After a brief research on each GICS classification, the aim is to read all the Yahoo Finance overviews for the S&P 500 companies that belong to the class. Furthermore, I will read the overview and MD&A of 10-K and the latest earnings call transcript for some select companies. Goal 1) See which companies fall under each sector. Goal 2) Be able to understand the overview of each business. Goal 3) Come up with my understanding to a reasonable depth, in an efficient way. Goal 4) Find out key metrics for each industry.
Energy
Source: S&P Global
Energy Sector is divided into two industries – Oil, Gas & Consumable Fuels and Energy Equipment & Services. Consumable fuels refer to energy sources that have to be burned or consumed to produce energy. This is different from renewable energy like solar and wind where the source is not depleted. Oil, gas, coal, biomass, ethanol, propane, kerosene are examples of consumable fuels.
Oil, Gas & Consumable Fuels includes businesses in the exploration, production, refining, marketing (distribution and sales of refined petroleum products), storage, transportation of consumable fuels. Sub-industry for this industry is divided into 5 categories – Integrated Oil & Gas / Oil & Gas Exploration & Production / Oil & Gas Refining & Marketing / Oil & Gas Storage & Transportation / Coal & Consumable Fuels. The classification of sub-industries highlight the vertical supply chain of the energy sector. Consumable Fuels seem to be broken into Oil & Gas and Coal & others. This is understandable since oil & gas has a bigger share in energy usage particularly in developed economies. Petrochemical products are also an important piece of oil & energy besides energy.
Source: Finviz
Integrated Oil & Gas includes Exxon Mobil, Chevron. ExxonMobile was formerly Standard Oil, famous for its founder John D. Rockefeller. Chevron was Standard Oil of California. Oil & Gas Exploration & Production includes ConocoPhillips, EOG Resources, Diamondback Energy, Occidental Petroleum, EQT Corporation. Oil & Gas Refining & Marketing includes Phillips66, Marathon Petroleum, Valero Energy. Oil & Gas Storage & Transportation includes Williams Companies, Kinder Morgan, ONEOK, Targa Resources. In the value chain, exploration and production is upstream, storage & transportation is midstream, and refining & marketing is downstream. Oil & Gas Equipment and Services include Schlumberger, Baker Hughes and Halliburton. These companies manufacture drilling rigs and other equipment used in the development of oil & gas wells. The diagram below is how Standard Oil was broken down. Many names are still present across the energy value chain.
Source: Wikipedia
All company overview below are imported from Yahoo Finance. Data including market cap, p/e ratio, revenue, ROA, profit margin are as of October 2024.
Integrated Oil & Gas
Exxon Mobil Corporation (XOM)
Market Cap $540b, Trailing p/e 14.6x, Forward p/e 13.8x
Revenue (ttm) $345, ROA 7.4%, profit margin 9.9%
Yahoo Finance Description
Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas in the United States and internationally. It operates through Upstream, Energy Products, Chemical Products, and Specialty Products segments. The Upstream segment explores for and produces crude oil and natural gas. The Energy Products segment offers fuels, aromatics, and catalysts, as well as licensing services. It sells its products under the Exxon, Esso, and Mobil brands. The Chemical Products segment manufactures and markets petrochemicals including olefins, polyolefins, and intermediates. The Specialty Products segment offers performance products, including lubricants, basestocks, waxes, synthetics, elastomers, and resins. The company also involves in the manufacturing, trade, transport, and sale of crude oil, natural gas, petroleum products, petrochemicals, and other specialty products; and pursuit lower-emission business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, and lithium. Exxon Mobil Corporation was founded in 1870 and is based in Spring, Texas.
Chevron Corporation (CVX)
Market Cap: $270b, Trailing p/e 15x, Forward p/e 14x
Revenue (ttm): $195b, ROA 6%, profit margin 9.6%
Yahoo Finance Description
Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. The Downstream segment refines crude oil into petroleum products; markets crude oil, refined products, and lubricants; manufactures and markets renewable fuels, commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives; and transports crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.
