Oil Companies Reap Cash Windfall From Price Surge
The surge in oil prices over the past year is generating an immense cascade of cash that is flooding the coffers of oil companies, raising pressure on their bosses to pursue acquisitions, further boost spending on production or give more of the gains to shareholders.
So far, big Western oil companies have been reluctant to commit the bulk of that cash toward any of those ends, over concern that the rise in oil prices will prove temporary. They argue that big acquisitions could lose value if oil prices drop, and say it's not worth pouring even their extra resources into further development if returns don't justify the expense -- despite rising competition from oil-hungry nations like China and India.
Moreover, though the cash windfall is large -- Exxon Mobil Corp., the world's biggest oil company, ended 2004 with $23.1 billion in cash on hand, more than double its hoard from a year earlier -- plans at most oil companies assume prices will drop from today's highs.
But some shareholders say they should get a big share of that windfall -- perhaps with a special dividend like the one Microsoft Corp. paid investors last year, worth $32.6 billion. With the tax rate on dividends at 15%, and the possibility that could rise in the future, Frederick Leuffer , an oil analyst at Bear Stearns, says a special payment this year is preferable to incremental boosts over several years.
Investors also say they're concerned because cash sitting on a company's books typically earns far less than when it's invested in an oil or natural-gas project. Despite company assertions that they have plenty of oil left to pump, some investors argue the industry lacks investment options in parts of the world that have the most fossil fuel -- particularly the Middle East.
To be sure, most oil companies have been boosting regular dividends and buying back shares; Exxon, for instance, raised spending on dividends and buybacks to $14.9 billion in 2004 from $11.5 billion a year earlier. Additionally, at least two large companies, ChevronTexaco Corp. and Eni SpA, are said to be considering a deal for Unocal Corp., which could be valued at $17 billion.
In response to questions from investors, industry executives preach patience. At a meeting with analysts last week in New York, Exxon Chairman and Chief Executive Lee Raymond said the company is carefully watching spending and doesn't plan a major acquisition soon. Exxon officials say a one-time special dividend wouldn't do much to boost the long-term value of the stock.
"Oil is a commodity," Mr. Raymond said. "It's hard to identify a single commodity that has maintained a very high price over a very long period of time."
Exxon's not alone in seeing its hoard of cash -- that is, the amount of money left over after paying all expenses, from capital projects to taxes -- grow as oil prices climb higher. At Royal Dutch/Shell Group, cash on hand rose to $8.5 billion in 2004, from $2 billion a year earlier. ChevronTexaco's cash jumped to $9.3 billion from $4.3 billion.
Together, the world's five biggest oil companies -- which include BP PLC and Total SA besides Exxon, Royal and ChevronTexaco -- generated $67.4 billion in free cash flow in 2004, according to Norwalk, Conn., energy-research firm John S. Herold. That figure refers to the amount of money left after capital spending, but before paying dividends and buying back shares. The 2004 figure, boosted by some asset sales, was up nearly 32% from the $51.1 billion generated in 2003.
Herold estimates the five companies will throw off just $55.5 billion in free cash flow in 2005 -- but that estimate is premised on an average oil price of $40 a barrel for the year. Right now, oil is priced much higher, driven steadily upward by surging demand, in the U.S. and in growing economies like China's, even as the industry pumps about as hard as it can.
Yesterday, crude oil for April delivery finished the day at $56.40, down six cents, after hitting a new intraday record in trading on the New York Mercantile Exchange of $57.60. That figure remains behind historical highs when adjusted for inflation.
Herold predicts Exxon will be the industry's biggest generator of free cash this year, racking up another $16.4 billion. Even allowing for a moderate increase this year in capital spending, share buybacks and the regular dividend, Exxon's cash pile is likely to rise to at least $35 billion by the end of the year, estimates Fadel Gheit, an oil analyst at Oppenheimer & Co. That would amount to a roughly 50% increase in Exxon's cash in 2005 alone.
Mr. Gheit calculates that every $1 increase in the average price per barrel of oil adds about $550 million to Exxon's after-tax annual profit. If its expenses don't change, that additional profit all piles up as cash -- a problem, Mr. Gheit says, that shows up in a company's "return on capital employed." That common industry measure is meant to capture how effectively the company's capital produces profit.
