Independents vulnerable to debt trap
A combination of aggressive cost-cutting and judicious hedging has given at least some independents a fighting chance of coming out the other side of the coronavirus crisis intact
Most recent coverage of the independent oil company sector has inevitably focused on how many companies will go under if oil prices do not rebound quickly. It is not hard to see why; the combined debt of independents listed in London as of 27 April, for example, was more than twice their total market capitalisation. Hedging has bought some operators valuable time—a typical company is likely to have hedged as much as 50pc of its output for at least a year. But with the price of such insurance now prohibitive, efforts to contain debt have shifted firmly towards reducing costs in general and capex in particular. “Many US-based independents have announced cuts of 40-50pc, which is quite a signif
Also in this section
4 December 2025
Time is running out for Lukoil and Rosneft to divest international assets that will be mostly rendered useless to them when the US sanctions deadline arrives in mid-December
3 December 2025
Aramco’s pursuit of $30b in US gas partnerships marks a strategic pivot. The US gains capital and certainty; Saudi Arabia gains access, flexibility and a new export future
2 December 2025
The interplay between OPEC+, China and the US will define oil markets throughout 2026
1 December 2025
The North African producer’s first bidding round in almost two decades is an important milestone but the recent extension suggests a degree of trepidation
