Posted on 08/11/2014 4:08:43 PM PDT by Lorianne
The world’s leading oil and gas companies are taking on debt and selling assets on an unprecedented scale to cover a shortfall in cash, calling into question the long-term viability of large parts of the industry.
The US Energy Information Administration (EIA) said a review of 127 companies across the globe found that they had increased net debt by $106bn in the year to March, in order to cover the surging costs of machinery and exploration, while still paying generous dividends at the same time. They also sold off a net $73bn of assets.
This is a major departure from historical trends. Such a shortfall typically happens only in or just after recessions. For it to occur five years into an economic expansion points to a deep structural malaise.
The EIA said revenues from oil and gas sales have reached a plateau since 2011, stagnating at $568bn over the last year as oil hovers near $100 a barrel. Yet costs have continued to rise relentlessly. Companies have exhausted the low-hanging fruit and are being forced to explore fields in ever more difficult regions.
(Excerpt) Read more at telegraph.co.uk ...
We are still in a deep recession ...
And from what I understand, those assets are being sold to Chinese companies.
That’s real funny because I have a shortfall of cash because of the high price of gas.
The Chinese are buying up resources all over the world.
Heard on the truck radio coming home this afternoon that the national average is $3.54/gal. Then I stopped to fill up.
$3.089 here in Aiken County, SC. It’s true SC has very low gas taxes but that price is really, really low. Don’t know why, not that I’m complaining :)
Peak oil?
No. It points to the fact that we have been and are in a depression.
If you call a tail a leg a dog still has four legs. Calling a tail a leg doesn't make it a leg.
Of course, these "smart" people are too smart to realize reality is biting them on the butt!
election year
Ambrose has that smirk on his face again...he knows something’s up.
Ambrose Evans-Pritchard is a moron who knows zilch about the markets. He lives in a hole-in-the-wall paid for by the queen of the block who hopes he can sell his sh*thole flat as the birth place of Fidel Csstro, Trotsky or Attila the Hun.
Should be good for another leg up on the S&P.
If anyone thinks the oil producers are profiteering they ought to see how much the stuff to produce oil and gas costs. The prices are astronomical for both equipment and services.
This too shall pass when the same hard lessons are taught again.
Without the goose there are no more golden eggs.
There is no economic expansion. This article is one more piece of the proof of that.
I’m in Norway now and the price of gas is between $2.27 and $2.60 (USD) a liter, about $9.00 a gallon average.
IIRC, the high gasoline prices in Europe are mostly caused by taxes.
($9.00 a gallon)
I think the deal here is; the Euros want to price gasoline out of the reach of the molotovologists.
The assumption that the historical trends were right is fallacious.
Now is now, not then
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