The world’s biggest oil companies are struggling just to break even. Despite billions of dollars in spending cuts and a modest oil-price rebound, Exxon Mobil Corp., Royal Dutch Shell PLC, Chevron Corp. and BP PLC didn’t make enough money in 2016 to cover their costs, according to a Wall Street Journal analysis.
To calculate each companies’ free cash flow—the excess cash remaining after costs—the Journal deducted the firm’s dividends and capital expenditures from its cash from operations.
All four firms fell short of cash flow for the year, although Exxon said it broke even by its own metrics, which exclude dividends. The analysis also showed that the four companies ended last year with more debt than they began it.
The firms are showing signs of improvement. For example, Shell and Exxon notched stronger quarters late last year. However, analysts point to challenges ahead as oil prices hover around $50 a barrel.