{"id":13472,"date":"2015-10-16T06:56:55","date_gmt":"2015-10-16T11:56:55","guid":{"rendered":"http:\/\/olduvai.ca\/?p=13472"},"modified":"2015-10-16T07:47:30","modified_gmt":"2015-10-16T12:47:30","slug":"is-the-oil-and-gas-fire-sale-about-to-start","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=13472","title":{"rendered":"Is The Oil And Gas Fire Sale About To Start?"},"content":{"rendered":"

Is The Oil And Gas Fire Sale About To Start?<\/a><\/h3>\n

Much has been written about the\u00a0mounting pile of debt<\/a>\u00a0for U.S. oil companies (not to mention the\u00a0well-known Brazilian oil giant<\/a>).<\/p>\n

Not that long ago, many oil and gas companies secured at least a part of their revenue by hedging contracts. Bloomberg\u00a0already reported<\/a>\u00a0in 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 \u2018frack now, pay later,\u2019 which were merely\u00a0a bold move<\/a>\u00a0by struggling oil services companies to encourage cash strapped oil and gas companies to continue operations.<\/p>\n

Simultaneously, we witnessed the bankruptcies of companies such as\u00a0Samson Resources, Hercules Offshore<\/a>\u00a0and\u00a0Sabine Oil & Gas Corp.<\/a>\u00a0These bankruptcies put the industry on notice. The cash flow situation for the entire oil and gas sector looks outright grim. Credit rating agency Moody\u2019s expects a\u00a0sector wide negative cash flow of $80 billion<\/a>\u00a0and is expecting spending cuts to continue next year. See figure 1 below for an overview of industry income and spending.<\/p>\n

Related:\u00a0Tanker Companies Profiting From Low Oil Prices<\/strong><\/a><\/p>\n

\"IndustrySourcesAndUses\"<\/a><\/p>\n

Image source:\u00a0Reuters<\/a><\/em><\/p>\n

(Click to enlarge)<\/p>\n

Summing it up, debt, negative cash flows and\u00a0the outlook for oil prices<\/a>\u00a0have led weak companies with balance sheets to a divest in a big way.<\/p>\n

Although we have witnessed a couple of noteworthy acquisitions in the last months, which put 2015 in the books as a year with\u00a0high volume takeovers<\/a>, we cannot yet speak about an absolute M&A boom.<\/p>\n

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.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Is The Oil And Gas Fire Sale About To Start? Much has been written about the\u00a0mounting pile of debt\u00a0for U.S. oil companies (not to mention the\u00a0well-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\u00a0already reported\u00a0in June that many of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[1361,1851,195,9910,541,1729,3044,5332,1427,846],"class_list":["post-13472","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-bankruptcy","tag-commodity-price-collapse","tag-debt","tag-fire-sale","tag-moodys","tag-oil-and-gas-industry","tag-oil-glut","tag-oilprice-com","tag-supply-and-demand","tag-us-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13472"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13472\/revisions"}],"predecessor-version":[{"id":13473,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/13472\/revisions\/13473"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}