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

 FirstGroup to launch budget London to Edinburgh rail service

FirstGroup to launch budget London to Edinburgh rail service

FirstGroup is to launch a budget direct London-Edinburgh rail service next month, which it hopes will lure air passengers to the train as a cheaper and greener alternative.   The new service, branded Lumo, will have just one single class of travel and the company hopes it will carry more than

One year on: HS2 reaches 20,000 jobs landmark

One year on: HS2 reaches 20,000 jobs landmark

Companies right across the country are now forming part of HS2’s ever-growing supply chain. Contracts have already been awarded to over 2,200 businesses, 97% of which are UK-based.   HS2’s jobs boost is also benefitting those in need, with bespoke initiatives designed to

Record infrastructure pipeline investment to support future workforce

Record infrastructure pipeline investment to support future workforce

This infrastructure pipeline includes the projected future workforce demand based on planned investment in projects and programmes. The Infrastructure and Projects Authority (IPA) estimates that in the four-year period up to 2024/25, over 425,000 individuals will be needed on an average

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.