Skip to content
American ExpressAmerican ExpressAmerican ExpressAmerican ExpressAmerican Express
  • Personal Accounts

    • Account Summary
    • View Statement
    • Manage Account
    • Make a Payment
    • Manage Pre-Authorized Payment
    • Add Someone to Your Account

    Business Accounts

    • Business Account Summary
    • American Express @Work
    • Merchant Services

    Online Services

    • Register for Online Services
    • Activate Your Card
    • American Express App
    • Manage Account Alerts
    • Sign Up for Email Offers
    • Online-Only Statements

    Other Services

    • American Express Gift Cards
    • Support 24/7
    • Welcome Centre
    CanadaChange Country
    English
    • Français
  • Personal Cards

    • View All Cards
    • Credit Cards
    • Why American Express?

    Small Business Cards

    • View Business Cards
    • Interested in a Card?
    • Refer a Business Owner

    Corporate Cards

    • Corporate Cards
    • Supplier Payment Solutions

    Quick Links

    • Travel Cards
    • Cash Back Credit Cards
    • Platinum Cards
    • AIR MILES®* Credit Cards
    • Aeroplan®* Rewards Cards
    CanadaChange Country
    English
    • Français
  • Online Travel

    • Book Travel Online
    • Book Fine Hotels & Resorts
    • Book The Hotel Collection
    • Travel Support

    Business Travel

    • Global Business Travel Solutions
    • Meetings & Events

    Other Travel Services

    • Travelers Cheques
    CanadaChange Country
    English
    • Français
  • Travel

    • Travel Insurance
    • Air Trip Insurance

    Personal

    • Account Protector Ultimate
    • Identity Defence

    Other

    • Review Your Coverage
    • Submit an Online Claim
    CanadaChange Country
    English
    • Français
  • Membership Rewards® Program

    • Explore Membership Rewards
    • Redeem Points
    • Fixed Points Travel Program
    • About Membership Rewards

    Other Reward Programs

    • AIR MILES®* Credit Cards
    • Aeroplan®* Rewards Cards

    American Express Invites®

    • Front Of The Line®, Entertainment, Shopping & Dining Offers
    • Sign Up for Entertainment e-Updates

    Refer a Friend

    • Refer a Friend. Get Rewarded
    CanadaChange Country
    English
    • Français
  • Merchants

    • Merchant Services
    • Accept the Card
    • Manage Merchant Account
    • Contact Us
    • FAQs

    Corporations

    • Corporate Cards
    • Supplier Payment Solutions
    • Cardmember Resources
    • Program Administrator Resources
    • Global Business Travel Solutions

    Small Business

    • Small Business Solutions
    • View all Cards
    • Business Trends & Insights

    Global Network

    • Home
    • Issuers
    • Acquirers
    • Service Providers
    • Developers
    CanadaChange Country
    English
    • Français
  • Contact Us
  • Login
      • Account Summary
      • View Statement
      • Manage Account
      • Make a Payment
      • Manage Pre-Authorized Payment
      • Add Someone to Your Account
      • Business Account Summary
      • American Express @Work
      • Merchant Services
      • Register for Online Services
      • Activate Your Card
      • American Express App
      • Manage Account Alerts
      • Sign Up for Email Offers
      • Online-Only Statements
      • American Express Gift Cards
      • Support 24/7
      • Welcome Centre
      • View All Cards
      • Credit Cards
      • Why American Express?
      • View Business Cards
      • Interested in a Card?
      • Refer a Business Owner
      • Corporate Cards
      • Supplier Payment Solutions
      • Travel Cards
      • Cash Back Credit Cards
      • Platinum Cards
      • AIR MILES®* Credit Cards
      • Aeroplan®* Rewards Cards
      • Book Travel Online
      • Book Fine Hotels & Resorts
      • Book The Hotel Collection
      • Travel Support
      • Global Business Travel Solutions
      • Meetings & Events
      • Travelers Cheques
      • Travel Insurance
      • Air Trip Insurance
      • Account Protector Ultimate
      • Identity Defence
      • Review Your Coverage
      • Submit an Online Claim
      • Explore Membership Rewards
      • Redeem Points
      • Fixed Points Travel Program
      • About Membership Rewards
      • AIR MILES®* Credit Cards
      • Aeroplan®* Rewards Cards
      • Front Of The Line®, Entertainment, Shopping & Dining Offers
      • Sign Up for Entertainment e-Updates
      • Refer a Friend. Get Rewarded
      • Merchant Services
      • Accept the Card
      • Manage Merchant Account
      • Contact Us
      • FAQs
      • Corporate Cards
      • Supplier Payment Solutions
      • Cardmember Resources
      • Program Administrator Resources
      • Global Business Travel Solutions
      • Small Business Solutions
      • View all Cards
      • Business Trends & Insights
      • Home
      • Issuers
      • Acquirers
      • Service Providers
      • Developers
  • Contact Us
CanadaChange Country
English
  • Français
  • Personal Accounts

    • Account Summary
    • View Statement
    • Manage Account
    • Make a Payment
    • Manage Pre-Authorized Payment
    • Add Someone to Your Account

    Business Accounts

    • Business Account Summary
    • American Express @Work
    • Merchant Services

    Online Services

    • Register for Online Services
    • Activate Your Card
    • American Express App
    • Manage Account Alerts
    • Sign Up for Email Offers
    • Online-Only Statements

    Other Services

    • American Express Gift Cards
    • Support 24/7
    • Welcome Centre
  • Personal Cards

    • View All Cards
    • Credit Cards
    • Why American Express?

