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Upstream Companies with the Lowest Free Cash Flow 2017

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Worst FCF upstream companies

After analyzing the top FCF (free cash flow) upstream companies in the US, we’ll discuss the bottom five normalized FCF generating companies from the oil and gas production sector in the US in 2017. To rank these companies, we only used oil and gas producers in the US with market capitalizations greater than $500 million and a 30-day average volume greater than 1,000,000 shares.

The above chart shows the bottom five normalized FCF generating companies from the oil and gas production sector in the US in 2017. Extraction Oil & Gas (XOG) led with a normalized 2017 FCF of -345%. Extraction Oil & Gas is followed by Gulfport Energy (GPOR), Halcon Resources (HK), Chesapeake Energy (CHK), and QEP Resources (QEP). They have a normalized 2017 FCF of -258%, -236%, -234%, and -230%, respectively. In comparison, the US upstream industry had a normalized FCF of -61% in 2017.

Except for Gulfport Energy and Chesapeake Energy, the other bottom five normalized 2017 FCF companies are mainly crude oil (USO) producers. Gulfport Energy and Chesapeake Energy are mainly natural gas (UNG) producers.

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Why the normalized FCF?

FCF is an important metric for crude oil (USO) and natural gas (UNG) production. FCF is calculated by subtracting capital expenditures from the OCF (operating cash flow). Within the upstream space, the FCF for each company varies greatly depending on the size of the company’s upstream operations, operating revenues, operating margins, operating cash flows, and capex. In order to rank the upstream companies in the US using FCF, we get the normalized 2017 FCF by dividing it by the 2017 OCF. Essentially, the normalized FCF is the percentage of the OCF turned into the FCF.

In this series                                    

In this series, we’ll discuss the FCF and normalized FCF trends for these companies. We’ll also look at Wall Street analysts’ ratings and the institutional activity in these stocks.

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