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XOM, CVX, Shell, BP: Which Had Surplus Cash Flow in 1Q18

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Integrated energy companies’ cash flow

Integrated energy companies have borne the brunt of lower oil prices in the past few years. However, now that oil prices have improved, integrated energy companies’ cash flow has strengthened.

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Cash flow comparison

The above table compares ExxonMobil’s (XOM), Chevron’s (CVX), Royal Dutch Shell’s (RDS.A), and BP’s (BP) cash flow, capex, dividend outflow, and cash flow surplus. Whereas ExxonMobil’s CFO (cash flow from operations) was $8.5 billion in 1Q18, its capex and dividend outflow were $3.3 billion each, resulting in a cash flow surplus of $1.9 billion, or 22% of its CFO, suggesting it was in the best liquidity position in the peer group we’re looking at.

Royal Dutch Shell’s surplus was lower than XOM’s, at 7%, placing XOM in a better position. In 1Q18, XOM’s dividend and capex outflow (as a percentage of operating cash flow) were lower than Shell’s, and its inflow was higher.

As a percentage of earnings capacity, Chevron and BP had a cash flow shortfall of 2% and 49% of CFO, respectively, in 1Q18. The size of the shortfall suggests CVX is better placed than BP. However, it’s worth noting that BP’s cash flow shortfall improved greatly year-over-year from 143%.

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