Oilfield Writedowns Loom as Crude Slump Guts Drilling Values

Economic and Mark of the Beast
prophecy-related information

Oilfield Writedowns Loom as Crude Slump Guts Drilling Values

Postby st louis steve on Tue Jan 06, 2015 4:02 am

Oilfield Writedowns Loom as Crude Slump Guts Drilling Values
By Joe Carroll and Tara Patel Jan 6, 2015 2:55 AM CT 15 Comments Email Print
http://www.bloomberg.com/news/2015-01-0 ... alues.html
Gas is flared from a tower on an oil drilling rig operated by Petroleos Mexicans in the... Read More
Fall in U.S. Stocks to Be `Short Lived,' Zlotnikov Says
Tumbling crude prices will trigger a flood of oilfield writedowns starting this month after industry returns slumped to a 16-year low, calling into question half a decade of exploration.

With crude prices down more than 50 percent from their 2014 peak, fields as far-flung as Kazakhstan and Australia are no longer worth pumping, said a team of Citigroup Inc. (C) analysts led by Alastair Syme. Companies on the hook for risky, high-cost projects that don’t make sense in a $50-a-barrel market include international titans such as Royal Dutch Shell Plc and small wildcatters like Sanchez Energy Corp.

The impending writedowns represent the latest blow to an industry rocked by a combination of faltering demand growth and booming supplies from North American shale fields. The downturn threatens to wipe out more than $1.6 trillion in earnings for producing companies and nations this year. Oil explorers already are canceling drilling plans and laying off crews to conserve cash needed to cover dividend checks to investors and pay back debts.

“The mid-cap and small-cap operators are going to be hardest hit because this is all driven by their cost to produce,” said Gianna Bern, founder of Brookshire Advisory and Research Inc., who also teaches international finance at the University of Notre Dame.
st louis steve
Posts: 10314
Joined: Tue Mar 07, 2006 11:50 am
Location: St louis, Missouri

Return to Economic/MOB Watch

Who is online

Users browsing this forum: No registered users and 1 guest