Wednesday, August 27, 1997

Increased energy revenues fueling rise in exploration spending

By TERRI LANGFORD / Associated Press Writer

HOUSTON (AP) -- Increased worldwide revenues for oil and gas are allowing energy companies to reinvest more money into exploration and development, an Arthur Andersen survey revealed Tuesday.

The consulting firm analyzed Securities and Exchange Commission data filed by 228 publicly held oil and gas companies and found that in 1996, the industry spent $21.6 billion to bring fuel out of the ground compared with $17.4 billion in 1995, a 24 percent increase.

Generating this rise in spending is the price per barrel increases, according to the Arthur Andersen's 18th Annual Oil & Gas Reserve Disclosures survey.

Major energy companies leading in 1996 exploration expenditures in the United States were Royal Dutch/Shell, Texaco and Amoco.

Independent spending leaders were Union Pacific Resources, Burlington Resources and Enron Oil & Gas.

Domestic oil and gas production revenues rose sharply from $43 billion in 1995 to $56 billion in 1996, thanks to a price per barrel rise from $11.61 produced in 1995 to $13.87 in 1996.

Foreign production revenues saw similar increases with a 22 percent rise from $82.5 billion in 1995 to $100.3 billion last year.

The survey reviews the industry's costs and spending and should not be read as an indicator of consumer prices at the pump, said Victor Burk, managing director for energy industry services at Arthur Andersen. Consumer gasoline prices are ruled more by supply and demand of the product -- not costs of bringing the product to the consumer.

Andersen's survey includes 25 companies that are headquartered outside of the United States but file reports with the SEC, like Royal Dutch Shell, British Petroleum and Elf Aquitaine.

The 228 publicly held companies account for 68 percent of total U.S. oil and gas reserves and 62 percent of domestic oil and gas production.