Cash-strapped explorers selling off oil fields as last resort

Cash-strapped explorers selling off oil fields as last resort

According to Bloomberg, energy explorers affected by the slump in oil prices are desperately seeking liquidity in their rocks after having exhausted other ways to raise cash.

 

Companies such as Anadarko Petroleum Corp. and Comstock Resources last month announced they were selling over $2.4 billion in asset sales, according to data compiled by Bloomberg.

 

Additional companies such as Chesapeake Energy Corp., Exco Resources Inc., Occidental Petroleum Corp. and Whiting Petroleum Corp. have also announced in recent weeks that they, too, are selling assets or exploring this option.

 

These asset sales are a symptom of companies trying to stay financially stable since the slump in the oil prices began, by trying to raise capital whilst tightening the purse strings. For companies with significant outstanding debt, this strategy may not be enough.

 

Until July, companies were reluctant to sell assets because oil prices were so low. Therefore, this latest strategy comes after months of other cost-cutting tactics such as negotiating lower fees with suppliers, staffing cuts, company restructuring and sidelining rigs.

 

Michael Watford, Chief Executive of Ultra Petroleum, said: “It’s clear that the asset market has higher valuation right now than the equity market.

 

“There is a growing benefit in selling assets to raise money for paying off loans or buying back shares.”

 

Source: 

Bloomberg 

Please rate

Comments 

Name
Email
  Ctrl + Enter

Most Read

The government has cut £1bn from the rail infrastructure budget

The government has cut £1bn from the rail infrastructure budget

Rishi Sunak had previously promised record infrastructure investment as part of the government's "levelling up" agenda. Until now, Network Rail's "enhancement" budget for the five year period from 2019-24 had been set at £10.4bn. But, this week rail minister Chris Heaton-Harris said

Farringdon-first Central London station to complete construction

Farringdon-first Central London station to complete construction

Construction work at Crossrail’s Farringdon station has come to an end.The station becomes the first central London station along the new line to reach the T-12 landmark; this means the station is substantially complete and it is now considered to be 12 weeks away from handover to

TfL allocates extra cash to fix ageing bridges and tunnels

TfL allocates extra cash to fix ageing bridges and tunnels

Of that, TfL’s major asset renewals programme will receive a £135M additional investment to repair key bridges and tunnels. TfL figures show that about 200 out of 500 bridges and other structures that it maintains in the capital have sections in "poor" or "very poor" condition. The

This website uses cookies to enhance your user experience. By continuing to use this site, you consent to our use of these cookies. See our Cookie Policy.