Financial and Operational Indicators for Evaluation of the Performance of Companies in the Oil and Gas Industry

The objective of this research was to determine, through factor analysis (FA), the most relevant financial and operational indicators that should be considered for oil and gas companies' performance evaluation, improving the quality of the analysis realized by managers, investors and other stakeholders. The sample of the study was composed of 55 oil companies listed on the New York Stock Exchange (NYSE) that have operations in oil and gas exploration and production. Data collected from the Evaluate Energy database for the year 2009 and from the 10-K and the 20-F financial statements of these companies were used to calculate financial and operational indicators selected on the basis of the literature review conducted. Results revealed three factors: Profitability, Leverage and Operational Performance. These factors are related to the profitability of operational transactions, financial and operational leverage and operational continuity and future cash flow generation capability of the organizations researched. It was possible to classify the oil and gas companies, using the results from the factor analysis, to determine a performance ranking.