As US independents invite foreign and major oil and gas companies to invest in their shale assets to fund development, EOG Resources is refusing to follow the trend.
The Houston-based independent is transitioning from producing mostly natural gas to the more expensive business of producing mostly oil, but Mark Papa, EOG’s chairman and chief executive (pictured), told the FT he is not seeking partners for its shale oil assets:
We want to emerge from this transition without diluting these crown jewels and retain 100 percent of our best assets.
The announcement by Chesapeake Energy that it will sell several assets to raise $5bn to put toward paying down debt was warmly greeted by analysts who have been lamenting prospects for a sector under intense pressure by low US natural gas prices.
Indeed, Standard & Poor’s, the ratings agency, placed a BB rating on Chesapeake, BB senior unsecured issue ratings and B preferred stock issue ratings on CreditWatch with positive implications. Here is what Standard & Poor’s credit analyst Scott Sprinzen had to say:
We placed the ratings on Watch positive because Chesapeake today announced its plan to sell all of its Fayetteville Shale assets, as well as its equity investments in Frac Tech Holdings LLC and Chaparral Energy Inc. and that it plans to reduce its long-term debt through 2012.