{"id":4223,"date":"2015-01-07T19:32:32","date_gmt":"2015-01-08T00:32:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=4223"},"modified":"2015-01-07T19:32:32","modified_gmt":"2015-01-08T00:32:32","slug":"mounting-debt-for-oil-drillers","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=4223","title":{"rendered":"Mounting Debt For Oil Drillers"},"content":{"rendered":"<h4><a href=\"http:\/\/oilprice.com\/Energy\/Energy-General\/Mounting-Debt-For-Oil-Drillers.html\" target=\"_blank\">Mounting Debt For Oil Drillers<\/a><\/h4>\n<p>In recent years oil exploration companies have taken on more debt in order to finance their operations. The level of debt in the upstream sector \u2013 excluding integrated oil companies like ExxonMobil \u2013 hit $199 billion at the end of 2014, a 55 percent increase since 2010, according to the\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/deep-debt-keeps-oil-firms-pumping-1420594436\">Wall Street Journal<\/a>.<\/p>\n<p>Loading up on debt made sense when oil prices were high. Fracking new shale wells can be an expensive process, but when oil was averaging over $100 per barrel, the debt load for many firms didn\u2019t seem so burdensome. Now with oil prices falling by more than half in the past six months, the most indebted firms are suddenly in crisis. As Warren Buffet\u00a0<a href=\"http:\/\/www.berkshirehathaway.com\/2001ar\/2001letter.html\">once said<\/a>, \u201cyou only find out who is swimming naked when the tide goes out.\u201d<\/p>\n<p>With an ebbing oil tide, the huge financial problems with several oil firms are starting to become clear for all to see. The\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/deep-debt-keeps-oil-firms-pumping-1420594436\">WSJ report<\/a>\u00a0finds that Quicksilver Resources has a net debt to EBITDA ratio of 12.6. This ratio measures debt to cash flows, with a resulting number that reflects the hypothetical number of years needed to pay back debt. Generally, anything above a 4 or 5\u00a0<a href=\"http:\/\/www.investopedia.com\/terms\/n\/net-debt-to-ebitda-ratio.asp\">starts to raise red flags<\/a>.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mounting Debt For Oil Drillers In recent years oil exploration companies have taken on more debt in order to finance their operations. The level of debt in the upstream sector \u2013 excluding integrated oil companies like ExxonMobil \u2013 hit $199 billion at the end of 2014, a 55 percent increase since 2010, according to the\u00a0Wall [&hellip;]<\/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":[195,263,2489,1775],"class_list":["post-4223","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-debt","tag-energy","tag-oil-companies","tag-oil-price-collapse"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4223","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=4223"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4223\/revisions"}],"predecessor-version":[{"id":4224,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/4223\/revisions\/4224"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}