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
19 March 2026
The regional crisis highlights the undervalued role of fixed pipelines in the age of tanker flexibility
18 March 2026
Rising LNG exports and AI-driven power demand have raised concerns that US gas prices could climb sharply, but analysts say abundant shale supply and continued productivity gains should keep Henry Hub within a range that preserves the competitiveness of US LNG
18 March 2026
Risks of shortages in oil products may cause world leaders to panic and make mistakes instead of letting the market do what it does best
17 March 2026
The crisis in the Middle East has put LNG’s ability to offer security and flexibility under uncomfortable scrutiny
