Oil & Gas Stock Roundup: BP And TOTAL Report Q2 Earnings
Zacks Investment Research | Jul 31, 2019 03:01AM ET
It was a week where oil prices tallied a small gain but natural gas futures settled lower.
On the news front, European integrated majors BP plc (LON:BP) (NYSE:BP) and TOTAL S.A. (NYSE:TOT) reported contrasting second-quarter earnings.
Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures edged up 0.8% to close at $56.20 per barrel, natural gas prices dropped 3.6% for the week to finish at $2.169 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Schlumberger (NYSE:SLB) & Halliburton (NYSE:HAL) Report Q2 Earnings )
The U.S. crude benchmark logged a gain after the U.S. government reported a sixth straight fall in domestic supplies. Prices also benefited from the possibility of mounting geopolitical tensions in the Middle East hampering global supplies.
Meanwhile, natural gas prices plunged to more than three-year lows, pressured by healthy supply and a bearish near-term weather forecast that signals weak power sector demand for the fuel.
Recap of the Week’s Most Important Stories
1. British supermajor BP reported second-quarter 2019 adjusted earnings of 83 cents per American Depositary Share (ADS) on a replacement cost basis, excluding non-operating items. The bottom line surpassed the Zacks Consensus Estimate of 78 cents. Oil equivalent volumes from key upstream projects along with higher refining marker margin primarily contributed to better-than-expected earnings.
In the second quarter, total production of 2.625 million barrels of oil equivalent per day (MMBoe/d) was higher than 2.465 MMBoe/d in the year-ago quarter. Key upstream projects primarily drove quarterly production volumes.
BP's net debt including leases was $56,650 million at the end of the second quarter, higher than $39,277 million in the prior-year quarter. Gearing was recorded at 31%, up from 27.5% in the prior-year quarter. Through the first half of 2019, the integrated energy firm made a payment of $2.1 billion, after tax, associated with the oil spill incident in the Gulf of Mexico. (Read more Cabot Beats on Q2 Earnings, Expands Buyback, FCF Soars )
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 | Last 6 Months |
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XOM | -0.2% | +2.8% |
CVX | -1.1% | +8.5% |
COP | -2.6% | -12.1% |
OXY | -1.4% | -21.4% |
SLB | +3.4% | -10.5% |
RIG | -3.6% | -30% |
VLO | +0.8% | -3.5% |
MPC | +2.9% | -13.9% |
The Energy Select Sector SPDR – a popular way to track energy companies – was down 0.5% last week. The worst performer was offshore driller Transocean Ltd. (NYSE:RIG) whose stock fell 3.6%.
Longer-term, over six months, the sector tracker is down 1.4%. Again, Transocean was the major loser during this period, experiencing a 30% price decrease.
What’s Next in the Energy World?
As usual, market participants will be closely tracking the regular releases i.e. the U.S. government statistics on oil and natural gas - one of the few solid indicators that comes out regularly. Energy traders will also be focusing on the Baker Hughes data on rig count and the 2019 Q2 earnings, with quite a few supermajors and S&P 500 members coming out with quarterly results.
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