Rumblings of pumping services being sold to the highest bidder to lower capital costs???
9 replies (most recent on top)
apparently you don't since this has been covered before!
I get all my finance information for the layoffs.com
Same methods being employed to keep capital coming in...sell something...discontinue something that helped with "vertical integration" to "save money". If they weren't continuing the same MO, then the same comments couldn't be made, but it's obvious this kind of thing can't continue forever: Concho, Diamondback, Encana. All these guys had to consolidate. In due time the permian basin will be run by the majors and they'll turn it into a manufacturing operation focus on efficiency and it will no longer be the "swing" production that causes such gyrations in oil prices because they'll just develop it in a very steady fashion only pumping extra cash into it for very short periods.
Learn a little something about financials and then maybe you won't be so blind.
Same posters were here in 2015 predicting pioneers eminent demise.....
Lookie there...no more sand mine....cost cutting so we can keep this cash sinkhole floating.
1byo....check out an actual cashflow statement and you'll see that cashflow from continuing operations NEVER makes enough money for this company to grow. That is why this company has had to sell everything under the sun to make this unconventional thing work....you can't grow unconventionals without outspending cashflow. That's because the inherent nature of these types of assets is quick DECLINE. Most people quit growing an unconventional asset and then invest enough to maintain a certain production level. With that method, you can operate within cashflow, but growth is gone and then it's an optimization and cost control game. Your "cash" is from selling assets and stock. It's no wonder we are starting to see some more serious consolidation in the unconventional industry. That's going to continue until the majors takeover and turn this type of asset into a factory mode.
1ofh Pxd has massive cash position.....
Answer is....unconventionals are CASH hungry and can only grow if you outspend cashflow...one way to mask that is to sell something and get some extra cash!!!!!
Pretty widespread rumor. I want to hear reasoning