Oil & Gas Exploration & Production
ConocoPhillips (COP)
Market Cap: $129b, Trailing p/e 12.4x, Forward p/e 11.5x
Revenue (ttm): $58b, ROA 10.9%, Profit Margin 18.4%
Yahoo Finance Description
ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States, Canada, China, Libya, Malaysia, Norway, the United Kingdom, and internationally. The company’s portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; global LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.
EOG Resources (EOG)
Market Cap: $75b, Trailing p/e 10.1x, Forward p/e 11.3x
Revenue(ttm): $24b, ROA 13.6%, Profit Margin 31.1%
Yahoo Finance Description
EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.
Diamondback Energy, Inc (FANG)
Market Cap: $57b, Trailing p/e 10x, Forward p/e 11x
Revenue(ttm) $8.9b, ROA 9.6%, Profit Margin 39.3%
Yahoo Finance Description
Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. The company also owns and operates midstream infrastructure assets, in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.
Q: What is an independent?
An independent refers to an oil & gas company that primarily engages in the upstream segment of exploration and production. An independent does not engage in the downstream activity of refining and marketing. These companies aim to discover lucrative wells in a cost-effective manner, and their performance are closely tied to oil price.
Oxydental Petroleum Corporation (OXY)
Market Cap $50b, Trailing p/e 14x, Forward p/e 11.6x
Revenue (ttm) $27b, ROA 4.5%, Profit Margin 17%
Yahoo Finance Description
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company’s Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas. Its Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, ethylene dichloride, chlorinated isocyanurates, sodium silicates, and calcium chloride; and vinyls comprising vinyl chloride monomer, polyvinyl chloride, and ethylene. The Midstream and Marketing segment gathers, processes, transports, stores, purchases, and markets oil, condensate, NGLs, natural gas, carbon dioxide, and power. This segment also invests in entities. Occidental Petroleum Corporation was founded in 1920 and is headquartered in Houston, Texas.
Notes
Sounds like they do everything except refining. They must sell crude oil to other refineries.
Market Cap $43b, Trailing p/e 16x, Forward p/e 13.5x
Revenue (ttm) $12b, ROA 11.5%, Profit Margin 22%
Yahoo Finance Description
Hess Corporation, an exploration and production company, explores, develops, produces, purchases, transports, and sells crude oil, natural gas liquids (NGLs), and natural gas. The company operates in two segments, Exploration and Production, and Midstream. It conducts production operations primarily in the United States, Guyana, the Malaysia/Thailand Joint Development Area, and Malaysia; and exploration activities principally offshore Guyana, the U.S. Gulf of Mexico, and offshore Suriname and Canada. The company is also involved in gathering, compressing, and processing natural gas; fractionating NGLs; gathering, terminaling, loading, and transporting crude oil and NGL through rail car; and storing and terminaling propane, as well as providing water handling services primarily in the Bakken Shale plays in the Williston Basin area of North Dakota. The company was incorporated in 1920 and is headquartered in New York, New York.
Devon Energy Corporation (DVN)
Market Cap $28b, Trailing p/e 7.8x, Forward p/e 8.8x
Revenue (ttm) $15b, ROA 12%, Profit Margin 24%
Yahoo Finance Description
Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins. The company was founded in 1971 and is headquartered in Oklahoma City, Oklahoma.
Market Cap $21b, Trailing p/e 24x, Forward p/e 11x
Revenue (ttm) 4.4b, ROA 2.2%, Profit Margin 15.7%
Yahoo Finance Description
EQT Corporation operates as a natural gas production company in the United States. The company sells natural gas and natural gas liquids to marketers, utilities, and industrial customers through pipelines located in the Appalachian Basin. It also offers marketing services and contractual pipeline capacity management services. The company was formerly known as Equitable Resources Inc. and changed its name to EQT Corporation in February 2009. EQT Corporation was founded in 1878 and is headquartered in Pittsburgh, Pennsylvania.
