Why E&P Operators Can Still Thrive with Short-cycle Projects

Since the downturn in oil prices back in 2014, the E&P industry has been shifting its capital investment priorities away from the high-reward, long-cycle investments often referred to as megaprojects. Now that oil prices are leveling off in the mid-$70s, owner companies are instead investing a growing proportion of their overall capital spend on small- and medium-sized plans known as short-cycle projects.

For large oil and gas companies, short-cycle projects are necessary to sustain existing site production and operations because they help maintain business cash flow. Although the larger players might use them to keep shareholders happy, short-cycle projects are critical for the financial survival of smaller owner companies—making up nearly 40% of the capital spend of these organizations. 

As a result of the shift to smaller, more frequent projects, it has become imperative for E&P operators to accurately analyze the return on these short-cycle investments and reduce the time and effort it takes to conduct business closing cycles.