EOG Resources joined the list of oil and gas company topping earnings views Thursday. Shale oil stocks, including EOG stock, booked heavy losses during regular market trading. EOG traded effectively flat in extended trading hours.
The earnings results from EOG come after Marathon Oil, SM Energy APA, Occidental Petroleum, Pioneer Natural Resources, Marathon Petroleum, Devon Energy and Diamondback Energy all bested estimates this week.
While U.S. shale oil producers reported strong earnings, stocks across the industry have fallen this week as oil prices retreated below their recent trading range. This comes after energy giants Exxon Mobil, Chevron and Shell all posting record profits.
EOG Resources Earnings
Estimates: Wall Street predicted that EOG would earn $2.68 per share on $5.5 billion in sales in Q2.
Results: EOG Resources reported $7.4 billion in revenue, a 80% increase compared to Q2 2021. The company earned $2.74 per share, a 58% gain year-over-year.
"Our performance this year proves that we have emerged from the downturn better than ever. The company is positioned to deliver significant value to shareholders with our low cost structure and increased exposure to oil and natural gas prices with the recent reductions in our hedge position," CEO Ezra Yacob said in a statement.
Yacob added that he felt the company was well positioned to enter 2023.
"We have offset a significant portion of inflation this year and are working on plans to identify further cost savings next year." Yacob said.
Shares fell 3.7% to 99.82 in Thursday's stock market trading. EOG stock has dropped below its 10- and 40-week moving averages, and could be headed for a test of its July lows.
In Q1, EOG saw its EPS grow 147% to $4.0 while its revenue increased 5% to $3.9 billion. The company beat earnings estimates but missed on total revenue projections.
The Houston-based EOG Resources is one of the largest oil and gas producers in the U.S. It also has natural gas operations in Trinidad & Tobago, along with other countries across the globe.
EOG Resources sits 26th in the Oil & Gas-U.S. Exploration and Production industry group. The company has a Composite Rating of 94. It has a Relative Strength Rating of 90 and a 98 EPS Rating.
Shale Oil Producer Stocks: Marathon Oil Earnings
Estimates: FactSet analysts predicted EPS of $1.28 and $2.1 billion in sales in the second quarter.
Results: Marathon Oil earned $1.32 per share, a 500% spike compared to Q2 2021. Sales increased 100% to $2.3 billion.
"Despite ongoing macro and equity market volatility, we remain well positioned to continue delivering financial results that compete with the best companies in the S&P 500,"CEO Lee Tillman said in a news release.
MRO stock was down 6.2% to 21.47 in Thursday's stock market trading.
The Houston-based Marathon Oil was founded in 1887 and engages in the exploration and production of oil and natural gas. Within the U.S. it operates in the resource-rich Bakken and Permian basins among others. Its international segment is involved with oil and gas development primarily in Equatorial Guinea and the United Kingdom.
MRO beat earnings views but missed on revenue in the first quarter. The company reported earning $1.02 per share, a 385% gain, in Q1. Sales increased 64% to $1.7 billion.
Marathon Oil ranks 11th in the Oil&Gas-Integrated industry group. MRO has a 96 Composite Rating. Its Relative Strength Rating is 97 and it has an EPS Rating of 80.
SM Energy Earnings
Estimates: Wall Street forecasted earnings per share of $2.17 and $800 million in revenue.
Results: SM reported that EPS ballooned 21,800% to $2.19 in Q2. Sales spiked 145% to $992 million.
The company said that total oil, gas and natural gas liquids revenue increased 76% due to a 7% increase in production and a 64% increase in the average price per barrel of oil equivalent, compared with 2021.
"Higher than expected production and continued strength in commodity prices are significantly boosting cash flows," CEO Herb Vogel said in a statement.
SM Energy increased its full-year capital spending guidance to $870 million-900 million. The company said the decision was made because of "higher than expected inflation" and a "supply-constrained environment."
