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.
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