What are operating netbacks?
Operating netback, also referred to as production netback, is the oil and gas revenue realized per boe (barrel of oil equivalent) after all costs to bring one barrel of oil equivalent to the market and then subtracted from the realized price.
Operating netback is derived by subtracting field operating expenses, or production expenses, production taxes, and transportation expenses from the realized price, including hedging benefit.
ConocoPhillips’s operating netbacks
In 3Q16, ConocoPhillips’s (COP) reported operating netback of ~$18 per boe was ~28.0% lower than 3Q15.
For 3Q16, other S&P 500 (SPY) upstream companies such as Marathon Oil (MRO), Pioneer Natural Resources (PXD), and Murphy Oil (MUR) have operating netbacks of $17.23, $29.76, and $23.76 per boe, respectively.