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CHAPTER 4: The Energy Sector > Strong Financial Position

Strong Financial Position

A strong financial position is always important to an energy firm, as the capital requirements for exploration and development are very high. Strong balance sheets with low debt levels, high return on equity, and significant free cash flow generation are key drivers to success in the energy sector. The generation of positive cash flow is particularly important in the current market environment, given that funding for more technologically challenging oil projects will become more critical. Energy firms now maintain strong balance sheets and diversified business mixes that involve energy production, refining, and chemicals. Exxon has $30 billion in net cash (cash less debt) and is likely to produce almost $50 billion of after-tax profit in 2....


  

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