ROCKMAN wrote:ralfy - Not sure what creditors you're talking about. Southwestern has no creditors: $900 PAID OFF THE DEBT. And the new owners: they bought the production with their own money: that's what "privately funded" means. And what makes you think those buyers require higher prices to turn a profit on their acquisition. And due to the sale Southwestern has $600 million in net income to fund other projects...no borrowing required. And bought $200 million of their own stock without borrowing a penny.
Your choice, of course. But you might want to re-read coffee's post with a less prejudiced eye.
Southwestern plans to pay off $900 million of its more than $3 billion in debt with the proceeds, and will spend $200 million to repurchase shares over the next 12 months, Way said.
In July, BHP Billiton (BHP.AX) sold its Fayetteville assets for about $300 million to Merit Energy Co as part of its exit from U.S. shale properties. Low gas prices have encouraged companies to seek more profitable liquids production.
pstarr wrote:
So which is it? Do we go with Reuters, that left-wing anti-energy Antifa mouthpiece . . . or our very own industry insiders?
ROCKMAN wrote:ralfie - Thanks for the clarification. The statement seemed to imply the $900 million was the company's total debt. But don't let corporate debt fool you: most carry some debt regardless of profitability. There was a small flurry of bankruptcies when oil prices first fell. But the vast majority of those companies came out in much better condition and continued operating. How many fillings have you seen reported lately?
You can't look at debt alone to judge a company's health: Microsoft currently has $80+ BILLION in debt...$72 BILLION in long term debt. I doubt Bill is worried about making payroll this month. LOL.
https://www.stock-analysis-on.net/NASDA ... lysis/Debt
coffeeguyzz wrote:The 900 million that SWN paid was for a specific portion of their debt portfolio.
Rocdoc attempted, once again, to expand the overall view on how the upstream boys regularly go charging into areas with high exuberance in the early stages of a new region.
It is not uncommon for companies to shed - in multi billion dollar amounts - acreage and operations to both streamline their businesses and reduce debt.
Of all the over arching components into this entire "Will It Work?"/"When Will It Collapse?" imbroglio, the fact that a wide swath of industries from Petro chemical, ports, shipping, pipelines, midstream infrastructure, even the most 'downstream entities like smelters, steel producers, consumer oriented manufacturers (think white goods, vehicles, Foxconn, etc) are cumulatively investing in the trillions of dollars might lead one to expect a whole lot of oil/gas is coming our way.
ROCKMAN wrote:ralfie - I wonder where you get the idea that the petroleum industry has been having trouble raising loans? Apparently you just repeat what you read others are saying. Obviously you don’t bother to search activity in the petroleum bond market. Here’s one relatively small example of the hundreds of $BILLIONS in bonds being placed all the time. From
https://www.investopoli.com/en/2018/03/ ... 74599cn34/
"New bond issue: Occidental Petroleum (NYSE:OXY) issued new debt notes (US674599CN34, 674599CN3) for 1B USD as of February 28, 2018. Tradable at TRACE OTC as of March 1, 2018. Listed at Stuttgart Stock Exchange as of March 8, 2018."
You do understand that these bonds are being bought by very experienced and well skilled traders who study the financial condition of the bond issuing companies in great detail, don’t you?
Marathon Oil alone has issued 100’s of $billions of new bonds. Just search the petroleum bond websites. Companies are constantly issuing new bonds to either raise new monies or replace older bonds that are approaching maturity.
If these represent bad investments I suggest you write those bond buyers and explain the errors of their decisions. They would gladly pay you $millions in consulting fees to save them from themselves. LOL.
As I and others repeatedly explained: during improving market conditions companies INCREASE their debt positions in order to take advantage of such conditions. Which can hurt them badly if those conditions abruptly reverse themselves. Or make the industry $TRILLION+ in profits if conditions hold long enough. The petroleum industry has always been a risk heavy game. And always will be. Fortunately, if things do go bad, it’s the bond buyers that suffer the bulk of the pain. The companies simply file bankruptcy and start over with a relatively clean slate. Some 80+ US public oil companies filed bankruptcy when the oil price collapsed. And with almost no exceptions, all came out of Chapter 11 in good financial condition and carried on doing business. Check Halcon for a great example. They became one of the new big players in the Permian Basin after clearing Chapter 11. And did so with a brand new $600 million credit line. Money lenders just love companies when they clear Chapter 11: often little or no debt and reserves that are proven at the then current price condition.
ROCKMAN wrote:ralfie - I agree with much of what you say. But: "And then there's one effect of peak oil, which is increasing cost to increase production, leading to diminishing returns, i.e., increasing debt needed for lower increases in production." Not sure what you mean by "effects of peak oil". We are obviously much closer to PO today then in then the late 1970's. But, adjusted for inflation, my cost to develop new oil reserves is much lower today. But this is a very complicated issue. Folks are easily confused. For instance the "easy oil" was found long ago and no longer exists. Such statements are typically made by folks who have never explored for oil. It was never easy. In reality the success rate is much higher today then in those "easy oil" days. Which is due to greatly improved exploration technology. What has changed is the size of fields left to discover: they are much smaller today. That fully explains why the volume of new reserves discovered has declined dramaticly...not because it is neither more difficult nor expensive. In truth many of the fields discovered today would have been impossible to find in the 1950's/60's.
Even the hot trends today (Bakken/Eagle Ford, etc) were known to contain oil long ago. But very little could be commercially developed with technology at that time. Ironically it is because of higher oil prices resulting from aspects of PO that technology was created that allowed unconventional plays to bloom which has delayed to inevitable day global PO is reached.
coffeeguyzz wrote:As per the NGV Global site, there are over 10 million Ngv fueled vehicles in China and Iran alone.
Throw in India, Pakistan, Argentina and Brazil gives you an additional 10 million.
Italy over 1 million.
Interesting to scan the global distribution on that site and correlate existing fueling stations as well as proximity to inexpensive, abundant fuel.
Absent Italy, European countries are barely a blip, which might explain the media blackout on this topic.
Worldwide research involving MOFs has exploded in recent years with 6,000 new iterations introduced annually to join the approximately 60,000 samples extant.
Flexible MOFS, liquid, Interpenetrated, on and on.
Applications range from microbial dosing, atmospheric water capture, toxic gas control, along with methane storage for vehicles.
Nanotechnology, materials compounding, along with ultra high data crunching with super computers are amongst the factors spurring developments.
One researcher claims MOFs will impact society on the scale of plastics.
Cutting edge samples sized at 1 gram have internal surface area of 10,000 square meters ... about the surface area of 2 football fields.
New world is dawning, folks.
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