OUR YEAR-END editorial lineup in this issue of OGFJ is chock full of interesting articles that are intended to be informative and insightful. We recognize that not every column and feature will appeal to everyone in our diverse audience of industry executives, investment bankers, fund managers, investors, research analysts, consultants, attorneys, and other managers and professionals. However, we try to find the right mix of editorial content so that every subscriber finds something of value in each issue of this publication. Not to overstate our abilities, but our aim is to provide you the reader with information that helps you perform your job better and accomplish your goals.
This month, we have a number of articles that should be of interest.
Our cover story is an interview with John White, Houston-based senior research analyst with Roth Capital Partners. An industry veteran, White has been through previous downturns and understands the cyclical nature of the oil and gas business as well as anyone. He shares his insight into geopolitical issues involving Saudi Arabia and the OPEC nations, the lifting of sanctions on Iran, and the necessity of bringing supply and demand into balance. He says we're in uncharted waters because never before have we had three million barrels a day of oil production from shale.
Stephen Phillips and Colin Graham of Orrick in London have written this month's Capital Perspectives article about reserve base lending, which is always a popular topic with our audience. Past articles about RBL have generated thousands of hits on our website. The Phillips and Graham piece examines how the current downturn has affected basic structures in the global oil and gas industry and discusses what will emerge from the restructuring. The focus is on key issues that distressed funds should consider as the industry goes through this time of financial stress.
Per Magnus Nysveen and Leslie Wei of Rystad Energy are regular contributors to OGFJ. This month, they look at how the low-price environment is impacting North American shale producers and how resilient they are in responding to the crisis. Companies are coping with the downturn by become more efficient in their operations and in shifting their emphasis to the "sweet spots" in each of the shale plays. They predict US oil production will decline only 3% as we exit 2015.
Roman Boros, a senior analyst with Rystad, says that the Norwegian company has developed a GIS method of estimating the prospectivity of global shale plays and provides a simplified GIS valuation model that enables relative comparisons among the various plays in his article about mapping global shale potential. We also offer a new global shale map for your perusal.
Adi Karev, global oil and gas leader for EY based in Hong Kong, has penned an article about the rising popularity of joint ventures in the oil and gas sector. He says that more companies are opting for this structure due to ongoing capital constraints. JVs will play a major role in funding capital projects in 2016, says Karev.
How are UK-based small-cap E&Ps faring in the current downturn? Tom Fox and Adam Mitchell of StrategicFit in London discuss how valuations have been affected by falling oil prices and how too much debt has weakened the group's financial strength.
Elizabeth McGinley and Vivian Ouyang of Bracewell & Giuliani in New York examine the tax consequences that may not be readily apparent in oil and gas restructurings. Sophisticated tax advisors can help companies work through the hidden tax dangers, they say.
How can you stay competitive in a down market? Optimizing digital assets is critical for maximizing performance, say Josh Arceneaux and Jeff Gilley of North Highland in Houston and Denver, respectively.
Syd Nejad, CEO and managing partner of Calgary-based NAFT Energy, asks a question that is on many minds - Is Iran worth the risk? A veteran of numerous projects in many emerging markets, Nejad writes about what we know about the Iranian Petroleum Contract and the 2016 Licensing Round.
Frequent contributing author Muhammad Waqas of the UAE specializes in energy politics in the Middle East and elsewhere. For December, he examines the conflict between China and Japan over hydrocarbon reserves in the East China Sea and discusses a similar disagreement between China and neighboring countries over the South China Sea.
In the monthly Deal Monitor column, David Michael Cohen of PLS Inc. takes a look at the portfolio shuffle going on among A&D players. He says that the top 75 US E&P companies collectively lost 40% of their equity value and added 23% to their debt during the year that ended on September 1.
John Graves, founder and president of Graves & Co., writing in The Final Word column, makes the case for lifting the crude oil export ban in the United States. He says that American oil producers should not be subject to global commodity prices if they can't sell their crude globally.