International and U.S. upstream oil companies wrote down $38 billion in assets in the third quarter of 2015, the largest for any quarter since at least 2008 for this set of 46 companies (Figure 1). Low oil prices continue to have a significant effect on the value of companies' assets and future prospects as well as on current revenue.

Although the volume of total liquids output for this group of companies increased over third-quarter 2014, the fall in oil prices contributed to a year-over-year decline in revenue. Lower oil prices also contributed to a 33% decline in cash flow from operations in the third quarter from the previous year. However, companies reduced capital expenditures by 34% over the same period, and for the first time in a year, these 46 companies showed a surplus of cash from operations over capital expenditures. Large write-downs—also called impairments—as well as reduced cash flow suggest that investment spending will continue to decline absent a meaningful increase in crude oil prices.