COVID Market Update
Adding to plans to slash 10,000 jobs by the end of the year, BP made another painful announcement this week to write down nearly $18 billion in oil and gas assets as it cut energy price forecasts. It also raised $12 billion of debt this week in hybrid bonds that is sure to help its balance sheet.
Iraq has made significant cuts in Basra crude supplies to Asia in July as the producer complies with an OPEC ultimatum to cut output. Basra crude supplies for July are expected to decrease by some 15-20%. Iraq’s Oil Marketing Company (SOMO) announced that the country intends to export 2.8 million barrels of Basra crude from its southern ports per day in June.
Colorado-based Extraction Oil & Gas has filed for bankruptcy protection as oil prices plunge amid the COVID-19 pandemic. The company’s market worth has collapsed from $4bn in 2016 to less than $100m on Friday, while its total debt outstanding amounted to $1.6bn at the end of the first quarter.
The Bureau of Land Management (BLM) has postponed the Wyoming oil and gas lease sale scheduled for late June. The bureau had originally planned to open 135 parcels totaling approximately 170,000 acres to energy developers. The decision follows similar postponements in New Mexico, Utah, Nevada, and Colorado as oil prices and lingering lockdowns put a damper on interest, though there has been no official explanation.
Chesapeake Energy could file bankruptcy as soon as this week…