Oil and gas companies have rough first half of 2023
By Alex Mills
Oil and natural gas companies have experienced a rugged time during the first half of 2023.
Oil and gas companies have had a rough first half of 2023. Inflation, supply chain issues, and attacks by politicians in the U.S. and Europe have resulted in a decline of investment capital from financial institutions and outside investors.
Out of the top eight oil and gas producing companies, six have had their stocks decline since Jan. 1. Chevron’s stock price has declined 12%, Conoco and EOG down 11%, Pioneer Natural Resources off 9%, ExxonMobil down 5%, and Oxy off 3%. All of these companies are headquartered in the U.S.
The only two with an increase in stock price are Shell up 9% and BP up 3%. Both of these companies are headquartered in Europe.
Crude oil prices are off 30% and natural gas prices are down 40% from a year ago.
The drilling rig count in the U.S. is down 11% to 695, which has resulted in a decline in the companies that provide drilling rigs.
The Wall Street Journal reported this week shares of the four largest onshore drilling companies have plunged by 33% on average this year, while the S&P 500 energy index is down 8% and the broader S&P 500 is up 15%.
“Some of the drillers say the hit to their share prices is an overreaction,” the WSJ story stated.
Recent news reports indicate Exxon Mobil and Chevron have been looking to acquire other exploration and production companies.
This week the merger between Patterson-UTI and NexTier Oilfield Solutions, valued at $5.4 billion, was announced. The merger will allow Patterson-UTI, which is largely focused on onshore-drilling services, to get more into fracking. NexTier, which was born out of a 2019 merger between C&J Energy Services and Keane Group, is a provider of well-completion and production services that doubled its revenue to $3.24 billion last year thanks to higher prices and increased fracking activity, according to the WSJ.
Even though the political rhetoric has died somewhat from last year, the regulatory agencies in Washington continue to propose pursue new regulations that would deter drilling and production in the U.S.
Alex Mills is the former President of the Texas Alliance of Energy Producers.
This article originally appeared on Wichita Falls Times Record News: Oil and gas companies have rough first half of 2023
