Top E and P Oil Companies Expected to Report Decreased Q2 Revenues

Low prices of natural gas and cooler prospects for the global economy have stopped huge oil producers like Chevron Corp and Exxon Mobil Corp. The two companies are ready to report that their quarter two earnings declined.

As a summary of the upcoming updates of both companies’ revenues, Bill Herbert, an analyst from Simmons & Co, said that oil exploration and production companies are faced with a highly challenging environment.

The headwinds consist of weak employment and GDP data in North America and the world, as well as strong oil production from the North America and Saudi Arabia that aided in pushing the quarter two per barrel crude price to as low as $77.

Exxon Mobil, the biggest energy firm in the U.S. by market cap, will announce its results in the coming days. According to FactSet’s compiled estimates, the company’s Q2 revenues are anticipated to fall from last year’s Q2 earnings of $10.68 billion, or $2.18 per share, to $9.35 billion, or $1.95 per share.

Chief Executive Officer of Exxon Mobil Mr. Rex Tillerson gave indications of the company’s challenges as the top U.S. producer of natural gas after it acquired XTO Energy two years ago.

In quarter two, the prices of natural gas dropped to about $2 per million BTU. Its current price is $3.17 per million BTU.

Chevron Corp., another major oil company, will also announce its quarter two results very soon. FactSet’s compiled data shows that the company’s income is projected to fall from last year’s Q2 revenue of $7.73 billion, or $3.85 per share to $6.48 billion, or $3.22 per share.

ConocoPhillips is also projected to give a lower Q2 profit for this year of $1.65 billion ($1.20 per share) from last year’s Q2 revenues of $3.4 billion, or $1.84 per share. The specialist in oil exploration and production will soon weigh in with its first quarterly results since the May 1st  spin off of Phillips 66 PSX, its refining unit.

Paul Sankey, an analyst from Deutsche Bank, said that his rating for ConocoPhillips and Exxon Mobile is a hold while Chevron deserves a buy.

The analyst said that the large involvement of Exxon to natural gas has cost the huge oil exploration and production company its top spot in the per barrel profitability, now grabbed by Chevron.

As a summary of what he expects from Chevron, Sankey said that he anticipates the company to have the least drama in its quarterly results.