Market Cap $18b, Trailing p/e 14x, Forward p/e 10x
Revenue (ttm) 5.6b, ROA 5.3%, Profit Margin 23.6%
Yahoo Finance Description
Coterra Energy Inc., an independent oil and gas company, engages in the development, exploration, and production of oil, natural gas, and natural gas liquids in the United States. The company’s properties include the Marcellus Shale with approximately 186,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania; Permian Basin properties with approximately 296,000 net acres located in west Texas and southeast New Mexico; and Anadarko Basin properties with approximately 182,000 net acres located in Oklahoma. It also operates natural gas and saltwater gathering and disposal systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies, and power generation facilities. Coterra Energy Inc. was incorporated in 1989 and is headquartered in Houston, Texas.
Marathon Oil Corporation (MRO)
Market Cap $16b, Trailing p/e 11x, Forward p/e 11.2x
Revenue (ttm) $6.6b, ROA 6.3%, Profit Margin 22.7%
Yahoo Finance Description
Marathon Oil Corporation, an independent exploration and production company, engages in exploration, production, and marketing of crude oil and condensate, natural gas liquids, and natural gas in the United States and internationally. The company also produces and markets products manufactured from natural gas, such as liquefied natural gas and methanol. In addition, it owns and operates Sugarloaf gathering system, a natural gas pipeline. The company was formerly known as USX Corporation and changed its name to Marathon Oil Corporation in December 2001. Marathon Oil Corporation was founded in 1887 and is headquartered in Houston, Texas.
APA Corporation (APA)
Market Cap $10b, Trailing p/e 3x, Forward p/e 6x
Revenue (ttm) $9b, ROA 12.7%, Profit Margin 33%
Yahoo Finance Description
APA Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has oil and gas operations in the United States, Egypt, and North Sea. The company also has exploration and appraisal activities in Suriname, as well as holds interests in projects located in Uruguay and internationally. APA Corporation was incorporated in 1954 and is headquartered in Houston, Texas.
Oil & Gas Refining & Marketing
Market Cap $56b, Trailing p/e 12x, Forward p/e 11x
Revenue(ttm) $152b, ROA 4.7%, Profit Margin 3.4%
Yahoo Finance Description
Phillips 66 operates as an energy manufacturing and logistics company in the United States, the United Kingdom, Germany, and internationally. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined petroleum products to market; provides terminaling and storage services for crude oil and refined petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment produces and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, aviation, and renewable. The M&S segment purchases for resale and markets refined petroleum products, including gasolines, distillates, and aviation fuels. This segment also manufactures and markets specialty products, such as base oils and lubricants. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.
Notes
Phillips 66 doesn’t engage in E&S. The company engages in transporting, storing, refining oil, and processing gas and subsequently marketing of the products.
Marathon Petroleum Corporation (MPC)
Market Cap $54b, Trailing p/e 8.5x, Forward p/e 14.4x
Revenue (ttm) $149b, ROA 7.5%, Profit Margin 4.8%
Yahoo Finance Description
Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. The company operates through Refining & Marketing, and Midstream segments. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States; and purchases refined products and ethanol for resale and distributes refined products, including renewable diesel, through transportation, storage, distribution, and marketing services. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures propane and petrochemicals. It sells refined products to wholesale marketing customers in the United States and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets, as well as through long-term fuel supply contracts to direct dealer locations primarily under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats, and barges; gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. Marathon Petroleum Corporation was founded in 1887 and is headquartered in Findlay, Ohio.
