Page 5 - NorthAmOil Week 18 2021

NorthAmOil COMMENTARY NorthAmOil

higher oil prices as the economy recovers,” said By contrast, another major Permian Basin
Chevron’s chairman and CEO, Mike Wirth. producer, Diamondback Energy, was among
“Results were down from a year ago, due in part those companies whose first-quarter profit
to ongoing downstream margin and volume exceeded analyst expectations. The company
effects resulting from the pandemic and the reported net income attributable to Diamond-
impacts of Winter Storm Uri.” back of $220mn for the first quarter of 2021,
Indeed, Chevron was not the only one to compared with a net loss of $272mn a year ago.
report taking a hit as a result of the winter storm, Adjusted net income attributable to Diamond-
which had a particularly severe impact on Texas, back was $379mn, or $2.30 per share, versus
with production, midstream and refining oper- analyst expectations of $1.80 per share accord-
ations in the state all affected by outages in Feb- ing to Refinitiv data.
ruary. Indeed, ExxonMobil said the extreme ConocoPhillips – the largest independent
weather event had reduced first-quarter earn- producer – also exceeded analyst expectations
ings by nearly $600mn “across all businesses with an adjusted profit of $900mn or $0.69 per
from decreased production and lower sales vol- share, above analysts’ average estimate of $0.51
umes, repair costs, and the net impact of energy per share, according to Refinitiv.
purchases and sales”. The company reported 1.49mn boepd of pro-
Chevron’s chief financial officer, Pierre Bre- duction for the first quarter, excluding Libya,
ber, said the winter storm had cost his com- despite incurring roughly 50,000 boepd of
pany $300mn in lost production and repairs. unplanned production downtime throughout
“That’s lost production in the Permian Basin the Lower 48 states as a result of Winter Storm Chevron was not
and lost production in refining and chemicals,” Uri. This still marked an increase of 210,000
he said. boepd y/y, though ConocoPhillips noted that the only one to
after adjusting for closed acquisitions and dis- report taking a
Seeing similarities positions, output fell by 59,000 boepd, or 4% y/y.
The trends seen across Chevron and Exxon- It attributed the decrease primarily to normal hit as a result
Mobil’s results can also be seen – on a smaller field decline, as well as production impacts from
scale – in the results being reported by US Winter Storm Uri. of the winter
independents. As more shale producers report their results,
For example, Pioneer Natural Resources more details of storm impacts against the back- storm, which had
reported an $80mn hit to its earnings in the lat- drop of a broader recovery are anticipated to a particularly
est quarter because of the winter storm. How- emerge. Barring any worsening of the COVID-
ever, this pushed Pioneer into a net loss even as 19 situation, the recovery can be expected to be severe impact on
some of its rivals have started reporting profits even more prominent in the second quarter.
again. The Permian Basin producer reported There will be no more storm impacts to report, Texas.
a net loss of $70mn, down year on year from a and positive performances will be compared
profit of $291mn in the first quarter of 2020. with last year’s particularly challenging second
Despite this, Pioneer’s CEO, Scott Sheffield, quarter.
described it as an “excellent quarter”, during US oil and gas producers are not out of the
which his company integrated Parsley Energy’s woods yet, but the first-quarter results have
assets into its business after acquiring the latter brought a growing amount of good news for
in January. them, amid ongoing challenges.™

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