Oil and natural gas companies that have provided data on upstream expenditures since 2000 spent more on exploration and development last year and less on property acquisitions, the U.S. Energy Information Administration (EIA) said Friday.
Data collected from filings with the Securities and Exchange Commission on 42 producers found that worldwide upstream spending last year rose 5% ($18 billion), while acquisitions fell by $17 billion.
EIA reviewed majors and big independents for spending habits, including analyzing data submitted by ExxonMobil Corp., Brazil's Petroleo Brasilerio, Encana Corp. and Talisman Energy Inc. Data for the review also was provided to EIA by Evaluate Energy Inc., which tracks exploration and production (E&P) activity (see Daily GPI, April 3).
The 42 E&Ps reviewed accounted for about 39% of production outside OPEC countries, and they had a combined market capitalization of more than $2.4 trillion. According to EIA, total upstream capital expenditures (capex) was relatively flat last year (0.4% higher) after a period of strong growth that averaged 11%/year between 2000 and 2012.
The slight increase in capex was directed at acreage already held, not new acquisitions, EIA principal contributor Jeff Barron said.
Over the past two years in fact, flat oil prices and rising costs contributed to declining cash flows for the 42 producers, Barron said. "Continued declines in cash flow, particularly in the face of rising debt levels, could challenge future exploration and development. However, reduced spending levels could be offset by rising drilling and production efficiency," a fact already noted by many U.S. E&Ps.
Capex in 2013 was at its lowest level since 2009, except for 2010, when ExxonMobil paid close to $40 billion for XTO Energy Inc.
Raymond James earlier this month reported flatter global E&P spending in 2013 (see Daily GPI, April 7). The firm reviewed 10 U.S.-based explorers and 10 multinationals to understand the level of capital spent. Based on the trends, the firm’s analysts expect overall spending this year to decline on average about 6% year/year.