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Why Did Apache See the Worst Decline in 4Q15 Revenue?

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Revenue growth comparison: HES, APA, DVN, and MRO

Hess (HES), Apache (APA), Devon Energy (DVN), and Marathon Oil (MRO) recorded lower 4Q15 revenues compared to the corresponding quarter in 2014.

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Devon’s revenue fell the least

Devon reported the lowest revenue decline among its peers. The company’s revenue fell by ~18% in 4Q15 versus 4Q14. DVN’s oil, gas, and NGL (natural gas liquids) sales segment’s revenues fell significantly. This means that DVN’s revenues took a hit mostly due to lower realized prices.

Hess’s revenue fell by 42%

Hess’ 4Q15 revenue fell 42% compared to 4Q14. Also, as we saw in Hess’s 4Q15 post-earnings analysis, barring 2Q15, Hess’s quarterly revenues declined consistently in 2015, again due to lower realized prices.

MRO and APA’s revenues fell the most

With a 52% decline between 4Q15 and 4Q14, Apache’s revenues saw the worst decline, closely followed by Marathon Oil, whose revenues fell by 50% in the same period. While DVN, HES, and MRO were hedged in 2015, APA wasn’t, which explains why its revenues fell the most.

Many upstream companies are hedged in 2016 to protect their cash flows. These companies include Chesapeake Energy (CHK), Newfield Exploration (NFX), and Cabot Oil and Gas (COG). These companies make up 6.4% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

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