FreightWaves Oil Report: Struggles In The Oil Patch Aren't Getting Any Easier
Market observers call new flow of capital in US oil production unlikely When Paul Murphy, the chairman and CEO of Cadence Bank (NYSE: CADE ), got on his recent earnings conference call, he described the bank's approach to new lending into the energy patch in words that could have been uttered by many of his peers. "With respect to any new energy loans, we are highly cautious. It is a very high bar you must clear for any new energy originations," he said, according to the transcript supplied by SeekingAlpha. "Our intent is to keep the portfolio flat or see it reduce over the near term." Or consider a Canadian company called Pengrowth Energy. On Friday, it announced it was being sold to Cona Resources. Cona is paying C$740 million to take on Pengrowth's debt. It's also buying all its common shares….at five Canadian cents per share. Five years ago, the common shares were trading at more than C$4.50. In the statement announcing the sale, Pengrowth cited among other things "a severe funding crisis in the Canadian energy capital markets which impeded the Company's ability to achieve a funding solution." There are all sorts of stories like this through the oil patch.
FreightWaves Oil Report: Struggles In The Oil Patch Aren't Getting Any Easier
Market observers call new flow of capital in US oil production unlikely When Paul Murphy, the chairman and CEO of Cadence Bank (NYSE: CADE ), got on his recent earnings conference call, he described the bank's approach to new lending into the energy patch in words that could have been uttered by many of his peers. "With respect to any new energy loans, we are highly cautious. It is a very high bar you must clear for any new energy originations," he said, according to the transcript supplied by SeekingAlpha. "Our intent is to keep the portfolio flat or see it reduce over the near term." Or consider a Canadian company called Pengrowth Energy. On Friday, it announced it was being sold to Cona Resources. Cona is paying C$740 million to take on Pengrowth's debt. It's also buying all its common shares….at five Canadian cents per share. Five years ago, the common shares were trading at more than C$4.50. In the statement announcing the sale, Pengrowth cited among other things "a severe funding crisis in the Canadian energy capital markets which impeded the Company's ability to achieve a funding solution." There are all sorts of stories like this through the oil patch.