FTSE 350 Review 2018 

FTSE 350: Oil gotten gains

FTSE 350: Oil gotten gains

Not so long ago, markets paid a lot more attention to oil and gas companies’ resources. This isn’t to say energy stocks were valued purely for the hydrocarbons locked up in reservoirs; on its own, the EV/2P (enterprise value to proven and probable reserves) ratio overlooks many important factors related to financing, cash flow and operational capacity. But an oil company’s barrels in the ground were treated in a similar way to a property company’s land bank. After all, a high-quality portfolio – be it real estate or geological – has to count for something. In turn, this placed an onus on energy companies of all sizes to replace or increase their untapped stock of oil and gas.

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