Page 9 - NorthAmOil Week 07 2021

NorthAmOil PERFORMANCE NorthAmOil

More shale drillers

report quarterly

results, as others

defer them

US SHALE producers including Continental
Resources, Devon Energy and Ovintiv released
their results for the fourth quarter of 2020 this
week. However, others including Occiden-
tal Petroleum and Pioneer Natural Resources
rescheduled the release of their earnings because
of the disruption that hit Texas this week as a
result of extreme winter weather. (See: Occidental
declares force majeure on freezing weather, page
11)
Continental’s quarterly net loss of $92.5mn,
or $0.26 per share, was larger than the loss
it reported for the third quarter, which was
$79.4mn, or $0.22 per share. The increased
loss came as the company’s output remained has closed its acquisition of WPX Energy, which
flat, even as oil prices recovered from lows seen adds more production. Devon noted that includ-
earlier in 2020. Year on year, the result was also ing the results from WPX, total production aver-
down on net profit of $193.9mn achieved in the aged 584,000 boepd in the fourth quarter, with
fourth quarter of 2019. oil accounting for 305,000 bpd. This result for
For the fourth quarter, Continental’s pro- the combined company exceeded guidance by
duction averaged 339,307 barrels of oil equiv- roughly 5%, it said.
alent per day, down y/y from 365,341 boepd a Illustrating the ongoing challenges shale
year ago. Oil accounted for 176,639 barrels per drillers are grappling with, Ovintiv also reported
day, also marking a reduction from 206,249 bpd a net loss, coming in at $614mn, or $2.36 per
in the fourth quarter of 2019. Over the whole share, for the fourth quarter of 2020. The com-
of 2020, the company’s production averaged pany said its fourth-quarter production was “sig-
300,090 boepd, down from 340,395 boepd in nificantly” higher than expected on strong well
Illustrating 2019, while oil output declined over the same results across its portfolio. Its total output during
the quarter averaged 557,000 boepd, with oil and
period from 197,991 bpd to 160,505 bpd.
the ongoing The company noted that it had achieved its condensate volumes reaching 215,000 bpd and
challenges 2020 completed well cost targets in both the liquids production averaging 297,000 bpd.
Bakken and Oklahoma, with go-forward well
Ovintiv said it had set new, record-low well
shale drillers costs in the Bakken of around $690 per lat- costs in each of its three core assets, exceeding
eral foot, at a 10,000-foot (3,048-metre) lateral its stated goal of reducing 2020 well costs by 20%
are grappling length, and in Oklahoma of around $1,070 per from 2019 and delivering cost reductions of 25%
lateral foot, at an 8,200-foot (2,499-metre) lateral or more during the fourth quarter.
with, Ovintiv also length. The cost savings it achieved are 70-80% The company also said it had agreed to sell its

reported a net structural and are being driven by a “reduction assets in Canada’s Duvernay shale play in Alberta
in drilling cycle times, stage counts, proppant for $263mn. This transaction, which is expected
loss. volumes and stimulation days, as well as the to close in the second quarter of 2021, further
narrows Ovintiv’s focus on just three core assets
optimisation of artificial lift”, Continental said.
Devon, for its part, reported a net loss of – the Permian and Anadarko basins in the US
$102mn, or $0.27 per share, in the fourth quar- and the Montney play in Canada.
ter of 2020, up from a loss of $642mn in the same The sale also brings the company another step
quarter of 2019, but down slightly on a loss of closer to achieving its goal of reducing debt by
$92mn in the third quarter of 2020. The compa- $4.5bn by the end of 2022.
ny’s output from its legacy operations averaged In addition, Ovintiv – which was formerly
333,000 boepd in the fourth quarter, with oil known as Encana – unveiled plans to link
output rising 7% sequentially to 156,000 bpd. employee pay to new emissions intensity reduc-
However, since the fourth quarter ended, Devon tion targets.™

Week 07 18•February•2021 www. NEWSBASE .com P9