HOUSTON — Companies that invested in North American oil plays were rewarded with big stock gains in 2013, even as the world’s largest energy companies saw little change in their overall value, according to a new report from the research firm IHS.
Houston-based oil and gas producer EOG Resources was among the biggest Wall Street winners, according to the annual ranking of the 50 top publicly traded energy and utility firms by market capitalization. Many other Houston-based companies — including Halliburton, Schlumberger, Phillips 66 and Enterprise — also experienced significant jumps in their share prices in 2013.
The companies’ gains are especially significant when compared to the performance of the energy sector as a whole. The combined value of the 50 biggest energy companies was $3.78 trillion, up just 0.8 percent compared to the previous year’s report.
Winners and losers
EOG recorded the largest increase in market capitalization among the 50 companies, according to IHS. Its share price grew 40 percent year over year, resulting in a $45.8 billion market capitalization, the research firm noted. As a result, EOG jumped from 33rd to 27th in the IHS ranking.
The report’s author, Dan Trapp, a senior energy analyst for IHS, said EOG did well because of its heavy investment in oil as opposed to natural gas, whose price has dropped amid a supply glut unleashed by the U.S. shale boom.
The market also took notice of the strong performance of EOG’s wells. EOG moved into key plays rich in oil and other valuable liquids earlier than competitors and benefited from high-quality acreage, Trapp noted. And the company has developed the ability to drill at a low-cost.
“In sum, their strategy has been much more effective than their competition’s,” Trapp said.
The report also noted the turnaround of BG Group, which saw its market capitalization grow 31 percent in 2013. The market responded as the British oil and gas company right-sized its portfolio, following a difficult 2012.
The year’s biggest losers were the large national oil companies. The nine national oil companies on the list lost a combined 16 percent of their value. Colombia’s Ecopetrol saw its market cap fall 38 percent, and Brazil’s Petrobras saw a 27 percent decrease.
“By losing value, they were able to bump the others up in value,” Trapp said.
Oil field services
Service companies performed well on the IHS list, with Halliburton’s market capitalization increasing 34 percent and Schlumberger’s increasing 29 percent during the year. They were part of a broader trend of gains in the sector, with the top 15 oil-field services firms seeing a 25 percent increase in value.
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The growth marked a continued turnaround for Schlumberger after investors cooled on the company in 2009 and 2010, Trapp noted.
“The service companies only have so much bandwidth,” Trapp said. “They came in and have basically cleaned up. They’re able to take the cream of the crop projects.”
North American pipeline and midstream companies also did well, benefiting from the rise in shale oil and other unconventional liquids.
The top 15 midstream companies enjoyed a 26 percent increase in their market cap, IHS found.
U.S. refiners excelled compared to their peers in other countries, largely due to the low cost of domestic crude. Five predominantly U.S. refiners enjoyed a combined 33 percent increase in their market cap. The rest of the top refiners on the IHS list saw a 10 percent decrease in their market capitalization.
“The refiners made out,” Trapp said. “They could get crude at a cheap price and sell the refined product at market rate.”
IHS analysts said the common thread among the winners — both upstream and downstream — was that they prioritized North American investments while continuing to diversify in other areas.
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