file for bankruptcy or to reorganize by before Jan 1, 2021?
I have a difficult time thinking we can stay afloat with how well the company has been managed. Thoughts / comments?
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It takes a person making 150,000 per year to work 86.6 years to get a chance to make 13,000,0000. Fyi
Let’s be blunt. This market crash is worse than anything we’ve seen in the oil patch. Prices are in the basement and soon production volumes will be too. With storage filling fast wells have to be shut in. The result will be a double whammy on income. Add to that, the lower oil prices will dictate a massive reserve write-down, undermining the debt to equity position and making borrowing harder.
All this comes on the heels of six years of stagnant prices that have drained the company’s resources. Noble survived by selling assets and borrowing heavily. The company now has few marketable assets left to draw on. Let’s also not forget that senior management wasted additional billions on ill-conceived pet projects, further weakening the balance sheet. That cash could have been of great value now.
On the plus side, the international production helps. Leviathan is now thankfully generating cash. However, the furloughs and other recent cuts suggest it isn’t nearly enough. The global impact of this crash points to a slow recovery. It’s quickly become not just a demand issue but also a broader economic one. That will take time to sort itself out and makes a major restructuring look inevitable.
So, what will be left? West Texas? DJ? Seems more likely Noble may soon morph into an E Med centric international, with Israel facilitating the process to protect their interests. We shall see.
Leviathan sales are priced by long term contracts. Methanol market depends on manufacturing.
https://www.icis.com/explore/commodities/chemicals/methanol/ .
I appreciate the responses as I’m the original poster and it’s a sincere question, and concern.
Does this mean more downsizing (ie: cutting more of the workforce)?
Indeed, the international production is a plus. A bright spot competitors like Dvn and CHK lack. Still, with global demand down EMed and EG are under pressure too. I hear rumblings by EMed buyers that prices are too high. EG government is always unpredictable. Downward price pressure all around.
Fortunately for Noble it has conventional international assets that should keep it afloat. Noble will probably hunker down in survival mode until oil prices recover. That means cutting costs down to the bone. Oil prices are currently unsustainable for unconventional resources. Permian production is going to roll over big time and I don't think investors are going to be in any rush to fund unconventional projects anytime soon.