As second quarter financial results come pouring in and giving insight into the true economic toll of the coronavirus pandemic, it appears that oil companies have been hit significantly hard – not only by the pandemic, but by falling oil prices, global oil market fallout, and a general shift in sentiment regarding crude oil policies.
Crescent Point Energy Corp (TSX: CPG) has released its second quarter financials, suffering a 73% decline in revenue, which amounts to a loss of $145,1 million. Total revenue came in at $259 million, which is significantly down from the $945.2 million reported just a year prior. The unprecedented losses translate to a decline of $0.27 per diluted share, compared to a profit of $0.36 reported in the previous year. Crescent Point’s average oil production came in at 120,842 barrels per day, which is down from 172,476 barrels per day in the year prior.
In the meantime, Husky Energy (TSX: HSE) also released its financial statements, reporting a net quarterly loss of $304 million, which amounts to a 55% revenue decline compared to the same time a year prior. Total revenue came in at $2.38 billion, which is a substantial decline compared to revenues of $5.24 billion in the second quarter of 2019. Husky also reported a loss of $0.31 per diluted share, compared to a profit of $0.36 the same time a year prior. The second quarter of 2020 also saw oil production fall by 7.8% from 268,000 barrels per day to 247,000 barrels per day.
The significant losses in revenues for many oil companies in Canada come at a time when opinions regarding the oil industry appear to be shifting in favour of more sustainable energy in a post-pandemic world. Deutsche Bank has recently stated it will no longer provide financing to oil sands projects or projects that encompass hydraulic fracking, and French energy company Total has written off $9.3 billion worth of oil sands assets as well as revoked its CAPP membership in a bid to better align itself with its carbon reduction targets.
Information for this briefing was found via Bloomberg and CBC News. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.