Majors Driving Rise in Global Discoveries

The world’s publically listed oil and gas companies are bringing in cash at the best rate ever witnessed even though oil prices have only partially recovered from the huge drop suffered in 2014 and 2015, according to Rystad Energy.

“The fact that E&P companies are able to deliver the same shareholder returns despite much lower oil prices points to an impressive increase in profitability,” says Espen Erlingsen, Head of Upstream Research at Rystad Energy. Espen adds, “Our analysis of the latest annual reports from the majors clearly indicates that ‘super profits’ are back for large E&P companies. Free cash flow before financing activities was at a record high in 2018, and the mega profits were typically used to pay down debt and increase payments to shareholders.”

Rystad Energy finds as a result of such efforts, from recent cash flow statements from all the majors plus Norway’s Equinor; it found that such majors were making that almost 70 cents for every dollar in profits generated last year for these companies ended up in shareholders’ pockets. It is not surprising that the share price for such majors has returned to what it was before the oil price crash of 2014.