Measuring Natural Gas in MCF Explained, Vs. MCM

What Is MCF?

MCF is an abbreviation derived from the Roman numeral M for one thousand, combined with cubic feet (CF) to measure natural gas. For example, a natural gas well producing 400 MCF of gas per day has a daily production rate of 400,000 cubic feet. In terms of energy output, 1,000 cubic feet (MCF) of gas is approximately equal to 1,000,000 BTU (British Thermal Units). One BTU is the amount of heat that raises the temperature of one pound of water by one degree Fahrenheit at sea level, similar to a kitchen match.

Many people mistakenly believe that M stands for million, but that is incorrect. One million cubic feet of gas is denoted as MMCF, where the two Ms represent "one thousand thousand" or 1,000,000, with each M representing three zeros.

Key Takeaways

• MCF combines the Roman numeral M with cubic feet (CF) to measure natural gas.
• MCF is primarily used in the United States, where the imperial measuring system is standard.
• In Europe, the equivalent measurement term is MCM, which uses the metric system.

Understanding MCF

MCF is the conventional measurement for natural gas in the United States, which uses the imperial measuring system. In Europe, where the metric system is used, the most common abbreviation is thousand cubic meters or MCM. When analyzing companies’ quarterly results, oil and gas financial analysts must be cautious to avoid mixing up different units. For instance, U.S. companies report natural gas measurements in MCF, while European companies report them in MCM. This distinction is important because 1 MCM is equal to 35.3 MCF.

To assist analysts in dealing with these reporting differences, some companies provide conversion factor guides. These guides include specific conversion factors for natural gas, such as cubic meters, cubic feet, tons of oil equivalent, tons of liquefied natural gas, BTU, and barrels of oil equivalent.

Special Considerations

Most major international oil and gas companies offer standardized reports to help analysts and investors accurately assess these figures. This is a regulatory requirement, with the U.S. Securities and Exchange Commission (SEC) mandating that foreign companies listed on U.S. exchanges file standardized reports annually, known as a 20-F. This filing is equivalent to the 10-K filing for U.S. companies and provides investors with oil and gas production and reserve statistics in imperial measurements for comparison purposes.

Investors in emerging markets, such as Russia, Africa, or Latin America, often receive reports using the metric system. Analysts of these companies must use conversion tables to accurately quantify and compare them to more established international operators.