Though high oil prices boost the short-term profits of oil companies, they make it tougher for companies to produce enough new oil and natural gas to replenish what is pumped out of the ground. Under agreements that are becoming increasingly common in the oil industry, governments that own much of the remaining big fossil-fuel stashes give Western oil companies proportionately less fossil fuel as the price of those commodities rises.
Industry executives have reason to watch spending. When oil prices surged in the 1970s, companies sought new investments, as when the former Mobil Corp. bought Montgomery Ward and Occidental Petroleum Corp. acquired Iowa Beef Processors. Neither purchase succeeded, and each company ended up shedding its acquisition.
Even so, if executives are wrong, and prices keep rising and stay high, the companies may well be forced to rethink their current approach. If they don't, they could lose potential assets to smaller competitors, including state-controlled oil companies in the developing world, that are hungrier for growth.
The cash windfall goes well beyond the industry giants. Burlington Resources Inc., a Houston-based independent, reported last month that it had $2.18 billion in cash and cash equivalents at the end of 2004, nearly triple the amount it had a year earlier. Steven Shapiro, Burlington's chief financial officer, told analysts in January that his company was "interested" in acquisitions but wouldn't aggressively ramp up capital spending because that tends to hurt returns. He acknowledged that the company was nearing a point at which, if it didn't find an acquisition in 2005, adding more cash would become "inefficient," and promised to address the issue.
Exxon's Mr. Raymond, though downplaying the likelihood his company would make a major purchase soon, hasn't ruled one out down the road. Indeed, in signaling that Exxon probably will raise its rate of share buybacks, he recalled at last week's meeting that Exxon has used buybacks in previous periods of high oil prices to amass equity that the company later used to pounce when prices fell.
One such buyback started in the early 1980s, he recalled. Exxon ended up repurchasing one billion shares at a cost of $16 billion. In 1999, it used them to buy Mobil for about $80 billion.
"A pretty good investment for the shareholders," Mr. Raymond said.
手头宽裕的石油公司将如何花钱？
过去一年原油价格的飙升给石油公司带来了庞大的现金，但由此石油行业管理层在如何使用现金这个问题上也感到了压力，是进行收购、增加生产支出，还是更多地回报股东？
