Exploration Costs11 Dec 2019 11:57
People don't have a clue how expensive is nowadays exploration (with a high chance of not good quality as experienced here in Guyana) to get just 1000 BOPD. The more important oil producers with writedowns (Repsol $5b last week and Chevron rumors are $11b) because decreased reserves were not sufficiently updated for years.
While this writedowns are positive for a lower tax rate benefiting their cash flows, these players need urgently to increase reserves to keep balance sheet and assets. As they cannot do it organically in a short-mid term they only can do it by acquisitions overall if the target is at discount, offers synergies and BOD is weak.
Takeover bid here is served in days.