Billions in impairments, spending cuts expected in oil earnings

27-Oct-2015

HOUSTON — A $32 billion operating cash shortfall and persistent low oil prices will probably force big shale drillers to announce billions in oil field impairments and spending cuts in third-quarter earnings reports this week.

“It should be a weaker quarter,” said Guy Baber, an analyst at Simmons & Company International in Houston. “Third quarter prices were the worst of the year, down 20 percent from the second quarter. It was a pretty significant fall.”

Barclays said it expects a handful of large North American oil producers including Chesapeake Energy Corp. and Apache Corp. to report in the next few weeks that they wrote off a combined $20.9 billion in oil property values in the third quarter.

That’s on top of the $40 billion in impairments the six producers, also including Devon Energy, Southwestern Energy Co., Encana Corp. and Newfield Exploration Co., posted in the first half of the year. (by Colin Eaton, MySanAntonio.com)


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