Oil giant ChevronTexaco
So, let's start by defining cash rich. A simple answer would be more cash than debt -- that is, net cash positive.
ChevronTexaco has a net debt of $850 million -- although the latest quarter's $3.2 billion in net income has allowed the company to trim its net debt by a massive $6.4 billion since the end of last year. Unocal, after today's net income of $330 million, has a net debt of $2.1 billion.
When an oil company like BP
The oil business is capital-intensive. There is the $20 billion natural gas pipeline from Alaska through Canada making headlines today. Looming natural gas inventory problems in the U.S. are going to be relieved by liquid natural gas projects -- the sum total of which will greatly exceed the cost of the natural gas pipeline. Add in the already expensive search for oil, especially in deep-water locations, and you can see that energy is a very expensive enterprise.
So if oil companies are not cash rich, who is? There is Microsoft
The point is to blunt the common misperception that oil companies roll in cash. True, some are cash rich. But most accumulated a lot of debt as they made our energy future possible.
Fool contributor W.D. Crotty owns stock in ChevronTexaco.