Independents

Three more North American natural gas-focused independents — Kerr-McGee Corp., Pioneer Natural Resources Corp. and Noble Energy Inc. — released their second quarter earnings on Thursday. Kerr-McGee, which is set to merge with Anadarko Petroleum Corp., reported that its gas production fell from a year ago, while Pioneer and Noble both reported gains on the strength of their onshore and deepwater operations.

Major producers and large independents continued to report soaring earnings last week, with at least double-digit profit on higher commodity prices. Producers with operations in the Gulf of Mexico continued to feel the effect of hurricanes in the final quarter of the year, but several managed to overcome offshore losses with strong domestic drilling results.

Using third quarter income statements from 21 of the largest U.S.-based exploration and production (E&P) companies — both majors and large independents — the Energy Information Administration (EIA) estimates overall profit rose 69% from the same period a year ago. The EIA report, issued Thursday, comes just one day after Congress questioned top E&P officials about record high profits (see Daily GPI, Nov. 10).

Most of the majors and several of the largest independents all reported soaring second quarter profits — as expected — last week. However, North American natural gas production continued to be a mixed bag, with few surprises.

ExxonMobil Corp., Royal Dutch Shell plc and Marathon Oil Co., along with independents Apache Corp. and EnCana Corp. all reported soaring second quarter profits as expected on Thursday. However, North American gas production continued to be a mixed bag, with a few surprises.

Exploration and production (E&P) fourth-quarter and year-end profit reports began in earnest last week, with many of the largest independents and a few of the majors reporting record income on higher commodity prices. However, Hurricane Ivan, which led to widespread shut ins in the Gulf of Mexico last September, continued to affect output in the final quarter.

Two of the largest North American independents, Pioneer Natural Resources and EOG Resources Inc., reported stronger oil and gas production in the second quarter, but only EOG showed profit gains.

Two of the larger U.S.-based independents, Murphy Oil Corp. and Newfield Exploration Co., on Tuesday both reported higher net income for the second quarter. Production-wise, Murphy’s oil and gas volumes increased substantially on the strength of higher output in the Gulf of Mexico, while Newfield’s remained flat over 2Q2003.

Several of the leading North American-focused oil and gas producers reported strong quarterly earnings on Wednesday, with three out of four — ConocoPhillips, Amerada Hess and Kerr-McGee — up on higher commodity prices. However, even though EnCana’s earnings were off compared with a year ago, it far and away took the honors in higher natural gas production.