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Oil producers' share values still at fraction of pre-pandemic levels

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Oil producers' share values still at fraction of pre-pandemic levels

This has been a difficult year for independent oil and gas producers on all fronts, and their stocks have not been immune to the damage. Companies that had already seen share prices slide in recent years have been battered over the course of 2020, with most seeing their stocks lose one-third of their value or more since Jan. 1.

The negative trend for independent producer stocks was exacerbated in early March when Saudi Arabia and Russia decided to increase production in an already oversupplied market. Share prices immediately went off a cliff, and while most have regained some of their losses, they remain well below pre-March levels.

One company that has seen virtually no rebound in its share price since the mid-March downturn is Occidental Petroleum Corp. The debt-strapped company reached a 2020 high of $45.85 per share Jan. 15 then fell to $9.68 per share March 23. While other independents have seen at least some recovery in their share prices, Occidental's has been minimal, with the stock trading at $12.25 per share at market close Sept. 4.

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Even independents considered to be on solid footing and well-positioned in plays such as the Permian Basin have taken a beating in 2020. Pioneer Natural Resources Co. entered 2020 with a share price of $150.24 but had fallen to just over $118 per share by March 3. With word of OPEC's decision not to extend production cuts and the first effects of the COVID-19 pandemic starting to take hold, Pioneer's stock fell to $65.39 per share six days later and bottomed out at $55.99 per share March 18. It has since clawed back much of its losses, trading at just over $99 per share Sept. 4 , a decline of more than 34% year-to-date.

Other Permian powers have faced similar scenarios. Concho Resources Inc. entered 2020 with a share price of $86.07 per share then endured a rapid decline that bottomed out at $35.74 per share March 18. The company's share price stood at $50.65 at close Sept. 4, a decrease of 41% since the start of the year. Diamondback Energy Inc.'s stock closed Jan. 2 trading at $90.47 per share on the NASDAQ, collapsed to $15.29 per share March 18 and has since recovered to more than $35 per share. That constitutes a decline of more than 60% since the start of the year.

EOG Resources Inc., which has prided itself on a clean balance sheet and solid investor returns, has not been immune to the effects of a negative market. Its stock has lost almost half of its value since the start of the year, trading at $82.46 per share at the close of the New York Stock Exchange on Jan. 2 and closing at $43.14 per share Sept. 4.

Hess Corp. and Apache Corp. have had positive news to report during the year due to their positions in oil plays off the coasts of Guyana and Suriname but suffered the same result as other independent producers. Hess saw its share price drop from $66.86 on the year's first day of trading to $28.76 March 23; it closed at $47.15 on Sept. 4. Apache shares hit a 2020 high of $33.17 per share Jan. 14 only to tumble to $4 per share April 1. The stock closed at $14.60 per share Sept. 4, or 44% of its mid-January value.

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