Write-Downs and Spending Cuts Are the Words of the Day in U.S. Shale
U.S. shale gas producers are ripe for further spending cuts and write-downs, investors and analysts said, with prices at four-year lows and China’s rejection of some gas imports weighing on earnings.
Natural gas production in the United States is at record levels, outpacing domestic consumption and leading to global supply glut. At the same time, China, the world’s largest importer of gas, has turned away shipments with its demand forecast to rise at the slowest pace in four years amid the coronavirus outbreak.
As a result, several large gas producers, have reduced the value of their production assets.
EQT Corp, the largest U.S. gas producer, recently said it would take a write-down of as much as $1.8 billion, following CNX Resources Corp, Royal Dutch Shell Plc and Chevron Corp in reducing the value of gas properties.
U.S. shale gas producers’ Antero Resources Corp, Cabot Oil & Gas Corp and EQT kick off fourth-quarter results in coming days. Antero has pledged to sell assets while Cabot plans a 27% cut to its drilling budget.Read more by clicking here.