Goodrich Petroleum looks to sell its South Texas assets

Oil and gas well detail profiled on blue sky with clouds
Source: DollarPhotoClub

U.S. shale company Goodrich Petroleum announced yesterday it is thinking of divesting itself of its South Texas assets.

As oil prices hit the lowest point since the Global Recession in 2009 and with Bank of America forecasting a further drop to $50 per barrel, shale exploration companies are looking for savings and efficiencies to protect their severely squeezed margins.

According to a statement released by Goodrich Petroleum, “With a preliminary 2015 capital expenditure budget of $150 – 200 million, the company is estimating it has sufficient projected liquidity under current market conditions, borrowing base and capital structure to execute its 2015 capital plan.”

In order to secure this liquidity, Goodrich was forced to reduce it’s spending budget and trim some of its less profitable assets. As a result, the company has announced that it is planning to sell “all or a portion” of the Goodrich’s Eagle Ford shale assets. According to Goodrich, the decision – which comes on top of the $61m sale of its East Texas Cotton Valley Field – is designed to give the company more room to expand its development activities elsewhere.

Goodrich Petroleum’s shares have collapsed 86 per cent since crude oil began its descent in June.

Article continues below this message

Have your opinion heard with Shale Gas International

We accept interesting, well-written opinion and analysis articles of up to 1,500 words, that offer unique insights into the shale industry. The articles cannot be overtly promotional in nature and need to fit into at least one of our content categories.

If accepted, the article must be exclusive to Shale Gas International website and cannot appear on any other websites, publications, etc. Each article may contain up to three links to external websites relevant to the content discussed in the piece.

If you would like to contribute to Shale Gas International website, please contact us at: editor[at]mw-ep.com