Earnings improve for energy sector
August 1, 2017
Updated: August 1, 2017 9:44pm
Higher prices for crude and gasoline helped lift profits of oil and refining companies. Here are the results reported Tuesday
Two in a row for EOG
The Houston oil company EOG Resources reported its second consecutive quarterly profit, lifted by higher crude prices and increased production.
EOG said it earned a net income of $23.1 million, or4 cents a share, in the second quarter, compared with a loss of $292.6 million, or 53 cents a share, in the same period last year. Revenue increased from $1.8 billion to $2.6 billion.
The company said it increased output by 25 percent to a record 334,700 barrels of oil a day in the second quarter.
EOG said it still plans to spend $3.7 billion to $4.1 billion in capital expenditures this year, even as other independent oil companies have said they’ll trim their budgets for the rest of the year. It expects to pump 20 percent more oil than last year, up from an 18-percent target earlier this year.
In the Wolfcamp region of the Delaware Basin in West Texas, the company brought 25 wells into production in the quarter. It also brought 19 wells online in the Bone Spring region, producing an average rate of 2,130 barrels a day in the first 30 days. It tapped another 51 wells in the Eagle Ford Shale in South Texas.
– Collin Eaton
Report by BP
Oil producer BP reported improved, but still weak second-quarter earnings as the Deepwater Horizon disaster continued to weigh on the company.
The chief executive, Bob Dudley, said BP is still working to adjust to an era of lower oil prices with a “tight focus on costs, efficiency and discipline in capital spending.”
Oil companies have been cutting costs and selling assets to adjust to lower oil prices, which early last year plunged to their lowest levels in more than a decade.
BP said the average price it received during the second quarter this year rose 17 percent to $46.27 a barrel. That pushed BP’s net income to $144 million, compared with a year-earlier loss of $1.42 billion.
BP set aside an additional $347 million in the quarter to cover claims and other expenses related to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, bringing total charges to $63.2 billion.
Net debt rose to $39.8 billion, higher than analyst forecasts of $38.5 billion.
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“While net debt rose primarily due to Gulf of Mexico payments, we expect this will improve over the second half as these payments decline and divestment proceeds come in towards the end of the year,” chief financial officer Brian Gilvary said.
– Associated Press
Earnings at Phillips 66
Profits at Phillips 66 jumped in the second quarter as its refining and petrochemical earnings strengthened.
Phillips 66 said that its profits in the three months from April to June climbed to $550 million, up 11 percent from the same period a year earlier. Revenues rose 10 percent, to $24.6 billion from $22.3 billion in the second quarter of 2016.
The refining sector is bouncing back after a weak 2016 when low fuel prices cut into profit margins, but Phillips 66 is diversifying from its core business as more fuel-efficient vehicles cut into U.S. gasoline demand.
While refining still accounts for the largest share of he company’s profits, Phillips 66 owns a 25 percent stake in the Dakota Access Pipeline, which began operating in the second quarter, and 50 percent of Chevron Phillips Chemical, a joint venture with Chevron to build a massive, $6 billion chemicals and plastics expansion in Baytown and Sweeny by the end of the year.
– Jordan Blum