NGI The Weekly Gas Market Report
During a year that saw fears of natural gas shortages sendprices through the roof, spurring E&P companies into frenzieddrilling, energy company shares reached a median total return of48% in 2000, according to a new report by John S. Herold, Inc., aConnecticut-based independent energy research consulting firm.
In the report titled “Oil Share Market Performance 2000,” Heroldstates that natural gas producers, drillers and the midstreamsector led the growth, with all but one of the peer groupsoutperforming the Dow Jones Industrial Average.
“The price recovery that began in 1999 has enabled manycompanies to adopt more aggressive exploration and capital spendingstrategies, particularly aimed at finding and developing U.S.natural gas reserves,” said Art Smith, CEO of Herold. “The markethas recognized the value this represents, rewarding, by providingcapital for successful players in these sectors. We expect thisrecognition to continue in 2001.”
The Herold report, which followed 307 publicly traded energycompanies in every sector of the international oil and gasindustry, showed the biggest winners in 2000 were U.S. E&Pcompanies. In response to high natural gas prices, mid-sizeddomestic E&Ps posted a 118.5% median gain, followed
by large domestic E&Ps and small domestic E&Ps withgains of 94.1% and 79.8% respectively.
According to the report, Canadian E&Ps trailed their U.S.counterparts for the first time in three years, which also fueledan active merger and acquisition market in the North country.Overseas E&Ps also posted a median return of 22.7%.
Reinforcing the unusual 2000 theme that “smaller is better,” TheHerold study showed that large integrated oil companies as a whole,only posted a modest 10.1% median gain, while the overseasintegrated oils, due to weak performance by South American andEastern European companies, showed an overall 16.1% decline.
Other notables within the energy industry study were pipelines,oil service and the drillers, which posted median returns of 70.6%,50.1% and 49.3% respectively. The consulting firm said that themost surprising result from this year’s study, was the turnaroundof the marketing and refining sector. The segment came from a 17.7%decline in 1999, to a 32.4% total return for the year 2000.
The firm said that the most impressive performances within theindustry came from a handful of companies. Among companies tradingabove $5 per share, Cross Timbers Oil posted a 359% return,followed by Key Production with a 347% gain, and Prima energy andSwift Energy, both posting 227%.
Of the U.S. integrated oil companies, Amerada Hess led the packwith a 29% return, followed by Phillips Petroleum with 21%, andConoco with 16%. Petro-Canada led the International integrated oilsector with an 87% gain. The poorest return in the sector came fromRepsol YPF, which lost 29% of its year end 1999 value according tothe Herold report.
For more information on the 21-page report, contact Tom Sommersat email@example.com.
©Copyright 2001 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.
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