Bondholder control bodes ill for future production growth

If you owe a lender $100, you’ve got a problem. If you owe $1mn, the lender has a problem. Oil companies exist at both ends of this old adage, and it all bodes ill for future production.

Lower for longer has led to a cash flow crisis in an industry that relies on up-front funding for returns that could be years down the line. Exploration spend is being pared to the bone, in favour of targeting cash to wring maximum value out of assets that already produce.

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