Debt Levels Spike Among E&P Companies In Q2: EIA Analysis

Debt levels spiked among E&P companies during Q2 according to the latest analysis by the U.S. Energy Information Administration (EIA), illustrating the immediate impact of reduced oil demand and prices on the sector. 

The EIA Financial Review for Q2 2020 is based on data extracted via EIA’s Evaluate Energy subscription. It can be downloaded in full at this link.

From its Q2 analysis of 102 E&P companies globally, the EIA also found that:

  • Cash from operations fell 54 per cent year-over-year;
  • 25 per cent of 102 producers recorded positive free cash flow;
  • Only 14 per cent of companies reported positive upstream earnings;
  • Cash balances increased $34 billion year over year for the 10 largest capitalized companies but decreased $6 billion for others.

Companies took on a combined $72 billion in new long- and short-term debt in the second quarter, said the EIA, with average debt to equity ratios climbing to almost 60 per cent.

“These figures are by far the highest recorded since at least the start of 2015, showing just how much and how quickly recent pressures have forced upstream producers to alter strategy around capital structure,” said Chris Wilson, managing director of Evaluate Energy, based in London, U.K.

The report also looks at production, capital expenditures, return on equity and more. Download the full document at this link.

For more information on the data behind the EIA’s analysis, click here to download a one-page overview of Evaluate Energy’s financial and operating database.