Who are the top 25 independent FTSE oil and gas producers? has been saved
Who are the top 25 independent FTSE oil and gas producers?
UK upstream independents league table 2020
- Oil market overview
- Overview of League Table
- Who entered the league table in 2020?
- Who left the league table in 2020?
Oil market overview
Crude oil producers had an extraordinarily difficult year in 2020. Driven by government decisions to restrict travel and close businesses due to the COVID-19 pandemic, demand for oil fell rapidly in the spring of 2020. The oversupply in the global markets was exacerbated by a price dispute between OPEC and its allies. As a result, the Brent crude spot price that briefly rose above $70/barrel (b) at the start of the year stayed below $30/b between mid-March and mid-May 2020. The contract futures price for West Texas Intermediate turned negative for the first time in its history.
Oil prices started to recover as countries around the world gradually came out of lockdown and as news of an agreement on production cuts between prominent oil producing countries emerged. The Brent crude oil spot price stabilised in the second half of the year and reached $50/b towards the end of 2020. While many countries experienced further lockdowns, the optimism following the rollout of vaccination programmes has had a positive impact on oil prices.
Chart 1. Europe Brent crude spot price FOB ($/barrel)
Source: Energy Information Administration
Table 1: Upstream independents league table 2020
The total market capitalisation of the top 25 upstream independents declined 35 per cent to £6.3bn in 2020 from £9.8bn in 2019.
Overall, the market caps of eight companies improved, while those of 17 declined at the end of December 2020 compared with the same time in 2019.
Overview of League Table
Energean remained at the top of the league table for the second year. The Eastern Mediterranean-focused oil and gas exploration and production (E&P) company had a strong year operationally and commercially. Energean that has ambitions to lead energy transition in the Mediterranean region was the first FTSE-listed E&P company to commit to net zero emissions by 2050.
Cairn Energy has retained its number two ranking on the league table. Winning its long-standing arbitration case against the Indian government over a tax dispute at the end of the year had a positive impact on the UK-based oil and gas E&P company’s share price performance.
Who entered the league table in 2020?
Six companies entered the top 25 in 2020:
- JKX Oil & Gas returned to the league table at 16th position after a year of solid performance at its Ukrainian and Russian assets.
- Trinity Exploration & Production returned to the league table at 21st position after a year of production growth and positive cash flow generated by its assets in Trinidad and Tobago.
- I3 Energy entered the league table at 22nd position. The company’s market cap was bolstered by its acquisitions of the assets of Toscana Energy Income and Gain Energy in Canada during the year. I3 Energy also owns two fields in the UK North Sea.
- Serinus Energy, owner and operator of oil and gas assets in Romania and Tunisia, entered the league table at 23rd position. In addition to a strong operational performance during the year, the company fully replaced its debt with equity. That in turn is expected to allow the independent to increase investment in boosting production in its existing assets.
- SDX Energy, the UK-based, North Africa-focused independent, entered the league table at 24th position.
- President Energy returned to the league table at 25th position. The company has a diverse portfolio of assets in Argentina, Paraguay, the US and Australia. The rising production during the year led the increase in President Energy’s market cap.
Who left the league table in 2020?
Of the six companies that left, two were due to acquisition, three due to relative declines in companies’ market caps and one to delisting.
Exits due to acquisitions:
- Rockrose Energy was acquired by the UK-based Vairo Energy
- Amerisur was acquired by GeoPark Limited, the Latin-American independent oil and gas company.
Exits due to relative declines in market cap:
- Rockhopper Exploration
- IGas Energy
- UK Oil & Gas.
Exillon Energy delisted from the Main Market during the year.
The main focus for upstream independents in 2020 was to protect their workforces, maintain short- and medium-term financial liquidity, and improve project economics and asset portfolio management. The companies are now hoping for a more stable and buoyant market, where focus can shift to longer-term positioning of asset portfolios and adjusting business models – partly to meet shareholder expectations on managing climate and environment-related risks.
Many independents in the league table either are assessing or planning on assessing their performance according to the Task Force on Climate-related Financial Disclosures framework. Further, several companies are working on strategic plans to reduce greenhouse gas emissions. As a result, we may see more climate- and energy transition-linked disclosures and actions emerge in the coming year.
The Upstream independents league table 2021 is expected to include a new name, Harbour Energy, as a result of Premier’s reverse takeover by Chrysaor. The transaction is due to be completed by the end of the first quarter 2021 and will create the largest independent oil and gas company listed on the London Stock Exchange.
How we did it
We include all UK, Guernsey, Jersey and Isle of Man incorporated, crude oil producers trading on the London Stock Exchange as of 31 December 2020. We then compare market capitalisation from the same point of the previous year and rank the top 25 companies by value in sterling.
Exclusion: We have excluded Zoetic International whose activities are not primarily focused on oil and gas exploration and production despite the above categorisation. The exclusion was based on principal activities and a review of the business sections as described in the company’s latest Annual Report and Accounts.
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