Posted on 10/16/2015 7:23:14 AM PDT by bananaman22
Much has been written about the mounting pile of debt for U.S. oil companies (not to mention the well-known Brazilian oil giant).
Not that long ago, many oil and gas companies secured at least a part of their revenue by hedging contracts. Bloomberg already reported in June that many of these companies saw their artificial safety nets vanishing as oil prices failed to recover. One month later, we heard such morale boosting terms as ‘frack now, pay later,’ which were merely a bold move by struggling oil services companies to encourage cash strapped oil and gas companies to continue operations.
Simultaneously, we witnessed the bankruptcies of companies such as Samson Resources, Hercules Offshore and Sabine Oil & Gas Corp. These bankruptcies put the industry on notice. The cash flow situation for the entire oil and gas sector looks outright grim. Credit rating agency Moody’s expects a sector wide negative cash flow of $80 billion and is expecting spending cuts to continue next year.
Summing it up, debt, negative cash flows and the outlook for oil prices have led weak companies with balance sheets to a divest in a big way.
Although we have witnessed a couple of noteworthy acquisitions in the last months, which put 2015 in the books as a year with high volume takeovers, we cannot yet speak about an absolute M&A boom.
One of the most important reasons holding back takeovers of entire companies is the oil price volatility we have seen in the last few weeks. Financially stronger oil and gas companies seem to have postponed takeover plans and are now focusing on the acquisition of promising land holdings. Nonetheless, it seems that both buyers and sellers are preparing themselves for what could turn out to be a fire sale.
(Excerpt) Read more at oilprice.com ...
Gas prices in my area were in the $1.93 range last week and $2.13 range yesterday.
Still better than the $3.49 range not that long ago.
Is the OPEC strategy of continuing their full output beginning to work for them?
Domestic oil producers need to dig a little deeper in their pockets to buy enough Congress critters to override any veto by Zero.
Then have them pass the repeal of the ban on selling crud overseas.
That would be even cheaper than waiting out the current glut.
Hell $500 million should do it. Most will come pretty cheap, but some will hold out for more.
As for price changes at the pump, there is an old saying;
“Gas prices go up like a balloon and down like a feather.”
I think this still hold true.
Not OPEC, just parts of it, like our Sunni buddies in the Gulf. When this all started late last year I posted a Vanity piece on how we should have put an import tax on Saudi oil and some of the Freepers got it and some didn’t. This was an economic war on our RED STATE blue collar jobs.
and it worked so far
Of course this administration couldn’t care less, the wine and cheese crowd were more than happy to sell out their fellow Americans to save a couple of bucks at the pump.
Thanks.
>> Then have them pass the repeal of the ban on selling crud overseas.
Hear, hear!
The Chinese sell us crud by the containerful.
Why shouldn’t we sell OUR crud to THEM??!?
Cute.
I dropped an e, so now I have to listen to your crap.
All I really hear is your mother barking.
Cute.
I dropped an e, so now I have to listen to your crap.
All I really hear is your mother barking.
Cute.
I dropped an e, so now I have to listen to your crap.
All I really hear is your mother barking.
It’s funny how the SERIAL f-ups are always the ones who are little-baby sensitive when called on it.
Don’t take yourself so seriously. You’re not really that big a deal.
And only click that post button once. I don’t like listening to your mother barking — over and over.
Schlumberger buys Cameron
I suppose you realize that oil is a fungible commodity, right?
Someone outside Saudi Arabia buys it, and either resells it to us, so it's not "Saudi" oil anymore, or uses Saudi oil and sells THEIRS to us, and what gets taxed?
Nothing.
As Gomer would say, "Surprise, surprise..."
BP has been mentioned from time to time as vulnerable to a buyout.
Not only is it fungible but it also is traceable.
And if you prefer slap an import duty on all oil imports and make it clear to the Saudis that it doesn’t come off until they stop their shenanigans. And remind them who protects the Straits of Hormuz.
If ANY industry deserves protection right now it’s our domestic oil and gas industry, and the jobs it produces in RED STATE America.
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