Posted in Finance, Accounting and Economics Terms, Total Reads: 328
Definition: Natural Gas Equivalent
The basic definition of the term is the amount of energy that is spent for the burning of natural gas as compared to that of crude oil. It is used as a metric in gas and oil industry and can be used as a comparison tool between natural gas and crude oil. According to various researches on an average 6000 cubic feet of natural gas is equivalent to a barrel of crude oil.
Nowadays in industry a new term called the “Billions of cubic feet equivalent” (BCFE) is used in, which is a common term used in annual reports and various other reports of oil and natural gas companies, this measure provides the amount of natural gas that is produced and/or delivered from the companies reserves. This metric is also used to measure the reserves strength of an ore.
So basically this could be used to quantify how much energy can be produced/ will be produced from reserves and hence could be used effectively to gauge the energy requirements and its potential. Also BCFE is an effective measure in comparison of various industries in the segment, and is used to good measure by investors also.