In the US there are 12 publicly traded integrated US based oil and natural gas companies. Within these companies executives and directors hold 0.5% of their outstanding shares, by value. According to the report, the three largest companies total 59% of the segment’s market capitalisation, and their executives and directors own 0.3% of their companies, in comparison to insider ownership averaging 1.5% in much smaller companies. Individual investors who are not senior executive directors hold 42.7% of the shares by value of the three largest integrated companies. In comparison individuals hold 21.9% of shares in smaller integrated firms. Institutions hold 57% of outstanding shares by value of the three largest integrated oil and gas companies, and 76.6% of the smaller nine.
This year there are 129 US domestic non-integrated oil and natural gas companies. The report has found that in recent years, holdings by insiders across these companies has fallen from 5.9% in 2011 to 5.5% in 2014. The five biggest companies in this category account for 36% of the segment’s market total at US$ 772 billion. Ownership of these five by insiders averages 0.7% of the valve of shares. For the smaller 124, the report found that 8.2% of shares value is owned by insiders. Institutional ownership amongst non-integrated companies has increased slightly in recent years from 75.7% in 2011 to 76.4% in the first quarter of this year. Among the five biggest companies the institutional share averages 81.3% but is lower in the remaining at an average of 73.6% of shares. Compared to integrated companies, the institutional ownership of non-integrated is higher and stands at 59.6% on average.
Asset management firms account for most of the institutional ownership in this segment. These firms hold 70.5% of outstanding shares in the five major companies and 66% in the rest. Individual investors who are not company executives or directors own 17.9% of the five largest non-integrated companies and 18.5% of the remaining.
The service sector includes 60 publicly traded domestic US companies with a combined market capital of US$ 313.5 billion for the first quarter of this year. Executives and directors as a total of all 60 companies own 3% of the shares, a drop from 2011 levels of 4.1% according to the report’s findings. Five companies in this segment account for 44% of total market capitalisation for services. The ownership stake of executives and directors is much smaller among the five major companies than the remaining 55 at 0.6% of share value on average. In the smaller 55 it stands at 4.9% of share value.
Institutional investments account for 70.1% of shares in oil and gas services companies. 76.8% of shares are held by institutions within the 5 biggest service companies and only 64.8% in the smaller 55. When it comes to individual investors who are not executives or directors, 22.7% of share values were held by them in 2011, this has now increased to 26.9%. Individual investors currently own 22.6% of the five largest services companies and 30.3% of the smaller 55.
Comments on the findings
American Petroleum Institute Vice President of Regulatory and Economy Policy, Kyle Isakower said, ‘when oil and natural gas companies do well, so do millions of their owners all across America. The study concludes that a large proportion of the benefits of oil and gas companies stock ownership goes to middle class Americans.
‘As companies announce third quarter earnings, it’s important to remember how they’re in line with other manufacturers, how they’re large as a total dollar figure because these are large multinational companies that compete on a global stage with foreign nationally owned oil and natural gas companies, and how these earnings represent good news for millions of Americans. The US oil and natural gas industry is a major part of our nation’s economy. It supports 9.8 million jobs and pays more taxes than any other industry and at higher effective rates. As the Sonecon study shows, the industry also benefits millions of Americans who are its true owners.’
Edited from report by Claira Lloyd
Read the article online at: https://www.oilfieldtechnology.com/exploration/24102014/oil-gas-company-ownership-2/