Loc, the best oil companies are still making money, albeit they are becoming a very select few.
Companies that have already sunk most of the capex required to produce are the safest right now. Hence why the likes of KAR, even with cash above its market cap is being beaten up, because they have no production and will need to spend every dollar they have.
Without wanting to dilute this thread or cross promote, I think you should look at some of the Cooper Basin stocks (BPT,DLS,SXY,COE) if you want to hold companies that are making money even now (and will continue to do so). BRU for me is a mix, after going through old reports, I am pretty confident that BRU can get its total cost of production down to AUD $30, Ungani crude also gets a premium to Brent (although not sure how much). Also, BRU is covered for $27 million by Mitsubishi as they progressively increase their production. So costs are somewhat covered, I really hold BRU because of its exploration potential.
Without doubt bankruptcies are going to occur on-mass in the U.S , at least for all the companies involved in shale. They all borrowed to get where they are, and whilst interest rates are low on paper, in reality the borrowing costs are increasing while the price being received for oil/gas is very low. I am still surprised that a wave of failures has not occurred yet. Conventional oil and gas is the cheapest to produce, then tight, then shale. BRU has a mix, but for now is focusing on Conventional and Tight.
Oil is up right now, so even with all the market instability, 90+ million barrels of oil are being consumed each day....
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