At the crack of a bankruptcy judge’s gavel, stalking-horse bidders slowly lurch out of the starting gate, lower their long necks and graze among the oil and gas bankruptcies. The slowly revealed results are fascinating.
The Permian Basin will likely continue to be the epicenter for shale consolidation among oil and gas producers because of its perceived advantages in economic well locations, a recent report says.
As 2020 crawls through the third quarter, the strains on M&A and the oil and gas industry are beginning to take on albatross-ian levels.
For years, the midstream sector has managed to stay strong in weak oil and gas markets, but the unforeseen impacts of COVID-19 and the OPEC+ oil price shock have had a deep impact.
Bankrupt Permian operator Approach Resources appears to be headed toward a sale again—albeit for less than two-thirds of the original sales price.
Shale operators have plans to restart production. But with OPEC seemingly satisfied with $40 oil prices, U.S. producers are facing the prospect of becoming ‘zombie companies’—all dressed up but with nowhere to drill.
The Oklahoma City-based oil and gas company, which suffered a brutal bankruptcy in 2016, said the deal will keep the specter of Chapter 11 at bay.
With historic drops in oil price, mass layoffs and the likelihood of prolonged recovery, some wonder how the industry will regroup as demand recovers.
Investors can be lured back to oil and gas, but free cash flow has to be returned to shareholders and not sunk back into the ground, say panelists during Summer NAPE.
The remainder of the year’s deals will likely involve gas assets (while prices are good) and could come to include the low cost supply areas in the Texas and Louisiana Haynesville. Barring a miraculous rally, oil looks likely to remain the New Coke of commodities.
