Exxon Mobil Corp. altered the North Texas business landscape when it moved its corporate headquarters from New York City to Irving in 1989, instantly establishing the oil giant as the regions largest company by revenue.

In the three decades since, its reign at the top has been largely unchallenged as Exxon went on to become the worlds most valuable company. It first gained that lofty title in 2005 and again as recently as 2013, before being pushed aside by the rise of big tech.

By the end of last year, though, it tumbled all the way to 18th in a global ranking, according to an analysis by PricewaterhouseCoopers.

This year, Exxon is at risk of losing the top spot in The Dallas Morning News annual ranking of the 150 largest public companies headquartered in North Texas.

Exxon and the rest of the oil and gas industry are staggering from a mighty one-two punch: a pandemic that zapped energy demand and an oil production standoff between Russia and Saudi Arabia that drove prices down to $20 a barrel earlier this year. Oil prices are now in the $40 range.

Oil averaged $57 a barrel last year, enough to keep Exxon atop The News ranking, despite shedding close to $24 billion in revenue.

Of the nearly two dozen oil and gas companies headquartered locally, just over half managed to pump out a profit last year as the U.S. shale boom lost its sheen. Three other energy companies in last years ranking went bankrupt and sold off assets before 2019 ended.

In all, 113 North Texas companies saw revenue rise last year, including 72 that eclipsed the $1 billion mark, according to data compiled by Bloomberg for The News. A handful even had banner years with triple-digit revenue growth. Plano-based Sharing Services Global Corp. led the way, raising its top line by 923.85% year-over-year.

This year, few companies are escaping the COVID-19 economic fallout. Most are cutting staff and capital spending, slicing employee and executive salaries, and delaying or canceling dividend payments to shareholders. Next years ranking will likely become a battle of survivors.

For Exxon, 2019 is already a distant memory overshadowed by a health crisis thats creating economic havoc across the globe. To control COVID-19, states like Texas enacted stay-at-home orders, bringing car, truck and plane travel to a screeching halt.

Early on, someone joked that because of the stay-at-home orders, they were getting three weeks to the gallon, said Bruce Newsome, a Haynes and Boone lawyer with more than 20 years experience in the energy field.

Demand is just beginning to bounce back. The four-week average gasoline supply is now less than 10% below levels from a year earlier, compared with 44% lower in April, according to Energy Information Administration data.

Texas oil and gas companies are accustomed to boom-and-bust cycles.

Coming into the pandemic, producers had to crank out 100 million barrels of oil a day globally to keep prices steady, said Kumar Venkataraman, a finance professor and academic director of the energy program at Southern Methodist University.

When prices dropped and people stopped traveling, global demand fell to around 82 million barrels of oil a day, leaving producers with an excess supply.

Many of the U.S. independent producers as well as major oil companies who respond to the economics of producing oil have cut down their supply, Venkataraman said.

At roughly the same time, an oil price war broke out between Russia and Saudi Arabia when Russia refused OPECs request to cut oil production. By March 23, oil prices had plummeted to $21 a barrel and even briefly turned negative on April 20.

By July, OPEC and U.S. producers had cut supply to about 90 million barrels a day, Venkataraman said.

Exxons revenue had already fallen 8.5% last year, from $279 billion in 2018 to $255 billion. In the first three months of this year, just before the pandemics deepest economic pain, the companys revenue came in at $56 billion or nearly $7.5 billion less than the same period a year earlier. It recorded its first quarterly loss in 32 years.

Based on its performance so far, Exxons 2020 revenue is projected to slide to $176 billion, an astonishing $80 billion drop, according to a June estimate by JPMorgan analysts. Exxon reports second-quarter results July 31, potentially giving a clearer picture of the pandemics toll.

So barring a significant second-half surge in oil prices, who stands to move up in The News ranking? Its one of the regions newest Fortune 500 companies.

McKesson Corp., an Irving-based pharmaceutical distribution company that relocated its headquarters from California in 2019, has been on an uptick due to the COVID-19 pandemic. It saw 12% revenue growth in the first three months of this year as a result of branded drug price increases and pandemic-driven orders from retail pharmacies.

