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.

RELATED TERMS
  1. Barrels Per Day - B/D

    Barrels per day (B/D) is a measure of oil output, represented ...
  2. Price to Free Cash Flow

    A valuation metric that compares a company's market price to ...
  3. Barrels Of Oil Equivalent Per Day ...

    A term that is used often in conjunction with the production ...
  4. Cash Flow From Financing Activities

    Cash flow from financing activities is a category in a company’s ...
  5. Cash Flow

    Cash flow is the net amount of cash and cash-equivalents being ...
  6. Non-Operating Cash Flows

    Non-operating cash flows are inflows and outflows of cash that ...
Related Articles
  1. Investing

    Evaluating A Statement Of Cash Flows

    The metrics for the Statement of Cash Flows is best viewed over time.
  2. Investing

    Oil Officially in a Bear Market

    Oil is now in a bear market. How long will OPEC sit on the sideline and watch it slide?
  3. Investing

    Time to Buy Oil Producers?

    Are oil companies undervalued now that the global energy sector has given up half its relative gains from 2016?
  4. Investing

    Top 6 Oil-Producing States

    Check out the U.S. states that produce the most barrels of crude oil each year.
  5. Investing

    Projected Gas Prices for 2016

    Learn what major authorities on gas prices are predicting for 2016, and about the different factors that can impact the price of gas.
  6. Investing

    What a $20 USD Barrel Means For the US Oil Industry

    Read about Goldman Sachs' prediction that oil prices could go as low as $20 a barrel. Understand how low prices impact companies in the U.S. oil sector.
  7. Investing

    How does crude oil affect gas prices?

    Understand the origins of oil, how its price is determined and where its correlation with gas prices falls in the global economy.
  8. Investing

    Fundamental Case Study: Is Amazon's Cash Flow Actually Solid? (AMZN)

    Review Amazon's cash flow situation, including its free cash flow yield, operating cash flow from organic growth and cash flow from debt financing.
  9. Investing

    How Long Will Oil Prices Remain Low?

    With demand for oil weakening and new sources of supply, the price of oil is likely to remain below $100 a barrel for quite some time.
RELATED FAQS
  1. What metrics can be used to evaluate companies in the oil and gas sector?

    Learn how to analyze oil and gas sector companies using the same metrics and analytical techniques as professional investment ... Read Answer >>
  2. Are taxes calculated in operating cash flow?

    Learn how taxes are involved with the calculations for a firm's operating cash flow, and the overall significance of operational ... Read Answer >>
  3. Why are stocks and oil so correlated right now?

    Learn whether the stock market and oil prices will continue their highly correlated price relationship or decouple again ... Read Answer >>
  4. What's more important, cash flow or profits?

    Learn about the different effects of cash flow and profit have on a business and how you can use the information for your ... Read Answer >>
  5. How should I evaluate a company with negative cash flow investing activities?

    Understand how a negative cash flow from investing activities should be evaluated. Learn the sources and uses of cash in ... Read Answer >>
Hot Definitions
  1. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  2. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
Trading Center