Trimming it back: Stone Energy of Lafayette has announced it will nearly halve its operating budget in 2015 from $875 million in 2014 to $450 million this year. The Advertiser reports the budget, authorized by Stone’s Board of Directors, will allocate some 75% to Deep Water/Gulf Coast assets, 8% to Appalachia, 4% to business development and 13% to abandonment expenditures. In a news release, the company notes the budget “is subject to change based on several factors, including commodity pricing, liquidity, permitting times, rig availability, regulatory, non-operator decisions and the sales of working interests in certain targeted assets.” Read the full story.
Pink slips: As crude oil prices continue slipping, pink slips are mounting in the oil patch. The latest: oilfield services provider Baker Hughes, which has announced plans to lay off about 7,000 employees—or about 11% of its workforce—in the wake of a nearly 60% drop in the price of crude oil. “While market demand ended up being more resilient in the fourth quarter than many had predicted, the recent declines seen in rig counts will clearly affect results in 2015,” says CEO Martin Craighead. “We are taking proactive steps to manage the business through these challenges.” USA Today has the full story.
The cause of it all: Oil prices will rebound rather than extend their decline to as low as $20 a barrel because a collapse since June isn’t merited by global supply and demand, OPEC’s Secretary-General predicts. Producers outside the Organization of Petroleum Exporting Countries should be first to reduce their output amid a surplus that’s pushed crude below $50 a barrel, Abdalla El-Badri says in an interview with Bloomberg at the World Economic Forum in Davos, Switzerland. “The price will not go to $20 or $25. I think the price will stay at where we are now,” El-Badri says. “We have seen this before—prices coming down very fast and go up very slow. But prices will rebound.” Read the full story.
