2017
2016
2015
2014
0
50
Source: Top 20 upstream operators’ quarterly reports, Chicago Mercantile Exchange, Oliver Wyman analysis
% West Texas Intermediate price change, annualized. Analysis of 2014-2017
Increase 2.5x
Price collapse
Volatility is here to stay...
2015
2013
2017
2016
2014
2012
2011
-8
12
Investment grade
Source: Top 20 upstream operators’ quarterly reports, Chicago Mercantile Exchange, Oliver Wyman analysis
Median EBIT/ interest ratio; selected upstream leaders
...but even the energy industry’s leaders can’t afford it.
Price
collapse
NET INCOME
DEBT
-126%
+35%
Companies are piling up debt even as their earnings decline…
US $ Billion; selected upstream leaders
Source: Top 20 upstream operators’ quarterly reports, Oliver Wyman analysis
2015
2013
2017
2016
2014
2012
2011
-50
400
250
0
2015
2013
2017
2016
2014
2012
2011
...and they continue to spend beyond their means…
SURPLUS
SHORTFALL
Cash in versus cash out ratio %; selected upstream leaders
Source: Top 20 upstream operators’ quarterly reports, Oliver Wyman analysis
2017
2016
2015
2014
2013
2011
2012
…harming the balance sheets of every energy industry player.
Needing
a new
approach
Net debt/capital – proxy of risk bearing capacity; % of upstream operators
Source: Top 20 upstream operators’ quarterly reports, Oliver Wyman analysis