Valero Energy Corporation (VLO)
Market Cap $45b, Trailing p/e 7.9x, Forward p/e 12x
Revenue (ttm) $134b, ROA 8.1%, Profit Margin 4.4%
Yahoo Finance Description
Valero Energy Corporation manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, Mexico, Peru, and internationally. It operates through three segments: Refining, Renewable Diesel, and Ethanol. The company produces California Reformulated Gasoline Blendstock for Oxygenate Blending and Conventional Blendstock for Oxygenate Blending gasolines, CARB diesel, diesel, jet fuel, heating oil, and asphalt; feedstocks; aromatics; sulfur and residual fuel oil; intermediate oils; and sulfur, sweet, and sour crude oils. It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company owns and operates renewable diesel and ethanol plants, as well as produces renewable diesel and naphtha under the Diamond Green Diesel brand name. In addition, it offers ethanol and various co-products, including dry distiller grains, syrup, and inedible distillers corn oil to animal feed customers. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.
Oil & Gas Storage & Transportation
The Williams Companies, Inc (WMB)
Market Cap $60b, Trailing p/e 21x, Forward p/e 23x
Revenue (ttm) $10.3b, ROA 4.6%, Profit Margin 27.6%
Yahoo Finance Description
The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments. The Transmission & Gulf of Mexico segment comprises natural gas pipelines; Transco, Northwest pipeline, MountainWest, and related natural gas storage facilities; and natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing, and fractionation activities in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio. The West segment consists of gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana, the Mid-Continent region that includes the Anadarko and Permian basins, and the DJ Basin of Colorado; and operates natural gas liquid (NGL) fractionation and storage facilities in central Kansas near Conway. The Gas & NGL Marketing Services segment provides wholesale marketing, trading, storage, and transportation of natural gas for natural gas utilities, municipalities, power generators, and producers; asset management services; and transports and markets NGLs. The company owns and operates 33,000 miles of pipelines. The Williams Companies, Inc. was founded in 1908 and is headquartered in Tulsa, Oklahoma.
Kinder Morgan, Inc. (KMI)
Market Cap $54b, Trailing p/e 21x, Forward p/e 17x
Revenue (ttm) $15b, ROA 3.8%, Profit Margin 16%
Yahoo Finance Description
Kinder Morgan, Inc. operates as an energy infrastructure company primarily in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline, and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas gasification, liquefaction, and storage facilities. The Products Pipelines segment owns and operates refined petroleum products, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that stores and handles various commodities, including gasoline, diesel fuel, renewable fuel and feedstocks, chemicals, ethanol, metals, and petroleum coke; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; owns interests in/or operates oil fields and gasoline processing plants; and operates a crude oil pipeline system in West Texas, as well as owns and operates RNG and LNG facilities. It owns and operates approximately 82,000 miles of pipelines and 139 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1997 and is headquartered in Houston, Texas.
ONEOK, Inc. (OKE)
Market Cap $55b, Trailing p/e 21x, Forward p/e 16x
Revenue (ttm) $19b, ROA 7.8%, Profit Margin 13.4%
Yahoo Finance Description
ONEOK, Inc. engages in gathering, processing, fractionation, storage, transportation, and marketing of natural gas and natural gas liquids (NGL) in the United States. It operates through four segments: Natural Gas Gathering and Processing, Natural Gas Liquids, Natural Gas Pipelines, and Refined Products and Crude. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions; and provides midstream services to producers of NGLs. It also owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Kansas, Nebraska, Iowa, and Illinois; NGL distribution pipelines in Kansas, Nebraska, Iowa, Illinois, and Indiana; transports refined petroleum products, including unleaded gasoline and diesel; and owns and operates truck- and rail-loading, and -unloading facilities connected to NGL fractionation, storage, and pipeline assets. In addition, the company transports and stores natural gas through regulated interstate and intrastate natural gas transmission pipelines, and natural gas storage facilities. Further, it owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space and rail cars. Additionally, the company transports, stores, and distributes refined products, NGLs, and crude oil, as well as conducts commodity-related activities, including liquids blending and marketing activities. It serves integrated and independent exploration and production companies; other NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; utilities; industrial companies; natural gasoline distributors; propane distributors; municipalities; ethanol producers; petrochemical, refining, and marketing companies; and heating fuel users, refineries, and exporters. ONEOK, Inc. was founded in 1906 and is headquartered in Tulsa, Oklahoma.
