Seems like Oxy will need to keep GOM to have the cash flow to service their debt and dividends. Seems like cutting the dividend will really anger their shareholders. Permian is a big money sink, so they need cash flow from somewhere. But prob won’t keep GOM long term.
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If GoM is sold as a package, it's a BIG chunk of money. If broken up, partner's preferential rights come into play. A number of assets are 100% so doesn't matter for those. Just something to keep in mind, it's going to take a while to make (one or many) transactions happen.
GoM is Gone
It doesn't really matter if the GOM is kept or sold immediately the guys out there will still have a job either way. They will have to have people operate the faculties. The guys I have talked to dont care whose name is their check from just as long as they keep working.
I think basic economics is to make as much money today as possible. Tomorrow's cash flow is not a given.
Government taxes and regulations can change with the swipe of a pen. Oil prices can be manipulated for political interests.
The energy business has been a gamble since one person drilled a hole and another had to produce it.
There are dry holes, poor production results and sadly, unforeseeable man made or natural catastrophic events.
Force Majeure
No, that’s my point, if they sell it, I don’t think they have enough cash flow to service the remaining debt and cover dividends and taxes. I don’t think the sale price for GOM will lower debt enough to relieve the need for the cash flow.
If there's a buyer, they will sell it. It's instant cash, as opposed to waiting to make money.
Blah blah blah....who cares! Move on people money isnt worth the agony, stress, drama, unknown b--ching...life is greener on the other side. Move On!
OP here. Not trying to convince anyone. Really just soliciting opinions. I thought they would sell GOM, but after looking at financials, I’m not sure they can. Need the cash flow.
Who are you trying to convince?
That sounds like a familiar bedtime story.
DJ is FCF positive in excess of $1.0B/year. Oxy specializes in onshore shale. GOM is FCF positive? Bottom line, any assets that generate FCF will be kept to fund Permian ops...