OPEC will win this Mexican stand off as they know what's involved with shale production. Don't underestimate OPEC as shale, in tow parts, had been the boom which kick started this oil production glut and I will be the US that suffers in the end. The freeze had been a placebo and there will be no cut in production they will create more storage, they have even agreed terms with India to store oil in the foreseeable future in return for free oil. Shale, banks nad services to the oil sector and beyond will suffer which will all be reflected in the SP of oil companies and the investors, II's ETC..... RRL need the financial deal to be on the table, sooner the better.
You really need to do your research first before commenting.
Sinosure does not provide finance as such but is the Chinese Export Credits Guarantee Department (CECGD). They provide guarantees to those Chinese companies providing credit to overseas companies. It is LandOcean who wants Sinosure involved because it is Sinosure who will guarantee LandOcean and come after Range if Range fail to meet their credit obligations.
So RRL's management has to ensure the company cash flow will be sufficient to repay LandOcean after 2 years which will include meeting their interest costs.
In other words Range do not have the cash to carry out all their plans and are dependent on making sufficient profit from production to fulfil their plans.
The IEA said: "Only in 2017 will we finally see oil supply and demand aligned but the enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices when the market, having balanced, then starts to draw down those stocks."
So they're only predicting any recovery to start around the end of 2017 - the spike (or "rebound hard" they are predicting could be 5 years out: "The International Energy Agency (IEA) is warning consumers not to let cheap oil lull them into a false sense of security amid forecasts of a price spike by 2021."
Puts a slightly different complexion on it.
Personally I'm more bullish than that myself as well, but I wouldn't presume to know better than the IEA, or to put words in their mouth....
It does seem that this next year or so could be seen as a period of extreme opportunity, for any company able to weather that storm for the next 1-2 years.
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