E&P Companies

Actor Type: Producer Breaks When: Price Collapse, Credit Tightening Capital Intensity: Extreme Cash Flow Stability: Boom/Bust Economic Nature: Asset Ownership Margin Driver: Commodity Price Notes / Insights: Central coordinators of the system but poor risk-adjusted returns Performs Best When: High Prices, Supply Shortages Pricing Power: Limited Primary Function: Discover, develop, and extract oil Primary Risks Held: Commodity Price, Environmental, Physical, Political Public / Private Mix: Mostly Public Representative Firms: ExxonMobil, Chevron, ConocoPhillips Residual Risk After Transfer: High Revenue Model: Sale of Crude Typical Margin Profile: Highly Variable / Event-Driven Value Chain Segment: Upstream Who Ultimately Bears the Risk?: Shareholders