One of the refrains I often hear about the oil industry — particularly on those focused-on shale and tight oil — is that it collectively doesn’t make any money. There have been many stories over the past few years about the ongoing negative free cash flow (FCF) problem among the shale producers. It is true that in recent years oil companies have collectively outspent their revenues. But two important issues are often overlooked in the stories about negative cash flow. First is the question of the reason cash flow is negative. To better understand this, let’s talk about what cash flow actually represents. What is Free ... (full story)