迄今为止，西方大石油公司都不太愿意将大部分现金用于上述用途，他们担心油价的上涨或许只是暂时的。如果油价下跌，大宗收购的价值就可能下降。而如果回报不足以弥补支出，也不值得将过剩的资源用于开发，即使中国、印度等石油需求大国争夺石油资源的竞争加剧。
油价飙升给石油公司带来大量现金收入，例如，2004年年末全球最大的石油公司埃克森美孚(Exxon Mobil Corp., XOM)有231亿美元的现金，较上年同期增长一倍多。但大多数石油公司在前景规划中都认定油价将从目前的高点下跌。
而一些股东主张，他们应从现金的增长中得到更大的回报，比如以微软(Microsoft Corp.)去年支付326亿美元特别股息那样的形式。鉴于股息税率为15%以及未来可能上调，贝尔斯登(Bear Stearns)的石油分析师勒弗(Frederick Leuffer)表示，今年进行一次性的特别派息要比未来几年逐步上调股息更具吸引力。
投资者还表示，他们的担心还因为现金的收益率通常要远远低于投资一个石油或天然气项目。虽然石油公司表示，他们有充足的石油可供开采，但一些投资者称，这个行业在世界上石油储量最丰富的地区（如中东）缺乏投资选择。
当然，大多数石油公司早已调高了常规股息，并回购了股票：如埃克森美孚，2004年在调高派息和回购股票方面支出了149亿美元，高于上年的115亿美元。此外据称，至少有两家大石油公司雪佛龙德士古(ChevronTexaco Corp., CVX)和Eni SpA正在考虑收购加州联合石油公司(UNOCAL Corp.)，估价可能为170亿美元。
在回应投资者的质疑时，业内管理人士要求给予耐心。埃克森美孚的董事长兼首席执行长雷蒙德(Lee Raymond)上周在纽约与分析师举行会议时表示，公司对支出持谨慎态度，但近期没有大宗收购计划。埃克森美孚的管理人士则表示，一次性的特别派息对于提升股票长期价值的作用不大。
“石油是大宗商品，”雷蒙德表示，“很难找出有哪种大宗商品的价格能在非常长的一个时期里保持很高的水平。”
像埃克森美孚这样现金余额大幅增长的公司并不在少数。2004年年末，皇家壳牌石油公司(Royal Dutch/Shell Group)的现金余额从上年年末的20亿美元增至85亿美元。雪佛龙德士古的现金余额则从43亿美元增至93亿美元。
根据康涅狄格州能源研究公司John S. Herold的数据，2004年全球五家最大的石油公司──除了埃克森美孚、皇家壳牌、雪佛龙德士古，还有英国石油公司(BP PLC)和法国道达尔公司(Total SA)──产生的自由现金流总额为674亿美元，较2003年的511亿美元增长近32%。这个数据指的是资本支出后的现金余额，未扣除派息和回购股票支出，去年的数据受到了一些资产出售的提振。
Herold估计五大公司2005年的自由现金流将仅为555亿美元，但这个数值是基于2005年油价平均水平为每桶40美元的假设。由于美国和中国等经济快速增长的国家对石油的需求飙升，目前的油价远远高于这个水平，虽然石油行业正在竭尽所能全力生产。
纽约商品交易所上周五，4月份原油期货收于每桶56.40美元，跌6美分，盘中高点见57.60美元。经过通货膨胀调整，这个数据依然低于历史高点。
Herold预计埃克森美孚今年的自由现金流将以164亿美元达到业内第一。Oppenheimer & Co.的石油分析师盖特(Fadel Gheit)表示，即使是扣除今年小幅增长的资本支出、股票回购和常规派息支出后，埃克森美孚的现金余额到年底仍可能至少增长至350亿美元。
根据盖特的计算，油价每上涨1美元，埃克森美孚每年的税后利润就能增加约5.50亿美元。如果支出和费用不变，增加的利润就会全部转化为现金，盖特称，这将给一家公司的资本回报率带来问题。作为通用的行业标准，资本回报率衡量的是一家公司的资本盈利效率。
虽然高油价提振了石油公司的短期利润，但这些公司维持或提高产量的难度越来越大。根据石油行业越来越普遍的协议，如果石油价格上涨，持有剩余大型石油储藏的一些国家政府给于西方公司的石油比例就会下降。
行业管理人士有理由要关注支出。20世纪70年代石油价格飙升时，石油行业曾普遍寻求新的投资，当时的美孚(Mobil Corp.)收购了Montgomery Ward，而西方石油公司(Occidental Petroleum Corp.)收购了Iowa Beef Processors。但两宗收购都没有成功，最后收购方不得不出售了购得的资产。
即使管理层目前的判断失误，如果油价继续上涨，保持高企，石油公司很可能不得不重新考虑其现行策略。否则，一些中小型竞争者──包括发展中世界的一些国营石油公司，他们对实现企业成长的愿望更为迫切──可能会夺得潜在资产。
油价飙升带来的利润增长，并不仅限于业内巨头。总部位于休斯顿的独立能源公司Burlington Resources Inc.上个月宣布，截至2004年年底拥有现金及现金等价物21.8亿美元，较上年年末增长近2倍。Burlington的首席财务长夏皮罗(Steven Shapiro)1月份告诉分析师，公司对收购有兴趣，但不会大幅增加资本支出，因为这可能会损害回报率。他承认公司目前接近这样一个状态，如果今年一宗收购也没有，增加的现金将变得“低效”。他承诺要解决这个问题。
埃克森美孚的雷蒙德虽然竭力降低近期进行大宗收购的可能性，但并没有排除未来这方面的可能性。事实上，他在上周的会议上似乎暗示埃克森美孚很可能加大股票回购力度。他回忆说，埃克森美孚在以前油价高企时期曾通过股票回购的方式扩大持股，之后在油价下跌时用回购的股本进行换股式收购。
其中一次回购就是在20世纪80年代初期，埃克森美孚以160亿美元回购了10亿股股票，之后于1999年以800亿美元收购Mobil时动用了这些股票。
“对股东来说这是一个非常理想的投资途径，”雷蒙德表示。
