Quote:
Originally Posted by GGG
I don’t really think the government should be throwing additional money at oil companies outside of what all other industries are getting in terms of salary support.
Where I think the government could help is to buy debt as it comes up for renewal in exchange for shares of the company. If a company fails on cash flow then it may not make sense throwing good money after it. If it is failing because of an inability to renew debt Because of current prices then getting it through that point would be helpful.
WCS is $30 US today. If you aren’t cash flow positive at this point you are in real trouble long term.
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And if you are not, formula to be cash flow positive is
layoffs + other opex/capex cuts + shutting in high lifting cost wells.
Maybe instead of throwing money at the oil companies, throw money at everyone who is getting layed off and losing contracts. or fund some other programs to give them work.
Im not sure I fully support bailouts as the layoffs will still happen and the oil companies will just pocket it or put it towards debt.