Sustaining capital Spend - US Oil

I reckon a sale of Linc US oil assets was on the cards given the lack of current capital spend there. All about short term cash flow to sale completion.

Then we have oil price plunge - In light of current oil prices the cost of production and maintaining wells is a challenge for all producers.

If Linc do sell they will sell into a distressed oil market and it will need to be a low price to seal a deal IMO - we have seen issues with divestment of coal assets into a distressed market where you cant make any money due to low commodity price cycle.

If they dont sell then they have an issue with revenue generation down the track due to lack of capital investment.

Peter Coleman from Woodside yesterday said about the capital spend on their existing assets:
QUOTE
Because we have a view that sustaining capital, or cutting back on sustaining capital in
the short term, has quite detrimental long term consequences for you. So the sustaining capital we're talking
about are things like activities on our offshore platforms, that we think we need for fabric maintenance and so
forth. Very importantly a commitment to continuing with our Karratha Life Extension activities around the
Karratha Gas Plant and working that through. So all of that is included in the sustaining capital number for
us.
ENDQUOTE

Interesting times.