Talos, EOG join oil firms in profit surges

Houston companies Talos Energy and EOG Resources on have became the latest in the oil and gas industry to report surging second-quarter profits, as rising demand and tight global supply pushed crude prices above $100 a barrel.

The ongoing war in Ukraine has supercharged oil markets, leading to blockbuster profits this year for oil and gas producers. Houston-based supermajor Exxon Mobil has already made $23.4 billion this year, more than its total 2021 profit of $23 billion. Overall, public oil and gas company profits are expected to exceed $800 billion this year.

Talos Energy

Talos Energy, the offshore oil and gas producer, on Thursday said it made $195.1 million in the three month period ended June 30th, compared with a $125.8 million loss during the same period last year. Revenues rose just more than 70 percent to $519 million from $303.8 million.

“It was a strong quarter for Talos as we achieved rapid debt reduction led by record-breaking revenue and cost control efforts despite macro inflationary pressures,” CEO Timothy Duncan said in a statement.

Talos had also lost $66.4 million in the first quarter, in part because of unplanned thirdparty pipeline shut-ins. The year-ago losses stemmed from Talos’ hedges, a practice oil companies use to lock in the price of oil to avoid losses when prices plunge. The company made a bad bet that prices would go down last year, and when they rose instead, it cost Talos $186.6 million.

During the call with investors, Duncan also said the proposed federal Inflation Reduction Act — which has yet to be voted on by lawmakers — could uniquely affect Talos. The legislation would raise the tax credit

for carbon capture and would reinstate lease sales from last November. Talos has budding carbon capture projects and was highly active in the lease sale in the Gulf of Mexico.

Talos shares rose $2.28, or 14 percent, to close at $18.34 on Friday.

EOG Resources

Oil production in the Permian Basin helped EOG Resources score a $2.2 billion proft in the second quarter, compared with $907 million during the same period in 2021. Revenues soared 80 percent to $7.4 billion from $4.1 billion.

“Our performance this year proves that we have emerged from the (2020 pandemic) downturn better than ever,” CEO Ezra Yacob said. “The company is positioned to deliver significant value to shareholders with our low cost structure and increased exposure to oil and natural gas prices with the recent reductions in our hedge position.”

EOG also said it increased production by nearly 100,000 barrels of oil equivalent per day, a measurement that includes natural gas. The company said it produced 920,700 barrels per day, compared with 828,000 in the same period last year.

The quarterly results led EOG’s board to approve a special dividend of $1.50 per share.

EOG shares rose $7.19, or 7 percent, to close at $107.01 on Friday.