The second-quarter earnings for some of Texas’ largest energy companies were announced last week. Unfortunately the results of the reports were dismal and overall disappointing for the industry. Continually declining net incomes and a host of job cuts were among the areas that saw the most declines within these companies. Good news came in the form of some unlikely places including U.S. lawmakers and production data. Let’s take a closer look at some important topics of discussion that are developing in the energy industry this week.
The industry has Republican Senator Lisa Murkowski from Alaska to thank for a bill that was approved by the U.S. Senate Energy Committee. This bill, which was authored to lift the federal crude oil export ban, was approved in a 12-10 vote. The approval of the Offshore Production and Energizing National Security Act of 2015 means it will now face the full Senate for a vote. Though it is said that the bill will still have a rough road ahead of it.
Analysts’ expectations for Exxon Mobil Corp. (NYSE: XOM) earnings were not met during its second quarter. The Irving-based company posted quarterly earnings of $1 per share. This is a 52 percent difference from last year’s earnings per share. Revenue for the energy company has also fallen significantly from $111.65 billion last year to $74.11 billion currently in 2015.
Additional job cuts were revealed by two of Houston’s largest oilfield services providers Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI). They were announced during the quarterly earnings report last week with the U.S. Securities and Exchange Commission. Their competitor, Chevron Corp. (NYSE: CVX) also reported that they would be planning job cuts. Chevron’s Houston workforce, which is currently made up of around 8,000 employees, will see roughly 950 jobs eliminated according to a spokeswoman with the company. Unfortunately, there was still one other energy company that fell victim to job cuts. Netherlands-based Royal Dutch Shell PLC (NYSE: RDS.A) also said that it plans to cut around 6,500 jobs that will include direct contractors and staff of the company.
Now let’s take a look at what is happening in the Eagle Ford Shale and the Permian Basin. The production numbers revealed that drilling is up in the Permian Basin but down in the Eagle Ford Shale. The number of rigs currently operating in the Eagle Ford Shale actually has dropped from 100 to 98 over the course of just one week according to Baker Hughes. Drilling in the Permian Basin, however, has increased with the addition of three rigs. Even with the staggering drop in oil prices the Texas Petro Index indicators show that Texas crude oil production could soon reach record-breaking levels.
The last piece of news comes from a joint venture partnership for a new pipeline. Phillips 66 (NYSE: PSX), Dallas’ Energy Transfer (NYSE: ETP) and Sunoco Logistics Partners LP (NYSE: SXL) have teamed up to build a pipeline titled the Bayou Bridge. It will run from the Phillips 66 and Sunoco Logistics terminals in Nederland to Lake Charles, Louisiana. Sunoco Logistics will operate the new system.