Many of the smaller e&ps will need to raise cash to pay back loans based on asset valuations. However EPE benefits from the fact that the only borrowings subject to asset revaluation due to lower oil prices is the 2.75B revolver which is only 31% drawn down. That and the great hedge position will mean that no equity offerings will be needed.
LPI is one that has already anticipated the problem of lower asset valuations and has sold new equity to pay off debt.
Cramer's TheStreet headlined that LPI's production for 2015 would be lower. I believe their guidance is that the rate of growth will be lower--ie.; only a 12% increase. Some of these "experts" are morons or they don't proof read what their underlings write---stupid in itself.
LPI and EPE are the most fully hedged of all the E&Ps. EPE at 100% at 90. No one seems to realize this about either one.
Obama has a more humane solution in dealing with these terrorists. He kills them with a drone. He doesn't get any information but they don't feel a thing. It's only the people around them who are maimed.
If the Saudi's goal is to bankrupt the small e&ps to return "balance" they are on a fool's errand. Remember how the Bakken got started. Horizontal drilling and fracking turned old stripper wells depleted in the 50s into highly profitable wells with oil at 80. If the small e&ps go bankrupt at 60 dollar oil, the Saudi's will have to keep oil below $60 or 70 indefinitely or the bigs will purchase and reopen those wells in the Bakken, Permian and EF.
Just one example is the earnings info site for EPE. It's all set for 2010 earnings releases. Did Yahoo lay everybody off because of Obamacare?
Some are of the opinion that small cap oils that are not currently making profits or a lot of cash flow may not survive lower oil prices. This would especially apply to small Bakken producers if they have another winter that hampers production significantly. I personally don't think oil will drop below 80 for any length of time, but I also can't predict the weather as well as Algore.
ISIS may turn out to be more disruptive to markets. If they gain full control of Iraqi and Kurdish fields they may find it tempting to disrupt industrialized economies by selling oil very cheaply or embargoing. They have no interest in modernizing their state of improving the lot of the people. It's all Sharia and screw the West to them.
An column in WSJ theorized that even more onerous EPA rules on railcars may be the followup to the death of the keystone pipeline. Strand oil by making rail too expensive.