U.S. Independent Oil and Gas Producers, 1993 - 1998: Survivors and Nonsurvivors
Purpose
The vertically integrated majors' role in U.S. oil & gas production continued to decline in the 1990's while nonintegrated majors and independents increased their production shares
The integrated majors' worldwide oil & gas production has been nearly constant in the 1990's as U.S. cutbacks have been offset by production gains abroad.
Among publicly-traded independents, survivors clearly grew and gained prominence. Privately-held independents, in contrast, registered a 15-percent decline in their U.S. oil & gas production.
Reserve holdings reflected a similar pattern. The big gainers were the independents that remained in production, while nonintegrated majors showed modest growth. The integrated majors registered the largest drop in U.S. reserve position followed by the private independents.
Surviving and entrant publicly-traded independents and the nonintegrated majors added, on balance, to their U.S. reserve base through purchases of reserves. Integrated majors, nonsurviving publicly-traded independents, and privately-held independents were net sellers of proved reserves.
Reserve replacement costs were not much different between survivors and nonsurvivors.
However, the combined costs of extraction (lifting costs) and replacement of reserves increased most for nonsurvivors.
Nonsurvivors had the largest increases in both cost categories.
Nonsurviving independent oil and gas producers began the period with a larger debt load.
As a result of their debt load, nonsurviving independents had a heavier interest burden.
The nonsurvivors' cost disadvantage and heavier interest burden contributed to their lower profitability.
Investors' outlook reflected the nonsurvivors' poor performance and low expectations of future performance.
Summary
Summary (cont.)
Email: jon.rasmussen@eia.doe.gov
Home Page: http://www.eia.doe.gov/emeu/finance/
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