IHS Energy 50: 2014 results

The 2014 IHS Energy 50 reveals that unconventional developments continued to drive value creation, especially in the North American upstream, midstream and downstream.

The IHS Energy 50 (formerly the PFC Energy 50) is the definitive ranking of the world's leading publicly traded energy companies by market capitalization. The listing includes companies from nine sectors: International Oil Companies; National Oil Companies; Exploration & Production; Midstream/Infrastructure; Refining & Marketing; Gas & Power Utilities; Oilfield & Drilling Services; Equipment, Engineering & Construction; and Alternative Energy.

The 2014 IHS Energy 50 report, published January 27, 2014, offers the opportunity to take stock of how companies performed in 2013. Unconventional developments continued to drive value creation - especially in US companies - with investors moving increasing amounts of capital into US E&P companies, but also into midstream players, refiners and the service sector - all of which saw ancillary benefits from the country's renewed growth.

Please note that the Energy 50 reports on the previous year's figures so these are the numbers reported at the end of 2013.

Tremendous Value Growth for North American Companies

Unconventional plays in the United States have provided benefits throughout the value chain. E&P companies performed especially well: ten of the 15 companies on the Top 15 Exploration and Production list are based in the United States and, as a group, these companies saw a 26% rise in market cap, as opposed to the five companies based elsewhere, which saw a combined 6% decline. This comes in stark contrast to 2012, when the US companies on the Top 15 Exploration and Production company list saw a 12% decline in combined market value, owing largely to weak gas prices.

Pioneer, Continental and EOG Resources reported 94%, 54% and 40% rises in respective market capitalization (see also share price changes below), primarily because of their exposure to some of the most productive, oily acreage in North American unconventional plays. While natural gas clearly remains less interesting to most companies, the fact that the market is on the upswing could have continued positive impacts for players with more gas in their portfolios.

Market capitalization has risen across the value chain in the US. The five US refiners on the Top 15 Refining & Marketing companies saw a combined rise in market value of 33% with Valero posting a 44% gain in respective value, to $27 billion. Refiner Phillips 66, spun off from ConocoPhillips in 2012, posted similarly impressive gains, growing in value by 39%, to $46 billion. The confidence in these companies speaks to well-placed refineries capturing the price differentials between their cost of crude and the price at which they are able to sell refined products.

Likewise, the combined value of the US companies on the Top 15 Midstream / Infrastructure companies grew by 37%, with top performers seeing added value from debottlenecking and arbitrage opportunities, but also production growth. At the top of the list was Enterprise, with saw an impressive 37% rise in value over 2012, closing the year at a market cap of $62 billion. Early movers have clearly been rewarded for their decisions, with the companies that waited faring less certainly.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.