Impairments and write-downs in the U.S. oil and gas industry were brought right back into focus by ExxonMobil’s (XOM) admission in October 2016 that it might have to write-down the value of some of its E&P assets around the world.

ExxonMobil, in what would be a significant change in accounting policy, may soon officially concede that 3.6 billion barrels of oil-sand reserves in Canada and one billion barrels of other North American reserves are currently not profitable to produce, according to the NY Times.

This would probably be the largest E&P impairment across the entire U.S. industry in 2016, but ExxonMobil would by no means be alone in declaring asset write-downs.

Over the year so far, looking at the most recent year-to-date nine monthly results for U.S.-listed companies in Evaluate Energy, Devon Energy Corp. (NYSE:DVN) has recorded the largest single upstream impairment charge in its income statement at $4.9 billion.

Source: Evaluate Energy (see note 1)

As for the three month Q3 period alone, the largest upstream impairment was Chesapeake Energy Corp.’s (NYSE:CHK) $1.2 billion charge on oil and gas properties and other fixed assets, which represented around 38% of its total 2016 impairment charges of $3.1 billion. 

Source: Evaluate Energy

While it did not have the largest actual figure relating to impairments, the largest impact of 9M 2016 impairments was felt by Halcon Resources Corp. (NYSE:HK). The company’s $1.2 billion impairment charge over the 9 month period – either side of bankruptcy proceedings – made up the biggest proportion (47%) of pre-impairment total assets at period end across the entire U.S. E&P space.

Source: Evaluate Energy (see note 2)

Evaluate Energy covers the entire U.S. oil and gas space, with historical financial and operating performance coverage for every single U.S. listed oil and gas company with E&P or refinery interests. To find out more, please download our brochure.

Notes:

1) Chevron’s impairment figure may include costs related to tax adjustments & environmental remediation provisions and severance accruals, as no breakdown of “Impairments and other charges – E&P” is reported.

2) The percentage fall in total assets for 9M 2016 is calculated by comparing 9M 2016 impairments with the total assets figure for 9M 2016 (pre-impairment charge). This gives an estimate of how big an impact the 9M 2016 impairments had on a company’s total assets at the end of the period, i.e. if it wasn’t for the impairments, Halcon’s total assets figure would have been around 47% higher.