Targa Resources Corp. (TRGP)
Market Cap $34b, Trailing p/e 32x, Forward p/e 21x
Revenue (ttm) $16b, ROA 7.4%, Profit Margin 6.7%
Yahoo Finance Description
Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America. It operates in two segments, Gathering and Processing, and Logistics and Transportation. The company is involved in gathering, compressing, treating, processing, transporting, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; and gathering, storing, terminaling, purchasing, and selling crude oil. It is also involved in the purchase and resale of NGL products; and sale of propane, as well as provision of related logistics services to multi-state retailers, independent retailers, and other end-users. In addition, the company offers NGL balancing services; and transportation services to refineries and petrochemical companies in the Gulf Coast area, as well as purchases, markets, and resells natural gas. As of December 31, 2023, it leased and managed approximately 605 railcars; 137 tractors; and 6 vacuum trucks and 2 pressurized NGL barges. Targa Resources Corp. was incorporated in 2005 and is headquartered in Houston, Texas.
Oil & Gas Equipment & Services
Schlumberger Limited (SLB)
Market Cap $62b, Trailing p/e 14.4x, Forward p/e 10.9x
Revenue (ttm) $35b, ROA 8%, Profit Margin 12.6%
Yahoo Finance Description
Schlumberger Limited engages in the provision of technology for the energy industry worldwide. The company operates through four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems. The company provides field development and hydrocarbon production, carbon management, and integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure, and flow-rate measurement services; and pressure pumping, well stimulation, and coiled tubing equipment solutions. In addition, the company offers mud logging, directional drilling, measurement-while-drilling, and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures, and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement, and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services. Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology, and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators, and surface trees; and OneSubsea, an integrated solutions, products, systems, and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors, and services. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.
Baker Hughes Company (BKR)
Market Cap $37b, Trailing p/e 19x, Forward p/e 14x
Revenue (ttm) $27b, ROA 5.2%, Profit Margin 7.4%
Yahoo Finance Description
Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. The company operates through Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. The OFSE segment designs and manufactures products and provides related services, including exploration, appraisal, development, production, rejuvenation, and decommissioning for onshore and offshore oilfield operations. This segment also provides drilling services, drill bits, and drilling and completions fluids; completions, intervention, measurements, pressure pumping, and wireline services; artificial lift systems, and oilfield and industrial chemicals; subsea projects and services, flexible pipe systems, and surface pressure control systems; and integrated well services and solutions. It serves oil and natural gas companies; the United States and international independent oil and natural gas companies; national or state-owned oil companies; engineering, procurement, and construction contractors; geothermal companies; and other oilfield service companies. The IET segment provides gas technology equipment, including drivers, driven equipment, flow control, and turnkey solutions for the mechanical-drive, compression, and power-generation applications; and energy sectors, such as oil and gas, LNG operations, petrochemical, and carbon solutions. This segment also provides rack-based vibration monitoring equipment and sensors; integrated asset performance management products; inspection services; pumps, valves, and gears; precision sensors and instrumentation, and condition monitoring solutions. It serves upstream, midstream, downstream, onshore, offshore, and small and large scale customers. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes Company was incorporated in 2016 and is based in Houston, Texas.