Its $214 billion in revenue for the 2019 fiscal year grew to $231 billion for its 2020 fiscal year, which ended March 31. McKessons 2019 fiscal year results were included in The News ranking.

For Exxon to retain its No. 1 status, the oil and gas explorers 2020 revenue will have to top $231 billion.

It would not surprise me if the revenues of McKesson are higher than they are for Exxon, said Bud Weinstein, an economist and associate director of SMUs Maguire Energy Institute.

This is again a reflection of the problems facing the energy sector and the falling demand for energy and energy products, while at the same time, McKesson and other companies that are into medical products like pharmaceuticals, their stocks have held up pretty well.

AT&T, the regions perennial runner-up to Exxon before McKessons arrival, could also pass up the oil king. Bloomberg analysts estimate AT&Ts 2020 revenue will come in between $170 billion and $179 billion. Hitting the high end of the range could push Exxon down to third.

But AT&T is facing headwinds of its own. When it released first-quarter results in April, AT&T said its revenue was down $2 billion from the same period last year $42.8 billion vs. $44.8 billion. And in June, the company embarked on a $6 billion cost-cutting plan that includes closing 250 stores and cutting 1,300 jobs.

While the coronavirus increased use of AT&Ts broadband and wireless networks and its content platforms, it also hit the companys advertising revenue.

A third of AT&Ts business is through Turner Broadcasting System, which includes television channels such as CNN, TNT and Cartoon Network, said Bloomberg Intelligence analyst John Butler, who closely follows AT&T. Warner Bros. television and film production was also halted due to the pandemic.

Theres been a big advertising revenue recession, Butler said. Satellites have been under pressure from cord-cutting, and now with the loss of sports programming, [COVID-19] is not only hitting the advertising markets hard, but its also hitting paid TV.

Both small and large oil companies are feeling the pandemic pinch.

Law firm Haynes and Boone has monitored North American oil and gas producer bankruptcies since 2015. Over the past five years, 226 producers filed for bankruptcy, according to the firms data. Texas producers accounted for 106 of those.

The energy industry was already having to change going into the pandemic, and this is going to accelerate that change, Newsome said.

In the past month, Fort Worth-based Lilis Energy and Oklahoma City-based fracking pioneer Chesapeake Energy sought bankruptcy protection. Oil major Royal Dutch Shell PLC wrote down the value of its assets by up to $22 billion on June 30, citing lower energy prices and a lack of demand during the pandemic. BP PLC did the same in early June.

Oil and gas assets are valued on how much a company holds in reserves. Reserves are estimated on an anticipated price of a barrel of oil. Companies reduce the value of assets when oil prices fall below predictions, said Michael Cooper, a Haynes and Boone energy lawyer who has worked in the industry for more than 40 years.

Cooper said he expects Exxon to eventually do the same, as even the oil patchs biggest players prepare for an uncertain future.

Theres no way I see this being like it has been in the past, Cooper said. Itll be a slow recovery. Slower than anything weve seen in the past.

Exxon did not respond to The News interview request, but CEO Darren Woods addressed the pandemic during a call with investors in late May when the company cut its spending in the oil-rich Permian Basin.

On average, we estimate that global demand for oil in 2020 to be down roughly 10%, Woods told investors. We expect demand for natural gas to be down less than 5%.

With the industrys boom periods in mind, Weinstein said he wont be surprised if Exxon loses the top spot and then regains it in the future after COVID-19 economic disruptions level out.

Exxons not going away, Weinstein said. Energy is kind of the lubricant for the national and global economy.

*J.C. Penney, Dean Foods, Pier 1 and Tuesday Morning filed for bankruptcy in 2020.

**Alliance Data and Howard Hughes Corp. moved their headquarters out of D-FW during 2019.

**Addus HomeCares employee total is as of Dec. 31, 2018.

****TPG Pace Holdings merged with Accel Entertainment in November 2019 and its headquarters moved to Illinois.

Fluor Corp., Hallmark Financial Services Inc. and Tandy Leather Factory Inc. delayed filing 2019 annual reports.

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Exxon has topped North Texas' biggest-companies list for 3 decades. Now there's a challenger to the throne - The Dallas Morning News