Return on Investment

Because the oil and natural gas industry is massive
and requires huge investments, its earnings contribute
greatly to the American economy and way of life. They
allow companies to reinvest in the facilities, infrastructure
and new technologies that keep America going strong
well into the future while generating returns that meet
shareholders’ expectations.

The oil and natural gas industry is probably one of the
world’s largest industries. Its revenues are large, but so
are its costs of providing consumers with the energy
they need. Among those are the cost of finding and
producing oil and natural gas and the costs of refining,
distributing and marketing it.

These costs remain huge, regardless of whether
earnings are high or low – as was the case throughout
most of the 1990s and during other industry downturns.
The return on investment (net income/net investment
in place) for the oil and natural gas industry has been lower than the returns for the S&P industrials.