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Amid Low Prices, Oil Giants Gush About Breaking Even

By Sarah Kent: Dow Jones Newswires

The world’s biggest oil companies have a suddenly popular measure for success: breaking even. Once obscure and little noted, the break-even number has become an obsession for investors in oil giants such as Exxon Mobil Corp., BP PLC and Chevron Corp. as crude prices stay mired between $50 and $60 a barrel. At its simplest, the metric represents the oil price that a company needs to generate enough cash so it can cover its capital spending and dividend payouts.

BP says its break-even was $47 a barrel in the first half of the year, and the company is targeting between $35 and $40 a barrel by 2021, assuming prices stay about where they are today. Overall, Europe’s biggest oil companies have cut break-evens to around $50 a barrel, according to Barclays. Exxon doesn’t release a break-even but has succeeded in covering its costs with cash from operations for the last three quarters, when international benchmark Brent crude averaged just over $51 a barrel, according to Barclays. FULL ARTICLE

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