EIA: Oil, gas producers post higher third-quarter cash from operations

Oil and gas producers saw their cash from operations soar in the third quarter as crude oil prices rose, according to the U.S. Energy Information Administration (EIA).

The EIA released Wednesday (Dec. 29) a third-quarter financial analysis of 87 global oil and gas producers that shows their cash from operations totaled $157 billion, the highest for any quarter over the past four years. The increase was primarily attributed to higher oil prices.

In the third quarter, international benchmark Brent crude oil daily average prices rose by 69% to $73 per barrel, from the same period in 2020. Meanwhile, natural gas prices more than doubled.

Among the 87 companies included in the analysis, 51 are based in the United States, 16 are located in Canada and 10 are in Europe. The remaining 10 are based in Argentina, Brazil, Chile, China, Colombia and Russia.

Combined, their petroleum liquids production rose by 1% in the third quarter, from the same period in 2020. Over the same period, natural gas production increased by 4%. Third-quarter production levels remained lower than in any quarter in 2019.

Capital expenses in the third quarter rose by 25% to $57 billion, from the same period in 2020. About 86% of the companies reported positive free cash flow, and 89% noted positive upstream earnings in the third quarter. Upstream activities refer to crude oil exploration, production and other operations that happen before refining.

Net losses from hedging derivatives were $11 billion in the third quarter. Over the first three quarters of 2021, the losses were almost $30 billion. Distributions to shareholders via dividends and share repurchases comprised 24% of cash from operations. The companies’ debt decreased by $37 billion in the third quarter, and the long-term debt-to-equity ratio was flat at 50%. By comparison, U.S. manufacturing companies’ long-term debt-to-equity ratio was 61%.