How Did Big Oil Do In Q1?

Michael Teague |

Crude OilSome of the largest oil companies reported earnings on Thursday and Friday. The price-per barrel of oil was lower in the first quarter of 2013 compared to Q1 2012, which has had an industry-wide effect on profits.

This has especially been the case for those companies who are not as well positioned to supplement the losses with natural gas and chemicals operations, with stockpiles down and the price of futures above the $4 dollar per million BTU mark for the past three weeks. Natural gas futures have more than doubled over the past year, while the price per barrel of oil has dropped 11 percent for the same time period.

Here is a quick look at some of the results:

Chevron (CVX) reported net income on Friday of $6.18 billion, or $3.18 per share on revenue of $56.82 billion, down from the prior year period when the company made $6.47 billion, or $3.27 per share on revenue of $61 billion. However, Chevron beat expectations of $3.08 per share on revenue of $56.46 billion.

The company suffered from a drop in earnings in the U.S., down to $1.13 billion due to higher operating expenses resulting from troubles at certain of its refineries, including the fire at the Richmond, California facility last year.

The decrease in downstream earnings from U.S. operations is also partially due to the fact that the average per-barrel price, currently $94, is about $8 less that it was at the same time last year. Earnings from refining and marketing were also down over 70 percent, with refinery complications dampening crude input to 576,000 barrels per day (a decrease of 350,000 barrels).

Still, overall, during the first quarter of 2013, Chevron produced 2.65 million barrels per day, compared to 2.63 prior year. The company projected a 25 percent increase in output by 2017, and announced an 11 percent increase in its dividend.

Shares were trading for as much as $120.27 at one point before stepping back slightly to $119.88, an increase of 1.15 percent.

Exxon Mobil (XOM) - The world’s largest company reported net income on Thursday of $9.5 billion, or $2.12 per share on revenue of $108.8 billion, against the prior year period when it made $9.45 billion, or $2 per share on revenue of 124.1 billion. While down from Q1 of 2012, the company came in well ahead of earnings expectations of $2.05 per share.

Production overall was down 3.5 percent. While oil production dropped 1 percent, natural gas output was down 5.9 percent overall and 8.7 percent in the U.S.

The company also took a hit from the lower price of oil and natural gas, but was able to recuperate some of this loss with its refining and chemicals businesses. Exxon brought in $1 billion in net profit from U.S. refining. Globally, profits from chemicals during the first quarter were up 62 percent to $639 million, as the company made more money selling cheap domestic gas abroad.

Shares for Exxon were trading at $87.60, before nudging back up to $88.04, a slight loss of 0.03 percent.

Total SA (TOT) - The French oil company reported on Friday adjusted net income for Q1 of $3.8 billion dollars, or $1.67 per share, compared to Q1 of 2012’s $4 billion or $1.78 per share.

The company pulled out of the substantial tar sands project known as “Voyageur” in Canada, losing $1.6 billion, preferring the relative wealth of easily-refined light crude currently flowing from North America’s shale boom to the comparatively sludgy oil that comes from Canadian sands. Combined with the drop in production, the loss from Voyageur cost the company 58 percent in profits during the first quarter.

Total also stressed a multitude of new projects that it has either just begun or is currently developing, including a $20 billion-5 year investment in the UK’s North Sea, where it plans to become the top oil and gas producer by 2015.

Additionally, the company announced new discoveries of substantial reserves of the coast of Ghana and the Cote d’Ivoire, as well as continued work on natural gas projects in Angola, China, Kazakhstan, the North Sea, and the Barents Sea.

The company said in its statement that it expects maintenance work at some of its European refineries to be impacted by turnaround and maintenance work.

Total’s shares had dropped only slightly, by 0.17 percent to $48.99 before the close.

ConocoPhillips (COP) - Conoco reported earnings on Thursday of $2.1 billion, or $1.42 per share on revenue of $12.25 billion, compared to the prior year period during which the company made $58.3 billion, or $1.54 per share on revenue of $58.3 billion. Earnings were even with expectations, while revenue came in lower than the projected $12.78 billion.

The discrepancy between Q1 earnings of 2012 and 2013 was due to the company spinning off its refining unit last year.

Like its peers, the company is currently struggling with a decline in production, 3 percent during Q1 compared to the prior year, as well as the lower crude prices.

Conoco’s shares were up slightly, 0.63 percent to $58.74.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
COP ConocoPhillips 43.66 1.48 3.51 16,585,799
CVX Chevron Corporation 101.27 -0.88 -0.86 8,148,404
SLWD Sol-Wind Renewable Power LP n/a n/a n/a 0
TOT Total S.A. 47.64 0.45 0.95 2,201,478
XOM Exxon Mobil Corporation 86.46 -0.44 -0.51 19,082,873

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