Adhere to: 2016 oil ...
2016-05-18 14:42Source:
At the end of the year in the oil industry, industry executives may feel a little comfort, but the idea of 2016 will be a worse year, and that is a bit of a discount.
Oil and gas prices have fallen since the summer of 2014, and have so far deprived hundreds of thousands of jobs, leading to the cancellation or delay of hundreds of billions of dollars worth of projects. Today, the external environment is more challenging than a year ago, and energy companies to reduce the ability to cope with difficult conditions.
For oil and gas producers, in 2016 will be to cut costs and restructuring of the year, if possible, but also to arrange refinancing, if it is not possible to refinance, in some cases can only be bankrupt. Due to the difficult to reach a consensus on the valuation, mergers and acquisitions in 2015 rather sluggish, but in 2016 may be speed.
Those who have other sources of income, such as oil refining and chemical industry, and the use of oil and gas in the capital market, will find that the day is sad, but the survival should not be a problem. Companies that are fully focused on oil and gas production, and the weak balance sheet, if they can survive in 2016, even if they do well.
A year ago, the industry outlook has dimmed. Since then, Brent crude fell 39%, 2015 December 28, fell to $37, close to 11 year lows (editor's note: Brent crude oil in January 12, has dropped to a barrel of 30.34 $, West Texas Intermediate crude fell to a barrel $29.93). Delivery times longer oil futures prices also fell sharply, making the production of derivatives to protect the attractiveness of the income becomes smaller, and led to the crude oil will be in a longer period hovering in the low. Natural gas prices have also been falling (gas prices have been linked to oil prices in Europe and Asia). In the United States, the warm winter weather helped to benchmark Henry Hub natural gas prices to a 16 year low.
Ernst & Young (Ernst & Young), Andy Brogan (Andy Brogan) said that weak prices to deal with many of the available methods are already in use. "Businesses have a hedge against oil prices, they cut costs that can be cut quickly and put aside some of the capital spending that can be put on hold," he said. "A lot of these factors are beginning to disappear."
Oil producers have cut costs, the way is to improve efficiency, and to lower the cost of their suppliers - oil field Service Corporation charges. In December 2015, global market value of the highest independent oil and gas producer ConocoPhillips (ConocoPhillips) said that in the United States, in the past year drilling onshore drilling cost dropped 32%, and through the hydraulic fracturing to these wells on production cost decreased by 38%.
Shale oil producers in the United States are also continuing to steadily increase productivity in recent years. For example, in November 2015, EOG Resources Inc. (EOG Resources said the in South Texas Eagle Ford Eagle Ford shale per drill wells have been from a year of 8.9 days shortened to 7.7 days.
Companies are still cutting capital spending. October 2015, the British BP, said its proposed capital expenditures of about $19 billion, less than the original 24 billion to $26 billion.
Such reductions helped stabilize the industry's financial position. Energy research firm Wood Mackenzie (Mackenzie) said that on average, mainly listed oil companies will need to 2016 period, Brent crude oil price per barrel to $66, in order to make their cash flow coverage capital expenditure, interest payments and dividends, the threshold is lower than a barrel by 2015 $81. Before cutting costs and expenses, the price of their cash balance point is $104 a barrel.
However, at the price of $66 a barrel reached breakeven still means, the current level of oil prices, industry levels of borrowing destined to will rise. Large international oil prices can bear more high debt, but they also do not want to borrow out of control, so they announced a new round of cost cutting plan. In December 2015, is seeking shareholder approval for its acquisition of British Gas Group (BG) group of Royal Dutch Shell (Royal Dutch Shell) said, once the transaction is approved, the company intend to 2800 more jobs -- accounts for about three percent of the total number of employees in the group after the merger.
When it is time to re negotiate the contract, the cost of the oil field service charges will continue to reduce the cost of the manufacturer. For example, in accordance with the contract, Transocean deepwater champion rig from January to November 2015 to 2016 in the Gulf of Mexico for Exxon Mobil (ExxonMobil) provide services, charge $39.5 million a day, charges than the previous low of 41%.
However, there is a limit to the cost decline. Oil field service charges must be high enough to allow providers to maintain operations. Halliburton (Halliburton) chief executive officer Dave - Lesage (Dave Lesar) argued, oil service charges is unsustainable low level. Companies have been in improving productivity (such as only the best Block drilling), but in the three major U.S. shale oil producing two -- the Eagle Beach and North Dakota Bakken (Bakken) -- has been the emergence of signs of a slowdown in productivity gains.
If enterprises continue to cut capital expenditure indefinitely, it is bound to lose revenue and operating income. 2015, companies generally focus on promoting the production of fast effective projects, while halting exploration and more long-term development projects, but the natural decline of the oil field means that must continue to invest in order to stop production decline.
The outlook of the tight supply of oil recovery laid the foundation already lowered the cost of the company will be situated in an advantageous position, can benefit from it. "If the oil price back to $60, then the situation may start to look a lot better," wood Mackenzie - Tom ellacott (Tom Ellacott) said, "in the oil and gas industry is supposed to restart in the lower cost basis."
In the oil industry is full of all kinds of trouble "Pandora's box" in, one ray of hope is that, at present on the exploration and development expenditures cut more. Final rebound in oil prices will be more powerful. Petroleum enterprises are facing the task will be difficult to change, adhere to the price rebound, the rebound in oil prices and pick fruit.
