Operating Netback

Operating netback is important in the oil and gas industry because it allows analysts to compare the operations of different oil and gas producers without being distracted by nonoperating, financing, or other extraneous costs. It simply shows how efficient the company is at extracting and selling its product.

However, it is important to note that operating netback is a non-GAAP measure, meaning that different companies might use different formulas to calculate the measure. Thus, it is important to learn how each company calculates operating netback when conducting comparisons.