SM Energy shares dropped 0.6% Thursday after falling 5.36% Wednesday, trading around 37.25.
SM Energy is headquartered in Denver, Colorado, and was founded in 1908. It primarily operates in the Midland Basin of South Texas. In Q1, SM Energy reported earning $1.98 per share, a 4000% gain from a 5-cent net loss a year earlier. The company also posted $860 million in sales, a 94% increase.
SM ranks 23rd in the Oil & Gas-U.S. Exploration and Production industry group. The stock has a Composite Rating of 95. Its Relative Strength Rating is 96. It has an EPS Rating of 77.
Shale Oil Producer Stocks: APA Earnings
Estimates: Analysts estimated that APA would report EPS of $2.33 in the second quarter. Revenue is expected to be $2.6 billion.
Results: APA earned $2.37 per share, a 238% increase. Revenue grew 66% to $3 billion in the second quarter.
"We managed our largest spending categories – capital investment, operating costs, and general & administrative – very well despite an overall challenging supply chain and cost environment," CEO John Christmann IV said in a press release.
APA stock sank nearly 11% to 30.68 Thursday amid increased volume, dipping below its 200-day line.
APA has been around since 1954 and his based in Houston. The company produces oil and gas in the U.S. and also has plays in Egypt and the United Kingdom. It also has offshore exploration activities in Suriname.
The company saw its earnings per share grow 110% in Q1 to $1.92. APA also gained 86% in revenue with $2.7 billion in the first quarter. APA has a 88 Composite Rating. Its Relative Strength Rating is 95 and it has a 77 EPS Rating. The company is seventh in the Oil & Gas-Exploration and Production industry group.
Shale Oil Producer Stocks: Occidental Petroleum
Estimates: Analysts forecast earnings of $3.03 per share vs. 32 cents in the year-ago quarter. Revenue is expected at $9.8 billion, a 64% increase.
Results: Occidental Petroleum reported earning $3.16 per share, a 887% year-over-year increase. Revenue increased 81% to $10.7 billion in the second quarter.
"Oxy completed another quarter with strong operational and financial performance across all of our businesses," CEO Vicki Hollub said in a statement. "Our ongoing efforts to improve the balance sheet remain in place, but we are pleased that our deleveraging progress has reached a stage where our focus can expand to additional cash flow priorities."
Shares were down 5.7% to 57.51 Thursday after losing 6% in Wednesday's stock market trading. Occidental has moved below its 50-day moving average after advancing above it Friday, helped by strong earnings reports from Exxon Mobil and Chevron. OXY has generally held up better than many other energy stocks as it battles for support at its 50-day line.
In July, Warren Buffett's Berkshire Hathaway bought an additional 12 million shares of OXY stock, bringing its stake to nearly 20%. Like many other oil and gas producers, Occidental has showed booming revenue growth in recent quarters.
In the first quarter, revenue jumped 56% to just over $8.5 billion, a slight slowdown from triple-digit year-over-year growth in the prior three quarters. Broken down by segment, oil and gas revenue jumped 66% to just over $6 billion. Chemical revenue increased 55% to $1.68 billion.
The Houston-based Occidental ranks first in the Oil & Gas-Exploration and Production industry group. OXY stock has a Composite Rating of 99. Its Relative Strength Rating is a best-possible 99. Its EPS Rating is 77.
Shale Oil Producer Stocks: Pioneer Natural Resources
Estimates: Wall Street expected earnings per share of $8.82, a 246% year-over-year surge, while sales are seen more than doubling to $7 billion.
Earnings: Pioneer Natural Resources saw earnings per share grow 267% to $9.36. Sales increased 102% to $6.9 billion in the second quarter.
PXD also announced Tuesday a quarterly base-plus-variable cash dividend of $8.57 per common share. The dividend is payable September 16 to stockholders of record at the September 6 market close.
