MMCFE is the abbreviation for million cubic feet of gas equivalent. It has become a common measurement unit in the gas industry, as it’s used for quantifying natural gas production. However, it’s based on another base unit MCF.
This article explains MMCFE and answers questions like what it means, how it is derived, where it is used, and what are some of the other equivalent units.
What Is MMCFE?
MMCFE means million cubic feet equivalent of natural gas. It’s represented by the ratio of six thousand cubic feet of natural gas to one barrel of crude oil, gas condensate, or natural gas liquids.
MMCFE is primarily used in the US in the exploration and production of natural gas from fields across the country. It comes from the Imperial unit of volume cubic foot (cu ft. or ft3), as the US uses the Imperial system for units.
Gas exploration and production companies use these units to estimate reserves and the per day production from gas wells. Both MCF and MMCFE are used by gas companies that list on American stock exchanges.
The MM in the abbreviation represents million. While people mistake the M for million, both Ms in the abbreviation make up million. That’s because MM is the Roman representation for one million. The M in MMCFE stands for milia, which is Latin for thousand. So MM means thousand x thousand or one million.
MMCFE vs. MMCF
MMCFE is different from MMCF (million cubic feet). The difference is the E or equivalent at the end of the term.
The equivalent denotes the equivalent amount of energy produced by burning the fuel in consideration (in this case, natural gas) compared with crude oil. For natural gas, it’s 6000 cubic feet for one barrel of oil. In other words, 6000 cubic feet of natural gas produces the same amount of energy as one barrel of oil.
MMCF is normally used for measuring or estimating the volume of gas in a well or the volume of gas produced by a well in a day.
What is MCF?
To understand MMCFE or MMCF, you first need to understand MCF. MCF represents thousand cubic feet, where the M means thousand.
MCF is the standard way of measuring natural gas in the US, as the unit is based on the Imperial cubic foot.
For instance, if a gas well produces 100 MCF per day, it produces 100,000 cubic feet of natural gas per day.
To measure the daily output of a gas well, MCF per day or MCF/d is used.
The counterpart of MCF in the metric system, which is used worldwide, is MCM or thousand cubic meters. Here’s how both equate:
1 MCF = 0.028 MCM
1 MCM = 35.3 MCF
Regarding energy production, one MCF of gas equals 1,000,000 British Thermal Units (BTU) or one MMBTU (million BTU).
MMCFE is most commonly used in the annual reports of gas and oil companies. It helps estimate the energy produced or value produced by the company. Similarly, it is also used to quantify a company’s reserves of natural gas, again, in terms of energy.
Companies use MMCFE as opposed to MMCF or MCF because it helps investors and analysts understand a company’s potential. Just the reserves or production may not be enough for investors to understand the value of those resources. Still, with a unit like MMCFE, they can estimate the value through energy production.
For instance, 1000 MMCFE can produce over a trillion BTUs of energy, which can power Delaware for a week.
Like MCF, MMCFE is common in the US because of the imperial system. In other countries, where the metric system is the standard, MCM or thousand cubic meters is the unit for measuring gas.
For analysts, this difference in the unit can lead to confusion, as US companies report gas production in MCF and other units derived from it and European companies it in MCM and its derivative units. The difference between the two units is quite significant, as one MCM equals 35.3 MCF.
For this reason, oil and gas companies use standard reporting formats that investors and analysts can use without needing to convert between different units. The US Securities and Exchange Commission (SEC) has made it a requirement for international oil and gas companies listed on stock exchanges (for example, British Petroleum or Equinor) to file standardized reports.
However, the metric system remains the most common, followed even in the oil and gas industry. So it’s not uncommon for analysts to use conversion tables to convert MMCFE data into its metric system equivalent, especially for those international companies that operate in the US and other regions.
The gas industry uses even bigger units than MMCFE. For annual production, they also use BCFE or billions cubic feet equivalent.
MMCFE stands for million cubic feet of gas equivalent, a unit used in the gas industry for estimating the energy production equivalent of gas reserves or production. In simpler words, it tells how much energy a certain amount of natural gas can produce. You’ll most often find it in financial reports of oil and gas companies with gas wells.
The unit comes from MMCF, which is million cubic feet, which, in turn, comes from MCF (thousand cubic feet). The counterparts of these units in the metric system are MCM (thousand cubic meters) and MMCM (million cubic meters).