Two more Houston oil companies reported this week that they were losing money despite unexpected success drilling more efficiently and recovering more oil.
Apache Corp. said Thursday that it lost $244 million, or 65 cents a share, in the second quarter, significantly narrowing the $860 million loss during the same period in 2015. Production dropped 8 percent to 535,000 barrels of oil equivalent per day. But executives lauded a marked improvement in well costs, down 4 percent from the first quarter and 17 percent year over year.
"We continue to surprise ourselves," Apache CEO John Christmann said on a call with analysts Thursday.
EOG Resources also reported a second-quarter loss on Thursday, of $293 million, or 53 cents per share, swinging from a profit of $5.3 million a year earlier. EOG pumped 50 million barrels of oil equivalent, 2 percent less than it did in the second quarter of last year - but 2 percent more than expected.
And EOG, too, reported a steep drop in lease and well expenses, which fell 23 percent, the company said.
"The benefits of EOG's premium drilling strategy are beginning to show in our operating performance," CEO Bill Thomas said in a statement. The company is focused on its best wells, he said, "which we are confident will increasingly lead to breakout performance as prices improve."
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Three other independent oil producers reported Wednesday that they were pumping oil at a healthy clip, but not making any money. Noble Energy, Occidental Petroleum Corp. and Marathon Oil Corp., all based in Houston, said they lost money in the second quarter as oil prices stayed low.
Prices rose above $50 a barrel in June, but have since retreated. Oil settled at $41.93 on Thursday in New York, up $1.10.
Despite cutting its costs aggressively, Apache said its revenue fell faster, dropping in the second quarter by 38 percent to $1.4 billion.
Over the first six months of the year, Apache lost $616 million, compared with a $2.2 billion loss in the first half of last year. Revenue fell by 36 percent to $2.5 billion. Production dropped by 5 percent in the first half of the year to 538,000 barrels of oil equivalent per day.
Christmann praised Apache's efforts to cut costs and improve efficiency.
"Despite the industry downturn, Apache has far more potential than it did just 18 months ago," he said during the call.
Apache is on track to deliver higher volumes in the coming quarters, he said.
EOG earnings were similar. The company cut expenses by 15 percent, or $366 million, to $2.1 billion - but revenue dropped by 28 percent, or $694 million, to $1.8 billion.
During the first half of the year, EOG lost $764 million, almost $600 million more than during the same period a year earlier. Revenue slipped 35 percent to $3.3 billion. Production fell by 4 percent, to 100 million barrels of oil equivalent.
Apache stock fell $1.55, or 3 percent, to $50.18. Shares of EOG rose $1.87, or 2 percent, to $84.24.
Provide by Houston Chronical.