    Small Business Cards

    • View Business Cards
    • Interested in a Card?
    • Refer a Business Owner

    Corporate Cards

    • Corporate Cards
    • Supplier Payment Solutions

    Quick Links

    • Travel Cards
    • Cash Back Credit Cards
    • Platinum Cards
    • AIR MILES®* Credit Cards
    • Aeroplan®* Rewards Cards
  • Online Travel

    • Book Travel Online
    • Book Fine Hotels & Resorts
    • Book The Hotel Collection
    • Travel Support

    Business Travel

    • Global Business Travel Solutions
    • Meetings & Events

    Other Travel Services

    • Travelers Cheques
  • Travel

    • Travel Insurance
    • Air Trip Insurance

    Personal

    • Account Protector Ultimate
    • Identity Defence

    Other

    • Review Your Coverage
    • Submit an Online Claim
  • Membership Rewards® Program

    • Explore Membership Rewards
    • Redeem Points
    • Fixed Points Travel Program
    • About Membership Rewards

    Other Reward Programs

    • AIR MILES®* Credit Cards
    • Aeroplan®* Rewards Cards

    American Express Invites®

    • Front Of The Line®, Entertainment, Shopping & Dining Offers
    • Sign Up for Entertainment e-Updates

    Refer a Friend

    • Refer a Friend. Get Rewarded
  • Merchants

    • Merchant Services
    • Accept the Card
    • Manage Merchant Account
    • Contact Us
    • FAQs

    Corporations

    • Corporate Cards
    • Supplier Payment Solutions
    • Cardmember Resources
    • Program Administrator Resources
    • Global Business Travel Solutions

    Small Business

    • Small Business Solutions
    • View all Cards
    • Business Trends & Insights

    Global Network

    • Home
    • Issuers
    • Acquirers
    • Service Providers
    • Developers

CanadaChange Country
English
  • Français
Skip to content
DON'T do business WITHOUT IT
DON'T do business WITHOUT IT

Business Cards

Small to Medium

  • American Express® Business Gold Rewards Card

  • Business Platinum Card® from American Express

  • Marriott Bonvoy™ Business American Express® Card

  • American Express® AIR MILES® for Business Card

  • American Express® AIR MILES® Gold Business Card

  • American Express Business Edge™ Card

  • View all Business Cards

Large/Corporate

  • American Express® Corporate Card

  • American Express® Corporate Gold Card

  • Corporate Platinum Card® from American Express

  • American Express® AeroplanPlus®* Corporate Card

  • American Express® AeroplanPlus®* Corporate Platinum Card

  • View All Corporate Cards

Supplier Payment Solutions

  • American Express vPayment

  • American Express Corporate Purchasing Card

  • American Express Business Travel Account

  • American Express Buyer Initiated Payments

  • American Express Corporate Meeting Card

  • View all

Business Class

Business Class

Insights and Inspiration to Help Grow Your Business

Managing Money

  • Cash Flow

  • Financing

Creating Efficiencies

  • Suppliers

  • Inventory Management

  • Productivity

  • Automation

Planning for Growth

  • Strategy

  • People

  • Business Expansion

  • Risks and Controls

  • Innovation

Industry Thought Leadership

  • Industry Insights

  • Oil & Gas

  • Construction

  • Thought Leadership

Request Info

  • Trends and Insights
  • Industry Thought Leadership
  • Oil & Gas
Business Class

December 02, 2019

Managing Working Capital in the Challenging Oil and Gas Industry

Managing Working Capital in the Challenging Oil and Gas Industry

Twitter Icon
Facebook Icon
LinkedIn Icon
American Express

Summary

Canadian oil and gas companies must implement strategies to improve their working capital management so they can release cash trapped on their balance sheet. Here's how to start.

Twitter Icon
Facebook Icon
LinkedIn Icon

Working capital has generally improved over the past two years for Canadian oil and gas companies, but up to CAD $30 billion of cash is still trapped on their balance sheets, according to the recent "Cash in the barrel" report from American Express® and EY. The paper's findings further reveal that there are strategies such companies can implement to optimize working capital. The key: properly managing the three pillars of working capital: accounts receivable, accounts payable and inventories. Indeed, an improved cash culture can enhance cash flow and ensure required changes are sustainable.

