Ocean wave energy may be recovered by oscillating wave energy converters. The energy converter studied in this work is a horizontally orientated cylinder which can be placed at different depths in the sea. The cylinder can oscillate in horizontal and vertical directions and transfer mechanical energy forward by hydraulic cylinders. To study the interaction between the waves and the converter, we have used potential flow theory separately for both the waves and the oscillating cylinder, and then combined these potential functions by using the principle of superposition. Combined potential flow fields, together with Euler’s equations, enable us to obtain the pressure distribution around the cylinder. When knowing the pressure distribution, both the force upon the cylinder, and the net mechanical power transferred from the waves to the moving cylinder, can be calculated. With this model we have analyzed several interesting topics which affect the efficiency of the wave energy converter. The phase shift is the most important parameter – with the phase shift -π/2 the best efficiency 0.5 was achieved. To achieve the right phase shift for different waves is essential due to the power capture. Furthermore, it is shown that feedback control is necessary for keeping the phase shift constant. Also the cylinder radius has a great effect on the efficiency. The other important parameters studied in this work were the wave height and the wave period.