• 2 minutes California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 6 minutes China and India are both needing more coal and prices are now extremely high. They need maximum fossil fuel.
  • 11 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 9 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 7 mins "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 3 hours Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 1 day Did China cherry-pick the factors that affected the economic slow-down?
  • 11 hours Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 2 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 6 hours Are you aware of Oil Price short videos on our energy topics?
  • 13 hours NordStream2
  • 4 days U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 410 days Class Act: Bet You've Never Seen A President Do This.
  • 4 days Forecasts for Natural Gas
  • 4 days Australia sues Neoen for lack of power from its Tesla battery
  • 4 days Nord Stream - US/German consultations

Crisis Made Largest U.S. Oil Firms Book Highest Writeoffs Since 2015

Due to the oil and gas price collapse last year, the 50 largest listed exploration and production companies in the United States booked a total of $66.6 billion in impairment charges—more than triple the previous high for 2015-2020 and the highest since 2015, EY said in a new report.

After-tax losses at those 50 companies were $84.1 billion, the greatest loss for the study period and the first loss since 2016, according to EY’s estimates. Revenues also tumbled, by a cumulative 33 percent to $110.8 billion as a result of depressed commodity prices.

Capital expenditures (capex) plunged by 60 percent in 2020 compared to 2019 and stood at just $60.3 billion last year. This was the lowest level for the 2016–20 study period, with significant decreases in all capital spending categories.

The price collapse and the lower demand last year also significantly cut drilling activity at the largest publicly traded U.S. oil firms, EY’s report showed.

U.S. firms drilled 41 percent fewer development wells and 32 percent fewer exploration wells in 2020 compared to 2019.

After the disastrous 2020, in which even giant ExxonMobil booked its first annual loss since the 1999 merger of Exxon and Mobil, and the first annual loss in at least 40 years, profits for U.S. firms have been rather good this year, thanks to the rally in oil prices in the first half.

“Even as prices rise and economics improve, as they have so far in 2021, it is unclear how aggressively companies will be investing in the oilfield,” said

Mitch Fane, Americas Energy & Resources Leader and US Oil & Gas Leader at EY.

U.S. firms have reduced the share of cash flows reinvested in drilling as capital markets now demand returns instead of production growth, according to EY.

As U.S. oil firms are generating record cash flows this year, they have three primary pathways to using the extra cash, EY says. These are boosting returns to shareholders, reinvesting in the core business, or invest in decarbonization and alternative energy, the consultancy noted.

“As the market recovers from the pandemic and the financial positions of companies improve, the future of the industry will be determined. One thing is certain: there's no stopping the energy transition. The oil and gas companies that remain today are confronting the immense challenge of how to access capital, reinvest and reshape their businesses,” EY’s Fane says.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on August 30 2021 said:
    I reiterate my price target for the oil futures contract as "nil."

    Long $tsla Tesla Motors
    Strong buy
    "Selling the most expensive electricity upon the Earth and yes you will pay for that."

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News