uploads/2015/11/YTD-Fall-In-Prices-Of-Energy-Stock-2015-11-131.jpg

Did Russian Energy Companies Outperform in 2Q15?

By

Updated

Falls in sales

The sales of ExxonMobil (XOM) and Chevron (CVX) contracted by 19% and 34%, respectively, between 2Q14 and 2Q15. Gazprom Pao (OGZPY), Gazprom Neft (GZPFY), and Lukoil (LUKOY) posted sales falls of 20%, 10%, and 25%, respectively, in the same period.

Gazprom Neft is a subsidiary of Gazprom Pao but operates with a different production mix. Gazprom Pao, Gazprom Neft, and Lukoil represent the large-cap (large capitalization) Russian ADRs (American depositary receipts) in the oil and gas sector.

ExxonMobil and Chevron represent the large-cap US energy companies.

The average falls in sales of the US-based energy companies were higher than those of their Russian peers. The 3Q15 financial results for the Russian companies are set to be announced around the middle of November.

Article continues below advertisement

YTD performance

ExxonMobil and Chevron fell 14% and 19%, respectively, in 2Q15, whereas Gazprom Pao, Gazprom Neft, and Lukoil fell by 11%, 6%, and 5%, respectively, on a YTD (year-to-date) basis. The US-based energy benchmark, the SPDR Energy Select Sector ETF (XLE), fell about 16% on a YTD basis.

EPS (earnings per share) rose about 26% and 53%, respectively, for Gazprom Pao and Gazprom Neft in 2Q15 over 2Q14 compared to falls of 48% and 67%, respectively, for ExxonMobil and Chevron.

Lukoil’s earnings fell 56% in 2Q15 compared to 2Q14. The chart above shows the YTD performances of these companies.

Production mix

  • ExxonMobil operates with a production mix of 46% in both natural gas and crude oil.
  • Chevron has a production mix of 33% in natural gas and 66% in crude oil.
  • Gazprom Pao has a production mix of 85% in natural gas and 10% in crude oil.
  • Gazprom Neft has a production mix of 22% in natural gas and 79% in crude oil.
  • Lukoil has a production mix of 13% in natural gas and 85% in crude oil.
Advertisement

More From Market Realist