"Pioneer's strong balance sheet provides the financial flexibility to return significant free cash flow to investors, while still growing annual oil volumes," CEO Scott Sheffield said in a statement.
Shares dropped 3.54% Thursday to 212.86. The stock saw losses Monday and Tuesday.
Pioneer Natural Resources ranks 10th in the Oil & Gas-U.S.-Exploration and Production industry group. PXD has a 99 Composite Rating. Its Relative Strength Rating is 95, and it has a 99 EPS Rating.
PXD is one of the top five U.S. oil producers and the leading oil producer for 2021 in the Permian basin production area, according to the Railroad Commission of Texas.
Profit growth moved higher in Q1. Earnings were up 337%, compared with 328% in the prior report. Analysts expect earnings growth of 150% for the full year.
While the U.S. Energy Information Administration estimates U.S. crude oil production will approach on average 11.9 million barrels per day for all of 2022, an average increase of 700,000 barrels a day vs. 2021, Sheffield warned investors in May that they should expect much less production.
"The growth profile that EIA has, and some of the other think-tank firms, I think it's too aggressive over the next two years for U.S. oil production," Sheffield said during the first quarter earnings call.
Marathon Petroleum Earnings
Estimates: Analysts forecasted Marathon Petroleum earnings per share 0f $8.92 vs. 67 cents in Q2 2021, with sales up 35% to $40.3 billion.
Earnings: MPC reported earnings per share ballooning 1483% to $10.61. Sales increased 82% to $54.2 billion.
"Our team delivered on supplying products to meet strong market demand," CEO Michael Hennigan said in a statement.
The company's capital expenditures in the second quarter were $577 million, up 23% year over year. So far in 2022, MPC's capital spending has spiked 31% to $1.1 billion.
MPC stock fell 2.7% Thursday. Marathon Petroleum shares fell 1.4% to 90.40 on Monday.
The Ohio-based MPC primarily focuses on downstream production and operates the largest refining system in the U.S. The company also is the majority owner of MPLX, which is a midstream company involved in natural gas and crude oil production.
Marathon Petroleum ranks eighth in the Oil & Gas-Refining, Marketing and Transportation industry group. MPC has a 93 Composite Rating. Its Relative Strength Rating is 96 and EPS Rating is 77.
Shale Oil Producer Stocks: Devon Energy Earnings
Estimates: FactSet analysts projected earnings for Devon Energy to skyrocket 285% year over year to $2.31 per share and sales to surge 72% to $4.1 billion for the second quarter.
Results: Devon Energy earnings surged 331% to $2.59 per share, a 331% increase year over year. Revenue grew 133% to $5.6 billion.
Based on its second quarter performance, DVN increased its full-year production guidance by 3% to a range of 600,000- 610,000 oil-equivalent barrels per day. Devon Energy also adjusted its upstream capital guidance to between $2.2-$2.4 billion, up from $2.1 billion.
"This success was showcased by production from our Delaware-focused program that exceeded guidance expectations, our streamlined cost structure captured the full benefit of higher commodity prices and we returned record-setting amounts of cash to shareholders," CEO Rick Muncrief said in a news release.
Production for the second quarter averaged 616,000 oil-equivalent barrels per day, an increase of 7% from Q1. Upstream capital spending was 5% below the company's expectations, totaling $513 million.
Devon Energy expects capital spending in Q3 to total between $680-$755 million.
Shares fell 3.9% Thursday to 54.49. Devon Energy has started to work its way higher after finding support at the 200-day line. DVN stock is still below its 50-day line, according to MarketSmith.
The Oklahoma City-based Devon Energy is a leading onshore U.S. oil and gas producer. It operates in multiple basins across the country, including the resource-rich Delaware Basin in West Texas and the Barnett Shale, one of the largest onshore natural gas fields in the U.S.
The company ranks third in the Oil & Gas-U.S. Exploration and Production industry group. DVN has a Composite Rating of 99. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The stock has an EPS Rating of 80.
