Turning A Liability Into An Asset

摘要

With natural gas prices at levels where some exploration and production companies are losing money with each molecule produced, these entities are left with no alternative other than to shut-in this production and wait until prices rebound. These wells will eventually be turned on because they are commercially viable (ie. they are still capable of producing hydrocarbons) and have been shut-in purely for economic reasons. Whether or not these wells are credited with value in an M&A transaction depends upon the purchaser's perception of the ability of the wells to generate positive future operating income.