Which Upstream Company Saw Production Volumes Rise the Most?
HES, APA, DVN, and MRO: How Do Top Upstream Players Stack Up?
Changes in production volumes: HES, APA, DVN, and MRO
One of the biggest reasons behind the oil price slump is the production glut, which has caused many upstream companies to lower their production volumes in a bid to lower costs. We will be comparing changes in production volumes between 4Q14 and 4Q15 for Hess (HES), Apache (APA), Devon Energy (DVN), and Marathon Oil in this part of the series.
Hess and DVN increased production in 4Q15 versus 4Q14
Hess’s total production growth was driven by its Utica, Bakken, and Gulf of Mexico operations. Meanwhile, Devon has been ramping up its oil production, which has driven its overall production. Oil production growth in 4Q15 was driven by growth in the Delaware Basin and Rockies in the US and the Jackfish 3 project in Canada.
MRO and APA decreased production in 4Q15 versus 4Q14
MRO’s total production fell slightly in 4Q15 versus 4Q14. However, MRO’s 4Q15 unconventional production volume excluding Libya was 383 Mboe per day, which was flat compared to 4Q14. APA’s total production fell the most. This decline was led by APA’s international and Gulf of Mexico operations.
Lower production guidance for 2016
For 2016, all four companies have guided for lower production volumes as a result of lower prices, which have resulted in a lower capex budget. We’ll talk about capex for these companies in the next part.
Many upstream companies have been reducing their 2016 capex in response to lower energy prices. ConocoPhillips (COP) and Anadarko Petroleum (APC) lowered their 2016 capex by 37% and 50%, respectively, versus 2015. Concho Resources’ (CXO) 2016 capex is expected to be 35% less than its 2015 capex. All these companies make up ~5.8% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).
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