Q2 wasn’t all bad for Houston-area energy companies

Houston-area companies with ties to the energy sector released a mixed bag of second-quarter results Thursday despite the ongoing coronavirus pandemic that has made it the worst-performing sector of the U.S. stock market, according to analysts.

• NRG Energy, one of the state’s biggest generators and retailers of power, reported higher profits in the second quarter, reflecting its acquisition of Stream Energy last year, lower fuel prices and reduced operating costs.

The Houston- and Princeton, N.J.-based company, whose brands include Reliant Energy, Green Mountain Energy and Cirro Energy, said it made $313 million during the second quarter, compared with $202 million during the same period last year.

Revenue declined to $2.2 billion in the second quarter compared with $2.5 billion a year earlier.

• Westlake Chemical Corp., a Houston-headquartered chemical manufacturer, said Thursday that it eked out a profit of $15 million in the second quarter amid a dramatic drop in oil prices and significantly lower demand for the company’s products.

The company’s profits plummeted 87 percent from the second quarter of 2019, when it earned $119

million. Westlake Chemical’s net sales fell 20 percent to $1.7 billion in the second quarter from $2.1 billion in the same quarter of 2019.

The company said that profits fell primarily because of the economic impact of COVID-19, which drove a significant decline in oil prices, which in turn reduced the competitiveness of natural gas feedstocks used in making ethylene, a chemical building block of plastics.

• Targa Resources ,a Houston-based natural gas pipeline operator, halted seven quarters of losses to make $48.9 million in the second quarter compared with a $41.2 million loss one year earlier.

The company’s secondquarter revenue declined by 25 percent to $1.5 billion from $2 billion during the same quarter of 2019.

Targa took most of its pain during the first quarter, when the company wrote down the value of $2.2 billion worth of assets, cut its budget by more than $1 billion and slashed its dividend to save another $755 million.

• Cheniere Energy, the Houston-based liquefied natural gas company, made $197 million during the quarter compared with a $114 million loss during the same quarter a year earlier. The profit came even as dozens of LNG cargoes were canceled during the ongoing pandemic.

Second-quarter revenue increased 5 percent to $2.4 billion from $2.3 billion during the same quarter a year earlier.

Cheniere said exports declined 25 percent to 78 shipments from 104 one year earlier.

Cheniere still earns fees on canceled cargoes, collecting $708 million worth of fees in the second quarter, according to an SEC filing.

• Parsley Energy, the Austin-based shale driller, said it lost $356 million during the quarter, compared with a profit of $116 million during the same period a year earlier. Second-quarter revenue fell by more than half to $220 million from $499 million in the same period in 2019.

“From a macro standpoint, the second quarter represented an unforgiving stress test for much of our industry,” CEO Matt Gallagher said in a statement. “The worst may be behind us — prices have found firmer footing as oil markets seek a cautious equilibrium. However, at Parsley Energy, we harbor no illusions of the difficulties facing our industry and we remain well-built for that endurance test.”

Parsley responded to the oil bust by suspending new drilling and completion operations, and it idled 15 rigs and five hydraulic-fracturing equipment sets in May and June. The company also paused 20 percent of its oil production.

• Talos Energy, a Houston-based oil and gas company, lost $140.6 million during the quarter, compared with a profit of $94.8 million during the same period a year earlier. Secondquarter revenue fell by more than two-thirds to $88.9 million from $286.8 million in the same period in 2019.

“Although the second quarter presented unprecedented challenges for our industry, we took several actions in the quarter that have made us a stronger company for the remainder of this year and beyond,” CEO Timothy Duncan said.

Talos has deferred oil and gas production by 14,400 barrels equivalent per day and permanently shut down production totaling about 600 barrels equivalent per day. It plans to cut administrative costs by about $20 million, or about 25 percent, and reduce operating expenses by $40 million, or about 12 percent.