Calgary, AB – The world’s oil and gas super majors, BP, Chevron, ConocoPhillips, ExxonMobil, Royal Dutch Shell and Total, have all seen their earnings in the upstream segment fall in Q3 2014 since Q2, according to a new Evaluate Energy analysis of the companies’ recently released quarterly results.
This drop is in no small part attributable to a fall in global realised prices for these companies, proving that it doesn’t matter how big an oil company you are, you are still susceptible to price changes.
In fact, this quarter has been amongst the worst for this group of companies as a whole in the upstream sector over the past two years.
This is a complete reversal of the trend over the past six to nine months; the first and second quarters of 2014 both saw an increase on the previous quarterly earnings. Q3 2014 saw a fall in earnings for all six companies in the upstream segment since Q2. The biggest total drop was for ExxonMobil, whose adjusted earnings fell by $1.465 billion (19%) to $6.416 billion in Q3 2014. Percentage-wise, BP suffered the biggest fall, recording a 31% drop off on Q2 earnings.
Each company will have its own set of reasons for the fall, but one factor that has had an impact on the entire group is a fall in worldwide realised prices this quarter. The group’s realised oil prices fell on average by 7% from $97.59/bbl in Q2 to $90.72/bbl in Q3, whilst gas prices fell by 6% from $6.34/mcf to $5.93/mcf. The biggest fall in oil price was suffered by Total, whose price fell by $9.00/bbl (9%) in Q3 to $94.00. The biggest fall in gas price was suffered by ConocoPhillips, an 11% fall to $5.91/mcf from $6.66/mcf.