Brandon Davis and Imran Khan, Swan Energy, comment on the recent bankruptcies and how that will impact the oil and gas market in the second half of the year.
The trend of CEOs taking multi-million dollar bonuses, example Whiting, Chesapeake and Hertz given, and while laying off employees and service contracts is also discussed in detail.
Host Jason Spiess asked the two if companies are using bankruptcy as a business strategy now while donating to political groups as they promote the oil companies up as leaders in industry. Another trend that seems to coincide with CEO’s receiving large bonuses for bankrupting companies. The three talk about how ten years ago bankrupting a business was beyond a fireable action, now however, it is rewarded with big bonuses.
A questionable trend that has been seen (and used) in politics for years, is the oil and gas industry now adopting that strategy?
As the market corrects itself through the managed marketplace, the concept of alternative financing is discussed. Payroll Paycheck Programs and other government assistance will be running out and soon and banks are tightening up their rules and regulations, which should open up a new market of private financing.
Davis talks about the current state of oil and gas, citing examples from different areas of his portfolio. While there is opportunity and growth in some areas like natural gas, other areas, like trucking, is losing money.
The managed marketplace is also discussed as Kahn questions whether many of the leaders in today’s society from the media to energy to politics, if they actually have any “skin in the game”. The conversation transitioned into whether the current leaders are receiving guaranteed paychecks, creating new rules and regulations while directing subsidies and tax breaks to appointed and chosen people and companies.
The Crude Life Podcast can be heard every Monday through Thursday with a Week in Review on Friday.
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