Free cash flow records tumble among North America’s oil and gas producers

Source: Evaluate Energy

A significant leap in operating cash flow in Q1 2022 allowed oil and gas producers across the U.S. and Canada to enjoy record levels of free cash flow – again.

The latest cash flow report from Evaluate Energy shows that 82 North American oil and gas companies recorded free cash flow of $29.8 billion in Q1, a $7.3 billion increase over Q4 2021.

“Total Q1 operating cash flow for the group came in at almost $45 billion – the sum of all four quarters in pandemic-hit 2020,” said report author Mark Young, Senior Analyst at Evaluate Energy.

“While capital spending has not kept pace with operating cash flow, spending has consistently increased since Q3 2020. We’re now seeing spending across the industry similar to pre-pandemic trends. Q1 saw the first quarterly capex spend of over $14 billion since early 2020, and capital spending increased to over 35% of total cash used in a quarter for the first time since Q2 2021.”

Data shows capex increases across the industry with no distinct group of producers responsible for the bulk of any spending rise.

“Fifty of the 82 companies in our study group increased spending in Q1 compared to Q4, the sixth quarter in a row where more than 48 increased quarterly spending, after only 10 did so in Q2 2020 at the height of the pandemic,” added Young.

“Latest guidance shows that these spending increases in early 2022 should be sustained throughout the year, with 2022 budgets typically larger than those we saw in 2021.”

For more on the latest cash flow, capex, debt, dividend and share buyback trends for oil, gas and oilsands producers across North America, download the full Evaluate Energy cash flow review at this link.

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