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E&P Cash Flow Margins

posted May 10, 2012, 12:19 PM by Jeff Davies   [ updated May 10, 2012, 12:23 PM ]
1Q 2012 cash flow margins shown compared to 2011 average.  This metric is impacted by a number of factors, including but not limited to cost structure, commodity mix, hedges, and financial leverage.  Gas prices clearly impacted the vast majority of US e&p's as cash costs couldn't be lowered enough to offset the top line decline.  There were a few outliers that improved on this metric and a quick look not surprisingly shows they are oil-leveraged or companies that are transitioning to a more liquids production base.

Note: this metric is cash flow before working capital divided by oil & gas revenue adjusted for realized hedges.