Demand Brands Inc. (DMAN)

[dragon52]

Exploration and Production (E&P) Companies

Exploration and production (E&P) companies find hydrocarbon reservoirs, drill oil and gas wells, extract these raw materials, and sell them to be refined by other companies into products such as gasoline.

E&P companies are often valued by their oil and gas reserves; these untapped resources are the key to their future earnings.

This activity is often referred to as upstream oil and gas activity. Today, hundreds of public E&P companies are listed on U.S. stock exchanges. Virtually all cash flow and income statement line items of E&P companies are directly related to oil and gas production.

Understanding Oil Production Numbers

E&P companies measure oil production in barrels. One barrel, usually abbreviated as bbl, is equal to 42 U.S. gallons. Companies often describe production in terms of bbl per day or bbl per quarter.

A common methodology in the oil patch is to use a prefix of "m" to indicate 1,000 and a prefix of "mm" to indicate one million. Therefore, 1,000 barrels is commonly denoted as mbbl, and one million barrels is denoted as mmbbl. For example, when an E&P company reports production of seven mbbl per day, it means 7,000 barrels of oil per day.

https://www.investopedia.com/investing/oil-gas-industry-overview/

Great explanation of Upstream and Downstream activity

Upstream Explained

The upstream sector of the oil and gas industry includes all the steps involved from the preliminary exploration through the extraction of the resource. Upstream companies can be involved in all the steps of this phase of the life cycle of the oil and gas industry, or they may only be involved in part of the upstream sector. Another name for the upstream oil sector, which is actually more representative of what occurs in this stage of development of an oil asset and/or natural gas asset, is the exploration and production (E&P) sector.

The Exploration Process

Oil and gas exploration is an important part of the upstream sector. Petroleum exploration requires very sophisticated techniques, and the technology available for petroleum exploration is rapidly advancing. Normally, exploration starts in an area that has high potential to hold a resource, usually due to the local geology and known nearby petroleum deposits. In a high-potential area, further exploration is completed to delineate a resource. Geophysical and geochemical analysis is done using techniques including induced polarization (IP) surveys, drilling and assaying, electrical currents, and so on. In the exploration phase, the goal is to locate and estimate the potential of a resource. If an area shows potential to host a resource, exploratory wells are drilled to test the resource. In the oil and gas sector, test drilling is an important component of the exploration phase. In the event that the exploratory well is successful, the next step is to construct wells and extract the resource.
Upstream companies also operate the wells that bring the crude oil or natural gas to the surface.

The Following Phases

Once the resource has been extracted, the upstream part of the business is over. Midstream companies gather the raw resource and transport the resource via pipeline, railway, or tanker truck to refineries. Refineries are the downstream phase of the oil and gas industry. They process the raw crude oil into their end petroleum products. They also sell and distribute natural gas and the products that are derived from crude oil.


https://www.investopedia.com/terms/u/upstream.asp

https://www.investopedia.com/terms/m/midstream.asp