the company’s end-of-year loss came from writing down the value of $5.4 billion of assets during the second quarter. Crude oil prices stuck in the $50 per barrel range for most of past year have dramatically cut demand for drilling and hydraulic fracturing services in the United States. The shale slump has created eye-popping losses for oilfield services companies, which have written down billions of dollars of assets in response.
“The fourth quarter saw continued improvements in international and offshore markets, partially offset by another sequential decline in spending by our customers in North America,” National Oilwell Varco CEO Clay Williams said in a statement.
Looking at the company’s fourth quarter performance, NOV posted a $385 million loss, which was a dramatic swing from the $15 million profit during the fourth quarter of 2018.
The company’s fourth quarter revenue also slipped by 5 percent year-over-year. NOV reported making $2.3 billion during the fourth quarter, compared to $2.4 billion during the fourth quarter one year earlier.
With historical roots going back to 1862, NOV is headquartered in Houston and has more than 35,000 employees in 65 nations.
The company has not made an annual profit since 2014.
February 6, 2020
Reuters
ABERDEEN, Scotland – Total (TOTF.PA) beat forecasts on Thursday by keeping net adjusted fourth-quarter profit steady at $3.2 billion despite low oil prices and fulfilled a pledge to boost dividends, lifting the French energy firm’s shares.
Source: Reuters
The stock rose about 3% before easing off its highs as the company bucked a trend in the industry which has seen profits tumble in the last three months of 2019. Analysts had expected Total’s net profit to slip to $2.7 billion.
“This performance is better than that of our rivals in terms of resisting low oil prices,” CEO Patrick Pouyanne told journalists, adding Total was rewarding investors with a 6% increase in the final dividend for 2019 to 0.68 euros per share.
“Taking into account the strong visibility on cash flow, the group will continue to increase the dividend with the guidance of 5% to 6% per year,” the company said in its statement.
Total bought back $1.75 billion in shares in 2019 and plans to buy back $2 billion more in 2020.
Pouyanne said the group had reported solid results including debt-adjusted cash flow (DACF) of $7.4 billion, up more than 20% from a year earlier.
“While some peers buckled last week to a synchronized slowdown in their commodity prices and margins, Total has bucked that trend with flat year-on-year net income,” Bernstein analysts wrote, adding that net income and net operating income were both ahead of forecasts.
The analysts, which rate the stock “outperform”, said liquefied natural gas (LNG) margins “also beat our expectations as the company proved immune to low spot gas prices despite market concerns”.
LNG prices have been under pressure as new projects have kept the market well supplied, while oil prices LCOc1 have tumbled to around $55 per barrel from last year’s peak in April of almost $75.
Rivals have seen fourth-quarter profits slide on lower prices. BP (BP.L) reported a 26% drop on Tuesday while Royal Dutch Shell (RDSa.L) last month said its profits had halved.
(Graphic: Majors cashflow Total, here)
LNG OUTPUT
Total’s oil and gas production grew by 9% in 2019 thanks to project start-ups and ramp-ups, while its LNG business doubled, boosting cash flow.
“One of the reasons our results resisted the low oil environment was because of the strong LNG output which grew 50%,” Pouyanne said.
He said exceptional production growth was unlikely to continue in the years to come and output growth for 2020 was seen at 2% to 4%, a more typical level in the industry.
The chief executive said Total was expanding in the low carbon energy business and was on track to meet its goal of producing 25 gigawatts (GW) of renewable electricity by 2025, helped by solar projects in Qatar and India.
Total, which kept its capital expenditure target steady for 2020 at $18 billion, said it was on track to achieve its target of $5 billion in divestments during 2019 and 2020.
Total said it had sold its 27.5% interest in Fosmax LNG, which operates France’s Fos Cavaou LNG terminal, to Engie (ENGIE.PA) unit Elengy for about $260 million.
Total is on track to achieve its divestment target with transactions worth $3 billion so far, Jefferies analysts said.
(Graphic: Total Results, here)
