What exactly is M.C.F.?
M.C.F. is a natural gas measurement acronym derived from the Roman number M for thousand, combined with cubic feet (C.F.). For example, a natural gas well that produces 400 MCF of gas per day has a daily production rate of 400,000 cubic feet. One thousand cubic feet (M.C.F.) of gas produces roughly 1,000,000 BTU (British Thermal Units) of energy. One B.T.U. is the amount of heat necessary to raise the temperature of one pound of water at sea level by one degree Fahrenheit (approximately equivalent to a kitchen match).
Many people believe that M stands for the English term for million; however, this is not the case. Instead, one million cubic feet of gas is indicated as MMCF, where the two Ms stand for “one thousand thousand” or 1,000,000, with each M signifying three zeros.
M.C.F. Understanding
M.C.F. is the standard way to measure natural gas in the United States and employs the imperial metric system. In Europe, where the metric system is used, the most popular abbreviation is thousands of cubic meters or MCM. When assessing quarterly results for oil and gas businesses, financial analysts must be extra careful not to mix up different units. For example, it is easy to overlook that U.S. companies report natural gas measurements in M.C.F., whereas European companies frequently report them in MCM. This is significant since 1 MCM = 35.3 MCF.
Some corporations publish approximate conversion factor guidance to help analysts handle these reporting variations. Natural gas conversion factors are commonly listed in these publications as cubic meters, cubic feet, tons of oil equivalent, tons of liquefied natural gas, B.T.U., and barrels of oil equivalent.
Particular Considerations
Most big worldwide oil and gas corporations produce standardized reports to assist analysts and investors in appropriately assessing these numbers. This is partially a statutory necessity, as the Securities and Exchange Commission (S.E.C.) requires international firms with stock listed on U.U.S. exchanges to file standardized reports, known as 20-Fs, every year.2 This is the equivalent of a 10-K filing for a company in the United States, and it offers investors oil and gas production and reserve figures given in imperial measurements to enable like-for-like comparison.
Investors in Russia, Africa, and Latin America frequently receive reports with data from the metric system, a worldwide measurement standard. Analysts for these firms must employ conversion tables to quantify and compare them to more sophisticated multinational players appropriately.
Conclusion
- The name M.C.F. comes from putting together the Roman figure M, meaning “thousand,” and the word “cubic feet.”
- As the English system is the standard in the United States, M.C.F. is a common way to measure natural gas.
- Europe uses the metric system, so MCM is the word for measuring similar natural gas.
