Price Per Flowing Barrel


DEFINITION of 'Price Per Flowing Barrel'

A metric used to determine the value of a oil and gas company. Price per flowing barrel is calculated as:

(Market Cap + Debt - Cash) / Production Barrels Per Day

For example, an oil company with a market capitalization of $20 billion, debt of $500 million and $100 million in cash that produces 600,000 BPD will have a price per flowing barrel of $34,000.

BREAKING DOWN 'Price Per Flowing Barrel'

Price per flowing barrel does not take into account the potential production from undeveloped fields. To get a better picture of an oil companies financial health, investors should also determine the cost of developing new fields.

As a comparative metric, price per flowing barrel is typically more useful when comparing similar types of oil from similar types of fields.

  1. Barrel Of Oil Equivalent (BOE)

    A term used to summarize the amount of energy that is equivalent ...
  2. Barrels Of Oil Equivalent Per Day ...

    A term that is used often in conjunction with the production ...
  3. Netback

    A summary of all the costs associated with bringing one unit ...
  4. Barrels Per Day - B/D

    A measure of oil output, represented by the number of barrels ...
  5. Bidding Ring

    A group of individuals or businesses that conspire to affect ...
  6. Negative Option Deals

    A dubious business practice that involves supplying a typically ...
Related Articles
  1. Economics

    Peak Oil: What To Do When The Wells Run Dry

    Find out how to invest and protect your investments in this slippery sector.
  2. Investing Basics

    Oil: A Big Investment With Big Tax Breaks

    Oil and gas investments can provide unmatched deduction potential for accredited investors.
  3. Active Trading

    Oil And Gas Industry Primer

    Before jumping into this hot sector, learn how these companies make their money.
  4. Active Trading

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  5. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  6. Active Trading

    What Determines Oil Prices?

    Changes in the price of oil aren't arbitrary. Read on to find out what moves them and why.
  7. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  8. Economics

    What Determines Gas Prices?

    Gas prices are influenced by more than supply and demand. Find out what determines the price you pay at the pump.
  9. Fundamental Analysis

    Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
  10. Budgeting

    Understanding Oil Industry Terminology

    The drillers are just one aspect of the oil & gas industry, and by knowing some details of their role, you'll be better suited to make investment decisions.
  1. How much oil must be produced to maintain inventory levels in the United States?

    Domestic energy investors should track the reserve inventory of crude oil for the United States, which is released in a weekly ... Read Full Answer >>
  2. To what extent is the oil and gas sector dominated by a few major companies?

    Oil and gas are two expansive and highly diverse product lines, with active competition domestically and internationally. ... Read Full Answer >>
  3. What factors are the primary drivers of share prices in the oil and gas sector?

    The primary drivers of share prices in the oil and gas sector are energy prices and economic growth. Stock prices in the ... Read Full Answer >>
  4. What impact does the growth in horizontal drilling have in the oil and gas sector?

    It is tough to separate the growth in horizontal drilling from the growth in hydraulic fracturing, or fracking; the two techniques ... Read Full Answer >>
  5. What are the main substitutes for oil and gas energy?

    The main substitutes for oil and gas energy include nuclear power, solar power, ethanol and wind power. Fossil fuels dwarf ... Read Full Answer >>
  6. How much of the United States' energy comes from oil and gas?

    As of 2014, the oil and gas sector accounted for approximately 50% of total U.S. energy needs, with approximately another ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!