Source: FT Chinese network
Oil and gas prices have fallen since the summer of 2014, and have so far deprived hundreds of thousands of jobs, leading to the cancellation or delay of hundreds of billions of dollars worth of projects. Today, the external environment is more challenging than a year ago, and energy companies to reduce the ability to cope with difficult conditions.
For oil and gas producers, in 2016 will be to cut costs and restructuring of the year, if possible, but also to arrange refinancing, if it is not possible to refinance, in some cases can only be bankrupt. Due to the difficult to reach a consensus on the valuation, mergers and acquisitions in 2015 rather sluggish, but in 2016 may be speed.
Those who have other sources of income, such as oil refining and chemical industry, and the use of oil and gas in the capital market, will find that the day is sad, but the survival should not be a problem. Companies that are fully focused on oil and gas production, and the weak balance sheet, if they can survive in 2016, even if they do well.
A year ago, the industry outlook has dimmed. Since then, Brent crude fell 39%, 2015 December 28, fell to $37, close to 11 year lows (editor's note: Brent crude oil in January 12, has dropped to a barrel of 30.34 $, West Texas Intermediate crude fell to a barrel $29.93). Delivery times longer oil futures prices also fell sharply, making the production of derivatives to protect the attractiveness of the income becomes smaller, and led to the crude oil will be in a longer period hovering in the low. Natural gas prices have also been falling (gas prices have been linked to oil prices in Europe and Asia). In the United States, the warm winter weather helped to benchmark Henry Hub natural gas prices to a 16 year low.
Ernst & Young (Ernst & Young), Andy Brogan (Andy Brogan) said that weak prices to deal with many of the available methods are already in use. "Businesses have a hedge against oil prices, they cut costs that can be cut quickly and put aside some of the capital spending that can be put on hold," he said. "A lot of these factors are beginning to disappear."
Oil producers have cut costs, the way is to improve efficiency, and to lower the cost of their suppliers - oil field Service Corporation charges. In December 2015, global market value of the highest independent oil and gas producer ConocoPhillips (ConocoPhillips) said that in the United States, in the past year drilling onshore drilling cost dropped 32%, and through the hydraulic fracturing to these wells on production cost decreased by 38%.
Shale oil producers in the United States are also continuing to steadily increase productivity in recent years. For example, in November 2015, EOG Resources Inc. (EOG Resources said the in South Texas Eagle Ford Eagle Ford shale per drill wells have been from a year of 8.9 days shortened to 7.7 days.
Companies are still cutting capital spending. October 2015, the British BP, said its proposed capital expenditures of about $19 billion, less than the original 24 billion to $26 billion.
Such reductions helped stabilize the industry's financial position. Energy research firm Wood Mackenzie (Mackenzie) said that on average, mainly listed oil companies will need to 2016 period, Brent crude oil price per barrel to $66, in order to make their cash flow coverage capital expenditure, interest payments and dividends, the threshold is lower than a barrel by 2015 $81. Before cutting costs and expenses, the price of their cash balance point is $104 a barrel.
However, at the price of $66 a barrel reached breakeven still means, the current level of oil prices, industry levels of borrowing destined to will rise. Large international oil prices can bear more high debt, but they also do not want to borrow out of control, so they announced a new round of cost cutting plan. In December 2015, is seeking shareholder approval for its acquisition of British Gas Group (BG) group of Royal Dutch Shell (Royal Dutch Shell) said, once the transaction is approved, the company intend to 2800 more jobs -- accounts for about three percent of the total number of employees in the group after the merger.
When it is time to re negotiate the contract, the cost of the oil field service charges will continue to reduce the cost of the manufacturer. For example, in accordance with the contract, Transocean deepwater champion rig from January to November 2015 to 2016 in the Gulf of Mexico for Exxon Mobil (ExxonMobil) provide services, charge $39.5 million a day, charges than the previous low of 41%.
However, there is a limit to the cost decline. Oil field service charges must be high enough to allow providers to maintain operations. Halliburton (Halliburton) chief executive officer Dave - Lesage (Dave Lesar) argued, oil service charges is unsustainable low level. Companies have been in improving productivity (such as only the best Block drilling), but in the three major U.S. shale oil producing two -- the Eagle Beach and North Dakota Bakken (Bakken) -- has been the emergence of signs of a slowdown in productivity gains.
If enterprises continue to cut capital expenditure indefinitely, it is bound to lose revenue and operating income. 2015, companies generally focus on promoting the production of fast effective projects, while halting exploration and more long-term development projects, but the natural decline of the oil field means that must continue to invest in order to stop production decline.
The outlook of the tight supply of oil recovery laid the foundation already lowered the cost of the company will be situated in an advantageous position, can benefit from it. "If the oil price back to $60, then the situation may start to look a lot better," wood Mackenzie - Tom ellacott (Tom Ellacott) said, "in the oil and gas industry is supposed to restart in the lower cost basis."
In the oil industry is full of all kinds of trouble "Pandora's box" in, one ray of hope is that, at present on the exploration and development expenditures cut more. Final rebound in oil prices will be more powerful. Petroleum enterprises are facing the task will be difficult to change, adhere to the price rebound, the rebound in oil prices and pick fruit.
Source: FT Chinese network
