1The Most Indebted US Oil Companies
By Shobhit Seth | February 23, 2015
The effects of declining oil prices over the last few quarters have started
to show. January 2015 saw companies such as WBH Energy filing for bankruptcy
. A few others that met the same fate earlier include KiOR Inc., Endeavour
International, and Marion Energy. Consolidation is visible among major
players. For instance, the second-largest oil field services company
Halliburton Company bought the third-largest Baker Hughes. Excited by the
prospects of shale gas fracking in the US, many US oil and gas companies
took on huge debt, on the assumption that high oil prices would continue,
which they did not. Increasing operational costs, oversupply with low demand
from major consumers like China, development of alternate technologies like
fracking, and the refusal of Organization of the Petroleum Exporting
Countries (OPEC) to cut production have all had a major impact on oil
companies’ balance sheets. (See related: Oil Price Analysis: The Impact Of
Supply & Demand.)
This article lists the top companies in US oil and gas sector that have the
most debt. (Related: World's Top 10 Oil Companies)
1. Chevron Corporation (CVX): This US-based integrated oil and gas
company has $25.71 billion in debt. Founded in 1879, it is listed on the New
York Stock Exchange with headquarters in San Ramon, California. The company
is involved in petroleum, energy, chemicals, mining, and power generation
operations globally through its subsidiaries.
2. Exxon Mobil Corporation (XOM): ExxonMobil was founded in 1870 and is
headquartered in Irving, Texas. It is one of the world’s largest oil and
gas companies when ranked by revenue. Its total debt is reported to be $21.
83 billion, as of December 31, 2014.
3. ConocoPhillips Co. (COP): Founded in 1917, Texas-based ConocoPhillips
operates globally, with its primary business involving the exploration,
development, and production of crude oil, natural gas, bitumen, liquefied
natural gas, and natural gas solids. It had $21.2 billion of debt, as of
4. Anadarko Petroleum Corporation (APC): Established in 1959 in The
Woodlands, Texas, Anadarko Petroleum in involved in the exploration,
development, production, and marketing of oil and gas properties. Its total
debt as of December 2014 was $15.09 billion.
5. Devon Energy Corporation (DVN): Involved in the exploration,
development, and production of crude oil, natural gas, and natural gas
liquids, Devon Energy has a presence in the US and Canada. It was founded in
1971 in Oklahoma City, and as of September 2014, its reported total debt
was $12.1 billion.
6. Apache Corporation (APA): Apache was founded in 1954 and is based in
Houston. It is in the business of exploration, development, and production
of crude oil, natural gas, and natural gas liquids. As of December 2014, it
had a total debt of $11.24 billion.
7. Occidental Petroleum Corporation (OXY): The company is engaged in the
acquisition, exploration, and development of oil and gas fields around the
world, as well as chemicals, midstream, and marketing. Its total debt as of
December 2014 was $8.44 billion. Based in Houston, Texas, Occidental was
established in 1920.
8. Valero Energy Corporation (VLO): Founded in 1955 and presently based
in San Antonio, Valero has a global presence with operations in the US,
Canada, Caribbean, UK, and Ireland. It operates through two segments:
refining and ethanol. As of December 2014, it had a total debt of $6.38
9. Phillips 66 (PSX): An energy manufacturer and energy logistics
company, Phillips 66 operates through four segments: midstream, chemicals,
refining, and marketing and specialties. It was founded in 1875 and its
headquarters are in Houston. As of December 2014, its total debt was $6.21
10. EOG Resources Inc. (EOG): EOG Resources is in the business of
exploring, developing, producing, and marketing crude oil and natural gas.
It has a global presence with operations in the US, Canada, UK, Africa,
China, and Argentina. As of December 2014, EOG had a total debt of $5.9
billion. It was established in 1985 and its headquarters are in Houston.
The Bottom Line
Efficient use of debt can be healthy, as it allows a business to accumulate
capital for startup, operations, and growth. However, debt can quickly turn
deadly if the business faces falling prices, excess inventory from
oversupply, and a decline in demand (as is presently occurring in the oil
industry). Oil and gas businesses require a large amount of working capital.
A balanced mixed of debt and equity, a possibility of restructuring, and a
cautious approach can help circumvent some of the problems due to high debt
in global oil companies.