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Chronically low oil prices have caused American oil and gas majors in the S&P 500 to lose billions of dollars from their cash reserves, according to a new report by Bloomberg.
Analysts uncovered that the top fifty companies in the notorious S&P Index controlled more than half of the $825 billion in cash assets owned by the elite group of firms.
Energy firms are currently amongst the most cash-poor firms on the list, especially in recent months. For example, former industry hotshot Chesapeake Energy Corp. (CHK) lost over 95 percent of its $2.1 billion in cash reserves over the past year. The effects of the capital shortage can also be seen in the firm’s dividend payout record. According to NASDAQ, the company has not paid out a dividend to investors since April 2015.
Within the energy sector, per-share dividends have either stagnated or declined across the board. Western Refining is the sole company on the list that increased dividends during this difficult economic period, though the firm still saw its cash reserves fall drastically over the past year.
Here’s a look into the coffers of the rest of the S&P 500-certified energy exploration firms:
Anadarko ended the second quarter of 2016 with $1.4 billion of cash on hand – down from $2.2 billion during the same period last year. The firm offers quarterly dividends to its shareholders, and in March of this year, it decreased its payouts from $0.27 a share to $.05 per share.
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Parsley Energy Inc. held $476 million in liquidity ($21 million in cash) as of Q2 2015. By the end of Q2 this year, the firm held $966 million of liquidity, $441 million of which was in cash. Unfortunately for investors, the company has not paid out a single dividend to date, according to MorningStar.
SM Energy only held $18,000 in cash by the end of Q2 this year, though it’s not much lower than figures from Q2 2015, when the debt-riddled company held $20,000. The company pays out a dividend every six months worth $0.05 a share – an amount that has remained steady since May 2001.
Energen Corp. boasted $309.9 million in cash on hand at the end of Q2 2016, a drastic increase compared to Q2 2015, when it held just $1.5 million. In November 2014, just as the pricing crisis began taking its toll on oil and gas production, the firm lowered its dividends from 15 cents a share to two cents a share, according to NASDAQ.
Devon Energy exited Q2 this year with $1.7 billion of cash on hand, the exact same amount it held in its coffers in the second quarter of last year. Devon’s dividends remained steady at $0.24 a share from mid-2014 to March 2016, but, the firm cut payouts by 75 percent this past June.
Western Refining – saw cash reserves fall from $544 million in Q2 2015 to $198 million in the same period this year. Since February 2015, when payouts stood at $0.30, the firm’s dividends have been on the rise. Currently the figure stands at $0.38 a share, but WR paid out $2.00 dividends in November 2014, after the initial oil price drop.
WPX Energy held just over $1 billion in cash at the end of June 2016, compared to $317 million one year ago. To date, WPX has not paid out a single dividend since 2012, when the company made its initial public offering.
PDC Energy reported $1.38 billion in cash reserves to investors at the end of June last year, but by the end of Q2 of this year, cash on hand declined to $109 million. The firm does not usually offer dividend payouts.
Rice Energy Inc. held $565 million in cash at the end of June, up from $257 million at the end of the same month last year, though the company does not offer dividend payouts. It’s subsidiary, Rice Midstream Partners LP, does offer payouts of around 20 cents a share every three months or so, but the firm is not listed in the S&P 500.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…