Oil Price Forcing Explorers to Cut Spending

The crash in oil prices has forced oil and gas explorer Premier Oil to cut spending on development next year by 40%.

And it has said it will write off some $300m in its 2014 results, due out next month.

Development spending on new oil fields next year, already cut to $600m, will be “subject to further review”.

The cuts mean the company is already in negotiations to reduce costs with a number of key contractors.

Premier said 2014 revenues are 6% up on 2013, but profits will be hit by an impairment charge estimated at $300m.

Tony Durrant, chief executive, said: “Premier is in a strong position to weather a period of oil price weakness due to its long-term cash flow generation.

“Premier has also responded to the sharp fall in the oil price with a broad programme of cost reductions and the postponement of discretionary spend.”

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza