North America's unconventionals, oilfield services and midstreamers offered nice paybacks to investors last year, according to IHS Inc.
The consultant on Monday published the IHS Energy 50 ranking of leading energy companies, a ranking that it took on after acquiring PFC Energy in 2013. The PFC Energy 50 for the past 15 years had ranked publicly traded energy companies by market capitalization.
This year's top 50 included electric and natural gas utilities. The combined value of the Energy 50 was $3.78 trillion in market capitalization for 2013, less than 1% (0.8%) more than in 2012.
However, North American companies were the stars of the report.
EOG Resources Inc., a big player in the Eagle Ford and Bakken shales, experienced a 40% increase in value to just under $46 billion, which made it the largest gainer for upstream exploration and production (E&P) companies.
"The U.S. companies on the top 15 E&P list performed markedly better than the group's average -- garnering 32% average growth in value, compared to the group's 21% as a whole," the report indicated.
Overall, oilfield service providers rose in market value year/year by 25%. The value of shares of midstream businesses also grew, with Enterprise Products Partners LP up in value by 30%, reaching a market cap of almost $62 billion. Midstream company values rose 26% year/year.
The rankings of the world's most valued energy companies "tells a very compelling story of how the market appeared to reward companies that prioritized North American investments in 2013 while divesting elsewhere," said IHS Senior Vice President of Energy Insight Atul Arya. "This value also was evident not only in the upstream sector, but also in downstream operations.
"The availability of low-cost feedstocks from inexpensive domestic crude supply also benefited the five predominantly U.S. refiners among the top 15 refining and marketing companies on our list, which saw a combined market cap increase of 33%. This increase in value compared with an average decline in value of 10% for the rest of refiners on the IHS list, which is a significant value gap."
Within the top 10, U.S.-focused enterprises garnered the most value, led for a second year in a row by ExxonMobil Corp. Moving into second place from fourth last year was Chevron Corp., while Royal Dutch Shell plc kept its third place position. PetroChina now is in fourth place, versus second in the 2012 ranking, while BP plc held on to fifth place once again.
France's Total SA moved into sixth place from eighth, while Schlumberger Ltd. was seventh, versus 13th in 2012. Gazprom is eighth, versus ninth in 2012, and Brazil's Petrobras fell to No. 9 from seventh. Rounding out the top 10 was China's Sinopec. Other North American-focused operators in the top 20 included ConocoPhillips, to 12th place from 16th, Occidental Petroleum Corp., which remained in the 17th slot, and Enterprise moved up to 20th from 24th in 2012.
International oil companies (IOC) maintained their rankings on the latest list by offering steady growth and the highest market capitalizations, IHS noted.
UK-based BG Group, whose principal U.S. holdings are in the Haynesville and Marcellus plays, grew by 31% in market value to more than $73 billion. Spain's Repsol SA, which holds significant leases in the Gulf of Mexico and has liquefied natural gas (LNG) send-out capacity of 1.2 Bcf from Canaport LNG in Saint John, NB, rose in value by 27% last year, or slightly less than $33 billion in market capitalization. The group of 16 companies in the IOC category posted a combined market capitalization of $1.7 trillion at the end of 2013, more than 10% above 2012 values.
National oil companies (NOC) fared poorly, according to IHS, with nine companies dropping in market value by 16%. As a group, NOCs fell below $1 trillion in value for the first time since 2008.
According to IHS, investors have become increasingly concerned that NOCs' "privileged access to resources is often tied to expectations that they will build value, not only for shareholders, as other companies must, but also for the parent state and key sectors of the host economy -- a heavy burden for any one company to bear." In North America, Mexico's Petroleos Mexicanos is the only NOC.
"While economic and geopolitical uncertainty will certainly continue driving energy company values, it is clear that a thought-out and well-executed strategy positively affects value," said IHS senior energy analyst Daniel Trapp, the report's principal author.
"This was particularly true with companies that refocused on North America in 2013, notably Occidental, which saw its value expand 24% and ConocoPhillips, which grew 23% in value."
Investment shifts to North America is a clear indicator of concerns about uncertainty and escalating costs overseas, Trapp noted. As a result, he said, operator reaction to cost inflation may already be factoring into the value of equipment/engineering, procurement, production companies, which grew overall about 5% year/year.
"Value and a strong strategy played exceedingly well to the markets in 2013, with fears of global economic uncertainty -- and questions over access to barrels -- waning."