Halliburton Company (HAL)
Market Cap $26b, Trailing p/e 10x, Forward pe 8.3x
Revenue (ttm) $23b, ROA 10.4%, Profit Margin 11.6%
Yahoo Finance Description
Halliburton Company provides products and services to the energy industry worldwide. It operates through two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services that include stimulation and sand control services; cementing services, such as well bonding and casing, and casing equipment; and completion tools that offer downhole solutions and services, including well completion products and services, intelligent well completions, and service tools, as well as liner hanger, sand control, and multilateral systems. This segment also provides electrical submersible pumps, as well as artificial lift services; production solutions comprising coiled tubing, hydraulic workover units, downhole tools, and pumping and nitrogen services; pipeline and process services, such as pre-commissioning, commissioning, maintenance, and decommissioning; and specialty chemicals and services. The Drilling and Evaluation segment offers drilling fluid systems, performance additives, completion fluids, solids control, specialized testing equipment, and waste management services; drilling systems and services; wireline and perforating services consists of open-hole logging, and cased-hole and slickline; and drill bits and services comprising roller cone rock bits, fixed cutter bits, hole enlargement, and related downhole tools and services, as well as coring equipment and services. This segment also provides cloud based digital services and artificial intelligence solutions on an open architecture for subsurface insights, integrated well construction, and reservoir and production management; testing and subsea services, such as acquisition and analysis of reservoir information and optimization solutions; and project management and integrated asset management services. Halliburton Company was founded in 1919 and is based in Houston, Texas.
More on Energy ...
Oil & Gas Formation
This video is a great starting point. Although conventional oil reservoirs seem to be like a large pool of liquid situated in the middle of the earth’s crust, it’s actually a porous rock that acts as a sponge, where oil is held.
Conventional Reservoir & Vertical Well
This illustrates the process of oil extraction for a conventional reservoir. A well is vertically drilled. The hold is encased by casing pipe and cement. A perforating gun creates openings through which oil would seep through from the porous rocks due to the natural pressures that have been built up. Since it relies on natural pressure for the oil to enter the pipe, yields are high at then beginning and decrease over time. This is known as the primary recovery. A secondary recovery is possible if additional pressure is applied to the reservoir. This is achieved through injecting materials like water and gas through a secondary hole drilled to the same reservoir. A few more helpful videos – 1, 2, 3.
Hydraulic Fracturing & Horizontal Drilling
Slick water fracturing involves drilling down around 3km to where the shale rock formation containing shale oil & gas are located followed by making a horizontal turn at its kickoff point. After extending for an additional 1.5km, a perforating gun will produce around 30cm long holes in the shale layer. A pressurized water mixture will be pumped through the hole causing the layer to fracture. Through these cracks oil & gas will escape, making its way back up getting mixed with the fracturing fluid. Fracking comes with potential dangers like underground water contamination, methane leakage, increased seismic activity.
Source: EIA
Oil & Gas Formations in the US
These formations are where major oil & gas production occurs in the United States. Bakken of North Dakota, Niobrara of Colorado and Wyoming, Eagle Ford of Texas, Marcellus and Utica of Pennsylvania and West Virginia are known for their unconventional plays. While other areas like the Permian and Anadarko host both conventional reservoirs and unconventional shale formations.
Oil Pipeline
Oil crosses the US from North to South, delivering crude oil from oil wells in Canada to processing facilities in Texas. From storage tanks in oil sites, oil is sent to a regional tank farm via feeder pipes or trucks. From there oil is sent to a junction point located at a trunk line. A pump is located every 80km or so for the consistent continued flow. The processed gasoline from the refineries are then sent to wholesalers or retailers via pipeline. From the wholesale terminal a fleet of vehicles will carry gasoline to gas stations.
Fractional Distillation
Crude oil is distilled into different fractions depending on the segment’s property. The heated crude oil is split into different levels according to its boiling point. Refinery gas, gasoline, naptha, kerosene, diesel, fuel oil, lubricating oil, bitumen are collected and further refined.
Offshore Oil Rigs
Oil is also retrieved from underneath the seabed. Oil rig is a platform that is either floating, or fixed on the seabed for the oil extraction. The drilling process is the same as on land. Oil is delivered via subsea pipelines or crude tankers.
Written from scratch by Meston Ecoa
May contain incorrect data and information.
Company overview and data from Yahoo Finance.