Quattro will continue to flourish through this economic downturn by delivering profitable, low-cost energy to support the long term growth of the economy. Oil and gas are volatile commodities and today’s low energy prices are a product of the realignment of supply and demand within the context of the global economy. Over time, the global economy will continue to grow and require more energy to meet the expectations of the world’s consumers. These energy consumers are ultimately Quattro’s key stakeholders. Quattro has a strong balance sheet and continually drives towards being a low-cost producer. This downturn has provided us with the opportunity to utilize our knowledgeable and experienced staff to effectively allocate our resources towards the further development of our assets and further identification of A&D opportunities that will add to our low-cost producing portfolio.
DEFINITION of "Low-Cost Producer"
BusinessDictionary.com A manufacturer, distributor or processor that, through distinctive technology advantages or economies of scale is able to deliver products or services at a cost that is below the general market resulting in more competitive pricing or larger profit margins.
One tool for comparing the cost of production between producers/operators is their "Netback"
DEFINITION of 'Netback'
Investopedia.com A summary of all the costs associated with Bringing one unit of oil to the marketplace, and all the revenues from the sale of all the products generated from that same unit. The netback is calculated by taking all the revenues from the oil, less all costs associated with getting the oil to a market. These costs can include, but are not limited to, importing, transportation, production and refininf cost, and royalty fees. Managing Costs and controlling debt levels will be critical to surviving as prices for the underlying commodity remain low. Producers who spend the least to pull a barrel of oil (or an equivalent amount of natural gas) out of the ground (Netback) will be best positioned to make it through a prolonged downturn.
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