Barrel of oil equivalent
The barrel of oil equivalent (BOE) is used by oil and gas companies in their financial statements as a way of combining oil and natural gas reserves and production into a single measure.
BOE is a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158.9873 litres) of crude oil. The US Internal Revenue Service defines it as equal to 5.8 × 106. The value is necessarily approximate as various grades of oil have slightly different heating values.
One BOE is roughly equivalent to 5,800 cubic feet of natural gas or 58 CCF. The USGS gives a figure of 6,000 cubic feet (170 cubic meters) of typical natural gas.
A commonly used multiple of the BOE is the kilo barrel of oil equivalent (kboe or kBOE), which is 1,000 times larger.
Other common multiples are the BBOe, (also BBOE), or billion barrel of oil equivalent, representing 109 barrels of oil, used to measure petroleum reserves, and million barrels per day, MMbd (or MMBD), used to measure daily production and consumption. Also used is the Mtoe, or Millions of tonnes of oil equivalent, a metric measurement equivalent to approximately 0.006841 BBOE.
Natural Gas Pricing
The price of natural gas varies greatly depending on location and type of consumer. In 2007, a price of $7 per 1,000 cubic feet (28 m3) was typical in the United States.
The typical caloric value of natural gas is roughly 1,000 British thermal units (BTU) per cubic foot, depending on gas composition. This corresponds to around $7 per million BTU, or around $7 per gigajoule.
In April 2008, the wholesale price was $10 per 1,000 cubic feet (28 m3) ($10/MMBTU). The residential price varies from 50 per cent to 300 per cent more than the wholesale price. At the end of 2007, this was $12–$16 per 1,000 cu ft (28 m3).
Natural gas in the United States is traded as a futures contract on the New York Mercantile Exchange. Each contract is for 10,000 MMBTU (~10,550), or 10 billion BTU. Thus, if the price of gas is $10 per million BTUs on the NYMEX, the contract is worth $100,000.