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Performance Profiles of Major Energy Producers 1997.

By several key measures, 1997 was a good year for the 24 major U.S.-based energy producing companies monitored by the Energy Information Administration's Financial Reporting System (FRS). Despite a slump in crude oil prices, overall net income reached a record $32 billion (see table). Cash flow from operations, at $67 billion, also set a record. Low oil prices, strong demand for refined petroleum products, and cost-cutting in refinery operations pushed net income from refining and marketing to the highest level of the decade; global refining and marketing operations accounted for almost 80 percent of the FRS companies' net income growth in 1997.

Other highlights of the year, as reported in Performance Profiles of Major Energy Producers 1997, include $62 billion in capital expenditures by the FRS companies, a 13-year high. Much of this spending went for U.S. upstream (oil and gas production) investments, including mergers and acquisitions, onshore natural gas development, and exploration and development of offshore oil and gas deposits, as well as investments in foreign oil and gas production, especially in the North Sea and Canada. Capital spending for foreign oil and gas production reached almost $17 billion in 1997, yet another record. Not all areas benefited from increases; capital spending for U.S. refining operations fell 20 percent to the lowest level since 1978.

Growth in the FRS companies' collective asset base accelerated in 1997, continuing a trend that began in 1993 after a period of asset shedding designed to enhance stock values and reduce debt. Domestic oil and gas refining and marketing assets were among those divested; many were bought by independent refiners lacking production assets. Sources of asset growth from 1993 through 1997 included foreign oil and gas production, refining, and marketing; other energy enterprises; and chemicals.

The new edition of the report, the Energy Information Administration's annual financial analysis of the profits, investment strategies, and worldwide operations of the major U.S.-based energy producing companies, now casts a wider analytical net in examining investments and operations of independent (non-major) oil and gas producers and refiners as well as discussing emerging issues in U.S. energy company financial performance.
Consolidated Income Statement for FRS Companies, 1996 and 1997
(Billion Nominal Dollars)

Income Statement Items 1996 1997 1996-1997

Operating Revenues 541.4 525.1 -3.0
Operating Expenses -492.7 -478.4 -2.9
 Operating Income 48.7 46.7 -42.0
Interest Expense -6.9 -6.4 -7.5
Other Revenue 10.3 10.5 1.8
Income Tax Expense -20.0 -18.6 -6.9
 Net Income 32.0 32.1 0.2

Net Income Excluding Unusual Items 30.5 33.9 11.2

Note: Sum of components may not equal total due to independent rounding. Percent changes were calculated from unrounded data.

Source: Energy Information Administration.
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Publication:Monthly Energy Review
Geographic Code:1USA
Date:Jan 1, 1999
Previous Article:Appendix D. List of Features.
Next Article:Section 1. Energy Overview.

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