Written Off - Most Diversified E&Ps Fare Well in Second Quarter; ConocoPhillips Walloped by Write-Down

The 13 diversified exploration and production companies we’ve been tracking would have posted second-quarter 2017 pre-tax operating profits of more than $4.8 billion — $1.1 billion more than their profits in the first quarter — if ConocoPhillips, the largest of the 13, hadn’t taken a $6.3 billion write-down in the value of the company’s crude oil and natural gas assets and registered a nearly $2.8 billion second-quarter loss as a result. With an outlier radically skewing the group’s numbers, it’s best to put our baker’s dozen diversified E&Ps into two baskets — one for the 12 that didn’t take any significant impairments and the other for the lone E&P that took a huge one — and analyze each basket separately. Which is what we do in today’s blog.

This is Part 3 of our update of the 43 U.S. E&Ps we have been tracking based on second-quarter results.  A couple of weeks ago we drilled down into the diminution of financial results of our 43-company universe in Roller Coaster. Next, we zeroed in on the 21 companies that make up the Oil-Weighted Peer Group in Down Bound Train. Today, we analyze the second-quarter results of the 13 companies that make up the Diversified Peer Group.

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But first, a few words about Yao Ming. By the time Ming — the former star center for the Houston Rockets — was in third grade, he was 5 feet 7 inches tall, a foot and a half taller than the average eight-year-old boy. He grew to 7 feet 6 inches, which made him the tallest living man in Texas. [El Paso’s Jack Earle (1906-52), who Ringling Brothers circus marketed as “the tallest man in the world,” was at least a half-inch taller, and some say he topped 8 feet — see photo below.] 

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