Access to capital will improve in 2014, energy execs say

HOUSTON — Growing international demand for U.S. oil and gas will help domestic energy companies locate the financing to invest in exploration, according to a national survey released Tuesday morning.

More than two-thirds of the 100 energy executives who responded said they expect better access to credit markets next year, according to the BDO 2014 Energy Outlook Survey.

“Oil and gas executives can feel relatively secure in their finances this coming year as the U.S. energy industry continues to gain momentum,” says Charles Dewhurst, partner and leader of the natural resources practice at BDO. “Not only is our economy improving, but with demand exploding worldwide, new doors are opening for increased revenue.”

Pulling back: BHP targets 18% capital spending cut in 2014

Almost two-thirds of the executives expect global demand for natural gas and oil to grow next year as the middle class expands in countries like Mexico and China, making up for decreased demand in several industrialized countries, including the United States.

But the expected rise in investment probably will not be accompanied by a growth in energy deals, executives said, who indicated they will emphasize making their operations more efficient rather than expanding their reach.

Energy deals totaled about $34 billion through the third quarter this year, compared to $83 billion for all of 2012, according to the survey. Fewer than half of the responding energy CFOs think that value will increase in 2014.

“Companies are looking to streamline operations and reduce costs in 2014 in an effort to entrench the gains of recent years,” BDO wrote in an analysis of the survey, noting nearly 40 percent of executives said they planned to start cost reduction programs in an effort to increase value for stakeholders, a 58 percent jump from last year’s study.

The BDO 2014 Energy Outlook Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, which interviewed executives from a range of oil and gas exploration and production companies from September through November 2013.

Also on FuelFix:

Top 10 deals of the US energy boom