Larger oil companies endured another brutal quarter as earnings came in lower year-to-year across the board. Once again, no one got a break. Upstream operations felt the impact of oil and gas prices that were below their average for second-quarter 2001. Downstream results suffered from continued poor margins in many markets. The result was a 45% year-to-year drop in total second-quarter earnings for 20 major oil companies and independents, according to Petroleum Finance Week newsletter. Total first-half 2002 earnings for the group fell even further (57.2%) from first-half 2001. Year-to-year revenue growth clearly was the result of large acquisitions as at least four companies' sales volumes increased. Earnings improvements clearly were more elusive as all 20 companies were earning less in 2002 than they did in first-half 2001. Independents emphasized their year-to-year production growth during the second quarter. Anadarko Petroleum Corp. produced 50 million barrels of oil equivalent (BOE) during the first half and is on schedule to increase production at least 5% in 2003. Devon Energy Corp. led its peer group in production growth (75%) during the second quarter, largely due to its acquisitions of Anderson Exploration Ltd. and Mitchell Energy & Development Corp. since second-quarter 2001. Occidental Petroleum's production grew 14% to 512,000 BOE per day. Not every producer emphasized its production growth, however. Apache Corp.'s production declined 5% from second-quarter 2001, primarily due to reduced capital spending and producing property sales during second-half 2001. "During the first half, Apache concentrated on strengthening our balance sheet, increasing financial flexibility and building our inventory of drilling prospects," says Steven Farris, president, CEO and chief operating officer. "Now, we are in a position to loosen the purse strings a little and start building momentum for 2003." Apache expects to record its 25th consecutive year of production growth in 2002, he says.