Page 16 - NorthAmOil Week 40

NorthAmOil PERFORMANCE NorthAmOil

Chevron edges ahead of ExxonMobil

to become largest US oil company

US CHEVRON has overtaken ExxonMobil to by over 50% this year.
become the US’ largest oil and gas company by Chevron, meanwhile, has maintained a rel-
market capitalisation. Chevron was valued at atively strong balance sheet despite posting
$142bn on October 7, edging ahead of Exxon- an $8.3bn loss in the second quarter, largely
Mobil at $141.6bn. This marks the first time Exx- as a result of asset impairments. Indeed, it
onMobil has been knocked out of the top spot has the strongest balance sheet out of all the
since it first came into existence as Standard Oil super-majors.
in the 19th Century. It is worth noting, however, that both Chev-
The companies have switched places after ron and ExxonMobil are trailing NextEra
this year’s downturn took a toll on ExxonMobil’s Energy, the world’s largest producer of wind and
performance. The Texas-based company has solar power, which ended October 7 with a mar-
prioritised protecting its dividend, but various ket capitalisation of $145.5bn. NextEra’s shares
expensive projects it has taken on in recent years have gained more than 20% this year, and the
put pressure on its cash flow when the coronavi- utility is pursuing further expansion, with plans
rus (COVID-19) pandemic hit earlier this year. to grow its renewables portfolio to 30 GW.
In July, ExxonMobil posted a $1.1bn loss NextEra’s growth comes as more investors
for the second quarter of the year – its second turn away from oil and gas and towards renewa-
consecutive quarterly loss, which also marked bles, embracing the energy transition.
the super-major’s first back-to-back losses in “It’s not a niche investment anymore,” a
at least 36 years. Last week it warned that it Bloomberg Intelligence utilities analyst, Kit
could see a larger loss in the third quarter than Konolige, was quoted by Bloomberg as saying of
previously expected and its stock has plunged the renewable sector. “It’s a big industry.”™

Pioneer cuts more jobs

US PIONEER Natural Resources, a leading Permian
Basin-focused shale driller, has reportedly laid
off 300 more people this week. The Dallas Morn-
ing News reported on October 6 that the layoffs
had been evenly split between Pioneer’s corpo-
rate office in Irving, Texas and its operations in
the Permian Basin.
The staff cuts come as the shale industry bat-
tles to survive this year’s downturn, which has
been exacerbated by the impact of the coro-
navirus (COVID-19) pandemic on oil and
gas demand. West Texas Intermediate (WTI)
prices have stabilised at around $40 per barrel
in recent weeks, but the risk of significant vola-
tility remains, and producers have been racking Scaling back spending
up quarterly losses, primarily as a result of asset cut staff, Pioneer has continued to cautiously and staff numbers has
impairments and lower earnings from oper- move forward with some new drilling, bringing not stopped Pioneer
ations. Indeed, Pioneer reported a net loss of 75 horizontal wells online in the second quarter from bringing new wells
$439mn for the second quarter of 2020. of the year. The company attributed its ability to online.
Pioneer had about 2,300 employees at the bring new wells online at this time to efficiency
end of 2019, after eliminating 877 jobs over the gains that it made during the quarter. It reported
course of the year, including 300 buyouts and cost reductions of around $1.8mn per well, or
230 involuntary layoffs. In June 2020, it cut 50 roughly 20% compared with its original budget
jobs from its well services business. for 2020.
In late August, media reported that the com- Indeed, it revised its 2020 production guid-
pany intended to make further layoffs, as part of ance upwards in its second-quarter results, to
a restructuring process that is due to conclude 356,000-371,000 barrels of oil equivalent per
during the fourth quarter of the year. day (boepd), with oil accounting for 203,000-
But despite having to scale back spending and 213,000 barrels per day (bpd).™

P16 www. NEWSBASE .com Week 40 08•October•2020