Diamondback Energy Earnings
Estimates: Wall Street projected Diamondback Energy earnings per share of $6.68, a 179% increase over the year-ago quarter, and a 48% rise in sales to $2.5 billion.
Earnings: Diamonback Earnings per share increased 194% to $7.07. Revenue climbed 59% to $2.7 billion.
Capital spending on operating and non-operating drilling in Q2 was $468 million. So far in 2022, Diamondback Energy capital expenditures have come to $905 million. The company is projecting another $470-$510 million in spending in the third quarter.
"We continue to focus on operational excellence and cost control in this inflationary operating environment, working to mitigate and offset the persistent inflationary pressures we are seeing across our business. Diamondback has a strong track record of cost control, and we expect to continue to improve on this track record in the coming quarters," CEO Travis Stice said in a statement.
FANG stock fell 4% Thursday to 116.48. The stock began the week sinking 1.7% to 125.83 on Monday. Shares are attempting to get above their 200-day line.
Diamondback Energy ranks fifth in the Oil & Gas-U.S. Exploration and Production industry group. FANG has a 99 Composite Rating. It has a 94 Relative Strength Rating and an EPS Rating of 94.
In Q1, Diamondback reportedly turned aggressive, operating 12 rigs in the Permian Basin. However, well completion services, materials and labor are increasingly expensive and difficult to procure, and much of the drilling has gone to simply holding output levels steady.
"Everything is tight across the board, whether it's sand, casing, new high-spec rigs, frack crews — everything is very, very tight," CFO Kaes Van't Hof said during the company's Q1 earnings call in May. "We're doing our part by keeping our activity levels flat."
Spiking oil prices have made holding production steady a winning strategy. Analysts project Diamondback earnings for all of 2022 will rise 126% to $25.50 a share on a 41% sales increase to $9.6 billion.
Flat Production, Spiking Capital Spending
While many oil and gas producers are seeing strong profits in 2022, inflation and supply-chain snags have resulted in increased capital spending even as many of them are keeping production flat.
The U.S. Energy Information Administration shows oil and gas companies downshifted both spending and production for the second quarter.
An EIA scan of 53 public U.S. oil and gas companies, collectively responsible for about 34% of domestic production, showed that combined cash flows increased 86% to $25.7 billion during the first quarter. Meanwhile, capital spending nearly doubled vs. 2021. These same companies reported a 5% decline in capital expenditures in the second quarter vs. Q1 this year. Crude oil production has increased 10% compared with the first quarter, but it remains flat vs. Q4 2021.
The EIA found that while the price of crude oil has increased, supply-chain issues and production expenses continue to pressure the energy sector. The costs of supplies and labor for oil production have more than doubled from the pre-pandemic average, according to the EIA.
Oilfield service firms Schlumberger and Halliburton both reported capital spending increases in Q2.
OPEC+ Ups Production
Amid earnings this week, the Organization of the Petroleum Exporting Countries and its allies, including Russia, decided Wednesday to approve a small output increase of 100,000 barrels per day for September. The quota increase is equal to around 0.1% of global oil demand. OPEC+ is scheduled to meet again on September 5.
U.S. crude oil futures sank nearly 3% to below $88 per barrel Thursday. This is the lowest price since before Russia invaded Ukraine in February. This came after data from the U.S. Energy Information Administration showed that U.S. crude stockpiles grew by around 4.5 million barrels the week prior, beating predictions of a 629,000 barrel decline.
In early June, OPEC+ decided to increase output by 648,000 barrels per day for July and August, up from the previous quota of 432,000 bpd. The organization met again in late June to confirm August oil output even as world leaders urged oil giants to drum up supply amid inflation and recession fears.
However, many members have not been able to meet this production quota. Saudi Arabia, which leads OPEC, and the United Arab Emirates are the only countries that could meaningfully increase capacity but neither have shown a willingness to produce at maximum levels.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
