The oil patch has been an important driver of the economy for other 150 years and many people have invested in oil companies and the successful ones have paid dividends for centuries. At one time John D Rockefeller and Standard Oil controlled the world market but it was broken up to become the 7 sisters – Standard Oil of New Jersey became Exxon; Standard Oil of New York which became Mobil; Standard Oil of California became Chevron; Texas Oil became Texaco; Gulf Oil which merged with Chevron; Anglo Persian Oil which became BP and Royal Dutch Shell or Shell Oil. For generations, BP was the biggest dividend payer in the UK; Shell was the biggest dividend payer in Netherlands; Exxon was the biggest dividend payer in the US. The above points out investors receive lots of money from the oil industry. But how much?

In an article from Reuters, Ernst and Young wrote that spending on dividends and stock buybacks of the top 50 independent oil and gas producers hit $58.8 billion, topping the $55.1 billion allocated to exploration and development.

Combined profits of the group which includes DiamondBack Energy, Pioneer Natural Resources, and ConocoPhillips to $333 billion, over 30% more than $217 billion in 2014.

Last year’s investor payout was up 214% over 2021 and more than sevenfold over 2020.

Bruce On, a principal in EY’s strategy and transaction group, expects the trend will continue and a new outlet for the cash is acquisitions.

Returns benefited from strong oil and gas prices and a cost-consciousness that emerged after energy prices collapsed 3 years ago. Profit per barrel was $32 compared to $10 in 2014 when energy prices were about the same level as today.

Linking to dividend paying stocks, in our economy one can expect oil and gas industry to continue to make profits and pay dividends. Which company is the best choice is up to each investor but a profitable industry which has a long history of paying dividends is worth owning.

There are more questions than answers, till the next time – to raising questions.