Industry Quickly Moves To Defensive Strategies
The news is bad, and then it gets worse. Oil and natural gas commodity prices are in freefall. Energy stocks have given back all their tremendous gains of the past year and more.
Companies with loans due are scrambling to refinance or extend deadlines. Operators are choking back capital expenditures to preserve liquidity. Deals are being cancelled. Credit lines are being tapped while they are still available, and the cash held tightly.
Defense is the game. The industry is digging trenches and laying in rations. We’ve been through this before, but the speed and severity of this crash is stunning. And this time, it’s not just the oil and gas industry that’s affected. The collapse is broad and deep.
We’re bracing for more shocks. Keep your head down and your helmet on.
–by Peggy Williams, Senior Exploration Editor, Oil and Gas Investor
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