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Who’s on Top in Upstream: Comparing Operating Cash Flows


Dec. 27 2017, Updated 1:37 p.m. ET

Why upstream cash flow is important

Upstream or oil and gas exploration and production companies tend to be capital intensive. Projects usually have long lead times, and so it’s important to analyze an upstream company’s operating cash flows against its capital requirements. Lower cash flows from operating activities increase a company’s chances of debt financing (not good for the balance sheet) or equity financing (not good for existing shareholders).

In this series, we’ll look at the top ten upstream companies based on their cash flow from operating activities or operating cash flow during the first nine months of 2017 (ended September 30).

The data we’ll use will be based on upstream companies included in these three key energy sector ETFs:

  • the Energy Select Sector SPDR ETF (XLE)
  • the SPDR S&P Oil & Gas Explore & Production ETF (XOP)
  • the iShares US Oil & Gas Exploration & Production ETF (IEO)
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COP and OXY: the top guns

During the first nine months of 2017 and the first nine months of 2016, ConocoPhillips (COP) reported the highest operating cash flows among its peers in the top ten. Occidental Petroleum (OXY) reported the second-highest operating cash flows during both periods.

COP’s operating cash flows the first nine months of 2017 came to ~$4.6 billion, while OXY reported operating cash flows of ~$3.6 billion for the same period. The ranking of the remaining company has, however, changed in 2017 compared to 2016.


In the first nine months of 2017, EOG Resources (EOG), Anadarko Petroleum (APC), and Devon Energy (DVN) all made into the top five of upstream companies by operating cash flows. EOG’s operating cash flow during that period was ~$3 billion, while APC’s operating cash flow came to $2.6 billion, and DVN’s operating cash flow came to $2.4 billion.

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The other five companies in the top ten include Apache (APA), Antero Resources (AR), Marathon Oil (MRO), Noble Energy (NBL), and Continental Resources (CLR).

APA, AR, MRO, NBL, and CLR’s operating cash flows in the first nine months of 2017 were ~$1.8 billion, ~$1.7 billion, $1.5 billion, $1.4 billion, and $1.3 billion, respectively.

Operating cash flows grew year-over-year

As you can see in the chart above, all the companies listed reported higher operating cash flows during the first nine months of 2017, compared with the first nine months of 2016.

Continue to the next part of this series for a closer look at the individual cash flow trends for these companies.


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