Net profits versus oil price variations – Boom or Bust

[Petroleum economist]

Oil and gas companies can be sensitive to oil price fluctuations. Gas companies and service companies are almost insensitive, but some oil companies are very sensitive. Sensitivity is dependent on fluid composition, royalties, unit costs, profit margins and taxes.

The top-20 companies which have the highest sensitivity in their 2025 net profit to a $ 10/bbl variation up/down from WTI = $ 80/bbl are listed below. The percentage shown indicates the percentage up or down versus the net profit at $ 80/bbl:

1. W&T offshore - 143% - offshore
2. Talos Energy - 97% - offshore
3. Gran Tierra - 93% - South America
4. Gear Energy - 73% - Canada
5. Baytex - 72% - Canada
6. Surge Energy - 58% - Canada
7. Geopark - 52% - South America
8. Canadian Natural - 50% - Canada
9. Tamarack Valley - 48% - Canada
10. Evolution - 43%
11. Cenovus - 43%
12. Inplay Oil - 42% - Canada
13. High Peak - 42%
14. Cardinal Energy - 39% - Canada
15. Occidental - 39%
16. Vermillion - 38% - Canada
17. Crescent Energy -35%
18. Veren=CPG - 38% = Canada
19. Petrus Resources - 36% - Canada
20. Murphy Oil -32%

To explain: WTI in 2025 will be loss making at $ 70/bbl (profit drops by more than 100%, but at $ 90/bbl the net profit will be a factor 2.43 higher (=1+143%) than at $ 80/bbl.

The list is dominated by: (1) companies operating offshore in the GoM (WTI, Talos), (2) companies operating in South America (Geopark, Gran Tierra) and (3) Canadian companies (all paying extensive royalties).