Reuters
Oil stocks have crashed in step with the price of oil, causing companies to slash their budgets and fire workers. Here, a crew looks over idle rigs in the Gulf of Mexico.
- Energy stocks crashed over the last three months as the coronavirus pandemic cratered demand for oil, according to new data from S&P Global Market Intelligence.
- The top 25 oil and gas companies lost an eye-popping $811 billion altogether in market capitalization between the end of 2019 to the end of March 2020.
- Those remarkable losses are sending the industry spiraling, with companies filing for bankruptcy, firing staff, and slashing their 2020 capital expenditure.
- Using data provided by S&P, Business Insider ranked the top oil and gas companies by market cap loss in the last three months as a percent.
- Visit Business Insider's homepage for more stories.
Energy stocks crashed in the first three months of 2020, falling by more than 50%, according to a report published earlier this week by S&P Global Market Intelligence. The broader S&P 500 slid, as well, by about 20%, the firm said.
What that looks like in dollars is especially striking. The top 25 oil and gas companies by market capitalization at the end of March lost an eye-popping $811 billion in just three months, falling from a total market capitalization of nearly $2 trillion at the end of last year.
Exxon lost about $135 billion during that period, or about 17% of its total value that evaporated. Other supermajors including Shell and Total lost billions, too.
Schlumberger took the biggest hit to the value of its shares. According to the S&P, the oilfield services company lost $36.9 billion, or 66% of its market capitalization.
Refiners and pipelines companies "saw particularly wide market cap swings," S&P said. Energy Transfers, for example, the firm behind the controversial Dakota Access Pipeline, lost nearly two-thirds of its market cap, falling from about $34 billion to about $12 billion in three months.
Meanwhile, pipeline companies focused on transporting gas, such as Kinder Morgan, "are expected to weather the financial downturn better than their smaller midstream counterparts." They're more likely to have a diverse customer base and not rely on a single oilfield for revenue, S&P said.
Reuters
A pump jack sucks oil out of the ground in the Permian Basin
Coronavirus has cratered demand for oil
Oil industry profits are tethered to the price of oil, which has collapsed dramatically in the last three months, falling by about 60% since the start of the year.
The problem is cratering demand.
Governments have advised large chunks of the planet's population to stay at home in order to slow the spread of the novel coronavirus. That means fewer people are traveling and consuming oil-based fuels.
Saudi Arabia has also begun increasing supply, which is likely to plunge the price further into the ground.
However, signals from President Trump that an agreement to cut production between Saudi Arabia and Russia might be forming, including a statement he tweeted this morning, drove the prices up slightly on Thursday.
This week, the price of US crude oil has hovered just over $20 a barrel. At that cost, many oil companies are likely losing money - considering that the breakeven oil price for an average company's cash flow is $25 a barrel, according to the research firm Rystad Energy.
Read more: The oil market braces for a 'tsunami' of oversupply that threatens to upend an entire industry
Associated Press
An oilfield worker operates valves in Nihran Bin Omar field north of Basra, Iraq
What's next: Budget cuts, layoffs
By March 26, the top 10 oil and gas companies by market cap had already announced about $30 billion in spending cuts, according to S&P. Most of those cuts are on the order of 20% or higher.
But budget cuts are just the start out of it.
Slashing spending typically means paring back oil and gas exploration and cutting staff. Several companies including ConocoPhillips and Occidental Petroleum have already lowered their production forecasts for 2020, and others - such as Apache and Halliburton - are laying off or furloughing staff, according to several news reports.
Mike Segar/Reuters
Oil tanks owned by the energy giant Phillips 66
Market cap losses, ranked
Business Insider ranked the top 25 largest oil and gas companies by smallest to largest losses over the last three months as a percentage of their market capitalizations, using data provided by S&P Global Market Intelligence.
Numbers in the parenthesis represent losses in dollars for the same period.
- Neste Oyj - 2.6% ($686 million)
- TC Energy Corp. - 17.1% ($8.6 billion)
- Enbridge Inc. - 27.3% ($22 billion)
- TOTAL - 29.9% ($42.7 billion)
- Cheniere Energy Partners - 32.2% ($6.2 billion)
- BP - 32.2% ($41 billion)
- Kinder Morgan Inc. - 32.2% ($16.4 billion)
- Eni - 34.8% ($19.1 billion)
- Equinor - 36.9% ($24.3 billion)
- Chevron - 40% ($90.6 billion)
- Williams Cos. Inc. - 40.3% ($11.6 billion)
- Repsol - 41.4% ($9.6 billion)
- Royal Dutch Shell - 41.5% ($96.2 billion)
- ExxonMobil - 45.6% ($134.8 billion)
- Enterprise Products Partners - 49.2% ($30.3 billion)
- Valero Energy Corp. - 51.7% ($19.8 billion)
- Suncor Energy - 51.9% ($26.1 billion)
- Phillips 66 - 52.2% ($25.6 billion)
- ConocoPhillips - 53% ($37.4 billion)
- MPLX - 54.4% ($14.6 billion)
- EOG Resources - 57.1% ($27.8 billion)
- Canadian Natural Resources - 58.3% ($22.4 billion)
- Marathon Petroleum Corp. - 60.7% ($23.7 billion)
- Energy Transfer - 64.1% ($22.1 billion)
- Schlumberger - 66.4% ($36.9 billion)