Is the upstream oil and gas industry on-track to generate free cash flow?
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Report summary
The Brent price required for cash-flow neutrality continues to fall. The weighted average was US$93/bbl heading into 2015, US$75/bbl by the end of the year and US$65/bbl entering 2016. Action taken since has reduced our current estimate to just US$53/bbl; an impressive 40% lower than 18 months ago. But can companies generate free cash flow? We review the current corporate positioning, and the strategic actions taken.
Table of contents
- Key Messages
- Surviving the cycle
- Capital budgets remain the key strategic lever
- Peer-group positioning
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What to expect during 2016?
- Continued push for cash flow neutrality
- Balance sheets at both ends of the spectrum will evolve
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