Most global energy firms performed beyond expectation going by the just released results of their first quarter performance.
Royal Dutch Shell
Shell capped a strong first quarter reporting season for oil majors with better-than-expected results which were boosted by gas earnings, while shareholders were rewarded with a higher dividend.
The first quarter also saw new profitable production from the deep-water Gulf of Mexico and Iraq fields, together with new LNG from the acquisition of Repsol’s portfolio.
Shell first-quarter earnings, on a current cost of supplies basis, were $4.5 billion compared with $8.0 billion for the first quarter 2013.
Earlier this year, Shell announced it was divesting refining and marketing businesses in Australia, Italy, Denmark and Norway. Shell is planning to divest $15 billion worth of assets in 2014/15 to improve profitability and payouts.
ExxonMobil
Exxon Mobil posted a quarterly profit that beat Wall Street’s expectations as cold winter throughout much of the United States boosted natural gas prices.
Prices for natural gas rose globally as well, even as the price the company receives for its crude oil slipped both in the US and internationally.
Exxon Mobil reported first-quarter net income of $9.10 billion, or $2.10 per share, compared with $9.50 billion, or $2.12 per share, in the year-ago quarter. Total production fell about 6 percent to 4.2 million barrels of oil equivalent per day (boed).
Exxon reported weakening margins in both its chemicals and refining units. Part of the dip was due to a cut in production at its 560,500 barrel per day Baytown, Texas refinery after an oil barge spill caused the closure of the Houston Ship Channel in March.
Exxon Mobil is building a liquefied natural gas (LNG) plant with Rosneft, Russia’s state-controlled oil giant, on Russia’s eastern coast. The plant, which Exxon executives have repeatedly said will not be deterred by the Ukrainian political situation, is expected to be online by 2019.
BP
BP reported adjusted net income of $3.2 billion for the first quarter, beating consensus expectation by 4 percent.
BP’s production was slightly better than expected, with the firm producing at an average first-quarter rate of 2.13 million barrels per day.
BP’s Upstream business reported $4.4 billion underlying pre-tax replacement cost profit for the quarter, compared with $3.8 billion for the previous quarter and $5.7 billion for 1Q 2013. The firm said that after its decision to create a separate BP business around onshore oil and gas activities in the United States, it has decided not to proceed with development plans in the Utica shale.
The Downstream unit reported $1 billion underlying pre-tax replacement cost profit for the first quarter, compared with $70 million for 4Q 2013 and $1.6 billion for 1Q 2013. The result here was primarily affected by a weaker refining environment.
Meanwhile, BP confirmed that eight exploration wells have been completed so far in 2014, including the Cobalt-operated Orca discovery in Angola and the BG-operated Notus discovery in Egypt. BP said it is on track to participate in at least 15 exploration wells over the full year.
Three new major upstream projects started production during the first quarter – Chirag Oil in Azerbaijan, Na Kika Phase 3 and the Shell-operated Mars B in the Gulf of Mexico.
ConocoPhillips
ConocoPhillips reported a flat quarterly profit that beat expectations on higher prices and output from North American shale and growth in its Canadian oilsands projects.
Conoco, which shed its refining operations in 2012, is investing heavily to drill in rock formations like the Eagle Ford in south Texas, where returns are higher and projects have less risk.
The company earned a profit of $2.1 billion, or $1.71 per share, in the three months through March 31, little changed from the $2.1 billion, or $1.73 a share, it earned a year earlier.
The “main driver” that helped Conoco beat earnings estimates was higher-than expected prices for the company’s oilsands bitumen and natural gas production in the lower 48 states. Conoco realized an average price of $56.47 per barrel for its bitumen in the first quarter, up sharply from $39.23 a barrel a year ago.
BG
British oil and gas company BG Group reported a lower-than-expected drop in first-quarter profit. The company saw a 6 percent fall in operating profit to $2 billion but beat consensus forecasts and reassured investors its big projects were on track to help meet its 2014 production target of 590,000-630,000 barrels of oil equivalent per day.
The company has cut its output forecast several times in the last two years, resulting in a profit warning earlier this year. BG’s first-quarter exploration and production (E&P) volumes fell 4 percent, hit hard by output problems in Egypt where the company’s liquefied natural gas (LNG) project failed to deliver any cargoes in the first quarter. Its Australian Queensland Curtis LNG production facility is on schedule and budget to deliver first LNG in the fourth quarter of 2014.
Chevron
Chevron posted a lower-than-expected quarterly profit on lower global production and crude oil prices. The company posted net income of $4.51 billion, or $2.36 per share, compared with $6.18 billion, or $3.18 per share, in the year-ago quarter.
Globally, Chevron’s production fell 2 percent to 2.59 million barrels of oil equivalent per day. The average price Chevron received for its crude oil fell as well.
The results stood in contrast to rivals Exxon Mobil Corp and ConocoPhillips which posted quarterly profits that beat expectations. Both companies produce more natural gas than Chevron inside the United States, and rebounding natural gas prices in the first quarter lifted their respective results.
