Riding the Low Price Environment – Companies with lowest debt to cash flow ratio

Imperial's Cold Lake operations.

Latest debt level data from CanOils shows that some E&P players in the Canadian oil and gas space are much better positioned to survive the lower price environment for longer duration. A handful of companies have very low level of debt in relation to their cash flow compared to their peers.

In order to identify the companies in the best position, we have used Net Debt to Cash Flow. This ratio is a measure of how many times greater a company’s debt is compared to its current level of cash flow, i.e. how long it will take to pay it all off based on the most recent data. The measure is a good indicator of financial health of a company and is more complete than most cash flow coverage ratios in that it includes all forms of debt and takes the cash on the balance sheet into account.

This analysis was conducted using data available in annual reports of 46 Canadian-listed companies that have majority of their oil production in Canada.

  • Of the group, we looked at those that produced at an average of over 10,000 bbls/d of oil in 2019.
  • The base components of net debt including cash balances, long term debt, short term debt, net debt, available credit facility, credit facility utilization, capital leases etc., are available in the CanOils F&O module.

Comparing the net debt metrics (that take credit facility utilization into account) at the end of Q4 2019, we ranked the companies with lowest net debt to cash flow ratios and found that companies outlined below in the table were in the best position.

Top 5 Companies with lowest Net Debt to Cash Flow ratio, Q4 2019


Net Debt/
Cash Flow

International Petroleum Corporation


Enerplus Corporation


Tamarack Valley Energy Ltd.


Imperial Oil


TORC Oil and Gas


Source: CanOils

Note that the above metrics are based on data as of Dec. 31, 2019. The recent price crash may have altered the picture entirely and left many companies worse off when it comes to this metric as cash flow from operations may have taken a significant dip in Q1 2020. The companies most protected from such a dip were covered in our previous article “Riding the low price environment – Largest hedgers of Q2 2020.”

Using CanOils data, it is also possible to study the other extreme of the spectrum. By analyzing CanOils debt levels, credit facility utilization data in combination with hedging strategies and each company’s operating and overhead costs per flowing barrel, it is possible to identify the companies that may be in a more challenging position through these uncertain times.

For more information and a CanOils demo, please contact Amit Patel, CanOils Account Executive at 403-209-3581 or apatel@glacierrig.com

Alternatively, you can find out more about the CanOils Financial and Operating data bycompleting the form at this link.

Example dataset pulled from CanOils – ARC Resources Ltd.’s full liability profile along with some key ratios, based on data available in Q4 2019 financial statements.

All Financial Data in $C

ARC Resources Ltd.

Balance Sheet ('000)

Q4 2019

Bank Indebtedness/Overdraft


Revolving Credit Facility (364-Day Loans)


Short-Term Convertible Debentures


Current Portion of Long-Term Debt


Current Portion of Capital Lease


Advances From Parent/Subsidiary/Affiliate


Current Operating Leases/Right-of-Use Liabilities


Other Short-Term Debt


Total Current Short-Term Debt


Total Trade Payables & Accrued Liabilities


Distributions/Dividends Payable


Income Taxes & Other Taxes Payable


Current Deferred Tax Liability


Current Derivative Instruments (Liabilities)


Other Current Liabilities


Liabilities Held For Resale/Discontinued Operations


Total Current Liabilities


Bank Debt & Notes Payable


Convertible Debentures


Capital Lease


Advances From Parent/Subsidiary/Affiliate


Long-Term Operating Lease Liabilities


Other Long-Term Debt


Total Long Term Debt


Deferred Taxes


Asset Retirement Provisions


Pension Related Provisions


Other Provisions


Total Provisions


Long-Term Derivative Instruments (Liabilities)


Deferred Revenue/Credit/Obligation


Other Long-Term Liabilities


Preferred Stock (Classified as Debt)


Non-Controlling Interest


Total Liabilities


Capital Structure

Net Debt (Net of Cash & Equivalents, '000)


Cash Flow Statement ('000)

Total Cash From (To) Operating Activities


Total Cash From (To) Financing Activities


Credit Facilities ('000)

Total Credit Available


Amount Drawn


Total Amount Undrawn


Letters of Credit


Remaining Credit Available


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