Energy CFOs Expect to Feel Impact of Recession at Least Six More Months, According to BDO Seidman, LLP Study
Business Wire, Dec 02, 2009
-Legislative Changes and Access to Capital or Credit are Top
Financial Challenges-
CHICAGO — According to a new study by BDO
Seidman, LLP, one of the nations leading accounting and consulting
organizations, 40 percent of chief financial officers (CFOs) at oil and
gas exploration and production companies dont expect access to credit
to improve until the second half of 2010. An additional 31 percent
believe conditions wont improve until between 2011 and 2012. There is
similar sentiment about when the recession will end, with regard to its
negative impact on oil and gas demand 31 percent say the second half
of 2010 and 33 percent say between 2011 and 2012. Most respondents
believe it will take longer for their capital spending budget to get
back to 2007 levels. Sixty-four percent believe it wont happen until
2011 or beyond; only twenty-two percent believe it will bounce back by
the second half of 2010.
Its still a tough environment for the energy industry right now, but
concerns about the availability of financing are easing. Many companies
report that their banking relationships remain very strong, which could
help them bounce back more quickly, said Charles Dewhurst, a partner
and National
Energy Industry Practice Leader at BDO Seidman, LLP. Looking ahead
to 2010, there are a number of legislative issues on the table that have
CFOs worried in particular, proposals to eliminate certain tax
incentives for oil and gas producers.
These findings are from the BDO
Seidman 2010 Energy Outlook Survey, which
examined the opinions of 100 chief financial officers at U.S. oil and
gas exploration and production companies. The survey was conducted in
November of 2009.
Some of the major findings of the BDO
Seidman 2010 Energy Outlook Survey include:
-
Legislative Changes Top Financial Concerns. CFO respondents
most frequently cite legislative changes (33%) and access to capital
or credit (27%) as their greatest financial challenge in 2010. Oil
field service production and equipment costs is a growing concern for
some companies, with nine percent listing it as their top financial
challenge, up from two percent last year
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