Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on September 29, 2008

Bookmark and Share

Cash-Rich Oil Firms Snap Up Assets

The turmoil on Wall Street is reshaping the U.S. oil industry, forcing debt-laden smaller producers to sell assets and creating opportunities for larger, cash-rich companies that until recently had been criticized by investors for spending too conservatively.


The latest example: Occidental Petroleum Corp., one of the largest independent oil producers, Thursday snapped up the 50% interest it didn’t already own in oil and gas fields in Texas and the Rocky Mountains from smaller company Plains Exploration & Production Co. The $1.25 billion price tag was nearly 20% less than the $1.55 billion Occidental paid less than a year ago for the first half of the assets.
The deal comes amid a rapid reversal of fortunes for many in the energy sector. In the first half of the year, energy prices skyrocketed and investors eagerly lent money to oil companies, one of the few industries still thriving in the struggling economy.

Oil prices, though still high by historical standards, have declined more than 25% from their July peak. Natural-gas prices have fallen even more sharply as rising production has led to fears of a looming glut. And many energy companies have seen their share prices plummet 40% or more from their highs in June or July.


The shift has led to a scramble for cash just when the global financial crisis has made it hardest to come by.


Rigzone



Leave a Reply

Your email address will not be published. Required fields are marked *