Oil & Gas Stock Roundup: Shell, Concho Resources Reports Strong Q1, Apache Misses
Zacks Investment Research | May 09, 2017 04:34AM ET
It was a week where oil prices erased all gains associated with the OPEC-led output cut, while natural gas futures inched down after storage data.
On the news front, integrated major Royal Dutch Shell (LON:RDSa) plc RDS.A and energy explorer Concho Resources Inc. (NYSE:CXO) came up with strong first-quarter earnings reports but another oil producer Apache Corp. (NYSE:APA) reported lower-than-expected bottom line.
Overall, it was a rough week for the sector. West Texas Intermediate (WTI) crude futures dived 6.3% to close at $46.22 per barrel, while natural gas prices edged down 0.3% to $3.266 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Exxon (NYSE:XOM) & Chevron (NYSE:CVX)'s Q1 Beat, Pembina's $7.1B Buy & More .)
Suffering its third loss in as many weeks, oil prices were pressured by the continued growth in U.S. production and a burgeoning rig count – both pointing to the ever-increasing shale drilling activities. Talks of recovery in Libyan output further stymied the commodity.
Meanwhile, natural gas turned lower following a larger-than-expected storage build.
Recap of the Week’s Most Important Stories
1. Europe’s largest oil firm Royal Dutch Shell plc reported strong first-quarter results, as its upstream business swung to a profit on rebounding oil prices. The Hague-based Shell reported earnings per ADS (on a current cost of supplies basis, excluding items) of 82 cents, same as the Zacks Consensus Estimate but way ahead of the year-ago adjusted profit of 22 cents.
Upstream segment recorded a profit of $540 million (excluding items) during the quarter, turning around from the $1,437 million (adjusted) loss in the year-ago period.This primarily reflects the impact of a rise in production on the back of contribution from the BG assets, higher oil and gas realizations, reduced depreciation charges and better operational performance.
During the quarter under review, Shell generated cash flow from operations of $9,508 million, returned $3,900 million to shareholders through dividends and spent $4,720 million on capital projects.(Read more: Cheniere Energy Earnings Surprise in Q1, Sales Jump .)
Price Performance
The following table shows the price movement of some the major oil and gas players over the past week and during the last 6 months.
Company | Last Week | 
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Last 6 Months |
XOM | +0.99% | -3.90% |
CVX | -0.19% | -0.89% |
COP | -2.83% | +3.06% |
OXY | -2.60% | -9.42% |
SLB | -2.90% | -9.66% |
RIG | -1.93% | +8.68% |
VLO | +1.59% | +6.58% |
TSO | +2.30% | -1.67% |
Over the course of last week, the Energy Select Sector SPDR – a popular way to track energy companies – fell by 1.29%. Consequently, investors witnessed selling in most market heavyweights. The worst performer was oilfield services giant Schlumberger Ltd. (NYSE:SLB) whose stock price declined 6.12%.
Longer-term, over the last 6 months, the sector tracker is down 3.78%. Schlumberger was again the major laggard during this period, experiencing a 9.66% price decline.
What’s Next in the Energy World?
In this week, market participants will be closely tracking the regular releases i.e. the U.S. government data on oil and natural gas. Energy traders will also be focusing on the Baker Hughes data on rig count. Finally, the 2017 Q1 earnings will continue to command attention with some S&P 500 members coming out with quarterly results.
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