Judgment day has arrived for companies of the oil shale boom and many are looking superfluous.
That is label used by Deloitte to describe 50% of the companies in its shale universe, representing nearly half the production.
The dictionary defines superfluous as more than is needed or wanted. The accounting firm describes them as “companies with a high-risk profile, making them unnecessary bets in the current environment.”
During the current deep funk in the oil business, these companies with low grades for financial strength and operational efficiency are in jeopardy.
“The grim financial position of many companies and weak economic outlook could trigger deep consolidation in the US shale industry,” Deloitte wrote in a recent report.
Note the use of the qualifier “could” in that sentence.
https://pubs.spe.org/en/jpt/jpt-article-detail/?art=7348
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