Unlike price-to-earnings ratios, exploration and development costs can’t be shifted around by energy companies for appearance’s sake.
In this clip from Industry Focus: Energy, Sean O’Reilly and Taylor Muckerman explain what investors need to know when they’re evaluating a company’s exploration and development budgets. Also, they look at why the entire oil sector has been drastically cutting its exploration budgets, and what that will mean a few years down the line.