Sector: Energy | Focus: Oil & Gas Exploration & Production
HQ: Houston, Texas
Financial Risks
The company faces market risk from fluctuating oil, gas, and NGL prices, interest rates, foreign currency exchange rates, and potential adverse governmental actions. Impairments of $1.1B in Q3 2024, including $793M in North Sea assets and $315M in Permian Basin assets, highlight significant asset write-downs. Legal proceedings, including environmental claims and decommissioning obligations on sold Gulf of Mexico properties, pose substantial contingent liabilities. The company's reliance on commodity hedging arrangements and counterparty creditworthiness also presents risks.
Financial Upside
The Callon acquisition, valued at $4.5B, offers potential cost savings, improved capital efficiency, and expanded development inventory. A $950M sale of Permian Basin properties is expected to reduce debt. Increased drilling activity in the Permian Basin and Egypt, along with a positive investment decision for a Suriname oil development, could boost production and revenues. Higher operating cash flows of $2.6B in the first nine months of 2024 suggest potential for increased shareholder returns.
