Key Ratios For Analyzing Oil And Gas Stocks: Conclusion

In summary, key ratios for analyzing oil and gas stocks can vary significantly from one analyst to another. Oil and gas E&P companies have their own niche, which is why a different set of ratios are needed. Trying to value these companies through the same types of calculations used for other industries is improper and may produce inconsistent results. Those ratios are, at best, used as secondary methods to compare companies such as oil and gas E&Ps. There are three main variables of focus when investing in oil and gas: production, reserves and cash flow.