Overview
|
 Third Quarter 2008 Key Findings |
|
|
Net Income |
$7.0 billion |
|
Revenues |
$46.4 billion |
|
Highlights |
Independent energy companies reported a 33-percent increase in
net income relative to the third quarter of 2007, with large earnings
increases for producers and oil field service companies. Higher earnings for producers and oil field service companies
were driven by higher oil and natural gas prices and increased rig activity,
while refiners' earnings increased slightly on higher margins. |
Earnings for the 37 independent
energy companies included in this report grew 33 percent in the third quarter
of 2008 (Q308) over earnings in the third quarter of 2007 (Q307) (Table 1).
This was driven by the performance of the producers and the oil field service
companies; refiner/marketer earnings were nearly unchanged from the year-ago
quarter. Oil field company third quarter earnings have increased each year for
at least the last six years, with the average for the 2006-2008 period over six
times higher than the average for 2002-2004.
The imported average crude oil price for Q308 increased $43.20 per
barrel (61 percent) relative to a year earlier (Table 2). (See the current and recent issues of
the Short-Term Energy Outlook for an explanation of these price changes and
those discussed below.) This is the twenty-third time in the past twenty-five
quarters (i.e., six and one-quarter years) that the price of crude oil was
higher relative to the year-earlier quarter. (The first and second quarters of
2007 were the only exceptions since the second quarter of 2002.)
The average
The gross refining margin (the per-barrel
composite wholesale product price less the composite refiner acquisition cost
of crude oil) was 11 percent higher in Q308 than in Q307 (Table 2). The $45.22 per-barrel increase
in the average price for petroleum products exceeded the $43.20 per-barrel
increase in the price of crude oil and resulted in a slightly larger margin.
Independent Energy Company Earnings
Independent producers' earnings increased 192 percent from Q307 to Q308 due to higher oil and natural gas prices. Net income of the independent oil and gas producers included in this report increased 192 percent between Q307 and Q308, while revenues increased 41 percent (Table 1). The 61-percent jump in oil prices, combined with the 49-percent rise in natural gas prices (Table 2), led to the sharp increase in profits.
Oil field companies' earnings
increased 12 percent from Q307 to Q308 due to higher rig counts. Net
income of
Breaking down the overall (oil
plus natural gas)
Worldwide rig count growth
matched the
Refiner earnings increased 1 percent from Q307 to Q308 on higher margins. Earnings of the independent refiners included in this report increased 1 percent, from $315 million in Q307 to $317 million in Q208 (see Table 1), as refining margins increased 11 percent over the year-ago quarter (see Table 2). (The gross refining margin is the difference between the composite wholesale refined petroleum product price and the composite refiner acquisition cost of crude oil.) Refiners’ third quarter earnings have steadily increased from at least 2003 through 2008 with the exception of 2007.
The "Financial News
for Independent Energy Companies" is issued several weeks after the close
of each quarter to report recent trends in the financial performance of
independent energy companies, which are typically smaller than the majors and
do not have integrated production/refining operations. The information is
compiled from companies' quarterly reports and press releases.
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Contact:
Bob Schmitt
robert.schmitt@eia.doe.gov
Fax: (202) 586-9753