Page 8 - NorrthAmOil Week 43 2021
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NorthAmOil PERFORMANCE NorthAmOil
Pioneer filing shows $501mn of
third-quarter hedging losses
US PIONEER Natural Resources lost $501mn on and $1.3bn for the first nine months of the year.
hedging in the third quarter of 2021, according The company is not the only one to report hedg-
to a securities filing. This brings the Permian-fo- ing losses, as more and more producers post
cused independent’s hedging losses in the nine their third-quarter earnings. Gas producer
months up to September 30 to $2.02bn, the filing EQT, which had hedged heavily, reported a
shows. third-quarter net loss of $1.98bn, or $5.55 per
Hedging – or locking in oil prices for future share, this week.
production – has been a popular tool among a Data analytics firm Enverus anticipates
number of shale producers during the recent roughly $6bn in aggregate pre-tax losses from
crude price downturns, helping to protect them third-quarter hedges among the 64 North Amer-
from some of the impact of unforeseen declines. ican oil and gas producers it tracks.
However, this year, oil prices have recovered Conversely, those producers that had not
to multi-year highs, with both Brent and West hedged heavily are expected to post their strong-
Texas Intermediate (WTI) sitting above $80 est profits since the start of the coronavirus
per barrel this week. Over the third quarter, (COVID-19) pandemic, bolstered by recent oil
WTI futures averaged over $71 per barrel, up by price trends.
around 80% year on year (y/y). This has come as “The only thing that is going to be prevent-
a blow to those companies that hedged their pro- ing a blowout quarter is the hedging situation,”
duction at a lower level, in anticipation of prices a Brandes Investment Partners equity research
continuing to stay depressed. analyst, Chris Duncan, was quoted by Reu-
The majority of Pioneer’s losses were the ters as saying. He added that around 50% of
results of payments to settle oil derivative con- production volumes for the third quarter had
tracts, which totalled $427mn for the quarter been hedged.
PROJECTS & COMPANIES
Hilcorp to take over operatorship
of Point Thomson field
ALASKA HILCORP Energy is set to take over the oper- vice-president for Alaska, Luke Saugier, stated.
atorship of the Point Thomson field on Alaska’s An ExxonMobil spokesman, Hans Neidig,
North Slope from ExxonMobil, it has emerged. said the change “takes advantage of Hilcorp’s
The super-major will remain the majority owner scale and experience operating North Slope
of the field, however, with a stake of 62%, and no assets”.
cash has been exchanged as part of the deal. Reuters noted that Point Thomson is consid-
Hilcorp, for its part, owns a 37% interest in ered critical to the further development of North
Point Thomson, which it acquired via its pur- Slope gas, as it contains around 8 trillion cubic
chase of BP’s Alaska assets in 2020 for $5.6bn. feet (226.6bn cubic metres) of known reserves.
Other parties collectively own 1% in the field. This accounts for roughly a quarter of the total
The acquisition of these assets has helped known reserves on the North Slope. Both Point
Hilcorp to grow into a leading Alaskan operator. Thomson and Prudhoe Bay have been identified
Also included was a 26% stake in the Prudhoe as primary sources of feedstock gas supply for
Bay field, where Hilcorp replaced BP as operator the proposed Alaska LNG project, should it ever
once the deal closed. go ahead.
An agreement signed between Hilcorp and Point Thomson also produces natural gas liq-
ExxonMobil on the operatorship of the Point uids (NGLs), with output averaging about 8,300
Thomson field on October 19 will take effect barrels per day (bpd) between January 2020 and
early next year, media reported. The move illus- July 2021, according to ExxonMobil data sub-
trates the ongoing pullback from Alaska by mitted to the state.
super-majors, allowing smaller players to step in. Alaska’s marketed gas production fell to
“We welcome the opportunity to apply our about 900mn cubic feet (25.5mn cubic metres)
proven record of enhancing legacy conven- per day in 2020, down from a peak of 1.5bn cubic
tional assets to Point Thomson,” Hilcorp’s senior feet (42.5 mcm) per day in 1994.
P8 www. NEWSBASE .com Week 43 28•October•2021
