JPT - Are Half the Companies in Shale Really Superfluous?

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

JPT - BP Slashes Up to $17.5 Billion in Assets; Cites Pandemic for Swifter Shift to Net Zero

BP has announced it will write off up to $17.5 billion from the value of its assets when it reports its second-quarter results, after cutting long-term oil and gas price forecasts.

The impairments are set to raise its debt burden and increase pressure to reduce its dividend.

BP lowered its benchmark Brent oil price forecasts to an average of $55/bbl until 2050, down by around 30% from previous assumptions of $70.

BP shares were down 4.3% at 1418 GMT on 15 June.

The second week in June, BP said it would cut about 14% of its workforce in response to the coronavirus crisis and to support CEO Bernard Looney’s strategy.

https://pubs.spe.org/en/jpt/jpt-article-detail/?art=7188