Analysis: Revising overly optimistic assumptions
Wednesday, 02 March 2016
“Keep your eyes on the stars, and your feet on the ground,” said Teddy Roosevelt and US shale gas driller would be well advised to do just that. Headline-grabbing figures forecasting oil back over $100/bbl by 2030 have been touted by BP Group, in an effort to look beyond the current slump. Realities today are far different: Brent is forecast to average $38/bbl in 2016, while Henry Hub spot gas prices keep dropping below $2/mmBtu threshold. Worse still, a flurry of profit warnings from oil and gas majors is getting banks worried about debt repayments.
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