Adopting a cash culture

In an industry not traditionally focused on cash, many oil and gas companies struggle to optimize working capital. According to the report, a good starting point would be to implement a strong governance model and meet frequently with functional leaders to discuss working capital. The main driver: That managing working capital should not be an afterthought but a primary goal for all oil and gas company stakeholders. Leaders should at least evaluate the capital that is consumed to measure its effect on cash flow in any significant decision. To manage the trade-offs between cost and cash, the report also highlights how the finance team can—and should—be a business partner by giving a hand to the different functions. Process improvements should be tracked after a formal structure is established.

Increasing visibility of how cash flow performs

Unpredictable cash flow in any business, specifically within Canada's oil and gas industry, makes it hard to manage liquidity efficiently. Not having an adequate system to track the impact of working capital is another major problem. To help boost cash flow performance visibility, analytics, along with the appropriate metrics based on key drivers, can greatly help. For this to be fully effective, a company should establish a cycle time performance baseline for main processes, analyze and challenge these findings and continuously measure any gaps to be closed. The report reveals that measuring such financial impact of processes will raise awareness in your company to respond to the need for action. The goal is that the change in management mindset will quickly spread throughout the organization.

Implementing improvements that generate cash flow

Best practices find that successful oil and gas companies should also review what is driving their cash flow, such as their planning of operations and sales, payment terms and timing and their collections and billing process. Digital technologies can also be useful in helping sustain and generate cash flow. Automation solutions and advanced software capabilities can greatly facilitate the optimization of cash flow and improvement of internal efficiencies. American Express works with business clients to enable those type of improvements. By using American Express' unsecured credit, they benefit from paying suppliers on time and may even obtain early pay discounts, while having up to 55 interest-free days* to pay their card bill back. This allows business to keep their cash on hand for longer, giving them more liquidity. The cash flow released from working capital can also serve as a source of funding for investing in growth projects and make improvements.

Preparing the future of oil and gas cash management

Overall, improving cash flow remains a top priority among financial leaders. However, significant challenges must be addressed to support progress in its availability, ongoing management and forecasting. The coming months and years will be a critical period for the oil and gas industry. There is no one-size-fits-all solution to improve the working capital in the oil and gas industry. Although each sector has priority areas for intervention, companies will need to continue to innovate to optimize cash flow while adopting a cash culture. Make sure you have set cash flow management objectives for the next 12 to 18 months and that your organization is ready to implement the required changes.

 

* As a charge card, the balance must always be paid in full each month in which no interest charges will apply. The interest free grace period is 28, 29, 30 or 31 days from the closing date of the current statement to the closing date of the next statement depending on the number of days in the calendar month in which the closing date occurs. The number of interest-free days varies based on a variety of factors, including when charges are posted to your account, whether your account is in good standing, and the closing date of your statement.

 

 

This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.

Twitter Icon
Facebook Icon
LinkedIn Icon
Want to Dig Deeper?

American Express Cards

  • Personal Cards
  • Credit Cards
  • Small Business Cards
  • Corporate Cards
  • American Express Gift Cards
  • Add Someone to Your Account

More Products & Services

  • Membership Rewards® Program
  • American Express App
  • Insurance Home
  • Book Travel Online
  • Merchant Services
  • Accept the Card

Important Links

  • Form & Document Centre
  • Online Services
  • Global Assist
  • Shop Confidently
  • See Merchants Near You
  • Refer a Friend

Company Information

  • About American Express
  • Careers
  • Contact Us
  • Sign Up for Email Offers
  • Frequently Asked Questions
  • Moving Abroad?
    • Personal Cards
    • Credit Cards
    • Small Business Cards
    • Corporate Cards
    • American Express Gift Cards
    • Add Someone to Your Account
    • Membership Rewards® Program
    • American Express App
    • Insurance Home
    • Book Travel Online
    • Merchant Services
    • Accept the Card
    • Form & Document Centre
    • Online Services
    • Global Assist
    • Shop Confidently
    • See Merchants Near You
    • Refer a Friend
    • About American Express
    • Careers
    • Contact Us
    • Sign Up for Email Offers
    • Frequently Asked Questions
    • Moving Abroad?

American Express
CanadaChange country
English
  • Français
  • Facebook
  • Connect with Amex on Instagram
  • Tweet your questions to @AskAmex
  • YouTube

  • Trademarks
  • Terms & Conditions of Use
  • Updated Online Privacy Statement (01/2018)
  • Complaint Handling
  • Codes of Conduct & Commitments
  • Amex Bank of Canada Prime Rate
  • Security Alerts
  • Accessibility Policy
  • Accessibility Plan
  • Cardmember Agreements

Amex Bank of Canada, P.O. Box 3204, Station F, Toronto, ON M1W 3W7

Copyright © 2021 American Express Company