Sparked by much higher natural gas and oil prices during 2000, major U.S. energy companies posted net income of $53.2 billion for the year 2000, representing a 133% increase over 1999’s results, according to EIA’s Performance Profiles of Major Energy Producers 2000. The recent report showed that profits in 2000 notched a record high in EIA’s 27 years of surveying the industry through its Financial Reporting System (FRS).

In an effort to monitor the changing energy industry, the EIA uses the FRS to gather various operating and financial information from major U.S. energy companies throughout the industry. For 2000’s study, the EIA sampled 33 domestic companies including new entrants: Apache Corp.; Devon Energy Corp.; Dominion Resources Inc.; and EOG Resources Inc.

Net income for worldwide oil and gas production for the respondents totaled $40.6 billion for 2000, up 159% from 1999. These bottom line results were primarily attributable to “sharply higher prices for oil and gas in 2000,” the EIA said. During the year, oil averaged $28/bbl, $10 above the prior year’s price, while U.S. natural gas prices at the wellhead averaged $3.60/Mcf in 2000, a 66% increase over 1999.

Capital expenditures also enjoyed a banner year, due primarily to heavy merger and acquisition (M&A) action. Expenditures of the surveyed companies posted an all-time high in 2000 of $109.3 billion, up 90% from 1999. The EIA noted that most of the merger and acquisition movement occurred between FRS companies. Outside of M&A activity, FRS companies’ capital expenditures increased only 3% from 1999 levels.

The report revealed that more than 80% of the value of mergers and acquisitions in 2000 went for oil and gas production assets. The EIA noted that the high level of capital expenditures for previously discovered oil and gas reserves is part of a recent trend among the majors. By 2000, more than 60% of the companies’ total additions to reserves were gained through M&A, up from an average of slightly more than 10% in the 1990 to 1996 period.

However, performance through the drill bit in 2000 was among the best in the history of FRS. The majors’ worldwide additions to their oil and gas reserves from exploration and development activities, mainly drilling, totaled 6.6 billion boe in 2000. Only the 6.8 billion boe added in 1997 exceeded this level, the EIA said. Worldwide reserve additions exceeded worldwide oil and gas production by 22% in 2000. That is, the “replacement ratio,” equaled 122% in 2000, again the second best since at least 1974.

Excluding the affects of M&A, the report showed that some regions stood out as targets for upstream investment. Of note, the U.S. onshore — which includes Alaska — registered the largest increase in expenditures. Gas projects in the Rocky Mountains and oil projects on Alaska’s North Slope showed increased activity, while Texas’ Permian Basin experienced a rejuvenation due to advanced drilling technologies. The report showed that offshore projects in the Gulf of Mexico also showed growth.

EIA’s report also found that:

To obtain a copy of Performance Profiles of Major Energy Producers 2000 in its entirety, visit EIA’s website at: https://www.eia.doe.gov/emeu/perfpro/.

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