Oil Companies 2022 Tax Analysis

Key Findings

Tax Refund: Halliburton recorded a $17 million tax benefit on U.S. income taxes, despite reporting U.S. net income before tax of almost $1 billion, and overall adjusted earnings of almost $2 billion.

Zero Income Taxes: Three companies again paid zero in federal income tax after paying nothing in 2021 as well. All three of these companies showed positive earnings before taxes (EBT) in both  2021 and 2022 and all three grew in that metric in 2022.

  • Hess Corporation
  • Marathon Oil Corp
  • Murphy Oil

Near-Zero Income Taxes: Four companies paid effectively close to nothing in federal income taxes (less than 0.5% effective tax rate)

  • APA Corporation (0.04%)
  • Cheniere Energy (-0.38%
  • EQT Corporation (0.03%)
  • Ovintiv Inc (0.28%)

Tax Bills Defying Income Growth: 3 Companies saw their federal income tax payments go down, despite growth in earnings before tax (EBT)

  • APA Corporation (EBT grew $2 billion while taxes decreased by $15 million)
  • EQT Corporation (EBT grew by $3.9 billion while taxes decreased by $260,000)
  • Halliburton (EBT grew by $709 million while taxes decreased by $23 million)

Taxes Avoided: Every company except Murphy Oil reported adjusted net income of over $1 billion in 2022, which will make them subject to the IRA’s 15% minimum tax rate starting in 2023. 

  • In 2022, only 4 out of 21 companies paid more than a 15% effective tax rate.
  • None of the companies we tracked paid the full statutory 21% corporate income tax rate.
    • If every company had paid the full 21% corporate income tax rate, it would have generated an additional $21.2 billion in revenue.

Climate Power tracked the U.S. tax disclosures recorded in the footnotes to financial statements of 21 domestic, publicly-traded oil and gas companies. This information is reported to the Securities and Exchange Commission on Form 10-K. 

Federal income tax as used in this memo refers to the tax expense (or benefit) for current federal income taxes. This excludes entries for deferred income taxes, or taxes paid to state or local, or foreign governments, which may also be included as components of tax expenses on consolidated financial statements.