BLOG

July 18, 2016

Although the crude oil price decline since 2014 has led to significant reductions in operating cash flow for U.S. oil companies, their immediate financial situations are improving. As oil companies' spending falls and crude oil prices increase, the need for oil companies to find external sources of funding may decline, which could reduce financial strain in the coming quarters.

First-quarter 2016 financial results from U.S. onshore producers reveal an improving balance between capital expenditure and operating cash flow. Although operating cash flow was the lowest in any quarter in the past five years, larger reductions to capital expenditure brought these companies closest to self-finance (when capital investment can be paid for entirely from operating cash flow). With crude oil prices such as the global benchmark Brent price averaging over $45 per barrel in the second quarter—a 34% increase from first-quarter 2016—cash flow may improve and help offset declining revenue from lower prod...

The U.S. Energy Information Administration projects that U.S. petroleum and other liquid fuels production, which in addition to crude oil and condensate production includes natural gas plant liquids derived from natural gas processing as well as biofuels and volume gain at refineries, is projected to grow from 14.8 million barrels/day (b/d) in 2015 to 18.6 million b/d in 2040 in its Annual Energy Outlook 2016 (AEO2016) Reference case. Given the uncertainty inherent in making projections, AEO2016 also includes several alternative cases, based on different assumptions for world oil prices, macroeconomic growth, resource availability, technology improvement, and other factors. Differences in crude oil from tight formations (tight oil) and natural gas plant liquids (NGPL) account for most of the differences in production across these cases. 

The oil price cases illustrate the effect of higher or lower global crude oil prices on U.S. production and use of petroleum. By 2030, the Brent crude...

Please reload

Featured Posts

The Golden Block of 16/08 in the South China Sea - the Story of Texaco's Early Operations in China

May 20, 2016

1/1
Please reload

Recent Posts
Please reload

Archive
Please reload