Price Per Flowing Barrel

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. P5+1

    The P5+1 is a group of world powers who have been negotiating ...
  6. Opaque Pricing

    Opaque pricing is a way that companies can sell their merchandise ...
RELATED FAQS
  1. What are the different types of price discrimination and how are they used?

    Price discrimination is one of the competitive practices used by larger, established businesses in an attempt to profit from ... Read Full Answer >>
  2. If oil producers run out of room to store oil, will the price of gasoline plummet?

    The price of gasoline would plummet if oil producers run out of room to store oil. However, running out of room to store ... Read Full Answer >>
  3. How can traders use contango to take advantage of the storage shortage for crude ...

    Traders with access to physical oil and storage can make substantial profits in a contango market. Other traders may seek ... Read Full Answer >>
  4. How does the price of oil affect Venezuela's economy?

    The price of oil is one of the most heavily watched trends in economics, as it has an effect on the economies of every nation ... Read Full Answer >>
  5. How would a true market economy ensure that the world never runs out of oil

    The physical supply of oil will never run out in an economic system where prices are allowed to fluctuate based on supply ... Read Full Answer >>
  6. What percentage of the global economy is comprised of the oil & gas drilling sector?

    According to market research by IBISWorld, a leading business intelligence firm, the total revenues for the oil and gas drilling ... Read Full Answer >>
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.

You May Also Like

Hot Definitions
  1. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  2. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  3. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  4. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  5. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
Trading Center