For large integrated oil companies, 2013 looks to be an inflection point where costs continue to soar and replacing already drilled hydrocarbons start to shrink. While the companies like Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM) maintain impeccable balance sheets, record capital expenditures could stunt shareholder gains. For example, over the past year Chevron, a perennial free cash flow machine, is just covering its capital expenditure with operating cash flow. ExxonMobil is in a better position but the firm's reserve replacement ratio, the percent of oil and gas replaced, is well under the company's 10 year average. 

As more oil and gas companies stretch the globe to unlock expensive resources, investors stand to lose with some big oil firms struggling to cover capital expenditures and capital return programs with cash generated from operations.

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