Following its quarterly study, the Energy Performance Review (EPR) found that ten of the largest United States-based integrated petroleum companies reported consolidated earnings before special items totaling $11 billion for the third quarter of 2001, off one-third from the near-record $15.6 billion posted for the second quarter of the year. The mark also reflects nearly a one-third reduction from the $15.9 billion posted for the third quarter of 2000, according to the groups most recent data.

EPR’s research showed that the decline stemmed from reduced income from oil and gas exploration and production and greatly reduced income from chemical operations partly offset by increased income from oil products. The EPR said revenues totaling $191 million were off 7% from the near-record $206 billion posted for the second quarter and off 9% from the third quarter of 2000.

John Gehman, EPR publisher, said in the report that the primary source of income for the quarter was oil and gas exploration and production, which generated $9 billion before special items and accounted for 69% of total petroleum income and 66% of total income from operations. Oil products generated $4.1 billion, or 31% of total petroleum income and 30% of income from operations. Chemicals generated $152 million, or 1% of the total.

Despite the overall downturn in results, Gehman said that oil products was the only sector that showed improved income relative to the prior-year quarter. The report showed that oil earnings were off about one-quarter from the record $5.6 billion posted for the second quarter, but up 13% from the third quarter 2000. Oil and gas earnings were off one-quarter from the $11.9 billion posted for the prior quarter and off close to one-third from the prior-year quarter, but were nonetheless “strong” relative to historical levels. Chemicals were the one operation that showed a major decline–earnings off more than half from the prior quarter and off more than three-fourths from the prior-year quarter.

Earnings before special items from worldwide oil and gas operations totaled $9 billion, or $6.12/boe sold for the third quarter of 2001, off one-quarter from the prior quarter and off one-third from $13.1 billion, or $9.11/boe, posted for the prior-year quarter. Gehman said that nine-month oil and gas results reflect the more dramatic upturn posted for the first half of the year, and in particular the first quarter. Earnings before special items were flat from the 2000 period, at $35.4 billion, or $7.88/boe.

The sharpest decline from the prior-year quarter was posted by U.S. domestic operations. Due to the severe price drop experienced by natural gas, the report showed that earnings were off close to 40%, to $3.3 billion. Gas prices declined more than one-quarter, to $2.98/Mcf, approaching historical levels. However, domestic operations were more profitable relative to output, at $6.65/boe before special items compared to $5.84 for operations outside the United States.

According to EPR, the most profitable oil and gas operations measured by 2001 third-quarter income per boe reported net of tax, but before special items were posted by Exxon Mobil at $5.91, Chevron at $5.47, and Royal Dutch/Shell at $5.40. The report said Conoco at $8.14, Exxon Mobil Corp. at $7.58, and Royal Dutch/Shell at $7.08, were standouts on the U.S. side. Outside the United States, Chevron, at $5.42, Exxon Mobil at $5.26, and Royal Dutch/Shell at $5.01, stood out from the pack.

Adamstown, MD-based EPR is a database featuring company and industry results by line-of-business. Additional information, including the names of the units included in the compilation is available at www.energyperformancereview.com.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.