Nearly all of the world's 25 largest oil and gas companies saw their market capitalization nose dive during the first quarter as the COVID-19 pandemic and a crude oil price war between OPEC and Russia ravaged the energy industry, according to data compiled by S&P Global Market Intelligence data.
Supermajors Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC each experienced at least a 40% drop in equity values even as they kept their top three spots during the quarter. Exxon took the biggest loss; its market cap plummeted from over $295 billion at the end of 2019 to just under $161 billion as of the March 31 trading close.
Since OPEC and Russia failed to agree to production cuts in March to fend off a collapse in commodity prices that was largely triggered by the coronavirus, oil and gas companies worldwide have responded by slashing spending, trimming dividends and, in some cases, reducing executive pay. As of March 26, the top 10 oil and gas companies had announced approximately $29.6 billion of spending cuts combined.
The bleak outlook for oil prices has also tipped off an anticipated wave of bankruptcies among shale drillers in North America. Schlumberger Ltd. recorded the steepest percentage loss as it shed over 66% of its value.
U.S. refiners and pipeline companies with oil exposure saw particularly wide market cap swings as well. Energy Transfer LP dropped three positions on the list. It was valued at $12.4 billion at the end of the quarter versus $34.4 billion on Dec. 31, 2019. MPLX LP came in just below that at $12.3 billion, representing a 54% decline during the first quarter.
Gas-focused pipeline heavyweights Kinder Morgan Inc. and Williams Cos. Inc., meanwhile, moved up several slots each even as they recorded 34% and 40% market cap slumps, respectively. Those companies are expected to weather the financial downturn better than their smaller midstream counterparts, which might rely on a single basin or producer customer for revenues, but the larger pipelines could still be forced to defer projects.
During the first quarter, energy stocks severely underperformed the broader market, with the S&P 500 Energy Index seeing a total return of -51% versus the S&P 500's total return of -20%. The prices of West Texas Intermediate and Brent crude oil during that same period plummeted over 66% and 65%, respectively.