First, the good news from a panel discussing natural gas finances at the recent IHS CERAWeek conference in Houston:
“The current problems are probably, over the long run, the best thing that could have happened to gas in some sense,” said Alastair Maxwell, managing director for Goldman Sachs. “The real challenge for the business at hand is cost and economics.”
See? This is good for us. Would you like some cod liver oil to go with that second helping of low commodity prices?
Duncan Caird, managing director and head of project and export finance, Americas, for HSBC Securities, offered a laundry list of items to address:
“We’ve seen the price of equity completely change, so people are going to have to reprice how they do that—on LNG, on pipelines, on terminals,” he said. “We will see overall cost probably go up. We then need to look at the synthetic form of cost to capital, which is, what is the cost of my steel, my unions, my labor, the technology that I’m bringing to it? And those things all need to improve.”
The transaction list this month tilts toward generation of funds, with only one acquisition: Summit Midstream Partners LLC’s $1.2 billion dropdown of operating assets to Summit Midstream Partners LP. The general partner will receive an initial payment of $360 million, with a deferred payment due in 2020.
Repaying debt is the stated purpose of the cash infusion for several companies listed below. A conservative capital structure is a necessary component of managing through the downcycle and ultimately, as they say, it’s good for us.
Recommended Reading
U.S. Shale-catters to IPO Australian Shale Explorer on NYSE
2024-05-04 - Tamboran Resources Corp. is majority owned by Permian wildcatter Bryan Sheffield and chaired by Haynesville and Eagle Ford discovery co-leader Dick Stoneburner.
Exxon Shale Exec Details Plans for Pioneer’s Acreage, 4-mile Laterals
2024-05-03 - Exxon Mobil plans to drill longer, more capital efficient wells in the Midland Basin after a major boost from the $60 billion Pioneer Natural Resources acquisition. Data shows that Exxon is a leading operator drilling 4-mile laterals in the Permian’s Delaware Basin.
Infrastructure Company Savage Acquires Houston’s Texon
2024-05-03 - Texon, a midstream service provider, will continue operations under its legacy brand.
1Q24 Dividends Declared in the Week of April 29
2024-05-03 - With earnings season in full swing, upstream and midstream companies are declaring quarterly dividends. Here is a selection of dividends announced in the past week.
Pitts: US, Qatar Face off in LNG ‘Olympics’
2024-05-03 - In the LNG exporting space, the U.S. is squaring off with its fiercest competitor, Qatar, with both countries expected to outpace Australia