HES, APA, DVN, and MRO: Who Had the Lowest Capex in 4Q15?


Mar. 21 2016, Updated 9:05 p.m. ET

Capex changes in 4Q15

In this part, we will talk about the capex changes in our four upstream companies: Hess (HES), Apache (APA), Devon Energy (DVN), and Marathon Oil (MRO).

Apache recorded the highest capex decline in 4Q15 of ~72% compared to the same quarter in 2014. In 4Q15, APA had spent $674 million in capex compared to ~$2.4 billion in 4Q14. MRO also recorded a significant capex decline of ~67% in 4Q15 versus 4Q14. In 4Q15, MRO had spent $561 million in capex compared to ~$1.7 billion in 4Q14.

DVN recorded a capex decline of ~45% in 4Q15 compared to 4Q14. In 4Q15, DVN had spent $1 billion in capex compared to ~$1.9 billion in 4Q14.

The lowest capex decline was recorded by Hess, whose capex declined by 40% in 4Q15 versus 4Q14. It had spent $943 million in capex in 4Q15 compared to ~$1.6 billion in 4Q14.

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Capex guidance for 2016

APA’s 2016 capex budget is 60% less than the 2015 capex budget while Hess’s 2016 capex budget is 40% lower than its 2015 capex of $4 billion. DVN’s exploration and production (or E&P) capex in 2016 is estimated to be 75% lower than the 2015 E&P capex. MRO’s 2016 capital program is more than 50% lower than its 2015 capex.

The capex cuts come amid low oil prices and reduced drilling activities in a bid to protect cash flows. Other upstream companies that have been reducing their 2016 capex in response to lower energy prices include ConocoPhillips (COP) and Anadarko Petroleum (APC), which lowered their 2016 capex by 37% and 50%, respectively, versus 2015. Concho Resources’s (CXO) 2016 capex is expected to be 35% less than its 2015 capex. All these companies make up ~5.8% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).


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