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US Oil Companies Financial Performance, Mergers and Acquisitions
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By OilGasArticles Editor
Published on 04/13/2006
 
Twenty-five major U.S. energy companies reported overall net income (excluding unusual items) of $26.0 billion on revenues of $295.1 billion during the third quarter of 2005. This level of net income represented a 69 percent increase relative to the third quarter of 2004
U.S. oil companies are experiencing strong revenues and profits
Twenty-five major U.S. energy companies reported overall net income (excluding unusual items) of $26.0 billion on revenues of $295.1 billion during the third quarter of 2005. This level of net income represented a 69 percent increase relative to the third quarter of 2004.

Domestic upstream oil and natural gas production operations accounted for $8.5 billion of net income, with domestic refining and marketing operations earning an additional $7.0 billion. Foreign upstream oil and natural gas production operations accounted for $7.6 billion of net income, while foreign refining and marketing operations accounted for $2.0 billion.

Independent oil and natural gas producers, oil field companies and refiner/marketers reported a sharp increase in net income (up 139 percent) during the second quarter of 2005 compared to the second quarter of 2005. This increase in net income was due primarily to large increases in the prices of natural gas and crude oil, and a rise in gross refining margins of 17 percent year-over-year.

On October 13, 2005, the Wall Street Journal (WSJ) reported that Occidental Petroleum Corporation had agreed to acquire Vintage Petroleum Inc. for about $3.5 billion of cash and stock. Other recent acquisitions reported by the Wall Street Journal include: 1) Valero Energy Corp. agreed to acquire Premcor Inc. for $6.9 billion in cash and stock (reported April 25, 2005); 2) ChevronTexaco Corporation agreed to buy Unocal Corporation for about $16.8 billion of cash and stock (April 5, 2005); and 3) Marathon Oil agreed to acquire from Ashland Corporation the 38 percent of the Marathon Ashland Petroleum refining/marketing joint venture that it did not already own (March 19, 2004).

Marathon reportedly paid about $3 billion (about $1.1 billion of cash and stock and the assumption of about $1.9 billion in debt) for Ashland's share in the refining/marketing joint venture. In addition to acquiring full ownership of the Marathon Ashland Petroleum assets, Marathon also acquired 61 Valvoline Instant Oil Change outlets and other related assets currently owned by Ashland.

Source: Energy Information Administration