Oil and gas debt at lowest level in 4 years

A new review by the Department of Energy shows that debt levels in the energy industry are at their lowest levels since the third quarter of 2014.

A new review by the Department of Energy shows that debt levels in the energy industry are at their lowest levels since the third quarter of 2014.

The financial analysis of the global oil and gas industry for the second quarter of 2018, which ended June 30, found that companies had reduced their debt for seven consecutive quarters, leading to the lowest long-term debt-to-equity ratio since the third quarter of 2014, shortly before oil prices began to their slide from more than $100 a barrel to less than $30 in early 2016.

The debt was reduced by more than $20 billion in the second quarter, while the long-term debt-to-equity ratio was 41 percent, according to data from the Energy Department. The debtto-equity ratio shows the amount debt in relation to the stock market value of the company.

The improvement has followed the rise in oil prices. The U.S. benchmark crude, West Texas Intermediate, climbed nearly 2 percent in New York on Wednesday to settle at $71.12.

The Energy Department report reviewed 107 oil and gas companies, of which 76 were based in the United States, 13 in Canada, nine in Europe and nine in other regions. Among the companies were Apache Corp. of Houston, Devon Energy of Oklahoma City, Exxon Mobil of Irving and Royal Dutch Shell, the European oil major.

The report said Brent crude prices, the global benchmark, were 48 percent higher in second quarter of 2018 than a year ago, averaging $75 a barrel, and the highest since the fourth quarter of 2014.