9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

List of latest Ponzi schemes in Nigeria

These are the latest and past Ponzi scams and shady investment products that Nigerians are putting their monies into. What...

For 9M-19, the financial performance of the Oil & Gas players – both downstream and upstream reflected burning issues in the local and global oil markets. Upstream companies struggled with lower realized prices, as global crude oil prices declined on the back of geopolitical risks and trade tensions. As such, SEPLAT recorded a 12.6% y/y decline in revenue, which was also worsened by a 6.2% drop in average working interest production (47,163boepd). However, profit for the period was up by 102.5% y/y, as tax credit masked the tepid performance.

9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices

Analyzing the downstream sector, growth in revenue was mixed, as MOBIL (+13.2% y/y) and FORTE (+30.3% y/y) recorded growth across major product lines, while TOTAL’s revenue fell by 2.2% y/y. However, with capped PMS prices, growth in the cost of sales outweighed revenue, causing gross profit to decline across the board (MOBIL: -10.2%y/y, FORTE: -3.8%y/y and TOTAL: -19.0%). For MOBIL, despite lower operating expenses, PAT dropped by 19.4%, as income from its property business fell. TOTAL recorded the worst position y/y, declaring a loss of N204.8mn, due to expensive borrowing and higher administrative expenses. However, FORTE recorded a massive 1408.2% increase in PAT, due to gains on disposal of a subsidiary and interest from the subsidy.

Read Also:  Conoil Plc posts N1.6 billion profit, N75.8 billion turnover in Q3

Looking into Q4-19, the weaker outlook for oil prices, due to prolonged uncertainty in global trade and weakening growth, will have negative implications on upstream production revenues. Also, with deregulation unlikely this year and the recent border closure cutting off revenues from neighbouring countries, the downstream players will remain in a high cost/ capped price environment.

- Advertisement -

UNITED CAPITAL PLC

- Advertisement -
9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Read Also:  Honeywell Flour Posts Marginal Profit Growth on High Financing Cost

This site uses Akismet to reduce spam. Learn how your comment data is processed.

9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices

Latest News

Nigeria H2’20 Outlook – The viral shock

The year 2020 has been a struggle. A global pandemic is in full swing and is poised to upend...

BUA Group to set up 3 million Metric-ton Cement Company, 50MW Power Plant in Adamawa

The Bua Group announced that it is set to establish a three million metric tonnes cement plant and 50 megawatts power plant in Guyuk...

Economic Slowdown – Quick Response But No Quick Fix (LBS Executive Breakfast Session – July 2020)

Nigerian manufacturers are mostly anxious about two things today: How long will the pandemic lockdown continue before demand for my products recover? (X) - Unknown When will...

Equities Market: Lagos Bourse Plunges by 1.98% amid Sell-Offs

In the just concluded week, the domestic equities market closed in red amid renewed selloffs as investors took profit on stocks such as GLAXOSMITH,...

Naira Gains Against USD at I&E FXW Despite Dwindling External Reserves

In the just concluded week, Naira appreciated against the USD at the Investors and Exporters FX Window (I&E FXW) by 0.09% to close at...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices9M-19 Earnings for Oil & Gas Companies: Elevated costs, Volatile prices